There has not been a lot of "buzz" in the industry about the Country of Origin Labeling law. That may be about to change.
The USDA's Office of Inspector General issued a report in mid-August on the implementation of an oversight program for the law at the USDA's Agricultural Marketing Service. Here is coverage from The Packer.
In short, the OIG didn't see a whole lot to like in AMS oversight. One of most eye-popping revelations was the variation in how state inspectors performed. From the report:
For example, only 18 percent of the reviews completed in Kentucky during CY 2009 identified one or more noncompliances, while 96 percent of those conducted in Missouri during the same period identified noncompliances.
OIG recommendations about improving enforcement were :
Recommendation 9: Develop and implement written procedures to monitor and provide timely followup with retailers who may be willfully violating COOL regulations or who do not make a good faith effort to comply with COOL regulations. These procedures should include comparing followup reviews to prior reviews completed at applicable retailers.
Recommendation 10: Develop procedures to investigate potentially willful violations and issue civil penalties. This should include specific criteria for the types of violations that warrant civil penalties.
In response, the AMS said it agrees and has already targeted retailers who appear to be "willful" violators.
Since the Compliance and Enforcement document has been implemented, AMS has referred 137 cases of possible willful violations to the Office of the General Counsel for further action, including potential civil penalties.
USDA spokesman Mike Jarvis told The Packer that fines are coming.
“Right now (USDA) is putting together language that will come out in the final rule that will allow the imposition of fines,” he said.
I asked Kathy Means if PMA had a chance to look at the report yet. Here is her comment.
Yes – I have seen the USDA report. As you know, we’ve been heavily involved in COOL from the get-go, and we’ve continued that through the implementation and enforcement. Lee Mannering has been to USDA’s training sessions to learn how the program is going, where there are issues, where there are successes.
So the report isn’t a big surprise to us. Most the recommendations are tweaks to USDA’s systems on this issue – such as making sure only PACA-licensed retailers are reviewed, improve understanding of COOL compliance with state inspectors for more uniformity in reviews, improve the noncompliance rating system, speed noncompliance communications with retailers, follow-up with what they call “willful” noncompliance issues, do more outreach on COOL to retailers, identify national or corporate trends and offer guidance on COOL in general and to help improve compliance.
One of the interesting comments in the report is that, on some occasions, reviewers who return to a store that had a noncompliance issue can find the original issue still in noncompliance and find additional issues. Here’s what the report said: “By analyzing the 1,005 followup reviews AMS initiated between February 2010 and September 2010, we identified 21 retailers who had more instances of recorded noncompliances at the time of the followup than were noted in the initial visits, and whose noncompliances repeated those noted previously. For four retailers, the noncompliances noted in the followup review even involved the same commodity items involved in the earlier noncompliances. While these represent only a small portion of the total followup reviews, they do indicate the possibility that some retailers may be deliberately violating regulations, which may require monetary penalties.”
Obviously we’re not talking about a lot of stores here, but it was something USDA found worthy to note in the report as the agency is seeing that lack of attention by a retailer to noncompliance issues as well as new noncompliance issues may need to trigger stiffer penalties as provided in the regulations. One of the things Lee has heard consistently at the USDA meetings as well as from retailers is that execution at retail is a key issue. Ongoing training with produce personnel is essential. This is an issue we all talked about and commented on when the COOL rules were being written. The staff doing signage at the retail level is often young, part-time, and has high turnover. Keeping those folks trained on proper signage is a challenge for some retailers. We know from previous reports that vegetables have the highest noncompliance rates, and fruits are number two. The main violation is lack of COOL information.
There is a document at USDA to help inspectors, and it might be useful for retailers to look at because it lists the noncompliance issues. Retailers could see exactly what the inspector is looking for. You can find that document here. Around page 5 you’ll see the table if you’re interested. We’ve also got a variety of resources on this issue at our COOL page.
So all in all, this is nothing unexpected. It’s a continual evolution of the COOL system – on the part of USDA and inspectors as well as on the part of retailers. We urge all retailers to use the resources available and comply with COOL by training store-level employees, particularly in produce. It appears USDA will be stepping up its timelines and its enforcement.
TK: Yes, "a continual evolution of the COOL system" is taking place. But hearing that the USDA is putting in place a rule to enforce fines on retailers for "willful" violations of COOL should ramp up the "buzz" about this controversial law once again.