Preparing for the Food Safety Modernization Act

May 15, 2013  As our readers know, we are now in the comment period for the Proposed Rules on Risk-Based Preventative Controls (RBPC) and on Produce  Food Safety. (See posts on our Blog pages dated January 5, 2013)

In the Food Import sector, we now await FDA’s release of the Proposed Rules on the Foreign Supplier Verification Program (FSVP) and on the Voluntary Qualified Importer Program – two rules which will make substantial changes to food import regulation and procedure.

Our firm’s clients are primarily in the Aquatic Food Products (Seafood and Aquaculture) industries and in the Produce industry (both importers and domestic producers). As a lawyer with Food Science credentials, my specialization makes sense when you consider that nearly 50% of serious Food Safety regulatory problems are in these two industries.

Major retail grocery and food service buyers are now starting to recognize FSMA compliance issues and are requiring extensive documentation from their suppliers. In recent months, Food Importers have started coming to me with questions now that their retail grocery and food service customers are demanding detailed Food Safety Packages including guarantees with very broad indemnification language. This is particularly evident in the Produce sector (because of recent major Food Safety incidents), but, increasingly, buyers are setting extensive documentation requirements in Aquatic Food Products as well.

Based upon what we are seeing from our clients, here are a few comments on what you should be doing now.

ONE   You must find competent counsel to assist you in drafting required documents. Your ideal counsel would be a person who was both a licensed attorney and who also held professional credentials in Food Science. However, persons with such qualifications are by now fully-occupied by their existing food-industry clients and probably do not have any time free for new clients. So, you will probably have to settle for a lawyer who is not a credentialed Food Scientist and who may not be well qualified to advise you on technical aspects of areas such as developing your RBPCs.

TWO   Be extremely careful with so-called “consultants” since your communications with “consultants” are not privileged. Remember, serious Food Safety incidents can easily slip into civil litigation (and criminal prosecution). A so-called “consultant” can become a very damaging witness against you in a criminal prosecution or in a tort liability action. I have seen several otherwise sophisticated clients propose “Recall Plans” that foolishly involve too many clerical level employees and outsider people in their “Crisis Management” group. They have somehow come to believe in the simple-minded concept that “sharing” information with lots of people is “good”. On the contrary, a properly designed Recall Plan entails strict compartmentalization of information and active protection of privilege.

THREE   If you are an importer, this third point is for you. At present, while we wait for the FSVP and VQIP Proposed Rules, you should have already completed your Recall Plan document and you should have already sent to all your suppliers the Supplier Questionnaire and the required Guaranty Document Package. Your Supplier Questionnaire should, of course, also be gathering the information that will be required in the RBPC Plan document that you will soon be required to prepare.

FOUR   Since we already have a nearly complete understanding of what will be required for RBPC documentation, you should already have been in contact with all your suppliers on this matter. Remember, we are talking about not only the food products themselves, but also all food additives, processing aids, and food-contact materials.

FIVE  As mentioned above, be particularly attentive to Guarantee and Warranty Agreements that you are asked to sign from downstream customers. Very few practicing lawyers are, at present, familiar enough with Food Law in general, and the FSMA in particular, to competently produce such document without making fundamental errors. We have seen many such documents recently which contain terms which violate Product Liability coverages and which demonstrate ignorance of basic insurance law and procedure. Also, many such Guarantees and Warrantys are routinely signed by sales executives who are not competent to review such complex documents. All Food Safety Guarantees and Warrantys must be reviewed by competent counsel. No CEO should ever permit sales executives to sign Guarantees and Warrantys without prior review by counsel.

SIX  If you are an importer, you should already have been in touch with each of your suppliers to plan for FSVP and VQIP compliance. This is an area where the “You snooze, You Lose” rule applies. If you are an importer who is behind the FSMA implementation curve, you may well find yourself playing second-fiddle behind one of your competitors who “gets it” and is using FSMA compliance as a tool to expand his or her business.  

SEVEN  Food Exporters from around the world will be under great pressure to meet FSMA goals and requirements in the next several years. They will be forming stronger links with US importers who can help them. In the new era of Food Safety, importers who sit passively and let the world change around them may wake up and find that they have been left behind.

Our final comment is that, in business, “You either make dust – or eat dust”. So you can get with the program and ride the FSMA to greater success, or get left eating dust and wondering why you missed the bus.

CFW   May 15, 2013