Aon Risk Solutions Food Safety Modernization Act Highlights and Implications for Your Business Risk. Reinsurance. Human Resources.
On January 4, 2011, President Obama signed the Food Safety Modernization Act, aimed at strengthening the security and safety of the U.S. food supply. This translates into new requirements for many food service industry businesses, including manufacturers, processors, packers, distributors, receivers, holders and importers. The law excludes farms and restaurants, and has some exceptions for small businesses and specialty markets such as seafood and alcohol facilities. Food Safety Modernization Act Report March 2011 Aon Risk Solutions 1
Food Safety Modernization Act...the new law explicitly places primary responsibility for food safety prevention on food producers and processors. Think of it as supply chain management written into law. Michael R. Taylor, Deputy Commissioner for Foods On January 4, 2011, President Obama signed the Food Safety Modernization Act, aimed at strengthening the security and safety of the U.S. food supply. The U.S. Center for Disease Control estimated about 48 million people or one out of six Americans get sick, 128,000 are hospitalized and 3,000 die each year from food borne diseases. Among additional changes, the new law grants the Department of Health and Human Services and the Food and Drug Administration regulatory authority to increase the frequency of inspections, establishes mandatory recall authority, strengthens the food import-tracing capabilities, and creates open access to records and documentation. This regulation translates into new requirements for all food and beverage businesses regulated by the FDA in the food service industry, including manufacturers, processors, packers, distributors, receivers, holders and food product importers. The FDA has regulatory authority over approximately 80 percent of the food supply. The law excludes farms and restaurants, and has some exceptions for small businesses and specialty markets, such as seafood and alcohol facilities. One of the most noteworthy requirements is the development of a food safety plan, which requires companies to conduct a risk analysis of the facilities and plants to minimize and prevent the occurrence of any hazardous material from entering into the product. Moreover, the new law grants the FDA legal access to company records, such as the food safety plan, licenses and supply system documents. While not all provisions of the bill go into immediate effect, there are certain provisions that require immediate attention. In addition, the FDA still must author rules and regulations on a variety of provisions which could take several years. It is estimated that full implementation of FSMA will require $1.4 billion over the next five years. In this time of budget reductions, many wonder whether the FDA will be able to implement changes effectively. It is important to remember that the law is still in effect and companies are responsible for moving forward to address the requirements in a timely basis. Other parts of the FDA are clearly signaling a greater focus on prosecution for food company executives that violate the law. What Should You Be Doing Now? Evaluate current hazard analysis plans regarding compliance with Section 103 Evaluate records and capabilities regarding traceability forward and back Determine if facility records are inspection-ready Discuss and train your employees on new FDA inspection guidelines Determine supplier qualification and audit methods and their sufficiency Evaluate importer s qualifications and processes Stay on top of science-based standards for your industry Be aware of FDA s upcoming hearing and rulemaking activities and participate when possible Food Safety Modernization Act Report March 2011 Aon Risk Solutions 2
Key Provisions of the Food Safety Modernization Act 1 Tier I Hazards Analysis and Risk-based Preventive Controls (Sec. 103, amending Sec 418) Requires the owner, operator or agent of each registered facility to conduct a hazardous analysis and implement preventive and crisis control plans. The written hazardous plan must be reanalyzed no less than every three years, starting in July 2012 (18 months after enactment of the law). If requested, the hazardous plan and documents must be made available to the FDA for review or inspection. The hazardous analysis and preventive controls plan must include identification and evaluation of all known or foreseeable hazards to the facility (biological, chemical, physical and/or radiological hazards, natural toxins, pesticides, drug residues, parasites, allergens, and unapproved food or color additives). Hazards must include those naturally occurring and those that may unintentionally or intentionally be introduced, including terrorism. In addition, the owner, operator or agent of the facility must identify and implement preventive controls to assure and prevent any hazardous outbreak. Facilities subject to the following FDA programs that are in compliance are exempt from this particular requirement: Seafood Hazard Analysis Critical Control Points Juice Hazard Analysis Critical Control Points Thermally Processed Low-Acid Foods Packaged in Hermetically Sealed Containers Inspection of Records (Sec. 101, amends Sec. 414(a)) Authorizes the Secretary of HHS access to all records relating to an article of food if there is a reasonable probability that it will cause adverse health consequences to humans or animals. The Secretary also has access to any other article of food that has been affected in a similar manner. FDA will issue specific rules and guidelines outlining record management and documentation. Companies are now responsible to maintain records for at least two years. Inspection of Facilities (Sec. 201, amends Sec. 421) Starting immediately, the FDA will increase the frequency of inspections of all facilities domestic and foreign. The Secretary of HHS will also inspect over 600 foreign facilities within one year after the enactment. In addition, the HHS Secretary will coordinate with the Secretary of the Department of Homeland Security to inspect any food article with known safety risks. Foreign Supplier Verification Program (Sec. 301 & 303, amends Sec. 805 and 801(a)) No later than one year after enactment, the Secretary of HHS will issue regulations around import verification. The new law requires the foreign supplier to abide by the same rules and standards of a U.S. supplier. Verification of activities from a foreign supplier may include monitoring shipping records, lotby-lot certification of compliance, annual onsite inspections, checking the hazard analysis and risk-based control plan of the foreign supplier and periodic testing and sampling of shipments. Records of a foreign supplier must be maintained for no less than two years and made readily available to the Secretary upon request. The Secretary of HHS may require an import certificate for assurance if there are known safety risks (Sec. 303). Mandatory Recall Authority (Sec. 423) If the Secretary of HHS believes there is a reasonable probability that a food article will cause adverse health consequences to humans or animals, the responsible party with be given an opportunity to cease distribution and recall the article. The Secretary of HHS has the authority to cease distribution of the article if the responsible party fails to cease distribution. Registration of Food Facilities (Sec. 102, amends Sec. 415 (a)) Requires food facilities to register with the FDA biennially between October 1 and December 31 of each evennumbered year. If the FDA determines there is a reasonable probability that food from a facility will cause adverse health consequences to humans or animals, the FDA may suspend the registration of a facility. 1 all details are summarized directly from PUBLIC LAW 111 353 Jan. 4, 2011 Food Safety Modernization Act Report March 2011 Aon Risk Solutions 3
Authority to Collect Fees (Sec. 107, adds Sec. 743) Authorizes HHS Secretary to assess and collect fees for re-inspection of facilities effective immediately. Facilities are responsible for the costs of a recall if associated with an order performed by the Secretary, including technical assistance, follow-up effectiveness checks and public notices. Businesses are responsible for 100 percent of the associated costs. Standards for Fruit and Vegetable Production (Sec. 105, amends Sec. 419) No more than one year after enactment, the Secretaries of U.S. Department of Agriculture and DHS will establish sciencebased minimum standards for safe production and harvesting of fruits and vegetables. Tier II National Agriculture and Food Defense Strategy (Sec. 108) No later than one year after enactment, the Secretaries of HHS, USDA and DHS plan to implement a national defense strategy and determine strategies to mitigate the intentional adulteration of food. The plan will address preparedness, detection, emergency response and recovery efforts. In the interest of national security the Secretaries will determine the manner and format in which the National Agriculture and Food Defense strategy is made publicly available. Voluntary Qualified Importer Program (Sec. 302, adds Sec. 806) Starting no later than 18 months after enactment, the Secretary will establish a voluntary program to provide expedited review and importation of food articles. Transportation of Food (Sec. 111) Starting no later than 18 months after enactment, the Secretary will enact regulations on the transportation of food articles, including air transport. Improving the Reportable Food Registry (Sec. 211, amends 416 (b)) Starting no later than 18 months after enactment, the Secretary of HHS may require responsible parties to submit consumer-oriented information, such as a description of the product, UPC/SKU, contact information and any other additional necessary information the Secretary determines necessary for a consumer to identify a reportable food item in their possession. Voluntary Food Allergy Guidelines (Sec.112) Secretaries of HHS and Education will issue regulations and guidelines one year after enactment around food allergies in public schools. Laboratory Accreditation for Analyses of Foods (Sec 202, amends Sec. 422) Starting two years after the enactment, the Secretary of HHS will establish a program to test food articles. Within two years a registry will be established of accredited laboratories and accreditation bodies. The Secretaries will determine the time, manner and form in which the registry will be made available. No later than 30 months after the enactment, food testing shall be conducted by federal laboratories or accredited non-federal laboratories. Testing under this provision will be in response to a testing requirement under the Act, to address an identified or suspected food safety problem or under Import Alerts requiring successful consecutive tests. Results of testing shall be sent directly to the FDA. However, the Secretary may by regulation exempt test results from the submission requirement if the Secretary determines they do not contribute to the protection of public health. Enhancing Tracking and Tracing of Food and Recordkeeping (Sec. 204) No later than 270 days after the enactment, the Secretary will establish pilot projects with the food industry to develop methods for rapid and effective tracking and tracing of foods. Decontamination and Disposal Standards and Plans (Sec. 208) The Environmental Protection Agency will work with Secretaries of HHS, DHS, USDA and local governments to develop specific standards and protocols regarding the clean up and recovery of threat agents. Food Safety Modernization Act Report March 2011 Aon Risk Solutions 4
Timeline for Implementation Effective January 2, 2011 Inspection of Records (Section 101) Registration of Food Facilities (Section 102) Payment Fees (Section 107) Port Shipping Coordination with DHS and FDA (Section 115) Alcohol-related Facilities Compliance (Section 116) Inspections (Section 201) Mandatory Recall Authority (Section 206) Import Certification Authority (Section 303) Whistleblower Protection (Section 402) Effective Later Hazardous Analysis Plan (Section 103) 18 months after date of enactment Laboratory Food Accreditation (Section 202) Two years after date of enactment Traceability and FDA pilot projects (Section 204) 18 months after date of enactment Consumer Notification of Reportable Foods (Section 211) 18 months after date of enactment Foreign Supplier Verification Program (Section 301) Two years after date of enactment Accreditation of Third Party Auditors (Section 307) 18 months to two years after date of enactment Food Safety Modernization Act Report March 2011 Aon Risk Solutions 5
Provisions Requiring Rulemaking and Specific Guidance from FDA Section 102 Registration of Food Facilities Section 103 Hazard Analysis and Preventative Controls Section 104 Performance Standards Section 105 Standards for Fresh Produce Section 106 Protection Against Intentional Adulteration Section 111 Sanitary Transportation of Food Section 113 New Dietary Ingredients Section 201 Inspections Section 204 Traceability Section 207 Administrative Detention of Food Section 301 Foreign Supplier Verification Program Section 302 Voluntary Qualified Importer Program Section 304 Prior Notice of Imported Food Shipments Section 307 Accreditation of Third Party Auditors Food Safety Modernization Act Report March 2011 Aon Risk Solutions 6
Additional Resources U.S. Health and Human Services Food Safety: http://www.foodsafety.gov/ U.S. Food and Drug Administration Food Safety: http://www.fda.gov/food/foodsafety/default.htm U.S. Food and Drug Administration Regulatory Information: http://www.fda.gov/regulatoryinformation/dockets/fr/default.htm U.S. Center for Disease Control Food Net Information: http://www.cdc.gov/foodnet/ U.S. Department of Agriculture Food Safety and Inspection: http://www.fsis.usda.gov/about_fsis/index.asp U.S. Department of Homeland Security: http://www.dhs.gov/index.shtm Food Safety Modernization Act Report March 2011 Aon Risk Solutions 7
Contacts Richard L. Shanks, ARM National Managing Director Aon Risk Solutions Aon Food Systems, Agribusiness and Beverage Industry Group +1.816.698.4666 Rick.Shanks@aon.com Tami Griffin Managing Director Aon Risk Solutions Aon Food Systems, Agribusiness and Beverage Industry Group +1.816.698.4643 Tami.Griffin@aon.com Aon Risk Solutions, 2011. All rights reserved. Disclaimer: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any way or by any means, including photocopying or recording, without the written permission of the copyright holder, application for which should be addressed to the copyright holder. 3066-P096315010-0710