[Federal Register Volume 85, Number 151 (Wednesday, August 5, 2020)]
[Proposed Rules]
[Pages 47536-47592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14581]
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Vol. 85
Wednesday,
No. 151
August 5, 2020
Part IV
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 205
National Organic Program; Strengthening Organic Enforcement; Proposed
Rule
Federal Register / Vol. 85, No. 151 / Wednesday, August 5, 2020 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 205
[Document Number AMS-NOP-17-0065; NOP-17-02]
RIN 0581-AD09
National Organic Program; Strengthening Organic Enforcement
AGENCY: Agricultural Marketing Service, USDA
ACTION: Proposed rule.
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SUMMARY: The United States Department of Agriculture (USDA)
Agricultural Marketing Service (AMS) proposes amending the USDA organic
regulations to strengthen oversight and enforcement of the production,
handling, and sale of organic agricultural products. The proposed
amendments are intended to protect integrity in the organic supply
chain and build consumer and industry trust in the USDA organic label
by strengthening organic control systems, improving farm to market
traceability, and providing robust enforcement of the USDA organic
regulations. Topics addressed in this proposed rule include:
Applicability of the regulations and exemptions from organic
certification; National Organic Program Import Certificates;
recordkeeping and product traceability; certifying agent personnel
qualifications and training; standardized certificates of organic
operation; unannounced on-site inspections of certified operations;
oversight of certification activities; foreign conformity assessment
systems; certification of grower group operations; labeling of
nonretail containers; annual update requirements for certified
operations; compliance and appeals processes; and calculating organic
content of multi-ingredient products.
DATES: Send comments on or before October 5, 2020.
ADDRESSES: You may send comments on this proposed rule to the Federal
eRulemaking Portal at https://www.regulations.gov/. You can access this
proposed rule and instructions for submitting public comments by
searching for document number, AMS-NOP-17-0065. Comments may also be
sent to Jennifer Tucker, Deputy Administrator, National Organic
Program, USDA-AMS-NOP, 1400 Independence Ave. SW, Room 2642-So., Ag
Stop 0268, Washington, DC 20250-0268; (202) 260-9151 (Fax).
Instructions: All comments received must include the docket number
AMS-NOP-17-0065; NOP-17-02, and/or Regulatory Information Number (RIN)
0581-AD09 for this rulemaking. You should clearly indicate the topic
and section number of this proposed rule to which your comment refers,
state your position(s), offer any recommended language change(s), and
include relevant information and data to support your position(s)
(e.g., scientific, environmental, manufacturing, industry, or industry
impact information, etc.). All comments and relevant background
documents posted to https://www.regulations.gov will include any
personal information provided.
In addition to the questions following each topic in the Overview
of Proposed Amendments section of this proposed rule, AMS is requesting
comments on the following general topics:
1. The clarity of the proposed requirements. Can certified
operations, handlers, and certifying agents readily determine how to
comply with the proposed regulations?
2. The implementation timeframe. AMS is proposing that all
requirements in this proposed rule be implemented within ten months of
the effective date of the final rule (this is also one year after
publication of the final rule).
3. The accuracy of the estimates in the Regulatory Impact Analysis
and Regulatory Flexibility Analysis, which describe the expected costs
of this proposed rule on all affected entities and on small businesses,
respectively.
4. Are there alternatives to regulations, or less stringent
requirements, that could achieve the same objectives as this proposed
rule?
5. How will certifying agents cover the costs of additional actions
required under this rule, such as the required unannounced inspections
and the issuing of NOP Import Certificates? Will certifying agents
charge fees that are consistent for expanded handlers, brokers,
importers and exporters?
FOR FURTHER INFORMATION CONTACT: Jennifer Tucker, Ph.D., Deputy
Administrator, National Organic Program. Telephone: 202-720-3252.
Email: [email protected].
SUPPLEMENTARY INFORMATION:
Executive Summary
A. Purpose of the Proposed Rule
This proposed rule would amend several sections of the USDA organic
regulations, 7 CFR part 205, to strengthen oversight of the production,
handling, certification, marketing, and sale of organic agricultural
products as established by the Organic Foods Production Act of 1990
(OFPA, or ``the Act'').\1\ If implemented, this proposed rule will
improve organic integrity across the organic supply chain, and benefit
stakeholders throughout the organic industry. The proposed amendments
will close gaps in the current regulations to build consistent
certification practices to deter and detect organic fraud, and improve
transparency and product traceability. In addition, the proposed
amendments will assure consumers that organic products meet a robust,
consistent standard and reinforce the value of the organic label.
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\1\ The Organic Foods Production Act of 1990, 7 U.S.C. 6501-
6524, is the statute from which the Agricultural Marketing Service
derives authority to administer the NOP, and authority to amend the
regulations as described in this proposed rule. This document is
available at: https://uscode.house.gov/view.xhtml?path=/prelim@title7/chapter94&edition=prelim.
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The need for more consistent oversight to protect organic integrity
is a product of the rapidly expanding organic market, increasingly
complex organic supply chains, and price premiums for organic products.
Total sales of organic agricultural products in the United States grew
from $3.4 billion in 1997 to $55.1 billion in 2019.\2\ This substantial
market growth has allowed many additional types of business to
participate in the organic supply chain, and organic agricultural
products are now traded on a global scale. Today's global organic
marketplace is marked by a multifaceted supply chain with organic
products increasingly sold and handled by entities not regulated by the
USDA. The absence of direct enforcement authority over some entities in
the organic supply chain, in combination with price premiums for
organic products, presents the opportunity and incentive for organic
fraud, which has been discovered in the organic sector by both the
National Organic Program (NOP) and organic stakeholders. The amendments
in this proposed rule are designed to mitigate the occurrence of
organic fraud.
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\2\ Organic Trade Association, Organic Industry Survey, 2018-
2020.
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In response to their experiences in the organic system,
stakeholders have repeatedly called for the NOP to take steps to
improve oversight of organic systems and enforcement of the USDA
organic regulations. Commonly cited areas for improvement include
certification of excluded handlers, organic import oversight, fraud
prevention, organic trade arrangements, and organic inspector
qualifications. In addition, public discussions on many proposals
included in this action occurred during multiple National
[[Page 47537]]
Organic Standards Board (NOSB) meetings.\3\
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\3\ The April 2019 NOSB meeting is the most recent example of a
public discussion to address fraud concerns in the organic supply
chain. A discussion document, meeting transcripts, and public
comments are available at: https://www.ams.usda.gov/event/national-organic-standards-board-nosb-meeting-seattle-wa.
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The NOP identified the need for many of the proposed amendments as
part of its direct experience in administering this program,
particularly during complaint investigations and audits of certifying
agents. Other proposed amendments are based on recent amendments to the
OFPA included in the Agriculture Improvement Act of 2018; \4\ the
recommendations of a 2017 Office of Inspector General audit; the
recommendations of a federal advisory committee, the NOSB; and industry
stakeholder feedback. The amendments in this proposed rule are intended
to: (1) Strengthen organic control systems; (2) improve organic import
oversight; (3) clarify organic certification standards; and (4) enhance
supply chain traceability.
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\4\ The Agriculture Improvement Act of 2018 (Pub. L. 115-334),
commonly known as the ``2018 farm bill,'' is available at https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf. Organic
certification is discussed in Title X, Section 10104.
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B. Summary of Provisions
This proposed rule will strengthen enforcement of the USDA organic
regulations through several actions mandated by the Agriculture
Improvement Act of 2018:
1. Reduce the types of uncertified entities in the organic supply
chain that operate without USDA oversight--including importers,
brokers, and traders of organic products. This will safeguard organic
product integrity and improve traceability.
2. Require the use of NOP Import Certificates, or equivalent data,
for all organic products entering the United States. This proposed
change will expand the use of NOP Import Certificates to all organic
products imported into the United States, improving the oversight and
traceability of imported organic products.
3. Clarify the NOP's authority to oversee certification activities,
including the authority to act against an agent or office of a
certifying agent. Additionally, certifying agents must notify the NOP
upon opening a new office, which will allow the NOP to provide more
effective and consistent oversight of certifying agents and their
activities.
Additionally, this proposed rule includes several discretionary
actions that work in alignment with the provisions above to further
strengthen enforcement of the USDA organic regulations:
4. Clarify the labeling of nonretail containers used to ship or
store organic products. Requiring additional information on nonretail
containers will clearly identify organic products, reduce the
mishandling of organic products, and support traceability. This is
needed to maximize the linkage between operation certificates and
import certificates and the organic product.
5. Specify the minimum number of unannounced inspections of
certified operations that must be conducted annually by accredited
certifying agents, and require that supply chain audits be completed
during on-site inspections.
6. Require certifying agents to issue standardized certificates of
organic operation generated from the USDA's Organic Integrity Database
(INTEGRITY) and to keep accurate and current certified operation data
in INTEGRITY. Standardization will simplify the verification of valid
organic certificates and import certificates. It will also reduce
reporting, by eliminating the need to provide notices of approval or
denial of certification and annual lists of certified operations to
USDA.
7. Clarify that certified operations only need to submit changes to
their organic system plan during annual updates, and clarify that
certifying agents must conduct annual inspections of certified
operations. This will reduce paperwork burden for organic operations
and ensure that all organic operations are inspected at least once a
year.
8. Establish specific qualification and training requirements for
certifying agent personnel, including inspectors and certification
reviewers. Requiring that personnel meet minimum education and
experience qualifications and requiring continuing education will
ensure quality and consistency of certification activities performed by
certifying agents.
9. Clarify conditions for establishing, evaluating, and terminating
equivalence determinations with foreign government organic programs,
based on an evaluation of their organic foreign conformity systems.
This will ensure the compliance of organic products imported from
countries that have organic equivalence determinations with the United
States.
10. Clarify requirements to strengthen and streamline enforcement
processes, specifically noting that the NOP may initiate enforcement
action against any violator of the OFPA, including responsible parties;
defining the term adverse action to clarify what actions may be
appealed and by whom; and clarifying NOP's appeal procedures and
options for alternative dispute resolution.
11. Specify certification requirements for grower group operations,
to provide consistent, enforceable standards and ensure compliance with
the USDA organic regulations. Grower group certification would be
restricted to crop production and handling only, and would require the
use of an internal control system to monitor compliance.
12. Clarify the method of calculating the percentage of organic
ingredients in a multi-ingredient product to promote consistent
interpretation and application of the regulation.
13. Require certified operations and certifying agents to develop
improved recordkeeping, organic fraud prevention, and trace-back audit
processes. Information sharing between certifying agents and documented
organic fraud prevention procedures are also required.
C. Costs and Benefits
AMS estimates the following costs and benefits of this proposed
rule:
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Economic impact of SOE proposed rule
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Annualized \a\ Total \b\
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Costs............................................. $7,205,815-$7,351,910 $65,629,941-$87,766,628
Benefits.......................................... $83,992,975-$86,874,833 $765,000,793-$1,037,106,112
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\a\ Estimated 15-year annualized domestic costs for affected industry discounted at 3 and 7 percent.
\b\ Estimated total domestic costs for affected industry in Net Present Value discounted at 3 and 7 percent, 15
year.
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Table of Contents
I. General Information
A. Does this proposed action apply to me?
II. Background
III. Overview of Proposed Amendments
1. Applicability and Exemptions From Certification
2. Imports to the United States
3. Labeling of Nonretail Containers
4. On-Site Inspections
5. Certificates of Organic Operation
6. Continuation of Certification
7. Paperwork Submissions to the Administrator
8. Personnel Training and Qualifications
9. Oversight of Certification Activities
10. Accepting Foreign Conformity Assessment Systems
11. Compliance--General
12. Noncompliance Procedure for Certified Operations
13. Mediation
14. Adverse Action Appeal Process--General
15. Adverse Action Appeal Process--Appeals
16. Grower Group Operations
17. Calculating the Percentage of Organically Produced
Ingredients
18. Supply Chain Traceability and Organic Fraud Prevention
19. Technical Corrections
20. Additional Amendments Considered But Not Included in This
Proposed Rule
IV. Statutory and Regulatory Authority
A. Summary of Economic Analyses
B. Executive Order 12988
C. Paperwork Reduction Act
D. Executive Order 13175
E. Civil Rights Impact Analysis
I. General Information
A. Does this proposed action apply to me?
You may be affected by this proposed action if you are engaged in
the organic industry. Potentially affected entities may include, but
are not limited to, the following:
Individuals or business entities that are considering
organic certification;
Existing production and handling operations that are
currently certified organic under the USDA organic regulations;
Brokers, traders, and importers of organic products that
are not currently certified under the USDA organic regulations;
Operations that use non-retail containers for shipping or
storing organic products;
Retailers that sell organic products;
Operations that receive or review organic certificates to
verify compliance with USDA organic regulations;
USDA-accredited certifying agents, inspectors, and
reviewers;
Operations that import organic products into the United
States; and/or
Operations that export organic products to the United
States.
This listing is not intended to be exhaustive but identifies key
entities likely to be affected by this proposed action. Other types of
entities may also be affected. To determine whether you or your
business may be affected by this proposed action, you should carefully
examine the proposed regulatory text.
II. Background
The Organic Foods Production Act of 1990 (OFPA) (7 U.S.C. 6501-
6524), authorizes the Agricultural Marketing Service (AMS) to establish
and maintain national standards governing the marketing of organically
produced agricultural products. AMS administers these standards through
the National Organic Program (NOP). Final regulations implementing the
NOP, also referred to as the USDA organic regulations, were published
on December 21, 2000 (65 FR 80548) and became effective on October 21,
2002.\5\ Through these regulations, AMS oversees national standards for
the production, handling, labeling, and sale of organically produced
agricultural products.
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\5\ 7 CFR part 205 National Organic Program; Final Rule.
December 21, 2000. Available on the AMS website: https://www.federalregister.gov/documents/2000/12/21/00-32257/national-organic-program.
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Since full implementation of the USDA organic regulations, the
organic industry has experienced significant change. Both demand for
and sales of organic products have risen steadily; total U.S. sales of
organic products reached more than $55 billion in 2019.\6\ The number
of businesses producing, handling, marketing, and selling organic
products has also grown to meet consumer demand. Rapid growth has
attracted many businesses to the USDA organic label and increased the
complexity of the global organic supply chain.
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\6\ Organic Trade Association, Organic Industry Survey, 2020.
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AMS is confident in the integrity and value of the USDA organic
seal. Consumers can trust the organic label due to a rigorous oversight
system that operates globally. However, the growth and complexity of
the modern organic industry has exposed the limitations of the current
organic regulations, revealing gaps in oversight and enforcement that
the original regulations do not address. A lack of clear and specific
standards in portions of the regulations has sometimes led to different
interpretations of the regulations, inconsistent practices, and unequal
enforcement across the industry. Increasingly complex organic supply
chains reduce transparency and complicate traceability, yet these
elements are essential to trust in the organic label. In addition,
businesses that operate in the organic supply chain without oversight
from the NOP pose risks to organic integrity. This can lead to
mishandling of organic product, loss of organic integrity, and fraud.
The provisions in this proposed rule are designed to address these
risks.
Complex Organic Supply Chains
The need for this proposed rule is driven partially by the
increasing complexity of organic supply chains. When the organic
regulations were published in 2000, organic products were marketed
mostly locally or regionally, and supply chains tended to be short and
transparent; for example, farm to wholesale to retail to consumer.
Demand and sales have grown considerably since then. This significant
market growth has attracted more producers, handlers, product
suppliers, importers, brokers, distributors, and others to the organic
market.
Consider the example of an organic egg supply chain in the United
States, beginning with the production of certified organic corn and
ending with the sale of eggs to the consumer. This demonstrates the
typical entities and transactions in an organic supply chain under the
existing regulations:
A certified organic farm produces organic corn.
The corn is transported via an uncertified truck to a
local grain elevator, where it is aggregated with other organic corn
from nearby producers.
An uncertified commodity trader buys the corn.
The corn is transported via uncertified truck to an
uncertified storage facility; both transport and storage are
subcontracted and are not owned by the commodity trader.
The commodity trader sells the corn to a certified organic
grain supplier; the two parties remain anonymous because they use an
uncertified broker to facilitate the transaction.
The corn is transported via uncertified rail and river
barge to the grain supplier; it is transloaded and stored temporarily
several times before being delivered to the certified grain supplier.
The certified organic grain supplier stores the corn and
combines it with imported organic corn purchased from an importer via
an uncertified broker.
The certified grain supplier sells the corn to a certified
organic feed processer; the corn is transported via an uncertified
truck.
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The certified processer combines the corn with several
other ingredients to create organic chicken feed.
The certified processer sells the feed to a certified
organic egg producer and transports it via an uncertified truck.
The certified organic egg producer sells organic eggs to
an uncertified distributor.
The uncertified distributor sells the organic eggs to a
retailer prior to final sale to the consumer.
This is just one example of a complex organic supply chain. It
becomes even more complex if one considers that the processer combines
several ingredients into the final chicken feed, sourced both
domestically and imported. Each ingredient has its own unique supply
chain--and together they weave a complex and dense web converging on a
single organic product.
Organic Fraud
The risk of organic fraud has grown due to high demand for organic
products, the absence of direct enforcement authority over some
entities in the organic supply chain, and price premiums for organic
products. Both the NOP and organic stakeholders have uncovered organic
fraud in the organic supply chain. The following examples highlight the
extent and complexity of organic fraud in organic grain and oilseed
supply chains.
Organic Grain and Oilseed Fraud in the United States
In recent years, the NOP has identified fraud in both domestic and
foreign organic grain and oilseed supply chains. These supply chains
are generally complex and involve multiple changes in product
ownership, creating additional risk and opportunity for fraud. Demand
for organic grain and oilseed (especially for organic livestock feed)
currently exceeds domestic production. In 2019, a private organic
outlook firm predicted a double-digit decline in domestic organic corn
and soybean production. The shortage of domestic organic commodities,
combined with a projected shrinking supply, increases the incentive for
organic fraud. Federal investigations show that organic grain and
oilseed fraud can lead to tens of millions of dollars in fraudulent
sales within just a few months. Below are several examples which
outline the different actors, market complexities, and indicators of an
increase in fraud.
In 2019, the U.S. Attorney's office of Northern Iowa sentenced five
individuals to prison for their role in an organic grain fraud ring.
The lead defendant pled guilty to defrauding customers in a scheme
involving at least $142 million in nonorganic grains sold as organic.
The lead defendant sold fraudulent grain to customers over a period of
seven years, claiming the product was organically grown in Nebraska and
Missouri.
In February 2020, a federal grand jury indicted an individual in
South Dakota for allegedly selling $71 million of nonorganic grains and
oilseeds falsely labeled organic over five years. The fraud ring
spanned multiple states. After the NOP revoked the organic business'
organic certificates, the responsible parties established new brokerage
firms to continue their fraud. Under the current organic regulations,
these brokerages did not require organic certification; the NOP had no
oversight of their activities. This proposed rule would require the
certification and oversight of brokers like those involved in this
case. This would allow the NOP to identify and prevent the fraud,
minimizing damage to the U.S. market.
In addition to the examples above, the NOP continues to investigate
multiple cases of organic grain and oilseed fraud at the production and
handling levels. Continuing complaints of organic grain fraud received
by the NOP demonstrate an ongoing need for stronger enforcement
provisions to ensure integrity in organic supply chains.
Fraud Within Complex Supply Chains
Cases of organic fraud are often compounded by a complex supply
chain. Uncertified entities acting within a complex supply chain can
create significant oversight and enforcement challenges for both the
NOP and accredited certifying agents. Recent fraud investigations have
shown that the use of uncertified handlers can decrease the NOP's
ability to prevent fraudulent grain sales in the organic market.
Fraudulent actors may obtain organic handler certification solely
to take advantage of the regulatory exclusions at 7 CFR 205.101.
Investigations have found fraudulent actors using these exclusions to
funnel nonorganic feedstuffs through uncertified grain elevators.
Because organic certifying agents sometimes consider elevators to be
transportation, they are not required to obtain organic certification.
In addition, because some grain elevators are not certified, the NOP
cannot compel organic certifying agents to investigate the onsite
activities at these elevators.
The above examples of actual fraud investigations demonstrate the
complexity of organic supply chains, the certification status of the
entities involved, and the transactions where fraud occurred. It is
also useful to consider the types of entities involved:
Certified organic farms thought to supply little or none
of the feedstuffs later sold as organic.
Uncertified farms supplying non-GMO feedstuffs to
uncertified grain elevators.
Uncertified grain elevators currently excluded from
certification requirements.
Certified handlers that brokered the sale of nonorganic
feedstuffs through an uncertified elevator to certified buyers,
falsifying paperwork to represent the products for sale as organic.
Certified organic handlers that consolidated fraudulent
products from previous handlers, thinking the product was organic.
Certified feed mills that purchased the nonorganic
feedstuffs believing the products were organic.
Livestock and poultry operations that purchased feed
rations from the mills and thus unknowingly fed nonorganic feed to
their animals, which are required to eat a diet of 100% certified
organic feed.
The proposed rule would require the certification of some types of
currently uncertified entities, such as the grain elevators in this
example. Organic certification would subject these entities to regular,
systematic oversight from accredited certifying agents and allow the
NOP to monitor these entities' activities through on-site
investigations, ensuring faster detection and prevention of millions of
dollars in organic fraud.
Terminology and Objectives
Throughout this proposed rule, AMS refers to four concepts--organic
integrity, organic fraud, audit trails, and supply chain traceability--
which are integral to the purpose of this proposed rule. AMS is
explaining these concepts upfront to assist reader understanding: \7\
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\7\ These terms are explained only for use in this proposed rule
and are not intended to represent any addition to 7 CFR part 205 or
revision to the term audit trail.
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1. Organic integrity: The unique attributes that make a product
organic, and define its status as organic. A product that fully
complies with the USDA organic regulations has integrity, and its
organic qualities have not been compromised.
2. Organic fraud: Intentional deception for illicit economic gain,
where nonorganic products are labeled, sold, or represented as organic.
This may include substitutions or deliberate mislabeling; falsified
records; and/or false statements given in applications or
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organic system plans, or during inspections, investigations, and
audits.
3. Audit trail: Documentation that is sufficient to determine the
source, transfer of ownership, and transportation of any agricultural
product labeled as ``100 percent organic,'' the organic ingredients of
any agricultural product labeled as ``organic'' or ``made with organic
(specified ingredients)'' or the organic ingredients of any
agricultural product containing less than 70 percent organic
ingredients identified as organic in an ingredients statement (7 CFR
205.2).
4. Supply chain traceability: The ability to identify and track a
product (including its location, history, and organic nature) along its
entire supply chain, from source to consumption, and/or ``backwards''
from consumption to source. A supply chain audit assesses supply chain
traceability for specific products, verifying whether records show all
movement, transactions, custody, and activities involving the products.
The objective of this proposed rule is to strengthen enforcement of
the USDA organic regulations and protect the integrity of the organic
label by (1) strengthening organic control systems; (2) improving
organic import oversight; (3) clarifying organic certification
standards; and (4) enhancing supply chain traceability. AMS identified
the need for these proposed changes from the following sources:
Direct experience in administering the NOP, particularly
complaint investigations and audits of accredited certifying agents;
The Agriculture Improvement Act of 2018,\8\ which amended
the OFPA.
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\8\ The Agriculture Improvement Act of 2018, Public Law 115-334,
is available at: https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
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Recommendations of a 2017 Office of Inspector General
report; \9\
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\9\ USDA Office of Inspector General Audit Report 01601-0001-21:
National Organic Program International Trade Arrangements and
Agreements. September 2017: https://www.usda.gov/oig/webdocs/01601-0001-21.pdf.
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Recommendations of the NOP's federal advisory committee,
the National Organic Standards Board (NOSB); and
Industry stakeholder and consumer feedback.
If implemented, AMS expects the amendments proposed in this rule
will bring more effective oversight and enforcement, improve organic
integrity and product traceability, clarify existing standards to
ensure fair competition, bolster consumer trust in the organic label,
reduce organic fraud, and support continued industry growth.
Information about each amendment is described in more detail below.
III. Overview of Proposed Amendments
1--Applicability and Exemptions From Certification
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Section Action Proposed text
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205.2.................................... Revise...................... Handle. To sell, process, or package agricultural products, including but not
limited to trading, facilitating sale or trade, brokering, repackaging,
labeling, combining, containerizing, storing, receiving, or loading.
205.2.................................... Revise...................... Handler. Any person engaged in the business of handling agricultural products.
205.2.................................... Revise...................... Handling operation. Any operation or portion of an operation that handles
agricultural products, except for operations that are exempt from
certification.
205.2.................................... Revise...................... Retail operation. An operation that sells agricultural products directly to
final consumers through in-person and/or virtual transactions.
205.100(a)............................... Revise...................... Except for the exempt operations described in Sec. 205.101, each operation,
or portion of an operation, that produces or handles agricultural products
that are intended to be sold, labeled, or represented as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified ingredients or food
group(s))'' must be certified according to the provisions of subpart E of this
part and must meet all other applicable requirements of this part.
205.101.................................. Revise...................... Exemptions from certification.
205.101.................................. Revise...................... The following operations in subparagraphs (a) through (e) of this section are
exempt from certification under subpart E of this part and from submitting an
organic system plan for acceptance or approval under Sec. 205.201 but must
comply with the applicable organic production and handling requirements of
subpart C of this part, including the provisions for prevention of contact of
organic products with prohibited substances set forth in Sec. 205.272, and
the specific additional requirements stipulated in Sec. 205.101(a) through
(f).
205.101(a)............................... Revise...................... A production or handling operation that sells agricultural products as
``organic'' but whose gross agricultural income from organic sales totals
$5,000 or less annually. The products from such operations must not be used as
ingredients identified as organic in processed products produced by another
handling operation. Such operations must comply with the labeling provisions
of Sec. 205.310.
205.101(b)............................... Revise...................... A retail operation or a portion of a retail operation that sells, but does not
process, organically produced agricultural products.
205.101(c)............................... Revise...................... A retail operation or portion of a retail operation that processes agricultural
products that were previously labeled for retail sale as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified ingredients or food
group(s)),'' provided that the products are processed onsite at the point of
sale to the final consumer. Such operations must comply with the labeling
provisions of Sec. 205.310, and must maintain records sufficient to:
(1) Prove that agricultural products identified as organic were organically
produced and handled; and
(2) Verify quantities produced or sold from such agricultural products.
205.101(d)............................... Add......................... A handling operation or portion of a handling operation that only handles
agricultural products that contain less than 70 percent organic ingredients
(as described in Sec. 205.301(d)), or that only identifies organic
ingredients on the information panel. Such operations must comply with the
labeling provisions of Sec. Sec. 205.305 and 205.310 and must maintain
records sufficient to:
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(1) Prove that agricultural products identified as organic were organically
produced and handled; and
(2) Verify quantities produced or sold from such agricultural products.
205.101(e)............................... Add......................... An operation that only stores, receives, and/or loads agricultural products,
but does not process or alter such agricultural products.
205.101(f)............................... Add......................... Records described in subparagraphs (a)-(d) of this section must be maintained
for no less than 3 years beyond their creation, and the operations must allow
representatives of the Secretary and the applicable State organic programs'
governing State official access to these records for inspection and copying
during normal business hours to determine compliance with the applicable
regulations set forth in this part.
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AMS proposes amending Sec. Sec. 205.2 and 205.100-101 of the USDA
organic regulations to clarify the applicability of the regulations and
limit the types of operations excluded from organic certification in
the global supply chain. This includes revising the definitions of
handle, handler, handling operation, and retail food establishment. The
proposed amendments would require certification of operations that
facilitate the sale or trade of organic products, including but not
limited to brokers, importers, and traders.
In general, this proposed rule requires the certification of any
handling operation whose activities may affect the organic status of
agricultural products they handle or represent after production, as the
products move from production source through a supply chain. The
amendments also clearly specify which entities and activities are
exempt from certification. Most notably, this includes exemptions for
retail operations and entities that only store organic products; the
current exclusions at Sec. 205.101(b)(1) would be removed.
Authority
AMS' authority to modify Sec. Sec. 205.2, 205.100, and 205.101 of
7 CFR is established in the OFPA. The statute allows AMS to ``establish
an organic certification program for producers and handlers of
agricultural products'' (7 U.S.C. 6503(a)) and ``require such other
terms and conditions as may be determined . . . necessary'' (7 U.S.C.
6506(a)(11)). The OFPA and the USDA organic regulations state that any
operation that produces or handles certified organic agricultural
products is required to be certified (7 U.S.C. 6503 and 7 CFR 205.100).
Additionally, the Agriculture Improvement Act of 2018 (the ``2018 farm
bill'') requires that the USDA ``issue regulations to limit the type of
organic operations that are excluded from certification under section
205.101'' of the organic regulations.\10\
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\10\ See section 10104(a) of the Agriculture Improvement Act of
2018, Public Law 115-334, available at: https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf
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This proposed amendment clarifies the terms handle, handler, and
handling operation to better align with the OFPA definition of handle,
``to sell, process, or package agricultural products'' (7 U.S.C.
6502(8)). Limiting handler exemptions is necessary to meet the basic
purposes delineated in 7 U.S.C. 6501(2)-(3), ``to assure consumers that
organically produced products meet a consistent standard, and to
facilitate interstate commerce in fresh and processed food that is
organically produced.'' As the current exclusions at Sec.
205.101(b)(1) are no longer appropriate, AMS is exercising its
authority, as mandated in the 2018 farm bill, to limit those exclusions
in order to fully implement the national standards authorized by 7
U.S.C. 6504 and to ensure compliance with the OFPA and the USDA organic
regulations.
History and Justification for Amendments
In addition to the 2018 farm bill, several factors compel
regulatory changes to require the certification of many currently
excluded operations. The present need for expanded oversight to protect
organic integrity is primarily due to the emergence of complex global
supply chains and business relationships, and price premiums for
organic products. These factors present the opportunity and incentive
for organic fraud, which has materialized in the organic sector, and
which would be mitigated by reducing the types of entities excluded
from certification.
Following full implementation of the NOP in 2002, AMS believed that
organic product integrity would not be compromised or altered when
handled by entities such as brokers, distributors, traders, storage
professionals, receivers, and loaders. As such, these handlers were not
required to be certified. At that time, marketing was mostly local or
regional, and organic market sales totaled a fraction of today's
figures. Additionally, the percentage of organic product handled by
excluded entities was relatively low.
The organic market has grown considerably since the USDA organic
regulations took effect in 2002. The Organic Trade Association reports
that total U.S. organic sales grew from $3.4 billion in 1997 to $55.1
billion in 2019.\11\ This significant market growth has created the
opportunity for additional domestic and international producers,
handlers, product suppliers, importers, brokers, distributors, and
others to participate in the organic market. Interpretation of the
current regulations has allowed many of these operations to remain
uncertified. This has resulted in increased complexity of organic
supply chains. Today's organic marketplace is marked by multifaceted
supply chains with organic products increasingly coordinated by
entities not regulated by the USDA, creating risks that could impact
the integrity of organic products.
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\11\ Organic Trade Association, Organic Industry Survey, 2018-
2020.
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Other contributors to risk include entities in the middle of supply
chains that facilitate the sale or trade of organic products. These
include domestic importers of products, brokers/traders, distributors,
and other handlers who represent a link between certified parties.
Although some of these handlers voluntarily seek certification, the
current organic regulations do not require their certification.
Handlers are responsible for the integrity of the organic products they
handle, even if they never take ownership or possession of a product,
because they frequently make decisions impacting the integrity of
organic products. For example, they may file import and export permits;
arrange sales to both certified and uncertified entities; and comply
with
[[Page 47542]]
mandatory import conditions such as fumigation or irradiation. The
current lack of certification requirements for excluded handlers can
negatively affect the organic status of products, and reduce the
availability of auditable records needed to assess organic status.
The evolution of the organic industry has made clear that the
current terms handle, handler, and handling operation, as defined at
Sec. 205.2 of the organic regulations, no longer adequately represent
the full scope of organic supply chains. The allowance of uncertified
handlers creates gaps in the organic supply chain, breaking chains of
custody and complicating the verification of product origin. Expanding
organic certification to cover a wider range of handling operations is
critical to supply chain traceability. It would make more parties
visible and accountable, require the generation and maintenance of
auditable records, and improve the usefulness of audit trails and
product verification. The NOP believes improved supply chain
traceability is critical to the continuing success of the program and
its ability to ensure the integrity of organic products. Supply chain
traceability is discussed in more detail later in this proposed rule.
Previous Actions by AMS, the NOSB, and Stakeholders
In 2010, the NOSB provided AMS recommendations to address the risks
to organic integrity created by handler exclusions.\12\ The NOSB
determined that handlers of unpackaged bulk agricultural products
should not be excluded from certification and requested that the NOP
define the scope of handling activities addressed by Sec. 205.101(b)
of the organic regulations. In 2014, the NOP issued guidance on the
certification requirements for handling unpackaged organic products
(NOP 5031) \13\ and provided clarification about the circumstances
under which a handling operation is excluded from certification
requirements. This guidance was based upon both the 2010 NOSB
recommendations and the findings of two Office of Inspector General
audits of the NOP's oversight of organic milk.\14\ Because the guidance
in NOP 5031 only addresses handlers of unpackaged organic products, it
has not eliminated the audit trail gaps that prevent full product
traceability from farm gate to consumer. Furthermore, NOP 5031 has not
been consistently implemented by certifying agents, particularly with
respect to less-typical handling activities (e.g., auguring commodities
from vessels to rail cars at ports).
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\12\ NOSB Formal Recommendation: Clarifying the Limits of
205.101(b), October 28, 2010: https://www.ams.usda.gov/sites/default/files/media/NOP%20CACC%20Final%20Rec%20Clarifying%20the%20Limitations.pdf.
\13\ NOP 5031--Guidance, Certification Requirements for Handling
Unpackaged Organic Products, January 22, 2014: https://www.ams.usda.gov/sites/default/files/media/5031.pdf.
\14\ USDA Office of Inspector General Audit Report 01601-0001-
Te: National Organic Program--Organic Milk, February 2012: https://www.usda.gov/oig/webdocs/01601-0001-Te.pdf.
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Clarification of Applicability
The proposed rule clarifies the applicability of the regulations by
revising Sec. 205.100 and the definitions of handle, handler, and
handling operation. These proposed revisions clearly state which
entities, operations, and activities require certification under the
USDA organic regulations. Specifically, the proposed rule revises the
definition of handle by including additional activities, most notably
trading, brokering, and facilitating sale or trade. The revised
definition of handle reflects the broad range of handling activities
that take place in the modern organic industry, and can be generally
described to include activities that affect the organic status or
ownership of an agricultural product after production as it moves from
production source through a supply chain.
Unless specifically exempted from certification, as discussed in a
later section, any person or operation that conducts activities
described in the revised definition of handle would need to be
certified and comply with all applicable requirements for handlers.
This would require the certification of certain types of excluded
handlers that currently operate without regular systematic oversight
from the USDA, most notably intermediate market actors such as brokers,
traders, and importers. Certified organic products that are handled by
an uncertified, non-exempt operation at any point in the supply chain
will lose their certified organic status and may no longer be sold,
labeled, or represented as organic. In turn, certified organic
operations that receive products from uncertified, non-exempt handlers
and subsequently label the products as organic, use as feed for organic
livestock, or use as ingredients for organic products are in violation
of USDA organic regulations, and may be subject to proposed suspension
or revocation of certification and possible civil penalties.
The proposed rule also modifies the definitions of handler and
handling operation to include any person or operation that handles
agricultural products. This includes handling operations such as
importers, brokers, and traders. Accountability from these operations
is required to maintain the integrity of organic products. Even if
these operations do not take physical possession or ownership of the
product they represent, their decisions affect the status of organic
products; the operation's records are essential to demonstrate a
product's compliance at that point in the supply chain. For example,
uncertified brokers may receive notices of organic products being
treated with substances prohibited for use on organic products, but
might not provide those notices to certified importers or accredited
certifying agents. Such critical breaks in the audit trail could allow
products to be sold as organic, after being treated with substances
prohibited for use on organic products.
Similarly, uncertified storage facilities may store and split or
combine lots and loads. Certifying agents and certified importers may
not be informed of the full range of activities conducted at such
facilities; however, handlers at these locations have a critical role
in maintaining the integrity and traceability of organic products. For
this reason, the proposed rule would require the certification of these
types of handlers.
Finally, because uncertified handlers are not required to maintain
auditable records for five years, sales or transit records might not be
available for inspection by the USDA or certifying agents. The U.S.
Government has limited ability to obtain records from foreign
businesses who are not certified to the USDA regulations. The current
exclusion of these brokers from organic certification creates risks for
organic integrity when they facilitate the sale of USDA-organic
products produced overseas, prior to export to the United States.
Clarification of Exemptions From Certification
In addition to clearly stating who requires organic certification,
the proposed rule also describes the activities that would not require
certification to produce, handle, or sell organic agricultural
products. The proposed rule modifies Sec. 205.101 by renaming the
section ``Exemptions from certification,'' eliminating the exclusions
currently listed at Sec. 205.101(b), and listing in revised Sec.
205.101 all operations that are exempt from organic certification.
Eliminating reference to exclusion and excluded
[[Page 47543]]
operations, and categorizing as exempt those operations that do not
require organic certification, will reduce confusion and
misinterpretation about who needs to be certified.
Although they do not require certification, exempt operations must
comply with portions of the organic regulations. Exempt operations that
are producing or handling organic products are responsible for
maintaining organic integrity and must follow the production and
handling requirements of the organic regulations that relate to their
activities. Stakeholders have expressed concern about the clarity and
consistent implementation of these requirements. The proposed rule
addresses this concern by clearly stating what requirements each exempt
operation must follow. In general, all exempt operations must follow
the applicable organic production and handling requirements of subpart
C of the regulations, including the provisions for prevention of
contact of organic products with prohibited substances (Sec. 205.272).
In addition, specific additional requirements are included for some
exemptions, and recordkeeping requirements are explained in revised
Sec. 205.101.
Exemptions Retained by the Proposed Rule
The current exemption for operations with $5,000 or less in annual
income from organic sales is retained at revised Sec. 205.101(a). To
ensure the integrity of organic products, these operations are required
to comply with the provisions for the prevention of contact of organic
products with prohibited substances (Sec. 205.272) and the labeling
provisions of Sec. 205.310. The current exemptions for operations that
handle products with less than 70 percent organic ingredients and
operations that only identify organic ingredients on product labels are
also retained at new Sec. 205.101(d). These exempt handlers are
required to comply with the labeling requirements of Sec. Sec. 205.305
and 205.310, the comingling requirements of Sec. 205.272, and must
maintain records that (1) prove that agricultural products identified
as organic were organically produced and handled, and (2) verify
quantities produced or sold from such agricultural products.
Exclusions Removed From the Proposed Rule
The current exclusion at Sec. 205.101(b)(1), for operations that
only handle packaged organic products, is omitted from the proposed
rule. This amendment will improve traceability of organic products
through the supply chain and reduce the potential mishandling of
packaged organic products by uncertified operations. This modification
also addresses many stakeholders' request that everyone in the supply
chain producing or handling organic products must be certified, with
very limited exceptions. Requiring certification of additional types of
handling operations, including those previously excluded by the
``packaged product'' condition, would substantially enhance the
integrity of organic products by eliminating record gaps in the supply
chain and enabling more complete audit trails. Expanded certification
also would reduce the risk of exposure of packaged organic products to
prohibited methods such as ionizing radiation and fumigation with
prohibited materials, processes that may compromise the product's
organic status.
Clarification of the Retail Operation Exemption
The proposed rule renames the term retail food establishment as
retail operation and expands the definition to include current modes of
direct-to-consumer sales that commonly occur in the modern marketplace.
The term retail operation is defined as an operation that sells
agricultural products directly to final consumers through in-person
and/or virtual transactions. This amended term is required to capture
the full range of direct-to-consumer sales that may occur in the
current era of electronic and internet commerce. ``Virtual
transaction'' is used to describe any form of transaction that does not
occur in person (e.g., telephone, mail-order, and/or online sales).
Additionally, expanding the term to include food and other agricultural
products is necessary to reflect the full range of certified organic
products that may be sold directly to consumers in today's retail
marketplace. Examples of retail operations include but are not limited
to restaurants, delicatessens, bakeries, grocery stores, or any retail
business with a restaurant, delicatessen, bakery, salad bar, bulk food
self-service stations (e.g., grains, nuts), or other eat-in, carry-out,
mail-order, or delivery service of raw or processed agricultural
products.
The OFPA excludes final retailers that do not process agricultural
products from the definition of ``handler'' and ``handling operation.''
(7 U.S.C. 6502). Therefore, these types of retailers are not required
to be certified in order to sell organic products. In the proposed
rule, AMS is modifying and expanding the current provision in the USDA
organic regulations which permits retailers that process raw and ready-
to-eat agricultural products to sell, label, or represent these
products as organic. In the future, under its existing authority, AMS
could consider requirements for the certification of retailers that
process agricultural products intended to be sold, labeled, or
represented as organic. We are retaining the exemption from
certification for retailers that process unless and until we have more
input from stakeholders on the need for and impact of removing this
exemption and recommended standards for retailers.
The proposed rule would exempt retail operations from
certification, including retail operations that sell, but do not
process, organic agricultural products (proposed Sec. 205.101(b)), and
retail operations that process agricultural products previously labeled
for retail sale as organic (proposed Sec. 205.101(c)). These
exemptions are very similar to the current exemption and exclusion for
retail food establishments at current Sec. Sec. 205.101(a)(2) and
(b)(2). To qualify for the exemption at proposed Sec. 205.101(c), any
processing of organic products performed by a retail operation must
occur in connection with the direct sale to the final consumer. This
means that the products must be processed and sold in the same physical
location. An operation processing a product for sale at another site
would require certification. This would include retailers that sell
virtually; the organic products which they sell, label or represent as
organic must have been produced and processed by certified operations.
Retail operations may present risks to organic integrity. For
example, a grocery store may accidentally mix or combine organic and
nonorganic produce of the same type, or they may unintentionally place
an organic label on a shelf that holds nonorganic products. Further,
storing organic produce in a container that was previously used for
nonorganic produce without first cleaning the container may expose the
organic produce to a prohibited pesticide. Therefore, all exempt retail
operations must comply with the requirements of Sec. 205.272, which
describe handling requirements to prevent comingling and contact with
prohibited substances. Additionally, exempt retail operations that
process organic products must follow the labeling provisions of Sec.
205.310, and maintain records to (1) demonstrate that agricultural
products identified as organic were organically produced and handled;
and (2) verify quantities received, sold, or produced from such
agricultural products. Following these requirements will help maintain
organic integrity, even in the absence of certification.
[[Page 47544]]
Exemption for Storage of Organic Agricultural Products
There are many operations that store organic products; however,
these operations are generally considered low-risk because of the type
of activities they perform and because they may be identified in the
organic system plan of a certified operation. Given that these
operations are lower-risk and are subject to oversight by certified
handlers in adjacent segments of the supply chain, AMS proposes
exempting from organic certification operations that only store
agricultural products, but do not process or alter such agricultural
products (proposed Sec. 205.101(e)).\15\ This approach is consistent
with risk-based oversight models.
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\15\ Processing, as defined by 7 CFR 205.2, includes
``packaging. . .or otherwise enclosing food in a container.''
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This exemption would apply to warehouses, storage facilities, and
other operations whose only function is the temporary holding or
storage of organic products, and the associated receiving and loading
of organic products. An operation that processes or alters the organic
products they store would not qualify for the exemption and must be
certified. Storage operations claiming this exemption must not label/
relabel, combine, split, containerize, pack/repack, treat, sort, open,
enclose, or otherwise alter the organic products they handle. Like
other exempt operations, the proposed rule would require storage
operations exempted at proposed Sec. 205.101(e) to comply with the
requirements of Sec. 205.272 for the prevention of commingling and
contact with prohibited substances.
Transport of Organic Agricultural Products
Like storage, transport also qualifies as a low-risk activity and
may be identified in the organic system plan of a certified handler.
Because transport alone is not a handling activity (see 7 U.S.C.
6502(8) and 7 CFR 205.2), operations that only transport organic
products are not required to be certified. Certifying agents have
expressed confusion about which activities constitute transport versus
which activities qualify as handling and, thus, require certification.
Transport commonly refers to the movement of products in commerce; any
activity that alters an agricultural product during transport would
qualify as handling, and would require certification. Other activities
that could occur adjacent to transport include, for example, combining,
splitting, containerizing, packing/repacking, treating, sorting,
opening, enclosing, or labeling/relabeling. These activities are
handling and would require certification. Permitted activity that does
not require certification would be restricted to movement of
agricultural products only.
Certified Operations' Verification and Recordkeeping Responsibilities
The exempt activities described in this proposed rule present
relatively low risk to organic integrity; however, exempted operations
are not without risk. To address this risk, AMS proposes that certified
operations include in their organic system plans monitoring practices
and procedures to verify their supply chains and the organic status of
products they receive (see proposed amendments to Sec. 205.201 and
discussion on Supply Chain Traceability and Fraud Prevention later in
this proposed rule). This includes verifying the organic status of
products that are handled by exempt operations in a supply chain.
Certified operations should carefully review the practices and records
of operations in their supply chain, including transportation and
storage operations. Certified operations that load/sell/export organic
products and certified operations that receive/purchase/import organic
products are ultimately responsible for verifying that organic status
has not been compromised during transport or storage.
In addition to procedures in an organic system plan, certified
operations must also maintain records to support the verification of
organic integrity and facilitate supply chain audits. The current
organic regulations at Sec. 205.103 state that certified operations
``must maintain records concerning the production, harvesting, and
handling'' of their products. Certified operations must keep records of
these activities to ``Fully disclose all activities and transactions of
the certified operation in sufficient detail'' to ``demonstrate
compliance with the Act and the regulations.'' Therefore, to
demonstrate compliance, certified operations must maintain records of
products that were handled by operations in their supply chain,
including transportation and storage operations.\16\
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\16\ 7 U.S.C. 6519(a)(1) ``. . .each person who sells, labels,
or represents any agricultural product as having been produced or
handled using organic methods shall make available. . .all records
associated with the agricultural product.''
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As a best practice, records covering these types of handling
activities should (1) demonstrate that the organic integrity of the
product is maintained during transport and/or storage, and (2) verify
both the quantities and the organic status of the product being
transported and/or stored. Records could include clean truck
affidavits; records of cleaning and sanitizing materials, and
procedures used to clean trucks; bills of lading, manifests,
transaction certificates, shipping records, delivery records, invoices,
lot numbers, and other audit trail documents; and records documenting
the audit trail, chain of custody, tanker seals, wash tags, truck and
trailer numbers. Records such as these can be used by a certified
operation to verify that organic products are properly handled by
exempt transport or storage operations. Records can also be used for
traceability, both by certified operations to verify the source of a
product they receive, and by certifying agents to verify the origin of
a product during a trace-back audit.
These recordkeeping requirements will ensure that certified
operations maintain documents to demonstrate that the organic integrity
of products is not compromised during transport and/or storage.
Additionally, records will show the quantities of organic products
transported and/or stored, and facilitate certifying agents in
performing trace-back and mass-balance audits through a supply chain.
Clarifying what activities that are exempt from certification--and
clarifying recordkeeping responsibility--will enhance accountability
for the integrity of both domestic and imported organic products by
bolstering the NOP's oversight of handlers that affect the status of
organic products.
Request for Comment
AMS seeks comment regarding the proposed amendments to Sec. Sec.
205.2 and 205.100-101 discussed above, including answers to the
following questions:
1. Are there additional activities that should be included in the
proposed definition of handle (i.e., are there additional activities
that require certification)? Are there any activities in the proposed
definition of handle that should be exempt from certification?
2. Are there specific activities not included in the proposed rule
that you believe should be exempt from organic certification?
3. Are there additional requirements that exempt handlers described
in this proposed rule should follow?
4. Activities at ports may present a threat to the integrity of
organic products due to the multiple types of handling activities
performed in these locations. It is common for independent operations
to perform specific physical handling activities within a port (e.g.,
loading, unloading, or transfer of
[[Page 47545]]
packaged, unpackaged, or bulk organic product). The proposed rule would
require certification of these operations, who are often contractors.
What other activities performed at ports should require certification
and why?
2--Imports to the United States
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Section Action Proposed text
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205.2.................................... Add new term................ Organic exporter. The owner or final exporter of the organic product who
facilitates the trade of, consigns, or arranges for the transport/shipping of
the organic product from a foreign country.
205.2.................................... Add new term................ Organic importer of record. The operation responsible for accepting imported
organic products within the United States.
205.273.................................. Add new section............. Imports to the United States.
205.273.................................. Add......................... Each shipment of organic products imported into the United States through U.S.
Ports of Entry must be certified pursuant to subpart E of this part, labeled
pursuant to subpart D of this part, be declared as organic to U.S. Customs and
Border Protection, and be associated with a valid NOP Import Certificate (Form
NOP 2110-1) or equivalent data source.
205.273(a)............................... Add......................... Persons exporting organic products to the United States must request an NOP
Import Certificate, or provide data through an equivalent data source, from a
certifying agent, for each physical shipment of certified organic products
prior to their export. Only certifying agents accredited by the USDA or
foreign certifying agents authorized under an organic trade arrangement may
issue an NOP Import Certificate or approve a listing in an equivalent data
source (e.g., a third-party export system).
205.273(b)............................... Add......................... The certifying agent must review an NOP Import Certificate request, determine
whether the shipment complies with the USDA organic regulations, and issue the
NOP Import Certificate or equivalent within 30 calendar days of receipt if the
shipment complies with the USDA organic regulations.
205.273(c)............................... Add......................... Each compliant organic shipment must be declared as organic to U.S. Customs and
Border Protection through a U.S. Port of Entry by uploading the unique NOP
Import Certificate, or equivalent electronic data entry, into the U.S. Customs
and Border Protection's Automated Commercial Environment system.
205.273(d)............................... Add......................... Upon receiving a shipment with organic products, the organic importer of record
must ensure the shipment is accompanied by a verified NOP Import Certificate
or equivalent; must verify that the shipment contains only the quantity and
type of certified organic product specified on the NOP Import Certificate or
equivalent; and must verify that the shipment has had no contact with
prohibited substances pursuant to Sec. 205.272 or exposure to ionizing
radiation pursuant to Sec. 205.105, since export.
205.273(e)............................... Add......................... The use of the term equivalent in this section refers to electronic data,
documents, identification numbers, databases, or other systems verified as an
equivalent data source to the NOP Import Certificate.
205.300(c)............................... Revise...................... Products produced in a foreign country and exported for sale in the United
States must be certified pursuant to subpart E of this part, labeled pursuant
to this subpart D, and must comply with the requirements in Sec. 205.273,
Imports to the United States.
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AMS proposes amending the USDA organic regulations by adding a new
section (205.273) discussing the use of the National Organic Program
Import Certificate (``NOP Import Certificate''). Currently, NOP Import
Certificates are only required for organic products imported from a
country that the NOP has determined uses an equivalent system of
organic certification, e.g., NOP Import Certificates are currently used
for imports from the European Union, Switzerland, Japan, and South
Korea. This proposed rule would require that any organic agricultural
product imported to the United States be associated with a valid NOP
Import Certificate or equivalent data source. The use of the term
``equivalent'' in this section refers to data and systems that are
created, issued, or used by the United States or foreign governments to
share trade-related information. Allowing for equivalent data and
systems that harmonize with U.S. Government trade systems allows for
the future development of interoperable import and export systems that
facilitate information exchange between governments or authorized
entities.
What is an NOP import certificate?
The NOP Import Certificate, or equivalent, is a type of transaction
certificate, or equivalent data source, that contains detailed
information about the quantity and origin of organic product being
imported into the United States. The purpose of the NOP Import
Certificate is to document the organic status and quantity of a
specific physical shipment of imported organic products. The NOP Import
Certificate is associated with a specific shipment of imported organic
products as it travels from a certified organic exporter in a foreign
country to a certified organic importer in the United States. The NOP
Import Certificate is used to ensure a smooth, auditable business
transaction by documenting that the products in the shipment are
organic and may be sold, represented, and distributed as organic within
the United States.
NOP Import Certificates are currently used for organic products
imported from countries that the NOP has determined to be equivalent
(OMB Approval No. 1651-0022). The USDA has established equivalency with
Canada, the European Union, Switzerland, Japan, South Korea, Taiwan,
and the United Kingdom.\17\ Organic imports from Canada are accompanied
by an attestation statement that the products comply with the terms of
the United States-Canada Organic Equivalency Arrangement. Organic
imports from the European Union, Switzerland, Japan, South Korea,
Taiwan, and the United Kingdom are accompanied by an NOP Import
Certificate. The certifying agent evaluates the request for an NOP
Import Certificate, and upon verification of the organic shipment,
completes and issues an NOP Import Certificate. Form NOP 2110-1 (OMB
Control Number 0581-0191) is currently used for this purpose.
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\17\ The United States-United Kingdom equivalency will be
effective in January 2021.
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[[Page 47546]]
AMS does not currently require NOP Import Certificates for organic
imports from countries that the United States does not have organic
equivalency with. This proposed rule would expand and make compulsory
the use of NOP Import Certificates, regardless of an imported product's
country of origin. Specifically, this proposed rule would require that
all imported products intended to be sold, represented, or labeled as
organic in the United States must be declared as organic to U.S.
Customs and Border Protection (CBP), and that each physical shipment
passing through a U.S. Port of Entry must be associated with an NOP
Import Certificate, or equivalent data source. Requiring an NOP Import
Certificate provides trackable and auditable verification that a
specific shipment of imported organic products complies with the USDA
organic regulations. It will also support investigations if
noncompliant products are exported and misrepresented as organic for
sale in the United States.
Authority and Justification for the Mandatory Use of NOP Import
Certificates
The mandatory use of NOP Import Certificates is authorized by the
OFPA, as amended by the Agriculture Improvement Act of 2018.\18\ The
OFPA specifies what information an NOP Import Certificate must include
(7 U.S.C. 6502(13)), and also stipulates that the NOP Import
Certificate must ``be available as an electronic record'' and captured
in a tracking system maintained by the U.S. Government (7 U.S.C.
6514(d)). The OFPA also provides the Secretary with broad authority to
establish appropriate and adequate enforcement procedures and any other
requirements that the Secretary may determine to be necessary (7 U.S.C.
6506).
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\18\ See sections 10104(b)(3) and 10104(c) of the Agriculture
Improvement Act of 2018, Public Law No: 115-334. Available at:
https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
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Both the OFPA and the USDA organic regulations require certified
operations to maintain and make available to the Secretary records
concerning the production, harvesting, and handling of agricultural
products that are or that are intended to be sold, labeled, or
represented as organic (7 U.S.C. 6519, 7 CFR 205.103, and 7 CFR
205.400(d)). This includes sufficient records to provide an audit trail
to determine the source, type and quantity, transfer of ownership, and
transportation of any agricultural product labeled as organic (7 CFR
205.2). Likewise, both the OFPA and the USDA organic regulations
require certifying agents to maintain and make available to the
Secretary records concerning its activities (7 U.S.C. 6519, 7 CFR
205.501(a)(9), 7 CFR 205.510(b)).
NOP Import Certificate Format and Tracking System
AMS proposes that NOP Import Certificates must be provided in a
standardized electronic format to ensure consistency. AMS anticipates
that Form NOP 2110-1, or an electronic equivalent that provides the
same data, will serve this purpose, because it includes fields for the
information needed to meet the requirements of an NOP Import
Certificate as defined in the OFPA: Origin; destination; the certifying
agent issuing the NOP Import Certificate; harmonized tariff code, when
applicable; total weight; and the organic standard the product was
certified to (7 U.S.C. 6502(13)). For the purposes of uploading and
tracking NOP Import Certificates, Form 2110-1 must be available as an
electronic format to meet the requirements of the OFPA (7 U.S.C.
6514(d)(1)).
The OFPA, as amended by the 2018 farm bill, also states that AMS
must establish a system of tracking NOP Import Certificates, and that
AMS ``may integrate the system into any existing information tracking
systems for imports of agricultural products'' (7 U.S.C. 6514(d) and
6522(c)).\19\ Because the OFPA enables AMS to access information
available in CBP's Automated Commercial Environment system (ACE) (7
U.S.C. 6521(c)), AMS expects that ACE will be used to track and store
NOP Import Certificates, or equivalent electronic data.\20\ ACE is an
automated and electronic system for processing commercial trade data.
ACE is the primary system through which the global trade community
files information about imports and exports so that admissibility into
the United States may be determined by government agencies (including
AMS) to ensure compliance.
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\19\ See section 10104(c) of the Agriculture Improvement Act of
2018, Public Law No: 115-334. Available at: https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
\20\ See sections 10104(h) and (j) of the Agriculture
Improvement Act of 2018, Public Law No: 115-334. Available at:
https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
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Use of the NOP Import Certificate
The proposed rule includes two new terms, organic exporter and
organic importer of record, that describe businesses that facilitate
the international trade of organic products. An organic exporter is
responsible for facilitating the trading, selling, consigning, shipping
or exporting of organic product from a foreign country to the United
States. An organic exporter must be certified organic by certifying
agents accredited by the USDA or certifying agents authorized by a
trade arrangement, and must maintain records required under Sec.
205.103. Organic exporters may be the final physical handler of organic
products within a foreign country or they may be the entities that
facilitate, sell, or arrange the sale of organic products shipped to
the United States.
An organic importer of record is the entity responsible for
receiving organic products within the United States. An organic
importer of record must be certified and must maintain records required
under 7 CFR 205.103. The proposed rule would specify that there is a
consistent party, the organic importer of record, that is responsible
for ensuring the compliance of organic agricultural products imported
into the United States.
This proposed rule would require that a certified organic exporter
sending organic products to the United States request an NOP Import
Certificate, or equivalent, from their certifying agent for the organic
products intended for export. As discussed in the proposed amendments
to the USDA organic regulation at Sec. 205.2, Terms defined, and Sec.
205.101, Exemptions from certification, entities that facilitate the
sale of organic products and arrange for the transport of organic
products into the United States (e.g., organic exporters) would need to
be certified. The request for an NOP Import Certificate must include
information required for the organic exporter's certifying agent to
complete the NOP Import Certificate or equivalent.
The organic exporter's certifying agent would issue the NOP Import
Certificate, or equivalent, provided it has verified that the shipment
complies with the USDA organic regulations or an equivalent standard.
This means that: (1) The information submitted on the NOP Import
Certificate, or equivalent, is accurate, including confirmation of the
organic status of each product listed on the NOP Import Certificate;
and (2) the final handler has the capacity to produce or handle the
quantity of organic product to be exported. The final handler would
typically be the exporter or the last handler that processed the
product. Verifying that the product complies with the organic standards
includes, but is not limited to, verifying that the import has not been
exposed to a prohibited substance, treated with a prohibited substance
as a
[[Page 47547]]
result of fumigation or treated with ionizing radiation at any point in
the products' movements across country borders.
Upon receiving a shipment, an organic importer of record must
verify that the organic product(s) comply with the USDA organic
regulations. This includes, but is not limited to, verifying that the
import has not been treated with a prohibited substance as a result of
fumigation or treated with ionizing radiation at any point in the
products' movements across country borders.
Both the organic exporter and organic importer of record must
maintain records of NOP Import Certificates, and these records must be
available for inspection by the NOP and certifying agents in accordance
with Sec. 205.103.
Only certifying agents accredited by the USDA, or foreign
certifying agents authorized by a trade arrangement, may prepare and
issue an NOP Import Certificate or equivalent. Once completed by the
certifying agent, an NOP Import Certificate or equivalent is provided
to the organic exporter, and the organic exporter must provide the data
associated with the NOP Import Certificate to CBP by uploading the data
into the ACE system as an electronic record.
An NOP Import Certificate, or equivalent, would also require use of
the 10-digit NOP operation ID, or equivalent ID, name, and address of
the organic importer of record in the United States, and the 10-digit
NOP operation ID, or equivalent ID issued by a foreign certifying agent
authorized under a trade arrangement, for the organic exporter of the
product to be exported to the United States. The NOP Operation ID, or
an equivalent ID, is a critical piece of data because it is a unique
number generated in the Organic INTEGRITY Database for certifying
agents accredited by the USDA, or in an equivalent system for foreign
certifying agents authorized under a trade arrangement. This unique ID
for each certified operation will link the exported organic product to
the organic importer of record in the United States. This will
strengthen the audit trail by ensuring that handlers on both sides of
the transaction are known to Federal agents and can be linked when an
organic product is imported into the United States.
AMS acknowledges the concern that using NOP Import Certificates may
slow the importation of organic product. Therefore, AMS is requiring
that organic imports that pass through U.S. Ports of Entry be
associated with, but not accompanied by, an NOP Import Certificate.
This means that a shipment containing organic products may enter the
United States without an NOP Import Certificate at the time of entry.
However, the NOP Import Certificate, or equivalent data, must be
uploaded into the ACE system within 10 calendar days of the shipment
entering the United States. This is consistent with existing trade
filing timeframes in ACE using the Entry Summary process.\21\ AMS
expects that this 10-day timeframe will result in little to no impact
to the timely importation of organic products. Regardless of when an
NOP Import Certificate is completed, the organic exporter and organic
importer of record are fully accountable for the compliance of the
imported product(s).
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\21\ CBP Form 7501: Entry Summary. Available on the U.S. Customs
and Border Protection website: https://www.cbp.gov/trade/programs-administration/entry-summary/cbp-form-7501.
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Cooperation With U.S. Customs and Border Protection
The OFPA, as amended by the Agriculture Improvement Act of 2018,
requires the establishment of an Organic Agricultural Product Imports
Interagency Working Group, consisting of members of both the USDA and
CBP (see 7 U.S.C. 6521a).\22\ The mandatory use of NOP Import
Certificates supports the working group's goal to ensure the compliance
of organic agricultural products imported to the United States, and
builds upon ongoing cooperation between the USDA and CBP.
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\22\ See section 10104(i) of the Agriculture Improvement Act of
2018, Public Law No: 115-334. Available at: https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
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AMS is working with CBP to verify that shipments of imported
organic products are associated with unique NOP Import Certificates. In
April 2020, the electronic version of the NOP Import Certificate (or
``message set'') was deployed in ACE as an optional filing step for
organic imports. The use of the electronic NOP Import Certificate will
be mandatory when the SOE final rule is implemented.
AMS expects some of the information collected via the NOP Import
Certificate may be modified. In addition to the NOP Operation ID
mentioned above, AMS is considering adding fields for the U.S. Customs
Entry Number and the Purchase Order (PO) number to assist with tracking
organic imports.
Other fields may be eliminated to avoid collecting duplicate
information already collected through the ACE database.
Once established, the availability of the electronic NOP Import
Certificate in ACE would notify CBP officials of organic shipments and
provide AMS with more data to identify specific shipments of organic
imports.
Alignment With Other Supply Chain Traceability Norms
One of the goals of this action is to harmonize USDA regulatory
requirements for importing organic products with international
guidelines and norms. NOP considered international standards
established by the Codex Alimentarius Commission (Codex) \23\ and norms
published by the International Federation of Organic Agriculture
Movements (IFOAM).\24\ Both provide for and support the use of
transaction shipment certificates such as the NOP Import Certificate.
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\23\ Section 7 of the Codex Guidelines for the Production,
Processing, Labelling and Marketing of Organically Produced Foods
recommends imported organic products to be marketed only where the
competent authority or designated body in the exporting country has
issued a certificate of inspection stating that the lot designated
in the certificate was obtained within an organic system of
production, preparation, marketing and inspection.
\24\ IFOAM Norms define a transaction certificate as a
``document issued by a certification body or by the operator,
declaring that a specified lot or consignment of goods is
certified.''
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Future Harmonization With Sanitary and Phytosanitary Data Systems
Further, the use of health certificates, sanitary certificates,
phytosanitary certificates, and other regulatory requirements in place
to contain certain plant and animal pests or diseases may offer a
possible resource for the NOP and other government agencies to document
the movement of organic products across national borders. Over time, it
is expected that the United States and foreign countries will automate
and harmonize systems to support the more seamless exchange of
electronic import and export data in organic trade. AMS will continue
to work to improve, adapt to, and support seamless electronic paperless
supply chain traceability and transparency using the International
Trade Data System (ITDS) and other technologies as they evolve.
Request for Comment
AMS seeks comment regarding the use of NOP Import Certificates
discussed in this proposed rule, including answers to the following
questions:
1. Is the 30-day timeframe for certifying agents to review and
issue an NOP Import Certificate appropriate? Why or why not?
2. How could the mode of transportation and frequency of shipments
affect the use of the NOP Import Certificate?
[[Page 47548]]
3--Labeling of Nonretail Containers
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Section Action Proposed text
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205.307.................................. Revise title................ Labeling of nonretail containers.
205.307 (a).............................. Revise...................... Nonretail containers used to ship or store certified organic product must
display the following:
(1) The term, ``100 percent organic,'' ``organic,'' or ``made with organic
(specified ingredients or food group(s)),'' as applicable, to identify the
product;
(2) The statement, ``Certified organic by (name of certifying agent),'' or
similar phrase, to identify the name of the certifying agent that certified
the producer of the product, or, if processed, the certifying agent that
certified the last handler that processed the product; and
(3) The production lot number of the product, shipping identification, or other
information needed to ensure traceability.
205.307 (b).............................. Revise...................... Nonretail containers used to ship or store certified organic product may
display the following:
(1) Special handling instructions needed to maintain the organic integrity of
the product;
(2) The USDA seal. Use of the USDA seal must comply with Sec. 205.311;
(3) The name and contact information of the certified producer of the product,
or if processed, the last certified handler that processed the product;
(4) The seal, logo, or other identifying mark of the certifying agent that
certified the producer of the product, or if processed, the last handler that
processed the product; and/or
(5) The business address, website, and/or contact information of the certifying
agent.
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Accurate labeling of non-retail containers used to ship or store
organic products is critical to organic integrity. Detailed labeling
reduces misidentification and mishandling, facilitates traceability
through the supply chain, reduces the potential for organic fraud, and
allows accurate identification of organic product by customs officials
and transportation agents. Therefore, AMS proposes amending Sec.
205.307 to add new requirements for the labeling of nonretail
containers.
If implemented, this proposed action will require that nonretail
containers used to ship or store organic products are labeled with two
additional pieces of information: (1) A statement identifying the
product as organic; and (2) the name of the certifying agent that
certified either the producer of the product, or, if the product is
processed, the last handler that processed the product. In addition,
the current requirement to show the production lot number on nonretail
containers will be expanded, the option to include the name of the
certified operation that produced or handled the product will be added,
and the use of the USDA seal on nonretail containers will be clarified.
Nonretail containers are defined under Sec. 205.2 of the USDA
organic regulations as ``any container used for shipping or storage of
an agricultural product that is not used in the retail display or sale
of the product.'' Nonretail containers are used to ship or store either
packaged or unpackaged organic products, and may include the following:
1. Produce boxes, totes, bulk containers, bulk bags, flexible bulk
containers, harvest crates and bins; and
2. Boxes, crates, cartons, and master cases of wholesale packaged
products.
Section 205.307 does not apply to large nonretail containers that
are associated with a mode of transportation or storage, such as
trailers, tanks, railcars, shipping containers, grain elevators/silos,
vessels, cargo holds, freighters, barges, or other method of bulk
transport or storage. As labeling of these types of large containers
may be impractical, they do not need to be labeled with the information
described in Sec. 205.307. However, this information must be evident
in documentation associated with and traceable to the container, to
ensure that organic integrity is maintained during transport, storage,
and handling.
The current regulations require only one piece of information on
nonretail container labeling: A production lot number. Other
information elements--such as identification of the product as organic,
certifying agent information, and special handling instructions--are
optional, but not required on nonretail container labels. Lack of this
information creates gaps in the organic chain of custody, complicates
the verification of organic integrity, and increases the vulnerability
to organic fraud.
Nonretail containers labeled with only a production lot number
provide no identifying information about the entity that provided that
number. This can create problems when nonretail containers are used to
store or ship unlabeled unpackaged product (e.g., produce or bulk
commodities), because a production lot number alone is not sufficient
to immediately identify the product as organic or conventional. An
organic product stored or shipped in a nonretail container labeled with
only a production lot number is at risk of having its organic integrity
compromised, including treatment with a prohibited substance during
border crossings, or comingling with conventional product during
transport and aggregation.
This proposed amendment will provide an additional safeguard for
organic integrity by alerting certifying agents, handlers, and border
agents to the contents of nonretail containers, and by helping prevent
unintentional mishandling of organic product. This proposed action also
aligns with the OFPA requirement that an agricultural product which is
sold or labeled as organic must have been produced and handled without
prohibited synthetic chemicals (7 U.S.C. 6504(1)).
Some stakeholders have asked AMS to limit the applicability of
Sec. 205.307 to packaged organic products described in Sec. Sec.
205.303-304, i.e., products labeled ``100% organic,'' ``organic,'' or
``made with organic (specified ingredients or food group(s)).'' AMS
believes that amending the regulations to require a statement of
organic status on all nonretail containers, including those which
contain unpackaged and/or unlabeled product, is a more comprehensive
and enforceable solution. Further, this will support the requirement
for certified operations to maintain auditable records (Sec.
205.103(b)(2)). An audit trail, as defined by the regulations, includes
documents that show the source, transfer of ownership, and
transportation of any agricultural product with an organic label (Sec.
205.2). Obscuring the ``organic'' status of any product during a
segment of the supply
[[Page 47549]]
chain disrupts the audit trail. By clearly stating that nonretail
containers must be labeled with the product's organic status and the
name of the certifying agent (both currently optional), this proposed
amendment will ensure that all organic product in nonretail containers
is identifiable.
Organic products often pass through multiple handlers in the supply
chain as they move from production source to consumer. However, the
proposed rule does not require nonretail container labels to list the
certifying agent of every operation that handled the product. The
proposed amendments to Sec. 205.307 require that nonretail container
labels list either (1) the certifying agent that certified the
producer, or, if the product is processed, (2) the certifying agent
that certified the operation that last processed the product.\25\ This
means that:
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\25\ See definition of processing in Sec. 205.2 of the USDA
organic regulations.
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1. If a product is not processed between production and sale, then
the certifying agent of the producer must be listed on the nonretail
container label;
2. If a product is processed after production, then the certifying
agent of the processer must be listed on the nonretail container label;
3. If a product is processed sequentially by different operations
(A, B, and C) after production, then only the certifying agent of the
last processer (operation C) must be listed on the nonretail container
label; and
4. The certifying agents of operations that handle, but do not
process, organic products after production do not need to be listed on
the nonretail container label.
Listing the certifying agent of the producer or last processer on
nonretail container labels will provide a point of contact to verify
the organic status of a product, without adding surplus information to
the label. However, to maintain a complete audit trail, all operations
that produced, processed, handled, or transported the organic product
must be visible in the product's audit trail documentation.
Clearly labeling a nonretail container with organic identification,
certifying agent, and production lot number will ease product
traceability during audits, help to prevent unintentional contact with
prohibited substances (e.g., fumigation) and comingling with
conventional product, and help to ensure accurate representation of the
product at the point of sale. In addition, this proposed amendment is
also expected to reduce the vulnerability to organic fraud by ensuring
that organic product status is visible throughout the supply chain.
Request for Comment
AMS seeks comment regarding the proposed amendments to the labeling
of nonretail containers, specifically whether or not the certified
operation that produced or last processed the product must be listed
(i.e., not optional) on all nonretail container labels.
4--On-Site Inspections
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Section Action Proposed text
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205.403(b)-(e)........................... Redesignate................. Redesignate paragraphs (b)-(e) as paragraphs (c)-(f).
205.403(b)............................... Add......................... Unannounced inspections.
205.403(b)(1)............................ Add......................... A certifying agent must, on an annual basis, conduct unannounced inspections of
a minimum of five percent of the operations it certifies, rounded up to the
nearest whole number.
205.403(b)(2)............................ Add......................... Certifying agents must be able to conduct unannounced inspections of any
operation it certifies and must not accept applications or continue
certification with operations located in areas where they are unable to
conduct unannounced inspections.
205.403(c)............................... Redesignate as 205.403(d)... Verification of information. The on-site inspection of an operation must
verify:
205.403(d)(4)............................ Add......................... That sufficient quantities of organic product and ingredients are produced or
purchased to account for organic product sold or transported; and
205.403(d)(5)............................ Add......................... That organic products and ingredients are traceable by the operation from the
time of production or purchase to sale or transport; and that certifying
agents can verify traceability back to the source per Sec. 205.501(a)(21).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unannounced Inspections
Unannounced inspections are a critical enforcement tool for
ensuring ongoing compliance by organic operations. AMS proposes
amending Sec. 205.403 of the organic regulations to require a minimum
number of unannounced inspections that certifying agents must perform
annually. The current regulations allow for, but do not require,
unannounced inspections, leaving this to the discretion of the
certifying agent. NOP has issued an instruction to certifying agents
(NOP Instruction 2609) on unannounced inspections, which recommends
that certifying agents conduct unannounced inspections of 5 percent of
their total certified operations per year as a tool in ensuring
compliance with the regulations.\26\ This NOP instruction was supported
by a recommendation made by the NOSB in December 2011.\27\ The majority
of USDA-accredited certifying agents currently complete unannounced
inspections at this frequency.\28\ This provision would make these
inspections a regulatory requirement.
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\26\ NOP 2609, Instruction, Unannounced Inspections. September
12, 2012. Available in the NOP Program Handbook: https://www.ams.usda.gov/sites/default/files/media/2609.pdf.
\27\ NOSB Recommendation, Unannounced Inspections. December 2,
2011. Available on the AMS website: https://www.ams.usda.gov/sites/default/files/media/NOP%20CACC%20Final%20Rec%20on%20Unannounced%20Inspections.pdf.
\28\ 42 of the 49 USDA-accredited certifying agents the NOP
audited in calendar years 2018 and 2019 completed unannounced
inspections of 5% of the operations they certify.
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Unannounced inspections are an effective and useful tool in the
USDA organic regulations to ensure compliance across certified
operations and bolster consumer trust in the organic label. Therefore,
AMS is proposing to codify a requirement for certifying agents to
conduct a minimum number of unannounced inspections annually of
certified operations. This proposed amendment, consistent with NOP
Instruction 2609, would require certifying agents to conduct
unannounced inspections annually on a minimum of 5 percent of
operations they certify. The operations may be selected randomly, risk-
based, and/or in
[[Page 47550]]
response to a complaint or investigation. The proposed requirement
specifies that the number of unannounced inspections should be
calculated by rounding up to the nearest whole number, so that
certifying agents with very few certified operations (e.g., under 20
operations) would still be required to conduct at least one unannounced
inspection per year.
The OFPA requires that organic operations make their records
available at all times for inspection by the Secretary, the certifying
agent, and State officials (7 U.S.C. 6506(b)(1)(B)). Additionally, the
OFPA requires that certifying agents employ a sufficient number of
inspectors to implement the organic regulations (7 U.S.C. 6515(b)). By
establishing a baseline requirement for unannounced inspection
activities, AMS can verify that certifying agents employ a sufficient
number of inspectors (i.e., enough inspectors to perform annual
inspections and unannounced inspections) and will ensure, through
unannounced inspections, that organic operations keep records related
to their organic activities and comply with other requirements of the
OFPA and the USDA organic regulations.
AMS also proposes a requirement that certifying agents only accept
applications for certification from operations located where the
certifying agent is able to conduct unannounced inspections. Further,
certifying agents must be able to conduct unannounced inspections of
any operation it continues to certify. To ensure consistency,
transparency, and accountability, certifying agents would be expected
to describe the areas where they operate in the written materials they
provide to both applicants and certified operations, and review the
locations of all operations during their application review or annual
review. This proposed requirement is also based on recommended practice
in the NOP Instruction 2609 and was recommended by the NOSB in December
2011.
AMS proposes this requirement to ensure that all certified
operations are subject to unannounced inspections, regardless of
location. A certifying agent that cannot conduct unannounced
inspections in an applicant's or certified operation's location due to
logistical challenges, staffing, security, or other reasons, is
considered to not have or no longer have the administrative capacity
for certification activities in that area, consistent with Sec.
205.501(a)(19). In this case, the certifying agent would need to
document the specific reasons it does not have, or no longer has, the
administrative capacity to certify in that area, and would need to
inform the applicant or certified operation to seek certification from
another certifying agent. If new certification is not obtained, the
operation's certification would be suspended. This process would be
similar to the current procedures used when a certifying agent
surrenders its accreditation or is suspended; however, it would be
limited to a specific well-defined location, with justifications
specific to that area.
Supply Chain Audits During On-Site Inspections
Additionally, AMS proposes two new requirements in Sec. 205.403 to
clarify the responsibilities of inspectors and certifying agents
related to on-site inspections. AMS has consistently provided training
to certifying agents which specifies that supply chain audits must be
conducted at on-site inspections, but the types of audits required are
not explicit in the current regulations. Audits can help detect organic
fraud and should be routine practice during inspections. These proposed
audit requirements are needed to ensure that AMS can take appropriate
action against certifying agents that are not conducting adequate
audits during inspections.
First, AMS proposes a requirement that certifying agents must
verify that the quantity of organic product sold does not exceed the
quantity of organic product that is produced or purchased. Second, AMS
proposes a requirement that certifying agents verify that organic
products and organic ingredients are traceable from the time of
production or purchase to the time of sale or movement of product from
the operation and vice versa. These new verification requirements are
also referred to as ``mass-balance'' and ``trace-back'' audits.
Certifying agents should determine the minimum number of products to
review to assess whether the operation is compliant with the
regulations. This should involve a risk-based sampling of products that
span different time ranges and products.
For example, the inspection of a grain milling operation is to
include an examination of the transaction and processing records for
various commodities and time ranges. An inspection of a manufacturer of
organic frozen meals, or other multi-ingredient products, is to examine
records for various types of products to cover a range of ingredients
and production dates.
During an on-site inspection, a certifying agent may also choose to
conduct a broader review of an entire supply chain for an operation's
product(s), to fulfill the proposed requirement at Sec. 205.501(a)(21)
to conduct risk-based supply chain audits according to the certifying
agent's written procedures to meet that audit requirement (see proposed
Sec. 205.504(b)(7)). Full supply chain audits are discussed in more
detail later in this proposed rule.
The OFPA requires that organic operations maintain all records
associated with the production and handling of organic products and
make these records available to certifying agents at all times (7
U.S.C. 6519(a) and 6506(b)(1)(B)). The proposed inspection requirements
support the review and verification of these required records.
5--Certificates of Organic Operation
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Section Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.2.................................... Add new term................ INTEGRITY. The National Organic Program's electronic, web-based reporting tool
for the submission of data, completion of certificates of organic operation,
and other information, or its successors.
205.404(b)............................... Revise...................... The certifying agent must issue a certificate of organic operation. The
certificate of organic operation must be generated from INTEGRITY and may be
provided to certified operations electronically.
205.404(c)............................... Redesignate................. Redesignate as paragraph (d).
205.404(c)............................... Add......................... In addition to the certificate of organic operation provided for in Sec.
205.404(b), a certifying agent may issue its own addenda to the certificate of
organic operation. If issued, any addenda must include:
(1) Name, address, and contact information for the certified operation;
[[Page 47551]]
(2) The certified operation's unique ID number/code that corresponds to the
certified operation's ID number/code in USDA Organic INTEGRITY;
(3) A link to USDA Organic INTEGRITY or a link to the certified operation's
profile in USDA Organic INTEGRITY, along with a statement, ``You may verify
the certification of this operation at USDA Organic INTEGRITY,'' or a similar
statement;
(4) Name, address, and contact information of the certifying agent;
(5) ``Addendum issue date;'' and
(6) ``Addendum expiration date,'' which must not exceed the expiration date of
the certificate of organic operation.
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The certificate of organic operation (``organic certificate'')
communicates information about the organic certification of an
operation and the raw and processed products it is permitted to
represent as organic. The proposed rule would require certifying agents
to provide organic certificates that are uniform in appearance. To
achieve this uniformity, the proposed rule would require that
certifying agents create and provide organic certificates that are
generated from a USDA-hosted electronic web-based system known as the
Organic INTEGRITY Database (``INTEGRITY''). In this way, AMS would be
responsible for the functionality of INTEGRITY and ensure consistent
content and style of all organic certificates. Buyers of organic
products would be able to recognize and validate legitimate organic
certificates. This is currently difficult due to wide variability in
the content and style of certifying agent-generated organic
certificates.
The appearance and format of current organic certificates vary
depending upon which certifying agent issued the organic certificate.
Currently, AMS accredits almost 80 certifying agents; only a few create
organic certificates through INTEGRITY. As a result, more than 70
distinct formats of organic certificates exist in the market. This
variation increases the chance of alteration and organic fraud. In
addition, AMS consistently cites noncompliances to certifying agents
who do not currently include all the required information on their own
organic certificates. Of the 49 USDA-accredited certifying agents
audited by the NOP in calendar years 2018 and 2019, 16 were cited for
issuing organic certificates not consistent with USDA organic
regulation and instruction. The use of a uniform organic certificate
generated through INTEGRITY would eliminate these inconsistencies.
The changes are proposed under AMS' authority provided in the OFPA
to establish a program for organic certification (7 U.S.C. 6503(a)) and
to facilitate interstate commerce of organic foods (7 U.S.C. 6501(3)).
The proposed changes are also consistent with recommendations made by
the NOSB between 2005 and 2007, including a recommendation that all
certifying agents use a common database to issue and maintain organic
certificates and that organic certificates include expiration
dates.\29\
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\29\ NOSB Formal Recommendation: Information on Certificates of
Organic Operation, March 2005: https://www.ams.usda.gov/sites/default/files/media/NOSB%20Rec%20Standardize%20Organic%20Certifications%20Certificates.pdf.
NOSB Formal Recommendation: Expiration Dates on Certificates of
Organic Operation, November 2006: https://www.ams.usda.gov/sites/default/files/media/NOP%20Final%20Rec%20Use%20of%20Expiration%20Dates%20on%20Certificates%20of%20Organic%20Op.pdf.
NOSB Formal Recommendation: Standardized Certificates, November
2007: https://www.ams.usda.gov/sites/default/files/media/NOP%20Final%20Rec%20Standardization%20of%20Certificates.pdf.
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The Organic INTEGRITY Database
The OFPA was amended in 2014 to, among other things, require the
USDA to modernize database and technology systems. To that end, the NOP
created the Organic Integrity Database. INTEGRITY contains information
about certified operations as well as information about operations that
have surrendered their organic certification or had their organic
certification suspended or revoked. The data or information is provided
directly from certifying agents. The information can be viewed and
searched by the general public online at https://organic.ams.usda.gov/Integrity/Default.aspx.
INTEGRITY and Organic Certificates
In 2016, NOP enhanced the functionality of INTEGRITY to allow for
the generation of organic certificates. When the currently optional
function is activated, INTEGRITY generates a one-page organic
certificate and an accompanying detailed product list (together
referred to as the ``organic certificate''). Few certifying agents
currently use INTEGRITY to generate organic certificates. This proposed
rule would require all certifying agents to generate organic
certificates through INTEGRITY. Foreign-based certifying agents that
are accredited to and certify operations to the USDA organic
regulations would be required to enter data in INTEGRITY to generate
the organic certificates for USDA-certified operations. The proposed
changes would adopt a March 2005 NOSB recommendation that the NOP
establish a common database for all certifying agents to issue and
maintain organic certificates and that the database allow certifying
agents to upload data from their existing systems.\30\ INTEGRITY is the
system that certifying agents would use to perform these functions.
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\30\ NOSB Formal Recommendation: Information on Certificates of
Organic Operation; March 2005: https://www.ams.usda.gov/sites/default/files/media/NOSB%20Rec%20Standardize%20Organic%20Certifications%20Certificates.pdf.
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Once created in INTEGRITY, an organic certificate is available
online via a unique link where it can be electronically downloaded or
printed as a hard copy. A permalink to the online certificate is
included on every organic certificate, including downloaded and printed
organic certificates. If an operation's certification has been
suspended, revoked, or surrendered, information from the linked web
page will indicate that a valid organic certificate is no longer
available.
AMS expects the proposed changes would promote access to robust
information about individual operations and support timely verification
of the organic status of operations and products. Additionally, we
expect the changes would encourage a move toward sharing of real-time
electronic documents and away from paper-based documents, which can
quickly become outdated and can be more easily falsified. AMS also
expects that the proposed change would reduce the administrative burden
on operations in the supply chain that must verify the validity of
organic certificates,
[[Page 47552]]
especially for companies that purchase from many different organic
operations.
Certifying agents that are not currently using INTEGRITY to
generate organic certificates would need to modify their practices to
routinely enter information in INTEGRITY before issuing organic
certificates. Specifically, these certifying agents may need to provide
additional information in INTEGRITY to populate all fields that appear
on the organic certificate, including: Effective date of certification
status, scope of organic certification (e.g., crops, handling), details
about certified products (e.g., organic labeling category, brands),
acreage, and livestock details. AMS would be responsible for the
functionality of INTEGRITY, including the style and content of organic
certificates.
Expiration Dates on Organic Certificates
The USDA organic regulations do not currently require expiration
dates on organic certificates, and an operation's organic certification
does not expire--once granted, it may only be suspended, revoked, or
surrendered. Through this proposed rule, AMS intends to include
certificate expiration dates on the organic certificates generated via
INTEGRITY. AMS sees this as an important measure to establish a clear
and consistent method for assessing whether an organic certificate is
current and valid. This change was recommended by the NOSB in a
November 11, 2006 recommendation titled ``Expiration Dates on
Certificates of Organic Operation.'' \31\ Expiration dates would ensure
the data on an organic certificate is up to date and current. Using
current (i.e., unexpired) certificates would support verification of an
operation's organic status. Expiration dates are intended to prompt the
generation of an updated organic certificate, rather than to void or
have any effect on the operation's certification status; an operation
could remain certified even if their organic certificate has expired.
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\31\ NOSB Formal Recommendation: Expiration Dates on
Certificates of Organic Operation, November 2006: https://www.ams.usda.gov/sites/default/files/media/NOP%20Final%20Rec%20Use%20of%20Expiration%20Dates%20on%20Certificates%20of%20Organic%20Op.pdf.
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AMS intends to allow organic certificates to remain valid for 12
months from the date they are issued. The expiration date would be
calculated automatically by INTEGRITY and appear on all organic
certificates. Certifying agents could validate information and create a
new organic certificate in INTEGRITY at any time to generate a new
organic certificate with a new expiration dated 12 months from the
creation of the certificate. AMS believes this flexibility would allow
certified operations to obtain valid organic certificates from their
certifying agent in a timely fashion. Operations that are certified
(i.e., that have not surrendered their certification or had their
certification suspended or revoked) would continue to have a right to
obtain a valid organic certificate from their certifying agent to
demonstrate their certification.
Allowance for Additional Addenda to Certificates of Organic Operation
AMS recognizes that certifying agents have invested in systems to
create their own unique addenda to organic certificates; AMS is not
seeking to eliminate these unique sources of value offered by
certifying agents. Under the proposed rule, certifying agents could
continue to provide their own certification addenda that would
communicate additional information about an operation's certification
in a different format than generated by INTEGRITY.
For example, an addendum may include information about the
compliance of the operation's crops or products with various
international organic standards that may not be included on the
INTEGRITY organic certificate. AMS is proposing six required elements
(proposed Sec. 205.404(c)) on any organic certificate addenda issued
by certifying agents to deter organic fraud and provide consistency
across certifying agents. Primarily, the proposed requirements are
intended to ensure that someone viewing the document is aware that the
certification may be verified in INTEGRITY.
As with organic certificates from INTEGRITY, this proposed rule
requires that any organic certificate addenda include an expiration
date. Certifying agents would need to ensure that the expiration date
of the addendum does not extend beyond the expiration date of the most
recent organic certificate generated by INTEGRITY, to ensure an
operation does not simultaneously possess a valid addendum and an
expired organic certificate, which could cause confusion.
Request for Comment
AMS seeks comment on the proposed amendments regarding certificates
of organic operation discussed above, including answers to the
following questions:
1. How frequently should accredited certifying agents update the
information in an operation's organic certificate?
2. Should a minimum reporting frequency (e.g., monthly, quarterly,
etc.) be added to the regulations?
3. Should an expiration date be included on all certificates of
organic operation? Would this make them more useful?
6--Continuation of Certification
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Section Action Proposed text
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205.406(a)............................... Revise...................... To continue certification, a certified operation must annually pay the
certification fees and submit the following information to the certifying
agent:
(1) A summary statement, supported by documentation, detailing any deviations
from, changes to, modifications to, or other amendments made to the organic
system plan submitted during the previous year; and
(2) Any additions or deletions to the previous year's organic system plan,
intended to be undertaken in the coming year, detailed pursuant to Sec.
205.201;
(3) Any additions to or deletions from the information required pursuant to
Sec. 205.401(b); and
(4) Other information as deemed necessary by the certifying agent to determine
compliance with the Act and the regulations in this part.
205.406(b)............................... Revise...................... The certifying agent must arrange and conduct an on-site inspection, pursuant
to Sec. 205.403, of the certified operation at least once per calendar year.
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[[Page 47553]]
AMS proposes amending Sec. 205.406 to clarify the annual update
requirements for certified operations and to clarify that certifying
agents must conduct annual inspections of certified operations.
The current regulations require that certified operations annually
submit an updated organic production or handling system plan (Sec.
205.400(b)). Some certifying agents require that certified operations
submit an organic system plan (OSP) in its entirety every year, while
other certifying agents only require that operations annually submit
revisions to the OSP. Clarifying in the regulations that operations are
only required to submit sections of the OSP that have changed will
eliminate unnecessary paperwork without compromising oversight of
organic operations. The NOP previously described this approach in
published certifying agent Instructions (NOP 2615 and NOP 2601).\32\
These proposed changes are necessary to ensure legal enforceability,
consistent practices between certifying agents, and reduce the
paperwork burden of organic certification. The proposed changes in this
section will not impact the requirements for certified operations to
maintain an updated OSP or the requirement for an operation to notify
their certifying agent of changes in their operation that may affect
its compliance with the organic regulations (Sec. 205.400(f)).
Further, the on-site inspection must verify that the entire OSP is
implemented as described.
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\32\ NOP 2601 The Organic Certification Process, December 16,
2013: https://www.ams.usda.gov/sites/default/files/media/2601.pdf.
NOP 2615 Organic System Plans, Organic System Plan Updates, and
Notification of Changes, December 16, 2013: https://www.ams.usda.gov/sites/default/files/media/2615.pdf.
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AMS also proposes removing current paragraph Sec. 205.406(a)(3) to
reduce paperwork and simplify the certification process. Section
205.406(a)(3) requires that certified operations provide, along with
their annual update, an update on the correction of minor
noncompliances previously identified by the certifying agent as
requiring correction for continued certification. This requirement is
duplicative and unnecessary, as certifying agents (when issuing a
notice of noncompliance) must specify a date by which a certified
operation must rebut or correct noncompliances (Sec. Sec.
205.662(a)(3) and 205.404(a)). Certifying agents should establish this
due date in accordance with the severity of the noncompliance. If a
certified operation does not resolve noncompliances by the due date,
their certifying agent should take further action (i.e., issue a notice
of proposed suspension); therefore, AMS sees no benefit to requiring a
partial response (i.e., an update) as part of the annual renewal. While
removing this requirement, AMS proposes to maintain the allowance in
this section for certifying agents to require other information from
certified operations during the annual renewal process that they
determine is necessary to assess compliance. AMS believes this will
provide certifying agents with the flexibility they require to verify
compliance.
Additionally, AMS proposes revising paragraph Sec. 205.406(b) to
simplify the regulatory text and to clarify that inspections are to be
conducted on an annual basis. Current requirements at paragraph (b)
could be interpreted to mean that an operation may be inspected once
every 18 months on an ongoing basis (i.e., two inspections over a 36-
month period compared to three inspections if conducted annually).
Revision of paragraph (b) would clarify that all certified operations
must be inspected at least annually, regardless of (1) when the
certified operation was last inspected and (2) when, or if, the
certified operation provided its annual updates. Additional inspections
may be needed to ensure full compliance of complex operations (e.g.,
during and outside the grazing season for livestock operations). This
requirement does not replace the need for additional unannounced
inspections.
This revision would allow certifying agents flexibility to conduct
on-site inspections at any time during the year (essential for
verifying activities throughout the growing season, for example) while
ensuring that an inspection is conducted every single calendar year.
Annual inspection cycles are essential to vigilant oversight and AMS
seeks to eliminate confusion around and deviations from alternative
timing of on-site inspections.
7--Paperwork Submissions to the Administrator
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Section Current text Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.405(c)(3)......................... Provide notice of approval or denial to Remove..................
the Administrator, pursuant to Sec.
205.501(a)(14).
205.501(a)(15)........................ Submit to the Administrator a copy of: Revise.................. Maintain current and accurate data in
INTEGRITY for each operation which it
certifies;
(i) Any notice of denial of certification
issued pursuant to Sec. 205.405,
notification of noncompliance,
notification of noncompliance correction,
notification of proposed suspension or
revocation, and notification of
suspension or revocation sent pursuant to
Sec. 205.662 simultaneously with its
issuance; and
(ii) A list, on January 2 of each year,
including the name, address, and
telephone number of each operation
granted certification during the
preceding year;
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AMS proposes amending Sec. 205.405 and Sec. 205.501 to reduce the
paperwork burden of accredited certifying agents. In addition, AMS is
proposing that certifying agents must maintain current data in
INTEGRITY on all operations which they certify. The availability of
accurate and current information about certified operations is an
essential tool for certifying agents and operations in the organic
supply chain to support the verification of specific organic products.
The proposed removal of paragraph (c)(3) of Sec. 205.405 will
eliminate the need to provide notices of approval or denial of
certification to the Administrator following the issuance of a notice
of noncompliance to an applicant for certification. The proposed rule
would also amend provisions at Sec. 205.501(a)(15) regarding
information
[[Page 47554]]
that accredited certifying agents must submit to the Administrator. The
proposal removes the requirement for submission of any notices of
denial of certification, notifications of noncompliance, notification
of noncompliance correction, notification of proposed suspension or
revocation, or notification of suspension or revocation. Also, the
proposed rule removes the annual requirement for certifying agents to
submit by January 2 an annual list of operations certified during the
preceding year.
These two requirements will be replaced by a requirement for
certifying agents to maintain updated data in INTEGRITY for each
operation they certify; these mandatory data requirements will include
listings of items and certified acreage, among other data fields. This
proposed rule would require certifying agents to generate organic
certificates in INTEGRITY, as discussed above in the proposed
amendments to Sec. 205.404. The organic industry, including certifying
agents, certified operations, consumers, AMS, and other regulatory
agencies, use INTEGRITY to confirm the certification status of an
operation, organic status of a product, find product information about
specific operations, and obtain data for investigation and enforcement.
Timely updates to maintain data reflecting an operation's current
status, including certified products and acreage, is critical to
commerce and enforcement. As discussed later in this proposed rule,
amendments to Sec. 205.662 would require certifying agents to update
INTEGRITY within three business days of accepting an operation's
surrender, or suspending or revoking an operation's certification.
AMS believes the availability of complete data on certified
operations, including complete information on certified items and
acreage, will reduce the time certifying agents and AMS spend
responding to inquiries about specific operations and will enable
interested parties to obtain information with less time and effort.
Therefore, we propose including INTEGRITY reporting as a general
requirement for accreditation to reinforce that data reporting is a
mandatory practice.
8--Personnel Training and Qualifications
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Section Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.2.................................... Add new term................ Certification review. The act of reviewing and evaluating a certified operation
or applicant for certification and determining compliance with the USDA
organic regulations. This does not include performing an inspection.
205.501(a)(4)............................ Revise...................... Continuously use a sufficient number of qualified and adequately trained
personnel, including inspectors and persons who conduct certification review,
to comply with and implement the USDA organic standards;
(i) Certifying agents must demonstrate that all inspectors, including staff,
volunteers, and contractors, have the required knowledge, skills, and
experience to inspect operations of the scope and scale as assigned and to
evaluate compliance with the applicable regulations of this part; and
(A) Certifying agents must demonstrate that inspectors continuously maintain
adequate knowledge and skills about the current USDA organic standards,
production and handling practices, certification and inspection, import and/or
export requirements, auditing practices and skills in written and oral
communications, sample collection, investigation techniques, and preparation
of technically accurate inspection documents; and
(B) Initially and every year thereafter, inspectors must demonstrate successful
completion of a minimum of 20 hours of training in topics that are relevant to
inspection. Training may include material delivered via the NOP learning
management system, certifying agents, or other relevant training provider; and
(C) Certifying agents must demonstrate that inspectors have a minimum of 1 year
of field-based experience related to both the scope and scale of operations
they will inspect before assigning inspection responsibilities;
(ii) Certifying agents must demonstrate that all persons who conduct
certification review, including staff, volunteers, or contractors, have the
knowledge, skills, and experience required to perform certification review of
operations of the scope and scale assigned and to evaluate compliance with the
applicable regulations of this part; and
(A) Certifying agents must demonstrate that all certification review personnel
continuously maintain adequate knowledge and skills in the current USDA
organic standards, certification and compliance processes, and practices
applicable to the type, volume, and range of review activities assigned; and
(B) Initially and every year thereafter, all persons who conduct certification
review activities must demonstrate successful completion of a minimum of 20
hours of training in topics that are relevant to certification review.
Training may include material delivered via the NOP learning management
system, certifying agents, or other relevant training provider; and
(iii) Certifying agents must maintain current training requirements, training
procedures, and training records for all inspectors and persons who conduct
certification review activities.
205.501(a)(5)............................ Revise...................... Demonstrate that all persons with inspection or certification review
responsibilities have sufficient expertise in organic production or handling
techniques to successfully perform the duties assigned;
(i) Sufficient expertise must include knowledge of certification to USDA
organic standards and evidence of formal education, training, or professional
experience in the fields of agriculture, science, or organic production and
handling that directly relates to assigned duties.
205.501(a)(6)............................ Revise...................... Conduct an annual performance evaluation of all persons who conduct
inspections, certification review, or implement measures to correct any
deficiencies in certification services;
(i) On-site evaluation of inspectors--Certifying agents must observe each
inspector performing on-site inspections at least once every three years, or
more frequently if warranted; and
[[Page 47555]]
(A) On-site inspector evaluations must be performed by certifying agent
personnel who are qualified to evaluate inspectors;
(ii) Certifying agents must maintain documented policies, procedures, and
records for annual performance evaluations and on-site inspector evaluations.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USDA organic regulations at 7 CFR 205.501, General Requirements
for Accreditation, require certifying agents and their inspection and
certification personnel to have sufficient expertise in organic
production and handling techniques to fully comply with and implement
the USDA organic regulations. The OFPA establishes AMS' authority to
modify the USDA organic regulations at 7 CFR 205.501. The proposed rule
amends Sec. 205.501 to specify minimum qualifications and training
requirements for inspectors and persons who perform certification
review activities. The OFPA states that to be accredited as a
certifying agent, the certifying agent will have sufficient expertise
in organic farming and handling techniques as determined by the
Secretary (7 U.S.C. 6514(b)(2)).
Organic inspectors and review staff are the most direct form of
enforcement and verification in the organic system. Inspectors protect
organic integrity by inspecting certified organic operations onsite and
reporting their findings to certifying agents. Persons performing
certification review activities also ensure organic integrity by
reviewing organic system plans, inputs, inspection reports, and other
certification documents. It is essential that these personnel have
knowledge, skills, and experience related to the scope and scale of the
organic operations they inspect and review. The role of inspectors and
reviewers has grown more critical as organic operations and supply
chains become more complex and diverse.
The USDA organic regulations currently require that certifying
agents ``have sufficient expertise in organic production or handling
techniques,'' and maintain ``a sufficient number of adequately trained
personnel.'' However, the regulations lack specific detail about
qualifications, experience, and continual training for inspectors and
reviewers. Certifying agents set their own policies and minimum
qualifications to hire inspectors and reviewers. This can result in
variability of inspection and certification review between certifying
agents. Further, many inspectors are independent contractors who are
responsible for establishing and maintaining their own knowledge base.
This diversity of background and training creates an inconsistent
baseline of knowledge and skill, exposing a potential weakness at one
of the most critical points in the organic certification system.
This proposed rule would clearly define expertise requirements to
ensure that all inspectors are capable of verifying an organic
operation's compliance with the USDA organic regulations. The
requirements would ensure that all inspectors can identify non-
compliant or fraudulent practices when observed during inspection and
produce a technically accurate inspection report that is sent to the
certifying agent. The requirements would also ensure that persons
performing certification review are competent in identifying any non-
compliant or fraudulent practices of operations when reviewing
inspection reports prepared by an inspector, organic system plans, or
other certification documents. Examples of certification review
includes reviewing applications for certification, reviewing
certification documents, evaluating qualifications for certification,
making recommendations concerning certification, or making
certification decisions and implementing measures to correct any
deficiencies in certification services. Establishing baseline criteria
for qualifications and training of inspectors and certification review
personnel would create a uniform level of scrutiny in inspections and
certification compliance reviews for all USDA certified organic
operations, leading to greater consistency and integrity in organic
certification.
In a 2012 memo, the NOP notified certifying agents that all
inspectors and reviewers, whether staff or independent contractors,
must possess the expertise and qualifications needed to evaluate
compliance with the USDA organic standards.\33\ During audits performed
twice every five years, AMS has observed that inspectors and
certification review staff currently receive at least 10 hours of
training per year from certifying agents on topics related to the USDA
organic regulations.\34\ In 2018, the NOSB provided recommendations for
the specific qualification and training requirements for inspectors and
persons performing certification review.\35\ AMS has considered these
recommendations and determined that the proposed changes align with the
OFPA and would bolster the integrity of organic products.
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\33\ NOP Memo: Criteria and Qualifications for Organic
Inspectors; April 2012: https://www.ams.usda.gov/sites/default/files/media/NOP-Notice-OrganicInspectorCriteria.pdf.
\34\ Paperwork burden attributed to current training is
accounted for in the NOP's 2020 Information Collections Renewal
(ICR) (AMS-NOP-19-0090; OMB Control #: 0581-0191). Also, please see
Paperwork Reduction Act chapter and Information Collection Request
(ICR) package associated with this proposed rule for additional
details regarding this proposed burden.
\35\ NOSB Formal Recommendation, Inspector Qualifications and
Training, May 29, 2018: https://www.ams.usda.gov/sites/default/files/media/CACSInspectorQualificationsRec.pdf.
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The USDA organic regulations stipulate that accredited certifying
agents must have sufficient expertise in organic production and
handling techniques to fully comply with and implement the terms and
conditions of the organic certification program. The regulations at
Sec. 205.501(a)(4) require that certifying agents use a sufficient
number of adequately trained personnel, including inspectors and
certification review personnel, to comply with and fully implement the
organic certification program. It is essential that certifying agents
maintain adequate staffing levels and the range of expertise needed to
perform the full range of certification activities, including
inspections and reviews. This includes maintaining an inspection staff
to timely complete initial on-site inspections, annual inspections for
all operations it certifies, unannounced inspections on a minimum of 5
percent of the operations it certifies annually, and any other
inspections that may be warranted for investigations or reinstatements.
If certifying agents reduce staffing levels, if the number of certified
operations increases, or if certifying agents add new certification
scopes to the certification services they provide, then the number and
qualifications of personnel used by certifying agents may become
insufficient to fully comply with the organic regulations.
[[Page 47556]]
Therefore, this proposed rule amends Sec. 205.501(a)(4) to clarify
that certifying agents must continuously use a sufficient number of
qualified and adequately trained personnel. This proposed rule also
specifies and strengthens requirements for organic inspectors and
certification review personnel. These additional qualification and
training requirements will help certifying agents meet their obligation
to provide sufficient expertise in organic production and handling
techniques. The new proposed requirements would specify the areas of
knowledge, skills, and expertise required for certifying agents in
using adequately trained inspection and certification review personnel
for organic inspection and review activities.
Inspector Qualifications and Training
The regulations at Sec. 205.501(a)(4) currently do not contain
requirements for specific qualifications or training of inspectors.
Certifying agents depend on qualified inspectors who are experienced
with the complexity of the organic market to verify the integrity of
organic products. Organic inspections, a critical component for
ensuring organic integrity, are an assessment of an entire production
system, not just the final product. Therefore, when conducting organic
inspections, inspectors must continuously maintain adequate knowledge
and skills about the current USDA organic standards, production and
handling practices, certification and inspection, import and/or export
requirements, auditing practices and skills in written and oral
communications, sample collection, investigation techniques, and
preparation of technically accurate inspection documents. In addition,
the knowledge, skills, and experience in these areas must be relevant
to the scope and scale of the operation seeking or continuing organic
certification.
Given that certifying agents may use a variety of inspectors,
including staff, volunteers, and contract inspectors, there is
variability in the level of experience and qualifications of inspectors
performing the key function of ensuring organic integrity at the source
of production and through the supply chain. This proposed rule adds
subparagraph (i) requiring certifying agents to ensure all inspectors
have the level of knowledge, skills, and experience needed to conduct
the specific inspections assigned, based on the scope and scale of the
operations to be inspected. The proposed rule clarifies that the
requirement applies not only to staff inspectors, but to all inspectors
(i.e., including volunteers and contractors) and further requires
certifying agents to provide evidence of inspectors' qualifications,
matching the scope and scale of inspection assignments.
This proposed rule at Sec. 205.501(a)(4)(i)(A) describes the
general scope of the knowledge and skills required for inspectors to be
deemed adequately qualified. Inspections of organic operations provide
information to certifying agents to verify whether the practices and
inputs used in an operation's implemented organic system plan are
compliant with the USDA organic regulations. To ensure an adequate
organic inspection, each inspector must be knowledgeable and competent
both in inspection and auditing procedures, as well as in the processes
of organic certification and inspection. Organic inspectors must know
the USDA organic regulations and have expertise in the scope of the
agricultural or processing system (i.e., crops, wild crops, livestock,
or handling) being inspected.
In addition, inspectors must have sufficient knowledge of organic
and general agricultural practices, as well as a general awareness of
other rules and regulations that may be applicable to the operation
being inspected. Qualified organic inspectors must also have skills in
written and oral communications, auditing, investigation and
observation techniques which support fraud detection, and sample
collection. Inspectors must be proficient in orally communicating
inspection findings both during the inspection closing meeting with the
inspected operation, and in writing to provide detailed and technically
accurate descriptions of the inspection findings in the report to the
certifying agent. The inspection report is a critical tool used by
certifying agents to verify if on-site practices are in compliance with
the USDA organic regulations. As such, the quality and depth of the
inspection report directly affects the integrity of organic products.
An adequately qualified inspector would know how to independently apply
knowledge in the above areas to assess whether an operation is
complying with all applicable parts of the regulations and clearly
communicate those findings to the certifying agent.
AMS proposes strengthening and specifying training requirements to
Sec. 205.501(a)(4)(i)(B) for all inspectors currently inspecting
organic operations or seeking to become qualified to conduct organic
inspections. For inspectors to remain qualified or to become qualified
in any scope of organic inspection, they must obtain and continuously
update knowledge, skills, and experience relevant to the types of
operations they inspect. Organic training hours should include: Organic
and general agricultural practices; USDA organic regulations and
guidance; inputs allowed for organic production and handling (i.e.,
changes to the National List); new technology that may be used in
organic production and handling; investigation and auditing techniques;
and new developments in marketing organic products. To ensure
consistency in inspector training and qualifications across the organic
industry, this proposed rule requires that inspectors initially, and
every year thereafter, complete at least 20 hours of training that may
include material delivered via the NOP learning management system,
certifying agents, or other relevant training providers.
In their 2018 recommendation, NOSB did not specify the number of
hours of training that inspectors must complete annually. However, they
requested that the NOP set the minimum training guidelines. A minimum
of 20 hours of annual training for inspectors is consistent with
standards established by other agencies or organizations (e.g.,
Preventive Controls Qualified Individuals per 2011 Food Safety
Modernization Act; ISO 9001 Global Certified Lead Auditor). The
proposed training requirements will ensure that inspectors meet the
training requirements recommended by the NOSB, which state that
continuing education is essential to ``professional competence.'' \36\
Establishing baseline training criteria for inspectors across the
organic industry is essential for ensuring that compliance with USDA
organic standards would be assessed in all sectors of this rapidly
growing and diversifying global industry. Additionally, requiring
inspectors to continuously supplement their knowledge with a minimum
annual training requirement is vital to ensuring the integrity of
organic products amidst rapidly changing technologies and product
supply chain practices.
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\36\ NOSB Formal Recommendation, Inspector Qualifications and
Training, May 29, 2018: https://www.ams.usda.gov/sites/default/files/media/CACSInspectorQualificationsRec.pdf.
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Each scope of organic certification, as well as the scale and type
of operation being inspected, provides different challenges to ensuring
a comprehensive and sufficient organic inspection. Inspectors who are
inexperienced with an agricultural production or handling system may
underestimate the scale of an operation or may miss components of
[[Page 47557]]
that system during the inspection. Varied quality of inspections can
result in an inconsistent organic certification process. In addition,
to enhance inspection consistency and organic certification integrity,
this rule proposes to add the requirement, in Sec.
205.501(a)(4)(i)(C), that certifying agents must ensure and demonstrate
an inspector has a minimum of one year of on-site experience related to
the scope and size of the operation being inspected. The proposed
requirement aligns with recommendations developed by the NOSB.
Certification Review Personnel Qualifications and Training
The regulations in Sec. 205.501(a)(4) currently do not contain
requirements for specific qualifications or training of persons who
conduct certification review. Certification review personnel are
critical to ensuring organic integrity. Certification review activities
include, but are not limited to, review of organic system plans, inputs
(e.g., production aids, fertilizers, pesticides), seeds, planting
stock, inspection reports, and residue tests for compliance with the
USDA organic standards. Certification review personnel are responsible
for verifying whether the procedures being implemented at the point of
production or handling are compliant with the USDA organic standards.
Certification review personnel must continuously maintain adequate
knowledge about the current USDA organic standards, certification and
compliance processes, and practices applicable to the type, volume, and
range of review activities assigned. The level of knowledge, skills,
and experience of certification review personnel must be relevant to
the scope and scale of the operations seeking or continuing organic
certification.
In addition, certification review personnel play a crucial role in
determining if an operation is granted organic certification initially,
if continued certification is warranted, and/or if issuing a non-
compliance, proposed suspension, or revocation. In cases where an
operation has been issued a non-compliance or has been suspended, the
certification review personnel determine if sufficient corrective
actions have been taken to bring the operation into compliance. As
such, the certification review personnel are integral to maintaining
organic integrity. Therefore, this proposed rule adds a requirement at
Sec. 205.501(a)(4)(ii) that certifying agents are responsible for
demonstrating that all certification review personnel, whether staff,
volunteers, or contractors, have the knowledge, skills, and experience
needed to conduct the specific reviews assigned.
This proposed rule at Sec. 205.501(a)(4)(ii)(A) specifies the
types of knowledge and essential skills in which certification review
personnel must be proficient to be deemed qualified. To verify the
integrity of organic products, reviewers must be knowledgeable and
competent in current USDA organic regulations, guidance, and
instructions; certification procedures; and practices specific to the
type, volume, and range of review activities assigned by the certifying
agent. To remain current with changes in technology, new developments
in marketing or importing organic products, changes in organic
standards, novel input materials, or changes to the National List,
reviewers must continuously update knowledge, skills, and experience
directly related to their specific review responsibilities.
To ensure consistency in reviewer training and qualifications
across the organic industry, this proposed rule in Sec.
205.501(a)(4)(ii)(B) requires that all persons conducting certification
review activities initially, and every year thereafter, complete at
least 20 hours of training that can include material delivered via the
NOP learning management system, certifying agents, or other relevant
training providers. A minimum of 20 hours of annual training for
certification review personnel is consistent with training required by
other agencies or organizations (e.g., Preventive Controls Qualified
Individuals per 2011 Food Safety Modernization Act; ISO 9001 Global
Certified Lead Auditor). Establishing baseline training criteria for
certification review personnel across the organic industry is essential
for ensuring that compliance with USDA organic standards would be
assessed in all sectors of this rapidly growing and diversifying global
industry. Additionally, requiring certification review personnel to
continuously supplement their knowledge with a minimum annual training
requirement is vital to ensuring the integrity of organic products
amidst rapidly changing technologies and product supply chain
practices.
Documented Training Requirements and Procedures
The current regulations at Sec. 205.504(a) require certifying
agents to provide descriptions of personnel qualifications and training
but do not contain requirements for documenting training procedures.
This proposed rule adds Sec. 205.501(a)(4)(iii) to require certifying
agents to maintain current documented training requirements,
procedures, and records for all inspectors and certification review
personnel. This requirement would enable the NOP to verify if
accredited certifying agents are meeting the requirement in Sec.
205.501(a)(4) to maintain a sufficient number of qualified and
adequately trained personnel to comply with and implement the organic
certification program established under the Act.
Expertise
The regulations in Sec. 205.501(a)(5) require that certifying
agents ensure that all persons with inspection, analysis, and decision-
making responsibilities have sufficient expertise in organic production
and handling techniques. However, the regulations currently do not
contain requirements for specific expertise areas needed to ensure the
integrity of organic products. This proposed rule adds Sec.
205.501(a)(5)(i) to clarify the areas of expertise required. The change
specifies that expertise must include knowledge of certification to
USDA organic standards, as well as evidence of formal education,
training, or professional experience in the fields of agriculture,
science, or organic production and handling that directly relates to
assigned duties. This clarification will assist certifying agents in
evaluating potential hires for adequate expertise needed to perform
certification duties. The added specificity regarding areas of
expertise and the need for formal education or training aligns with
recommendations proposed by the NOSB.\37\ AMS evaluated the proposed
recommendations and found them to be consistent with the OFPA and
therefore has included similar requirements in this proposed rule.
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\37\ ``Training and Oversight of Inspector and Certification
Review Personnel'' proposal, August 17, 2018: https://www.ams.usda.gov/sites/default/files/media/CACSTrainingOversightInspectorsProposalOct2018Web.pdf.
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Performance Evaluations
The proposed rule also revises the requirements for annual
performance evaluations, described in Sec. 205.501(a)(6), to include
requirements for regular field evaluation of inspectors and
documentation of annual performance and field evaluation procedures and
results. The proposed rule amends Sec. 205.501(a)(6) to clarify the
requirements for annual performance evaluations conducted by accredited
certifying agents. Subparagraph (i) is added to address the evaluation
of inspectors while performing on-site inspections. The proposed rule
ensures that inspectors
[[Page 47558]]
are evaluated regularly in the field (i.e., while performing an
inspection on a farm, in a processing facility, etc.). The proposed
change specifies a minimum frequency of every three years for on-site
inspection evaluation, unless higher frequency is warranted based on
experience level or past performance of the individual inspector. For
inspectors that work for or contract with multiple certifying agents,
the on-site evaluation conducted by one certifying agent may fulfill
the on-site evaluation requirements for all certifying agents, provided
that the report of the evaluation is shared. Another certifying agent
may choose to independently conduct an on-site evaluation in addition
to one performed by another certifying agent within the 3-year period.
All certifying agents are required to ensure that all inspectors they
employ or contract with have been evaluated during an on-site
inspection at least once every three years. The proposed frequency of
on-site inspection evaluation is based upon the frequency recommended
in the NOSB proposal ``Personnel Performance Evaluations of
Inspectors'' \38\ and aligns with the ``Guidance on Organic Inspector
Qualifications'' published by the Accredited Certifiers Association,
Inc.\39\ (February 2018). AMS considered requiring more frequent on-
site evaluations. However, the NOSB has indicated that requiring
inspector on-site evaluations on a more frequent basis worldwide may
pose undue financial burden on certifying agents. AMS also determined
that inspector evaluations every year would create a significant
resource constraint on certifying agents.
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\38\ ``Personnel Performance Evaluations of Inspectors''
proposal, December 13, 2016: https://www.ams.usda.gov/sites/default/files/media/CACSInspectorsProposal.pdf.
\39\ The Accredited Certifiers Association, Inc. is a 501(c)(3)
non-profit educational organization created to benefit the
accredited organic certifying agent community and the organic
industry: https://www.accreditedcertifiers.org/.
---------------------------------------------------------------------------
On-site evaluations of inspectors are necessary to verify that
inspectors possess the knowledge and skills to evaluate the compliance
of certified organic operations and to produce technically accurate
inspection reports. Requiring recurring, on-site evaluations of
inspectors would enhance the integrity of organic products by verifying
competence of organic inspectors and ensuring consistency in organic
certification inspections. Subparagraph (i)(A) is added to ensure that
inspector on-site evaluations are performed by certifying agent
personnel who are qualified to evaluate inspectors. This could include
for example, a person who has prior experience as an inspector,
conducts training for inspectors, and/or evaluates inspection reports
to determine compliance.
Subparagraph (ii) is added to address the need for certifying
agents to maintain detailed procedures regarding how performance
evaluations are conducted. The text also requires certifying agents to
document results of on-site inspector performance evaluations and
results of annual performance evaluations for all persons who review
applications for certification, perform on-site inspections, review
certification documents, evaluate qualifications for certification,
make recommendations concerning certification, or make certification
decisions and implement measures to correct any deficiencies in
certification services. This change would ensure uniformity in scope
and frequency of performance evaluations implemented across certifying
agents, thereby enhancing organic integrity.
Request for Comment
AMS seeks comment regarding certifying agent personnel
qualifications and training, including answers to the following
questions:
1. Is 20 training hours a year an appropriate amount of continuing
education for organic inspectors and certification review personnel?
2. Should organic inspectors be evaluated on-site more frequently
than once every three years?
3. Should any other types of knowledge, skills, and experience be
specified?
9--Oversight of Certification Activities
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Section Action Proposed text
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205.2.................................... Add new term................ Certification activity. Any business conducted by a certifying agent, or by a
person acting on behalf of a certifying agent, including but not limited to:
Certification management; administration; application review; inspection
planning; inspections; sampling; inspection report review; material review;
label review; records retention; compliance review; investigating complaints
and taking adverse actions; certification decisions; and issuing transaction
certificates.
205.2.................................... Add new term................ Certification office. Any site or facility where certification activities are
conducted, except for certification activities that occur at certified
operations or applicants for certification, such as inspections and sampling.
205.501(a)(22)........................... Add......................... Notify AMS not later than 90 calendar days after certification activities begin
in a new certification office. The notification must include the countries
where the certification activities are being provided, the nature of the
certification activities, and the qualifications of the personnel providing
the certification activities.
205.640.................................. Revise...................... Fees and other charges equal as nearly as may be to the cost of the services
rendered under the regulations, including initial accreditation, review of
annual reports, and renewal of accreditation, shall be reviewed, assessed, and
collected from applicants in accordance with the following provisions:
205.665(a)............................... Revise...................... Notification. (1) A written notification of noncompliance will be sent to the
certifying agent when:
(i) An inspection, review, or investigation of an accredited certifying agent
by the Program Manager reveals any noncompliance with the Act or regulations
in this part; or
(ii) The Program Manager determines that the certification activities of the
certifying agent, or any person performing certification activities on behalf
of the certifying agent, are not compliant with the Act or the regulations in
this part; or
(iii) The Program Manager determines that the certification activities at a
certification office, and/in specific countries, are not compliant with the
Act or the regulations in this part.
(2) Such notification must provide:
(i) A description of each noncompliance;
[[Page 47559]]
(ii) The facts upon which the notification of noncompliance is based; and
(iii) The date by which the certifying agent must rebut or correct each
noncompliance and submit supporting documentation of each correction when
correction is possible.
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AMS proposes amending Sec. Sec. 205.2, 205.501, and 205.665 of the
USDA organic regulations to strengthen oversight and enforcement of
certifying agents and their activities. These proposed changes are
primarily intended to address recent changes to the OFPA, as amended by
the Agriculture Improvement Act of 2018 (see 7 U.S.C. 6515(i)-(j)).\40\
Clarifying the oversight of certifying agents is a critical component
of this proposed rule, because it will allow the NOP to provide robust
enforcement of the USDA organic regulations, and ensure a level playing
field for all accredited certifying agents and certified operations.
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\40\ See section 10104(d) of the Agriculture Improvement Act of
2018, Public Law No: 115-334, available at: https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
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General Clarification of Oversight
To clarify the USDA's oversight of the certifying agents it
accredits, AMS proposes adding the new term certification activities to
the organic regulations. This new term defines the general activities
which are considered essential to the function of a certifying agent,
and therefore subject to oversight by the NOP. Any business operation
conducted by a certifying agent as they implement the USDA organic
regulations is considered a certification activity, including review,
inspection, and certification of organic operations. The new term also
clarifies that NOP oversight extends to the activities of any person
performing work on behalf of the certifying agent (e.g., a specific
office operating in specific countries, or a subcontractor or
subcontractor organization). Because the use of subcontractors is very
common in the organic industry, effective enforcement depends upon
oversight that reaches all persons involved in the certification of
organic operations. This is reinforced by the proposed revision of
Sec. 205.665, at paragraph (a)(1)(ii), which clarifies the Program's
authority to send notifications of noncompliance to a certifying agent
based upon review of certification activities, including those of a
person acting on behalf of the certifying agent.
Certifying Agents With Multiple Offices of Operation
Certifying agents commonly operate multiple offices to ensure
adequate service (e.g., sufficient capacity or proximity) to the
operations they certify. This can result in a single certifying agent
with multiple offices spread across several different countries, many
of which act independently and are quite remote from the central
office. NOP is aware that several certifying agents accredited by the
USDA use multiple offices to perform certification activities. As part
of our ongoing efforts to improve enforcement, AMS has requested
information about certification offices and the types of certification
activities that are conducted at those offices. The lack of specificity
in the USDA organic regulations and the dynamic nature of relationships
between a certifying agent and its offices create oversight challenges
for the USDA. This has led to inconsistent application and enforcement
of the regulations amongst certifying agents and offices.
To clarify the USDA's authority to oversee certification offices,
AMS proposes the addition of the new term certification office, and the
previously mentioned term certification activities. A certification
office is defined as any site or facility where certification
activities take place (except for activities that take place at
certified operations or other specialized facilities, such as
inspection, sampling, and testing). In combination with the proposed
revisions to Sec. 205.665 at paragraph (a)(1)(iii), this allows the
NOP to send notices of noncompliance to a certifying agent, based upon
the certification activities at a specific certification office and in
specific countries.
Another gap in the oversight of certification offices is the
current lack of requirements to notify the NOP of the opening of new
certification offices. Because of this, the NOP has difficulty readily
quantifying how many certification offices exist; this is compounded by
reports of offices opening and closing frequently and unpredictably,
complicating the NOP's ability to effectively oversee the activities of
these offices. To ensure more robust enforcement of certification
offices, AMS proposes adding a new paragraph, (a)(22), to Sec.
205.501, which will require that certifying agents notify the NOP
within 90 calendar days of the opening of any office performing
certification activities. The notification must include basic
information to assist the NOP in effectively overseeing the office,
including the countries serviced, location and nature of the
certification activities, and the qualifications of the personnel that
will provide the certification activities. Information on the location
of new offices will enable AMS to more efficiently utilize personnel
and travel resources to schedule on-site evaluations, and to specify
countries in which the certifying agent's certification activities must
cease should a certifying agent's office be suspended or revoked based
on failure to resolve its noncompliances. Information on the types of
certification activities being conducted will allow AMS to better
evaluate the need for additional oversight; for instance, a new office
located in a high-risk area with a history of organic fraud may require
additional oversight.
The proposed rule, if finalized, will codify this practice and
ensure that certifying agents are providing complete information about
their certification offices in a timely manner. Accurate and timely
reporting of information about certification activities will bolster
the NOP's ability to oversee certifying agents, and provide for more
equitable enforcement of the Act and the USDA organic regulations.
[[Page 47560]]
10--Accepting Foreign Conformity Assessment Systems
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Section Action Proposed text
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205.2.................................... Add new term................ Conformity assessment system. All activities undertaken by a government to
ensure that the applicable technical requirements for the production,
handling, and processing of organic agricultural products are fully and
consistently applied from product to product.
205.2.................................... Add new term................ Technical requirements. A system of relevant laws, regulations, regulatory
practices, and procedures that address the production, handling, and
processing of organic agricultural products.
205.500(c)............................... Remove...................... ...............................................................................
205.511.................................. Add new section............. Accepting foreign conformity assessment systems.
205.511(a)............................... Add......................... Foreign product may be certified under the USDA organic regulations by a USDA-
accredited certifying agent and imported for sale in the United States.
Foreign product that is produced and handled under another country's organic
certification program may be sold, labeled, or represented as organically
produced in the United States if AMS determines that such organic
certification program provides technical requirements and a conformity
assessment system governing the production and handling of such products that
are at least equivalent to the requirements of the Act and the regulations in
this part (``equivalence determination'').
205.511(b)............................... Add......................... Countries desiring to establish eligibility of product certified under that
country's organic certification program to be sold, labeled or represented as
organically produced in the United States may request an equivalence
determination from AMS. A foreign government must maintain compliance and
enforcement mechanisms to ensure that its organic certification program is
fully meeting the terms and conditions of any equivalence determination
provided by AMS pursuant to this section. To request this determination, the
requesting country must submit documentation that fully describes its
technical requirements and conformity assessment system. If AMS determines it
can proceed, AMS will conduct an assessment of the country's organic
certification program to evaluate whether it is equivalent.
205.511(c)............................... Add......................... AMS will describe the scope of an equivalence determination.
205.511(d)............................... Add......................... AMS will conduct reviews on a two-year cycle, beginning at the close of the
prior review, to assess the effectiveness of the foreign government's organic
certification program. AMS will reassess a country's organic certification
program that AMS has recognized as equivalent every five years to verify that
the foreign government's technical requirements and conformity assessment
program continue to be at least equivalent to the requirements of the Act and
the regulations of this part, and will determine whether the equivalence
determination should be continued.
205.511(e)............................... Add......................... AMS may terminate an equivalence determination if the terms or conditions
established under the determination are not met; if AMS determines that the
country's technical requirements and/or conformity assessment program are no
longer equivalent; if AMS determines that the foreign government's organic
control system is inadequate to ensure that the country's organic
certification program is fully meeting the terms and conditions under the
determination; or for other good cause.
--------------------------------------------------------------------------------------------------------------------------------------------------------
AMS proposes adding a new section to the USDA organic regulations,
Sec. 205.511, on accepting foreign conformity assessment systems that
oversee organic production in foreign countries. If this proposed rule
is implemented, new Sec. 205.511 will replace current Sec.
205.500(c), which will be removed.
International trade is critically important to the economic
vitality of the organic sector. The OFPA, under 7 U.S.C. 6505(b),
allows imported products to be sold or labeled as organically produced
if the Secretary determines that the products have been produced and
handled under an organic certification program with requirements and
oversight determined to be at least equivalent to those described in
the OFPA. Under this authority, AMS has developed a process for
determining the equivalence of foreign organic certification programs.
AMS' equivalence determination process is based on the similar
processes used by other U.S. government agencies and foreign trading
partners, and on guidelines from international organizations such as
the World Trade Organization (WTO), the International Standards
Organization (ISO), the Food and Agriculture Organization (FAO), and
the International Federation of Organic Agriculture Movements (IFOAM).
AMS' process was roughly described in two previous certifying agent
Instruction documents in the National Organic Program Handbook: NOP
2100--Equivalence Determination Procedure; and NOP 2200--Recognition
and Monitoring of Foreign Government Conformity Assessment Systems.
AMS has used its equivalence determination process to establish
trade arrangements for organic products with 10 other countries.\41\
These arrangements facilitate trade and are an important mechanism for
ensuring robust oversight of imported organic products. The most common
type of trade arrangement is a full organic equivalence determination,
in which AMS determines a country's entire organic certification
program to be equivalent to that of the United States. AMS has also
established recognition agreements, where AMS determines that a foreign
government's ability to accredit certifying agents and enforce
standards is equivalent and authorizes that government to oversee
certification of products to the USDA organic standards.
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\41\ The United States has seven organic equivalence
arrangements: Canada, the European Union, Japan, South Korea,
Switzerland, Taiwan, and the United Kingdom. The United Kingdom
equivalency will be effective in January 2021. The United States
also has three recognition agreements: India, Israel, and New
Zealand.
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The USDA has direct oversight over the certifying agents it
accredits under the NOP. In contrast, certifying agents accredited by a
foreign government whose organic certification program has been
determined to be equivalent are
[[Page 47561]]
accredited by the foreign government or by an agent of that government.
The USDA has no direct oversight of these certifying agents and relies
upon the conditions of the equivalence determination to ensure
compliance with the Act and the regulations.
The current USDA organic regulations address the USDA's authority
to make equivalence determinations in general terms under Sec.
205.500(c), but do not describe the criteria, scope, and other
parameters to establish, oversee, or terminate such equivalence
determinations, all of which are critical to the enforcement of organic
imports. This proposed new section is necessary to adequately address
AMS' authority and clarify the procedures that the agency follows for
organic equivalence determinations. Importantly, the section codifies
the agency's existing practices and does not establish any new
requirements. The new regulatory language will strengthen AMS oversight
and enforcement capacity of organic imports. Clear language in the
regulations regarding equivalence determination will support AMS
authority to determine the scope of equivalence determinations. It will
also support AMS' authority in reassessing, and either continuing or
terminating equivalence determinations, as necessary. Finally,
additional clarity in the regulations will increase transparency for
stakeholders and foreign governments by establishing a foundation for
AMS to develop more detailed documents that describe the process and
requirements for equivalence determinations. Without adding this new
section to the regulations, AMS could face challenges establishing and
enforcing terms under current and future equivalence determinations
that are critical to ensuring the integrity of imported organic
products.
To support proposed new Sec. 205.511, AMS proposes adding two new
terms to Sec. 205.2: Conformity assessment system; and technical
requirements. These terms are defined to ensure that the process and
requirements described in new Sec. 205.511 are clear.
The term conformity assessment system would be defined as all
activities undertaken by a government to ensure that the applicable
technical requirements for the production, handling, and processing of
organic agricultural products are fully and consistently applied from
product to product. Technical requirements would be defined as a system
of relevant laws, regulations, regulatory practices, and procedures
that address the production, handling, and processing of organic
agricultural products. A government's conformity assessment system and
technical requirements would cover the full range of activities
associated with administering a federal organic program (i.e.,
development of standards, policies and procedures, accreditation and
oversight of certifying agents, and compliance and enforcement
activities).
New Sec. 205.511(a) describes AMS' authority under the OFPA to
make equivalence determinations. New Sec. 205.511(b) describes the
process for initiating a request for equivalence used by AMS and other
foreign governments. Since there are several factors that may impact
whether AMS moves forward to review an equivalence request (i.e.,
agency resources, capacity to oversee the potential trade arrangement,
relative benefits for the U.S. organic sector), this section clarifies
that AMS will determine if it can proceed with the evaluation process
in each case.
New Sec. 205.511(c) clarifies that AMS will determine the scope of
each equivalence determination that it makes. It is important to make
this clarification because not all determinations must cover the same
organic products and activities and they may include different terms or
conditions. These differences depend upon AMS' evaluation of each
foreign government's unique technical requirements and conformity
assessment system and are important to AMS' ability to ensure the
integrity of organic products produced under different systems.
New Sec. 205.511(d) lays out the current process that AMS and
other foreign governments use to monitor equivalence determinations
that have been made. The review cycles mirror ISO standards, which
include a five-year reassessment cycle and mid-cycle reviews. The
section provides some flexibility in the timing of the mid-cycle
reviews to accommodate unavoidable factors in both countries that can
impact timing (e.g., federal budgets, election cycles, growing
seasons).
New Sec. 205.511(e) describes the conditions under which AMS may
terminate equivalence determinations. These conditions for termination
are commonly accepted among countries that maintain equivalence
determinations and are based upon the core concepts underlying
equivalence. AMS must be able to terminate equivalence determinations
under these conditions in order to fulfill its statutory obligation to
assure that organic products sold in the United States are compliant
with OFPA and the USDA organic regulations and maintain a level playing
field for U.S. farms and businesses.
Request for Comment
AMS seeks comment regarding whether the public sees a differential
risk to enforcement associated with certain organic trade
relationships. Specifically, compared with organic equivalence
determinations, are there increased risks associated with recognition
agreements where other countries' governments oversee the
implementation of NOP certification?
11--Compliance--General
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.660(c)-(d)........................... Redesignate................. Redesignate paragraphs (c)-(d) as paragraphs (d)-(e).
205.660(c)............................... Add......................... The Program Manager may initiate enforcement action against any person who
sells, labels, or provides other market information concerning an agricultural
product if such label or information implies, directly or indirectly, that
such product is produced or handled using organic methods, if the product was
produced or handled in violation of the Organic Foods Production Act or the
regulations in this part.
205.661.................................. Revise section title........ Investigation.
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AMS proposes adding new paragraph (c) to Sec. 205.660, to clarify
that the NOP Program Manager may initiate an enforcement action against
any violator of the OFPA, as amended (7 U.S.C. 6501 et. al). The
proposed change will clarify that the OFPA grants the Secretary
administrative powers to enforce the Act against any violator,
regardless of certification status. This clarification is important
because noncertified status does not protect an operation that
[[Page 47562]]
commits organic fraud from enforcement action. The NOP currently
pursues enforcement actions against uncertified parties for which AMS
has evidence of OFPA violations.
This proposed change is consistent with the enforcement authority
granted to the Secretary in the OFPA. All agricultural products sold,
labeled, or represented as organic must be produced and handled in
compliance with the USDA organic regulations. The OFPA at 7 U.S.C.
6505(a)(1) states: (A) A person may sell or label an agricultural
product as organically produced only if such product is produced and
handled in accordance with this chapter; and (B) no person may affix a
label to, or provide other market information concerning, an
agricultural product if such label or information implies, directly or
indirectly, that such product is produced and handled using organic
methods, except in accordance with this chapter. Further, the OFPA at 7
U.S.C. 6506(a)(7) requires that the NOP provide for appropriate and
adequate enforcement procedures, as determined by the Secretary to be
necessary and consistent with this chapter.
AMS also proposes amending the title of Sec. 205.661 from
``Investigation of certified operations'' to ``Investigation.'' The
proposed change is intended to further clarify that the OFPA grants the
Secretary administrative powers to enforce the Act against any
violator, regardless of the person's certification status.
The proposed changes are necessary to emphasize the Secretary's
administrative powers to investigate and enforce against operations who
are not certified to the USDA organic standards. During calendar years
2011-2017, over 70% of complaints received by the NOP alleging
violations of the OFPA involved uncertified operations representing
products as organic. Therefore, continued AMS enforcement against
uncertified operations is central to the effective administration of
the OFPA.
12--Noncompliance Procedure for Certified Operations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.100(c)............................... Revise...................... Any person or responsibly connected person that:
205.662(e)(3)............................ Add......................... Within 3 business days of issuing a notification of suspension or revocation,
or the effective date of an operation's surrender, the certifying agent must
update the operation's status in INTEGRITY.
205.662(f)(1)............................ Revise...................... A certified operation or a person responsibly connected with an operation whose
certification has been suspended may at any time, unless otherwise stated in
the notification of suspension, submit a request to the Secretary for
reinstatement of its certification, or submit a request for eligibility to be
certified. The request must be accompanied by evidence demonstrating
correction of each noncompliance and corrective actions taken to comply with
and remain in compliance with the Act and the regulations in this part.
205.662(g)(1)............................ Revise...................... Knowingly sells or labels a product as organic, except in accordance with the
Act, shall be subject to a civil penalty of not more than the amount specified
in Sec. 3.91(b)(1)(xxxvii) of this title per violation.
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AMS proposes amending Sec. Sec. 205.100 and 205.662 to clarify
that a person who is responsibly connected to an operation that
violates the OFPA or the USDA organic regulations may be subject to a
suspension of certification (if the responsibly connected person is
certified), or civil penalties or criminal charges and/or may be
ineligible to receive certification. This will bolster the enforcement
capacity of AMS by ensuring that penalties for violations of the OFPA
extend to all accountable parties.
The USDA organic regulations, at section Sec. 205.2, define
responsibly connected as ``Any person who is a partner, officer,
director, holder, manager, or owner of 10 percent or more of the voting
stock of an applicant or a recipient of certification or
accreditation.'' The OFPA provides that any person who (1) attempts to
label a product as organic and who knows or should have known that the
product is noncompliant; or (2) makes a false statement to the USDA; or
(3) otherwise does not comply with the USDA organic regulations is
ineligible to receive organic certification for 5 years (7 U.S.C.
6519(c)(3)). In addition, the OFPA states that any person who knowingly
sells or labels a nonorganic product as organic, or makes a false
statement to the Secretary, a State organic program, or a certifying
agent, shall be subject to civil penalty fines or imprisonment,
respectively (7 U.S.C. 6519(c)(1)-(2)).
This proposed rule clarifies that a person responsibly connected to
a violator of the OFPA may be complicit in the OFPA violation(s)
because of that association, and may be ineligible to receive
certification. This parallels the current provisions in the USDA
organic regulations for revocation of certification, where a certified
operation or person responsibly connected with an operation whose
certification has been revoked will be ineligible to receive
certification for 5 years (Sec. 205.662(f)(2)). AMS expects that when
issuing a proposed suspension, certifying agents will identify all
persons responsibly connected, and when such persons exist, notify the
appropriate certifying agent(s) or the NOP, as applicable.
This proposed rule also clarifies that a person responsibly
connected to a person that knowingly sells nonorganic product as
organic or makes a false statement to authorities about compliance with
the OFPA, may be subject to fines and/or imprisonment (18 U.S.C. 1001).
This will enable AMS to take comprehensive enforcement action to hold
all responsible individuals accountable and prevent persons that enable
or assist in activities that violate the OFPA from continuing that
activity.
AMS also proposes adding new paragraph Sec. 205.662(e)(3) to
require certifying agents to timely update the status of an operation
that has been suspended or revoked, or that has surrendered its
certification. The updates should be completed within three business
days of issuing a notification of suspension or revocation, or from the
effective date of a surrender. Timely updates to INTEGRITY are critical
to inform other certifying agents, operations in the supply chain, and
consumers when an operation is no longer certified and can help prevent
noncompliant products from entering or continuing in the stream of
commerce.
Finally, AMS proposes amending Sec. 205.662(g)(1) to update the
citation which specifies the maximum civil penalty amount for
violations of the OFPA. This aligns with the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015. On March
[[Page 47563]]
14, 2018, the USDA published in the Federal Register its annual
inflation adjustment for 2018 (83 FR 11129). This most recent
adjustment increased the civil penalty amount from $11,000 to $17,952
for violations of the OFPA which occurred on or after March 14, 2018.
13--Mediation
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Section Action Proposed text
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205.663.................................. Revise...................... (a) A certifying agent must submit with its administrative policies and
procedures provided in Sec. 205.504(b): Decision criteria for acceptance of
mediation, and a process for identifying personnel conducting mediation and
setting up mediation sessions.
(b) A certified operation or applicant for certification may request mediation
to resolve a denial of certification or proposed suspension or proposed
revocation of certification issued by a certifying agent or State organic
program.
(1) A certified operation or applicant for certification must submit any
request for mediation in writing to the applicable certifying agent or State
organic program within 30 calendar days of receipt of the notice of proposed
suspension or proposed revocation of certification or denial of certification.
(2) A certifying agent or State organic program may accept or reject a request
for mediation based on its own decision criteria.
(i) If a certifying agent rejects a mediation request, it must provide this
rejection in writing to the applicant for certification or certified
operation. The rejection must include the right to request an appeal, pursuant
to Sec. 205.681, within 30 calendar days of the date of the written
notification of rejection of the request for mediation.
(c) Both parties must agree on the person conducting the mediation.
(d) If a State organic program is in effect, the parties must follow the
mediation procedures established in the State organic program and approved by
the Secretary.
(e) The parties to the mediation have a maximum of 30 calendar days to reach an
agreement following a mediation session. Successful mediation results in a
settlement agreement agreed to in writing by both the certifying agent and the
certified operation. If mediation is unsuccessful, the applicant for
certification or certified operation has 30 calendar days from termination of
mediation to appeal the denial of certification or proposed suspension or
revocation pursuant to Sec. 205.681.
(f) Any settlement agreement reached through mediation must comply with the Act
and the regulations in this part. The Secretary may review any mediated
settlement agreement for conformity to the Act and the regulations in this
part and may reject any agreement or provision not in conformance with the Act
or the regulations in this part.
(g) The Program Manager may propose mediation and enter into a settlement
agreement at any time to resolve any adverse action notice that it has issued.
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AMS proposes revising Sec. 205.663 to improve the general
readability of this section and to more clearly explain how mediation
may be used in noncompliance procedures. When successful, mediation is
an efficient way to bring operations into compliance and resolve
conflicts among certifying agents and operations. The USDA organic
regulations require that certifying agents and State organic programs
provide applicants for certification and certified operations the right
to request mediation when they issue a denial of certification, notice
of proposed suspension, or proposed revocation of certification
(Sec. Sec. 205.405(d) and 205.662(c)). Section 205.663 provides
requirements for requesting mediation, responding to a mediation
request, the time frame for reaching an agreement, and what happens
when mediation is unsuccessful.\42\
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\42\ The OFPA does not specifically mention mediation. The OFPA
does require that the USDA have procedures for producers and
handlers to appeal adverse determinations. The right to request
mediation in the regulations provides an additional opportunity for
producers and handlers to resolve adverse actions while preserving
their right to appeal if mediation in unsuccessful.
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The USDA organic regulations require certifying agents and State
organic programs to notify operations of the option to request
mediation as an alternative dispute resolution to resolve noncompliance
findings that have led to a proposed suspension, revocation, or denial
of certification. This will facilitate resolution of these issues
before they escalate to an appeal to AMS or a State organic program.
AMS proposes revising the existing requirements for mediation to
support a process that is efficient and accessible to producers and
handlers who want to resolve a denial of certification, proposed
suspension, or revocation of certification. Mediation should be a
collaborative process between a certifying agent and an operation. A
successful mediation addresses the noncompliance(s) and leads to full
compliance with the USDA organic regulations. In summary, the proposed
changes would clarify the process for engaging in mediation and would
clarify that a settlement agreement is the outcome of successful
mediation. The revised rule would permit certifying agents and
certified operations or applicants to engage in mediation without a
third-party mediator, provided that all parties agree upon the person
who will serve as the mediator.
After a certifying agent issues a denial of certification, proposed
suspension, or revocation of certification, a certified operation and
certifying agent may discuss the option of mediation prior to receiving
a request for mediation. However, for mediation to proceed as a form of
alternative dispute resolution, an operation must request mediation in
writing to the certifying agent. This proposed rule provides 30
calendar days to request mediation. This aligns with the length of time
provided to submit an appeal of a proposed adverse action.
A certifying agent determines whether to accept or reject a written
request for mediation. This proposed rule requires certifying agents to
include mediation acceptance decision criteria as part of the
administrative policies and procedures which certifying agents are
required to submit under Sec. 205.504(b). Parties to the mediation may
develop conditions, such as cost, timeframes to reach a settlement
agreement, and any incremental steps, only after a certifying
[[Page 47564]]
agent accepts a mediation request. A certifying agent must not impose
any preconditions for the acceptance of mediation (i.e., the certifying
agent cannot require that the operation take a specific action--other
than submitting a written request for mediation--before it will
consider mediation).
In accepting mediation, a certifying agent may also, at its
discretion, offer a settlement agreement for an operation to consider.
A settlement offer may be useful when the corrective action(s) is clear
and the noncompliance(s) is not recurrent. As part of the mediation, an
operation may accept or reject the settlement agreement, negotiate the
terms with the certifying agent, or request a mediator to try and reach
a settlement agreement. Settlement agreements may impose additional
compliance requirements or may include agreed-upon suspensions or
revocations of organic certificates, as appropriate to the
noncompliance.
This proposed rule clarifies that mediation does not require a
third-party mediator to reach a settlement agreement. The certifying
agent and operation may agree that mediation will be between only those
two parties. For example, mediation may consist of a phone call or
series of phone calls between the operator and the certifying agent to
discuss the terms of a settlement offer prior to signing the agreement.
In some cases, the use of a mediator may be appropriate, either
because the operation initially requested this, or the operation
rejected a settlement offer and then requested a mediator. To
accommodate this situation, the proposed rule would require each
certifying agent submit a process to identify a qualified mediator and
set the time and location of mediation session(s), mediation format
(in-person, video, phone), and mediation fees and payment.
The outcome of a successful mediation is a settlement agreement
that brings an operation into compliance with the USDA organic
regulations. A settlement agreement must clearly describe the
corrective actions and timeframes for implementing corrective actions,
and may impose additional actions (e.g., unannounced inspections,
sampling for residue testing) to ensure the operation maintains
compliance. A settlement may also include a suspension of organic
certification.
This proposed rule would also clarify that the Secretary does not
require, manage, or otherwise participate in mediation between
operations and certifying agents or State organic programs. This does
not change the authority of the Secretary to review an agreement that
results from the mediation for conformity to the OFPA and the USDA
organic regulations and reject any nonconforming provision or
agreement.
This proposed change is needed to clarify and emphasize that
mediation under the USDA organic regulations is an alternative dispute
resolution mechanism, conducted between a certified operation or
applicant for certification and a certifying agent or State organic
program. The Secretary is not involved in determining the outcome of a
mediation, notwithstanding his or her authority to review dispute
resolution terms for conformity with the OFPA and the USDA organic
regulations.
This proposed change would not affect AMS' ability to carry out
oversight, compliance, and enforcement activities on behalf of the
Secretary. For example, AMS may conduct informal mediation, at its
discretion, and enter into mutually agreeable settlement agreements
with parties that receive an NOP-issued proposed adverse action.
14--Adverse Action Appeal Process--General
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Section Action Proposed text
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205.2.................................... Add new term................ Adverse action. A noncompliance decision that adversely affects certification,
accreditation, or a person subject to the Act, including a proposed suspension
or revocation; a denial of certification, accreditation, or reinstatement; a
cease and desist notice; or a civil penalty.
205.680(a)............................... Revise...................... Persons subject to the Act who believe they are adversely affected by an
adverse action of the National Organic Program's Program Manager, may appeal
such decision to the Administrator.
205.680(b)............................... Revise...................... Persons subject to the Act who believe they are adversely affected by an
adverse action of a State organic program may appeal such decision to the
State organic program's governing State official who will initiate handling of
the appeal pursuant to appeal procedures approved by the Secretary.
205.680(c)............................... Revise...................... Persons subject to the Act who believe they are adversely affected by an
adverse action of a certifying agent may appeal such decision to the
Administrator, Except, That when the person is subject to an approved State
organic program, the appeal must be made to the State organic program.
205.680(d)............................... Redesignate................. Redesignate as paragraph (f).
205.680(d)............................... Add......................... Persons subject to the Act who believe they are adversely affected by an
adverse action of a certifying agent or a State organic program may request
mediation as provided in Sec. 205.663.
205.680(e)............................... Revise and redesignate as All appeals must be reviewed, heard, and decided by persons not involved with
paragraph (g). the adverse action being appealed.
205.680(e)............................... Add......................... All appeals must comply with the procedural requirements in Sec. 205.681(c)
and (d) of the USDA organic regulations.
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AMS proposes to revise and clarify parts of the adverse action
appeals process in Sec. Sec. 205.680 and 205.681. In summary, these
changes will clarify which actions can be appealed, recognize the use
of alternative dispute resolution practices in lieu of a formal
administrative proceeding to resolve an appeal, and reinforce that
appeal submissions need to comply with the basic requirements in the
regulations. We expect that these changes will support an expedited
appeals process.
The OFPA authorizes an expedited appeals procedure that gives
persons the opportunity to appeal actions that adversely affect the
person(s) (7 U.S.C. 6520). The current USDA organic regulations
describe how certified operations, accredited certifying agents, and
applicants for certification or accreditation may appeal a
noncompliance decision that would affect their certification or
accreditation
[[Page 47565]]
status or eligibility to become certified or accredited (Sec.
205.680(a)). The current regulations explain when an appeal may be
submitted, how it must be submitted, and what the appeal submission
must contain. Specifically, appeals of noncompliance decisions of a
certifying agent or the NOP are appealable to the AMS Administrator, or
to the State organic program if the appellant is located in a State
with an approved State organic program.\43\ In addition, the current
regulations explain that a decision to sustain an appeal results in a
favorable action with respect to the appellant's certification or
accreditation, and a decision to deny an appeal requires AMS to
initiate a formal administrative proceeding (i.e., a hearing). AMS
explains how it administers the adverse action appeal process, the
status of an appellant during an appeal, and the possible outcomes of
an appeal in NOP 4011, Adverse Action Appeal Process.\44\
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\43\ As of the publication of this proposed rule, California is
the only approved State organic program.
\44\ NOP 4011, Adverse Action Appeal Process. December 23, 2011:
https://www.ams.usda.gov/sites/default/files/media/4011.pdf.
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The proposed rule would add the new term adverse action to clarify
which actions may be appealed under the USDA organic regulations.
Adverse action would be defined as a noncompliance decision that
adversely affects certification, accreditation, or a person subject to
the Act, including a proposed suspension or revocation; a denial of
certification, accreditation, or reinstatement; a cease and desist
notice; or a civil penalty.\45\ This term would replace the use of
``noncompliance decision'' throughout this section. AMS is proposing to
change ``noncompliance decision'' in the current regulation to adverse
action. This clarifies the scope of actions which may be appealed.
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\45\ Only AMS issues civil penalties.
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This proposed rule would add a new provision that reminds
operations of the option to request mediation when a certifying agent
or State organic program has issued an adverse action. The option to
request mediation is provided in addition to the option to appeal
(mediation is covered in Sec. 205.663, and proposed changes to this
section are discussed above). The mediation process can be a viable
path to resolve noncompliances that are correctable, and not willful or
recurrent. If mediation is rejected or is not successful, the operation
maintains the right to appeal.
Finally, this proposed rule would add an explicit requirement that
appeals must be properly filed, as described in paragraphs (c) and (d)
of Sec. 205.681. This means that an appeal must be timely filed, sent
to the correct address, include a copy of the adverse action, and
explain why the adverse action is incorrect. In effect, this
requirement will help to expedite the review of appeals and supports
AMS' decisions to dismiss appeals which are not timely filed.
15--Adverse Action Appeal Process--Appeals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.681(a)............................... Revise...................... Adverse actions by certifying agents. An applicant for certification may appeal
a certifying agent's notice of denial of certification, and a certified
operation may appeal a certifying agent's notification of proposed suspension
or proposed revocation of certification to the Administrator, Except, That,
when the applicant or certified operation is subject to an approved State
organic program, the appeal must be made to the State organic program which
will carry out the appeal pursuant to the State organic program's appeal
procedures approved by the Secretary.
205.681(a)(2)............................ Revise...................... If the Administrator or State organic program denies an appeal, a formal
administrative proceeding may be initiated to deny, suspend, or revoke the
certification. Such proceeding must be conducted pursuant to the U.S.
Department of Agriculture's Uniform Rules of Practice, 7 CFR part 1, subpart
H, or the State organic program's rules of procedure.
205.681(b)............................... Revise...................... Adverse actions by the NOP Program Manager. A person affected by an adverse
action, as defined by 205.2, issued by the NOP Program Manager, may appeal to
the Administrator.
205.681(b)(1)............................ Revise...................... If the Administrator sustains an appeal, an applicant will be issued
accreditation, a certifying agent will continue its accreditation, or an
operation will continue its certification, a civil penalty will be waived and
a cease-and-desist notice will be withdrawn, as applicable to the operation.
205.681(b)(2)............................ Revise...................... If the Administrator denies an appeal, a formal administrative proceeding may
be initiated to deny, suspend, or revoke the accreditation or certification
and/or levy civil penalties. Such proceeding must be conducted pursuant to the
U.S. Department of Agriculture's Uniform Rules of Practice, 7 CFR part 1,
subpart H.
205.681(c)............................... Revise...................... Filing period. An appeal must be filed in writing within the time period
provided in the letter of notification or within 30 days from receipt of the
notification, whichever occurs later. The appeal will be considered ``filed''
on the date received by the Administrator or by the State organic program. An
adverse action will become final and nonappealable unless an appeal is timely
filed.
205.681(d)(1)............................ Revise...................... Appeals to the Administrator and Requests for Hearing must be filed in writing
and addressed to: 1400 Independence Ave. SW, Room 2642, Stop 0268, Washington,
DC 20250, or electronic transmission, [email protected].
205.681(d)(3)............................ Revise...................... All appeals must include a copy of the adverse action and a statement of the
appellant's reasons for believing that the action was not proper or made in
accordance with applicable program regulations, policies, or procedures.
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AMS is proposing several changes to Sec. 205.681 to revise and
clarify appeal procedures. We propose revising the title of paragraph
(a) from ``Certification appeals'' to ``Adverse actions by certifying
agents,'' and the title of paragraph (b) from ``Accreditation appeals''
to ``Adverse actions by the NOP Program Manager.'' This is necessary
because certifying agents and the NOP Program Manager may issue
different types of adverse actions, and the respective appeal decisions
will have different effects.
[[Page 47566]]
AMS proposes clarifying the process when the Administrator denies
an appeal and upholds an adverse action. The current regulations, at
Sec. Sec. 205.681(a)(2) and (b)(2), state that the USDA will initiate
a formal administrative proceeding (hearing) to finalize the action,
i.e., suspend, revoke or deny certification. AMS proposes changing
``will'' to ``may'' to reflect actual practice and to recognize that
AMS may pursue the resolution of appeals through expedited, alternative
means, such as settlement agreements, before initiating a formal
administrative proceeding. In current practice, an appellant whose
appeal is denied by the Administrator has the option to request or
waive a hearing. If the appellant does not request a hearing, AMS does
not initiate a formal administrative proceeding and the Administrator's
appeal decision is final and takes effect.\46\ When an appellant
requests a hearing, AMS and the appellant may enter into a settlement
agreement prior to the hearing. This proposed revision provides
flexibility to resolve appeals outside of the formal administrative
process.
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\46\ This is described in NOP 4011.
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AMS also proposes revising current paragraph (b), ``Accreditation
appeals,'' to address the scope of adverse actions issued by the NOP
which may be appealed to the Administrator. This could include appeals
of proposed suspensions or revocations of accreditation or
certification, denials of accreditation, denials of reinstatement, or
civil penalties.
AMS proposes clarifying the requirement for the appeal filing
period in paragraph Sec. 205.681(c). The wording, ``noncompliance
decision'' is removed because that term is being removed or replaced
throughout the Adverse Action Appeal Process section. In addition, we
are proposing to replace the phrase, ``A decision to deny, suspend, or
revoke certification or accreditation will become final'' with ``An
adverse action will become final'' because the use of the term
``adverse action'' is broader and includes denials of reinstatement,
cease and desist notices, and other actions that could affect
certification.
Additionally, this proposed rule would update the address for
filing appeals and provide an email address for submitting appeals
electronically in Sec. 205.681(d)(1). The address in the current
regulation is outdated and does not provide an option for electronic
submission, even though this occurs in practice.\47\
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\47\ The AMS website has the current information for filing an
appeal either by mail or electronically: https://www.ams.usda.gov/services/enforcement/organic/appeals.
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Finally, this proposed rule would revise the term ``adverse
decision'' to ``adverse action'' in Sec. 205.681(d)(3) to be
consistent with the use of the term ``adverse action'' throughout this
section. This maintains the requirement that an appellant must submit a
copy of the adverse action which they are contesting with their appeal.
16--Grower Group Operations
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Section Action Proposed text
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205.2.................................... Add new term................ Grower group member. A person engaged in the activity of growing or gathering a
crop and/or wild crop as a member of a grower group operation.
205.2.................................... Add new term................ Grower group operation. A single producer consisting of grower group members in
geographical proximity governed by an internal control system under an organic
system plan certified as a single crop and/or wild crop production and
handling operation.
205.2.................................... Add new term................ Grower group production unit. A defined subgroup of grower group members in
geographical proximity as a part of a single grower group operation that use
similar practices and shared resources to grow or gather similar crops and/or
wild crops.
205.2.................................... Add new term................ Internal control system. An internal quality management system that establishes
and governs the review, monitoring, training, and inspection of the grower
group operation and the procurement and distribution of shared production and
handling inputs and resources, to maintain compliance with the USDA organic
regulations as a single producer.
205.201(c)............................... Add......................... In addition to paragraph (a) of this section, a grower group operation's
organic system plan must describe its internal control system. The description
of the internal control system must:
(1) Define the organizational structure, roles, and responsibilities of all
personnel;
(2) Identify grower group production units and locations;
(3) Define geographical proximity criteria for grower group members and grower
group production units;
(4) Describe characteristics of high-risk grower group members and grower group
production units;
(5) Describe shared production practices and inputs;
(6) Describe the internal monitoring, surveillance, and auditing methods used
to assess the compliance of all grower group members;
(7) Describe the system of sanctions for noncompliant grower group members,
including procedures to address noncompliances detected among grower group
members, impose sanctions, and remove grower group members when warranted, and
procedures for reporting noncompliances to the certifying agent;
(8) Describe measures to protect against potential conflicts of interest;
(9) Describe how training, production and handling inputs, and other resources
are procured and provided to all grower group members and personnel;
(10) Have clear policies and procedures to verify the grower group operation's
and grower group members' compliance with the USDA organic regulations; and
(11) Address any other terms or conditions determined by the Administrator to
be necessary to enforce compliance with the USDA organic regulations and the
Act.
205.400(g)............................... Add......................... In addition to paragraphs (a) through (f) of this section, a grower group
operation must:
(1) Be a single producer organized as a person;
(2) Sell, label, or represent only crops and/or wild crops as organic;
(3) Use centralized processing, distribution, and marketing facilities and
systems;
(4) Be organized into grower group production units;
[[Page 47567]]
(5) Ensure that all crops and/or wild crops sold, labeled, or represented as
organic are from grower group members only;
(6) Ensure that grower group members do not sell, label, or represent their
crops and/or wild crops as organic outside of the grower group operation
unless they are individually certified;
(7) Report to the certifying agent on an annual basis the name and location of
all grower group members and grower group production units, and the crops,
wild crops, estimated yield, and size of production and harvesting areas of
each grower group member and grower group production unit;
(8) Conduct internal inspections of each grower group member, at least
annually, by internal inspectors, which must include mass-balance audits and
reconciliation of each grower group member's and grower group production
unit's production yield and group sales;
(9) Document and report to the certifying agent the use of sanctions to address
noncompliant grower group members, at least annually; and
(10) Implement procedures to ensure all production and handling by the grower
group operation is compliant with the USDA organic regulations and the Act,
including recordkeeping requirements to ensure a complete audit trail from
each grower group member and grower group production unit to sale and
distribution.
205.403(a)(2)............................ Redesignate................. Redesignate as paragraph (a)(3).
205.403(a)(2)............................ Add......................... Initial and annual on-site inspections of a grower group operation as defined
in Sec. 205.2 must:
(i) Assess the compliance of the internal control system of the organic system
plan, or its capability to comply, with the requirements of Sec.
205.400(g)(8). This must include review of the internal inspections conducted
by the internal control system.
(ii) Conduct witness audits of internal control system inspectors performing
inspections of the grower group operation.
(iii) Individually inspect at least 1.4 times the square root of the total
number of grower group members. This must include an inspection of all grower
group members determined to be high risk according to criteria in
205.201(c)(4). At least one grower group member in each grower group
production unit as defined in Sec. 205.2 must be inspected.
(iv) Inspect each handling facility.
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AMS proposes clarifying regulatory requirements for crop and/or
wild crop production and handling operations with multiple member
growers that are certified as a single producer. Operations with
multiple grower and gatherer members can pose higher risks to
traceability and organic integrity because of their unique structure
and composition, longer and more complex supply chains, and reliance
upon internal quality control systems. Specific certification
requirements are therefore needed to ensure adequate and consistent
oversight of these types of operations and facilitate enforcement
action.
Grower Group Structure and Function
In this proposed rule, operations with multiple growers organized
and certified as a single crop and/or wild crop producer are referred
to as grower group operations, also commonly known as grower groups.
Individual growers, known as grower group members, grow or gather the
same crops and/or wild crops in geographical proximity to one another
using similar practices with centralized handling, processing, and
marketing. Shared farming or gathering practices may include fertility
management, pest control, acceptable inputs (including seeds), and
post-harvest handling practices. There is one organic certificate for
the grower group operation and the certification applies only to the
grower group operation as a whole; individual members do not
independently sell or market their own crops and/or wild crops using
the grower group's organic certificate. There is one organic system
plan for the grower group operation as a single producer using shared
handling and marketing facilities, and a common recordkeeping system.
Grower group structure is different than traditional, individually
certified organic operations. As such, they require special controls to
ensure compliance with the USDA organic regulations. Central to the
function of a grower group is an internal control system (ICS). An ICS
consists of both personnel and procedure that act a grower group's
internal governance and verification system. The ICS is described in
the grower group operation's organic system plan, and ensures that
grower group production and handling activities are compliant with the
USDA organic regulations. The ICS is unique to grower groups; it acts
as a third tier of enforcement and verification between the grower
group members and the certifying agent. The ICS is responsible for
direct enforcement of the grower group and its members, including
inspection of all grower group members. In grower group certification,
the certifying agent's primary role is to assess and enforce the
function of the ICS, not the individual members.
Unique Certification Challenges of Grower Groups
Grower group operations present unique certification challenges
relative to traditional, individually certified organic operations.
Grower groups are inherently more complex because they are collectives
of many members organized under a single organic certification. Grower
groups commonly have thousands of members spread across a large area,
and utilize centralized collection, handling, processing, and
marketing. This complicates all aspects of enforcement, including
inspection, product traceability, and mass-balance assessment. Most
significantly, this complexity demands the use of an ICS as an
additional tier of enforcement.
The current USDA organic regulations do not include specific
provisions addressing the certification of grower groups. In
particular, the regulations lack grower group eligibility criteria and
[[Page 47568]]
requirements describing ICS function and organization. As a result, the
NOP regularly observes inconsistent grower group certification
practices during audits and certification appeals.
NOP staff accompanying certifying agents during witness audits
frequently report that grower groups lack a functioning ICS. This often
results in poorly trained ICS personnel that do not use effective
sanctions policies to enforce against noncompliant members, fail to
inspect all members, and do not complete mass-balance audits. The lack
of specific requirements in the organic regulations inhibits the
effective function of an ICS, which in turn threatens the integrity of
products produced by grower group operations.
The NOP also often cites noncompliances to certifying agents who
fail to adequately assess the structure of a grower group and the
function of an ICS. In the absence of specific regulation, some
certifying agents struggle to define the acceptable limits of grower
groups (geographical, numerical, and scope). This can result in too
many members distributed over too large an area, complicating effective
enforcement. A lack of specific requirements also makes it difficult
for certifying agents to adequately assess the ICS's ability to enforce
all members of a grower group operation. Some certifying agents also
attempt to directly enforce grower group members, not the ICS, leading
to inadequate oversight. There is a clear need for specific criteria
grower groups must meet to qualify for organic certification, and
practices certifying agents should use to inspect grower groups and
assess compliance of an ICS. Describing these requirements in the
organic regulations would allow for more effective oversight of grower
groups and their organic products.
Authority and Background
The OFPA authorizes the certification of groups because it defines
person as an ``individual, groups of individuals, corporation,
association, organization, cooperative, or other entity.'' (7 U.S.C.
6502). The OFPA also defines handler and producer as persons. Further,
the OFPA provides for producers and handlers to seek certification (7
U.S.C. 6503(a)). Therefore, grower group operations are production and
handling operations which are eligible for organic certification as a
single producer.
Grower group certification was developed in the 1990s to reduce
barriers for small-scale farms in developing countries entering the
global organic market. Initially, organic farmer associations obtained
group certification for organic coffee and cacao operations to export
products to the United States and Europe. Presently, growers organized
as grower group operations export many organic agricultural products to
the United States, such as coffee, cocoa, bananas, tea, and spices.
This method of certification gives small growers or gatherers organized
into grower groups access to organic markets while expanding consumer
choices. Grower group certification supports U.S. consumer demand for
organic products that are not produced in the United States, such as
coffee, cacao, and bananas.
The International Federation of Organic Agriculture Movements
(IFOAM) \48\ Organics International started to develop criteria for
grower group certification in 1994, and in 2003 published its position
on ``Small Holder Group Certification for organic production and
processing'' to support the concept.\49\ The criteria formed the basis
for acceptance of grower group certification in the European Union and
United States. Grower group operation certification is also utilized by
other standards organizations, such as the International Accreditation
Forum and GlobalG.A.P., to provide small-holder farming operations
access to markets while ensuring the integrity of the supply chain.\50\
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\48\ http://www.ifoam.bio/.
\49\ https://www.ifoam-eu.org/sites/default/files/page/files/small_holder_group_certification_0.pdf.
\50\ https://www.iaf.nu/;https://www.globalgap.org/uk_en/.
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On January 21, 2011, the NOP issued Policy Memorandum 11-10,
``Certification of Grower Groups,'' \51\ which specified how certifying
agents could certify grower group operations, using 2002 and 2008 NOSB
recommendations.\52\ The NOSB recommendations identified criteria for
grower group operations to qualify for certification, and auditing
practices and methodologies for certifying agents to inspect grower
groups and assess the compliance of the internal control system.
---------------------------------------------------------------------------
\51\ Policy Memorandum 11-10, Certification of Grower Groups.
January 21, 2011: https://www.ams.usda.gov/sites/default/files/media/NOP-11-10-GroupGrowerCert.pdf.
\52\ NOSB Recommendation: Criteria for Certification of Grower
Groups. October 20, 2002: https://www.ams.usda.gov/sites/default/files/media/Rec%20Criteria%20for%20Certification%20of%20Grower%20Groups.pdf.
NOSB Recommendation: Certifying Operations with Multiple Production
Units, Sites, and Facilities under the National Organic Program.
November 19, 2008: https://www.ams.usda.gov/sites/default/files/media/NOP%20Final%20Rec%20Certifying%20Operations%20with%20Multiple%20Sites.pdf.
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This proposed rule codifies many of the requirements described in
the 2002 and 2008 NOSB recommendations, and adds several requirements,
including more detail about documentation requirements and inspection
methods. AMS and certifying agents need clear standards for the
certification of grower group operations as a single producer to
effectively identify and enforce against noncompliant activities.
Grower group operations present an elevated risk to organic integrity
because of their structure (numerous growers conform to one organic
system plan), longer and more complex supply chains, and use of an
internal control system for oversight of grower group members, grower
group production units, and handling facilities. Therefore,
requirements for consistent certification practices for grower group
operations are critical. AMS' proposed requirements for grower group
operations will strengthen the oversight of organic supply chains by
enabling certifying agents to more readily assess whether a grower
group operation is complying with the USDA organic regulations and
supporting enforcement actions when necessary.
Definitions
AMS proposes adding four new terms to the USDA organic regulations
to clarify the certification of a grower group operation as a single
producer: grower group operation, internal control system, grower group
member, and grower group production unit.
A grower group operation would be defined as a single producer
consisting of grower group members in geographical proximity governed
by an internal control system under an organic system plan certified as
a single crop and/or wild crop production and handling operation.
Therefore, the requirements for production and handling operations
throughout the regulations would apply to a grower group operation as a
single producer. AMS has not committed to a specific maximum distance
for geographic proximity and is not proposing parameters for the
physical extent of a grower group operation. Certifying agents will
need to determine if the locations of grower group members within a
grower group production unit and grower group operation meet the
``geographical proximity'' requirement based on the conditions of an
operation. Generally, this will vary depending on site-specific
conditions and crops.
A grower group member would be defined as a person engaged in the
activity of growing or gathering a crop and/or wild crop as a member of
a grower group operation. The practices of each grower group member
would need to align with the organic system plan.
[[Page 47569]]
The requirements for producers and handlers throughout the regulations
would also apply to grower group members, although some requirements
may be met collectively by the grower group operation, such as the
organic production and handling system plan.
The proposed rule defines an internal control system (ICS) as an
internal quality management system that establishes and governs the
review, monitoring, training, and inspection of the grower group
operation and the procurement and distribution of shared production and
handling inputs and resources, to maintain compliance with the USDA
organic regulations as a single producer. The ICS is a key component of
a grower group operation certified as a single producer. The ICS
verifies that the grower group operation is implementing the organic
system plan, ensuring that growers or gatherers and handling facilities
know how to comply. The ICS is responsible for the overall compliance
of the grower group operation and its adherence to the organic system
plan.
Finally, this rule proposes adding the term grower group production
unit: A defined subgroup of grower group members in geographical
proximity as a part of a single grower group operation that use similar
practices and shared resources to grow or gather similar crops and/or
wild crops. Adding this proposed term will clarify that each grower
group production unit within a grower group operation requires an
initial and annual inspection by the certifying agent, as required by
Sec. 205.403(a)(1) of the organic regulations. The term also clarifies
that a grower group operation may produce and market more than one type
of crop or wild crop, with each grower group production unit described
and managed under a single organic system plan of a grower group
operation.
Certification Requirements for Grower Group Operations
This proposed rule would add provisions to the general requirements
for certification (Sec. 205.400) which are specific to grower group
operations. These criteria would clarify the eligibility requirements
for grower group operations. Entities that do not meet all criteria
would need to be certified separately in order to sell, label, or
market agricultural products certified to the USDA organic regulations.
The proposed rule would require that a grower group operation is a
single producer legally organized as a person. The OFPA and the USDA
organic regulations apply to a person as the basic regulatory unit. The
organization of a grower group operation as a person clarifies that
certification is granted to the grower group operation as a single
producer, rather than individual grower members engaged in the activity
of growing or gathering within the grower group operation.
Under the proposed rule, a grower group operation may sell, label,
or represent only crops or wild crops as organic; any non-crop
agricultural products (e.g., livestock or livestock products) would not
be eligible for certification under the grower group operation. AMS
acknowledges that many organic farming systems utilize integrated crop-
livestock systems--especially operations in developing areas where
grower group operation certification is more likely to occur.
Therefore, the use of integrated or mixed crop-livestock systems is
compatible with and would be permitted in certified grower group
operations. However, the management of any non-crop agricultural
products must not affect the integrity of the organic crops or wild
crops produced and handled by the operation, and non-crop agricultural
products must not be sold, labeled, or represented as organic by the
grower group operation. Individual grower group members seeking to sell
non-crop agricultural products would need their non-crop agricultural
products certified independently from the grower group operation.
The proposed rule also specifies that grower group operations must
use centralized processing, distribution, and marketing facilities and
systems. In addition, AMS proposes a requirement that all crops and/or
wild crops sold, labeled, or represented as organic by a grower group
operation must be grown or gathered by grower group members only. A
grower group operation may not buy crops and/or wild crops from non-
member growers and sell, label, or represent them as organic using the
grower group certification. In turn, AMS also proposes that grower
group members must not market crops and/or wild crops as organic
outside of the grower group operation unless they are individually
certified.
Finally, this proposed rule would add a requirement that grower
group operations provide their certifying agent with the name and
location of all grower group members, grower group production units,
and the crops, wild crops, estimated yield, and growing/gathering areas
(acreage) of each grower group member and grower group production unit.
This information must be submitted at least annually as part of the
organic system plan.
The Internal Control System
This proposed rule would add an additional requirement for organic
system plans for grower group operations. Specifically, an organic
system plan (OSP) for a grower group operation would need to include a
description of the internal control system (ICS) and how it verifies
the operation's compliance with the USDA organic regulations. For all
operations, the OSP describes shared farming and handling practices,
inputs to be used (including seeds), monitoring practices and
procedures, recordkeeping systems, and practices to prevent commingling
and contact with prohibited substances (Sec. 205.201(a)).
The ICS serves as the grower group operation's internal governance
and verification system to ensure that grower group operation
production and handling activities at every level are implemented in
accordance with the OSP and are compliant with the USDA organic
regulations. A grower group operation's OSP must describe the function
of the ICS. This description must:
(1) Define the organizational structure, roles and responsibilities
of all personnel;
(2) Identify grower group production units and locations;
(3) Define geographical proximity criteria for grower group members
and grower group production units;
(4) Describe characteristics of high-risk grower group members and
grower group production units;
(5) Describe shared production practices and inputs;
(6) Describe the internal monitoring, surveillance, and auditing
methods used to assess the compliance of all grower group members;
(7) Describe the system of sanctions for noncompliant grower group
members, including procedures to address noncompliances detected among
grower group members, impose sanctions, and remove grower group members
when warranted; and procedures for reporting noncompliances to the
certifying agent;
(8) Describe measures to protect against potential conflicts of
interest;
(9) Describe how training, production and handling inputs, and
other resources are procured and provided to all grower group members
and personnel;
(10) Have clear policies and procedures to verify the grower group
operation's and grower group members'
[[Page 47570]]
compliance with the USDA organic regulations; and
(11) Address any other terms or conditions determined by the
Administrator to be necessary to enforce compliance with the USDA
organic regulations and the Act.
This proposed rule would set inspection and oversight requirements
for the ICS. Specifically, the ICS would need to use qualified internal
inspectors (ICS personnel) free of conflicts of interest to conduct
independent and impartial inspections, at least annually. Consistent
with the scope of an on-site inspection of any organic producer, the
inspection of a grower group member should cover all areas of the
organic system plan, including a review of all production or gathering
areas managed by each grower group member, all post-harvest handling
and storage facilities, inputs and resources used, and records
maintained by each grower group member and grower group production
unit. ICS personnel must also conduct mass-balance audits of each
grower group member, grower group production unit, and handling
facility, including reconciliation of individual grower group member
and grower group production unit production with the grower group
operation's sales. ICS personnel conducting inspections should focus on
critical organic control points such as buffer areas, condition of
crops and/or wild crops, soil quality indicators, input and equipment
use and storage areas, and level of understanding of organic
requirements by the grower group members AMS expects that qualified ICS
personnel would be familiar with the local production practices,
general organic production and handling practices, the USDA organic
regulations, ICS procedures and regulations, and be fluent in the
language(s) of the grower group members and the ICS.
Finally, AMS proposes a requirement that the ICS must develop and
implement procedures to ensure that all production and handling
activities of the grower group operation are compliant with the USDA
organic regulations. This includes recordkeeping which demonstrates
complete audit trails for all crops and/or wild crops sold, labeled, or
represented as organic by the grower group operation, and a system to
sanction noncompliant members, production units, and handling
facilities of the grower group operation so that those members,
production units, and handling facilities do not jeopardize the
compliance status of the grower group operation.
On-Site Inspections by the Certifying Agent
This proposed rule would establish requirements for how certifying
agents must conduct annual on-site inspections of grower group
operations. The certifying agent would need to inspect the ICS, review
internal inspections conducted by the ICS, and observe ICS personnel
conducting inspections. Certifying agents would need to inspect each
handling facility and inspect at least 1.4 times the square root of the
total number of grower group members. This number must include all
high-risk members (determined according to the criteria in proposed
Sec. 205.400(g)(8)), and at least one grower member in each grower
group production unit (as defined in Sec. 205.2), to ensure all grower
group production units are inspected.
Inspections should include a full inspection of the growing or
gathering areas and records of the grower group members selected.
Selection of members should include all high-risk members; however, the
certifying agent should also select members from across the risk
spectrum--including lower-risk members. This may require a sample size
larger than the minimum required by the proposed regulation (i.e., more
than 1.4 times the square root of the number of grower group members).
As a best practice, after all risk-based and other inspection selection
criteria are satisfied, certifying agents should randomly select the
remaining member inspections so that different lower-risk grower group
members are inspected each year.
The square root sampling methodology was formalized for use by
agricultural regulatory inspectors by the Association of Official
Agricultural Chemists (AOAC) in 1927.\53\ The formula used was the
square root (Sqrt) of the lot size (N) + 1. The 1.4 multiplier aligns
with the highest minimum sampling number under the IFOAM accreditation
system and therefore provides a common minimum sampling number for all
grower group operations around the world. All numbers must be rounded
up to the next whole number (e.g., 50 members = 10 inspections, 100
members = 14 inspections, 500 members = 32 inspections, and 1000
members = 45 inspections).
---------------------------------------------------------------------------
\53\ Blanck, F.C. (1927). ``Report of the Committee on
Sampling,'' J. Assoc. Official Agricultural Chemists, 10, 92-98. The
square root sampling scheme was developed in the 1920s as a sampling
scheme for agricultural regulatory inspectors.
---------------------------------------------------------------------------
Risk-based inspections rely upon certifying agents having policies
and procedures to determine the risk factors associated with grower
group operations. The certifying agent should apply the risk assessment
procedures to determine and instruct the inspector on which grower
group members to inspect. When assessing the risks of the grower group
operation to determine which grower group members to inspect, the
certifying agent should consider:
Noncompliance history;
The criteria used to designate a collection of grower
group members as a single grower group production unit;
Application of prohibited materials adjacent to member
fields;
Split or parallel operations (i.e., they are also
producing nonorganic crops and/or wild crops);
Integrated crop-livestock systems;
Grower group members with incomes greater than $5000 USD
per year;
The procurement, availability and distribution of inputs
and resources to members;
The prevalence of nonorganic production of similar crops
in the region;
Geographic proximity of grower group members and grower
group production units;
Post-harvest handling practices designed to prevent
comingling and contact with prohibited substances;
New entrants to the grower group operation;
Size of grower group member's production or gathering
areas; and
Significant expansion of a grower group member's
production area.
As a best practice, the inspection of the ICS should also include:
Document review; auditing of production and sales/distribution records;
reconciliation of product inventory; review of procurement and
distribution of inputs; review of the inspections conducted by the ICS;
review of ICS personnel qualifications; witness audits to observe ICS
inspectors; review of noncompliance actions for grower group members;
examination of organic control points and high-risk areas; interviews
with managers responsible for the OSP, governance of the ICS, and
grower group members and individuals overseen by the ICS; and review of
training provided to ICS staff and grower group members.
Request for Comment
AMS seeks public comment regarding the certification of grower
group operations, including answers to the following questions:
1. Should there be limits on gross sales or field sizes of
individual grower group members? If yes, please describe these limits.
[[Page 47571]]
2. Should there be a limit on the maximum number of members allowed
in a grower group operation or in a grower group production unit? If
yes, please describe these limits.
3. Should there be a limit to the geographical distribution of
members? This includes limits to the maximum geographical proximity or
distance between grower group members, grower group production or
gathering areas, or grower group production units within a single
grower group operation. If yes, please describe these limits.
17--Calculating the Percentage of Organically Produced Ingredients
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.302(a)(1)............................ Revise...................... Dividing the total net weight (excluding water and salt) of combined organic
ingredients at formulation by the total weight (excluding water and salt) of
all ingredients.
205.302(a)(2)............................ Revise...................... Dividing the fluid volume of all organic ingredients (excluding water and salt)
at formulation by the fluid volume of all ingredients (excluding water and
salt) if the product and ingredients are liquid. If the liquid product is
identified on the principal display panel or information panel as being
reconstituted from concentrates, the calculation should be made based on
single-strength concentrations of the ingredients and all ingredients.
205.302(a)(3)............................ Revise...................... For products containing organically produced ingredients in both solid and
liquid form, dividing the combined weight of the solid organic ingredients and
the weight of the liquid organic ingredients (excluding water and salt) at
formulation by the total weight (excluding water and salt) of all ingredients.
--------------------------------------------------------------------------------------------------------------------------------------------------------
While most of this proposed rule focuses on certification and
compliance provisions, clarification of standards is also a critical
element of organic integrity. To ensure cross-industry consistency in
the certification of multi-ingredient processed products, AMS proposes
revising Sec. 205.302, which describes how to calculate the organic
content of multi-ingredient products. This calculation is performed by
certifying agents to classify products as ``100% organic,''
``organic,'' or ``made with organic (specified ingredients or food
group(s)).'' The proposed revisions would streamline calculations and
ensure consistent enforcement of the USDA organic regulations.
The USDA organic regulations (Sec. 205.302(a)) describe how to
measure or quantify the organic content in a multi-ingredient product.
To calculate organic content, the weight or volume of the organic
ingredients is divided by the total weight or volume of the product.
Water and salt added as ingredients are excluded from the calculation.
Section 205.302(a) currently refers to ``finished product'' and
includes the phrase ``total weight of the finished product.'' This
terminology has created confusion, unnecessary paperwork burden, and
enforcement challenges for certifying agents and organic handlers, as
it is not clear if ``finished product'' is meant to specifically
describe the product after processing or if it simply means the sum of
all ingredients at the time of formulation. The proposed changes would
clarify that the calculation of organic content is to be made at the
time of formulation, regardless of whether processing (currently
defined at Sec. 205.2) occurs after formulation.
When ingredients are combined and subsequently processed (e.g.,
cooked, baked, dehydrated, freeze dried), the post-processing weight of
all ingredients can be less than the weight of all ingredients at the
time of formulation due to loss of water from ingredients (i.e., not
added water). Calculating organic content based on the weight of
ingredients at formulation divided by the weight of the finished
product (after processing) could result in a calculation of organic
content in excess of 100 percent, which is not possible. The same can
be true of calculations based on fluid volume, as allowed at Sec.
205.302(a)(2). AMS is proposing these changes to ensure accurate and
consistent calculation of organic content by requiring calculation at
the time of formulation.
In December 2016, AMS published draft guidance \54\ on the topic of
calculating organic content to respond to an April 2013 NOSB
recommendation,\55\ inform the public of AMS' current thinking, and to
invite public comment.\56\ The calculation of organic content described
in this proposed rule is consistent with NOP 5037. AMS received no
objections via public comments to calculating organic content based on
the weight of ingredients at the time of formulation. The proposed
changes are consistent with the NOSB recommendation to amend Sec.
205.302(a)(1)-(3).
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\54\ The draft guidance and comments can be viewed at https://www.regulations.gov/document?D=AMS-NOP-16-0085-0001 and in the NOP
Program Handbook: https://www.ams.usda.gov/sites/default/files/media/NOP5037DraftGuidancePercentCalculations.pdf.
\55\ NOSB Recommendation, Calculating Percentage Organic in
Multi-Ingredient Products, April 11, 2013: https://www.ams.usda.gov/sites/default/files/media/NOP%20CACC%20Final%20Rec%20Calculating%20Percentage.pdf.
\56\ Notice of Draft Guidance for Calculating the Percentage of
Organic Ingredients in Multi-Ingredient Products, December 6, 2016:
https://www.federalregister.gov/documents/2016/12/06/2016-29173/national-organic-program-notice-of-draft-guidance-for-calculating-the-percentage-of-organic.
18--Supply Chain Traceability and Organic Fraud Prevention
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.2.................................... Add new term................ Organic fraud. Intentional deception for illicit economic gain, where
nonorganic products are labeled, sold, or represented as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified ingredients or food
group(s)).''
205.103(b)(2)............................ Revise...................... Fully disclose all activities and transactions of the certified operation in
sufficient detail as to be readily understood and audited, including
identification in records of products as ``100% organic,'' ``organic,'' or
``made with organic (specified ingredients or food group(s)),'' as applicable;
205.103(b)(3)............................ Redesignate................. Redesignate as paragraph (b)(4).
[[Page 47572]]
205.103(b)(4)............................ Redesignate................. Redesignate as paragraph (b)(5).
205.103(b)(3)............................ Add......................... Include audit trail documentation for product handled or produced by the
certified operation;
205.201(a)(3)............................ Revise...................... A description of the monitoring practices and procedures to be performed and
maintained, including the frequency with which they will be performed, to
verify that the plan is effectively implemented. This must include a
description of the monitoring practices and procedures to verify suppliers in
the supply chain and organic status of products received, and to prevent
organic fraud, as appropriate to the certified operation's activities;
205.501(a)(10)........................... Revise...................... Maintain strict confidentiality with respect to its clients under the
applicable organic certification program and not disclose to third parties
(except for the Secretary or the applicable State organic program's governing
State official or their authorized representatives) any business-related
information concerning any client obtained while implementing the regulations
in this part, except:
205.501(a)(10)(i)........................ Add......................... For information that must be made available to any member of the public, as
provided for in Sec. 205.504(b)(5);
205.501(a)(10)(ii)....................... Add......................... For enforcement purposes, certifying agents must exchange any compliance-
related information that is credibly needed to certify, decertify, or
investigate an operation, including for the purpose of verifying supply chain
traceability and audit trail documentation; and
205.501(a)(10)(iii)...................... Add......................... If a certified operation's proprietary business information is compliance-
related and thus credibly needed to certify, decertify, or investigate that
operation, certifying agents may exchange that information for the purposes of
enforcing the Act, but the information in question still retains its
proprietary character even after it is exchanged and all of the certifying
agents that are involved in the exchange still have a duty to preserve the
confidentiality of that information after the exchange.
205.501(a)(13)........................... Revise...................... Accept the certification decisions made by another certifying agent accredited
or accepted by USDA pursuant to Sec. 205.500. Certifying agents must provide
information to other certifying agents to ensure organic integrity or to
enforce organic regulations, including to verify supply chain integrity,
authenticate the organic status of certified products, and conduct
investigations;
205.501(a)(21)........................... Redesignate................. Redesignate as paragraph (a)(23).
205.501(a)(21)........................... Add......................... Annually, conduct risk-based supply chain audits to verify organic status of a
product(s) of a certified operation(s) it certifies, back to the source(s).
205.504(b)(4)............................ Revise...................... A copy of the procedures to be used for sharing information with other
certifying agents and for maintaining the confidentiality of any business-
related information as set forth in Sec. 205.501(a)(10);
205.504(b)(7)............................ Add......................... A copy of the criteria to identify high-risk operations and products; and
procedures to conduct risk-based supply chain audits, as required in Sec.
205.501(a)(21); and procedures to report credible evidence of organic fraud to
the Administrator.
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This proposed rule addresses many different sections of the USDA
organic regulations to enhance oversight, protect the integrity of the
organic label, and assure consumers that organic products meet a
consistent standard (see 7 U.S.C. 6501). Perhaps the most critical
component, and one which affects all aspects of this proposed rule, is
supply chain traceability from source to consumer (i.e., ``farm to
table'').
Because organic products are credence goods, the organic system
relies upon on trust between entities in organic supply chains.\57\
Therefore, traceability and verification are essential to the function
of a healthy organic market. This is especially true today, with
organic supply chains growing longer and more complex. Organic products
and ingredients are often handled by dozens of operations, including
many uncertified entities, on their way to the consumer. This may
expose organic products to greater risk--including opportunities for
mishandling and fraud.
---------------------------------------------------------------------------
\57\ A credence good is something with value or qualities that
cannot be easily determined by the consumer before, or even after,
purchase.
---------------------------------------------------------------------------
Underlying the value of the USDA organic label is an assumption
that organic products are not compromised at any step in the supply
chain. To verify the source at any step in the supply chain would
require complete visibility of the entire supply chain. However,
certified operations and certifying agents do not generally have access
to this information. Organic certification is typically verified back
to the last certified organic operation in the supply chain. In complex
supply chains, where products and ingredients are often handled
multiple times, information about a product's source may be difficult
to verify, especially where source information/origin is intentionally
obscured by some parties in the supply chain to protect confidential
business information.
Many parts of this proposed rule have already discussed ways to
address and improve supply chain traceability, largely through indirect
methods. These include:
Clarifying who needs to be certified, including previously
excluded operations (Sec. 205.101);
NOP Import Certificates (Sec. 205.273);
Clear identification of organic status and lot numbers on
nonretail containers (Sec. 205.307);
Trace-back audits and mass-balance audits during on-site
inspections (Sec. 205.403);
Specific qualification and training standards for organic
inspectors and certification review personnel (Sec. 205.501); and
Additional reporting of information about certified
organic operations in the Organic INTEGRITY Database (Sec. 205.501).
These proposed amendments will improve the industry's ability to
perform trace-back audits (and therefore ensure organic integrity).
However, AMS also proposes several additional amendments to more
directly address traceability. AMS expects both certified operations
and accredited certifying agents to share responsibility for product
traceability. The following proposed amendments will clarify
[[Page 47573]]
expectations for trace-back audits and product verification:
Organic operations must maintain audit trail documentation
to facilitate supply chain traceability, including identification of
products as organic on documents (Sec. 205.103);
Organic operations must describe in their organic system
plan the monitoring practices and procedures used to prevent organic
fraud and verify suppliers and organic product status (Sec. 205.201);
Certifying agents must share information with other
certifying agents to verify supply chains and conduct investigations
(Sec. 205.501 and Sec. 205.504); and
Certifying agents must have procedures for (1) identifying
high-risk operations and agricultural products to conduct risk-based
supply chain audits and for (2) reporting credible evidence of organic
fraud to the USDA (Sec. 205.504).
All successful systems of traceability include three common
elements: (1) Traceability within a single operation; (2) traceability
one step forward and one step back from an operation in a supply chain;
and (3) bidirectional traceability along an entire supply chain, source
to consumer, by a third party. The proposed rule supports traceability
by clarifying who is responsible for each element: Certified organic
operations are responsible for traceability within their operation,
back to their suppliers, and forward to their customers; certifying
agents are responsible for tracing products along a supply chain back
to their origin, and assessing the traceability efforts of operations.
This proposed rule would also add the new term organic fraud,
defined as intentional deception for illicit economic gain, where
nonorganic products are labeled, sold, or represented as organic. AMS
is including organic fraud to clarify actions this proposed rule is
intended to reduce.
Certified Operations
This proposed rule would require certified operations to maintain
an audit trail for products that they produce, receive, and/or handle.
In addition, certified operations would be required to describe and
implement a plan to: (1) Detect and prevent organic fraud in any
organic product that they produce, receive and/or handle; and (2)
identify, verify, and document their suppliers. These changes are
proposed to ensure that certified operations keep documentation that is
sufficient to verify the source, ownership history, and movement of
organic products (see audit trail definition in Sec. 205.2) and to
take measures to verify that the organic product they receive is
legitimately represented as organic. These proposed amendments are
intended to support AMS' goal of full supply chain traceability.
Although all entities in a supply chain are responsible for organic
integrity, these proposed amendments do not intend to shift liability
from one operation to another. An operation that encounters fraud
committed by a supplier may not be liable for that fraud, provided that
the operation, while following adequate detection and prevention
procedures, did not detect the fraud or deliberately continue to
represent a fraudulent product as organic.
AMS proposes amending the recordkeeping requirements at Sec.
205.103(b)(2) to clarify that records maintained by certified
operations must identify agricultural products as ``100% organic,''
``organic,'' or ``made with organic (specified ingredients or food
group(s)), as applicable. This proposed amendment is needed to ensure
that a product's organic status is clear throughout the audit trail.
AMS anticipates that most organic operations already maintain records
that meet this requirement, because product-specific records are
generally a good business practice and are necessary to ensure that
records are auditable. This proposed action is not intended to limit an
operation's flexibility to use alternative abbreviations or indicators
of a product's organic status on nonretail labels or other
recordkeeping. This may include use of abbreviations such as ``MWO''
(i.e., ``made with organic''), ORG (i.e., ``organic''), color
designations, or other tracking systems that are used internally within
a certified organic operation to denote a product's organic status.
Retail labels must continue to comply with the requirements at Subpart
D--Labels, Labeling, and Market Information.
The USDA organic regulations currently require certified operations
to maintain records that fully disclose all activities and transactions
in sufficient detail to be readily understood and audited (Sec.
205.103(b)(2)). The regulations also define the term audit trail but do
not use this term within the regulations. By inserting audit trail into
the recordkeeping requirements, this proposed rule clarifies the type
and extent of records that a certified operation needs to maintain.
Lastly, AMS proposes that certified operations must describe and
implement practices to verify the organic status of suppliers and
products in their supply chain and to prevent organic fraud. Such
procedures and practices are often referred to as ``fraud prevention
plans.'' Under the current organic regulations, certified operations
are already required to describe in their organic system plan (OSP)
``monitoring practices and procedures'' to ``verify that the [OSP] is
effectively implemented'' (7 CFR 205.201(a)(3)). This proposed rule
would explicitly state that an OSP must describe how existing
monitoring and verification practices are used to verify suppliers and
products and detect and prevent fraud. This will ensure that certified
operations use appropriate and effective means to prevent organic
fraud, help maintain organic integrity as products travel along a
supply chain, and help certifying agents to assess the effectiveness of
certified operations' anti-fraud efforts.
Traceability is a shared responsibility across all entities in a
supply chain, but the use of effective procedures at the operation
level is especially critical. Certified operations have first-hand
knowledge of their supply chains and are therefore better able to
detect and prevent fraud than a third party. Operation-level
traceability is also key to full supply chain trace backs; a gap or
deficiency of information at any step may prevent a full trace-back. As
part of a larger integrated system of traceability, fraud prevention
plans and procedures allow certified operations to verify that the
products in their supply chains are compliant with the USDA organic
regulations, and have been handled only by certified organic operations
(see 7 U.S.C. 6506(a)(1)).
The scope and complexity of a fraud prevention plan will depend on
the type of operation. For example, AMS does not expect a producer who
does not handle products produced by another operation to develop
supplier verification practices, beyond verifying that any purchased
inputs meet organic requirements. In contrast, a processer that
receives many organic ingredients from numerous suppliers would need to
augment their organic system plan to describe practices to minimize
organic fraud risks in lengthy supply chains.
In general, AMS expects that a robust plan for supply chain
oversight and organic fraud prevention would include:
A map or inventory of the operation's supply chain which
identifies suppliers;
Identification of critical control points in the supply
chain where organic fraud or loss of organic status are most likely to
occur;
[[Page 47574]]
A vulnerability assessment to identify weaknesses in the
operation's practices and supply chain;
Practices for verifying the organic status of any product
they use;
A process to verify suppliers and minimize supplier risk
to organic integrity;
Mitigation measures to correct vulnerabilities and
minimize risks;
Monitoring practices and verification tools to assess the
effectiveness of mitigation measures; and
A process for reporting suspected organic fraud to
certifying agents and the NOP.
AMS is aware of private initiatives in the organic sector to
develop best practices for organic operations to detect and prevent
organic fraud.\58\ We predict that these best practices will provide
organic operations with practical tools to assess, monitor, and
mitigate organic fraud risks within their organic supply chains.
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\58\ A good example is the Organic Trade Association's ``Organic
Fraud Prevention Solutions'' project: https://ota.com/OrganicFraudPrevention.
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Certifying Agents
To facilitate trace-back audits, investigations, and verification,
AMS proposes amending the organic regulations to clarify that
certifying agents must share information with one another for the
purposes of certification and enforcement. This change would not affect
the existing requirement that certifying agents maintain strict
confidentiality with respect to its clients and not disclose business-
related information to third parties that are not involved in the
regulation or certification of operations, as required by the OFPA (7
U.S.C. 6515(f)). For enforcement purposes, certifying agents must
exchange any compliance-related information that is credibly needed to
investigate an operation to determine compliance with the USDA organic
regulations. Certifying agents must share information during any
investigation to make a compliance determination, including assessment
of applications for certification, noncompliance investigations, and
suspension/revocation of certification.
If a certified operation's proprietary business information is
compliance-related and thus credibly needed to certify, decertify, and/
or investigate that operation, certifying agents are to exchange that
information for the purposes of enforcing the Act; however, the
information in question still retains its proprietary character even
after it is exchanged, and all certifying agents involved in the
exchange still have a duty to preserve the confidentiality of that
information after the exchange. AMS expects that this change will
support verification of the organic integrity of product as it moves
through the supply chain while maintaining confidentiality of
information outside of the required parties.
Finally, AMS is proposing a requirement that certifying agents
develop and maintain procedures and criteria for identifying which
operations and products among those it certifies are at high risk for
organic fraud. Identifying organic fraud is a key role of certifying
agents, and the OFPA requires that certifying agents fully implement
organic law and regulations (7 U.S.C. 6515(a)) and that appropriate and
adequate enforcement procedures be employed (7 U.S.C. 6506(a)(7)). The
proposed rule would require that certifying agents conduct supply chain
audits on a sample of operations and products which it determines to be
high-risk.
AMS expects that certifying agents would need to develop risk-
assessment criteria by identifying the characteristics of operations,
agricultural products, and supply chains which are vulnerable to
organic fraud or unintentional mishandling. These could include:
Products for which there is a relatively high demand, low supply, and
high organic premium; products which may be subject to treatment with
prohibited substances after production; unpackaged products which are
not enclosed in final retail containers; products with multiple
handlers in the supply chain; products from a supplier that lacks a
record of compliance; a sudden increase in the available supply of an
organic product or commodity; operations which change certifying agents
frequently; and operations which are certified by more than one
certifying agent. A certifying agent could rank or weight these
vulnerabilities and determine that the presence of a certain number of
these factors equates to high risk, while also considering the total
volume of product produced or handled by the operation. The
vulnerability criteria would change based on market trends, enforcement
actions, and changing practices within the organic industry; certifying
agents would need to ensure that the procedures and criteria remain
applicable and accurate. Because a product or operation's level of risk
may change over time, it is important that certifying agents conduct
supply chain audits of lower-risk products (in addition to supply chain
audits of high-risk products) to support proactive fraud prevention and
detection.
The proposed rule does not establish a specific metric for the
number of annual supply chain audits that a certifying agent needs to
conduct, because the quantity and types of high-risk operations will
vary by certifying agent. The supply chain audits should adequately
assess high-risk areas. AMS recognizes that certifying agents' ability
to conduct supply chain audits depends on the implementation of other
requirements in this proposed rule, for example, certification of
previously excluded operations (e.g., brokers, traders, importers, and
other trade facilitators) and the mandatory use of NOP Import
Certificates. Therefore, we expect that certifying agents will increase
the number of supply chain audits they conduct annually as this rule is
fully implemented and use of technology for supply chain traceability
is more widely adopted among certified operations. By requiring written
procedures, AMS expects that certifying agents will make better use of
information sharing with other certifying agents to assess organic
integrity. As a requirement of accreditation, certifying agents'
processes and procedures would be reviewed during regular accreditation
audits.
A final proposed change requires that certifying agents report
credible evidence of organic fraud to AMS. This requirement is expected
to help AMS take action against bad actors more quickly and is required
by the OFPA at 7 U.S.C. 6519(c)(4). Certifying agents will need to
develop procedures for evaluating evidence to determine if evidence is
credible and develop procedures for reporting suspected organic fraud.
USDA will review these procedures and examine specific cases during
regular accreditation audits.
Electronic Supply Chain Traceability Systems
In addition to the amendments proposed above, AMS will continue to
work toward its goal of full supply chain traceability and fully
verifiable organic products to support and enforce the OFPA
requirements (see 7 U.S.C. 6506(a)(1)). Looking forward, AMS expects
electronic tracking systems, including digital ledger technology (DLT),
will play an essential role in supply chain traceability. DLT can
provide secure, verifiable, transparent, and near-instantaneous
tracking at the item level in complex supply chains. Critically, DLT
can also protect confidential business information and trade secret
information by
[[Page 47575]]
automatically restricting sensitive information to authorized entities.
The utility of electronic tracking in food systems has been
demonstrated by several successful, high-profile pilot programs.\59\
AMS expects interest within the community to grow as stakeholders
realize the potential of this technology.
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\59\ Walmart partnered with IBM to create blockchain
traceability systems for mangos and pork: https://jbba.scholasticahq.com/article/3712-food-traceability-on-blockchain-walmart-s-pork-and-mango-pilots-with-ibm. Nestle is testing a public
blockchain for milk supply chains: https://www.forbes.com/sites/benjaminpirus/2019/07/09/nestle-tests-public-blockchain-for-dairy-supply-chain/#7a89053b5f0f. Bumble Bee Foods partnered with SAP to
trace yellowfin tuna with blockchain technology: https://news.sap.com/2019/03/bumble-bee-foods-sap-create-blockchain-track-fish/.
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Electronic supply chain tracking systems have the potential to
address many of the issues discussed in this proposed rule. However,
they are often based on emergent technology; additional time and
development is required before a universal electronic system could
feasibly be implemented across the organic industry. Barriers to
widespread adoption of an electronic tracking system include inadequate
access to technology and connectivity in rural areas, acceptance of
universal electronic standards (interoperability), and distribution of
costs. Despite these barriers, AMS encourages the development and use
of electronic tracking systems. We anticipate that electronic tracking
technologies will allow AMS to achieve its goal of full supply chain
traceability, and foresee incorporation of electronic tracking systems
into future enforcement strategies.
Request for Comment
AMS seeks comment from the public and organic stakeholders
regarding the proposed amendments to address supply chain traceability
and organic fraud, including answers to the following questions:
1. Does the proposed definition of organic fraud encompass the
types of fraudulent activities you witness in the organic supply chain?
2. Should certifying agents be required to perform a minimum number
of trace-back audits each year?
3. Should more specific fraud prevention criteria be included in
the regulation?
19--Technical Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section Current text Action Proposed text
--------------------------------------------------------------------------------------------------------------------------------------------------------
205.301(f)(2)......................... Be produced using ionizing radiation, Revise.................. Be processed using ionizing radiation,
pursuant to Sec. 205.105(f); pursuant to Sec. 205.105(f);
205.301(f)(3)......................... Be processed using sewage sludge, pursuant Revise.................. Be produced using sewage sludge, pursuant
to Sec. 205.105(g); to Sec. 205.105(g);
205.400(b)............................ Establish, implement, and update annually Revise.................. Establish, implement, and update annually
an organic production or handling system an organic production or handling system
plan that is submitted to an accredited plan that is submitted to an accredited
certifying agent as provided for in Sec. certifying agent as provided for in Sec.
205.200; 205.201;
205.401(a)............................ An organic production or handling system Revise.................. An organic production or handling system
plan, as required in Sec. 205.200; plan, as required in Sec. 205.201;
--------------------------------------------------------------------------------------------------------------------------------------------------------
AMS proposes amending Sec. 205.301 to correct a technical error in
the description of the prohibition of ionizing radiation and sewage
sludge. A previous technical correction (80 FR 6429) contained an error
in the language used to describe the prohibition on ionizing radiation
and sewage sludge. The terms ``produced'' and ``processed'' are
erroneously used to describe the use of ionizing radiation and sewage
sludge, respectively, in the current regulatory text. This proposed
action would correct the language at paragraphs (f)(2) and (f)(3) to
clarify that all products labeled as ``100% organic'' or ``organic''
and all ingredients identified as organic in the ingredient statement
of any product must not be processed using ionizing radiation or
produced using sewage sludge.
AMS also proposes amending Sec. Sec. 205.400(b) and 205.401(a), to
correct the reference to organic system plans (Sec. 205.201), which is
incorrectly cited in the current organic regulation.
20. Additional Amendments Considered but not Included in This Proposed
Rule
Packaged Product Labeling
If implemented, the proposed amendments to Sec. Sec. 205.2 and
205.100-101 would require the certification of operations that sell or
represent organic products. This would include operations in ``private-
label'' relationships; both the operation that produced/processed the
organic product (the ``contract manufacturer''), and the operation that
sells the product under its own label (the ``brand name'' or
``distributor''), would require certification under this proposed rule.
However, the current regulations, at Sec. Sec. 205.303-304, do not
clearly specify which certified operation and certifying agent must be
listed on the label of a private-label organic product. This causes
inconsistent interpretation of the regulation and variable labeling
practices. Part of the challenge is variation in the terms used to
describe the operations involved in the manufacturing, labeling, and
distribution of packaged products. AMS considered amending the labeling
requirements for packaged products to better align with the proposed
updates to Sec. Sec. 205.100-101 and clarify who is responsible for
the compliance of private-labeled organic products. Amending the
labeling requirements of Sec. Sec. 205.303-304 may also improve
traceability and transparency, and ease verification of organic status.
Although AMS has chosen not to include packaged product labeling
amendments in this proposed rule, we seek public comment on the
following questions regarding private-labeled organic products. Please
explain how your answers could improve organic integrity and
transparency, and facilitate the verification and traceability of
organic products.
1. For private-label packaged products, which certified
operation(s) should be listed on the retail label (brand name/
distributor, contract manufacturer, or both)?
2. Which certifying agent(s) should be listed?
3. Should the certifying agent listed on a label always be the
certifying agent of the certified operation listed on the label (i.e.,
should the certifying agent match the operation)?
[[Page 47576]]
4. Should listing contract manufacturers on labels be mandatory?
Should it be optional?
5. What terminology should be used to describe private-labeled
organic products?
6. What terminology should be used to describe the operations
involved in packaged product or private labeling (e.g., brand name
manufacturer, contract manufacturer, and distributor)?
Expiration of Certification
In this proposed rule, AMS proposes requiring expiration dates on
organic certificates (without the expiration date affecting the status
of an operation's certification). AMS also considered proposing
expiration of certification, in which an operation's certification
would expire on an annual basis if the operation did not submit fees
and update its certificate of organic operation. Expiration of
certification would fundamentally shift the current process of
certification, which allows organic certification to continue until
certification is surrendered, suspended, or revoked. Although AMS has
decided not to include annual expiration of certification in this
proposed rule, AMS seeks comment on the following questions:
1. How might annual expiration of certification improve organic
integrity?
2. What are the limitations of requiring expiration of
certification?
3. What minimum requirements must be met before renewing
certification?
4. Could an operation with unresolved adverse actions renew
certification?
5. Would a grace period be appropriate for operations that failed
to renew by the expiration date? If so, what length grace period would
be appropriate?
6. What process should exist for an operation to regain organic
certification should it allow its certification to expire?
7. Should certifying agents notify certified operations of their
upcoming expiration of certification?
Fees to AMS and Oversight of Certifying Agents' Fees
Since the final rule establishing the National Organic Program
(NOP) was first published in the Federal Register in 2000, the
production, marketing, and sale of organic foods has undergone
tremendous growth. The proposed rule is intended to strengthen
enforcement of the USDA organic regulations through many actions,
including strengthened certification processes and coverage of
importers, brokers, and traders of organic products. Section 2107
(a)(10) of the Act allows the NOP to include fees from producers,
certifying agents and handlers. AMS periodically reviews the fees for
accreditation and accreditation services to ensure that they are in
compliance with Circular A-25.\60\ AMS also oversees the NOP fees that
certifying agents and others charge for their services. AMS is seeking
public comments in this proposed rule on how fees in the NOP could
strengthen testing and enforcement across all stakeholders to ensure
that the NOP keeps pace with the rapid growth and better serves the
industry.
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\60\ https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-025.pdf.
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IV. Statutory and Regulatory Authority
A. Summary of Economic Analyses
This rule is regulatory meets the definition of a significant
regulatory action under Executive Order 12866, therefore triggering the
requirements set forth in Executive Order 13771. The Executive Order
13771 value is $7.3 million, discounted at 7 percent, annualized over a
15-year time horizon. The impact of benefits are likely to result in a
rule that would have an annual effect of $100 million or more on the
economy. See Office of Management and Budget's (OMB) Memorandum titled
``Interim Guidance Implementing Section 2 of the Executive Order of
January 30, 2017, titled `Reducing Regulation and Controlling
Regulatory Costs' '' (February 2, 2017).\61\
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\61\ Interim Guidance Implementing Section 2 of the Executive
Order of January 30, 2017, titled `Reducing Regulation and
Controlling Regulatory Costs': https://www.whitehouse.gov/sites/whitehouse.gov/files/briefing-room/presidential-actions/related-omb-material/eo_iterim_guidance_reducing_regulations_controlling_regulatory_costs.pdf.
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Executive Orders 12866, 13563, and 13771 control regulatory
review.62 63 Executive Orders 12866 and 13563 direct
agencies to assess all costs and benefits of available regulatory
alternatives, and, if regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects, distributive impacts,
and equity). Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, reducing costs, harmonizing rules,
and promoting flexibility.\64\ Executive Order 13771 directs Agencies
to identify at least two existing regulations to be repealed for every
new regulation unless prohibited by law. The total incremental cost of
all regulations issued in a given fiscal year must have costs within
the amount of incremental costs allowed by the Director of OMB, unless
otherwise required by law or approved in writing by the Director of
OMB.
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\62\ Executive Order 12866, Regulatory Planning and Review,
September 30, 1993: https://www.reginfo.gov/public/jsp/Utilities/EO_12866.pdf.
\63\ Executive Order 13771, Reducing Regulation and Controlling
Regulatory Costs, January 30, 2017: https://www.whitehouse.gov/presidential-actions/presidential-executive-order-reducing-regulation-controlling-regulatory-costs/.
\64\ https://www.federalregister.gov/executive-order/13563.
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The Regulatory Flexibility Act (5 U.S.C. 601-612) requires agencies
to consider the economic impact of each rule on small entities and
evaluate alternatives that would accomplish the objectives of the rule
without unduly burdening small entities or erecting barriers that would
restrict their ability to compete in the market.
AMS proposes amending several portions of the USDA organic
regulations (7 CFR part 205) to strengthen oversight and enforcement of
the production, handling, sale, and marketing of organic agricultural
products in the United States. Parts of the current regulations lack
requirements for traceability and oversight throughout the organic
supply chain. This creates vulnerabilities for fraud in the organic
market and inconsistent certification practices to mitigate that risk.
The proposed amendments would reduce the types of operations exempt
from organic certification (e.g., brokers, traders, importers, and
exporters); require the mandatory use of NOP Import Certificates for
all shipments of organic products imported to the United States; and
clarify recordkeeping and fraud prevention procedures. Additional
amendments would further clarify organic labeling, accreditation, and
certification requirements. Collectively, these proposed amendments
would address gaps in the organic standards to deter organic fraud and
create a level playing field for farms and businesses. This will assure
consumers and stakeholders that organic products meet a robust,
consistent standard, and reinforce the value of the organic label.
The new and modified organic standards in this proposed rule would
affect: Certifying agents; certified operations (farms, processers, and
handlers); and operations that are currently excluded or exempt from
organic certification (e.g., brokers, traders, importers, exporters).
The costs associated with this proposed rule are primarily due to
new or additional reporting and recordkeeping (paperwork) activities.
In
[[Page 47577]]
addition, there is some cost associated with currently excluded and
exempt operations becoming certified to handle organic products. AMS
estimated the benefits of this proposed rule by quantifying the organic
fraud that will be prevented by implementation of the proposed rule;
the potential benefits are expected to outweigh the estimated costs.
Total costs and benefits of the proposed rule are summarized in Table 1
in the Executive Summary of this document.
AMS also performed additional analysis to determine the proposed
rule's impact to small businesses. This analysis revealed that small
businesses producing, selling, handling, and marketing organic products
would not be adversely affected by the amendments proposed in this
rule. AMS expects that most of the entities affected by this proposed
rule are small businesses as defined by Small Business Administration
criteria. For each category of affected entity (certifying agents,
certified operations, and exempt or excluded operations that need to
become certified), AMS estimates that the costs of the proposed rule
for each business type would be less than 1 percent of the annual
revenue.
A full economic analysis of this proposed rule is available at
https://www.regulations.gov/. AMS invites the public to comment on the
economic analysis. You may submit comments on this proposed rule and
economic analysis to the Federal eRulemaking Portal at https://www.regulations.gov/. You can access this proposed rule, economic
analysis, and instructions for submitting public comments by searching
for document number AMS-NOP-17-0065.
B. Executive Order 12988
Executive Order 12988 instructs each executive agency to adhere to
certain requirements in the development of new and revised regulations
in order to avoid unduly burdening the court system. This proposed rule
is not intended to have a retroactive effect. To prevent duplicative
regulation, states and local jurisdictions are preempted under the OFPA
from creating programs of accreditation for private persons or state
officials who want to become certifying agents of organic farms or
handling operations. A governing state official would have to apply to
USDA to be accredited as a certifying agent, as described in section
6514(b) of the OFPA. States are also preempted under Sec. Sec. 6503
through 6507 of the OFPA from creating certification programs to
certify organic farms or handling operations unless the state programs
have been submitted to, and approved by, the Secretary as meeting the
requirements of the OFPA.
Pursuant to Sec. 6507(b)(2) of the OFPA, a state organic
certification program that has been approved by the Secretary may,
under certain circumstances, contain additional requirements for the
production and handling of agricultural products organically produced
in the state and for the certification of organic farm and handling
operations located within the state. Such additional requirements must
(a) further the purposes of the OFPA, (b) not be inconsistent with the
OFPA, (c) not be discriminatory toward agricultural commodities
organically produced in other States, and (d) not be effective until
approved by the Secretary.
In addition, pursuant to Sec. 6519(c)(6) of the OFPA, this final
rule does not supersede or alter the authority of the Secretary under
the Federal Meat Inspection Act (21 U.S.C. 601-624), the Poultry
Products Inspection Act (21 U.S.C. 451-471), or the Egg Products
Inspection Act (21 U.S.C. 1031-1056), concerning meat, poultry, and egg
products, respectively, nor any of the authorities of the Secretary of
Health and Human Services under the Federal Food, Drug and Cosmetic Act
(21 U.S.C. 301 et seq.), nor the authority of the Administrator of the
Environmental Protection Agency under the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. 136 et seq.).
C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501-3520) (PRA), AMS is requesting OMB approval for a new information
collection totaling 275,417 hours for the reporting and recordkeeping
requirements contained in this proposed rule. OMB previously approved
information collection requirements associated with the NOP and
assigned OMB control number 0581-0191. AMS intends to merge this new
information collection, upon OMB approval, into the approved 0581-0191
collection. Below, AMS has described and estimated the annual burden,
i.e., the amount of time and cost of labor, for entities to prepare and
maintain information to participate in this proposed voluntary labeling
program. The Organic Foods Production Act of 1990 (OFPA), as amended,
provides authority for this action.\65\
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\65\ The Organic Foods Production Act of 1990, 7 U.S.C. 6501-
6524, is the statute from which the Agricultural Marketing Service
derives authority to administer the NOP, and authority to amend the
regulations as described in this proposed rule. This document is
available at: https://uscode.house.gov/view.xhtml?path=/prelim@title7/chapter94&edition=prelim.
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Title: National Organic Program.
OMB Control Number: 0581-NEW.
Expiration Date of Approval: 3 years from OMB date of approval.
Type of Request: New collection.
Abstract
Information collection and recordkeeping are necessary to implement
reporting and recordkeeping necessitated by amendments to Sec. Sec.
205.2, 205.100, 205.101, 205.103, 205.201, 205.273, 205.300-205.302,
205.307, 205.310, 205.400, 205.403-205.404, 205.406, 205.500-501,
205.504, 205.511, 205.660-205.663, 205.665, 205.680, and 205.681 of the
USDA organic regulations to protect organic product integrity and build
consumer and industry trust in the USDA organic label. The proposed
rule would strengthen organic control systems, improve organic import
oversight, clarify organic certification standards, and enhance farm to
market traceability, using a risk-based approach to oversight to assure
consumers that organically produced products meet a consistent
standard.
This proposed rule would amend several sections of the USDA organic
regulations, 7 CFR part 205, to strengthen the NOP's ability to oversee
and enforce the production, handling, marketing, and sale of organic
agricultural products as established by the OFPA. This proposed rule
would improve organic integrity throughout the organic supply chain and
benefit stakeholders at all levels of the organic industry. The
proposed amendments would close gaps in the current regulations to
build consistent certification practices, deter organic fraud, and
improve transparency and product traceability. The NOP identified the
need for many of the proposed amendments as part of its direct
experience in administering this program, particularly via complaint
investigation and audits of certifying agents. Other proposed
amendments are based on recent amendments to the OFPA included in the
Agriculture Improvement Act of 2018; \66\ the recommendations of a 2017
Office of Inspector General audit; \67\ the
[[Page 47578]]
recommendations of the federal advisory committee to the NOP, the
National Organic Standards Board (NOSB); and industry stakeholder
feedback.
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\66\ The Agriculture Improvement Act of 2018 (Public Law No:
115-334), commonly known as the ``2018 farm bill,'' is available at
https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
Organic certification is discussed in Title X, Section 10104.
\67\ The National Organic Program International Trade
Arrangements and Agreements Audit Report 01601-0001-21, September
2017: https://www.usda.gov/oig/webdocs/01601-0001-21.pdf.
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This proposed rule will strengthen enforcement with amendments to
the USDA organic regulations and will modify the reporting and
recordkeeping burdens as summarized below.
1. Reduces the types of uncertified handling operations in the
organic supply chain that operate without USDA oversight.\68\ The
proposed amendments would require certification of operations that
facilitate the sale or trade of organic products, including but not
limited to, brokers, importers, and traders. These handlers would be
required to obtain organic certification by developing an organic
system plan (OSP) to describe the practices and procedures used in
their operations. Certifying agents customize the format of the OSP to
cover standards applicable to the operations seeking certification.
Because traders and brokers do not farm or manufacture organic
products, the OSPs for traders and brokers would address fewer sections
of the current rule than OSPs for operations that farm or manufacture
organic products. Therefore, reporting impacts for traders and brokers
are estimated at 40 hours for each uncertified handling operation to
prepare its initial OSP. AMS estimates a recordkeeping burden of 10
hours annually. The estimated annual reporting burden for each entity
to update its OSP in future years is 20 hours (Sec. Sec. 205.2,
205.100, 205. 101, and 205.103).
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\68\ Mandated by the Agriculture Improvement Act of 2018. See
section 10104(a).
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2. Requires all currently certified organic operations and new
applicants to describe their procedures for monitoring, verifying, and
demonstrating the organic status of their suppliers and the products
received to prevent organic fraud. This information would be part of
the OSP. AMS estimates that each currently certified operation and
applicant seeking certification would need 30 minutes to describe the
supply chain verification procedures and monitoring practices proposed
by this regulation (Sec. Sec. 205.103 and 205.201).
3. Requires that each shipment of organic products imported into
the United States through U.S. Ports of Entry must be declared as
organic to U.S. Customs and Border Protection (CBP) and associated with
an NOP Import Certificate (NOP 2110-1) \69\ or an equivalent data
source.\70\ The NOP Import Certificate contains specific information
about the quantity and source of a specific physical shipment of
imported organic products. NOP Import Certificates are currently used
for organic products imported from countries with which the NOP holds
equivalency arrangements. This proposed rule would expand and make
compulsory the use of NOP Import Certificates, regardless of an
imported product's country of origin. AMS estimates that exporters and
certifying agents would need 30 minutes to report mandatory data, and
prepare and review the NOP Import Certificate, respectively. AMS
estimates that importers would need an average of one-tenth (0.1) of an
hour, or 6 minutes, to compare the shipping manifest with the NOP
Import Certificate to verify the accuracy and organic compliance of
each shipment (Sec. Sec. 205.273 and 205.300).
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\69\ Office of Management and Budget (OMB)-approved form NOP
2110-1 NOP Import Certificate: https://www.ams.usda.gov/resources/nop-2110-1.
\70\ Mandated by The Organic Foods Production Act of 1990
(OFPA), as amended by the Agriculture Improvement Act of 2018. See
sections 10104(b)-(c).
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4. Clarifies that previously optional information must now be
provided on nonretail container labels used to ship or store organic
products. Along with the production lot number that is already
required, nonretail labels would need: (1) The word ``organic'' to
identify the product as organic; and (2) the name of the certifying
agent that certified the product. These changes would help maintain the
integrity of organic products by reducing misidentification and
mishandling, facilitating traceability through the supply chain,
reducing organic fraud, and allowing accurate identification of organic
product by customs officials and transportation agents. AMS estimates
that producers and/or processers would need one-tenth (0.1) of an hour,
or 6 minutes, to add the word ``organic'' and the name of the
certifying agent to the labels that are displayed on nonretail
containers (Sec. 205.307).
5. Codifies current practices for the certification of groups of
crop producers as a single operation.\71\ The proposed rule describes
the criteria to qualify as a grower group, how grower group operations
can comply with the existing USDA organic regulations, and how
certifying agents should inspect these operations. It also sets a risk-
based benchmark to determine how many grower group members in an
operation need to be inspected annually. AMS expects that these
requirements would not add to current paperwork impacts for grower
group operations to prepare an OSP and maintain their certification, or
for certifying agents and inspectors auditing and inspecting these
operations for compliance with organic standards (Sec. Sec. 204.400
and 204.403).
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\71\ NOP Policy Memo 11-10, Grower Group Certification, October
31, 2011: https:/www.ams.usda.gov/sites/default/files/media/NOP-11-
10-GroupGrowerCert.pdf.
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6. Requires certifying agents to create fraud prevention procedures
to: (1) Identify high-risk operations, supply chains, and agricultural
products, (2) conduct risk-based unannounced inspections and supply
chain trace-back and mass-balance audits, (3) share information with
other certifying agents to verify supply chains and conduct
investigations, and (4) report credible evidence of organic fraud to
the USDA. AMS estimates each certifying agent would spend one hour
documenting these procedures (Sec. Sec. 205.403, 205.501 and 205.504).
7. Requires that certifying agents conduct unannounced inspections
on at least 5% of the operations they certify, which is the current
recommended practice in NOP Instruction 2609.\72\ For the purposes of
estimating paperwork impacts, AMS expects that half of the unannounced
inspections (2.5% of total inspections) would meet the requirement for
a full annual inspection and would not impact current paperwork burden.
The remaining half of the unannounced inspections (2.5% of total
inspections) would target high-risk operations and supply chains and
would not count as a full annual inspection. Examples of targeted,
limited-scope unannounced inspections include, but are not limited to,
verifying livestock on pasture or performing targeted mass-balance and
trace-back audits. AMS estimates that the paperwork impacts associated
with these unannounced inspections would average inspectors 5 hours per
inspection; half of the estimated 10 hours for a full annual inspection
(Sec. 205.403).
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\72\ NOP 2609, Instruction, Unannounced Inspections. September
12, 2012. Available in the NOP Program Handbook: https://www.ams.usda.gov/sites/default/files/media/2609.pdf.
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8. Requires certifying agents to issue standardized certificates of
organic operation generated from the USDA's publicly available Organic
Integrity Database (INTEGRITY).\73\ This would require an initial
upload of mandatory data for each operation and maintenance, at least
annually, to ensure that data in INTEGRITY are current and accurate.
Currently, all certifying agents have voluntarily uploaded and maintain
50% or more
[[Page 47579]]
data on all certified operations per the recommendations found in the
NOP's Data Quality Best Practices.\74\ The proposed amendments would
require a new, one-time burden of reporting hours for certifying agents
to upload remaining data pertaining to currently certified operations
into INTEGRITY for the first time. It is estimated that uploading these
data into INTEGRITY would require 30 minutes for each operation and
would be performed by administrative support personnel who have a lower
wage rate than review and compliance staff.
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\73\ Organic Integrity Database: https://organic.ams.usda.gov/integrity/.
\74\ Data Quality Best Practices: https://www.ams.usda.gov/sites/default/files/media/INTEGRITY%20Data%20Quality.pdf.
---------------------------------------------------------------------------
The proposed amendments would simultaneously eliminate the
requirement to physically mail the Administrator or State Organic
Program paper copies of: (1) The list of operations certified annually;
(2) notifications of proposed adverse actions, approvals, or denials of
corrective actions; and (3) notifications of executions of adverse
actions regarding certified operations or operations applying for
certification (Sec. Sec. 205.404 and 205.501). AMS is not seeking to
modify the estimate of paperwork burden associated with these changes
in requirements because any change would be trivial and these
activities and tasks are still occurring electronically as a part of
maintaining the data on all operations over time.
9. Requires certifying agents to submit their decision criteria for
acceptance of mediation, and a process for identifying personnel
conducting mediation and setting up mediation sessions with its
administrative policies and procedures provided in Sec. 205.504(b).
AMS estimates each certifying agent would spend one hour documenting
these procedures that they are already implementing.
10. Clarifies how certified operations may submit annual updates to
their OSP. This includes practices or procedures that have changed
since their last approved OSP, rather than submitting an OSP in its
entirety. This would reduce unnecessary paperwork without compromising
oversight because operations would continue to maintain an OSP that
accurately reflects current practices and procedures of the operation.
This codifies current policy and does not modify the paperwork burden
(Sec. 205.406).
11. Requires certifying agents to establish inspection oversight
procedures and demonstrate that they are sufficiently staffed with
qualified personnel and that all inspectors, certification reviewers,
and in-field evaluators meet knowledge, skills, and experience
qualifications. AMS estimates that each certifying agent would spend 60
minutes to draft policies and procedures for conducting inspector field
evaluations. Further, certifying agents must observe an inspector
performing an on-site inspection at least once every three years. AMS
estimates each certifying agent would conduct an average of four
inspector field evaluations per year and that this activity would
require 7.5 hours per evaluation (Sec. Sec. 205.2 and 205.501).
12. Requires inspectors and certification review staff to complete
an additional 10 hours of training annually.\75\ Through two audits
every 5 years, AMS estimates that inspectors and certification review
staff currently receive at least 10 hours of training per year from
certifying agents on topics related to the USDA organic regulations.
Inspectors and certification review personnel play a crucial role in
determining whether an operation is granted organic certification
initially and whether certified operations are compliant with the USDA
organic regulations. Certification review personnel may also serve as
inspectors. AMS is proposing an additional 10 hours of training
annually, calculated as two (2) five-hour trainings. Training offered
by the NOP through its new online Organic Integrity Learning Center
(OILC) and training provided by the certifying agents or other
providers may qualify towards the total of 20 hours of required
training (Sec. Sec. 205.2 and 205.501).
---------------------------------------------------------------------------
\75\ Ten hours of training are accounted for in the 2020
Information Collections Renewal for the NOP (AMS-NOP-19-0090; OMB
Control Number: 0581-0191). Our internal onsite accreditation audit
checklist used by our accreditation audit team includes a question
on training. With the implementation of this rule, the specific
hours of training offered by our 78 certifying agents will be
documented.
---------------------------------------------------------------------------
13. Clarifies AMS responsibilities for equivalent organic
conformity with foreign governments.\76\ The OFPA at Sec. 6505(b), and
the current USDA organic regulations at Sec. 205.500(c), provide the
authority to establish organic equivalency. The proposed regulations
describe the criteria, scope, and other parameters for ongoing peer
review audits of foreign organic conformity systems to determine
whether the USDA should continue, revise, or terminate such trade
arrangements. These peer review audits of trade arrangements would
occur twice within a five-year period and would result in new periodic
paperwork impacts for foreign governments. AMS estimates the paperwork
impacts for foreign governments when USDA reviews the applicable trade
arrangement to be 60 hours per year, which is comparable to the
estimated paperwork impacts for AMS audits of certifying agents (Sec.
205.511).
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\76\ Currently, the United States has established organic trade
arrangements with Canada, the European Union, the United Kingdom
(effective January 2021), India, Israel, Japan, New Zealand, South
Korea, Taiwan, and Switzerland.
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Respondents
AMS has identified four primary types of entities (respondents)
that would need to submit and maintain information as a result of this
proposed rule: Certified organic operations; accredited certifying
agents; organic inspectors; and foreign governments. Three respondent
types--certified operations (producers and handlers), certifying
agents, and inspectors--have been identified in a currently approved
information collection (0581-0191). To implement a 2018 Farm Bill
mandate, AMS is requiring certification of additional types of
operations in the organic supply chain and regular audits of trade
arrangements with foreign governments.\77\ This adds new types of
handlers as a subcategory of certified operations and foreign
governments as a new type of respondent.
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\77\ See Section 10104(a) of the Agriculture Improvement Act of
2018, Public Law No: 115-334, available at: https://www.congress.gov/115/plaws/publ334/PLAW-115publ334.pdf.
---------------------------------------------------------------------------
To more precisely understand the paperwork impacts of this proposed
rule, AMS has divided the categories of respondents into domestic and
foreign, as appropriate, to show the potential impacts on domestic-
based versus foreign-based USDA-accredited certifying agents,
inspectors, and certified operations, along with foreign-accredited
certifying agents, and foreign- governments serving as accrediting
bodies. For each type of respondent, we describe the general paperwork
submission and recordkeeping activities and estimate: (1) The number of
respondents; (2) the hours they spend, annually, creating and storing
records to meet the paperwork requirements of the organic labeling
program; and (3) the costs of those activities based on prevailing
domestic and foreign wages and benefits.
1. Certifying agents. Certifying agents are State, private, or
foreign entities accredited by the USDA, or by accreditation bodies of
foreign governments with whom USDA has equivalency, to certify domestic
and foreign producers and handlers as organic in accordance with the
OFPA
[[Page 47580]]
and the USDA organic regulations. Certifying agents determine whether a
producer or handler meets the organic requirements, using detailed
information from the operation about its specific practices and on-site
inspection reports from organic inspectors. Currently, there are 78
USDA-accredited certifying agents (46 are based in the United States
and 32 are headquartered in foreign countries). Both domestic- and
foreign-based USDA-accredited certifying agents certify operations
based in the United States and abroad. AMS assumes all currently
accredited certifying agents evaluate all types of production and
handling operations for compliance with the USDA organic regulations
and would be subject to the reporting and recordkeeping burdens of the
proposed amendments. In addition, AMS assumes there are 32 foreign
government-accredited foreign-based certifying agents that certify
handlers to the USDA organic regulations and that would issue NOP
Import Certificates, or their equivalent, for organic product shipments
to the United States.\78\
---------------------------------------------------------------------------
\78\ An estimate based on the number of foreign-based USDA
accredited certifying agents.
---------------------------------------------------------------------------
Certifying agents of operations that export to the United States
would need to issue import certificates for all shipments of imported
organic products. The USDA Foreign Agricultural Service (FAS) Global
Agricultural Trade System (GATS) showed 67,023 shipments of organic
product coming into the U.S. in 2017.\79\ Thirty-two (32) USDA-
accredited certifying agents based in foreign countries certify 92% of
the foreign operations certified under USDA organic standards. Of the
46 domestic-based USDA accredited certifying agents, 16 certifying
agents certify 8% of the foreign operations certified under USDA.\80\
This means that 30 domestic-based USDA-accredited certify agents only
certify domestic-based operations that do not import foreign organic
products or ingredients. AMS estimates 32 foreign-accredited certifying
agents that certify foreign operations under trade agreements.\81\ AMS
would review documents regarding imports during the accreditation
audits of USDA-accredited certifying agents. AMS estimates 30 minutes
for: (1) USDA-accredited domestic-based certifying agents to work with
their foreign-based operations to prepare the NOP Import Certificate
(Form NOP 2110-1) for 8% of 67,023 annual shipments; (2) USDA-
accredited foreign-based certifying agents to work with their foreign-
based operations to prepare the NOP Import Certificate for 46% of
67,023 annual shipments; and (3) foreign-accredited certifying agents
to work with their foreign-based operations to prepare the NOP Import
Certificate for 46% of 67,023 annual shipments.
---------------------------------------------------------------------------
\79\ Data source: USDA Foreign Agricultural Service (FAS) Global
Agricultural Trade System (GATS). Select: Partners, World Total,
Product Type, Imports--General, Products: All Aggregates; Product
Groups: Organic--Selected: https://apps.fas.usda.gov/gats/default.aspx.
\80\ Organic Integrity Database: https://organic.ams.usda.gov/integrity/.
\81\ An estimate based on the number of foreign-based USDA-
accredited certifying agents.
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AMS is proposing amendments that would reduce the current paperwork
burden of accredited certifying agents by eliminating the need to
provide notices of approval or denial of certification to the
Administrator following the issuance of a notice of noncompliance or
adverse action to an applicant for certification. Also, the proposed
rule removes the annual requirement for certifying agents to submit by
January 2 an annual list of operations certified. Certifying agents
would instead be required to update data in INTEGRITY for each
operation they certify. AMS is not seeking to modify the estimate of
paperwork burden with these changes in requirements because any change
would be trivial. These activities and tasks are still occurring
electronically as a part of maintaining the data on all operations over
time. In addition, all USDA-accredited certifying agents would need to
write procedures to identify high-risk operations and products they
certify and procedures to conduct supply-chain audits of those high-
risk products. Certifying agents would also be required to issue
organic certificates generated by INTEGRITY. Certifying agents would be
required to write procedures to demonstrate how they are sufficiently
staffed and that all persons who perform certification review
activities and on-site inspections (inspectors) are qualified and
complying with annual training requirements increased from 10 hours to
20 hours per year. Certifying agents would also be required to write
mediation procedures as per Sec. 205.504(b).
AMS projects that the proposed changes would increase the overall
reporting and recordkeeping burden for certifying agents (See Summary
Table 1: Certifying Agents). AMS estimates the annual collection cost
per domestic-based USDA-accredited certifying agents would be
$12,788.95.\82\ This cost is based on an estimated 123.36 labor hours
per certifying agent per year for staff with certification review
responsibilities at $45.91 per labor hour, including 31.7% benefits,
for a total salary component of $5,663.55 per year.\83\ The estimated
cost for domestic certifying agents also includes 300.24 labor hours
per certifying agent per year for administrative support staff to
upload data about certified operations to INTEGRITY at $23.73 per labor
hour, including 31.7% benefits, for a total salary component of
$7,125.40 per year.\84\
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\82\ In this assessment, all domestic labor rates are sourced
from the U.S. Bureau of Labor Statistics National Compensation
Survey, Occupational Employment and Wages, May 2018: https://www.bls.gov/oes/current/oes_nat.htm. Domestic benefits are based on
a Bureau of Labor Statistics News Release on Employer Costs for
Employee Compensation, which states that benefits account for 31.7%
of total average employer compensation costs. December 14, 2018:
https://www.bls.gov/news.release/ecec.nr0.htm.
\83\ The labor rate for certification review staff is based on
Occupational Employment Statistics group 13-1041, Compliance
Officers. Compliance officers examine, evaluate, and investigate
eligibility for or conformity with laws and regulations governing
contract compliance of licenses and permits, and perform other
compliance and enforcement inspection and analysis activities not
classified elsewhere.
\84\ The labor rate for administrative support staff is based on
Occupational Employment Statistics group 43-9199, Office and
Administrative Support Workers, who support general office work and
data entry functions.
---------------------------------------------------------------------------
In addition, AMS estimates the annual collection cost for all
domestic-based USDA-accredited certifying agents would be $589,458.85.
This cost is based on a total of 5,720.60 hours for all staff with
certification review responsibilities at $45.91 per labor hour,
including 31.1% benefits, for a total salary component of $262,636.29
for all staff with certification review and procedure writing
responsibilities of all domestic-based USDA-accredited certifying
agents. The estimated cost for all domestic-based certifying agents
also includes 13,771.19 hours total hours for administrative support
staff uploading data about certified operations to INTEGRITY at $23.73
per labor hour, including 31.7% benefits for a total salary component
of $326,822.56.
[[Page 47581]]
Summary Table 1--Certifying Agents
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cost/
Respondent categories Number of Wages + Hours per respondent Total all Total all
respondents benefits respondent type hours costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S.-Based USDA Certifying Agents....................... 46 $45.91 124.36 $5,709.37 5,720.60 $262,636.29
U.S.-Based USDA Certifying Agents--data entry........... 46 23.73 300.24 7,124.70 13,771.19 326,822.56
-----------------------------------------------------------------------------------------------
Subtotal U.S.-Based USDA Certifying Agents.......... 46 .............. .............. 12,834.06 19,491.79 589,458.85
--------------------------------------------------------------------------------------------------------------------------------------------------------
Foreign-Based USDA Certifying Agents.................... 32 24.59 547.74 13,468.93 17,527.63 430,181.78
Foreign-Based USDA Certifying Agents--data entry........ 32 12.71 300.24 3,816.05 9,569.81 121,633.35
-----------------------------------------------------------------------------------------------
Subtotal Foreign-Based USDA Certifying Agents....... 32 .............. .............. 17,286.98 27,097.44 551,815.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total USDA-Accredited Certifying Agents................. 78 .............. .............. 30,119.04 46,589.23 1,141,273.98
Foreign-Accredited Certifying Agents.................... 32 24.59 481.73 11,844.69 15,415.29 379,030.04
-----------------------------------------------------------------------------------------------
Total All Certifying Agents......................... 110 .............. .............. .............. 62,004.52 1,520,304.02
--------------------------------------------------------------------------------------------------------------------------------------------------------
For foreign-based USDA-accredited certifying agents, AMS estimates
the annual cost per certifying agent would be $17,527.63 per year. This
cost is based on an estimated 547.74 labor hours for staff with
certification review and procedure writing responsibilities at $24.59
per labor hour, including 35.92% benefits, for a total salary component
of $13,468.93 per foreign-based USDA-accredited certifying agent per
year. These estimated costs primarily pertain to the issuance and
review of NOP Import Certificates. The estimated cost for foreign-based
USDA-accredited certifying agents also includes 300.24 labor hours per
certifying agent per year for administrative support staff to upload
data about certified operations to INTEGRITY at $12.71 per labor hour,
including 35.92% benefits, for a total salary component of $3,816.08
per year.\85\
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\85\ In this assessment, all foreign labor rates are based on a
review of World Bank data, which indicates that labor rates in
foreign countries with USDA-accredited certifying agents are
approximately 52% of equivalent U.S. labor rates: https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD. Benefits are based
on a review of data from the Organisation for Economic Co-Operation
and Development (OECD), which indicates that benefits account for
35.92% of total compensation in foreign countries with USDA-
accredited certifying agents: https://stats.oecd.org/Index.aspx?DataSetCode=AWCOMP.
---------------------------------------------------------------------------
AMS estimates the annual collection cost for all foreign-based USDA
accredited certifying agents would total $551,815.13. This cost is
based on a total of 17,527.63 hours for all staff with certification
review responsibilities at $24.59 per labor hour, including 35.92%
benefits, for a total salary component of $430,181.78 for staff with
certification review and procedure writing responsibilities of all
foreign-based USDA-accredited certifying agents. The estimated cost for
all foreign-based USDA-accredited certifying agents also includes
9,569.81 hours total hours for administrative support staff uploading
data about certified operations to INTEGRITY at $12.71 per labor hour,
including 35.92% benefits, for a total salary component of $121,633.35.
For foreign-accredited certifying agents, AMS estimates the annual
cost will be $11,844.69 per certifying agent. This cost is based on an
estimated 481.73 labor hours per year for staff to issue and review NOP
Import Certificates, or an equivalent data source, at $24.59 per labor
hour plus 35.92% benefits. The total for all foreign-accredited
certifying agents is estimated to be $379,030.04. The cost is based on
an estimated 15,415.29 total hours for all staff involved in the
issuance and review of NOP Import Certificates, or an equivalent data
source, at $24.59 per labor hour plus 35.92% benefits.
The total cost for all certifying agents as a whole includes all
costs for all 78 USDA-accredited certifying agents, domestic- and
foreign-based, and all costs for the 32 foreign-accredited certifying
agents who certify operations that export products to the U.S. The
total costs for all certifying agents is $1,520,304.02. This cost is
based on 62,004.52 total hours at their respective wage rates and
benefits to comply with the proposed requirements.
2. Organic Inspectors. Inspectors conduct on-site inspections of
certified operations and operations applying for certification and
report the findings to the certifying agent. Inspectors may be
independent contractors or employees of certifying agents. Certified
operations must be inspected annually, and a certifying agent may call
for additional inspections or unannounced inspections on an as-needed
basis (Sec. 205.403(a)). Any individuals who apply to conduct
inspections of operations would need to submit information documenting
their qualifications to the certifying agent (Sec. 205.504(a)(3)).
Inspectors must also complete 20 hours of standardized organic training
every year. AMS estimates that 10 hours per year for each inspector is
a new paperwork burden associated with the proposed rule.
Inspectors provide an inspection report to the certifying agent for
each operation inspected (Sec. 205.403(e)) but are not expected to
store the record. Currently, AMS estimates that inspectors spend 10
hours on average to complete an inspection report for a full annual
inspection of an organic operation. The additional unannounced
inspections that would be newly required by this proposed rule are
likely to be more limited in scope (such as pasture or dairy
surveillance, or mass-balance and trace-back audits). AMS projects, on
average, that inspectors would spend 5 hours to complete an inspection
report for the unannounced targeted scope inspection. AMS Inspectors do
not have recordkeeping obligations; certifying agents maintain the
records of inspection reports (see Summary Table 2: Inspectors).
[[Page 47582]]
Summary Table 2--Inspectors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cost per
Respondent categories Number of Wages + Hours per respondent Total all Total all
respondents benefits respondent type hours costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
USDA U.S.-based Inspectors.............................. 148 $28.45 33.34 $948.43 4917.80 $139,897.57
USDA Foreign-based inspectors........................... 102 15.27 33.34 508.99 3417.45 52,172.66
-----------------------------------------------------------------------------------------------
All USDA Inspectors................................. 250 .............. .............. .............. 8335.25 192,070.23
--------------------------------------------------------------------------------------------------------------------------------------------------------
According to the International Organic Inspectors Association
(IOIA), there are approximately 250 inspectors currently inspecting
crop, livestock, handling, and/or wild crop operations that are
certified or have applied for certification. AMS estimates that 148
inspectors are working for USDA-accredited certifying agents in the
U.S. For the additional training and unannounced targeted-scope
inspections, AMS estimates the annual paperwork impact cost per
domestic-based inspector to be $948.43. This is based on an estimated
33.34 labor hours per year at $28.45 per labor hour, including 31.7%
benefits. The total annual cost for all domestic-based inspectors is
$139,897.57. This cost is based on 3,417 total hours for all domestic
based inspectors at $28.45 per labor hour, including 31.7%
benefits.\86\
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\86\ The labor rate for inspectors is based on Occupational
Employment Statistics group 45-2011, Agricultural Inspectors.
Agricultural inspectors inspect agricultural commodities, processing
equipment, facilities, and fish and logging operations to ensure
compliance with regulations and laws governing health, quality, and
safety.
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AMS estimates that 102 inspectors are working for USDA-accredited
certifying agents in foreign countries. AMS estimates the annual
paperwork impact cost per foreign-based inspector to be $508.99. This
estimate is based on an estimated 33.34 labor hours per year at $15.27
labor hour, including 35.92% benefits for attending 10 hours of
training and conducting 4.67 unannounced targeted scope inspections.
There are no recordkeeping costs for inspectors. The total annual cost
for all foreign-based inspectors is $52,172.66 at $15.27 per labor
hour, including 35.92% benefits. The total annual cost for all
inspectors working for USDA-accredited certifying agents is
$192,070.23, at their respective wage rates and benefits.
3. Producers and handlers. Domestic and foreign producers and
handlers seeking organic certification must submit an OSP that details
the practices and activities specific to their operation. Once
certified, operations are required to update any changes in their
operation or practices to their certifying agent at least annually.
(a) Uncertified Handlers. This proposed rule would require that
operations that facilitate the sale or trade of organic products--
including, but not limited to, brokers, importers, and traders--obtain
certification and submit and maintain an OSP. AMS estimates that 961
domestic,\87\ and an equal number of foreign-based, operations would
need to become certified as a result of this rule. As stated
previously, the OSPs for these handling operations would address fewer
sections of the current rule than OSPs for operations that farm or
manufacture organic products. Traders and brokers do not farm or
manufacture organic products so the OSPs for traders and brokers would
address fewer sections of the current rule than OSPs for operations
that produce or manufacture organic products. Certifying agents
customize the format of the OSP to cover standards applicable to the
operations seeking certification. Therefore, AMS estimates that
preparation of an initial OSP would require 40 reporting hours, plus 10
hours of annual recordkeeping. The estimated annual reporting burden
for each entity to update its OSP in future years is 20 hours (See
Summary Table 3a: Uncertified Handlers).
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\87\ These businesses are identified by NAICS Category 425:
Wholesale Electronic Markets and Agents and Brokers. These
businesses arrange for the sale of goods owned by others, generally
on a fee or commission basis. They act on behalf of the buyers and
sellers of goods. This subsector contains agents and brokers as well
as business-to-business electronic markets that facilitate wholesale
trade. Please refer to the ``Applicability and Exemptions from
Certification (Sec. Sec. 205.100-101)'' chapter in the Regulatory
Impact Analysis (RIA) for an explanation of how previously excluded
domestic handlers were estimated.
---------------------------------------------------------------------------
All operations that export organic products to the United States
would need to request an NOP Import Certificate, or its equivalent,
from their certifying agent for each organic shipment imported to the
United States. Further, operations that import organic products would
need to verify that each shipment is associated with and matches the
data on an NOP Import Certificate, and that organic integrity was
maintained throughout the import process. In addition, domestic and
foreign handlers that would be required to obtain organic certification
as a result of this proposed rule may also need to comply with the
proposed requirements for labeling nonretail containers.
Summary Table 3a--Uncertified Handlers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total cost per
Respondent categories Number of Wages + Total hours per respondent Total all Total all
respondents benefits respondent type hours costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Formerly Excluded Handlers--Domestic................... 961 $50.86 56.97 $2,897.49 54,752.30 $2,784,701.98
Formerly Excluded Handlers--Foreign.................... 961 27.13 84.87 2,302.56 81,561.50 2,212,763.50
------------------------------------------------------------------------------------------------
All Formerly Uncertified Handlers.................. 1,922 .............. ............... .............. 136,313.80 4,997,465.47
--------------------------------------------------------------------------------------------------------------------------------------------------------
AMS estimates the annual paperwork impact for each domestic handler
to prepare their initial organic system plan and to verify that
imported shipments match their respective NOP Import Certificates is
$2,897.71. This is based on an estimated 56.97 labor hours at $50.86
per labor hour, including 31.7% benefits. The total cost to all
previously
[[Page 47583]]
uncertified domestic handlers is $2,784,701.98. This cost is based on
55,752.30 total labor hours at $50.86 per labor hour, including 31.7%
benefits.\88\
---------------------------------------------------------------------------
\88\ For uncertified handlers, AMS chose to use the same labor
rate as certified producers and handlers: Occupational Employment
Statistics group 11-9013, Farmers, Ranchers, and Other Agricultural
Managers.
---------------------------------------------------------------------------
AMS estimates the annual paperwork impact for each foreign-based
handler to prepare their initial organic system plan and to work with
their certifying agent to prepare their NOP Import Certificates for the
products they export is $2,302.56. This is based on an estimated 84.87
labor hours per year at $27.13 per labor hour, which includes 35.92%
for benefits. The total cost to all previously uncertified foreign
handlers is $2,784,701.98. This cost is based on 55,752.30 total labor
hours at $27.13 per labor hour, which includes 35.92% for benefits.
Total costs to the 1922 previously uncertified handlers, domestic and
foreign, is $4,997,465.47, based on 136,313.80 total labor hours at
their respective domestic and foreign wage rates and benefits to
prepare and keep their initial OSP and related records, and to prepare
and review NOP Import Certificates for compliance.
(b) Certified Operations and New Applicants under Current Rules.
There currently are 42,259 organic operations worldwide that are
certified to the USDA organic standards. Over the next 12 months, AMS
expects 2,501 operations will seek organic certification, based on the
5.9% rate of growth in number of operations observed in the last 12
months under current rules.\89\ Therefore, AMS estimates that 26,408
operations based in the United States, and 18,352 operations based in
foreign countries, including the respective applicants for
certification, will be impacted by this proposed rule.
---------------------------------------------------------------------------
\89\ Organic Integrity Database: https://organic.ams.usda.gov/integrity/. Calculated on April 3, 2019.
---------------------------------------------------------------------------
All currently certified organic operations and projected new
applicants would need to describe their procedures for monitoring,
verifying and demonstrating the organic status of their suppliers and
products received to prevent organic fraud as part of their initial or
updated OSP. All certified organic operations would need to comply with
the proposed nonretail labeling requirements, and would be required to
keep all records about their organic production and/or handling for
five years (Sec. 205.103(b)(3)). See Summary Table 3b: Certified
Organic Operations and New Applicants.
Summary Table 3b--Certified Organic Operations and New Applicants
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total cost/
Respondent categories Number of Wages + Total hours/ respondent Total all Total all
respondents benefits respondent type hours costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Certified Producers & Handlers--New and Existing 26,408 $50.86 1.54 $78.33 47,815.50 $2,432,017.86
Domestic...............................................
Certified Producers & Handlers--New and Existing Foreign 18,352 27.13 1.54 41.78 20,466.00 555,242.58
-----------------------------------------------------------------------------------------------
All New and Existing Producers & Handlers........... 44,760 .............. .............. .............. 68,281.50 2,987,260.44
--------------------------------------------------------------------------------------------------------------------------------------------------------
AMS estimates that the average annual paperwork impact for domestic
certified organic producers and handlers to create a fraud prevention
procedure and to comply with nonretail labeling requirements is $78.33.
This is based on an estimated 1.54 labor hours at $50.86 per labor
hour, including 31.7% benefits. The total cost for all domestic
certified organic producers and handlers to comply with these new
requirements is $2,432,017.86. This cost is based on 47,815.50 labor
hours at $50.86 per labor hour, including 31.7% benefits.\90\
---------------------------------------------------------------------------
\90\ The labor rate for producers and handlers is based on
Occupational Employment Statistics group 11-9013, Farmers, Ranchers,
and Other Agricultural Managers, who plan, direct, or coordinate the
management or operation of farms, ranches, or other agricultural
establishments.
---------------------------------------------------------------------------
AMS estimates the average annual paperwork impact for foreign-based
USDA-certified organic producers and handers to create a fraud
prevention procedure and to comply with nonretail labeling requirements
to be $41.78. This is based on an estimated 1.54 labor hours per year
at $27.13 per labor hour, including 35.92% benefits. The total cost for
all foreign producers and handlers certified to the USDA organic
standards is $555,242.58. This cost is based on 20,446 labor hours year
at $27.13 per labor hour, including 35.92% benefits. The total cost for
the 44,760 current certified organic and projected new producers and
handlers under current rules, both domestic and foreign, is $2,987,260.
This cost is based on 68,281.50 labor hours at their respective
domestic and foreign wages and benefits, to create their new fraud
prevention procedures and comply with new nonretail label requirements.
4. Foreign Governments. The USDA has arrangements with 10 foreign
governments to facilitate the international trade of organic
products.\91\ The current regulations address this authority in general
terms under Sec. 205.500(c) but do not describe the criteria, scope,
and other parameters to establish, oversee, or terminate such
arrangements. The proposed rule describes equivalency determinations in
more detail; this creates a new type of PRA respondent category. The
proposed rule would allow a trade arrangement if AMS determines that
the technical requirements and conformity assessment system under which
foreign products labeled as organic are produced and handled are at
least equivalent to the requirements of the OFPA and the USDA organic
regulations. The proposed rule would also require periodic assessment.
---------------------------------------------------------------------------
\91\ Canada, the European Union, the United Kingdom (effective
January 2021), India, Israel, Japan, New Zealand, South Korea,
Taiwan, and Switzerland. Taiwan is not included in this assessment
because costs were calculated prior to May 2020, when the United
States-Taiwan equivalency arrangement became effective.
---------------------------------------------------------------------------
AMS expects these periodic peer review assessments would be similar
in depth and frequency to the audits of accrediting certifying agents
under USDA organic regulations and estimates a comparable level of
reporting and recordkeeping burden by foreign governments with whom AMS
has negotiated trade arrangements. AMS estimates the annual collection
cost per foreign government would be $1,721.15. This cost is based on
an estimated 60 reporting labor hours and an estimated 10 hours of
recordkeeping per foreign government per year at $24.59 per labor hour,
including 35.92% benefits, for a total salary component of $1,721.15
per
[[Page 47584]]
year. The total cost for all foreign governments, with whom AMS has
negotiated trade arrangements, to allow AMS to determine whether their
foreign products labeled as organic are produced and handled are at
least equivalent to the requirements of the OFPA and the USDA organic
regulations is $13,768.24. This cost is based on 560 total labor hours
for all foreign governments at $24.59 per labor hour, including 35.92%
benefits.\92\
---------------------------------------------------------------------------
\92\ The labor rate for foreign governments is estimated at 52%
of the labor rate for Occupational Employment Statistics group 13-
1041, Compliance Officers.
---------------------------------------------------------------------------
Total (Domestic and Foreign) Information Collection Cost (Reporting and
Recordkeeping) of Proposed Rule: $9,711,656 (Also, see Summary Table 4:
All Reporting and Recordkeeping Hours and Costs, and All Domestic
Reporting and Recordkeeping Hours and Costs)
Total All Reporting Burden Cost: $8,497,036
Estimate of Burden: Public reporting burden for the collection of
information is estimated to average .38 hours per year per response.
Respondents: Certifying agents, certified operations, inspectors,
and foreign governments.
Estimated Number of Reporting Respondents: 47,050.
Estimated Number of Reporting Responses: 644,269.
Estimated Total Annual Burden on Reporting Respondents: 244,927
hours.
Estimated Total Annual Reporting Responses per Reporting
Respondents: 13.69 reporting responses per reporting respondents.
Total All Recordkeeping Burden Cost: $1,214,620
Estimate of Burden: Public recordkeeping burden is estimated to be
an annual total of 0.65 hours per year per respondent.
Respondents: Certifying agents, certified operations, and foreign
governments.
Estimated Number of Recordkeeping Respondents: 46,768.
Estimated Total Recordkeeping Burden on Respondents: 30,568 hours.
Estimated Total Recordkeeping Responses per Recordkeeping
Respondents: 1 recordkeeping response per recordkeeping respondents.
Total Domestic Only Information Collection Cost (Reporting and
Recordkeeping) of Proposed Rule: $5,946,076
Total Domestic Only Reporting Burden Cost: $5,119,399
Estimate of Burden: Public domestic only reporting burden is
estimated to be an annual total .29 hours per year per domestic
respondent.
Respondents: Certifying agents, certified operations, and
inspectors.
Estimated Number of Domestic Reporting Respondents: 27,563.
Estimated Number of Domestic Reporting Responses: 380,119.
Estimated Total Annual Reporting Burden on Domestic Respondents:
110,719 hours.
Estimated Total Domestic Reporting Responses per Reporting
Respondents: 13.79 reporting response per reporting respondents.
Total Domestic Only Recordkeeping Burden Cost: $826,677
Estimate of Burden: Public domestic only recordkeeping burden is
estimated to be an annual total of 0.59 hours per year per respondent.
Respondents: Certifying agents and certified operations.
Estimated Number of Domestic Recordkeeping Respondents: 27,415.
Estimated Total Annual Recordkeeping Burden on Domestic
Respondents: 16,288 hours.
Estimated Number of Domestic Recordkeeping Responses: 27,542.
Estimated Total Domestic Recordkeeping Responses per Recordkeeping
Respondents: 1 recordkeeping response per recordkeeping respondents.
Summary Table 4--All Reporting and Recordkeeping Hours and Costs and All Domestic Reporting and Recordkeeping
Hours and Costs
----------------------------------------------------------------------------------------------------------------
Number of
Hours Costs respondents Respondent types
----------------------------------------------------------------------------------------------------------------
Total Reporting & Recordkeeping.... 275,495 $9,711,656 47,050 Certifying agents,
certified operations,
inspectors, and foreign
governments.
All Reporting...................... 244,927 8,494,137 47,050 Certifying agents,
certified operations,
inspectors, and foreign
governments.
All Recordkeeping.................. 30,568 1,214,620 46,768 Certifying agents,
certified operations, and
foreign governments.
Reporting & Recordkeeping--Domestic 126,977 5,946,076 27,563 Certifying agents,
certified operations, and
inspectors.
Domestic Reporting................. 110,719 5,119,399 27,563 Certifying agents,
certified operations, and
inspectors.
Domestic Recordkeeping............. 16,258 826,677 27,415 Certifying agents and
certified operations.
----------------------------------------------------------------------------------------------------------------
Comments
AMS is inviting comments from all interested parties concerning the
information collection and recordkeeping required as a result of the
proposed amendments to 7 CFR part 205. AMS seeks comment on the
following subjects:
1. Whether the proposed collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information would have practical utility.
2. The accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used.
3. Ways to enhance the quality, utility, and clarity of the
information to be collected.
4. Ways to minimize the burden of the collection of information on
those who are to respond, including the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
5. AMS estimates that the total number of certified organic
operations will grow by 5.6% annually, based on the increase in
operations recorded in INTEGRITY during the last 12 months. Is this a
reasonable and accurate projection of future growth, given the
[[Page 47585]]
additional burdens imposed by this proposed rulemaking? \93\
---------------------------------------------------------------------------
\93\ Organic Integrity Database: https://organic.ams.usda.gov/integrity/. Calculated on April 3, 2019.
---------------------------------------------------------------------------
Comments that specifically pertain to the information collection
and recordkeeping requirements of this proposed rule may be sent to the
Federal eRulemaking Portal at https://www.regulations.gov/. You can
access this proposed rule and instructions for submitting public
comments by searching for document number, AMS-NOP-17-0065. Comments
may also be sent to Valeria Frances, Agricultural Marketing Specialist,
National Organic Program, USDA-AMS-NOP, Room 2642-So., Ag Stop 0268,
1400 Independence Ave. SW, Washington, DC 20250-0268 and to the Desk
Officer for Agriculture, Office of Information and Regulatory Affairs,
Office of Management and Budget, New Executive Office Building, 725
17th Street NW, Room 725, Washington, DC 20503. Comments on the
information collection and recordkeeping requirements should reference
the date and page number of this issue of the Federal Register. All
responses to this notice will be summarized and included in the request
for OMB approval. All comments will become a matter of public record.
The comment period for the information collection and recordkeeping
requirements contained in this proposed rule is 60 days.
D. Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments. Executive Order 13175 requires Federal agencies to consult
and coordinate with tribes on a government-to-government basis on
policies that have tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian tribes, on the relationship between the Federal Government
and Indian tribes or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
The USDA's Office of Tribal Relations (OTR) has assessed the impact
of this rule on Indian tribes and determined that this rule does not
have tribal implications that require consultation at this time. If a
tribe requests consultation AMS will work with the OTR to ensure
meaningful consultation is provided where changes, additions, and
modifications identified herein are not expressly mandated by Congress.
E. Civil Rights Impact Analysis
AMS has reviewed this proposed rule in accordance with the
Department Regulation 4300-4, Civil Rights Impact Analysis, to address
any major civil rights impacts the proposed rule might have on
minorities, women, and persons with disabilities. AMS has determined
that this proposed rule has no potential for affecting producers,
handlers, certifying agents, or inspectors in protected groups
differently than the general population of producers, handlers,
certifying agents, or inspectors.
List of Subjects in 7 CFR Part 205
Administrative practice and procedure, Agriculture, Animals,
Archives and records, Imports, Labeling, Organically produced products,
Plants, Reporting and recordkeeping requirements, Seals and insignia,
Soil conservation.
For the reasons set forth in the preamble, the United States
Department of Agriculture proposes to amend 7 CFR part 205 as follows:
7 CFR PART 205--NATIONAL ORGANIC PROGRAM
0
1. The authority citation for 7 CFR Part 205 continues to read as
follows:
Authority: 7 U.S.C. 6501-6524.
0
2. Amend Sec. 205.2 by:
0
a. Revising the definitions ``Handle'', ``Handler'', and ``Handling
operation'';
0
b. Removing the term ``Retail food establishment''; and
0
c. Adding in alphabetical order the terms ``Adverse action,''
``Certification activity,'' ``Certification office,'' ``Certification
review,'' ``Conformity assessment system,'' ``Grower group member,''
``Grower group operation,'' ``Grower group production unit,''
INTEGRITY,'' ````Internal control system,'' ``Organic exporter,''
``Organic fraud,'' ``Organic importer of record,'' ``Retail
operation,'' and ``Technical requirements''.
The revisions and additions read as follows:
Sec. 205.2 Terms defined.
* * * * *
Adverse action. A noncompliance decision that adversely affects
certification, accreditation, or a person subject to the Act, including
a proposed suspension or revocation; a denial of certification,
accreditation, or reinstatement; a cease and desist notice; or a civil
penalty.
* * * * *
Certification activity. Any business conducted by a certifying
agent, or by a person acting on behalf of a certifying agent, including
but not limited to: Certification management; administration;
application review; inspection planning; inspections; sampling;
inspection report review; material review; label review; records
retention; compliance review; investigating complaints and taking
adverse actions; certification decisions; and issuing transaction
certificates.
Certification office. Any site or facility where certification
activities are conducted, except for certification activities that
occur at certified operations or applicants for certification, such as
inspections and sampling.
* * * * *
Certification review. The act of reviewing and evaluating a
certified operation or applicant for certification and determining
compliance with the USDA organic regulations. This does not include
performing an inspection.
* * * * *
Conformity assessment system. All activities undertaken by a
government to ensure that the applicable technical requirements for the
production, handling, and processing of organic agricultural products
are fully and consistently applied from product to product.
* * * * *
Grower group member. A person engaged in the activity of growing or
gathering a crop and/or wild crop as a member of a grower group
operation.
Grower group operation. A single producer consisting of grower
group members in geographical proximity governed by an internal control
system under an organic system plan certified as a single crop and/or
wild crop production and handling operation.
Grower group production unit. A defined subgroup of grower group
members in geographical proximity as a part of a single grower group
operation that use similar practices and shared resources to grow or
gather similar crops and/or wild crops.
Handle. To sell, process, or package agricultural products,
including but not limited to trading, facilitating sale or trade,
brokering, repackaging, labeling, combining, containerizing, storing,
receiving, or loading.
Handler. Any person engaged in the business of handling
agricultural products.
Handling operation. Any operation or portion of an operation that
handles agricultural products, except for
[[Page 47586]]
operations that are exempt from certification.
* * * * *
INTEGRITY. The National Organic Program's electronic, web-based
reporting tool for the submission of data, completion of certificates
of organic operation, and other information, or its successors.
Internal control system. An internal quality management system that
establishes and governs the review, monitoring, training, and
inspection of the grower group operation and the procurement and
distribution of shared production and handling inputs and resources, to
maintain compliance with the USDA organic regulations as a single
producer.
* * * * *
Organic exporter. The owner or final exporter of the organic
product who facilitates the trade of, consigns, or arranges for the
transport/shipping of the organic product from a foreign country.
Organic fraud. Intentional deception for illicit economic gain,
where nonorganic products are labeled, sold, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients or food group(s)).''
Organic importer of record. The operation responsible for accepting
imported organic products within the United States.
* * * * *
Retail operation. An operation that sells agricultural products
directly to final consumers through in-person and/or virtual
transactions.
* * * * *
Technical requirements. A system of relevant laws, regulations,
regulatory practices, and procedures that address the production,
handling, and processing of organic agricultural products.
* * * * *
0
3. Amend Sec. 205.100 by revising paragraphs (a) and (c) introductory
text to read as follows:
Sec. 205.100 What has to be certified.
(a) Except for the exempt operations described in Sec. 205.101,
each operation, or portion of an operation, that produces or handles
agricultural products that are intended to be sold, labeled, or
represented as ``100 percent organic,'' ``organic,'' or ``made with
organic (specified ingredients or food group(s))'' must be certified
according to the provisions of subpart E of this part and must meet all
other applicable requirements of this part.
* * * * *
(c) Any person or responsibly connected person that:
* * * * *
0
4. Revise Sec. 205.101 to read as follows:
Sec. 205.101 Exemptions from certification.
The following operations in paragraphs (a) through (e) of this
section are exempt from certification under subpart E of this part and
from submitting an organic system plan for acceptance or approval under
Sec. 205.201 but must comply with the applicable organic production
and handling requirements of subpart C of this part, including the
provisions for prevention of contact of organic products with
prohibited substances set forth in Sec. 205.272, and the specific
additional requirements stipulated in Sec. 205.101(a) through (f).
(a) A production or handling operation that sells agricultural
products as ``organic'' but whose gross agricultural income from
organic sales totals $5,000 or less annually. The products from such
operations must not be used as ingredients identified as organic in
processed products produced by another handling operation. Such
operations must comply with the labeling provisions of Sec. 205.310.
(b) A retail operation or a portion of a retail operation that
sells, but does not process, organically produced agricultural
products.
(c) A retail operation or portion of a retail operation that
processes agricultural products that were previously labeled for retail
sale as ``100 percent organic,'' ``organic,'' or ``made with organic
(specified ingredients or food group(s)),'' provided that the products
are processed onsite at the point of sale to the final consumer. Such
operations must comply with the labeling provisions of Sec. 205.310,
and must maintain records sufficient to:
(1) Prove that agricultural products identified as organic were
organically produced and handled; and
(2) Verify quantities produced or sold from such agricultural
products.
(d) A handling operation or portion of a handling operation that
only handles agricultural products that contain less than 70 percent
organic ingredients (as described in Sec. 205.301(d)), or that only
identifies organic ingredients on the information panel. Such
operations must comply with the labeling provisions of Sec. Sec.
205.305 and 205.310 and must maintain records sufficient to:
(1) Prove that agricultural products identified as organic were
organically produced and handled; and
(2) Verify quantities produced or sold from such agricultural
products.
(e) An operation that only stores, receives, and/or loads
agricultural products, but does not process or alter such agricultural
products.
(f) Records described in subparagraphs (a)-(d) of this section must
be maintained for no less than 3 years beyond their creation, and the
operations must allow representatives of the Secretary and the
applicable State organic programs' governing State official access to
these records for inspection and copying during normal business hours
to determine compliance with the applicable regulations set forth in
this part.
0
5. Amend Sec. 205.103 by:
0
a. Revising paragraph (b)(2);
0
b. Redesignating paragraphs (b)(3)and (4) as paragraphs (b)(4) and (5);
and
0
c. Adding new paragraph (b)(3).
The revision and addition read as follows:
Sec. 205.103 Recordkeeping by certified operations.
* * * * *
(b) * * *
(2) Fully disclose all activities and transactions of the certified
operation in sufficient detail as to be readily understood and audited,
including identification in records of products as ``100% organic,''
``organic,'' or ``made with organic (specified ingredients or food
group(s)),'' as applicable;
(3) Include audit trail documentation for product handled or
produced by the certified operation;
* * * * *
0
6. Amend Sec. 205.201 by:
0
a. Removing ``or excluded'' in paragraph (a) introductory text;
0
b. Revising paragraph (a)(3); and
0
c. Adding paragraph (c).
The revision and addition read as follows:
Sec. 205.201 Organic production and handling system plan.
(a) * * *
(3) A description of the monitoring practices and procedures to be
performed and maintained, including the frequency with which they will
be performed, to verify that the plan is effectively implemented. This
must include a description of the monitoring practices and procedures
to verify suppliers in the supply chain and organic status of products
received, and to prevent organic fraud, as appropriate to the certified
operation's activities;
* * * * *
(c) In addition to paragraph (a) of this section, a grower group
operation's organic system plan must describe its internal control
system. The description of the internal control system must:
[[Page 47587]]
(1) Define the organizational structure, roles, and
responsibilities of all personnel;
(2) Identify grower group production units and locations;
(3) Define geographical proximity criteria for grower group members
and grower group production units;
(4) Describe characteristics of high-risk grower group members and
grower group production units;
(5) Describe shared production practices and inputs;
(6) Describe the internal monitoring, surveillance, and auditing
methods used to assess the compliance of all grower group members;
(7) Describe the system of sanctions for noncompliant grower group
members, including procedures to address noncompliances detected among
grower group members, impose sanctions, and remove grower group members
when warranted, and procedures for reporting noncompliances to the
certifying agent;
(8) Describe measures to protect against potential conflicts of
interest;
(9) Describe how training, production and handling inputs, and
other resources are procured and provided to all grower group members
and personnel;
(10) Have clear policies and procedures to verify the grower group
operation's and grower group members' compliance with the USDA organic
regulations; and
(11) Address any other terms or conditions determined by the
Administrator to be necessary to enforce compliance with the USDA
organic regulations and the Act.
0
7. Add Sec. 205.273 to subpart C to read as follows:
Sec. 205.273 Imports to the United States.
Each shipment of organic products imported into the United States
through U.S. Ports of Entry must be certified pursuant to subpart E of
this part, labeled pursuant to subpart D of this part, be declared as
organic to U.S. Customs and Border Protection, and be associated with a
valid NOP Import Certificate (Form NOP 2110-1) or equivalent data
source.
(a) Persons exporting organic products to the United States must
request an NOP Import Certificate, or provide data through an
equivalent data source, from a certifying agent, for each physical
shipment of certified organic products prior to their export. Only
certifying agents accredited by the USDA or foreign certifying agents
authorized under an organic trade arrangement may issue an NOP Import
Certificate or approve a listing in an equivalent data source (e.g., a
third-party export system).
(b) The certifying agent must review an NOP Import Certificate
request, determine whether the shipment complies with the USDA organic
regulations, and issue the NOP Import Certificate or equivalent within
30 calendar days of receipt if the shipment complies with the USDA
organic regulations.
(c) Each compliant organic shipment must be declared as organic to
U.S. Customs and Border Protection through a U.S. Port of Entry by
uploading the unique NOP Import Certificate, or equivalent electronic
data entry, into the U.S. Customs and Border Protection's Automated
Commercial Environment system.
(d) Upon receiving a shipment with organic products, the organic
importer of record must ensure the shipment is accompanied by a
verified NOP Import Certificate or equivalent; must verify that the
shipment contains only the quantity and type of certified organic
product specified on the NOP Import Certificate or equivalent; and must
verify that the shipment has had no contact with prohibited substances
pursuant to Sec. 205.272 or exposure to ionizing radiation pursuant to
Sec. 205.105, since export.
(e) The use of the term equivalent in this section refers to
electronic data, documents, identification numbers, databases, or other
systems verified as an equivalent data source to the NOP Import
Certificate.
0
8. Amend Sec. 205.300 by revising paragraph (c) to read as follows:
Sec. 205.300 Use of the term, ``organic.''
* * * * *
(c) Products produced in a foreign country and exported for sale in
the United States must be certified pursuant to subpart E of this part,
labeled pursuant to this subpart D, and must comply with the
requirements in Sec. 205.273, Imports to the United States.
* * * * *
0
9. Amend Sec. 205.301 by revising paragraphs (f)(2) and (f)(3) to read
as follows:
Sec. 205.301 Product composition.
* * * * *
(f) * * *
(2) Be processed using ionizing radiation, pursuant to Sec.
205.105(f);
(3) Be produced using sewage sludge, pursuant to Sec. 205.105(g);
* * * * *
0
10. Amend Sec. 205.302 by revising paragraphs (a)(1), (2), and (3) to
read as follows:
Sec. 205.302 Calculating the percentage of organically produced
ingredients.
(a) * * *
(1) Dividing the total net weight (excluding water and salt) of
combined organic ingredients at formulation by the total weight
(excluding water and salt) of all ingredients.
(2) Dividing the fluid volume of all organic ingredients (excluding
water and salt) at formulation by the fluid volume of all ingredients
(excluding water and salt) if the product and ingredients are liquid.
If the liquid product is identified on the principal display panel or
information panel as being reconstituted from concentrates, the
calculation should be made based on single-strength concentrations of
the ingredients and all ingredients.
(3) For products containing organically produced ingredients in
both solid and liquid form, dividing the combined weight of the solid
organic ingredients and the weight of the liquid organic ingredients
(excluding water and salt) at formulation by the total weight
(excluding water and salt) of all ingredients.
* * * * *
0
11. Amend Sec. 205.307 by:
0
a. Revising the section heading;
0
b. Revising paragraphs (a) and (b); and
0
c. Removing ``and excluded'' in paragraph (c)
The revisions read as follows:
Sec. 205.307 Labeling of nonretail containers.
(a) Nonretail containers used to ship or store certified organic
product must display the following:
(1) The term, ``100 percent organic,'' ``organic,'' or ``made with
organic (specified ingredients or food group(s)),'' as applicable, to
identify the product;
(2) The statement, ``Certified organic by (name of certifying
agent),'' or similar phrase, to identify the name of the certifying
agent that certified the producer of the product, or, if processed, the
certifying agent that certified the last handler that processed the
product; and
(3) The production lot number of the product, shipping
identification, or other information needed to ensure traceability.
(b) Nonretail containers used to ship or store certified organic
product may display the following:
(1) Special handling instructions needed to maintain the organic
integrity of the product;
(2) The USDA seal. Use of the USDA seal must comply with Sec.
205.311;
(3) The name and contact information of the certified producer of
the product, or if processed, the last certified handler that processed
the product;
[[Page 47588]]
(4) The seal, logo, or other identifying mark of the certifying
agent that certified the producer of the product, or if processed, the
last handler that processed the product; and/or
(5) The business address, website, and/or contact information of
the certifying agent.
(c) Shipping containers of domestically produced product labeled as
organic intended for export to international markets may be labeled in
accordance with any shipping container labeling requirements of the
foreign country of destination or the container labeling specifications
of a foreign contract buyer: Provided, That, the shipping containers
and shipping documents accompanying such organic products are clearly
marked ``For Export Only'' and: Provided further, That, proof of such
container marking and export must be maintained by the handler in
accordance with recordkeeping requirements for exempt operations under
Sec. 205.101.
Sec. 205.310 [Amended]
0
12. Amend Sec. 205.310 by removing ``or excluded'' wherever it
appears.
0
13. Amend Sec. 205.400 by:
0
a. In paragraph (b), removing ``Sec. 205.200'' and adding in its place
``Sec. 205.201''; and
0
b. Adding new paragraph (g).
The addition reads as follows:
Sec. 205.400 General requirements for certification.
* * * * *
(g) In addition to paragraphs (a) through (f) of this section, a
grower group operation must:
(1) Be a single producer organized as a person;
(2) Sell, label, or represent only crops and/or wild crops as
organic;
(3) Use centralized processing, distribution, and marketing
facilities and systems;
(4) Be organized into grower group production units;
(5) Ensure that all crops and/or wild crops sold, labeled, or
represented as organic are from grower group members only;
(6) Ensure that grower group members do not sell, label, or
represent their crops and/or wild crops as organic outside of the
grower group operation unless they are individually certified;
(7) Report to the certifying agent on an annual basis the name and
location of all grower group members and grower group production units,
and the crops, wild crops, estimated yield, and size of production and
harvesting areas of each grower group member and grower group
production unit;
(8) Conduct internal inspections of each grower group member, at
least annually, by internal inspectors, which must include mass-balance
audits and reconciliation of each grower group member's and grower
group production unit's production yield and group sales;
(9) Document and report to the certifying agent the use of
sanctions to address noncompliant grower group members, at least
annually; and
(10) Implement procedures to ensure all production and handling by
the grower group operation is compliant with the USDA organic
regulations and the Act, including recordkeeping requirements to ensure
a complete audit trail from each grower group member and grower group
production unit to sale and distribution.
Sec. 205.401 [Amended]
0
14. Amend Sec. 205.401(a) by removing ``Sec. 205.200'' and adding in
its place ``Sec. 205.201''.
0
15. Amend Sec. 205.403 by:
0
a. Redesignating paragraph (a)(2) as paragraph (a)(3);
0
b. Adding new paragraph (a)(2);
0
c. Redesignating paragraphs (b) through (e) as paragraphs (c) through
(f);
0
d. Adding new paragraph (b);
0
e. In newly redesignated (d)(2), remove ``Sec. 205.200'' and add in
its place ``Sec. 205.201''; and
0
f. Adding new paragraphs (d)(4) and (5).
The additions read as follows:
Sec. 205.403 On-site inspections.
(a) * * *
(2) Initial and annual on-site inspections of a grower group
operation as defined in Sec. 205.2 must:
(i) Assess the compliance of the internal control system of the
organic system plan, or its capability to comply, with the requirements
of Sec. 205.400(g)(8). This must include review of the internal
inspections conducted by the internal control system.
(ii) Conduct witness audits of internal control system inspectors
performing inspections of the grower group operation.
(iii) Individually inspect at least 1.4 times the square root of
the total number of grower group members. This must include an
inspection of all grower group members determined to be high risk
according to criteria in 205.201(c)(4). At least one grower group
member in each grower group production unit as defined in Sec. 205.2
must be inspected.
(iv) Inspect each handling facility.
* * * * *
(b) Unannounced inspections. (1) A certifying agent must, on an
annual basis, conduct unannounced inspections of a minimum of five
percent of the operations it certifies, rounded up to the nearest whole
number.
(2) Certifying agents must be able to conduct unannounced
inspections of any operation it certifies and must not accept
applications or continue certification with operations located in areas
where they are unable to conduct unannounced inspections.
(d) * * *
(4) That sufficient quantities of organic product and ingredients
are produced or purchased to account for organic product sold or
transported; and
(5) That organic products and ingredients are traceable by the
operation from the time of production or purchase to sale or transport;
and that certifying agents can verify traceability back to the source
per Sec. 205.501(a)(21).
0
16. Amend Sec. 205.404 by:
0
a. Revising paragraph (b);
0
b. Redesignating paragraph (c) as paragraph (d); and
0
c. Adding new paragraph (c).
The revisions and additions read as follows:
Sec. 205.404 Granting certification.
* * * * *
(b) The certifying agent must issue a certificate of organic
operation. The certificate of organic operation must be generated from
INTEGRITY and may be provided to certified operations electronically.
(c) In addition to the certificate of organic operation provided
for in Sec. 205.404(b), a certifying agent may issue its own addenda
to the certificate of organic operation. If issued, any addenda must
include:
(1) Name, address, and contact information for the certified
operation;
(2) The certified operation's unique ID number/code that
corresponds to the certified operation's ID number/code in USDA Organic
INTEGRITY;
(3) A link to USDA Organic INTEGRITY or a link to the certified
operation's profile in USDA Organic INTEGRITY, along with a statement,
``You may verify the certification of this operation at USDA Organic
INTEGRITY,'' or a similar statement;
(4) Name, address, and contact information of the certifying agent;
(5) ``Addendum issue date;'' and
(6) ``Addendum expiration date,'' which must not exceed the
expiration date of the certificate of organic operation.
* * * * *
Sec. 205.405 [Amended]
0
17. Amend Sec. 205.405 by removing paragraph (c)(3).
[[Page 47589]]
0
18. Amend Sec. 205.406 by revising paragraphs (a) and (b) to read as
follows:
Sec. 205.406 Continuation of certification.
(a) To continue certification, a certified operation must annually
pay the certification fees and submit the following information to the
certifying agent:
(1) A summary statement, supported by documentation, detailing any
deviations from, changes to, modifications to, or other amendments made
to the organic system plan submitted during the previous year; and
(2) Any additions or deletions to the previous year's organic
system plan, intended to be undertaken in the coming year, detailed
pursuant to Sec. 205.201;
(3) Any additions to or deletions from the information required
pursuant to Sec. 205.401(b); and
(4) Other information as deemed necessary by the certifying agent
to determine compliance with the Act and the regulations in this part.
(b) The certifying agent must arrange and conduct an on-site
inspection, pursuant to Sec. 205.403, of the certified operation at
least once per calendar year.
* * * * *
Sec. 205.500 [Amended]
0
19. Amend Sec. 205.500 by removing paragraph (c).
0
20. Amend Sec. 205.501 by:
0
a. Revising paragraphs (a)(4), (5), (6), (10), (13), and (15);
0
b. Redesignating paragraph (a)(21) as paragraph (a)(23); and
0
c. Adding new paragraphs (a)(21) and (a)(22).
The amendments read as follows:
Sec. 205.501 General requirements for accreditation.
(a) * * *
(4) Continuously use a sufficient number of qualified and
adequately trained personnel, including inspectors and persons who
conduct certification review, to comply with and implement the USDA
organic standards;
(i) Certifying agents must demonstrate that all inspectors,
including staff, volunteers, and contractors, have the required
knowledge, skills, and experience to inspect operations of the scope
and scale as assigned and to evaluate compliance with the applicable
regulations of this part; and
(A) Certifying agents must demonstrate that inspectors continuously
maintain adequate knowledge and skills about the current USDA organic
standards, production and handling practices, certification and
inspection, import and/or export requirements, auditing practices and
skills in written and oral communications, sample collection,
investigation techniques, and preparation of technically accurate
inspection documents; and
(B) Initially and every year thereafter, inspectors must
demonstrate successful completion of a minimum of 20 hours of training
in topics that are relevant to inspection. Training may include
material delivered via the NOP learning management system, certifying
agents, or other relevant training provider; and
(C) Certifying agents must demonstrate that inspectors have a
minimum of 1 year of field-based experience related to both the scope
and scale of operations they will inspect before assigning inspection
responsibilities;
(ii) Certifying agents must demonstrate that all persons who
conduct certification review, including staff, volunteers, or
contractors, have the knowledge, skills, and experience required to
perform certification review of operations of the scope and scale
assigned and to evaluate compliance with the applicable regulations of
this part; and
(A) Certifying agents must demonstrate that all certification
review personnel continuously maintain adequate knowledge and skills in
the current USDA organic standards, certification and compliance
processes, and practices applicable to the type, volume, and range of
review activities assigned; and
(B) Initially and every year thereafter, all persons who conduct
certification review activities must demonstrate successful completion
of a minimum of 20 hours of training in topics that are relevant to
certification review. Training may include material delivered via the
NOP learning management system, certifying agents, or other relevant
training provider; and
(iii) Certifying agents must maintain current training
requirements, training procedures, and training records for all
inspectors and persons who conduct certification review activities.
(5) Demonstrate that all persons with inspection or certification
review responsibilities have sufficient expertise in organic production
or handling techniques to successfully perform the duties assigned;
(i) Sufficient expertise must include knowledge of certification to
USDA organic standards and evidence of formal education, training, or
professional experience in the fields of agriculture, science, or
organic production and handling that directly relates to assigned
duties.
(6) Conduct an annual performance evaluation of all persons who
conduct inspections, certification review, or implement measures to
correct any deficiencies in certification services;
(i) On-site evaluation of inspectors--Certifying agents must
observe each inspector performing on-site inspections at least once
every three years, or more frequently if warranted; and
(A) On-site inspector evaluations must be performed by certifying
agent personnel who are qualified to evaluate inspectors;
(ii) Certifying agents must maintain documented policies,
procedures, and records for annual performance evaluations and on-site
inspector evaluations.
* * * * *
(10) Maintain strict confidentiality with respect to its clients
under the applicable organic certification program and not disclose to
third parties (except for the Secretary or the applicable State organic
program's governing State official or their authorized representatives)
any business-related information concerning any client obtained while
implementing the regulations in this part, except:
(i) For information that must be made available to any member of
the public, as provided for in Sec. 205.504(b)(5);
(ii) For enforcement purposes, certifying agents must exchange any
compliance-related information that is credibly needed to certify,
decertify, or investigate an operation, including for the purpose of
verifying supply chain traceability and audit trail documentation; and
(iii) If a certified operation's proprietary business information
is compliance-related and thus credibly needed to certify, decertify,
or investigate that operation, certifying agents may exchange that
information for the purposes of enforcing the Act, but the information
in question still retains its proprietary character even after it is
exchanged and all of the certifying agents that are involved in the
exchange still have a duty to preserve the confidentiality of that
information after the exchange.
* * * * *
(13) Accept the certification decisions made by another certifying
agent accredited or accepted by USDA pursuant to Sec. 205.500.
Certifying agents must provide information to other certifying agents
to ensure organic integrity or to enforce organic regulations,
including to verify supply chain integrity, authenticate the organic
[[Page 47590]]
status of certified products, and conduct investigations;
* * * * *
(15) Maintain current and accurate data in INTEGRITY for each
operation which it certifies;
* * * * *
(21) Annually, conduct risk-based supply chain audits to verify
organic status of a product(s) of a certified operation(s) it
certifies, back to the source(s).
(22) Notify AMS not later than 90 calendar days after certification
activities begin in a new certification office. The notification must
include the countries where the certification activities are being
provided, the nature of the certification activities, and the
qualifications of the personnel providing the certification activities.
* * * * *
0
21. Amend Sec. 205.504 by:
0
(a) Revising paragraph (b)(4); and
0
(b) Adding paragraph (b)(7).
The revision and addition read as follows:
Sec. 205.504 Evidence of expertise and ability.
* * * * *
(b) * * *
(4) A copy of the procedures to be used for sharing information
with other certifying agents and for maintaining the confidentiality of
any business-related information as set forth in Sec. 205.501(a)(10);
* * * * *
(7) A copy of the criteria to identify high-risk operations and
products; and procedures to conduct risk-based supply chain audits, as
required in Sec. 205.501(a)(21); and procedures to report credible
evidence of organic fraud to the Administrator.
* * * * *
0
22. Adding Sec. 205.511 to subpart F to read as follows:
Sec. 205.511 Accepting foreign conformity assessment systems.
(a) Foreign product may be certified under the USDA organic
regulations by a USDA-accredited certifying agent and imported for sale
in the United States. Foreign product that is produced and handled
under another country's organic certification program may be sold,
labeled, or represented as organically produced in the United States if
AMS determines that such organic certification program provides
technical requirements and a conformity assessment system governing the
production and handling of such products that are at least equivalent
to the requirements of the Act and the regulations in this part
(``equivalence determination'').
(b) Countries desiring to establish eligibility of product
certified under that country's organic certification program to be
sold, labeled or represented as organically produced in the United
States may request an equivalence determination from AMS. A foreign
government must maintain compliance and enforcement mechanisms to
ensure that its organic certification program is fully meeting the
terms and conditions of any equivalence determination provided by AMS
pursuant to this section. To request this determination, the requesting
country must submit documentation that fully describes its technical
requirements and conformity assessment system. If AMS determines it can
proceed, AMS will conduct an assessment of the country's organic
certification program to evaluate whether it is equivalent.
(c) AMS will describe the scope of an equivalence determination.
(d) AMS will conduct reviews on a two-year cycle, beginning at the
close of the prior review, to assess the effectiveness of the foreign
government's organic certification program. AMS will reassess a
country's organic certification program that AMS has recognized as
equivalent every five years to verify that the foreign government's
technical requirements and conformity assessment program continue to be
at least equivalent to the requirements of the Act and the regulations
of this part, and will determine whether the equivalence determination
should be continued.
(e) AMS may terminate an equivalence determination if the terms or
conditions established under the determination are not met; if AMS
determines that the country's technical requirements and/or conformity
assessment program are no longer equivalent; if AMS determines that the
foreign government's organic control system is inadequate to ensure
that the country's organic certification program is fully meeting the
terms and conditions under the determination; or for other good cause.
0
23. Amend Sec. 205.640 by revising the introductory paragraph to read
as follows:
Sec. 205.640 Fees and other charges for accreditation.
Fees and other charges equal as nearly as may be to the cost of the
services rendered under the regulations, including initial
accreditation, review of annual reports, and renewal of accreditation,
shall be reviewed, assessed, and collected from applicants in
accordance with the following provisions:
* * * * *
0
24. Amend Sec. 205.660 by:
0
a. Redesignating paragraphs (c) and (d) as paragraphs (d) and (e); and
0
b. Adding new paragraph (c).
The addition read as follows:
Sec. 205.660 General.
* * * * *
(c) The Program Manager may initiate enforcement action against any
person who sells, labels, or provides other market information
concerning an agricultural product if such label or information
implies, directly or indirectly, that such product is produced or
handled using organic methods, if the product was produced or handled
in violation of the Organic Foods Production Act or the regulations in
this part.
0
24. Amend Sec. 205.661 by revising the section heading to read as
follows:
Sec. 205.661 Investigation.
* * * * *
0
26. Amend Sec. 205.662 by:
0
a. Adding new paragraph (e)(3);
0
b. Revising the first sentence of paragraph (f)(1); and
0
c. Revising paragraph (g)(1).
The amendments read as follows:
Sec. 205.662 Noncompliance procedure for certified operations.
* * * * *
(e) * * *
(3) Within 3 business days of issuing a notification of suspension
or revocation, or the effective date of an operation's surrender, the
certifying agent must update the operation's status in INTEGRITY.
(f) * * *
(1) A certified operation or a person responsibly connected with an
operation whose certification has been suspended may at any time,
unless otherwise stated in the notification of suspension, submit a
request to the Secretary for reinstatement of its certification, or
submit a request for eligibility to be certified. * * *
* * * * *
(g) * * *
(1) Knowingly sells or labels a product as organic, except in
accordance with the Act, shall be subject to a civil penalty of not
more than the amount specified in Sec. 3.91(b)(1)(xxxvii) of this
title per violation.
* * * * *
0
27. Revise Sec. 205.663 to read as follows:
[[Page 47591]]
Sec. 205.663 Mediation.
(a) A certifying agent must submit with its administrative policies
and procedures provided in Sec. 205.504(b): decision criteria for
acceptance of mediation, and a process for identifying personnel
conducting mediation and setting up mediation sessions.
(b) A certified operation or applicant for certification may
request mediation to resolve a denial of certification or proposed
suspension or proposed revocation of certification issued by a
certifying agent or State organic program.
(1) A certified operation or applicant for certification must
submit any request for mediation in writing to the applicable
certifying agent or State organic program within 30 calendar days of
receipt of the notice of proposed suspension or proposed revocation of
certification or denial of certification.
(2) A certifying agent or State organic program may accept or
reject a request for mediation based on its own decision criteria.
(i) If a certifying agent rejects a mediation request, it must
provide this rejection in writing to the applicant for certification or
certified operation. The rejection must include the right to request an
appeal, pursuant to Sec. 205.681, within 30 calendar days of the date
of the written notification of rejection of the request for mediation.
(c) Both parties must agree on the person conducting the mediation.
(d) If a State organic program is in effect, the parties must
follow the mediation procedures established in the State organic
program and approved by the Secretary.
(e) The parties to the mediation have a maximum of 30 calendar days
to reach an agreement following a mediation session. Successful
mediation results in a settlement agreement agreed to in writing by
both the certifying agent and the certified operation. If mediation is
unsuccessful, the applicant for certification or certified operation
has 30 calendar days from termination of mediation to appeal the denial
of certification or proposed suspension or revocation pursuant to Sec.
205.681.
(f) Any settlement agreement reached through mediation must comply
with the Act and the regulations in this part. The Secretary may review
any mediated settlement agreement for conformity to the Act and the
regulations in this part and may reject any agreement or provision not
in conformance with the Act or the regulations in this part.
(g) The Program Manager may propose mediation and enter into a
settlement agreement at any time to resolve any adverse action notice
that it has issued.
0
28. Amend Sec. 205.665 by revising paragraph (a) to read as follows:
Sec. 205.665 Noncompliance procedure for certifying agents.
(a) Notification. (1) A written notification of noncompliance will
be sent to the certifying agent when:
(i) An inspection, review, or investigation of an accredited
certifying agent by the Program Manager reveals any noncompliance with
the Act or regulations in this part; or
(ii) The Program Manager determines that the certification
activities of the certifying agent, or any person performing
certification activities on behalf of the certifying agent, are not
compliant with the Act or the regulations in this part; or
(iii) The Program Manager determines that the certification
activities at a certification office, and/in specific countries, are
not compliant with the Act or the regulations in this part.
(2) Such notification must provide:
(i) A description of each noncompliance;
(ii) The facts upon which the notification of noncompliance is
based; and
(iii) The date by which the certifying agent must rebut or correct
each noncompliance and submit supporting documentation of each
correction when correction is possible.
* * * * *
0
29. Revise Sec. 205.680 to read as follows:
Sec. 205.680 General.
(a) Persons subject to the Act who believe they are adversely
affected by an adverse action of the National Organic Program's Program
Manager, may appeal such decision to the Administrator.
(b) Persons subject to the Act who believe they are adversely
affected by an adverse action of a State organic program may appeal
such decision to the State organic program's governing State official
who will initiate handling of the appeal pursuant to appeal procedures
approved by the Secretary.
(c) Persons subject to the Act who believe they are adversely
affected by an adverse action of a certifying agent may appeal such
decision to the Administrator, Except, That when the person is subject
to an approved State organic program, the appeal must be made to the
State organic program.
(d) Persons subject to the Act who believe they are adversely
affected by an adverse action of a certifying agent or a State organic
program may request mediation as provided in Sec. 205.663.
(e) All appeals must comply with the procedural requirements in
Sec. 205.681(c) and (d) of the USDA organic regulations.
(f) All written communications between parties involved in appeal
proceedings must be sent to the recipient's place of business by a
delivery service which provides dated return receipts.
(g) All appeals must be reviewed, heard, and decided by persons not
involved with the adverse action being appealed.
0
29. Amend Sec. 205.681 by:
0
a. Revising paragraphs (a) introductory text and (a)(2);
0
b. Revising paragraphs (b) and (c)
0
c. Revising paragraph (d)(1); and
0
d. Revising paragraph (d)(3).
The amendments read as follows:
Sec. 205.681 Appeals.
(a) Adverse actions by certifying agents. An applicant for
certification may appeal a certifying agent's notice of denial of
certification, and a certified operation may appeal a certifying
agent's notification of proposed suspension or proposed revocation of
certification to the Administrator, Except, That, when the applicant or
certified operation is subject to an approved State organic program,
the appeal must be made to the State organic program which will carry
out the appeal pursuant to the State organic program's appeal
procedures approved by the Secretary.
* * * * *
(2) If the Administrator or State organic program denies an appeal,
a formal administrative proceeding may be initiated to deny, suspend,
or revoke the certification. Such proceeding must be conducted pursuant
to the U.S. Department of Agriculture's Uniform Rules of Practice, 7
CFR part 1, subpart H, or the State organic program's rules of
procedure.
(b) Adverse actions by the NOP Program Manager. A person affected
by an adverse action, as defined by 205.2, issued by the NOP Program
Manager, may appeal to the Administrator.
(1) If the Administrator sustains an appeal, an applicant will be
issued accreditation, a certifying agent will continue its
accreditation, or an operation will continue its certification, a civil
penalty will be waived and a cease-and-desist notice will be withdrawn,
as applicable to the operation.
(2) If the Administrator denies an appeal, a formal administrative
proceeding may be initiated to deny, suspend, or revoke the
accreditation or certification and/or levy civil penalties. Such
proceeding must be conducted
[[Page 47592]]
pursuant to the U.S. Department of Agriculture's Uniform Rules of
Practice, 7 CFR part 1, subpart H.
(c) Filing period. An appeal must be filed in writing within the
time period provided in the letter of notification or within 30 days
from receipt of the notification, whichever occurs later. The appeal
will be considered ``filed'' on the date received by the Administrator
or by the State organic program. An adverse action will become final
and nonappealable unless an appeal is timely filed.
(d) Where and what to file. (1) Appeals to the Administrator and
Requests for Hearing must be filed in writing and addressed to: 1400
Independence Ave. SW, Room 2642, Stop 0268, Washington, DC 20250, or
electronic transmission, [email protected].
* * * * *
(3) All appeals must include a copy of the adverse action and a
statement of the appellant's reasons for believing that the action was
not proper or made in accordance with applicable program regulations,
policies, or procedures.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-14581 Filed 8-4-20; 8:45 am]
BILLING CODE 3410-02-P