Broken links in food-safety chain hid peanut plants' risks

[Marc]

From USA Today:

Originally Posted by USA Today

Federal authorities have begun a criminal investigation of PCA, and the company is bankrupt. Records produced in the FDA's investigation of PCA and in congressional hearings on the outbreak portray a company that not only failed to heed warnings about its deficiencies, but allegedly shipped products that had tested positive for salmonella after retests were negative.

More important, the case reveals a food-safety system in which every key link in the chain of protection failed, food-safety officials and lawmakers say. The outbreak "is a poster child for everything that went wrong" with the USA's food-safety system, says William Hubbard, a former FDA associate commissioner. "Down the line, you can find flaws and failures."

The U.S. food-safety net relies heavily on companies to be good operators. Yet PCA repeatedly failed to fix problems that were brought to its attention, according to regulatory records and documents made public in congressional hearings. Nestlé, for example, twice inspected PCA plants and chose not to take on PCA as a supplier because it didn't meet Nestlé's food-safety standards, according to Nestlé's audit reports in 2002 and 2006.

Regulators never found anything major wrong with PCA's Blakely plant until after the outbreak. Then, the FDA found major problems in sanitation, manufacturing and even plant design.

Unlike Nestlé, other PCA customers, including Kellogg, never audited the Blakely plant themselves. Instead, they selected PCA as a supplier based in part on an inspection by an auditing firm that was paid by PCA and that rates almost every client "excellent" or "superior," said Rep. Bart Stupak, D-Mich., citing his committee's investigation.

Just another conflict of interest scenario: Audits paid for by the company being audited.

Read more...

[Wes Bucey]

In fairness, the auditing company mentioned as giving its clients good reports does have a link on its web page to an explanation of sorts - folks should read it before rushing to condemn the auditor.
https://www.aibonline.org/

[Marc]

Can you give a more specific ('deep') link, Wes? Are you referring to some type of disclaimer? Were they lied to? Was something hidden from them? Do they have low acceptance thresholds / requirements?

Apparently Nestlé knew things weren't right.

Edit add: I read the "Statement from AIB on Peanut Corporation of American and Related Matters", published April 2, 2009. That is not an explanation. It's a statement, but what does it say? Nada.

They're worried that their business model is threatened by government regulation because it's pretty obvious their audits are ineffective. Reminds me of the auditing firms during the Enron debacle.

[Sidney Vianna]

Originally Posted by Marc

Can you give a more specific ('deep') link?

"Setting the Record Straight", 2009 Peanut Products Recall and Related Food Safety Matters,"

[Marc]

Yeah, I found it and read it. I'm still not impressed. As I said, Nestlé saw what was happening.

[Wes Bucey]

Originally Posted by Marc

Yeah, I found it and read it. I'm still not impressed. As I said, Nestlé saw what was happening.

I didn't mean to imply I thought the "explanation" exonerated the auditor, but the situation does reflect what I have been writing the past six years I've been in the Cove - almost by definition, 3rd party assessors and auditors are forced to look at the best snapshots offered by the organization during the visit. When the auditee intends to deceive (as this one apparenly did), nobody ffers an additiona fee to the 3rd party auditor to perform a "forensic audit," even if the aditor has an itch things may not be ideal. A customer's auditor, however, seldom has a time or cost limit if he feels an itch, but usually just the "itch" is enough for a customer to say - "Hey, I've seen better - I'll let someone else worry about ferreting out the truth. We'll just move on to the next prospective supplier until we find one that does NOT give us an itch."

In my own experience, I've walked away from BOTH prospective customers and suppliers when I felt that itch, simply because there was rarely any economic benefit to take the time to ferret out the truth.

[Sidney Vianna]

Originally Posted by Marc

Just another conflict of interest scenario: Audits paid for by the company being audited.

That in itself does not constitute a conflict of interest, if the auditing organization realizes that their job is not to give the auditee a passing grade, irrespective of what the evidence shows.

The job of the auditor is to perform a fair and thorough assessment of the object (system, process, product, people, etc.) being audited and report the results adequately.

If an auditing organization disregards the evidence at hand to satisfy the immediate paying customers, they are obviously failing to address the needs of other stakeholders that rely on the audit report to make business decisions. However, paying attention only to the needs of the paying customer creates tremendous risks to your brand. A certificate is as good as the name/brand associated with the organization who issues it. If that name is tarnished, fewer clients will want to be associated with it.

But on a broader note, the underlying problem is that many business stakeholders promote the commoditization approach to audits and certification programs. In one hand, they want certificates, seals, approvals to bolster confidence in the "approved" organization; or pretend those certificates help them mitigate the risks of doing business with a given supplier. While, on the other hand, they apply pressure for fewer audit days, less qualified auditors, lower audit fees, etc...

As in the Dilbert strips, you can't have it both ways. Either you make sure that the audit process is robust enough to provide you with confidence, and pay accordingly, or you make a mockery of audits and certificates, trivializing it as much as possible and end up with approvals and certificates that don't mean anything.

[MIREGMGR]

I'd like to see all first-level audits paid for by the audited firm, with a requirement for frequent audits depending on product nature.

I'd also like to see food/drug/medical device auditing firms that can be shown to have missed a substantially safety-violative environment in two subsequent audits to be deemed co-civilly-liable in regard to those violations, including passthrough liability for their owner(s), top officers and corporate parents.

And, the consumers of those audits...customers for the company's products...need to have a clear liability path as well. The bigger they are, the more it should hurt to screw up.

If you want something to work right, assign a very painful cost to its working wrong. Does that make the stakes higher, significantly raise the costs of audits, pretty much eliminate an easygoing atmosphere from the work, and probably lead to expectations of more substantial credentials? Sure.