The Advantages of Industry Self-regulation

The GMP system is designed to bring sufficient expertise to the certification process.

Elden Cheng, vice president in charge of production for leading Taiwan tofu-maker Brothers Farm Foods Co., hardly looks forward to the annual Costco audit his company must endure to keep its products on Costco’s shelves. The process takes at least a day to complete and involves a detailed inspection of the entire factory as well as the company books. And it costs money. The inspection team’s travel costs are all paid for by the suppliers, and the company must invest significant sums on the latest technology to meet the Costco requirements.

But his firm still does it. Why? Not just to receive orders from Costco, he says, but because the Costco inspection system confirms that Brothers Farms has met the highest standards for both safety and the traceability of its supply chain.

As the government has come under withering fire over egregious food scandals that threatened the public health, food makers are left grasping for ways to assure their customers that they are indeed as safe and reliable as claimed in their marketing. A simple government seal of approval is no longer enough for some shoppers – and more importantly for some retailers – as many of the worst recently discovered problems had gone on for years practically under the noses of government inspectors. Even firms granted the vaunted Good Manufacturing Practices (GMP) certification, a locally owned but internationally recognized food manufacturing standard, were caught up in recent food scandals.

For various reasons, private industry may be better equipped and more capable than government agencies in overseeing mechanisms to ensure food safety and prevent fraud.

First, the government is short of resources for managing risks in the food supply chain. The Taiwan Food and Drug Administration (TFDA) has only 500 inspectors divided roughly evenly among its three branch offices in Northern, Central, and Southern Taiwan, but these inspectors must give priority to checking imported foodstuffs at the points of entry and to monitoring domestic output in high-risk sectors such as meat and dairy, with little time to directly inspect local factories. Factory inspections are generally left up to the local departments of health, who often lack sufficient expertise or time to pay close attention to details.

“The county inspectors don’t have any experience in food safety or the industry,” leading to superficial inspections, observes Brothers Food’s Cheng. “When the government inspectors come, if everything looks okay, then it’s okay,” he notes. “The retailers’ inspectors are stricter. They have their [regulatory] bible and they follow the rules one by one.”

In addition, the private-sector inspectors generally have greater familiarity with the particular industry they are monitoring and so know specifically what to look for when going through a plant.

Problems of food safety (chiefly focused on preventing contamination from microbes or pollutants) and food fraud (usually involving economically motivated adulteration) are certainly not unique to Taiwan, as the European horsemeat scandal in 2013 and the more recent listeria food poisoning deaths in the United States illustrate. Food safety issues are serious and often deadly, and so have rightly gained the attention of regulators.

But as processing methods have improved and safety standards raised, problems of accidental contamination have been eclipsed by issues of deliberate adulteration. According to NSF International, a global food-safety auditing firm, “the problem of food fraud is huge and growing,” often involving organized crime.

As most perpetrators of food fraud know how to take steps to try to evade detection, adulteration is often extremely difficult to uncover simply by testing the finished product. Instead, rooting it out requires intimate knowledge of food industry processing methods and supply chains.

Taiwan’s local health inspectors are trained to a certain degree in international management standard systems such as ISO (the International Organization for Standardization). But Kenneth Yeh-lin Chan, executive director of the Taiwan Food Industry Development Association (TFIDA), says that inspecting a factory and auditing the manufacturer’s processes, supply chain, and products requires deeper, category-specific training and experience that government inspectors simply don’t have.

“If you’ve never made ham in your life, even if you went through ISO training, you wouldn’t know what a manufacturer is doing to cheat in ham,” Chan says. “If they aren’t industry experienced, they wouldn’t know how to inspect.” Chan’s TFIDA is spearheading efforts to promote industry self-regulation as the best way to assure food safety and reliability.

The role of GMP

Taiwan’s government has long been aware that it cannot effectively monitor the increasingly complex food industry without the involvement of the industry itself. In addition to putting in place necessary laws and regulations, it has therefore also promoted the international Good Manufacturing Practices (GMP) standards through the government-funded, non-profit Taiwan Food GMP Development Association. The association describes GMP as “a voluntary management system that places particular emphasis on the quality, hygiene, and safety of manufacturing processes.” Besides food manufacturing, pharmaceutical makers also employ GMP standards in their production.

Food GMP focuses on all elements of the production process, dubbed the “4Ms”: Man, Material, Machine, and Method. The objective is to ensure that workers are well trained; that all materials included in the supply chain are safe and from reputable sources; that the equipment is modern, clean, and safe; and that the whole process pays paramount attention to safety at each critical junction.

According to Bonnie Sun Pan, professor of food science at National Ocean University and head of the GMP association, Taiwan’s GMP-certified companies comprise only a small proportion of the entire food industry, but these companies account for 35% of the industry’s total production value – 60% if partial certification holders are included.

Obtaining certification is a complex undertaking, and involves being thoroughly audited by a team consisting of representatives from the Industrial Development Bureau (IDB) under the Ministry of Economic Affairs (MOEA), industry through the GMP association, and scholars having expertise in the specific type of production involved. Samples taken both at the factory and from store shelves are analyzed either by the government-funded Food Industry Research and Development Institute (FIRDI) or the China Grain Products Research and Development Institute (CGPRDI), depending on the kind of product. The costs are subsidized by the IDB, which until recently was responsible for the final confirmation allowing the GMP association to issue the GMP certification.

The initial certification is subject to a second, unannounced inspection – and if standards are found wanting, the association will put the factory on suspension until a third inspection, which will result in either final certification or decertification. The process must be repeated annually.

According to Pan, the process ensures that “these are Taiwan’s better companies.” Better – but not perfect, as indicated by the several companies holding GMP certification that were implicated in recent food scandals. However, Pan notes that of the more than 150 manufacturers caught up in 2011’s plasticizer case, only nine held GMP certification, and while five of the companies implicated in the more recent waste/feed oil scandals held partial GMP certification, their lard production lines – the products directly involved – were not GMP-certified.

Still, the lapses demonstrate that while GMP has made a good contribution to improving overall food safety, more needs to be done. Pan says that the GMP association is in transition right now, and is inviting food wholesalers, retailers, consumer protection organizations, additives suppliers, and research and development institutes to join “so we can provide a forum for all different parts of the food production chain for everyone to talk, and we can come together set the standards.”

TFIDA’s Chan hopes to improve the system by benchmarking Taiwan’s GMP to the internationally recognized Global Food Safety Initiative (GSFI), “an industry-driven initiative providing thought leadership and guidance on food safety management system controls necessary to assure the safety of the food supply chain,” according to GSFI’s website.

GSFI serves as a benchmark for global best practices in food safety management. Working with the U.S.-based Safe Quality Food (SQF) Institute, industry and government are developing the next generation GMP standards – called GMP Plus – to build consumer confidence in the food supply.

The association is now identifying gaps in the current GMP system, such as weaknesses in distinguishing between food-grade and feed-grade materials. It also plans to allow private accreditation bodies such as FIRDI, as well as international firms such as SGS, to do the inspections of processing plants. The inspectors working for these private accreditors will be trained by SQF and will “be category specific, industry competent, and experienced,” says Chan.

Once GMP Plus is effectively benchmarked to GSFI standards and firms are able to meet those standards, processors will be freed from repeated audits by customers seeking additional protection in their supply chains. Pan stresses that GMP certification doesn’t replace local health inspections, but does serve to assure retailers that the food they are stocking is safe and genuine.

Chan also emphasizes that the GSFI or GMP logo that may be presented on a label by certified firms is not mainly intended for consumer guidance. “Consumers should not need to have a certification,” he says. “Consumers buying from Costco should expect good, safe products, and should be able to believe in the brands. These certifications are really for retailers, certifying the supply chain.”

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