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How FSMA Changes The Status Quo For Food Businesses

How FSMA Changes The Status Quo For Food Businesses






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    How FSMA Changes The Status Quo For Food Businesses How FSMA Changes The Status Quo For Food Businesses Presentation Transcript

    • How The FSMA Changes The Status Quo for Food Businesses
      Kenneth Odza
      Stoel Rives LLP
      March 22, 2011
    • What You Need to Know
      FSMA/RFR – How does it affect you?
      What can you do to minimize regulatory obligations?
      Products Liability Exposure
      How to Reduce Risk
      Recall Strategies
      Action Steps
    • Food Safety Modernization Act (H.R. 2751)
      Most expansive changes since 1938 Act
      Sweeping new enforcement authorities
      Exacting new food import requirements
      Major new program activities for FDA
    • FSMA Provisions Effective Now
      Stronger Records Access Authority (FSMA § 101)
      Mandatory Recall Authority (FSMA § 206)
      Increased Frequency of Inspections (FSMA § 201)
      Whistleblower Protection (FSMA § 402)
      Foreign Facilities and Refusal of Inspection (FSMA § 306)
    • Stronger Records Access Authority (FSMA § 101)
      • When “reasonable probability” of “serious adverse health consequences”
      • Includes records of other food affected in similar manner – NEW
      • Proper credentials and written notice
    • Mandatory Recall Authority (FSMA § 206)
      • Recall ordered if “reasonable probability” (1) food is adulterated or misbranded and (2) serious adverse health consequences
      • Opportunity for voluntary recall
      • Hearing within two days of the order’s issuance 
    • Increased Frequency of
      Inspections (FSMA § 201)
      • Immediate increased frequency of inspections
      • Risk-based
    • Whistleblower Protection (FSMA § 402)
      • Protects employees who
      •  Provide information re violation of FDC Act
      • Testify, assist or participate in a proceeding re violation
      • Object to “activity, policy, practice or assigned task” they “reasonably believe to be a violation”
    • Foreign Facilities and
      Refusal of Inspection(FSMA § 306)
      • Foreign establishment must allow entry to U.S. inspector w/i 24 hours of requesting entry
      • Or, imported food will be refused admission
    • Selected FSMA Provisions Effective Soon
      Amendments To The RFR (FSMA § 211)
      Suspension of Registration (FSMA § 102)
      Changes to Administrative Detention Standard (FSMA § 207)
      Preventative Controls (FSMA § 103)
      FDA Lab Accreditation (FSMA § 202)
      Traceability (FSMA § 204)
      Major Changes To Regulation of Imports (FSMA § § 301,302)
      Food Defense (FSMA § 108)
    • Reportable Food Registry (RFR)
      • “Reportable Food” - “Reasonable probability” of “serious adverse health consequences to humans or animals”
      • “Responsible Party” - FDA-registered facility where product is “manufactured, processed, packed, or held”
      • “Requirement” - Report to FDA portal within 24 hours
    • Amendments to RFR (FSMA § 211)
      New “critical information” required
      Within 18 months, FDA will require “consumer-oriented information” including
      Product ID codes
      Contact information
      Anything else FDA deems necessary to enable a consumer to accurately identify whether such consumer is in possession of the reportable food
    • Suspension of Registration
      • If FDA determines “reasonable probability” of food causing “serious adverse health consequences,” it MAY suspend registration
      • Facilities that are “responsible” and those that knew or had reason to know are in jeopardy
      • Informal hearing within two days
      • FDA to consider corrective plans within 14 days
      • Effective in 18 months
    • Broader Authority To Administratively Detain Foods (FSMA § 207)
      Effective w/in 180 days
      Lowers Standard For FDA To Detain Foods:
      FDA only needs “A reason to believe” food is “adulterated or misbranded.”
      Class I recall situation not required
    • Preventative Controls (FSMA § 103)
      Hazard analysis and implement preventative controls re:
      environmental controls
      allergen controls
      a recall contingency plan
      supplier verification activities
    • Preventative Controls (cont’d)
      • Facilities are required to:
      • monitor the controls
      • establish corrective actions
      • maintain records of monitoring, instances of nonconformance, and corrective actions taken
      • verify that the plan is working and test programs
      Reduced to writing and made available to FDA during inspections
      Effective within 18 months
    • Routine Environmental/Product Test Results Submitted To FDA (FSMA § 202)
      FDA Accredited Labs W/30 Months
      Testing by FDA Accredited Labs Mandated
      Results Sent Directly To FDA
    • Traceability (FSMA § 204)
      270 days to establish traceability pilot program(s)
      Not required:
      a full pedigree, or a record of the complete previous distribution history of the food from the point of origin of such food
      records of recipients of a food beyond the immediate subsequent recipient of such food
      product tracking to the case level by persons subject to such requirements
    • Foreign Supplier Verification
      Program (FSMA § 301)
      • Importers required to perform “risk-based foreign supplier verification activities”
      • FDA required to determine content of program within 1 year
      • Importer: U.S. owner or consignee of food at the time of entry into U.S. or U.S. agent or representative of foreign owner or consignee
    • Voluntary Qualified Importer
      Program (FSMA § 302)
      • Within 18 months, FDA shall “provide for the expedited review and importation of food” for importers who participate voluntarily
      • Will require third-party certification
      • Importer: “the person that brings food, or causes food to be brought, from a foreign country into the customs territory of the United States”
    • Import Certifications(FSMA § 302)
      • FDA may require third-party certification as a condition of import
      • FDA can create system of accreditation for auditors
      • Program may be funded through fees imposed on auditors
    • Food Defense (FSMA § 108)
      National Agriculture and Food Defense Strategy
      Some Information May Not Be Disclosed
    • The Road Ahead for FDA
      10 rulemakings
      No fewer than 10 guidance documents
      13 reports (some on a recurring basis)
      Numerous other resource-intensive implementation activities
    • Products Liability Exposure & Recalls
    • Recalls Happen
      Our manufacturing process is cautiously and carefully monitored at all times to ensure a safe, clean, bacteria-controlled environment - from the selection of the finest source products, throughout production to testing of the finished product. We take quality and safety very seriously.  Topps has steadily and attentively developed standards and procedures to make certain we manufacture a safe product. We are fully compliant with all USDA Good Manufacturing Practices, and we have fully adopted and closely follow a HACCP (Hazard Analysis and Critical Control Point) program.  Topps Meat Company consistently employs technologically advanced equipment and our own safety innovations to create great tasting, quality products.
    • Recall Alone Can Be a Death Sentence
      After Extensive Beef Recall, Topps Goes Out of Business
      In a statement, Anthony D’Urso, the chief operating officer at Topps, in Elizabeth, N.J., said that the company “cannot overcome the reality of a recall this large.”
      He added, “This has been a shocking and sobering experience for everyone.”
      Executives at Topps, which made frozen hamburgers and other meat products for supermarkets and mass merchandisers, declined to discuss how and why the company collapsed so quickly, or whether they could have taken steps earlier to protect consumers or to head off the plant’s closure.
      Workers leaving the Topps Meat plant in Elizabeth, N.J., on Friday.
      The company, which opened in 1940, went out of business shortly
      after it issued a recall that expanded to 21.7 million pounds of ground beef.
      Source: http://www.nytimes.com/2007/10/06/us/06topps.html?_r=2
    • ListeriaMonocytogenes
      • Pregnant women, newborns, and adults with weakened immune systems
      • Kills 20-30 percent of those hospitalized – more than any other food-borne pathogen
      • Expected FSMA impact : increased enviro testing
    • Salmonella
      • Diarrhea, fever, and abdominal cramps
      • More severe illness: infants, elderly people, and people with impaired immune systems
      • Increasing diversity of products
    • E. coli
      • Lots of publicity
      • Can result in kidney failure and death
      • Expect increased focus by FDA (and USDA) on non-O157 STECs
    • Strict Liability
      Focus is on the product, not fault or lack of care
    • Farm
      Processor and
      Restaurant or
      Strict Liability – Who’s Liable
      Anyone “engaged in the business of selling or otherwise distributing” the defective food product.
      - Restatement Third, Torts: Product Liability § 7
    • Records Strategy
      Food Safety Plan
      Rehearse Recalls/RFR Events
      FDA Inspection Plan
      Review Manufacturing Strategies
      Revise Supplier Agreements
      Insurance Audit
      What You Should Do Now
      to Reduce Risk
    • Record Keeping
      Know What Records Will You Have To Produce
      Strategize To Protect Trade Secrets
      Strategize To Protect Records Of Unaffected Products
      Use FOIA Where Possible To Protect Records
    • Food Safety Plan
      May Not Want To Wait Until Regulations
      HACCP May Not Be Sufficient Though It’s a Start
      Look Specifically At Environmental Risks Such As:
      Be As Specific As Possible With Suppliers
      Anticipate That We Be Living Without FDA Regulations
    • Potential Recall Event: What to Do
      • Have & follow a recall plan
      • Log events, actions, and communications
      • Record all reported injuries
      • Document investigation
      • Institute litigation “hold”
      • Cooperate and communicate with government officials
    • Rehearse/Follow Recall Plan
      Steps To Assure Food Safety Plan Is Followed
      Rehearse Recall Plan
      Strategize About Recall Team
      Make Sure Everyone on Recall Team Understands His/Her Role
      RFR Training
    • FDA Inspection Plan
      Who Will Be Involved?
      Documents to Be Released and Signed: If documents are going to be released, have a standard “FOIA Letter”
      Test Results
      Interviews (who and review of legal counsel)
      Plan Protected by Privilege?
    • Manufacturing Practices
      How Can You Limit Recalls?
      Look at:
      “Carry-Over” Practices
      Cleaning SOPS
      Testing SOPs
    • Supplier Agreements
      Be Specific:
      Food Safety Plan
      Test Results
      Records Access
    • Indemnification Language
      Totally Unambiguous
      Recognizes Strict Liability Concepts
      Indemnifies Regardless of Negligence
      Clear what “Recall” Costs Are Covered
      Not limited by Insurance Limits/Availability
      Insurance is limited, Indemnification Should Not Be
      But, Understand Your Suppliers Limits
    • Careful Review of Supplier/Vendor Agreement
      Seller agrees to defend, indemnify and hold harmless Buyer
      … for the recovery of damages… arising out of or alleged to have arisen out of (a) the delivery, sale, resale, labeling, use or consumption of any Product…
    • Careful Review of Supplier/Vendor Agreement (cont’d)
      Seller’s insurance described herein shall be primary and not contributory with Buyer’s insurance.
      Buyer shall be named as an additional insured…
      waivers of subrogation
    • Insurance Audit
      Right types of coverage
      Sufficient limits
      Problematic Exclusions
      Legal counsel & trusted broker who understands the industry & your business
    • Pollution Exclusion
      All-risk policy
      $8M Claim (No Consumer Injuries)
      No coverage for Listeria b/c language in pollution exclusion
    • Found In A $50M Umbrella Policy For Produce Co.
      1. Any actual, alleged or threatened exposure to, existence of, presence of, ingestion of, inhalation of or contact with any “biological agents” whether or not occurring alone.
    • Action Steps
      Supplier Agreements (indemnification, insurance, compliance with FSMA)
      Insurance Audit
      FDA Inspection Plan
      Food Safety Plan
      Plan for Import Compliance
      Recall Plan and Rehearsal
    • Questions?
      Direct Dial: 206-386-7595