FSMA Proposed Rule on Accreditation of Third-Party Auditors

By Ching-Fu Lin

Earlier this year, the Food and Drug Administration (FDA) published for public comment the proposed rule to implement §307 of the FDA Food Safety Modernization Act (FSMA).  The proposed rule is to establish a program for accreditation of third-party auditors to provide the FDA with a more efficient tool to regulate food products.  Particularly, it assists the FDA in regulating food entering the United States via international trade, as it is recognized by the FSMA that the FDA is administratively and financially unable to ensure the safety of imported foods solely on its current system of border inspection.  Under the new program, the FDA would recognize accreditation bodies, which would in turn accredit third-party auditors.  These third-party auditors would then conduct onsite food safety audits in foreign jurisdictions and issue certifications for foreign food producers.  According to the FSMA and the proposed rule, an accreditation body can be a foreign government/agency or a private third party, and a third-party auditor can be a foreign government, foreign cooperative, or a private third party.  Both are required by the proposed rule to meet standards for legal authority, competency and capacity, impartiality/objectivity, quality assurance, and records procedures.

Will such a multilayer delegation structure result in dilution of accountability and effectiveness?

Congress -> FDA -> Accreditation Body -> Third-Party Auditor -> Producer

The FSMA seems to have created a regulatory dilemma for the FDA in terms of addressing imported food safety.  The dilemma results from a structural mismatch between the broad scope of power granted to the FDA and the long chain of delegation to foreign/private actors as primary “regulators.”  The FSMA instructs the FDA to delegate its regulatory authority to foreign governments and/or private third parties, aiming to largely increase the effectiveness of regulation along the global supply chain. However, the FSMA does not give the FDA adequate capacity to closely oversee such foreign/private regulatory agents along the delegation chain.  Thus, the FSMA cannot hold foreign/private regulatory agents fully accountable for their failures in ensuring food safety.

The proposed rule §1.633 requires the FDA to monitor recognized accreditation bodies by periodically evaluating the performance (e.g. sample onsite assessments and document reviews) of each recognized accreditation body.  The FDA is to do so “by at least 4 years after the date of accreditation for a 5-year term of recognition, or by no later than mid-term point for recognition granted for less than 5 years.”  Such FDA evaluation builds mainly on the requirement of annual self-assessments by accreditation bodies themselves (§§1.622-23).  The proposed rule §1.662 provides a similar requirement on the FDA’s monitoring accredited auditors.  Accordingly to the proposed rule §§1.634 and 1.664, the FDA may revoke recognition of accreditation bodies and withdraw accreditation of third-party auditors based on specified grounds.

The multilayer delegation structure increases the distance between the FDA and the accredited auditors and the actual producers.  The structure in turn may dilute the rigorousness of oversight and accountability.  The proposed rule §1.662 however, provides the FDA with limited monitoring tools as it relies mainly on the self-assessments of the accreditation bodies and third-party auditors (and also the performance assessments conducted by an accreditation body on its accredited third-party auditors).  The problem posed by the multilayer delegation structure has arguably not been addressed fully.  In practice, the FDA may be limited to knowledge of obvious and serious errors.  This is especially the case when third-party auditors can and producers do locate outside the United States.  Thus, the FDA needs to have a more nuanced enforcement and monitoring mechanism rather than the merely ability to terminate the participation of the foreign/private regulators.

Last but not least, the proposed rule appears inadequate in its protection against conflicts of interest of accreditation bodies and third-party auditors.  §1.657 sets out the elements of a conflict of interest program that must be implemented by accreditation bodies and third-party auditors.  But the rule seems to be limited to “financial” conflicts of interest.  As it currently stands, regulatory impartiality/objectivity may become problematic when some foreign governments/agencies face potentially conflicting dual mandates: auditing food producers against U.S. standards versus promoting national food exports.  It is thus very possible then that the effectiveness and accountability of the system will be adversely affected.

With the FSMA foreign supplier certification requirement and the third-party certification program, the FDA is able to stretch and exercise its regulatory power beyond its normal boundaries.  The effectiveness and accountability of such institutional design however, remains uncertain.  And since the FDA has just extended the public comment deadline on the proposed rule to January 27, 2014 (see FDA’s official docket FDA-2011-N-0146), it is a good idea to review the proposed rule and comment now!


The Petrie-Flom Center Staff

The Petrie-Flom Center Staff

The Petrie-Flom Center staff often posts updates, announcements, and guests posts on behalf of others.

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