I am an operations director for a major US 3PL, one might expect me to side with those in my industry however in this case I am in agreement with the auditors on this one. Let me provide just one potential real world example of why you should have a food fraud policy and why we as 3PL operators do have some legal exposure and not just our certification body food safety program scheme requirement to develop, train and deploy this type of program.
Imagine your storing totes of say Cod, a type of whitefish, and they are being brought out to the dock. There you see an employee of your customer removing your LPN’s that identify it as such and they are writing PLK on the tote. Being the inquisitive type you are you ask them what they are doing to which they reply. Well…you don’t really want to know to which you say yes while you’re on my dock I do.
The customer then tells you well our production lines are set up for Cod patties but were are out of Cod so we are substituting Pollock it’s a close species of fish. What do you do? Well I would tell you that illicit substitution of one species for another may constitute economic fraud and/or misbranding violations of the Federal Food, Drug, and Cosmetic Act. I would also tell you that liability attaches at the point you become aware of something. Still think you don’t have the need to have a program?
A couple things, I am seeing here make me think folks in my opinion are confusing the food defense argument, yes it can intersect as a food defense issue but only if the intent is ideologically motivated to harm…but intentional adulteration is not just driven by ideological goals one has to consider economically motivated issues as well. This is where to the fraud or potential adulteration aspect comes into play. Substitution is one component of economically motivated fraud.
Theft diversion is as well, and every 3PL is subject to theft or how about mislabeling 3PL’s often provide value added services in relabeling. In the end I think in general terms 3PL’s have a lower risk profile and if you want you can probably manage your risk assessment so that you do not have to have a preventive control but you still need to be aware of where your risks are, train employees to be aware of and how to spot the following:
Examples of fraudulent activities
· EMA – Economically Motivated Adulteration
· Substitution – Sunflower oil partially substituted with mineral oil
· Concealment – Harmful food coloring applied to fresh fruit to cover defects
· Mislabeling – Expiry, provenance (unsafe origin)
· Dilution – Olive oil diluted with potentially toxic tea tree oil
· Unapproved enhancements – Melamine added to enhance protein value
· Grey Markets and Theft Diversion – Sale of excess unreported product
· Counterfeiting – Copies of popular foods - not produced with acceptable safety assurance