Fraud in Organics: Risk analysis
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- Evagret Förstner
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1 Jochen Neuendorff: Fraud in Organics: Risk analysis. Presentation at the European workshop for prevention of fraud Dealing with Frauds in Organic Production, held October 2-3, 2007 at the Research Institute of Organic Agriculture FiBL, Frick, Switzerland Fraud in Organics: Risk analysis Content - Clarification of terms and definitions - Risk analysis: Fraud types - Risk analysis: Psychological aspects - Risk management: Measures 1
2 What is fraud? According to legal definitions, fraud - is a deliberate act and - leads to a pecuniary advantage What is fraud? Each fraud case needs to be proven - in dubio pro reo. Deviations and nonconformities are not automatically fraud. 2
3 Fraud types 1. Use of prohibited substances in organic units (farms, processing) 2. Commingling and labeling of conventional products as organic (farms, processing, import, trade) Type 1: Examples 1. Use of treated seeds, mineral fertilizers or synthetic pesticides on organic farms 2. Purchase of conventional animals, use of conventional feed and inadequate housing conditions in organic animal production 3. Use of contaminated storage facilities 4. Use of prohibited ingredients and food additives in processing units 3
4 Type 2: Examples 1. Marketing of conventional cereals as organic 2. Import of conventional oilseeds without import authorization 3. Purchase of conventional eggs and marketing as organic 4. Marketing of conventional pigs as organic Fraud types The risk of occurrence for type 2-frauds is high. Reason: inspection instruments are inadequate if the supplier firstly issues organic delivery notes and invoices to his client and then replaces them by conventional delivery notes and invoices, the flow of products is found to be o.k. 4
5 Psychology The lower the risk to become detected and the lower the penalities, the higher the willingness to commit a fraud will be. Measures 1. The responsibility of the operators for the integrity of organic production needs to be strengthened 2. The risk-orientation of the inspections needs to be improved. 3. The transparency on the organic market needs to be improved. 5
6 Responsibility of operators 1. Operators need sufficient organic knowledge, otherwise they cannot be certified. 2. Goods in check of organic supplies (certificates, labels, delivery notes) 3. Analysis on pesticides/gmo and evaluation of reasons for contamination 4. Supplier audits Risk orientation 1. More focus on processing and trade 2. Increased inspection frequency and more unannounced visits in case of risky operators 3. Cross checks 6
7 Cross Checks an example Transparency 1. Data-exchange between certification bodies in case of operators changing their CB (sanctions!) 2. Standarized EU-certificates 2. Centralized database of e-certificates 7
8 BioC: a common approach of competing inspection bodies BioC: Electronic certificates 8
9 BioC: Tracking of organic lots Any questions left? 9
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