U.S. Food Safety Modernization Act and the Impact on Food Processors PROCESS EXPO – November 3, 2011 Tom Chestnut

1. U.S. Food Safety Modernization Act and theImpacton Food Processors PROCESS EXPO – November 3, 2011 Tom Chestnut Vice President Supply Chain Food Safety & Quality NSF International Ann Arbor, MI tchestnut@nsf.org

2. Discussion Points • Events leading to enactment of the Food Safety Modernization Act (FSMA) • Overview of FSMA and what wasn’t included in the Act • Specific sections of FSMA that apply to food processors • Summary of direct impact on your business • “Next steps” in the implementation of FSMA • What can you do – being proactive vs. reactive

3. NSF International Background & Interest in FSMA • NSF – an independent, not-for-profit organization with a mission to protect and improve human health • Over the last 60 years, NSF has developed over 70 public health standards, including the standards for certification of food equipment • NSF has collaborated with the FDA, USDA, CDC and other government organizations on HACCP and other public health programs over the last 25 years • Stakeholder: globally, over 28,000 food facilities and farms are audited by NSF annually under just the Global Food Safety Initiative programs (BRC, SQF, IFS, FSSC 22000, GLOBALGAP) - compared to less than 400 foreign facilities audited by the FDA in 2010

4. Drivers of U.S. Legislative & Regulatory Changes • 9/11 • Lead in toys • Melamine in foods • Primarily driven by foodborne illness outbreaks from both imported and domestic food products

5. 2009 – Peanut Corp of America (PCA) Salmonella Crisis

6. 2009 – PCA Salmonella Crisis • Resulted in hundreds of product recalls over several months • FDA investigation uncovered evidence that PCA management knew of contamination • Congressional Hearings – a major motivating factor in getting the U.S. legislature to move on the stalled Food Safety Modernization Act

7. Contaminated PCA Products – Many Consumer to Canine Transfers

8. Significant Increase – Canine Salmonella Infections

9. U.S. Legislative Actions 2009 • July, 2009 U.S. House of Representatives passed H.R. 2749, the Food Safety Enhancement Act of 2009 • November, 2009 Senate Committee passed S. 510, the FDA Food Safety Modernization Act 2010 • December, 2010 Senate and House pass S. 510 equivalent as H.R. 2751 2011 • Food Safety Modernization Act (HR 2751) signed into law Jan 4, 2011

10. HR 2751: FDA Food Safety Modernization Act Lots of detail – 236 pages Historic – 70 years since the “U.S. regime was overhauled top to bottom” New FDA enforcement authorities New import requirements More inspections More responsibilities placed upon food processors

11. What Didn’t Make It Into H.R. 2751 • Enhanced traceability requirements - “full pedigree” • Increased criminal penalties • Quarantine authority • Reports of finished product testing • Foreign facility registration fees

12. FSMA: Highlights – Enhanced FDA Powers • Mandatory product recall authority • Ability to suspend registration of foreign facilities • Expanded administrative detention authority at port of entry • “reason to believe” replaces “credible evidence” • “adulterated or misbranded” replaces “adverse health consequences or death”

13. FSMA: Highlights – Mandatory Increased FDA Inspections • U.S. Facilities • Every high risk facility inspected within 5 years, and every 3 years thereafter • Every non-high risk facility inspected within 7 years, and every 5 years thereafter • Foreign Facilities • 600 in the first year, and then doubling the number of inspections every year for the next 5 years

14. FSMA: Highlights – New Requirements for Food Processors • Bi-annual registration • Food safety plans (preventive controls), including management of raw material sources • More record-keeping and FDA access to records • Food defense plans (controlling intentional contamination)

15. Food Processors – Food Safety Plans • Must have a written plan – likely to be defined as HACCP • Key components of a plan • Hazard identification, including raw material sources upstream • Preventive controls • Documented monitoring of controls • Documented corrective actions when controls are found to be inadequate or not properly implemented • Verification – product testing, environmental testing, or other means

16. Food Processors – Food Safety Plans • Recordkeeping (2 years) and readily available upon request, including: • Food safety plan and related documents • Environmental and product testing (lab results) • Hazard monitoring and corrective action documentation • Exempted industries: seafood, juice processors, and low acid, canned products since these currently fall under other FDA HACCP programs (such as seafood HACCP that was implemented in 1995)

17. Food Processors – Food Defense Measures • To guard against the intentional introduction of food contaminants such as acts of terrorism • To be included in hazard analysis plans • FDA to issues more specific regulations, including type of facilities and/or products to be covered under the regulations

18. Food Importers Prior Notification Foreign Supplier Verification Program Voluntary Qualified Importer Program

19. Import-Related Provisions of FSMA • Foreign Supplier Verification Program • Certification of high risk products as a condition of entry into the United States • Accreditation of 3rd party auditing organizations (capacity building) • Laboratory accreditation (capacity building) • Voluntary Importer Program

20. Importer Requirements – Foreign Supplier Verification • Importers required to perform risk-based supplier verification to ensure that facilities are compliant with various sections of FSMA, including hazard analysis/preventive controls • Types of verification: • Monitoring records • Lot certification • Annual on-site inspections • Periodic sampling and testing • Records to be maintained for 2 years • Specific regulations to be developed within one year of FSMA being signed into law

21. Importer Requirements – Third Party Certification • Can become a new basis for import refusal if designated products/facilities are not certified • Certifies that food produced is in compliance with U.S. requirements • Any requirements for certification must be risk-based (product, country, region) • Certification by: • Approved agency or representative of a foreign government • Third party entities accredited under provisions in FSMA

22. Third Party Accreditation – Auditing Organizations & Laboratories • Support FDA capacity building • 3rd party audits • Used to “verify” regulatory compliance under the 3rd party certification program as a condition of entry for high risk • To determine whether a facility is eligible to be a facility from which food may be offered for import under the voluntary qualified importer program • Laboratories • For testing of products to satisfy specific regulatory requirements and import alerts

23. Voluntary Qualified Importer Program • Expedites importation of food for participants • Voluntary for those importer that elect to use a 3rd party to “certify” the regulatory compliance of a foreign facility

24. Timeline for Implementation of FSMA • Some areas, like FDA recall authority, took effect immediately • Some areas that don’t involve rule making, like the required updates to Seafood HACCP, had a shorter timeline (6 months) and have already been implemented • Rule making is a much longer process, and applies to most of the major areas under FSMA • Public/stakeholder input (comments to the dockets) • Proposed rules • Comment period on proposed rules • Final rules issued • Implementation period prior to enforcement (up to 2 years)

25. What Has Occurred to Date • FDA Public Meetings • March 29, 2011 (New Paradigm for Importers) • March 30 & 31, 2011 (Comparability of Food Safety Systems and Import Practices of Foreign Countries) • April 20, 2011 (Preventive Controls for Facilities) • June 6, 2011 (Focus on Inspections and Compliance Provisions) • FDA Meetings with Key Stakeholders (on-going) • NSF had one-on-one meeting with representatives of the FDA implementation team on April 14, 2011

26. NSF Input to FDA • Reviewed NSF prior work with FDA and other government agencies, and our scale as a 3rd party stakeholder – we audit over 28,000 foreign facilities and farms under just the Global Food Safety Initiative programs (SQF, BRC, FSSC 22000, GLOBALGAP) • Compared to 357 foreign food facility audits conducted by the FDA in 2010 • Discussions and Recommendations were made by NSF and then formally submitted as “letters to the dockets”

27. Summary – Areas Of FSMA With Most Impact On Food Processors • Must develop food safety plans (likely to follow HACCP) • Documentation of food safety practices at a much higher level (HACCP monitoring, corrective actions, and verification) • Product and environmental testing – such as HACCP verification steps • Food defense – steps to control “intentional” contamination

28. Summary – Areas Of FSMA With Most Impact On Food Processors • Potential “certification” requirements for high risk, imported products • More food safety inspections – by FDA, 3rd party, or importers • FDA re-inspection fees for non-compliance (25 million annual cap), and costs associated with failure to comply with a recall (20 million annual cap) • Greater enforcement and mandatory recall

29. What’s Next? Regulatory Initiatives (FDA Strategic Plan 2012 – 2016)

30. FDA Key Strategic Initiatives (2012-2016) • Two of the seven key FDA strategic initiatives for the next five years are: • Establish science-based preventive controls across the farm-to-table continuum • Adopt science –based regulations that protect the food and feed supplies from contamination • Key initiatives include: preventive control standards for food/feed processing facilities, produce safety, food transport, and intentional contamination

31. FDA Key Strategic Initiatives (2012-2016) • Achieve high rates of compliance with preventive control standards domestically and internationally • Conduct domestic inspections to verify compliance with standards. Key initiatives include: risk based selection of targets, risk based approach to inspections, implementation of Manufactured Food Regulatory Program Standards • Improve food safety assurance for imported foods. Key initiatives include: importer accountability through supplier verification program and 3rd party certification program • Effectively implement new and existing enforcement tools. Key initiatives include: administrative detention authority, suspension of registration, mandatory recalls

32. What’s Next? Industry Food Safety Initiatives

33. Global Food Safety Initiative (GFSI) • GFSI - launched at the CIES Annual Congress in 2000, following a directive from the food business CEO’s • GFSI Mission: “Continuous improvement in food safety management systems …. to deliver safe food to consumers worldwide” • Endorsed by Wal-Mart, McDonald’s, U.S. Foodservice, Ahold, Target, Publix, and many others in the food sector • GFSI Supply Chain Working Groups: developing sector-specific requirements along the supply chain (as prioritized by the GFSI Board) • 2011 – feed, packaging manufacturing • 2012 – storage & distribution, equipment manufacturing • 2013 – catering, retail outlets

34. Conclusion U.S. regulatory, consumer and buyer food safety expectations are evolving – it can no longer be “business as usual”. We must adapt, become more innovative, and shift to more proactive approaches to food safety. “It’s not the strongest species that survive, nor the most intelligent, but the most responsive to change” - Charles Darwin