Agency releases new proposed rules under FSMA for verifying foreign suppliers and accrediting third-party auditors

In order to implement the bipartisan Food Safety Modernization Act (FSMA) signed by President Obama, the U.S. Food and Drug Administration today issued two proposed rules aimed at helping to ensure that imported food meets the same safety standards as food produced in the United States.

These proposals are part of the FSMA approach to modernizing the food safety system for the 21st century. FSMA focuses on preventing food safety problems, rather than relying primarily on responding to problems after the fact. The FDA encourages Americans to review and comment on these important proposed rules.

Under the proposed rules, importers would be accountable for verifying that their foreign suppliers are implementing modern, prevention-oriented food safety practices, and achieving the same level of food safety as domestic growers and processors. The FDA is also proposing rules to strengthen the quality, objectivity, and transparency of foreign food safety audits on which many food companies and importers currently rely to help manage the safety of their global food supply chains.

The new measures respond to the challenges of food safety in today's global food system. Imported food comes into the United States from about 150 different countries and accounts for about 15 percent of the U.S. food supply, including about 50 percent of the fresh fruits and 20 percent of the fresh vegetables consumed by Americans. 

"We must work toward global solutions to food safety so that whether you serve your family food grown locally or imported you can be confident that it is safe," said FDA Commissioner Margaret A. Hamburg, M.D. "Today's announcement of these two new proposed rules will help to meet the challenges of our complex global food supply system. Our success will depend in large part on partnerships across nations, industries, and business sectors."

Under the proposed regulations for Foreign Supplier Verification Programs (FSVP), U.S. importers would, for the first time, have a clearly defined responsibility to verify that their suppliers produce food to meet U.S. food safety requirements. In general, importers would be required to have a plan for imported food, including identifying hazards associated with each food that are reasonably likely to occur. Importers would be required to conduct activities that provide adequate assurances that these identified hazards are being adequately controlled.

"FSMA provides the FDA with a modern tool kit that shifts the paradigm for imports, as well as domestic foods, from a strategy of reaction to one of systematic prevention," said Michael R. Taylor, deputy commissioner for foods and veterinary medicine. "Rather than relying primarily on FDA investigators at the ports to detect and respond to food safety problems, importers would, for the first time, be held accountable for verifying, in a manner transparent to the FDA, that the food they import is safe."

FSMA also directs the FDA to establish a program for the Accreditation of Third-Party Auditors for imported food. Under this proposed rule, the FDA would recognize accreditation bodies based on certain criteria such as competency and impartiality. The accreditation bodies, which could be foreign government agencies or private companies, would in turn accredit third-party auditors to audit and issue certifications for foreign food facilities and food, under certain circumstances.

Importers will not generally be required to obtain certifications, but certifications may be used by the FDA to determine whether to admit certain imported food that poses a safety risk into the United States. The FSVP proposed rule and the third-party accreditation proposed rule are available for public comment for the next 120 days. The two proposed rules will help the FDA create an integrated import oversight system that works efficiently to improve food safety and protect the public health.

These proposals work in concert with the proposed rules released in January 2013, for produce safety and preventive controls in facilities that produce human food. Those proposed rules are currently open for comment until September 16, 2013, but the FDA intends to grant a 60-day final extension of the comment period to allow commenters an opportunity to consider the interrelationships between the January proposals and the two proposals being announced today.

For more information:

• FDA Food Safety Modernization Act (FSMA) 
• Fact Sheet: Foreign Supplier Verification Programs for Importers of Food for Humans and Animals 
• Fact Sheet: Proposed Rule on Accreditation of Third-Party Auditors  

• Consumer Update 

Earlier this month Gov. Jerry Brown signed legislation phasing out tax breaks in the state's "enterprise zones" and replacing them with a package of incentives intended to benefit the state's manufacturing and high-tech sectors.  The bills are AB 90 (Committee on Budget) and SB 93 (Galgiani).

Created in the mid-1980s, California's 40 enterprise zones offer various tax exemptions and credits to attract business and jobs to areas deemed distressed. Many agricultural areas in the San Joaquin Valley, Coachella, Salinas and the Imperial Valley have Enterprise Zones.

Under the new incentives available starting a year from now, manufacturing and biotech companies anywhere in the state would be eligible for sales-tax exemptions on the purchase of manufacturing equipment. Companies also could get hiring credits if they are located in census tracts with the highest rates of poverty and unemployment. There also would be tax credits to attract and retain businesses.

MANUFACTURING

Businesses in existing enterprise zones have been eligible for certain sales-tax benefits.

Under the new law, manufacturing or biotech companies anywhere in California can avoid the state sales tax on purchases of new manufacturing or R&D equipment. The breaks will total an estimated $500 million annually.  About one-tenth of California's workforce is in manufacturing, according to the most recent census estimates. 
 

HIRING CREDIT

The new program also revamps the use of hiring credits. Some $200 million worth of credits will be targeted at employers in census tracts where unemployment and poverty are among the highest 25 percent in the state.  Among other criteria, the credits are available only when the worker earns from $12 to $28 an hour. Employers will be eligible to receive 35 percent of wages for a period of five years when there is a net increase in jobs.

In a two-day hearing this week in the House Energy & Commerce Committee subcommittee on energy and power on whether the federal Renewable Fuel Standard (RFS) is saving America's environment and reducing foreign oil imports or is a give-away to ethanol producers and forcing food prices higher, the outcome was a grudging agreement that all sides will "work together."   

Sixteen witnesses ranging from the American Petroleum Institute (API) to the Renewable Fuels Assn. (RFA) to the National Chicken Council (NCC), the Environmental Working Group (EWG) and the National Corn Growers Assn. (NCGA) continued their battle of conflicting views on the value of the RFS, and with a couple of notable exceptions, committee members from both sides of the aisle were desperate to find a middle ground.

Acknowledging the House is unlikely to repeal the RFS, several members said the law mandating how much alternative fuels must be blended with gasoline needs to be "fixed."  Full Committee Chair Fred Upton and subcommittee Chair Ed Whitfield (R, KY) both said the RFS is clearly "broken" and is need of reinvention.  Rep. John Shimkus (D, IL) said he's caught in the middle between his farmers and his ethanol producers, and asked the fuel industry witnesses if they'd be willing to negotiate a rework of a bill to repeal the RFS.  While the witnesses hedged initially, they eventually agreed to work with the committee on a new RFS amendments package.

NCGA President Pam Johnson, whose members grow corn as a feedstock for ethanol, reminded the subcommittee that 10 years ago corn was $2 a bushel and farmers were facing a financial crisis, but livestock producers were "benefitting from below-market prices."  She called the RFS a critical piece of U.S. energy policy that's created jobs, lessened the U.S. dependence on foreign oil and reduced the "environmental footprint" of the transportation fuels sector.

Bill Roenigk, NCC senior vice president, said if the RFS can't be fixed, it needs to be repealed. He said the bill is not only overly broad and complex, "but is a statute that has outlived its usefulness." Roenigk said that in the last seven years, his industry has paid $50 billion in increased costs for corn and soybeans - the main ingredients in poultry feed - and that growers find it increasingly difficult to pass the cost increases on to consumers.

Market end-users told the House Agriculture Committee this week that Dodd-Frank rulemakings to strengthen protections for customer funds are a vital part of new authority needed by the Commodity Futures Trading Commission (CFTC), but that futures commission merchant (FCM) proposed rules are problematic.

The National Council of Farmer Cooperatives (NCFC) told the House ag subcommittee on general farm commodities and risk management this week it is concerned about capital changes, residual interest and establishing risk management systems that could be "financially and operationally burdensome" for smaller FCMs.  It also said it continues to have concerns about the swaps rules about to be finalized - farmers are now defined as "end users" - due to increased recordkeeping requirements.  The Commodity Markets Council (CMC) echoed the concerns, saying the new swaps regulatory regime has "now morphed into a crusade" and is rewriting longstanding and workable futures market rules.  CMC said the changes are being written without consideration of the impact on producers or consumers.  

The Commodity Markets Oversight Coalition (CMOC), in which the American Feed Industry Assn. (AFIA) participates, told the subcommittee it needs to strengthen prohibitions on manipulation and excessive speculation, investigate automated computer trading in commodities, enhance customer fund protections, require the CFTC to reestablish the Energy Markets Advisory Committee and fix a provision requiring small hedgers to maintain at least $1 million in assets in order to be considered a counterparty to a swap.

Last week the National Grain & Feed Assn. (NGFA) told the Senate Agriculture Committee new margin requirements as part of a proposed CFTC rulemaking will adversely hit farmers and the grain trade.  Post-MF Global and Peregrine Financial Group cases, NGFA said two parts of proposed rules to protect customer funds "would dramatically increase customer risk."

The first provision to which NGFA objected would lessen the time in which customers' margin calls must arrive at the FCMs. The current three-day allowance would be cut to one day; NGFA says the three-day period must be maintained.  If it isn't, then FCMs could force customers to "pre-margin their hedge accounts," NGFA said, resulting in customers sending more money to their brokers and potentially putting more funds at risk.

The second NGFA objection centers on a proposal on how FCMs calculate "residual interest," a phenomenon resulting from FCMs contributing their own money to maintain customer account balances until margin money is received.  NGFA says the CFTC is abandoning a "consistent historical interpretation" of the Commodity Exchange Act (CEA) allowing FCMs to maintain full account balances.  The CFTC proposal means all customers would be required to be fully margined 24 hours a day, seven days a week. "Contrary to the commission's intent, this actually exposes futures customers to much more risk," NGFA said.  

Both sides of the political aisle in the House appear to be mellowing to the notion of federal immigration reform, with the GOP this week saying there's a willingness to create a path to citizenship for the nation's 11 million undocumented workers, while the Democrats said they're now willing to forgo a single, comprehensive legislative package in favor of moving reform "in chunks."   Both positions are key reversals from earlier, entrenched positions.

The House Judiciary Committee chaired by Rep. Bob Goodlatte (R, VA) is the center of all immigration reform action, with the panel having cleared already five bills, including an ag worker reform bill.  Goodlatte and House Majority Leader Eric Cantor (R, VA) are also working on what's called "the KIDS Act," legislation that would grant citizenship to the children of undocumented immigrants who brought minor children to the U.S. or who had their children after they entered the country illegally.  A Judiciary Committee subcommittee held a hearing on the issue this week. The House Homeland Security Committee has also passed a bill on creating a system for measuring increases in border security.

And while even House Speaker John Boehner (R, OH) referred to the KIDS Act as "compassionate" - while criticizing the Senate bill as overly ambitious and lacking sufficient border controls - House Democrats were not willing to embrace the Goodlatte-Cantor approach, with most taking a wait-and-see attitude before endorsing the action. 

Wellness. A term loosely tossed around these days by the media, insurance providers and within the four walls of many companies - or at least by HR departments. By now, many of us have read the studies exploring traditional corporate wellness programs and understand the highs and lows associated with rolling them out to employees.

It's easy for employers to be overly prescriptive with their wellness programs, telling employees to "complete this health risk assessment (HRA)," "take that biometric screening" or "participate in this specific program." But it's unclear how these tactics benefit both employees and employers - outside of maybe achieving a handful of short-term gains.

I call this approach "Wellness 1.0." By and large, it's failing, or delivering middling results at best. Companies have narrowed the focus to a nagging "do this, don't do that" strategy and are overlooking the most important thing: creating a wellness program that jibes with the company culture and actually engages employees and supports them in making healthy behavior changes - rather than telling them how they should act.

We're facing a true workplace engagement crisis. A staggering 52 percent of Americans admit to being disengaged, and only 18 percent say they're actively engaged on the job, according to a recent Gallup Poll. So with just 30 percent of employees really tuned in at the workplace, how are we getting anything done? Moreover, how do we fix this?

The new Wellness 2.0 movement starts, first and foremost, with creating a culture-first mentality. That vision creates more productive employees, focusing on their total quality life, from work/life balance, to physical and mental health, to social, financial and spiritual wellbeing. To get the best from employees, employers must care about their employees beyond the corporate walls and support them across all aspects of their lives. Wellness 2.0 means a shift to the Total Quality of Life mentality, and hones in on establishing deeper connections across the board, connecting employers and their teams with platforms that enable people to make healthy changes and support each other along the way.

So, how do we develop mindsets geared toward culture-first and Total Quality of Life? By changing the game when it comes to wellness programs, making them what they should be: More engaging, social, fun and part of everyone's day-to-day.

• Click here for full article.... 

Attached is a chart showing the latest legislative musical chairs assuming the Vidak victory sticks.  The Senate continues to hold a supermajority, and the Assembly remains one shy through the end of session.

• Click here for .pdf of chart 

Safety - Knives:

Planning:

• Assess tasks to identify the potential hazards and appropriate personal protective equipment (PPE).
• Require employees to use appropriate controls and hand protection when exposed to hazards such as cuts and lacerations.
• Review any hazards and needed controls for wearing gloves around machinery if there is a risk that gloves may be pulled into the machinery.
• Equip newly purchased knives and cleavers with blade guards or knuckle guards that protect the hand from slipping onto the blade.
• Allow only experienced, trained and authorized employees to handle and sharpen blades.

Proper usage:

• Wear cut-resistant gloves to minimize cut hazards when handling sharp items.
• Cut properly:
• Cut away from the body.
• Keep fingers and knuckles away from the blade. Assure that hands are out of the path of travel.
• Carry knives properly:
• With the tip pointed down to your side.
• With the cutting edge angled slightly away from the body.
• Do not try to catch a falling knife.
• Stay focused while cutting. Do not talk with other employees while using a knife or sharp item. When interrupted, stop working.
• Use a knife only for its intended purpose, and use the appropriate knife for the cutting job.
• When handing a knife or sharp item to someone, place it down on a clean surface, and let the other person pick it up.

• Do not store knives or sharp items where they could be accidently bumped, such as near the edges of work tables.
• Store knives, saws, and sharp items in a designated storage area when not in use. Do not store the blades with the cutting edge exposed.
• Blade care:
• Keep knives and blades sharp. Dull blades require more force, and they are more likely to slip under higher force, presenting a risk of laceration.
•  Immediately clean knives after each use or place them in a dishwasher or a dishpan labeled "for knives only."
• Do not store knives and sharp objects in a sink between periods of use.
•  

Mike Taylor, CPCU

Vice President 

InterWest Insurance Services, Inc.

100 Pringle Avenue, North Tower, Suite 550

Walnut Creek, CA 94596

(925) 977-4104 Office

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www.iwins.com

mtaylor@iwins.com