certification in developing countries – reducing costs, enhancing value and options for compliance...
TRANSCRIPT
Certification in Developing Countries – Reducing Costs, Enhancing Value and
Options for Compliance
Presentation to Standards and Technical Development Facility - 26 June 2008
David RichardsonManaging Director – International, Certification and
Risk Services
26 June 2008
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NSF-CMi OVERVIEW
NSF International is an independent, non-governmental organization
Vertically integrated, food and agriculture services
Specialist activities include:
• Food and agriculture certification
• Organic certification• Supply chain
management• Consulting &
technical services• Risk services• Training
NSF-CMi – major provider of fresh produce certification
Largest certifier of GlobalGap – c.20,000 producers
Tesco Nature’s Choice scheme registrar and sole certifier – c.17,000 producers
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REDUCING THE COSTS OF COMPLIANCE
Is certification necessary?
Role of certification?
Reducing costs of certification
Alternatives to certification?
Costs of compliance
Achieving value
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Certification & Assurance
Consumer Assurance
& ProductMarketing
Supply Chain Management
Risk Management
& Brand Protection
Food Safety & Legal
Compliance
CSR & Reputation
Management Business Enhancement
Supporting recognised quality marks and labelling claims; providing consumer assurance on product safety, integrity, authenticity, methods of production
Provides business focus for delivery of assurance and aids redeployment of company resources
Scheme architecture – admin, assessors, IT – provides vehicle for improved communication and management of supply chain
Enhanced ability to monitor, analyse and pre-empt new risks or areas of consumer concern. Support for Global brands
Documented systems and procedures supporting product quality and consistency
Development of food safety standards targeting supply chain safety and legality
THE ROLE OF CERTIFICATION
Product Quality & Consistency
Incorporation of environmental,
social and economic criteria to help demonstrate
corporate responsibility
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Ethics
Environment
Animal welfare
Mislabelling
Unnatural production
Healthy nutrition
Food safety
A model used by a leading UK food retailer
Source: Lang, T. & Heasman, M. 2004. ‘Food Wars. The Global Battle for Mouths, Minds and Markets.’ Earthscan, London.
CONSUMER ASPIRATIONS
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Retailers require food safety, due diligence and assurance on consumer concerns
This position is driven by legislation, Government policy, NGO pressure, brand protection/shareholder value concerns, media attention and consumer concerns
Certification has developed as a systematic approach to supplier conformity assessment
Certification favours large-scale producers in relatively developed countries.
Certification may disadvantage small-scale producers:
• Scope and content of standards• Certification fees may be relatively expensive• Compliance costs may be prohibitive
CURRENT SITUATION
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COMPONENTS OF CERTIFICATION
Standard Owner
Standards & Protocols
Accreditation
Certification
Assessment
Production
Components of accredited certification and sources of cost
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Assessment
Local assessors Risk-based approach to
sampling and assessment frequency
Practical interpretation of standards
Added-value activity to defray costs?
Scale of operation to defray accreditation costs and business overheads
Optimum level of competition Ability to offer multiple certification scopes Credibility with end-users delivers VFM
Certification
Standards Scope – what issues should be addressed? Content – science and evidence based; avoid
“gold plating” Drive for harmonisation introducing irrelevant
criteria? Standard setting and benchmarking:
• Competition drives innovation• Independent benchmarking gives credibility,
delivers consistency and reduces duplication
Standards Scope – what issues should be addressed? Content – science and evidence based; avoid
“gold plating” Drive for harmonisation introducing irrelevant
criteria? Standard setting and benchmarking:
• Competition drives innovation• Independent benchmarking gives credibility,
delivers consistency and reduces duplication
REDUCING COST : ENHANCING VALUE
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ALTERNATIVE SOLUTIONS
Rather than continue to drive complex standards and a certification based approach into emerging farmers, is there an alternative?
A new model is needed which:
Addresses the specific needs of the retail supply chain – and delivers equivalent assurance outcomes to a certification based system but:
• Targets the areas of greatest risk• Is proportionate to the magnitude of risk• Creates a framework for facilitating ongoing compliance in a
supportive environment• Draws on other compliance supporting activities• Is practical and affordable for small-scale producers
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RISK BASED APPROACH
Standards - are activity specific and intervention based with compliance criteria linked to specific risk avoidance
Risk based surveillance - producers segmented according to exposure to risk. Assessment resources and costs targeted accordingly
Risk assessment – evaluation of sources of risk and measurement of assurance outcomes:
• Index of compliance measures assurance outcomes in disparate systems• Risk reports identify and prioritise where producers can achieve the greatest risk
improvement for investment • Compliance costs focused on areas with greatest potential for risk reduction
Compliance strategy – optimum combination of:• Assessment to drive compliance • Training & education to facilitate continuous improvement
Coregulation – utilisation of both public and private sector mechanisms to enhance compliance
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SUMMARY
Private standards continue to evolve in response to changing assurance priorities
Certification is a means of assessing and demonstrating compliance in their supply chains and transferring compliance costs
Industry standards have reduced multiple assessments but:• They cannot cater for all purchasers’ requirements• As global standards become larger and more complex fragmentation may occur
Certification and compliance costs may be relatively high for emerging farmers but some cost is in meeting purchasers’ requirements is inevitable
A more risk-based approach to measuring compliance in emerging farmers could yield benefits but needs to:
• Deliver equivalent assurance outcomes to certification• Be equally scaleable and efficient to operate
“Thank You”
David RichardsonManaging DirectorInternational, Certification and Risk ServicesNSF-CMiLong Hanborough, Oxford, England, OX29 8SJ [email protected]