[Federal Register: March 13, 2000 (Volume 65, Number 49)]
[Proposed Rules]
[Page 13561-13610]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13mr00-22]
[[pp. 13561-13610]] National Organic Program
[[Continued from page 13560]]
[[Page 13561]]
requirements specified by a particular foreign buyer.
If labeled to meet foreign labeling requirements, such packaged
products cannot be sold in the United States. Pursuant to Sec. 205.306,
shipping containers and bills of lading for these products would have
to be marked ``for export only'' to assure that the product was not
distributed domestically. We are providing this exception to labeling
requirements for the convenience of exporters only. If the foreign
country or buyer does not require different product labeling, domestic
product which has been produced, certified, and labeled pursuant to
these regulations may be shipped without the statement, ``for export
only,'' on the containers and bills of lading.
Organic product produced in another country for export to the
United States may be certified to the requirements of this regulation
or to an approved foreign organic certification program that has been
recognized as equivalent to the requirements of the NOP. Such products
must be labeled pursuant to the requirements of this subpart.
(3) Product composition. Under new Sec. 205.301, Product
Composition, we have clarified the composition of organic and
nonorganic ingredients in products covered in the four labeling
categories. All ingredients labeled as ``organic'' in the ingredient
statement of the product package must be produced and handled pursuant
to these requirements. No substances prohibited on the National List in
subpart G and no production or handling practices prohibited in
Sec. 205.301(e) may be used in the production or handling of any
ingredient labeled as ``organic.'' Regulations covering the production
and handling of nonorganic ingredients varies with the labeling
category. The higher the percentage of a product's organic composition,
the more restrictive the production and handling requirements of the
nonorganic ingredients in the product. These requirements are found
under Sec. 205.301 and explained above under Proposal Description.
(4) Prohibited practices. Section 205.301(e) lists seven production
and handling practices that are prohibited from being used to produce
whole products or product ingredients that would be labeled as
``organic'' under the NOP. Some of these prohibited practices appear
for the first time in this proposal, and others were specified in the
first proposal and were supported by all those who addressed them in
their comments.
The first proposal prohibited organic labeling of a product or
ingredient produced using water that does not meet requirements of the
Safe Drinking Water Act (42 U.S.C. 300(f) et seq.). We have not
included that provision in this proposal because potable water is
required in other FDA and FSIS processing regulations and does not need
to be repeated as a requirement in this regulation.
The first three practices (use of excluded methods, sewage sludge,
and irradiation) are discussed elsewhere in this proposal and are added
as prohibited practices in this labeling section for consistency
purposes.
Only processing aids and substances on the National List in subpart
G of this regulation may be used in the production and handling of 95
percent-plus organic products and 50-95 percent organic products and in
any ingredient labeled as organic on a product package.
The first proposal prohibited use of sulfites, nitrates, and
nitrites in production or processing of organic products or
ingredients. We have amended the wording of this provision to clarify
that a handler cannot add any sulfites, nitrates, and nitrites to a
product and still label the finished product or ingredient as
``organic.'' We make this clarification because these substances are
found naturally in many substances and may appear naturally in potable
water used in processing.
The last two processing practices that would prohibit an
``organic'' label appeared in separate sections of the first proposal
and are included in this proposal in Sec. 205.301(e)(6) and (e)(7). The
first is that products and organic ingredients assembled using organic
or nonorganic forms of the same ingredient or component ingredients--
depending on availability of the organic ingredients--cannot be labeled
as ``organic when available'' or a similar phrase. Similarly, products
and organic ingredients assembled using both organic and nonorganic
forms of the same ingredient or component ingredients cannot be labeled
as organic if that ingredient is identified as organic on the
ingredient statement and included in the percentage of organic content
on the information panel.
(5) Calculating organic content. Because labeling requirements are
based on the amount of organic ingredients in a product, we have added
new section 205.302, which addresses the calculation of organic
percentages. Provisions in this new section were not included in the
first proposal. While this should be a simple mathematical procedure,
the section proposes certain guidelines for calculating and labeling
organic percentages.
Only one percentage figure for total organic ingredients will be
shown on a package. The percentage of individual organic ingredients
will not be displayed.
An organic product may be constituted completely of organic liquid
products. Therefore, this proposal adds the phrase, ``or fluid
volume,'' in several places in the proposal when referring to liquid
products and ingredients. For ingredients in liquid form that are
reconstituted with water from a concentrate, the calculation would be
based on a single-strength solution of the liquid concentrate. For
products that may contain both dry and liquid organic ingredients, the
percentage calculation would be based on the combined weight of the
organic ingredients, including the weight of the liquid ingredients,
minus water and salt.
(6) Labeling of nonretail containers. We have added new
Sec. 205.306, covering labeling of nonretail containers--those used
only for shipping and storage of agricultural products labeled as
organic or containing organic ingredients. While the same containers
are commonly used for both shipping and storage, the first proposal did
not reference storage containers or specify labeling requirements for
those containers. These provisions are proposed only for products
labeled as ``100 percent organic,'' ``organic,'' and ``made with
organic (specified ingredients).'' Some may believe that use of the
USDA Seal on a shipping container of products ``made with organic
(specified ingredients)'' may be inconsistent with other labeling
provisions prohibiting display of the Seal on consumer packages of
those products. However, in the case of shipping and storage
containers, the display of seals is not intended for marketing purposes
but would be used for easy identification of the product to help
prevent commingling with nonorganic product or handling of the product
which would destroy the organic nature of the product (fumigation,
etc.). These provisions will not apply to shipping and storage
containers of products containing less than 50 percent organic
ingredients.
(7) Retail Food Establishments. The extent of the regulatory
authority of this regulation has been the subject of intense
discussions in comments received, NOSB deliberations, and AMS
discussions. Commenters claimed that it makes no sense to regulate and
certify the production and handling of organic product but not require
certification and regulate retail food establishments where some fresh
foods containing organic ingredients are processed and
[[Page 13562]]
assembled and where they can become adulterated or misrepresented to
the consuming public.
Retail food establishments that market organic product, whether
produced in-store, in a corporate commissary, or by others, will be
subject to the labeling provisions of this subpart as that labeling
applies to: (1) Point-of-purchase, in-store displays describing the
organic nature of the product; and (2) other market information and
media advertising regarding the product being marketed at the retail
food establishment. Food retail establishments must describe the
product in in-store retail displays, market information, and media
advertising that is consistent with the organic content of the finished
product. Any labeling of a product that is inconsistent with the
percentage of organic content of the product will be considered a
violation of truth in labeling and/or truth in advertising regulations
of FDA and the FTC. Multiingredient products which are described as
organic product in retail displays and market information must be
assembled by a certified manufacturing facility, pursuant to the
Applicability subpart of this regulation.
Packaged organic products, organic fresh produce, and organic bulk
bin food items must be described in point-of-purchase displays, pricing
information, and consumer information in terms consistent with the
organic content of the product. For instance, an in-store retail
display would describe an 87 percent organic product by specifying the
percentage of organic content of the product and identifying the
organic ingredients in the ingredient statement, as may be required by
FDA. The market information for such a product must not, for instance,
label the product as ``organic'' or ``100 percent organic.'' This would
be a violation of truth in labeling and advertising regulations of FDA
and FTC. The USDA Seal and the seal of the certifying agent may be
displayed at retail sales and in market information on products
certified as containing 95 percent or more organic content.
Multiingredient products containing 50-95 percent organic ingredients
may display the seal or logo of the certifying agent of the organic
handling operation.
We believe these labeling practices will help assure appropriate
representation of bulk organic products at retail sale and will
encourage handlers to use more organic ingredients.
Products containing less than 50 percent organic ingredients at the
point of retail sale may not be identified in any way as ``organic'' or
containing organic ingredients. In addition, the USDA Seal and seal,
logo, or other identifying mark of the certifying agent is prohibited
from being used in retail displays and market information.
(8) Change in calculating the $5,000 exemption. We are proposing a
change in calculating the $5,000 exemption for producers and handlers.
The $5,000 annual exemption will be calculated on sales of organically
produced product and not on all agricultural products marketed by the
exempt producer or handler, as provided in the first proposal. This
exemption means that qualifying exempt organic producers and handlers
may annually sell up to $5,000 of organically produced products and not
be certified as an organic operation under this regulation. The
exemption could apply to a large, conventional agricultural operation
that also has a small amount of acreage designated for organic
production--the products of which, for example, is sold at a roadside
stand. Any sale of other, nonorganic products will not count against
the $5,000 sales total. The labeling and market information
requirements for organic products produced by such exempt operations
are specified in Sec. 205.309 of this regulation.
Subpart E--Certification
This subpart sets forth the requirements for a national program to
certify production and handling operations as certified organic
production or handling operations. The certification process proposed
in this subpart will be carried out by accredited certifying agents.
Proposal Description
General Requirements. Production and handling operations seeking to
receive or maintain organic certification must comply with the Act and
applicable organic production and handling regulations. Such operations
must establish, implement, and annually update an organic production or
handling system plan that is submitted to an accredited certifying
agent. They must permit on-site inspections by the certifying agent
with complete access to the production or handling operation, including
noncertified areas and structures.
As discussed in Subpart B, certified operations must maintain
records concerning the production and handling of agricultural products
that are sold, labeled, or represented as ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients)''
sufficient to demonstrate compliance with the Act and regulations.
Records applicable to the organic operation must be maintained for not
less than 5 years beyond their creation. Authorized representatives of
the Secretary, the applicable State program's governing State official,
and the certifying agent must be allowed access to the operation's
records during normal business hours. Access to the operation's records
will be for the purpose of reviewing and copying the records to
determine compliance with the Act and regulations.
Certified operations are required to immediately notify the
certifying agent concerning any application, including drift, of a
prohibited substance to any field, production unit, site, facility,
livestock, or product that is part of the organic operation. They must
also immediately notify the certifying agent concerning any change in a
certified operation or any portion of a certified operation that may
affect its compliance with the Act and regulations.
Certification Process. To obtain certification, a producer or
handler must submit a request for certification to an accredited
certifying agent. The request must contain descriptive information
about the applicant's business, an organic production and handling
system plan, information concerning any previous business applications
for certification, and any other information necessary to determine
compliance with the Act.
Applicants for certification and certified operations must submit
the applicable fees charged by the certifying agent. An applicant may
withdraw its application at anytime. An applicant who withdraws its
application will be liable for the costs of services provided up to the
time of withdrawal of the application.
The certifying agent will decide whether to accept the applicant's
application for certification. Certifying agents may decline to accept
an application for certification but may not decline to accept an
application on the basis of race, color, national origin, gender,
religion, age, disability, political beliefs, sexual orientation, or
marital or family status.
Upon acceptance of an application for certification, a certifying
agent will review the application to ensure completeness and to
determine whether the applicant appears to comply or may be able to
comply with the applicable production or handling regulations. As part
of its review, the certifying agent will verify that an applicant has
submitted documentation to support the correction of any deficiencies
identified in a previously received notification of noncompliance. The
certifying agent
[[Page 13563]]
will also review any available U.S. Department of Agriculture (USDA)
data on production and handling operations for information concerning
the applicant.
We anticipate using data collected from certifying agents to
establish and maintain a password-protected Internet database only
available to accredited certifying agents and USDA. This database would
include data on production and handling operations issued a
notification of noncompliance, noncompliance correction, denial of
certification, certification, proposed suspension or revocation of
certification, and suspension or revocation of certification.
Certifying agents would use this Internet database during their review
of an application for certification. This data will not be available to
the general public because much of the data would involve ongoing
compliance issues inappropriate for release prior to a final
determination.
After a complete review of the application, the certifying agent
will communicate its findings to the applicant. If the review of the
application reveals that the applicant may be in compliance with the
applicable production or handling regulations, the certifying agent
will schedule an on-site inspection of the applicant's operation to
determine whether the applicant qualifies for certification. The
initial on-site inspection must be conducted within a reasonable time
following a determination that the applicant appears to comply or may
be able to comply with the requirements for certification.
The certifying agent will conduct an initial on-site inspection of
each production unit, facility, and site included in the applicant's
operation. As a benchmark, certifying agents should follow auditing
guidelines prescribed by the International Organization for
Standardization Guide 10011-1, ``Guidelines for auditing quality
systems--Part 1: Auditing'' (ISO Guide 10011-1).\1\ The certifying
agent will use the on-site inspection in determining whether to approve
the request for certification and to verify the operation's compliance
or capability to comply with the Act and regulations. Certifying agents
will conduct on-site inspections when the applicant or an authorized
representative of the applicant who is knowledgeable about the
operation is present. An on-site inspection must also be conducted when
land, facilities, and activities that demonstrate the operation's
compliance with or capability to comply with the applicable production
or handling regulations can be observed.
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\1\ ISO Guide 10011-1 is available for viewing at USDA-AMS,
Transportation and Marketing Programs, Room 2945--South Building,
14th and Independence Ave., SW, Washington, DC, from 9:00 a.m. to
4:00 p.m., Monday through Friday (except official Federal holidays).
A copy may be obtained from the American National Standards
Institute, 11 West 42nd Street, New York, NY 10036; Website:
www.ansi.org; E-mail: ansionline@ansi.org; Telephone: 212-642-4900;
Facsimile: 212-398-0023.
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The on-site inspection must verify that the information provided to
the certifying agent accurately reflects the practices used or to be
used by the applicant or certified operation and that prohibited
substances have not been and are not being applied to the operation.
Certifying agents may use the collection and testing of soil; water;
waste; plant tissue; and plant, animal, and processed products samples
as tools in accomplishing this verification.
The inspector will conduct an exit interview with an authorized
representative of the inspected operation to confirm the accuracy and
completeness of inspection observations and information gathered during
the on-site inspection. The main purpose of this exit interview is to
present the inspection observations to those in charge of the firm in
such a manner so as to ensure they clearly understand the results of
the inspection. The firm is not required to volunteer any information
during the exit interview but would be required to respond to questions
or requests for additional information. The inspector will raise and
discuss during the exit interview any known issues of concern, taking
into account their perceived significance. As a general rule, the
inspector will not make recommendations for improvements to the
operation during the exit interview. However, the certifying agent will
have the discretion to decide the extent to which an inspector may
discuss any compliance issue.
Notification of Approval. A certifying agent will review the on-
site inspection report, the results of any analyses for substances, and
any additional information provided by the applicant within a
reasonable time after completion of the initial on-site inspection. The
certifying agent will approve certification upon making two
determinations: (1) That the applicant's operation, including its
organic system plan and all procedures and activities, is in compliance
with the Act and regulations; and (2) that the applicant is able to
conduct operations in accordance with its organic systems plan.
Upon determining the applicant's compliance and ability to comply,
the agent will approve certification and issue a ``certificate of
organic operation.'' The approval may include restrictions regarding
minor deficiencies that would not prevent certification as a condition
of continued certification. A certificate of organic operation will
specify the name and address of the certified operation; the effective
date of certification; the categories of organic operation, including
crops, wild crops, livestock, or processed products produced by the
certified operation; and the name, address, and telephone number of the
certifying agent. Once certified, a production or handling operation's
organic certification continues in effect until surrendered by the
organic operation or suspended or revoked by the certifying agent, the
State program's governing State official, or the Administrator.
Denial of Certification. Should the certifying agent determine that
the applicant is not able to comply or is not in compliance with the
act, the certifying agent will issue a written notification of
noncompliance to the applicant. Applicants who receive a notification
of noncompliance may correct the deficiencies and submit, by the date
specified, a description of correction and supporting documentation to
the certifying agent. As an alternative, the applicant may submit a new
application to another certifying agent, along with the notification of
noncompliance and a description of correction of the deficiencies and
supporting documentation. Applicants may also submit, by the date
specified, written information to the certifying agent to rebut the
noncompliance described in the notification of noncompliance. When a
noncompliance cannot be corrected, a notification of noncompliance and
a ``notification of denial of certification'' may be combined in one
notification.
The certifying agent will evaluate the applicant's corrective
actions taken and supporting documentation submitted or the written
rebuttal. If necessary, the certifying agent will conduct a followup
on-site inspection of the applicant's operation. When the corrective
action or rebuttal is sufficient for the applicant to qualify for
certification, the certifying agent will approve certification. When
the corrective action or rebuttal is not sufficient for the applicant
to qualify for certification, the certifying agent will issue the
applicant a written notice of denial of certification. The certifying
agent will also issue a written notice of denial of certification when
an applicant fails to respond to the notification of noncompliance. The
[[Page 13564]]
notice of denial of certification will state the reasons for denial and
the applicant's right to reapply for certification, request mediation,
or file an appeal.
An applicant who has received a notification of noncompliance or
notice of denial of certification may apply for certification again at
any time with any certifying agent. When the applicant submits a new
application to a different certifying agent, the application must
include a copy of the notification of noncompliance or notice of denial
of certification. The application must also include a description of
the actions taken, with supporting documentation, to correct the
deficiencies noted in the notification of noncompliance. When a
certifying agent receives such an application, the certifying agent
will treat the application as a new application and begin a new
application process.
A certifying agent has limited authority to deny certification
without first issuing a notification of noncompliance. This authority
may be exercised when the certifying agent has reason to believe that
an applicant for certification has willfully made a false statement or
otherwise purposefully misrepresented its operation or its compliance
with the requirements for certification.
Continuation of Certification. Each year, the certified operation
must update its organic production or handling system plan and submit
the updated information to the certifying agent to continue
certification. The updated organic system plan must include a summary
statement, supported by documentation, detailing deviations from,
changes to, modifications to, or other amendments to the previous
year's organic system plan. The updated organic system plan must also
include additions to or deletions from the previous year's organic
system plan, intended to be undertaken in the coming year. The
certified operation must update the descriptive information about its
business and other information as deemed necessary by the certifying
agent to determine compliance with the Act and regulations.
Following receipt of the certified operation's updated information,
the certifying agent will arrange and conduct an on-site inspection of
the certified operation. As a benchmark, certifying agents should
follow auditing guidelines prescribed by ISO Guide 10011-1. Upon
completion of the inspection and a review of updated information, the
certifying agent will determine whether the operation continues to
comply with the Act and regulations. If the certifying agent determines
that the operation is in compliance, certification will continue. If
any of the information specified on the certificate of organic
operation has changed, the certifying agent will issue an updated
certificate of organic operation. If the certifying agent finds that
the operation is not complying with the Act and regulations, a written
notification of noncompliance will be issued as described in
Sec. 205.662.
In addition to annual inspections, a certifying agent may conduct
additional on-site inspections of certified operations to determine
compliance with the Act and regulations. The Administrator or State
program's governing State official may also require that additional
inspections be performed by the certifying agent to determine
compliance with the Act and regulations. Additional inspections may be
announced or unannounced and would be conducted, as necessary, to
obtain information needed to determine compliance with identified
requirements.
Such on-site inspections would likely be precipitated by reasons to
believe that the certified operation was operating in violation of one
or more requirements of the Act or these regulations. The policies and
procedures regarding additional inspections, including how the costs of
such inspections are handled, would be the responsibility of each
certifying agent. Misuse of such authority would be subject to review
by the Department during its evaluation of a certifying agent for
reaccreditation and at other times in response to complaints. Certified
production and handling operations could file complaints with the
Department at any time should they believe a certifying agent abuses
its authority to perform additional inspections.
Certification After Suspension or Revocation of Certifying Agent's
Accreditation. When the Administrator revokes or suspends a certifying
agent's accreditation, affected certified operations will need to make
application for certification with another accredited certifying agent.
The certification of the production or handling operation remains in
effect during this transfer of the certification. The certified
production or handling operation may seek certification by any
qualified certifying agent accredited by the Administrator. To minimize
the burden of obtaining the new certification, the Administrator will
oversee transfer of the original certifying agent's file on the
certified operation to the operation's new certifying agent.
Upon initiation of suspension or revocation of a certifying agent's
accreditation, or upon suspension or revocation of a certifying agent's
accreditation, the Administrator may initiate proceedings to suspend or
revoke the certification of operations certified by the certifying
agent. The Administrator's decision to suspend or revoke a producer's
or handler's certification in light of the loss of its certifying
agent's accreditation would be made on a case-by-case basis. Actions
such as fraud, bribery, or collusion by the certifying agent, which
cause the Administrator to believe that the certifying agent's clients
do not meet the standards of the Act or these regulations, might
require the immediate initiation of procedures to suspend or revoke
certification from some or all of its client base. Removal of
accreditation, regardless of the reason, in no way affects the appeals
rights of the certifying agent's clients. Further, a certified
operation's certification will remain in effect pending the final
resolution of any proceeding to suspend or revoke its certification.
A private-entity certifying agent must furnish reasonable security
for the purpose of protecting the rights of operations certified by
such certifying agent. This security is to ensure the performance of
the certifying agent's contractual obligations. As noted elsewhere in
this proposed rule, the specific amount and type of security that must
be furnished by a private certifying agent will be the subject of
future rulemaking by the Department. We anticipate that the amount of
the security will be tied to the number of clients served by the
certifying agent and the anticipated costs of certification that may be
incurred by its clients in the event that the certifying agent's
accreditation is suspended or revoked. We anticipate that the security
may be in the form of cash, surety bonds, or other financial instrument
(such as a letter of credit) administered in a manner comparable to
cash or surety bonds held under the Perishable Agricultural Commodities
Act.
Certification--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) On-site Inspection Requirements. We have amended the general
requirements provision concerning on-site inspections. The first
proposal required production and handling operations to permit an
annual on-site
[[Page 13565]]
inspection by the certifying agent. A few commenters suggested that the
term, ``inspection,'' be made plural and that the section citations be
amended to include the section on additional inspections. The section
on additional inspections addressed the certifying agent's authority to
perform on-site inspections in addition to the annual on-site
inspection.
The commenters believe that ``inspection'' should apply to all
situations when on-site inspections must be or could be performed,
including the initial site inspection for a new certification as well
as, for instance, compliance inspections. Commenters believe that these
changes are needed to assure access to the certified operation and that
an applicant's agreement to permit any and all necessary on-site
inspections should be clearly stated as a general requirement for
certification.
We had intended for the general requirements provision concerning
on-site inspections to include all instances in which an on-site
inspection might be appropriate. Accordingly, we have amended the
requirement by replacing the phrase, ``an annual on-site inspection,''
with the phrase, ``on-site inspections.'' This terminology would cover
initial, annual, and additional inspections needed for certification,
continuation of certification, and to determine whether the operation
is in compliance with program requirements. To ensure complete access
to the production or handling operation for the purpose of conducting
on-site inspections and determining compliance with the requirements of
the National Organic Program (NOP), we have added a requirement that
the operation permit complete access to the production or handling
operation, including noncertified areas and structures. The general
requirements provision on on-site inspections is found at
Sec. 205.400(c).
(2) Providing Access to Records. We have clarified the meaning of
providing access to the records that the certified operation must
maintain by adding ``during normal business hours for review and
copying'' to the regulation. The first proposal required that certified
organic operations maintain records for not less than 5 years from the
date of their creation. It also required the certified operation to
allow authorized representatives of the Secretary, the applicable
governing State official, and the certifying agent access to such
records to determine compliance with the Act and regulations.
Several comments were received regarding these recordkeeping
requirements. Most of these comments were received from organic
producer organizations and certifying agents. A few commenters
questioned the necessity of maintaining records for 5 years, requested
a different period for different records, and requested clarification
on the meaning of providing access. Section 6511(d) of the Act requires
organic production or handling operations to maintain records for 5
years. Accordingly, we have made no change to the retention period in
this proposal. The clarification on the meaning of providing access to
records is found at Sec. 205.400(d).
(3) Notification of Drift. We have amended the requirement that
production and handling operations immediately notify the certifying
agent concerning any application of a prohibited substance by adding
the phrase, ``including drift.'' A few commenters suggested adding a
requirement that the certified operation notify the certifying agent
when an organically certified field is contaminated by drift. They
stated that drift is the most common reason for prohibiting the organic
label on otherwise organically produced product.
We agree that the certified operation should immediately report any
drift of a prohibited substance onto an organic field to its certifying
agent. Accordingly, Sec. 205.400(f)(1) provides that an applicant
seeking to receive or maintain organic certification must immediately
notify the certifying agent concerning any application, including
drift, of a prohibited substance. This provision applies to new
applicants as well as to ongoing certified operations. Contamination by
drift could occur during the time period between application for and
approval of certification. Accordingly, an applicant for certification
would be required to notify the certifying agent of any contact with a
prohibited substance.
(4) Applicant Requirements. We have added the requirement that
applicants for certification include other information necessary to
determine compliance with the Act and regulations. Commenters suggested
that the we add a provision to the application regulations requiring
applicants for certification to submit other information deemed
necessary by the certifying agent. They stated that this authority is
needed to assure that applicants are fully cooperative and responsive
throughout the certification process.
We believe the requested authority would be helpful to certifying
agents. However, we believe the authority for certifying agents to
request other information they deem necessary must be qualified by the
requirement that the information be necessary to determine compliance
with the Act and regulations. Accordingly, we have provided certifying
agents with the authority to request other information necessary to
determine compliance with the Act and regulations. This addition is
found at Sec. 205.401(d).
(5) Requirement for Notification of Noncompliance. We have replaced
the first proposal's section on ``preliminary evaluation of an
applicant for certification'' with a new section on ``review of
application.'' We have revised the section to clarify that certifying
agents will issue notices of noncompliance only after the initial on-
site inspection of an applicant's operations. We also allow applicants
to voluntarily withdraw their application for certification at any
time.
This change was in response to comments on the first proposal's
requirement that applicants for certification report, to the certifying
agent with whom they have applied, the receipt of a notice of
noncompliance received from another certifying agent. A State organic
growers association stated that this requirement places a stigma on
applicants who, for example, applied for certification before the
operation was ready to meet all requirements for certification. This
commenter suggested that notification of previous denial only be
required after an applicant has been denied certification. The
commenter went on to say that, if the language in the original proposal
is maintained, there should be a time limit of within the past 3 or 5
years of denial. Another commenter suggested that certifying agents
have the option of recommending that noncompliant applicants withdraw
their applications rather than be denied certification. As an
alternative, one of the commenters suggested that denial of
certification to an unprepared applicant should not have to be reported
on a subsequent application to another certifying agent unless the
first noncompliance notice led to a denial of certification.
We continue to believe that it is in the best interest of the
program and consumers to require applicants to report the receipt of
notices of noncompliance and denial of certification to any certifying
agent to whom they make application. However, we also believe that
operations should not be unnecessarily stigmatized because they applied
for certification before the operation was ready to meet all
requirements for certification.
[[Page 13566]]
Accordingly, this proposal requires that an applicant report the
receipt of a notice of noncompliance or denial of certification to any
certifying agent to whom application is made but allows applicants to
voluntarily withdraw their application at any time.
An applicant that voluntarily withdrew its application prior to the
issuance of a notice of noncompliance would not be issued a notice of
noncompliance. Similarly, an applicant that voluntarily withdrew its
application prior to the issuance of a notice of certification denial
would not be issued a notice of certification denial.
(6) Residue Testing. We have revised the verification of
information provisions to provide that the on-site inspection of an
operation must verify that prohibited substances have not been and are
not being applied to the operation. Verification would be through means
which, at the discretion of the certifying agent, may include the
collection and testing of soil; water; waste; seeds; plant tissue; and
plant, animal, and processed products samples.
Comments from certifying agents suggested adding a provision that
would allow a certifying agent to collect samples of substances from
the operation for residue testing. They stated that such testing is
necessary to detect unreported use or accumulation of prohibited
substances. Section 6506(a)(6) of the Act requires periodic residue
testing by certifying agents of products produced by certified organic
operations. It is our intent that collection of samples for residue
testing may be conducted as part of initial on-site inspections, as
well as during on-site inspections of certified organic operations. The
inspector could collect samples of soil; water; waste; seeds; plant
tissues; and plant, animal, and processed products. Collection of such
samples would be at the discretion of the certifying agent. To maintain
the integrity of the inspection process, it is necessary that the
certifying agent or inspector collect such samples first hand, rather
than receive the samples from the applicant. We have made the requested
addition at Sec. 205.403(c)(3).
(7) Postinspection Conference Requirements. We have amended the
postinspection conference requirements. We have changed all references
to ``postinspection conference'' to ``exit interview.'' We have removed
the requirement that the inspector discuss his or her observations
regarding the operation's compliance or ability to comply with the Act
and regulations. This requirement has been replaced with the
requirement that the inspector confirm the accuracy and completeness of
inspection observations and information gathered during the on-site
inspection. The inspector can use the exit interview to request any
additional information necessary to establish eligibility for
certification. Finally, this amendment requires the inspector to raise
and discuss during the exit interview any known issues of concern.
Certifying agents commented that it would be inappropriate for an
inspector to discuss observations and possible violations of compliance
at an exit interview. They stated that requiring exit interviews places
the inspector in the position of providing observations and feedback to
the applicant before the inspector is able to confer with the
certifying agent. Some certifying agents expressed concern that exit
interviews could result in inspectors providing false or misleading
information to the applicant. Some commenters requested that exit
interviews be held only for the purpose of checking the accuracy and
completeness of inspector observations made and the information
obtained during the inspection. Other commenters requested that the
exit interviews requirement be removed from these regulations.
We believe that qualified inspectors should be capable of
competently discussing an applicant's compliance or ability to comply
with these regulations. However, we also believe that a certifying
agent should have the opportunity to decide whether to allow its
inspectors to discuss issues of compliance at an exit interview.
Accordingly, we have amended the exit interview requirements as noted
above. These amended requirements are found at Sec. 205.403(d).
(8) Additional Inspections. We have added a new provision that
additional inspections may be announced or unannounced at the
discretion of the certifying agent or as required by the Administrator
or State program's governing State official. This change was made in
response to commenters who requested the addition of a requirement that
certifying agents conduct unannounced site visits in addition to the
initial and annual inspections. We believe that unannounced on-site
inspections are appropriate and valuable in both monitoring and
investigating compliance with the Act and regulations. The requested
addition is found at Sec. 205.403(a)(2)(iii).
(9) Requirements for Written Inspection Reports. We have removed
the requirement that the certifying agent require an inspector to
prepare and submit to the certifying agent, within 30 days of
completing an inspection, a written report that describes the
inspector's observations and assessments of the inspected operation's
compliance or ability to comply with the Act and regulations. A variety
of comments, pro and con, were received on this requirement. Certifying
agents questioned whether the 30-day timeframe was reasonable. Other
commenters suggested that, rather than specifying a time period, the
section should stress the need for timely reporting. A commenter
suggested that an inspector's observations and assessments on the
inspected operation include the inspector's recommendations on approval
of certification. Other commenters stated that the requirement amounted
to micro management of a certifying agent's business. This latter group
of commenters believe that the setting of a time period for inspector
reporting involves a policy matter that should be determined by the
certifying agent. We agree with the commenters who stated that setting
deadlines for the filing of inspection reports is an internal policy
matter better left to certifying agents.
We believe that policies and procedures regarding inspector
reporting are the purview of the certifying agent. Certifying agents
would be expected to develop and implement inspector reporting
requirements for on-site inspections internal to their own operations.
Such policies and procedures and a certifying agent's performance in
making timely certification decisions would be subject to review during
accreditation and reaccreditation of the certifying agent. Accordingly,
we have removed the provision.
Removal of this requirement does not eliminate the need for a
written on-site inspection report or the importance of timely
inspection reporting by an inspector to the certifying agent.
Certifying agents are expected to make timely decisions regarding
whether to certify an applicant and whether a certified operation is in
compliance with the Act and regulations. Applicants with complaints
regarding timeliness of service could forward their complaints to the
Administrator.
(10) Responsibilities of Certifier in the Application Process. We
have replaced the list of requirements to be reviewed by a certifying
agent in determining an applicant's eligibility for certification with
a general statement on determination of eligibility. Commenters
requested the addition of a provision requiring certifying agents to
verify implementation of the organic system plan. We agree that an on-
site
[[Page 13567]]
inspection of an ongoing operation must include assessment of the
operation's application of its organic system plan. Because an on-site
inspection of a new applicant's operation would be conducted at a time
when the operation can demonstrate its organic capabilities, the
operation must be able to show that it is satisfactorily carrying out
its organic system plan.
It was our intent that certifying agents would verify
implementation of the applicant's organic system plan during the
certifying agent's review of the on-site inspection report and
application. However, our list of requirements to be reviewed by a
certifying agent in determining an applicant's eligibility for
certification did not specifically reference verification of
implementation of the organic system plan. We have decided to replace
the list of requirements to be reviewed with a general statement on
determination of eligibility. This statement provides: ``If the
certifying agent determines that the organic system plan and all
procedures and activities of the applicant's operation are in
compliance with the requirements of this part and that the applicant is
able to conduct operations in accordance with the plan, the agent shall
approve certification.'' We believe this general statement, in
combination with the requirement that the certifying agent review the
application, the on-site inspection report, the results of any analyses
for substances conducted, and any additional information requested from
or supplied by the applicant, adequately addresses the commenters'
concerns. This revision to the approval of certification requirements
is found at Sec. 205.404(a).
(11) Information Included on the Certificate of Organic Operation.
We have amended the regulations specifying what information must be
included on a certificate of organic operation. Comments received from
organic operations, certifying agents, and consumers recommended that
certifying agents provide additional information on certificates of
organic operation. Specifically, they recommended that all certificates
include: (1) The certifying agent's name and address; (2) an expiration
date; (3) the physical location of certified operations, including
separate fields and facilities; (4) the name of the certified
operation's contact person responsible for compliance with program
requirements; (5) the name and address of the certified operation; and
(6) the crops and products certified. The commenters believe such
information, especially a date on which the certificate expires, to be
vital to assuring accountability and compliance with the program.
We believe it would be beneficial to persons with concerns
regarding a certified production or handling operation to have ready
access to information concerning the name, address, and telephone
number of the certifying agent. Further, because the certificate of
organic operation would be an official document of the certifying
agent, it would be appropriate for this information to appear on every
certificate. Accordingly, we have added the name, address, and
telephone number of the certifying agent to the information which must
be included on every certificate. This addition is found at
Sec. 205.404(b)(4).
We disagree with the commenters who requested that certificates of
organic operation display an expiration date. We believe annual
expiration of a certificate would place an unnecessary burden on
certifying agents and certified operations. Annual expiration of
certificates is also inconsistent with the fact that an operation's
certification does not expire. In fact, once an operation is certified
as an organic operation, its certification remains in effect until
surrendered by the certified operation or suspended or revoked by the
certifying agent, the State program's governing State official, or the
Administrator. All certified operations are required to annually update
their organic system plan. If the updated plan causes information on
the certificate to be incorrect, the certifying agent will issue a new
certificate with the correct information. This provides a mechanism for
ensuring that certificates are updated as necessary on an annual bases.
We have not included the recommended addition in this proposal.
For clarification, we have added Sec. 205.404(c). This section
provides that once certified a production or handling operation's
organic certification continues in effect until surrendered by the
organic operation or suspended or revoked by the certifying agent, the
State program's governing State official, or the Administrator.
We disagree with the commenters who requested that certificates
display the physical location of certified operations, including
separate fields and facilities, and the name of the certified
operation's contact person responsible for compliance with program
requirements. We believe that the location of a certified operation's
fields and facilities has no relationship to the operation's status as
a certified organic operation. Therefore, such information should only
be made available with the written consent of the certified operation.
The name of the certified operation's contact person would be
releasable information. We believe, however, that such detail is
unnecessarily burdensome to the certifying agent and will only serve to
clutter the certificate. By requiring the name, address, and telephone
number of the certifying agent, as noted above, the certificate would
provide interested persons with a contact for obtaining releasable
information concerning the certified operation. Further, the certifying
agent is the first line of compliance under this program and, as such,
is the person to whom all questions and concerns should be addressed
about certified operations.
We agree with the commenters who requested that certificates
display the name and address of the certified operation because such
information is potentially beneficial to consumers. Accordingly, we
have added the name and address of the certified operation to the
information which must be included on every certificate. This addition
is found at Sec. 205.404(b)(1).
The first proposal required that the certificate list the
category(ies) and type(s) of products produced by the certified
operation. Commenters were apparently confused about the meaning of
category(ies) and type(s) of products. We have, therefore, revised the
requirement to provide that a certificate of organic operation would
specify the categories of organic operation, including, crops, wild
crops, livestock, or processed products produced by the certified
operation. This revision is found at Sec. 205.404(b)(3).
(12) Certifiers Authority to Deny Certification. We have added
authority for certifying agents to deny certification to applicants who
do not meet the requirements for certification. The first proposal
required certifying agents to forward their recommendations for denial
of certification to the Administrator. Commenters stated that authority
for denial of certification should rest with the certifying agents.
They also contended that referral to the Administrator for denial of
certification establishes a bureaucratic process, which would create
unnecessary delays to the denial process and increased cost to
applicants. Many commenters suggested the appeals process is sufficient
to protect the interests of the Secretary.
We have determined that it is reasonable to authorize certifying
agents to deny certification. Denial by the certifying agent would
provide the applicant with a more timely decision on its eligibility
for certification. A more timely decision would provide an
[[Page 13568]]
earlier opportunity for applicants to appeal a denial of certification.
Authority for certifying agents to deny certification to applicants who
do not meet the requirements for certification is found at section
205.405.
This proposal requires certifying agents to evaluate the
applicant's corrective actions taken and supporting documentation or
written rebuttal submitted in response to a notification of
noncompliance. Certifying agents are authorized to perform on-site
inspections to verify corrections to deficiencies or statements
contained in a rebuttal, if necessary, to assure full compliance with
the certification requirements. The certifying agent will issue the
applicant a written notice of denial of certification if the corrective
action or rebuttal is not sufficient for the applicant to qualify for
certification.
We believe the denial of certification provisions should clearly
state an applicant's options and rights upon receiving a notice of
denial of certification. Accordingly, Sec. 205.405(c)(1)(ii) provides
that a notice of denial of certification must state the reasons for
denial and the applicant's right to reapply for certification, request
mediation, or file an appeal. An applicant who has received a written
notice of denial of certification may apply for certification again at
any time with any certifying agent, may request mediation to resolve a
dispute with the certifying agent, or may file an appeal with the
Administrator as outlined in Sec. 205.663 for mediation and
Sec. 205.681 for appeals. Applicants subject to an approved State
program would seek mediation or appeal in accordance with the rules of
the approved State program.
(13) Willful Misrepresentations or False Statements by Applicants.
We have included authority for certifying agents to deny certification
if the agent has reason to believe that the applicant has willfully
made a false statement or otherwise purposefully misrepresented its
operation or compliance with the certification requirements. Such false
statements would, in most cases, be verified during an on-site
inspection. This authority was provided to certifying agents in the
first proposal relative to certified operations. The first proposal,
however, did not reference an applicant's willful making of a false
statement or otherwise purposefully misrepresenting its operation or
compliance with the certification requirements. Certifying agents
commented that applicants for certification also may make false
statements or misrepresent facts. They suggested that the regulations
reflect a certifying agent's authority in such cases. We agree with the
commenters and have added Sec. 205.405(f). This section authorizes
denial of certification without first issuing a notification of
noncompliance when the certifying agent has reason to believe that the
applicant has willfully made a false statement or otherwise
purposefully misrepresented its operation or compliance with the
certification requirements.
Certification--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Timeliness of Applicant's Notification to Certifiers. A
commenter suggested that ``immediately'' in the requirement that
production and handling operations immediately notify the certifying
agent concerning any application of a prohibited substance be replaced
with ``within 2 days.'' No justification was given for the recommended
change, and the change has not been made. ``Immediately notify'' means
that the applicant or certified operation must at once notify its
certifying agent upon learning that a prohibited substance has come in
contact with any portion of its operation or production. The certifying
agent will evaluate the circumstances surrounding the event and decide
whether the certified operation acted within the intent of this
requirement. This requirement is found at Sec. 205.400(f)(1).
(2) Notification of Changes to Certifying Agent. Commenters
questioned how the certified operation would know what changes in its
certified operation or any portion of its operation would require
reporting to its certifier. Certified operations are responsible for
being familiar with the requirements of the Act and these regulations.
Further, they have an obligation to contact their certifying agent when
they have questions regarding compliance with this program. As a rule,
certified operations should contact their certifying agent whenever the
change is not covered under their approved organic system plan. The
requirement that a certified operation notify its certifying agent
concerning any change in its certified operation that may affect its
compliance with the Act and regulations is found at Sec. 205.400(f)(2).
(3) Tests for Soil Fertility and Irrigation Water. Certifying
agents suggested that applicants for certification be required to
submit test results for soil fertility and irrigation water quality to
prove compliance with the NOP. We recognize that increasing soil
fertility through organic production practices is a goal of the organic
industry. However, soil fertility will not qualify or disqualify an
applicant for organic certification. An applicant who has independently
had such tests conducted may, but is not required to, include them with
the application. While the Act requires that handlers only use in their
products water that meets all Safe Drinking Water Act requirements, no
similar requirements are placed on producers and the water they use to
irrigate their crops. For these reasons, we are not requiring
applicants for certification to submit soil fertility or irrigation
water quality test results.
(4) Timeliness of On-site Inspection. The first proposal required a
certifying agent to conduct an initial on-site inspection within a
reasonable time following a favorable preliminary evaluation of an
application for certification. Several commenters asked what
constitutes reasonable time between submission of an application and an
on-site inspection. Others stated that, when determining what
constitutes reasonable time, consideration should be given to factors
such as when the application was submitted relative to when activities
demonstrating compliance can be observed and when the inspection can be
scheduled to assure the presence of the applicant.
We stated in the first proposal that we did not specify a time
within which an inspection must be conducted because the time would
vary according to when the application was submitted and the type of
operation to be inspected. Timely service will be in the best interest
of certifying agents since applicants may forward complaints regarding
service to the Administrator. Such complaints could have an impact on a
certifying agent's reaccreditation or continued accreditation. Further,
our original position is consistent with those commenters requesting
flexibility in determining what constitutes reasonable time.
Accordingly, we have made no changes in this proposal regarding what
constitutes reasonable time. This requirement is found at
Sec. 205.403(b).
(5) Additional On-site Inspections. Some organic associations asked
what would trigger a decision to conduct an additional on-site
inspection. Commenters expressed the concern that certifying agents
could conduct additional, unneeded inspections at the expense of
operators who would have to pay the costs of the inspections. Other
commenters asked who would pay for the additional on-site inspections.
Some certifying agents suggested that guidelines need to be established
under
[[Page 13569]]
which additional inspections must be conducted. A certifying agent
suggested that additional inspections could be conducted based on the
inspector's observations, the certifier's recommendation, and,
possibly, third-party complaints.
The authority for on-site inspections is necessary for monitoring
and compliance purposes at the discretion of the certifying agent, the
Administrator, or a State program's governing State official. Such on-
site inspections would likely be precipitated by reasons to believe
that the certified operation was operating in violation of one or more
requirements of the Act or these regulations. The on-site inspection
would be conducted, as necessary, to obtain information needed to
determine compliance with identified requirements.
We believe policies and procedures regarding additional
inspections, including how the costs of such inspections are handled,
are the responsibility of each certifying agent. Misuse of such
authority would be subject to review by the Department during its
evaluation of a certifying agent for reaccreditation and at other times
in response to complaints. Certified production and handling operations
could file complaints with the Department at any time should they
believe a certifying agent abuses its authority to perform additional
inspections. Accordingly, we have made no changes in this proposal
based on these comments.
(6) Annual Renewal of Certification. Commenters requested annual
renewal of certification rather than updates to a continuing
certification program. Other commenters requested that the notice of
certification have an ending date or be issued for an established
period of time. An industry association commented that the proposed
continuation of certification regulations requires a certified
operation to annually certify that it is complying with the Act and
these regulations. This commenter stated that the proposed continuation
of certification procedures changes the process of recertification to
one more closely resembling self-certification. Another industry
association stated that certification until surrendered by the
certified operation or suspended or revoked would make the assurance of
compliance extremely difficult, if not impossible. This commenter
further stated that certifying agents will be unable to effectively
monitor applicants or gain needed information. This commenter
recommended that renewal paperwork include the items specified in the
continuation of certification regulations but that certifying agents
use their own discretion as to the forms and information needed.
Similarly, a certifying agent commented that certification must be
renewed with an application on an annual basis and that no operation
can be certified for life. This commenter recommended requiring a
yearly application and other documentation deemed necessary by the
certifying agent.
We disagree with the commenters. We prefer continuous certification
due to the very real possibility that the renewal process might not
always be completed before expiration of the certification period.
Expiration of the certification period would result in termination of
the operation's certification. Even a short period of interruption in
an operation's organic status could have severe economic ramifications.
Further, we believe that a regular schedule of expiration of
certification is unnecessary inasmuch as all certified operations are
required to annually update their organic system plan and submit any
changes to their certifying agent. Accordingly, this proposal retains
the provision for continuous certification.
(7) Timing of On-site Inspections. A State certifying agent and an
industry organization stated that requiring an on-site inspection after
receipt of the renewal application is not consistent with current
practice. The State certifying agent stated that it moved the renewal
date to January 1 of each year to make the renewal process less
burdensome to its certified producers. This commenter went on to say
that the annual inspection conducted during the appropriate growing or
processing season is used to evaluate the organic operation in the
renewal process. The State certifying agent further stated that an
additional inspection at renewal time would not be useful if it was not
an appropriate time to observe production practices at the organic
operation. Both commenters requested elimination of the requirement
that the certifying agent arrange and conduct an on-site inspection
following receipt of the operation's annual submission of information.
These commenters also requested that a determination of noncompliance
be based on on-site inspections conducted during the previous
certification year and a review of the information annually submitted
by the certified operation.
We disagree with the commenters. Certifying agents are required to
schedule on-site inspections for a time when land, facilities, and
activities that demonstrate the operation's compliance or capability to
comply with the applicable production or handling provisions of the NOP
may be observed. Accordingly, the initial certification must have
followed an on-site inspection performed when the operation was able to
demonstrate its compliance or capability to comply. The certified
operation, therefore, should be fulfilling its annual continuation of
certification obligations at a time when it can demonstrate its
compliance with the Act and regulations. The commenters'
recommendations are not accepted.
Certification--Additional Provisions
Upon further review of the certification provisions in the first
proposal, we have decided to propose the following additions and
changes.
(1) Requirements for Business Information. We have revised the
business information required of all applicants for certification as an
organic operation. First, the application must include the name of the
person who completed the application. Certifying agents will use this
information when following up on information within the application.
Second, we have removed the requirement that the application include
the names of personnel responsible for maintaining compliance with the
Act and regulations. We believe this information is unnecessary since
the person responsible for overseeing compliance is the certifying
agent. Third, we have added the requirement that when the applicant is
a corporation, the application must include the name, address, and
telephone number of the person authorized to act on the applicant's
behalf. Fourth, we have removed the requirement that the applicant for
certification submit a statement of compliance. We have also removed
the ``Statement of Compliance'' section which required the submission
of a statement of compliance with the application for certification. We
have removed this requirement because we have determined that it
creates an unnecessary burden upon applicants for certification.
Section 205.400(a) requires that a person seeking to receive or
maintain organic certification must comply with the Act and applicable
production and handling regulations. Accordingly, it is unnecessary to
require a separate document through which the applicant for
certification agrees to comply with the Act and regulations. The
requirements for the submission of business information with the
request for certification are found at Sec. 205.401(b).
(2) Disclosure of Previous Applications. The first proposal
[[Page 13570]]
required that the request for certification include the name(s) of any
organic certifying agent(s) to which application had previously been
made, the year(s) of application, and the outcome of the application(s)
submission. We have amended this requirement by adding ``including a
copy of any notification of noncompliance or denial of certification
issued to the applicant for certification and a description of the
actions taken by the applicant to correct the deficiencies noted in the
notification of noncompliance, including evidence of such correction.''
We have added this provision to clarify what we mean by ``the outcome
of the application(s) submitted.'' This provision is found at
Sec. 205.401(c).
(3) On-site Inspections. We have combined the arranging for
inspection, verification of information, postinspection conference, and
additional inspection regulations of the first proposal into a new on-
site inspections section, Sec. 205.403. We made this change for the
purposes of clarification and the removal of redundancies.
(4) Additional Inspections. We have revised the on-site inspections
requirements to provide that a State program's governing State official
may require a certifying agent to conduct an additional inspection of a
production or handling operation to determine the operation's
compliance with the Act and these regulations. We have provided State
program governing State officials with authority to require additional
inspections because such officials will have compliance
responsibilities under their State programs and will need such
authority to carry out their responsibilities. These requirements are
found at Sec. 205.403(a).
(5) Notifications of Noncompliance. We have added at
Sec. 205.405(b) a provision which identifies for applicants for
certification what their options are when they receive a notification
of noncompliance. Such applicants may correct the deficiencies and
submit a description and supporting documentation of correction to the
certifying agent, correct the deficiencies and submit a new application
to another certifying agent along with the notification of
noncompliance and a description and supporting documentation of
correction, or submit written information to the certifying agent to
rebut the noncompliance described in the notification of noncompliance.
(6) Reapplying After a Notice of Noncompliance or Denial of
Certification. We have added a new provision which requires a
certifying agent to treat an application for certification as a new
application when such application includes a notification of
noncompliance or a notice of denial of certification. While the new
application may contain the same organic system plan and other
information provided in the unsuccessful application for certification,
it must also provide any new information or changes in operations which
may have occurred since the filing of the unsuccessful application. The
updated information concerning the applicant's operation must include a
description of actions taken, with supporting documentation, to correct
the deficiencies identified in the notification of noncompliance. This
new provision is found at Sec. 205.405(e).
Subpart F--Accreditation of Certifying Agents
This subpart sets forth the requirements for a national program to
accredit State and private entities as certifying agents to certify
domestic or foreign organic production or handling operations. This
subpart also provides that USDA will accept a foreign certifying
agent's accreditation to certify organic production or handling
operations if: (1) USDA determines, upon the request of a foreign
government, that the standards under which the foreign government
authority accredited the foreign certifying agent meet the requirements
of this part; or (2) the foreign governmental authority that accredited
the certifying agent acted under an equivalency agreement negotiated
between the United States Government and the foreign government.
This National Organic Program (NOP) accreditation process will
facilitate national and international acceptance of United States
organically produced agricultural commodities. The accreditation
requirements in these regulations will replace the organic assessment
voluntary, fee-for-service program, established by AMS under the
Agricultural Marketing Act of 1946. That assessment program verifies
that State and private organic certifying agents comply with the
requirements prescribed under the International Organization for
Standardization/International Electrotechnical Commission Guide 65,
``General Requirements for Bodies Operating Product Certification
Systems'' (ISO Guide 65).\2\ ISO Guide 65 provides the general
requirements that a certifying agent would need to meet to be
recognized as competent and reliable. That assessment program was
originally established to enable organic certifying agents in the
absence of a U.S. national organic program to comply with European
Union (EU) requirements beginning on June 30, 1999. That assessment
program verifies that State and private organic certifying agents are
operating third-party certification systems in a consistent and
reliable manner, thereby facilitating uninterrupted exports of U.S.
organic agricultural commodities to the EU. ISO Guide 65 is used as a
benchmark in developing the accreditation program described in this
proposed rule. Certifying agents accredited under the NOP that maintain
compliance with the Act and these regulations will meet or exceed the
requirements of ISO Guide 65; therefore, the organic assessment program
is no longer needed.
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\2\ ISO/IEC Guide 65 is available for viewing at USDA-AMS,
Transportation and Marketing Programs, Room 2945-South Building,
14th and Independence Ave., SW, Washington, DC, from 9:00 a.m. to
4:00 p.m., Monday through Friday (except official Federal holidays).
A copy may be obtained from the American National Standards
Institute, 11 West 42nd Street, New York, NY 10036; Website:
www.ansi.org; E-mail: ansionline@ansi.org; Telephone: 212-642-4900;
Facsimile: 212-398-0023.
---------------------------------------------------------------------------
Participation in the NOP does not preclude the accredited
certifying agent from conducting other business operations, including
the certification of agricultural products, practices, and procedures.
An accredited certifying agent may not, however, engage in any business
operations or activities which would involve the agent in a violation
of or a conflict of interest under the NOP.
Proposal Description
The Administrator will accredit qualified domestic and foreign
applicants in the areas of crops, livestock, wild crops, or handling or
any combination thereof to certify domestic or foreign production or
handling operations as certified organic operations. Qualified
applicants will be accredited for 5 years.
Application Process. Certifying agents will apply to the
Administrator for accreditation to certify production or handling
operations operating under the NOP. The certifying agent's application
must include basic business information, must identify each area of
operation for which accreditation is requested and the estimated number
of each type of operation to be certified annually, and must include a
list of each State or foreign country where it currently certifies
production or handling operations and where it intends to certify such
operations.
[[Page 13571]]
Certifying agents must also submit personnel, administrative, conflict
of interest, current certification, and other documents and information
to demonstrate their expertise in organic production or handling
techniques, their ability to comply with and implement the organic
certification program, and their ability to comply with the
requirements for accreditation.
The administrative information submitted by the applicant should
include copies of their procedures for certifying operations, for
ensuring compliance of their certified operations with the Act and
regulation, for complying with recordkeeping requirements, and for
making information available to the public about certified operations.
The procedures for certifying operations encompass the processes used
by the certifying agent to evaluate applicants, make certification
decisions, issue certification certificates, and maintain the
confidentiality of any business information submitted by the certified
operation. The procedures for ensuring compliance of the certified
operations would include the methods used to review and investigate
certified operations, for sampling and residue testing, and to report
violations.
The personnel information submitted with the application should
demonstrate that the applicant uses a sufficient number of adequately
trained personnel to comply with and implement the organic
certification program. The certifying agent will also have to provide
evidence that its responsibly connected persons, employees, and
contractors with inspection, analysis, and decision-making
responsibilities have sufficient expertise in organic production or
handling techniques to successfully perform the duties assigned. They
must also show that these employees have revealed existing or potential
conflicts of interest.
Applicants who currently certify production or handling operations
must also submit a list of the production and handling operations
currently certified by them. For each area in which the applicant
requests accreditation, the applicant should furnish copies of
inspection reports and certification evaluation documents for at least
three operations. If the applicant underwent any other accrediting
process in the year previous to the application, the applicant should
also submit the results of the process.
Certifying agents are prohibited from providing advice concerning
organic practices or techniques to any certification applicant or
certified operation for a fee, other than as part of the fees under the
certification program. The Administrator will provide oversight of the
fees to ensure that the schedule of fees filed with the Administrator
is applied uniformly and in a nondiscriminatory manner. The
Administrator may inform a certifying agent that its fees appear to be
unreasonable and require that the certifying agent justify the fees.
The Administrator will investigate the level of fees charged by an
accredited certifying agent upon receipt of a valid complaint or under
compelling circumstances warranting such an investigation. Certifying
agents are prohibited from providing advice concerning organic
practices or techniques to any certification applicant or certified
operation for a fee, other than as part of the fees under the
certification program.
Statement of Agreement. Upon receipt of the certifying agent's
application for accreditation, the Administrator will send a statement
of agreement to the person responsible for the certifying agent's day-
to-day operations for signature. The statement of agreement affirms
that, if granted accreditation as a certifying agent under this
subpart, the applicant will carry out the provisions of the Act and the
regulations in this part. Accreditation will not be approved until this
statement is signed and returned to the Administrator.
The statement of agreement will include the applicant's agreement
to accept the certification decisions made by another U.S. Department
of Agriculture (USDA)-accredited certifying agent as equivalent to its
own and the applicant's agreement to refrain from making false or
misleading claims about its accreditation status, the USDA
accreditation program, or the nature or qualities of products labeled
as organically produced. Further, the statement will include the
applicant's agreement to pay and submit the fees charged by AMS and to
comply with, implement, and carry out any other terms and conditions
determined by the Administrator to be necessary. Applicants are also
required to affirm through this statement of agreement that they will:
(1) Conduct an annual performance appraisal for each inspector used;
(2) have an annual program evaluation conducted of their certification
activities by their staff, an outside auditor, or a consultant who has
expertise to conduct such evaluations; and (3) implement measures to
correct any deficiencies in compliance with the Act and regulations
identified in an inspector performance appraisal or program evaluation.
A private entity certifying agent must additionally agree to hold
the Secretary harmless for any failure on the agent's part to carry out
the provisions of the Act and regulations. A private entity certifying
agent's statement will also include an agreement to furnish reasonable
security for the purpose of protecting the rights of operations
certified by such certifying agent. Such security will be in an amount
and according to such terms as the Administrator may by regulation
prescribe. A private entity certifying agent must agree to transfer all
records or copies of records concerning its certification activities to
the Administrator if it dissolves or loses its accreditation. A private
entity certifying agent must also agree to make such records available
to any applicable State program's governing State official.
Approval of Accreditation. Upon receiving all the required
information, including the statement of agreement, and the required
fee, the Administrator will determine if the applicant meets the
requirements for accreditation. The Administrator's determination will
be based on a review of the information submitted and, if necessary, a
review of the information obtained from a site evaluation. The
Administrator will notify the applicant of approval of accreditation in
writing. The notice of accreditation will state the area(s) for which
accreditation is given, the effective date of the accreditation, and,
for a private-entity certifying agent, the amount and type of security
that must be established.
Certifying agents who apply for accreditation and do not meet the
requirements for accreditation will be provided, in accordance with
Sec. 205.665, with a notification of noncompliance and given an
opportunity to come into compliance. After receipt of a notification of
noncompliance, the applicant may submit a description of the actions
taken to correct the noted deficiencies and evidence demonstrating such
corrections or file an appeal with the Administrator. If the applicant
is successful in its appeal or provides acceptable evidence
demonstrating correction of the deficiencies, the Administrator will
notify the applicant of accreditation. If the applicant fails to
correct the deficiencies, fails to report the corrections by the date
specified in the notification of noncompliance, fails to file an appeal
by the date specified in the notification of noncompliance, or is
unsuccessful in its appeal, the Administrator will issue a written
notification of accreditation denial to the applicant. An applicant who
has
[[Page 13572]]
received written notification of accreditation denial may apply for
accreditation again at any time.
Once accredited, a certifying agent may establish a seal, logo, or
other identifying mark to be used by certified production and handling
operations. However, the certifying agent may not require use of its
seal, logo, or other identifying mark on any product sold, labeled, or
represented as organically produced as a condition of certification.
The certifying agent also may not require compliance with any
production or handling practices other than those provided for in the
Act and regulations as a condition for use of its identifying mark.
This provision does not apply to States with more restrictive
requirements approved by the Administrator or private-entity certifying
agents certifying operations within such States.
Site Evaluations. One or more representatives of the Administrator
will perform site evaluations for each certifying agent in order to
examine the certifying agent's operations and to evaluate compliance
with the Act and regulations. Site evaluations will include an on-site
review of the certifying agent's certification procedures, decisions,
facilities, administrative and management systems, and production or
handling operations certified by the certifying agent. A site
evaluation of an accreditation applicant will be conducted before or
within a reasonable time after issuance of the applicant's notification
of accreditation. Certifying agents will be billed for each site
evaluation conducted in association with an initial accreditation,
amendments to an accreditation, and renewals of accreditation.
Certifying agents will not be billed by USDA for USDA-initiated site
evaluations conducted to determine compliance with the Act and
regulations.
As noted above, a certifying agent may be accredited prior to a
site evaluation. If the Administrator finds, following the site
evaluation, that an accredited certifying agent is not in compliance
with the Act or regulations, the Administrator will issue the
certifying agent a written notification of noncompliance. If the
certifying agent fails to correct the deficiencies, report the
corrections by the date specified in the notification of noncompliance,
or file an appeal by the date specified in the notification of
noncompliance, the Administrator will begin proceedings to suspend or
revoke the accreditation. A certifying agent that has had its
accreditation suspended may apply for accreditation again at any time.
A private-entity certifying agent whose accreditation is revoked will
be ineligible for accreditation for a period of not less than 3 years
following the date of such determination.
Peer Review Panels. The Administrator may establish a peer review
panel to assist in evaluating applicants for accreditation. Peer review
panels will be used at the discretion of the Administrator following
the site evaluation of a certifying agent, but under no circumstances
will the Administrator convene a peer review panel when the peer review
pool does not contain sufficient persons qualified to peer review the
certifying agent.
To be eligible to serve on a peer review panel, the applicant for
membership in the peer review pool must provide the Administrator with
a written description and, upon request, supporting documentation of
its qualifications to conduct peer reviews. The applicant for
membership in the peer review pool must address possible limitations on
availability to serve and include information concerning commercial
interests with any person who may seek to become or who is an
accredited certifying agent. No person who has or has had a commercial
interest, including an immediate family interest or the provision of
consulting services, in an applicant for accreditation or renewal of
accreditation will be appointed to a panel evaluating such applicant
for accreditation or renewal of accreditation. Persons accepted to the
pool may serve until notified that their appointment has been rescinded
by the Administrator or until they are no longer qualified, whichever
occurs first. Peer reviewers will serve without compensation.
Peer review panels will consist of at least three but no more than
five members. A Department representative will preside over the panel.
A peer review panel will include no fewer than two members who possess
sufficient expertise in the certifying agent's areas of accreditation.
Peer review panels may include up to two members with expertise in
other disciplines, including organizational management and finance;
member(s) from the approved State organic certification program when
the applicant is a private entity that will operate within the State;
and member(s) from a foreign government's organic program when the
applicant is a private entity that will operate within the country.
Each person on a peer review panel must individually review the
site evaluation report prepared by the Department's evaluator(s) and
any other information that may be provided by the Administrator
relevant to continuing or renewing the accreditation status of a
certifying agent. Information about the certifying agent received as
part of the review process is confidential information, and peer
reviewers must not release, copy, quote, or otherwise use material from
the information received other than in the report required to be
submitted. Each peer reviewer must agree to treat the information
received for review as confidential.
A peer review panel meeting will be held solely for the purposes of
exchanging information. Any meeting or conference call will be
conducted in a manner that will ensure the actions of panel members are
carried out on an individual basis with any opinions and
recommendations by a member being made individually. We do not believe
that it is usual to have consensus in peer review or that it is the
best use of USDA resources or the time of peer reviewers to seek
consensus under a single report. Further, requiring a consensus report
may make peer review panels subject to the Federal Advisory Committee
Act, which might stifle meaningful dialog between reviewers, increase
the cost and time required of peer reviewers for peer review service,
and result in problems obtaining volunteers for service on peer review
panels.
Peer review panel members will prepare and submit individual
reports, including recommendations, to the Administrator regarding a
certifying agent's ability to conduct and perform certification
activities. The Administrator will consider the reports when
determining whether to continue or renew the certifying agent's
accreditation. Copies of the peer review panel reports will be
provided, upon request, to the certifying agent, and written responses
from the certifying agent may be submitted for consideration by the
Administrator. Copies of peer review panel reports may be provided to
any person requesting such reports under the Freedom of Information
Act.
Continuing Accreditation. An accredited certifying agent must
submit annually to the Administrator, on or before the anniversary date
of the issuance of the notification of accreditation, the following
reports and fees: (1) A complete and accurate update of its business
information, including its fees, and information evidencing its
expertise in organic production or handling and its ability to comply
with these regulations; (2) information supporting any changes
requested in the areas of accreditation; (3) a description of measures
implemented in the
[[Page 13573]]
previous year and any measures to be implemented in the coming year to
satisfy any terms and conditions specified in the most recent
notification of accreditation or notice of renewal of accreditation;
(4) the results of the most recent inspector performance appraisals and
annual program evaluation and a description of adjustments to the
certifying agent's operation and procedures implemented or to be
implemented in response to the appraisals and evaluation; and (5) the
required AMS fees.
Certifying agents will keep the Administrator informed of their
certification activities by: (1) Providing the Administrator with a
copy of any notice of denial of certification, notification of
noncompliance, notification of noncompliance correction, notification
of proposed suspension or revocation, and notification of suspension or
revocation issued simultaneously with its issuance; and (2) on a
quarterly calendar basis, the name, address, and telephone number of
each operation granted certification.
One or more site evaluations will occur during the 5-year period of
accreditation to determine whether an accredited certifying agent is
complying with the Act and regulations. USDA will establish an
accredited certifying agent compliance monitoring program, which will
involve no less than one randomly selected site evaluation of each
certifying agent during its 5-year period of accreditation. Larger and
more diverse operations, operations with clients marketing their
products internationally, and operations with a history of problems
should expect more frequent site evaluations by USDA. Operations with
clients marketing their products internationally will be annually site
evaluated to meet the ISO-Guide 61 \3\ requirement for periodic
surveillance of accredited certifying agents. USDA may also conduct
site evaluations during investigations of alleged or suspected
violations of the Act or regulations and in followup to such
investigations. Such investigations will generally be the result of
complaints filed with the Administrator alleging violations by the
certifying agent. Compliance site evaluations may be announced or
unannounced at the discretion of the Administrator. Certifying agents
will not be billed by USDA for USDA-initiated site evaluations
conducted to determine compliance with the Act and regulations.
---------------------------------------------------------------------------
\3\ ISO/IEC Guide 61 is available for viewing at USDA-AMS,
Transportation and Marketing Programs, Room 2945--South Building,
14th and Independence Ave., SW, Washington, DC, from 9:00 a.m. to
4:00 p.m., Monday through Friday (except official Federal holidays).
A copy may be obtained from the American National Standards
Institute, 11 West 42nd Street, New York, NY 10036; Website:
www.ansi.org; E-mail: ansionline@ansi.org; Telephone: 212-642-4900;
Facsimile: 212-398-0023.
---------------------------------------------------------------------------
An accredited certifying agent must provide sufficient information
to persons seeking certification to enable them to comply with the
applicable requirements of the Act and these regulations. The
certifying agent must maintain strict confidentiality with respect to
its clients and not disclose to third parties (with the exception of
the Secretary or the applicable State program's governing State
official or their authorized representatives) any business-related
information concerning any client obtained while implementing these
regulations except as authorized by regulation. A certifying agent must
make the following information available to the public: (1)
Certification certificates issued during the current and 3 preceding
calender years; (2) a list of producers and handlers whose operations
it has certified, including for each the name of the operation, type(s)
of operation, and the effective date of the certification, during the
current and 3 preceding calender years; and (3) the results of
laboratory analyses for residues of pesticides and other prohibited
substances conducted during the current and 3 preceding calender years.
A certifying agent may make other business information available to the
public if permitted in writing by the producer or handler. This
information will be made available to the public at the public's
expense.
An accredited certifying agent must maintain records according to
the following schedule: (1) Records obtained from applicants for
certification and certified operations must be maintained for not less
than 5 years beyond their receipt; (2) records created by the
certifying agent regarding applicants for certification and certified
operations must be maintained for not less than 10 years beyond their
creation; and (3) records created or received by the certifying agent
pursuant to the accreditation requirements, excluding any records
covered by the 10-year requirement must be maintained for not less than
5 years beyond their creation or receipt. Examples of records obtained
from applicants for certification and certified operations include
organic production system plans, organic handling system plans,
application documents, and any documents submitted to the certifying
agent by the applicant/certified operation. Examples of records created
by the certifying agent regarding applicants for certification and
certified operations include certification certificates, notice of
denial of certification, notification of noncompliance, notification of
noncompliance correction, notification of proposed suspension or
revocation, notification of suspension or revocation, correspondence
with applicants and certified operations, on-site inspection reports,
documents concerning residue testing, and internal working papers and
memoranda concerning applicants and certified operations. Examples of
records created or received by the certifying agent pursuant to the
accreditation requirements include operations manuals; policies and
procedures documents (personnel, administrative); training records;
annual performance appraisals and supporting documents; conflict of
interest disclosure reports and supporting documents; annual program
evaluation working papers, memoranda, letters, and reports; fee
schedules; quarterly reports of operations granted certification;
application materials submitted to the NOP; correspondence received
from and sent to USDA; and annual reports to the Administrator.
The certifying agent must make all records available for inspection
and copying during normal business hours by authorized representatives
of the Secretary and the applicable State program's governing State
official. In the event that the certifying agent dissolves or loses its
accreditation, it must transfer to the Administrator and make available
to any applicable State program's governing State official all records
or copies of records concerning its certification activities.
Certifying agents are also required to prevent conflicts of
interest and to require the completion of an annual conflict of
interest disclosure report by all personnel designated to be used in
the certification operation. Coverage of the conflict of interest
provisions extends to immediate family members of the certifying agent;
responsibly connected persons of the certifying agent; and any
employee, inspector, contractor, or other personnel of the certifying
agent. A certifying agent may not certify a production or handling
operation if the certifying agent or a responsibly connected party of
such certifying agent has or has held a commercial interest in the
production or handling operation, including an immediate family
interest or the provision of consulting services, within the 12-month
period prior to the application for certification. A certifying agent
may certify a production or handling operation if any employee,
inspector, contractor, or other personnel
[[Page 13574]]
of the certifying agent has or has held a commercial interest,
including an immediate family interest or the provision of consulting
services, within the 12-month period prior to the application for
certification. However, any such person must be excluded from work,
discussions, and decisions in all stages of the certification process
and the monitoring of the entity in which they have or have held a
commercial interest. The acceptance of payment, gifts, or favors of any
kind, other than prescribed fees, from any business inspected is
prohibited. However, a certifying agent that is a not-for-profit
organization with an Internal Revenue Code tax exemption or, in the
case of a foreign certifying agent, a comparable recognition of not-
for-profit status from its government, may accept voluntary labor from
certified operations. Certifying agents are also prohibited from
providing advice concerning organic practices or techniques to any
certification applicant or certified operation for a fee, other than as
part of the fees under the certification program.
No accredited certifying agent may exclude from participation in or
deny the benefits of the NOP to any person due to discrimination
because of race, color, national origin, gender, religion, age,
disability, political beliefs, sexual orientation, or marital or family
status.
Renewal of Accreditation. To avoid a lapse in accreditation,
certifying agents must apply for renewal of accreditation 6 months
prior to the fifth anniversary of issuance of the notification of
accreditation and each subsequent renewal of accreditation. The
accreditation of certifying agents who make timely application for
renewal of accreditation will not expire during the renewal process.
The accreditation of certifying agents who fail to make timely
application for renewal of accreditation will expire as scheduled
unless renewed prior to the scheduled expiration date. Certifying
agents with an expired accreditation must not perform certification
activities under the Act and these regulations.
Following receipt of the certifying agent's annual report and fees,
the results of a site evaluation, and, when applicable, the reports
submitted by a peer review panel, the Administrator will determine
whether the certifying agent remains in compliance with the Act and
regulations and should have its accreditation renewed. Upon a
determination that the certifying agent is in compliance with the Act
and regulations, the Administrator will issue a notice of renewal of
accreditation. The notice of renewal will specify any terms and
conditions that must be addressed by the certifying agent and the time
within which those terms and conditions must be satisfied. Renewal of
accreditation will be for 5 years. Upon a determination that the
certifying agent is not in compliance with the Act and regulations, the
Administrator will initiate proceedings to suspend or revoke the
certifying agent's accreditation. Any certifying agent subject to a
proceeding to suspend or revoke its accreditation may continue to
perform certification activities pending resolution of the proceedings
to suspend or revoke the accreditation.
Accreditation--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Equivalency of Imported Organic Products. We have removed the
regulations on equivalency of imported organic products included in the
first proposal. In this proposal, we have added foreign certifying
agents as entities eligible for accreditation as certifying agents
qualified to certify domestic and foreign organic production and
handling operations. We have also added to subpart A definitions for
private entity and State entity. We have defined ``private entity'' as
any domestic or foreign nongovernmental for-profit or not-for-profit
organization providing certification services. We have defined ``State
entity'' as any domestic or foreign governmental subdivision providing
certification services.
In commenting on the first proposal, several commenters expressed
confusion as to how the Secretary would determine equivalency of
imported organic products. They also expressed confusion as to how the
Secretary would ensure that imported products met the same requirements
as those produced domestically. We have addressed these concerns by
adding foreign certifying agents as private or state entities that may
be accredited under the NOP. We have also provided that USDA will
accept a foreign certifying agent's accreditation to certify organic
production or handling operations if: (1) USDA determines, upon the
request of a foreign government, that the standards under which the
foreign government authority accredited the foreign certifying agent
meet the requirements of this part; or (2) the foreign governmental
authority that accredited the certifying agent acted under an
equivalency agreement negotiated between the United States Government
and the foreign government. These changes ensure that all certifying
agents, including foreign private and state certifying agents, will be
required to meet the same requirements to be recognized as qualified to
certify organic production or handling operations. This change provides
foreign private and state certifying agents with transparent standards
for accreditation.
A commenter raised concerns that we acted in violation of
international agreements and domestic policy by proposing rules that
were contrary to internationally accepted organic standards and, thus,
created an unacceptable barrier to trade. The Act directs the Secretary
to establish national standards governing the marketing of certain
agricultural products as organically produced products. In accordance
with our international agreements, this proposal ensures that, with
respect to accreditation under this subpart, products imported from the
territory of any country are being accorded treatment no less favorable
than that accorded to products of U.S. origin. However, in accordance
with our international trade agreements and upon implementation of this
program, the Administrator will give positive consideration to
accepting as equivalent technical regulations of other countries, even
if these regulations differ from our own, provided such regulations
fulfil the objectives of this proposed program. Any such equivalency
agreements will be negotiated on a case-by-case basis, and ample
opportunity for public comment will be provided before and during the
negotiation process.
Two commenters requested that the Secretary recognize international
accreditation systems for foreign organic certification programs and
establish the requirements for approval of such systems in this
proposal. We have instead proposed for the purposes of this rule that
all certifying agents, regardless of their country of origin, meet the
same requirements for accreditation through the provisions of this
subpart.
One commenter requested that all imported organic products be
labeled by their respective country of origin. The purpose of this
proposal is to provide the requirements for the marketing of
agricultural products in the United States that are labeled or sold as
organic. The issue of country-of-origin labeling of imported products
is not related to this proposal or the Act. Further, regulations
pertaining to the labeling of organic agricultural products should not
be used to enforce country-of-origin labeling requirements.
Several commenters stated that the first proposal did not take into
account
[[Page 13575]]
the use of equivalency to ensure the marketing of U.S. organic products
in foreign markets. The Department will work to oppose other countries'
organic regulations that would prohibit entry of U.S. organic product
produced under the Act or these regulations. As appropriate, the U.S.
Government may represent U.S. organic interests in international
government-to-government bodies. However, neither of these objectives
is intended to be achieved by this rule.
(2) Accreditation Requirements Regarding Expertise of Employees. We
have added a new regulation to the general requirements for
accreditation. This regulation requires that the certifying agent
ensure that its responsibly connected persons, employees, and
contractors with inspection, analysis, and decision-making
responsibilities have sufficient expertise in organic production or
handling techniques to sufficiently perform the duties assigned.
Certifying agents were required under the first proposal to use a
sufficient number of adequately trained personnel, including
inspectors. They were also required to conduct an annual performance
appraisal of each inspector.
Commenters felt that the proposed rule did not sufficiently ensure
that certifying agents would employ qualified individuals. One of these
commenters requested that we require organic certification inspectors
to participate in an inspector accreditation program, such as that
offered by the Independent Organic Inspectors Association. We believe
that inspector participation in an inspector accreditation program
should be left to the discretion of the inspector and certifying agent.
However, we believe that the new requirement combined with the
requirements from the first proposal should ensure that responsibly
connected persons, employees, and contractors of an accredited
certifying agent are qualified to perform their inspection, analysis,
and decision-making duties. This new regulation is found at
Sec. 205.501(a)(5) of this proposal.
(3) Recordkeeping Requirements. We have proposed a new
Sec. 205.510(b), which identifies three categories of records and their
retention periods. This new paragraph was added to address commenter
concern that the requirement that an accredited certifying agent
maintain records about all of its activities for 10 years was excessive
and unnecessary. Commenters suggested a 5- to-7-year retention period.
We agree that for some records, a retention period of 10 years may be
excessive. Accordingly, in this proposal, we are proposing three
retention periods. First, records created by the certifying agent
regarding applicants for certification and certified operations would
have to be maintained for not less than 10 years beyond their creation.
We believe this retention period to be consistent with the Act's
requirement that the certifying agent maintain all records concerning
its activities for a period of not less than 10 years. Second, records
obtained from applicants for certification and certified operations
would have to be maintained for not less than 5 years beyond their
receipt. This retention period is the same as that required by the Act
for the retention of records by the certified operation. Since the
certified operation can dispose of its records 5 years after their
creation, the certifying agent should also be able to dispose of those
records it receives from the certified operation 5 years after their
receipt. Third, records created or received by the certifying agent for
USDA accreditation would have to be maintained for not less than 5
years beyond their creation or receipt.
(4) Conflict of Interest Provisions. We have made three changes
which we believe will strengthen the conflict of interest provisions.
We have made these changes because we concur with the comment from a
research foundation stating that the provisions for preventing
conflicts of interest needed to be significantly strengthened. First,
we have added a new Sec. 205.501(a)(11)(v), which requires the
completion of an annual conflict of interest disclosure report by all
personnel designated to be used in the certification of an operation,
including administrative staff, certification inspectors, members of
any certification review and program evaluation committees,
contractors, and all parties responsibly connected to the certifying
agent. Second, coverage of the conflict of interest provisions has been
extended to immediate family members of the certifying agent;
responsibly connected persons of the certifying agent; and any
employee, inspector, contractor (to be used in the certification of an
operation), or other personnel of the certifying agent. Immediate
family members would include the spouse; minor children, including
legally adopted children; or blood relatives who reside in the
immediate household of a certifying agent; responsibly connected person
of the certifying agent; or any employee, inspector, contractor, or
other personnel of the certifying agent. Third, this proposal lists
contractors among those persons who are prohibited from accepting
payment, gifts, or favors of any kind, other than regular fees from any
business inspected by the certifying agent. This addition, which is
found at Sec. 205.501(a)(11), was made to clarify that contractors,
including contract inspectors, are prohibited from accepting payment,
gifts, or favors of any kind, other than regular fees.
(5) Use of Voluntary Labor. We have added an exception to the
prohibition of the acceptance of payment, gifts, or favors of any kind.
The exception provides that any certifying agent that is a not-for-
profit organization with an Internal Revenue Code tax exemption or, in
the case of a foreign certifying agent, a comparable recognition of
not-for-profit status from its government may accept voluntary labor
from certified operations. Internal Revenue Code tax exemption or, in
the case of a foreign certifying agent, a comparable recognition from
its government is required as verification of the certifying agent's
status as a not-for-profit organization. This change was made to
clarify our original intent that not-for-profit certifying agents would
be allowed to accept volunteer labor from persons certified by the
certifying agent.
In the preamble to the first proposal, we stated that we would not
consider a volunteer who performs services for a not-for-profit
certifying agent as providing favors to any particular individual in
that agency and, therefore, would not consider the certifying agent as
being in a conflict of interest situation by accepting such services
from volunteers. We have made this clarification because a commenter
expressed the belief that the certifying agent should be allowed to
receive donations of time, food, and money beyond any mandatory fees
from persons they certify. The Act prohibits certifying agents from
accepting payments, gifts, or favors of any kind from a business
inspected, other than prescribed fees. Accordingly, this exception is
limited to acceptance of voluntary labor by not-for-profit certifying
agents. While Sec. 205.501(a)(11)(iii) prohibits the acceptance of
payments, gifts, or favors of any kind, other than prescribed fees,
from any business inspected for certification as a producer or handler
of organic agricultural products, the paragraph does not prohibit the
accredited certifying agent from accepting payments, gifts, or favors
of any kind, including time, food, or money, from persons for whom they
do not provide inspections for certification as a producer or handler
of organic agricultural products.
[[Page 13576]]
(6) Certification Fees. We have removed the requirement that a
certifying agent charge only such fees to applicants for certification
and operations it certifies that the Secretary determines are
reasonable. We have made this change because we concur with those
commenters who expressed the belief that certifying agents should be
permitted to set their own fees without the approval of the Secretary.
However, we continue to believe that the Administrator should retain
oversight of the fees, not for the purpose of setting the fees or of
dictating the level of the fees, but for the purpose of determining if
any certifying agent's fees are so high as to be unreasonable and to
ensure that the schedule of fees filed with the Administrator are
applied uniformly and in a nondiscriminatory manner. The Administrator
should also retain the ability to inform a certifying agent that its
fees appear to be unreasonable and to require a justification for the
level of fees set by the certifying agent. We further believe that the
Administrator should retain the ability to investigate the level of
fees charged by an accredited certifying agent if a complaint is made
or if compelling circumstances warrant such an investigation.
Accordingly, we have proposed at Sec. 205.501(a)(15) that a certifying
agent must charge applicants for certification and certified production
and handling operations only those fees and charges that it has filed
with the Administrator. We have also included at Sec. 205.642
regulations with respect to fees charged by certifying agents to
producers and handlers. Section 205.642 is discussed under fees in
subpart G of this preamble.
(7) State Standards That Vary From the National Organic Program. We
have added an exception to the regulation which prohibited certifying
agents from requiring, as a condition for use of the certifying agent's
identifying mark, compliance with any farming or handling requirements
other than those provided for in the Act and regulations. The exception
provides that the requirement does not apply to States with more
restrictive requirements approved by the Secretary or private entity
certifying agents certifying production or handling operations within
States with more restrictive requirements approved by the Secretary.
This change was made because we agree with the State commenters who
stated that the prohibition on requiring compliance with any farming or
handling requirements other than those provided for in the Act and
regulations would prohibit States from requiring that their more
restrictive standards, approved by the USDA, be met as a requirement
for use of the State's logo on organically produced products. We did
not intend to prohibit States from requiring that their more
restrictive standards be met as a requirement for use of the State's
logo on organically produced products. Including this exception in
Sec. 205.501(b)(2) will permit States with more restrictive
requirements approved by the Secretary and private entity certifying
agents certifying production or handling operations within the borders
of such States to require that the State's more restrictive standards
be met as a requirement for use of their logo or other identifying mark
on organically produced products.
Certifying agents may not require a certified operation to meet
production or handling standards greater than those established by the
Department or, when applicable, an approved State organic certification
program as a condition for using its logo or other identifying mark.
However, a certifying agent may verify, upon the request of a producer
or handler certified by the certifying agent, that the producer or
handler is meeting contractual specifications which include
requirements in addition to those of the Act and regulations.
(8) Time Period for Public Access to Information. For the
requirement that certifying agents describe the procedures they will
use for making information available to the public, we have changed the
time period from ``during the 10-year period preceding the receipt of
the request from the public'' to ``during the current and 3 preceding
calendar years.'' Commenters stated that the required 10-year period
was excessive and unnecessary. The Act requires public access to
certification documents and laboratory analyses that pertain to
certification. However, the Act does not specify that a certifying
agent must provide access to its records throughout their 10-year
retention period. We agree with the commenters that public access to
the records the certifying agent is required to keep should be limited
to a reasonable period short of the full retention period. Such a
reasonable period, we believe, would be the current calendar year and
the 3 calendar years preceding the calendar year of the request.
Accordingly, Sec. 205.504(b)(5) requires certifying agents to describe
the procedures they will use for making information available to the
public during the current and 3 preceding calendar years. This time
period will lessen the burden on certifying agents while assuring
reasonable public access to such records.
(9) Scope of Information for Public Release. We have expanded the
scope of information for public release which must be included in the
list of producers and handlers whose operations the certifying agent
has certified. Specifically, certifying agents will have to include the
name of the operation and type(s) of operation in its list of producers
and handlers it has certified. This change is included in section
Sec. 205.504(b)(5)(ii). Commenters requested that the list be expanded
to include the name of the operation, its physical location(s),
certification history, type(s) of operation, acreage (when applicable),
and person responsible for organic regulation compliance. While we
agree that the name of the operation and type(s) of operation should be
available to the public, we believe that the certified operation's
physical location(s), certification history, and acreage are
confidential information which has no relationship to the operation's
status as a certified organic operation. Therefore, such information
should only be made available with the written consent of the certified
operation. We also believe that it is unnecessary to list a person
responsible for organic regulation compliance since the applicant
ultimately has that responsibility. Therefore, these requested
additions have not been made. We have also removed the separate
requirement that certifying agents identify for the public the organic
agricultural products produced by each certified operation. We have
taken this action because the information is available on the
certificates and the list of producers and handlers required to be
released by the certifying agent to the public. These requirements are
found at Sec. 205.504(b)(5)(i) and (ii).
(10) Release of Nonconfidential Business Information. We have
removed the requirement that certifying agents provide a description of
the procedures to be used to make nonconfidential business information,
as permitted by the producer or handler and approved by the Secretary,
available to the public. This requirement has been replaced with the
requirement that the certifying agent provide a description of the
procedures to be used to make other business information, as permitted
in writing by the producer or handler, available to the public.
Commenters objected to the requirement that the Secretary approve the
release of nonconfidential business information that the producer or
handler had authorized the certifying agent to
[[Page 13577]]
release. They believed that this requirement lacked justification and
created unnecessary costs. We concur that this requirement is
unnecessary. However, we believe that the producer's or handler's
approval must be obtained in writing, which is reflected in this
proposal at Sec. 205.504(b)(5)(v).
(11) Submission of Applicant's Financial Policies and Procedures.
We have removed the requirement that a certifying agent include with
its application for accreditation a description of its policies and
procedures for collection and disbursement of funds and documents that
identify anticipated sources of income, including all fees to be
collected from producers and handlers. Commenters stated that they did
not believe the submission of applicant financial policies and
procedures was necessary. We have decided that the information
requested probably would not fully meet our needs in determining that
certification decisions were not influenced by the certifying agent's
concern for the certification decision's financial impact on the
certifying agent or in determining compliance with the conflict of
interest provisions of the Act and these regulations. Accordingly, this
requirement is not included in this proposal.
(12) Submission of Information Concerning Current Certification
Activities. We have changed the voluntary submission of information and
documents concerning current certification activities to a required
submission. Commenters stated that the submission of a list of all
farms, wild-crop harvesting operations, and handling operations
currently certified by the applicant should be required. They went on
to say that the submission of copies of the inspection reports and
certification evaluation documents for production or handling
operations certified by the applicant during the previous year should
remain optional. They also said the submission of results from any
accreditation process of the applicant's operation by an accrediting
body during the previous year for the purpose of evaluating its
certification activities should remain optional.
We agree with the commenters that a list of all operations
currently certified by the applicant should be a required submission.
We also believe that copies of inspection reports, certification
evaluation documents, and accreditation results should be a required
submission from all applicants currently certifying production or
handling operations. Accordingly, at Sec. 205.504(d) we have made the
submission of information and documents concerning current
certification activities mandatory for certifying agents currently
certifying production or handling operations.
This change has been made because of the value such information and
documents would have in assisting the Department in evaluating an
applicant for accreditation. However, we have limited the submission of
inspection reports and certification evaluation documents for
production and handling operations certified by the applicant. The
applicant is required to submit copies of at least 3 different
inspection reports and certification evaluation documents for
production or handling operations certified by the applicant during the
previous year for each area of operation for which accreditation is
requested. We have limited the submission to reduce the reporting
burden on certifying agents. The Administrator may, however, require
that the certifying agent submit additional inspection reports and
certification evaluation documents.
We recognize that a newly organized certifying agent with no
experience would be unable to supply the information. An applicant's
inability to provide the information and documentation required by the
revised paragraph due to lack of experience would not be prejudicial to
the Department's evaluation of the application.
(13) Site Evaluations. We have revised the site evaluation
provisions to clarify the scope of an evaluation, to specify that the
evaluation will be arranged and conducted by a representative of the
Administrator, and to specify when evaluations shall or may be
conducted. These changes are made in response to commenters who
suggested adding details to the regulatory text regarding the nature of
site evaluations. The revised section provides that site evaluations of
accredited certifying agents shall: (1) Be conducted for the purpose of
examining the certifying agent's operations and evaluating its
compliance with the Act and regulations; (2) include an on-site review
of the certifying agent's certification procedures, decisions,
facilities, administrative and management systems, and production or
handling operations certified by the certifying agent; (3) be conducted
by a representative(s) of the Administrator; and (4) be conducted after
application for renewal of accreditation but prior to the issuance of a
notice of renewal of accreditation. This revised section provides that
an initial site evaluation of an accreditation applicant would be
conducted before or within a reasonable period of time after issuance
of the applicant's notification of accreditation. Section 205.508 also
provides that one or more site evaluations will be conducted during the
period of accreditation to determine whether an accredited certifying
agent is complying with the general requirements for accreditation.
(14) Eligibility for Peer Review Panels. We have added a new
regulation addressing eligibility for peer review panels. Commenters
expressed concern that peer review pool applicants be free of conflicts
of interest and possess the necessary expertise in organic production
or handling. The first proposal provided that candidates for membership
in the peer review panel pool would be required to submit a letter to
the Program Manager of the NOP requesting appointment, describing their
qualifications, and identifying conflicts of interest. We believe that
there is value to the applicants for membership in the peer review
panel pool and the general public in addressing eligibility for peer
review panels in the regulatory text. Accordingly, we have added a new
regulation at Sec. 205.509(b) which provides that applicants for
membership in the peer review panel pool must provide the Administrator
with a written description and, upon request, supporting documentation
of their qualifications to conduct peer reviews. Such description must
include information concerning the applicant's training and expertise
in organic production or handling methods and in evaluating whether
production or handling operations are using a system of organic
production or handling. Applicants must also address their possible
limitations on availability to serve. Further, applicants would be
required to include information concerning their commercial interests
and those of their immediate family members, within the 12-month period
prior to application, with any person who may seek to become or who is
an accredited certifying agent. No person who has or has had a
commercial interest, including an immediate family interest or the
provision of consulting services, in an applicant for accreditation or
renewal of accreditation will be appointed to or accept appointment to
a panel evaluating the applicant. This provision was added for the
purpose of avoiding conflicts of interest by peer reviewers. This new
regulation also provides that persons accepted to the pool may serve
until notified that their appointment has been rescinded by the
Administrator or until
[[Page 13578]]
they are no longer qualified, whichever occurs first.
(15) Composition of Peer Review Panels. We have revised the
regulations concerning the composition of peer review panels.
Commenters requested that the peer review panel consist of at least two
members who are not USDA employees, rather than not AMS employees. We
agree with this suggested change, which clarifies what had been our
intent. This change is included in Sec. 205.509(c). Section 205.509(c)
provides that peer review panels shall consist of at least three but no
more than five members. This section provides that peer review panels
must include a Department representative who will preside over the
panel and no fewer than two members from the peer review pool who
possess sufficient expertise in the relevant areas of accreditation.
Additionally, section 205.509(c) provides that peer review panels may
include up to two members with expertise in other disciplines,
including organizational management and finance; member(s) from the
approved State organic certification program when the applicant is a
private entity seeking accreditation within the State; and member(s)
from a foreign government's organic program when the applicant is a
private entity that will operate within the country. We have added
authorization for these additional members to broaden the scope and
depth of expertise available to peer review panels.
Commenters also expressed concern that the peer review panels
consist of at least one member from a State organic certification
program. We do not believe that the composition of peer review panels
regulations needs to be amended to accommodate this concern. To the
extent possible, accredited private certifying agents will peer review
private certifying agents, and accredited State certifying agents will
peer review State certifying agents.
(16) Renewal of Accreditation. We have revised the renewal of
accreditation provisions to, among other things, require that an
accredited certifying agent's application for accreditation renewal be
received 6 months prior to the fifth anniversary of issuance of the
notification of accreditation and each subsequent renewal of
accreditation. The first proposal provided that an accredited
certifying agent would request renewal of accreditation on or before
the fifth anniversary of issuance of the notice of confirmation of
accreditation and each subsequent renewal of accreditation. Commenters
expressed concern about whether the accredited certifying agent's
accreditation would lapse during the renewal process. They suggested
that certifying agents should submit their application for renewal of
accreditation 6 months prior to the fifth anniversary of issuance of
the notice of confirmation.
We believe that clarification regarding the status of the
certifying agent's accreditation during the renewal process is
appropriate. We also concur with the commenters' suggestion that
certifying agents should submit their applications for renewal of
accreditation 6 months prior to the fifth anniversary of issuance of
the notice of confirmation. We have replaced ``notice of confirmation
of accreditation,'' however, with ``notification of accreditation''
because this proposal eliminates the section on confirmation of
accreditation. Accordingly, we have provided in this proposal at
Sec. 205.510(c) that: (1) An accredited certifying agent's application
for accreditation renewal must be received 6 months prior to the fifth
anniversary of issuance of the notification of accreditation and each
subsequent renewal of accreditation; (2) the accreditation of
certifying agents who make timely application for renewal of
accreditation will not expire during the renewal process; (3) the
accreditation of certifying agents who fail to make timely application
for renewal of accreditation will expire as scheduled unless renewed
prior to the scheduled expiration date; (4) certifying agents with an
expired accreditation must not perform certification activities under
the Act and regulations; and (5) following receipt of the information
submitted by the certifying agent, the results of any site evaluation,
and, when applicable, the reports submitted by a peer review panel, the
Administrator will determine whether the certifying agent remains in
compliance with the Act and regulations and should have its
accreditation renewed.
These changes would provide the Department with sufficient time to
fully process the certifying agent's application for accreditation
renewal prior to the accreditation's scheduled date of expiration. This
revised regulation also clarifies that a certifying agent's
accreditation will not expire during the accreditation renewal process
if the certifying agent has made timely application for renewal. It
also makes clear that the accreditation of certifying agents who fail
to make timely application for renewal of accreditation will expire as
scheduled unless renewed prior to the scheduled expiration date. This
regulation also provides that certifying agents with an expired
accreditation must not perform certification activities under the Act
and these regulations.
(17) Denial of Accreditation. We have revised the denial of
accreditation regulations to clarify that after receipt of a
notification of noncompliance, the applicant may submit a description
of the actions taken to correct the noted deficiencies and evidence
demonstrating such corrections, rather than submitting a new
application. We have taken this action because commenters were confused
by our reference to a new application in the denial of accreditation
regulations. The denial of accreditation regulations are found at
Sec. 205.507 in this proposal.
Accreditation--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Durations of Accreditation and Reporting Requirements.
Commenters expressed concern regarding the duration of accreditation
and whether the interval of required reporting is adequate. An
association expressed concern regarding the economic impact of
accreditation on small certifying agents. This commenter stated that
small certifying agents should not be accredited more often than every
5 years. An international organic federation expressed the belief that
accreditation for 5 years is too long. The commenter went on to say
that certification bodies are expanding rapidly and that annual reports
cannot be relied upon to fully convey the consequent changes. This
commenter believes that many of the conditions of accreditation may
relate to operational aspects that cannot be addressed in an annual
report.
Annual reporting by the certifying agent, under this proposal,
would provide: (1) A complete and accurate update of applicant
information and expertise and ability information previously submitted;
(2) information supporting any changes being requested in the areas of
accreditation; (3) the measures that were implemented in the previous
year and any measures to be implemented in the coming year to satisfy
any terms and conditions determined by the Administrator to be
necessary as specified in the most recent notification of
accreditation; and (4) the results of the most recent inspector
performance appraisal and program evaluation and adjustments to the
certifying agent's operation and procedures implemented and intended to
be implemented in response to the appraisals and evaluations. This
proposal includes a requirement at
[[Page 13579]]
Sec. 205.501(a)(14) that the certifying agent submit to the
Administrator a copy of each notification of: (1) Denial of
certification; (2) noncompliance; (3) noncompliance correction; (4)
proposed suspension or revocation; and (5) suspension or revocation,
simultaneously with its issuance.
We believe that these reporting requirements, coupled with feedback
from applicants for certification, certified operations, and other
interested parties, will provide the Department with sufficient
information regarding the certifying agent and its operation to
determine whether a site visit is necessary to evaluate the certifying
agent's suitability to remain accredited. Under this proposal, the
Department will conduct one or more site evaluations during the period
of accreditation to determine whether the accredited certifying agent
is complying with the requirements for accreditation. Accordingly, we
believe the duration of accreditation period first proposed was
correct, and we are, therefore, reproposing this time period at
Sec. 205.500(b).
(2) Performance Appraisals and Program Evaluation. Comments from
State departments of agriculture and some certifiers indicated that the
annual inspector performance appraisal and annual program evaluation
requirements duplicated State requirements. The commenters asked what
the required scope and depth of evaluations was expected to be, whether
third party evaluators would be required to be used to assess the
performance of the operation, and whether existing performance
appraisal and program evaluation practices of a certifying agent would
be used to meet the annual inspector performance appraisal and program
evaluation requirements.
We do not intend for States to develop dual performance appraisal
and program evaluation programs. We believe that performance appraisals
and program evaluations conducted to meet State requirements will also
meet the requirements of this proposal. State and private agency
personnel performance appraisals and program evaluations would be
expected to be consistent with good management practices and
appropriate to the organization's size and structure. This could be
different for different organizations. Therefore, we are not
prescribing the specific performance appraisal system or instrument to
be used to assess inspector performance, the specific program
evaluation methods that must be used, or that third parties must
conduct the required program evaluation. Accordingly, we have not
changed the questioned provisions, which appear at
Sec. Sec. 205.501(a)(6) and (7). We have, however, revised
Sec. 205.501(a)(7) to clarify that the annual program evaluation can be
conducted by the certifying agency staff, an auditing entity, or a
consultant who has expertise to conduct program evaluations.
(3) ``Open Records'' Requirements. Commenters expressed the belief
that confidentiality requirements for certifying agents might conflict
with State requirements for ``open records.'' We recognize this
potential for conflicting requirements. Records collected and
maintained under the NOP are subject to the confidentiality provisions
of the Act and these regulations. However, a State-entity certifying
agent will be subject to its State ``open records'' laws when such laws
conflict with the confidentiality provisions of the Act and these
regulations. Records collected and maintained under the NOP by a
private entity certifying agent will always be subject to the
confidentiality requirements of the Act and these regulations.
Accordingly, pursuant to the Act, we are reproposing the
confidentiality provisions at Sec. 205.501(a)(10).
To clarify that authorized representatives of the Secretary or the
applicable State program's governing State official may act on behalf
of the Secretary or the State program's governing State official and
must be given access to the records, we have added the phrase, ``or
their authorized representatives,'' to Sec. 205.501(a)(10). Such
representative could be a member of the NOP staff, a Department
compliance officer, or other official. This provision is standard
practice and is necessary for Government oversight of a regulatory
program.
(4) List of Confidential Records. One commenter requested a
definitive list of the records that had to be kept confidential. We
cannot create such a list because it is not possible to describe every
record that would be characterized as a business-related record. Such
records would include, however, organic production and handling plans,
records that are related to trade secrets and commercial or financial
information obtained from applicants for certification, and records or
information compiled for an investigation into alleged noncompliance
with the Act and regulations.
(5) Time Period for Prohibition of Commercial Interest. We received
many comments regarding the prohibition of commercial interest in an
organic production or handling operation during the 12 months prior to
certification. Several States and industry associations stated that the
prohibition of commercial interest should apply to the 12 months after
as well as the 12 months prior to certification. These commenters
offered no reasoning for their position. A research foundation
recommended that the prohibition of commercial interest should be for 3
years before and after the application for certification. This
commenter stated that the conflict of interest provisions needed
significant strengthening. A producer commenter stated that the
prohibition of commercial interest should be for an indefinite period,
not for 12 months. Some commenters recommended that certifying agents
and responsible parties and employees of certifying agents be barred
from accepting employment for 1 to 3 years from any certified
production or handling operation in which they participated in any
manner in the operation's certification. An accreditation service
stated it believed there would be a conflict of interest should a
consulting or business connection arise between an inspector and a
production or handling operation following the site evaluation. This
commenter presented the example of an inspector being offered
employment during the site evaluation but not taking the position until
6 months after the site evaluation. Many commenters, however, supported
our proposed prohibition of commercial interest in an organic operation
during the 12 months prior to certification.
We disagree with the recommendations calling for a longer
precertification conflict of interest prohibition period and with the
recommendations for a postcertification prohibition period for those
persons no longer associated with the certifying agent. Regarding the
recommendations for a longer precertification prohibition period, we
continue to believe that 12 months is a sufficient period to ensure
that any previous commercial interest would not create a conflict of
interest situation for two reasons. First, this time period is
consistent with similar provisions governing conflicts of interest for
government employees. Second, we have added a new section,
205.501(a)(11)(v), which requires the completion of an annual conflict
of interest disclosure report by all personnel designated to be used in
the certification operation, including administrative staff,
certification inspectors, members of any certification review and
program evaluation committees, contractors, and all parties
[[Page 13580]]
responsibly connected to the certification operation. This requirement
will assist certifying agents in complying with the requirements to
prevent conflicts of interest. We also continue to believe that a
longer prohibition period would have the effect of severely curtailing
most certifying agents' ability to comply with the Act's requirement
that they employ persons with sufficient expertise to implement the
applicable certification program. Accordingly, we have decided to
repropose the prohibition on commercial interest in an applicant for
certification for a 12-month period prior to the application for
certification at section Sec. 205.501(a)(11).
Regarding the recommendations for a postcertification prohibition
period for those persons no longer associated with the certifying
agent, we believe such a period is unnecessary. We take this position
because certifying agents and their responsibly connected parties,
employees, inspectors, contractors, and other personnel are prohibited
from engaging in activities or associations at any time during their
affiliation with the certifying agent which would result in a conflict
of interest. While associated with the certifying agent, all employees,
inspectors, contractors, and other personnel are expected to disclose
to the certifying agent any offer of employment they have received and
not immediately refused. They are also expected to disclose any
employment they are seeking and any arrangement they have concerning
future employment with an applicant for certification or a certified
operation. The certifying agent would then have to exclude that person
from work, discussions, and decisions in all stages of the
certification or monitoring of the operation making the employment
offer. If a certifying agent or a responsibly connected party of the
certifying agent has received and not immediately refused an offer of
employment, is seeking employment, or has an arrangement concerning
future employment with an applicant for certification, the certifying
agent may not accept or process the application. Further, certifying
agents and responsibly connected parties may not seek employment or
have an arrangement concerning future employment with an operation
certified by the certifying agent while associated with that certifying
agent. Certifying agents and responsibly connected parties must sever
their association with the certifying agent when such person does not
immediately refuse an offer of employment from a certified operation.
Accordingly, we have decided not to include a postcertification
prohibition period in this proposal.
(6) Conflicts of Interest. Some commenters stated that they
understood the proposed conflict of interest provisions to prohibit
certifying agents from certifying any organic operation owned or
operated by a member of the certifying agent's board of directors or
from certifying any organic operation owned or operated by an employee
of the certifying agent. One commenter stated that because
certification arose from the ranks of organic farmers, there are many
certification personnel, including inspectors, who also farm or have
family who farm. This commenter stated that it should be permissible
for a certifying agent to review and certify an organic operation owned
or operated by a responsibly connected person or employee, provided
that the responsibly connected person or employee is excluded from the
decision-making process with respect to the organic operation to be
certified.
The commenters are correct in their interpretation that the first
proposal prohibited certifying agents from certifying an operation when
the certifying agent or a responsibly connected party of such
certifying agent has or has held a commercial interest in the
operation. This prohibition is limited, however, to the 12-month period
prior to the application for certification. The first proposal did not
prohibit certifying agents from certifying an operation when an
employee of the certifying agent has or has held a commercial interest
in the operation. The first proposal prohibited a certifying agent from
using an employee in any phase of the certification process when such
employee has or has held a commercial interest in an operation making
application for certification within the 12-month period prior to the
application for certification. A responsibly connected party is any
person who is a partner, officer, director, holder, manager, or owner
of 10 percent or more of the voting stock of an applicant for or a
recipient of certification or accreditation.
We believe that a certifying agent and a responsibly connected
party of such certifying agent hold positions of power and authority
which preclude the certification of an operation in which they have or
have held a commercial interest during the 12-month period prior to an
application for certification. The certifying agent's control over the
employment of an agent's employee makes it unreasonable to expect an
employee of a certifying agent to impartially carry out the employee's
duties when the certifying agent or a responsibly connected party of
such agent has an interest in the applicant. Such is not true of an
employee who is subordinate to the certifying agent or a responsibly
connected party of the certifying agent. Accordingly, we have
reproposed the requirement that a certifying agent prevent conflicts of
interest by: (1) Not certifying a production or handling operation if
the certifying agent or a responsibly connected party of such
certifying agent has or has held a commercial interest within the 12-
month period prior to the application for certification and (2)
excluding any person with a conflict of interest from work,
discussions, and decisions in all stages of the certification process
and the monitoring of certified production or handling operations for
all entities in which the person has or has held a commercial interest
within the 12-month period prior to the application for certification.
Both of these provisions are found in Sec. 205.501(a)(11).
(7) Defining Commercial Interest. A research foundation recommended
that the provisions for preventing conflicts, found in this proposal at
Sec. 205.501(a)(11), be strengthened by changing ``a commercial
interest in the operation'' to ``a commercial interest in the operation
or the marketing or distribution of its products.'' We believe that the
recommended addition is unnecessary because ``commercial interest''
covers all business transactions between the certifying agent or
responsibly connected parties, employees, inspectors, contractors, or
other personnel of the certifying agent and the applicant for
certification or certified operation. This interpretation would not
apply to voluntary labor provided, in accordance with
Sec. 205.501(a)(11)(iii), by a certified operation to a certifying
agent that is a not-for-profit organization with an Internal Revenue
Code tax exemption. Further, this interpretation would not apply to the
providing of advice, in accordance with Sec. 205.501(a)(11)(iv),
concerning organic practices or techniques to any certification
applicant or certified operation when such advice is covered by fees
under the applicable certification program established under the Act.
(8) Provision of Information to Producers and Conflicts of
Interest. Commenters were concerned about the effect that some of the
conflict of interest provisions would have on certifying agents that
provide producers with information on organic practices through forums
such as in-house publications, conferences, workshops, informational
meetings, and field days
[[Page 13581]]
for a fee. Specifically, they were concerned about the impact of the
conflict of interest provision requiring that certifying agents prevent
conflicts of interest by not providing advice concerning organic
practices or techniques to any certification applicant or certified
organic production or handling operation for a fee, other than as part
of the fees established under the applicable certification program
established under the Act. These commenters requested that the
paragraph be rewritten to clarify that such activities would not be
prohibited. We also received a comment stating that advice relating to
improving production yields, market access, etc., is not the function
of an inspector and can lead to a nonmonetary conflict of interest.
This commenter stated that advice, where given, should be restricted to
issues related to the understanding and implementation of the
standards.
Certifying agents have historically provided advice concerning
organic practices or techniques to any certification applicant or
certified organic production or handling operation for a fee through
forums such as in-house publications, conferences, workshops,
informational meetings, and field days. Such activities and their fees
would not be prohibited under the Act or these regulations, provided
that such activities were not required as a condition for production or
handling certification. Section 205.503(c) would require that the
applicant for accreditation provide a copy of the applicant's schedule
of fees for all services to be provided under these regulations by the
applicant. We would consider such activities to be voluntary
participation activities provided by the certifying agent to producers,
handlers, and other interested persons under the NOP. We also believe
that it is appropriate, as well as industry practice, during an on-site
inspection for inspectors to provide advice on a wide range of issues
related to an on-site inspection of a production or handling operation.
Accordingly, the conflict of interest provisions found at
Sec. 205.501(a)(11) have not been rewritten as requested by the
commenters.
(9) Equivalency of Certification Decisions. We received a variety
of comments suggesting changes to the requirement that accredited
certifying agents accept the certification decisions made by another
USDA-accredited certifying agent as equivalent to its own. Several of
these commenters asked whether States with more restrictive standards
could challenge certification decisions made by any accredited
certifying agents. A few commenters representing State programs stated
that States should be able to maintain control over which certifying
agents operate within their State. Other commenters suggested that the
requirement be amended to: (1) Require that a certifying agent accept
the certification decisions made by another USDA-accredited certifying
agent as equivalent to its own only after the certifying agent's
accreditation has been confirmed by the Department; (2) provide that if
a certifying agent doubts the accuracy of another certifying agent's
determination, the certifying agent questioning the accuracy can file a
complaint with the Secretary; and (3) authorize an accredited
certifying agent to request additional documentation from another
certifying agent if questions arise regarding the other certifying
agent's certification activities or the activities or product of a
production or handling operation certified by the other certifying
agent.
No organic product may be produced or handled to organic standards
lower than the standards of the NOP. To certify organic production or
handling operations to the national standards or to more restrictive
State standards approved by the Secretary, the certifying agent must be
accredited by the Administrator. While States may set more restrictive
standards than the national organic standards for product produced or
handled within their State, those requirements do not apply to organic
product produced or handled outside of such State. Further, a State
government may not prevent the marketing or sale in the State of
organic product produced in another State to this program's national
organic standards. State organic certification programs approved by the
Secretary would be required to treat all accredited certifying agents
equally. Likewise under this program, accredited certifying agents in
one State cannot refuse to recognize another State's product which is
certified to these national organic standards.
We disagree with the suggestion to allow certifying agents to
challenge the decisions of certifying agents that have not yet had
their accreditation confirmed by the Department. We believe that
allowing a certifying agent to challenge the certification decisions
made by a certifying agent that has not had its site evaluation would
create an insurmountable barrier for persons wanting to become
accredited under the NOP, especially persons establishing new
operations. The proposed accreditation procedures are sufficiently
rigorous to permit a well-founded assessment of the applicant's
capabilities and qualifications and will allow all eligible certifying
agents to receive timely accreditation. We will only accredit
certifying agents that we believe possess the expertise and ability to
implement the proposed certification program. This includes newly
established certifying agents who might require a longer period of time
between accreditation and a site evaluation to allow the certifying
agent to perform sufficient certification activities for the Department
to perform a meaningful site evaluation.
Should questions arise regarding a certifying agent's certification
activities, a certified production or handling operation's activities,
or the organic status of a certified production or handling operation's
product, the questioning certifying agent could report a complaint or
allegation of noncompliance, with the certification provisions of this
part, to the State program's governing State official or the
Administrator. As appropriate, the State program's governing State
official or the Administrator will investigate such complaints or
allegations. Certifying agents are not authorized to investigate
allegations or suspicions of noncompliance by other certifying agents,
nor are certifying agents allowed to take unilateral action against an
accredited certifying agent, such as refusal to recognize the
certification decisions made by another certifying agent.
For the above reasons, we have not changed the requirement that a
certifying agent accept the certification decisions made by another
USDA-accredited certifying agent as equivalent to its own. This
requirement is located at Sec. 205.501(a)(12).
(10) False or Misleading Claims. Commenters objected to the
requirements that an accredited certifying agent must refrain from
making false or misleading claims about its accreditation status, the
USDA accreditation program for certifying agents, or the nature or
qualities of products labeled as organically produced. A few of these
commenters stated that the requirements exceed the authority given by
the Act by introducing claims other than those concerning
representations of nonorganic product as organic. Additionally, a few
commenters believed that the term, ``misleading,'' is too broad and
could be interpreted to mean that the certifying agent could make no
negative claims about the USDA accreditation program. They suggested
that the requirements be amended by removing the reference to
misleading claims. Another commenter
[[Page 13582]]
believed that the phrase, ``or the nature or qualities of products
labeled as organically produced,'' should be deleted because it is
vague and would unduly limit the freedom of certifying agents to share
information with consumers, farmers, processors, and other interested
parties regarding the attributes of organic food and organic production
systems, including nutritional properties, freshness, taste, and less
reliance on synthetic substances.
We disagree with the commenters who stated that the requirements
exceed the authority given by the Act by introducing claims other than
those concerning representations of nonorganic product as organic.
Claims regarding accreditation status, the USDA accreditation program
for certifying agents, and the nature and quality of products labeled
as organically produced all fall under the authority of the Act. We
believe that the requirements are needed to prevent the dissemination
of inaccurate or misleading information to consumers about organically
produced products. We further believe that the changes suggested by the
commenters would undermine the goal of a uniform NOP by allowing
certifying agents to make claims that would state or imply that organic
products produced by operations that they certify are superior to those
of operations certified by other certifying agents. These requirements
would not prohibit certifying agents from sharing factual information
with consumers, farmers, processors, and other interested parties
regarding verifiable attributes of organic food and organic production
systems. Accordingly, the requirements are reproposed in this proposal
without change at Sec. 205.501(a)(13).
(11) Notification of Status of Certified Operations. Comments
received on the requirements addressing documentation to be submitted
by certifying agents to the Department regarding the status of
certified operations suggested that: (1) The public should have access
to the notification of certification status documentation; (2) annual
reporting by certifying agents of the name of each operation whose
application for certification has been approved is sufficient; and (3)
the required reporting should only include the name of those operations
certified during the quarter being reported rather than a listing of
all operations certified by the certifying agent. First, we believe
that the Freedom of Information Act adequately provides for public
access to information. Second, we need the required information to
facilitate oversight and to ensure that we have relatively current data
for responding to inquiries involving the granting of certifications by
certifying agents. It was not our intent to have certifying agents
update their list of certified entities quarterly. Our intent was to
receive on a quarterly basis a listing of all certifications granted by
the certifying agent during the quarter being reported. Accordingly, no
changes have been made on the basis of these comments to the
requirements found in this proposal at Sec. 205.501(a)(14).
(12) Certifier Compliance With Terms and Conditions Deemed
Necessary. Commenters objected to the requirement that certifying
agents must comply with and implement other terms and conditions deemed
necessary by the Secretary. This requirement is consistent with
Sec. 6515(d)(2) of the Act, which requires a certifying agent to enter
into an agreement with the Secretary under which such agent shall agree
to such other terms and conditions as the Secretary determines
appropriate. Accordingly, this requirement, found at
Sec. 205.501(a)(17), is unchanged in this proposal except to change
``Secretary'' to ``Administrator'' since the Administrator will be
responsible for administration of the NOP.
(13) Limitations on the Use of Certifying Agent's Marks. Private
certifying agents disagreed with the provision that prohibited
certifying agents from requiring, as a condition of use of the
certifying agent's identifying mark, compliance with any production or
handling requirements other than those provided for in the Act and
regulations. Private certifying agents commented that they should be
allowed to use their identifying mark to recognize additional
achievements by producers and handlers that exceed the requirements
proposed in the national organic standards. The commenters' position is
the same as that suggested by public input prior to publication of the
first proposal.
We believe that the private certifying agents' position advocating
the use of their identifying mark to recognize additional achievements
is inconsistent with Sec. 6501(2) of the Act, which provides that a
stated purpose of the Act is to assure consumers that organically
produced products meet a consistent national standard. Accordingly, we
are reproposing the provision prohibiting certifying agents from
requiring, as a condition of use of the certifying agent's identifying
mark, compliance with any production or handling requirements other
than those provided for in the Act and regulations or under an approved
State organic certification program. This reproposed provision is found
at Sec. 205.501(b).
(14) Additional Requirements for Private Certifying Agents.
Commenters expressed concern regarding the three additional
requirements for a certifying agent who is a private person. First,
private certifying agents expressed concern regarding the requirement
that private certifying agents hold the Secretary harmless for any
failure on their part to carry out the provisions of the Act and
regulations. Their concern focused on the fact that applicants for
certification can appeal a certifying agent's refusal to certify to the
Secretary and that a certifying agent's recommendation to suspend or
revoke a certification can be appealed to the Secretary. They believe
that, without the authority to independently deny, suspend, or revoke
certification, the certifying agent becomes liable for the actions of
the Secretary.
We disagree with the assertion that the certifying agent becomes
liable for the actions of the Secretary. The provision clearly states
that private certifying agents hold the Secretary harmless for any
failure on their part. This in no way would make the certifying agent
responsible for any failure on the part of the Department. Further, the
wording of this provision is consistent with Sec. 6515(e)(1) of the
Act, which provides that private certifying agents shall agree to hold
the Secretary harmless for any failure on the part of the certifying
agent to carry out the provisions of the Act. Accordingly, we are
reproposing this regulation at Sec. 205.501(c)(1).
Second, commenters expressed concern regarding the requirement that
certifying agents furnish reasonable security, in an amount and
according to terms as the Secretary may by regulation prescribe, for
the purpose of protecting the rights of production and handling
operations certified by such certifying agent. The commenters expressed
concern regarding what would be the dollar amount of the security, how
the dollar amount of the security would be determined, and in what form
the security might be furnished. Several commenters expressed concern
over the availability of errors and omissions insurance. The commenters
also expressed a belief that guidance on what reasonable security might
entail will be needed by accreditation applicants to evaluate their
costs for accreditation.
A private-entity certifying agent must furnish reasonable security
for the purpose of protecting the rights of operations certified by
such certifying agent. This security is to ensure the performance of
the certifying agent's
[[Page 13583]]
contractual obligations. As noted elsewhere in this proposed rule, the
specific amount and type of security that must be furnished by a
private certifying agent will be the subject of future rulemaking by
the Department. Such rulemaking will provide for public input and will
occur prior to the call for applications for accreditation. We
anticipate that the amount of the security will be tied to the number
of clients served by the certifying agent and the anticipated costs of
certification that may be incurred by its clients in the event that the
certifying agent's accreditation is suspended or revoked. We anticipate
that the security may be in the form of cash, surety bonds, or other
financial instrument (such as a letter of credit) administered in a
manner comparable to cash or surety bonds held under the Perishable
Agricultural Commodities Act. Accordingly, we are reproposing this
regulation at Sec. 205.501(c)(2).
Third, commenters expressed concern regarding the requirement that
a private person accredited as a certifying agent must transfer to the
Secretary and make available to any applicable State program's
governing State official all records or copies of records concerning
the private certifying agent's certification activities in the event
that the certifying agent dissolves or loses its accreditation. This
requirement is consistent with Sec. 6515(c)(3) of the Act, which
provides that if any private person that was certified under the Act is
dissolved or loses its accreditation, all records or copies of records
concerning such person's activities under the Act shall be transferred
to the Secretary and made available to the applicable State program's
governing State official. In addition to being consistent with the Act,
we believe that this regulation is necessary to ensure the continuity
and integrity of the NOP. Accordingly, we are reproposing this
regulation at Sec. 205.501(c)(3).
(15) Public Access to Applicant Information. The first proposal
included provisions regarding what information had to be submitted by
an accreditation applicant. Commenters requested the addition of a
paragraph addressing public access to this information about the
applicant's organization and intended certification activities. We have
not made this requested change because the proposed recordkeeping and
availability requirements under this program, coupled with the Freedom
of Information Act, adequately provide for public access to
information. The regulations on applicant information are found at
Sec. 205.503 and include two additions to the provisions of the first
proposal. This proposal requires the applicant to provide the name of
the person responsible for the certifying agency's day-to-day
operations and to submit a copy of its schedule of fees for all
services to be provided under these regulations.
(16) Application Requirements for States. Commenters stated that
State certifying agents should not be required to submit documents and
information regarding personnel, administrative policies and
procedures, and financial policies and procedures to demonstrate
evidence of expertise and ability. They believe that the requirements
should not apply to States that have established hiring procedures,
standard qualifications for job descriptions, and statewide policies
for training, evaluating, and supervising personnel. They also stated
that administrative policy and procedure review should be limited to
organic program administration, not to agencywide policies or
procedures such as financial policies.
We acknowledge that States have established hiring procedures,
standard qualifications for job descriptions, administrative
procedures, and statewide policies for training, evaluating, and
supervising personnel and that such policies and procedures would be
applicable to State certifying agents. This fact, however, does not
make States uniquely different from private accreditation applicants
who would have similar policies and procedures in exercising good
business practices. State certifying agents cannot be exempt from these
requirements simply because they are a government agency.
We anticipate that a State will submit its established policies and
procedures to meet the requirements for demonstrating its expertise in
organic production and handling techniques and its ability to fully
comply with and implement the national organic certification program. A
stated purpose of the Act is the establishment of national standards.
We believe such national standards extend to uniform requirements for
State and private certifying agents unless otherwise provided by the
Act. We further believe the required information is essential to enable
the Administrator to make a determination concerning approval of an
application for accreditation. Accordingly, the requirements for
demonstrating expertise in organic production and handling techniques
and an ability to fully comply with and implement the national organic
certification program remain the same for private and State certifying
agents. These requirements are found at Sec. 205.504.
(17) Public Access to Information on Certified Operations.
Commenters requested that the public be provided information about a
certified operation's farming practices, use of pesticides, and
livestock production practices. All production and handling operations
must meet the requirements of the national organic certification
program to be certified. An accredited certifying agent will determine
whether an operation meets those requirements. Certified operations can
be held to no other standards except, if applicable, the requirements
of an approved State organic certification program. Accordingly, we
believe access to the requested information is unnecessary. We also
believe the information to be confidential business information that
should not be released to the public. Therefore, we have made no
changes to the proposed rule to accommodate the commenters' request.
(18) Conflicts of Interest. The first proposal required a
description of procedures intended to be implemented to prevent the
occurrence of conflicts of interest. It also required the
identification of any food or agriculture-related business interests of
all personnel intended to be used in the certification operation,
including administrative staff, certification inspectors, members of
any certification review and evaluation committees, all parties
responsibly connected to the certification operation, and immediate
family members, that may result in a conflict of interest. Commenters
stated that existing State policies should be sufficient to prevent
conflicts of interest. They also stated that lists of the business
interests of all inspectors, program staff, and their families are
unnecessary.
We agree with the commenters that existing State policies should be
sufficient to prevent conflicts of interest. However, we disagree with
the commenters' assertion that lists of the business interests of all
inspectors, program staff, and their families are unnecessary. At
Sec. 6515(h), the Act places responsibility for the prevention of
conflicts of interest with the certifying agent. We, however, have
responsibility for ensuring that the certifying agent complies with
that responsibility. We believe these requirements will provide the
Administrator with information essential to the identification of
conflicts of interest. A stated purpose of the Act is the establishment
of national standards. We believe such national standards extend to
uniform conflict of
[[Page 13584]]
interest requirements for State and private certifying agents. Further,
for conflict of interest standards to achieve their intended
effectiveness, they must be uniformly applied to both State and private
certifying agents. The required information is also essential to the
Administrator's determination of the applicant's suitability for
accreditation. As the commenters point out, States have established
conflict of interest policies and procedures. Thus, the required
information should be readily available for submission to the
Administrator with minimal inconvenience to the certifying agent.
Accordingly, we have made no changes in this proposal based on these
comments. Regulations concerning conflicts of interest are found at
Secs. 205.501(a)(11) and 205.504(c) in this proposal.
(19) Accreditation Prior to Site Evaluation. Commenters expressed
concern that applicants could be accredited prior to a site evaluation
of the applicant's facilities and operations. Most, however, recognized
the need for accreditation decisions on written materials as opposed to
further delay to program implementation. A few of the commenters urged
USDA to complete the site evaluations during the implementation phase.
The first proposal provided that an initial site evaluation of the
operation of each certifying agent must be performed for the purpose of
verifying its compliance with the Act and regulations. Two restrictions
concerning timing were placed on the performance of an initial site
evaluation. First, the site evaluation had to be performed within a
reasonable period of time after the date on which the agent's notice of
approval of accreditation was issued. Second, the site evaluation had
to be performed after the agent had conducted sufficient certification
activities for the Administrator to examine its operations and evaluate
its compliance with the general requirements for accreditation.
We never intended that a site evaluation be required prior to
accreditation. While site evaluations could be conducted before
approval, we believe accreditation approval without a site evaluation
is appropriate. We believe that the commenters' concerns are adequately
addressed by the first proposal, which provided for a well-founded
assessment of the applicant's qualifications and capabilities through a
sufficiently rigorous review of the application and supporting
documentation. In cases where the document review raises concerns
regarding the applicant's qualifications and capabilities and the
Administrator deems it necessary, a preapproval site evaluation would
be conducted.
As noted above, a site evaluation to verify compliance with the Act
and regulations would be conducted within a reasonable time period
after the date on which the agent's notice of approval of accreditation
was issued. Following the site evaluation, the certifying agent's
accreditation would be continued provided the certifying agent is in
compliance with the Act and regulations. Should it be found that the
accredited certifying agent is not in compliance with the Act and
regulations, the Administrator will issue the certifying agent a
notification of noncompliance and afford the certifying agent an
opportunity to correct the deficiencies. If the deficiencies are not
corrected, the Administrator will begin proceedings to suspend or
revoke the certifying agent's accreditation.
We also believe that: (1) Conducting a site evaluation of a newly
established certifying agent before it had begun any certification
activities might not contribute information that would be useful for
the Department's evaluation; (2) previously existing certifying agents
also would need time to make adjustments in their operations to comply
with the NOP regulations; and (3) requiring full site evaluations and
peer reviews to be conducted prior to granting accreditation would
further delay implementation of the Act. Accordingly, we have made no
changes to the application requirements found at Sec. 205.502 or the
site evaluation requirements found at Sec. 205.508 on the basis of
these comments.
(20) Conditional Accreditation. Commenters suggested that the rule
provide for conditional accreditation of certifying agents. We disagree
with the concept of conditional accreditation. We believe accreditation
before a site evaluation to be the most effective means of providing
new certifying agents with the opportunity to participate in the NOP.
New certifying agents need to be unconditionally accredited to sell
their services to potential organic clients. Such certifying agents
need organic clients to demonstrate to the Administrator their
compliance with the Act and regulations relative to the certification
of organic producers or handlers. Furthermore, the Act does not provide
for conditional accreditation. Accordingly, the proposed accreditation
program for initial accreditation provides for: (1) Review and analysis
of the applicant's application and evidence of expertise and ability,
(2) approval of accreditation upon determination that the applicant
meets the requirements for accreditation, and (3) site evaluation to
determine compliance with the Act and regulations.
(21) Application Fees Incurred From Notifications of Noncompliance.
Commenters questioned whether a new application for accreditation,
following the correction of deficiencies identified in the notification
of noncompliance, would require a second application fee. The
commenters stated that fees paid for the initial application should
cover timely resubmission of the application after correction of
deficiencies. In this proposal, we have replaced the flat fee for
accreditation with an hourly user fee system, which will involve
billing for actual time used in the accreditation process. Accordingly,
there will be additional costs to applicants who submit a description
of the actions taken to correct the deficiencies noted in the
notification of noncompliance.
(22) Peer Review Panels. Comments were received expressing various
opinions regarding the peer review panel provisions of the first
proposal. First, commenters stated that peer review panels should
participate in site evaluations. Prior to publishing the first
proposal, the Department received some public input which also
suggested the use of peer reviewers in the site evaluation process. As
noted in the first proposal, we did not provide for such participation
because we believed that the use of peer reviewers could pose an
excessive burden on the certifying agents, would increase the costs of
conducting site evaluations, and could delay site evaluations and
because AMS staff are well qualified to perform the site evaluations.
We have made no change to our proposal as a result of this comment.
Second, commenters stated that peer review panels should
participate in the initial review of an application for accreditation.
We believe this would not be an effective use of panel members' talents
and expertise and would not be cost effective. We have made no change
to our proposal as a result of this comment.
Third, an industry association stated that section 6516(a) of the
Act clearly states that the Secretary shall consider a report, not
three to five individual reports, in determining whether to approve an
applicant for accreditation. We do not agree that the Act requires a
single report, nor do we believe that it is usual to have consensus in
peer review. We also believe that it is impractical to bring peer
reviewers together for the purpose of reviewing the information
provided and drafting a single report. The Administrator could convene
a peer review panel meeting or
[[Page 13585]]
conference call if necessary. Such meeting or conference call would be
conducted in a manner that would ensure the actions of panel members
are carried out on an individual basis with any opinions and
recommendations by a member being made individually. A peer review
panel meeting or conference call will be held solely to give and
receive information. Such meeting or conference call will not be held
for the purpose of achieving consensus by the peer review panel. The
written report of each panel member would reflect the particular
knowledge, expertise, and opinion that its author-member brings to the
panel. The Administrator will consider all points in the individual
reports in making a determination as to the continued operation of the
accredited certifying agent. We have made no change to our proposal as
a result of this comment.
Fourth, commenters stated that the peer review panel regulations
should be revised to specify what situations, other than continuation
or renewal of accreditation, would trigger a peer review; that a peer
review panel should be used in determining noncompliance with
accreditation requirements; and that a peer review panel should be
convened to review any decision of noncompliance prior to initiation of
proceedings to suspend or revoke a certifying agent's accreditation.
The first proposal provided that the Administrator may convene a peer
review panel at any time for the purpose of evaluating a certifying
agent's activities under the Act and regulations. This provision would
provide flexibility for the Administrator to seek recommendations from
peer reviewers at other times when it may be necessary to evaluate a
certifying agent's compliance with the Act and regulations. We do not
believe that it is practical or necessary to require the use of peer
review panels in determining noncompliance and decisions to suspend or
revoke an accreditation. We have made no change to our proposal as a
result of these comments.
(23) Purpose of Annual Reporting Requirements. At least one
commenter was confused regarding the purpose for having certifying
agents submit annual reports to the Administrator. The reports would
update information and evidence of expertise and ability previously
submitted by the certifying agent; support any changes being requested
in the areas of accreditation; describe the measures that were
implemented in the previous year and any measures to be implemented in
the coming year to satisfy any terms and conditions determined by the
Administrator to be necessary, as specified in the most recent
notification of accreditation or notice of renewal of accreditation;
and describe the results of the most recent inspector performance
appraisals and program evaluation and adjustments to the certifying
agent's operation and procedures implemented and intended to be
implemented in response to the appraisals and program evaluation. The
first proposal stated that this information would be reviewed by the
Administrator to determine whether the certifying agent was maintaining
its accreditation by satisfying the requirements of the Act and
regulations and to assess the need for a site evaluation. We believe
that an annual process of reviewing information submitted by certifying
agents is necessary so that the Administrator can be informed of any
changes in the procedures and personnel used by the certifying agents.
We have made no change to our proposal as a result of this comment.
Accreditation--Additional Provisions
Upon further review of the accreditation provisions in the first
proposal, we have decided to propose the following additions and
changes.
(1) Access to Records. We have added the requirement that the
records maintained by the certifying agent under the Act and
regulations be made available for copying by authorized representatives
of the Secretary and the applicable State program's governing State
official. This addition is necessary to ensure that authorized
representatives are able to obtain copies of records applicable to a
review or an investigation regarding compliance with the Act and
regulations. This addition, found at Sec. 205.501(a)(9), is authorized
under section 6506 of the Act.
(2) Conflicts of Interest. A conflict of interest regulation in the
first proposal required that certifying agents prevent conflicts of
interest by not certifying an operation through the use of any employee
that has or has held a commercial interest in the operation, including
the provision of consulting services, within the 12-month period prior
to the application for certification. This regulation was closely
related to a second regulation which required certifying agents to
prevent conflicts of interest by not assigning an inspector to perform
an inspection of an operation if the inspector has or has held a
commercial interest in the operation, including the provision of
consulting services, within the 12 months prior to conducting the
inspection. For clarification, this proposal combines the regulations
at Sec. 205.501(a)(11)(ii). This new regulation provides for excluding
any person, including contractors, with conflicts of interest from
work, discussions, and decisions in all stages of the certification
process and the monitoring of certified production and handling
operations for all entities in which such person has or has held a
commercial interest, including an immediate family interest or the
provision of consulting services, within the 12-month period prior to
the application for certification. This regulation would permit a
certifying agent to certify the operation of an employee or contractor
or an employee's or contractor's immediate family member provided the
employee or contractor was not used in certifying the production or
handling operation.
(3) Reporting Requirements for Certifying Agents. The first
proposal required a certifying agent to submit to the Administrator a
copy of each notification of noncompliance issued simultaneously with
its issuance to the certification applicant or the certified operation.
It also required a certifying agent to submit to the Administrator on a
quarterly calendar basis the name of each operation certified. In this
proposal, we have expanded the provision to provide that certifying
agents must submit to the Administrator: (1) A copy of any notice of
denial of certification, notification of noncompliance, notification of
noncompliance correction, notification of proposed suspension or
revocation, and notification of suspension or revocation issued
simultaneously with its issuance; and (2) on a quarterly calendar
basis, the name, address, and telephone number of each operation
granted certification. This information is needed to facilitate
oversight and to ensure that we have relatively current data for
responding to inquiries involving the granting of certifications by
certifying agents. These changes are included in Sec. 205.501(a)(14).
We anticipate using the data collected under Sec. 205.501(a)(14) to
establish and maintain 2 Internet databases. The first Internet
database would be accessible to the general public and would include
the names and other appropriate data on certified organic production
and handling operations. The second Internet database would be password
protected and only available to accredited certifying agents and USDA.
This second database would include data on production and handling
operations issued a notification of noncompliance, noncompliance
correction, denial of certification, certification, proposed suspension
or revocation of certification, and
[[Page 13586]]
suspension or revocation of certification. Certifying agents would use
the second Internet database during their review of an application for
certification.
(4) Requirements for Nondiscrimination. We have included at
Sec. 205.501(d) the provision that no private or State entity
accredited as a certifying agent under subpart F shall exclude from
participation in or deny the benefits of the NOP to any person due to
discrimination because of race, color, national origin, gender,
religion, age, disability, political beliefs, sexual orientation, or
marital or family status. This regulation is consistent with USDA
regulations which prohibit discrimination in its programs and
activities.
(5) Submission of Policies and Procedures. The first proposal
required an applicant for accreditation as a certifying agent to submit
documents and information to demonstrate the applicant's expertise in
organic farming or handling techniques, its ability to fully comply
with and implement the organic certification program, and its ability
to comply with the requirements for accreditation. Much of the
documentation and information required involved submission of a
description of a policy or procedure to be used by the certifying
agent. In this proposal we have changed the requirement from submission
of a description of the policy or procedure to submission of a copy of
the actual policy or procedure. This will facilitate the Department's
determination of an applicant's eligibility for accreditation by
providing more complete information. By requiring a copy of each policy
and procedure, which should already be in the possession of the
applicant, rather than a description of each, we have lessened the
burden on applicants for accreditation. This change is found in
Sec. 205.504 of this proposal.
(6) Public Access to Certification Certificates. In this proposal,
we have added the requirement that certifying agents make copies of
certification certificates issued during the current and 3 preceding
calendar years available to the public. Such documents may be useful to
consumers wishing to verify that an operation is certified to produce
and label agricultural products as organic. Copies of certification
certificates will be especially valuable in assisting handlers in
assuring that the products they receive labeled as organic were
produced and handled by certified organic operations. This requirement
is found at Sec. 205.504(b)(5)(i).
(7) Submission of Residue Testing Procedures. We believe that
applicants for accreditation should provide evidence of expertise and
ability in meeting the sampling and residue testing requirements of
these regulations. Therefore, we have added the requirement that
applicants for accreditation submit a copy of the procedures to be used
for residue testing. This requirement is found at Sec. 205.504(b)(6).
Residue testing requirements are found at Sec. 205.670.
(8) Elimination of Section on Confirmation of Accreditation. We
have amended the section on approval of accreditation by adding the
duration of accreditation provision formerly included in the first
proposal's section on confirmation of accreditation. We have also
eliminated the section on confirmation of accreditation. We have taken
this action to eliminate the confusion created by having a section on
approval of accreditation and a section on confirmation of
accreditation.
(9) Denial of Accreditation. We have amended the denial of
accreditation regulations and eliminated the section on denial of
confirmation of accreditation. We have taken this action to eliminate
the confusion created by having a section on denial of accreditation
and a section on denial of confirmation of accreditation. We have added
to the denial of accreditation regulations that a notification of
noncompliance can be issued based on the findings of a site evaluation.
Under the first proposal's denial of accreditation regulations, the
Administrator could institute proceedings to deny accreditation to an
applicant who did not correct the deficiencies noted in a notification
of noncompliance within the time specified. In this proposal, we have
amended these regulations to provide that the Administrator will
provide the applicant with a written notification of accreditation
denial or begin proceedings to suspend or revoke the certifying agent's
accreditation if accredited prior to a site evaluation. Such action
will be taken when the applicant fails to correct the deficiencies,
report the corrections by the date specified, or file an appeal by the
date specified in the notification of noncompliance.
We have also clarified that an applicant who has received written
notification of accreditation denial or had its accreditation suspended
may apply for accreditation again at any time. Additionally, we have
provided that a private certifying agent whose initial accreditation is
revoked following an initial site evaluation will be ineligible for
accreditation for a period of not less than 3 years following the date
of such determination. This period of ineligibility is consistent with
section 6519(e) of the Act. These changes are included in Sec. 205.507.
A certifying agent accredited prior to an initial site evaluation
whose site evaluation reveals that the certifying agent is not properly
adhering to the provisions of the Act or these regulations will be
subject to suspension of its accreditation. A private certifying agent
accredited prior to an initial site evaluation who's site evaluation
reveals that the certifying agent has violated the provisions of the
Act and these regulations or that falsely or negligently certifies any
production or handling operation that does not meet the terms and
conditions of this national organic certification program as an organic
operation will be subject to revocation of its accreditation. Section
205.660(b) of subpart G provides that the Secretary may initiate
suspension or revocation proceedings against a certified operation upon
initiation of suspension or revocation proceedings against or upon
suspension or revocation of the certified operation's certifying
agent's accreditation.
(10) Peer Review Panels. We have removed the provision which
provided that the Administrator may convene a peer review panel at any
time for the purpose of evaluating an applicant for accreditation or a
certifying agent's activities under the Act and regulations. This
change has been made because peer review panels will only be used to
assist in the evaluation of applicants for accreditation, amendment to
an accreditation, and renewal of accreditation.
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
Proposal Description
This subpart contains criteria for determining which substances and
ingredients are allowed or prohibited in products to be sold, labeled,
or represented as ``organic'' or ``made with organic (specified
ingredients).'' It establishes the National List of Allowed and
Prohibited Substances (National List) and identifies specific
substances which may or may not be used in organic production and
handling operations. Sections 6504, 6510, 6517, and 6518 of the Organic
Foods Production Act (OFPA) of 1990 provide the Secretary with the
authority to develop the National List. The contents of the National
List are based upon a Proposed National List, with
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annotations, as recommended to the Secretary by the National Organic
Standards Board (NOSB). The NOSB is established by the OFPA to advise
the Secretary on all aspects of the National Organic Program (NOP). The
OFPA prohibits synthetic substances in the production and handling of
organically produced agricultural products unless such synthetic
substances are placed on the National List.
The first category of the National List includes synthetic
substances allowed for use in organic crop production. The second
category includes nonsynthetic substances prohibited for use in organic
crop production. The third category of the National List includes
synthetic substances allowed for use in organic livestock production.
The fourth category includes nonsynthetic substances prohibited for use
in organic livestock production. The fifth category of the National
List includes nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic (specified ingredients).'' The final category of
the National List includes nonorganically produced agricultural
products allowed as ingredients in or on processed products labeled as
``organic'' or ``made with organic (specified ingredients).'' This
subpart also outlines procedures through which an individual may
petition the Secretary to evaluate substances for developing proposed
National List amendments and deletions.
National List (General)
The NOSB is responsible for making the recommendation of whether a
substance is suitable for use in organic production and handling. The
OFPA authorizes the NOSB to develop and forward to the Secretary a
Proposed National List and any subsequent proposed amendments. In March
1995, the NOSB initiated a petition process to solicit public
participation in identifying specific materials to be added to the
National List. The NOSB convened a Technical Advisory Panel (TAP) to
review substances identified in the petition process and made extensive
recommendations on a Proposed National List during its meetings in 1995
and 1996. In 1999, the NOSB selected materials left from the original
petition process to authorize a second round of TAP reviews. The NOSB
used these updated TAP reviews to make additional recommendations on
the Proposed National List at its October 1999 meeting. With the
exception of four substances on which the Secretary did not concur with
the NOSB recommendations and minor formatting changes, the National
List in this proposal corresponds to the recommendations on allowed and
prohibited substances made by the NOSB. The National List in this
proposal has also been developed in consultation with the Food and Drug
Administration (FDA), the Environmental Protection Agency (EPA), and
the Food Safety Inspection Service (FSIS) of USDA. Additionally, we
have made changes in response to public comment received on the first
proposal.
Nothing in this subpart alters the authority of other Federal
agencies to regulate substances appearing on the National List. FDA
establishes safety regulations on approved and prohibited uses of
substances in food production and processing. FSIS has the authority to
determine efficacy and suitability regarding the production and
processing of meat, poultry, and egg products. FDA and FSIS
restrictions on use or combinations of food additives or ingredients
take precedence over the approved and prohibited uses specified in this
proposal. Any combinations of substances in food processing not already
addressed in FDA and FSIS regulations must be approved by FDA and FSIS
prior to use. Use-of-substance requirements are proposed by FDA and
FSIS in rulemaking actions and are frequently updated with revised use
requirements. It is important that certified organic producers and
handlers of both crop and livestock products consult with FDA
regulations in 21 CFR parts 170 through 199 and FSIS regulations in
this regard. All feeds, feed ingredients, and additives for feeds used
in the production of livestock in an organic operation must comply with
the Federal Food, Drug, and Cosmetic Act (FFD&CA). Animal feed labeling
requirements are published in 21 CFR part 501, and new animal drug
requirements and a listing of approved animal drugs are published in 21
CFR parts 510-558. Food (feed) additive requirements, a list of
approved food (feed) additives generally recognized as safe substances
(GRAS), substances affirmed as GRAS, and substances prohibited from use
in animal food or feed are published in 21 CFR parts 570-571, 21 CFR
part 573, 21 CFR part 582, 21 CFR part 584, and 21 CFR part 589,
respectively. Furthermore, the Food and Drug Administration has worked
closely with the Association of American Feed Control Officials (AAFCO)
and recognizes the list of additives and feedstuffs published in the
AAFCO Official Publication, which is updated annually.
National List--Changes Based On Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Genetically Engineered Organisms (GEO's). To solicit public
comment on the use of genetically engineered organisms in organic
production and handling, we included two such materials on the National
List in the first proposal. As discussed in Production and Handling--
Subpart C, we received many thousands of comments opposing the use of
substances or organisms produced through genetic engineering in organic
production and handling. Many commenters expressed strong concerns that
GEO's do not meet current consumer expectations of organic agriculture
or an organically produced product. They stated that existing national
and international organic certification standards clearly and
consistently prohibit GEO's. Accordingly, this proposal prohibits GEO's
and their derivatives and the products of GEO's and their derivatives
in any product or ingredient that is sold, labeled, or represented as
organic. As a result of the prohibition, the National List does not
contain any materials derived from GEO's.
(2) Inclusion of Substances not Recommended by the NOSB. The first
proposal allowed some synthetic substances in organic crop production
and handling that the NOSB had not included on the proposed National
List. Citing the statutory requirements of the OFPA, commenters were
overwhelmingly opposed to adding substances to the National List that
had not been recommended by the NOSB. Every substance on the National
List in this proposal was favorably recommended by the NOSB.
With four exceptions, the National List included in this proposal
contains every substance that the NOSB recommended to allow in organic
production and handling. The Secretary has not accepted the NOSB
recommendations to allow sulfur dioxide in the production of wine
labeled as ``made with organic grapes.'' Additionally, the Secretary
has not concurred with the NOSB recommendation to allow the
antibiotics, Streptomycin and Terramycin, in organic crop production or
to allow livestock producers to administer synthetic Oxytocin for
approved organic veterinary practices. The Secretary decided not to add
sulfur dioxide to the National List because its use produces sulfites,
which are
[[Page 13588]]
prohibited in the OFPA. Streptomycin and Terramycin were not added to
the National List for use in crop production in order to be consistent
with this proposal's prohibition on the use of all antibiotics in
animal production. The Secretary's decision not to allow livestock
producers to administer synthetic Oxytocin is based on extensive public
comment that opposed the use of animal drugs including hormones in
organic livestock operations. Many certifying agencies have allowed
producers to administer Oxytocin to animals that experience severe
complications resulting from labor. While most of the public comment
strongly opposed the use of synthetic hormones in organic dairy
production, Oxytocin has some uses that do not involve lactation but
are instead related to an animal's postpartum survival. Not allowing
Oxytocin in organic operations is responsive to the public comment
opposing the use of synthetic hormones but does preclude the use of an
animal medication that some producers have previously been able to use
in emergency situations.
(3) Prohibited Nonsynthetic Substances. The National List in the
first proposal contained no prohibited nonsynthetic (natural)
substances. Many commenters requested that the four nonsynthetic
substances which the NOSB proposed to prohibit be added to the National
List. We agree with this position, and this proposal lists ash from
manure burning, mined sodium fluoaluminate, strychnine, and tobacco
dust as natural substances that are prohibited in organic crop
production and handling. In addition, we have included arsenic and lead
salts on the National List of prohibited natural substances in
accordance with provisions of the OFPA.
(4) Annotations on National List Substances. The National List in
the first proposal did not include all of the annotations originally
developed by the NOSB for the materials it recommended to include on
the National List. The OFPA stipulates that when basing the National
List upon the NOSB's recommendations, the Secretary shall include ``an
itemization, by specific use or application,'' of each synthetic
substance permitted or natural substance prohibited. This itemization,
commonly known within the organic industry as an annotation, has been
used by existing State and private certification agents to regulate the
use of allowed materials. Annotations can establish allowable sources
or procedures for obtaining a substance, specify the crops or
conditions for which it may be applied, establish use restrictions
based on environmental monitoring, or create other conditions to govern
the use of a substance.
Many commenters stated that removing annotations diminished the
NOSB's role in advising the Secretary on the content of the National
List. Commenters also stated that annotations are essential for
ensuring that substances are used in a manner which is consistent and
compatible with a system of organic production and handling.
Considering how annotations have been applied in regulating the use of
allowed substances by State and private certifying agents, we have
incorporated every feasible NOSB-proposed annotation in this proposal.
(5) Incidental Additives. The first proposal stated that a
nonagricultural synthetic substance occurring as an incidental
additive, including a processing aid, could be used in organic
production and handling without having to be added to the National
List. This position was based on FDA and FSIS regulations which require
that active ingredients, but not incidental additives, appear on a
product label. Because incidental additives were not active ingredients
in organically processed food under these regulations, the first
proposal maintained that they were not prohibited by the OFPA and would
not need to be added to the National List.
Thousands of commenters responded with varying opinions on this
subject. Many commenters approved of the proposed approach, generally
stating that processing aids are essential and needed for most
agricultural products. These commenters felt that eliminating their use
entirely would greatly limit handlers' ability to produce a wide
variety of organic products. However, other commenters strongly opposed
allowing the use of any nonagricultural synthetic substance that had
not been petitioned, reviewed, and recommended by the NOSB; published
for comment in the Federal Register; and then added by the Secretary to
the National List. Some commenters protested the use of any synthetic
incidental additives in organic handling operations. They stated that
their use is not consistent with the principles of organic agriculture
and that consumers currently do not believe that such aids and
additives are used in organically processed products.
Prior to the first proposal, the NOSB reviewed this issue and
recommended allowing both synthetic and nonsynthetic incidental
additives in processed organic products. The NOSB's 1995 recommendation
stated that nonsynthetic, nonagricultural products used as ingredients,
processing aids, or incidental food additives should be categorically
allowed in organically processed products unless specifically
prohibited and that synthetic, nonagricultural products should not be
used as ingredients, processing aids, or incidental food additives
unless specifically included on the National List. The NOSB applied
these recommendations to processed foods labeled ``organic'' and ``made
with organic (specified ingredients).'' However, the OFPA does not
allow the categorical allowance for nonsynthetic, nonagricultural
products. Section 6510(a)(4) of the OFPA requires that any
nonorganically produced ingredient added to an organic product must be
included on the National List.
The NOSB revisited this issue at its February 1999 meeting when it
adopted criteria for accepting (adding to the National List) a
synthetic processing aid or adjuvant. These criteria are an
interpretation and application of the general evaluation criteria for
synthetic substances contained in the OFPA that the NOSB will apply to
processing aids and adjuvants. To review the adopted criteria, the
public can visit the USDA NOP website: www.ams.usda.gov/nop/
nosbfeb99.html or write Program Manager, Room 2945 South Building, U.S.
Department of Agriculture, AMS, Transportation and Marketing Programs,
NOP, PO Box 96456, Washington, DC 20090-6456. The NOSB adopted these
criteria as internal guidelines for evaluating processing aids and
adjuvants. The adopted criteria do not supercede the criteria contained
in the OFPA, or replace FDA's authority to regulate food additives.
We are proposing that to be used in or on a processed product
labeled as ``organic'' or ``made with organic (specified
ingredients),'' a nonagricultural substance, whether synthetic or
nonsynthetic, must be included on the National List. This position
supports the NOSB recommendation that synthetic substances be allowed
in organic processed foods but incorporates the National List
requirement reflected in public comment. We have divided the materials
on this list (Sec. 205.605) in the current proposal to reflect the
recommended distinction made by the NOSB between synthetic and
nonsynthetic substances. This distinction does not affect how the
substances may be used. We recognize that many commenters, basing their
argument on the OFPA, objected to allowing any synthetic substances in
processed organic products. However, we believe that the OFPA does
allow
[[Page 13589]]
synthetic substances, when added to the National List, to be used in
this manner. The criteria utilized by the NOSB for evaluating
processing aids and adjuvants are very restrictive and, if applied to
all incidental additives, should minimize the number of substances
added to the National List.
(6) Inert Ingredients in Formulated Products. The first proposal
addressed the presence of synthetic inert ingredients in formulated
products used as production inputs in organic crop or livestock
operations. Formulated products are multiingredient compounds including
pesticides, fertilizers, and animal drugs and feeds. In accordance with
the OFPA, we proposed that a formulated product containing an inert
ingredient could be used, provided that the substance did not appear on
EPA's List 1 as an Inert of Toxicological Concern. We also prohibited
the use of synthetic inerts not on EPA List 1 if the substance was also
used as an active ingredient that had not been added to the National
List. To review or to receive the most current listing of the EPA
Inerts, the public can visit EPA's Internet home page at http://
www.epa.gov/opprd001/inerts/lists.html, or write to Registration
Support Branch (Inerts), Registration Division (Mail Code 7505C),
Office of Pesticide Programs, Environmental Protection Agency, 401 M
St., SW., Washington, DC 20460.
The first proposal interpreted the statutory prohibition on EPA
List 1 inerts as allowing the use of synthetic inert ingredients that
were not specifically prohibited. This allowed the use of products
containing synthetic inert substances (provided that they were not also
used as active substances) included on the other EPA inert lists: List
2, Potentially Toxic Inerts; List 3, Inerts of Unknown Toxicity; and
List 4, Inerts of Minimal Concern. We also applied the term, ``inert,''
to all nonactive ingredients contained in any formulated product used
in organic production. This meant that the nonactive ingredients in
animal feeds (fillers or additives), animal drugs (excipients), and
fertilizers (carriers or adjuvants) would only be prohibited if they
were classified by the EPA as List 1 inerts.
We received many comments stating that our restrictions on inert
ingredients were too permissive and would result in many traditionally
prohibited materials being used in organic production. Commenters
stated that the statutory prohibition on EPA List 1 inerts did not
imply that all other inerts should be allowed and argued that the NOSB
had the authority to prohibit additional substances. Citing the
uncertainty associated with EPA List 2 (potentially toxic) and EPA List
3 (unknown toxicity) inert ingredients, they questioned how such
substances could satisfy the criteria in OFPA for adding synthetic
substances to the National List. Commenters also opposed expanding the
definition of inert to include nonactive ingredients in all formulated
products. They stated that the EPA classifies only those inerts used in
pesticides, and that many of the substances routinely used in other
types of formulated products were not subject to review. Therefore,
substances not used in pesticides would not appear on any EPA list and
would be allowed. Finally, commenters cited the disparity between the
allowance for synthetic inert ingredients in the first proposal and the
more restrictive substance review procedures used by existing organic
certifying agents.
The NOSB responded to the provisions for inert ingredients
contained in the first proposal. At its meeting in March 1998, the NOSB
stated that synthetic compounds should not be allowed in production
inputs unless they appear on the National List. In February 1999, the
NOSB voted to prohibit EPA List 1 and 2 inerts, prohibit EPA List 3
inerts unless specifically allowed by the NOSB, and allow EPA List 4
inerts unless specifically prohibited. The NOSB also recommended full
disclosure of all ingredients in formulated products, called for an
expedited review of EPA List 3 inerts currently in common use in
organic production, and endorsed an 18-month phase-out period for EPA
List 3 inerts not ultimately allowed.
In this proposal, only EPA List 4 inerts are allowed as ingredients
in formulated products used in organic production. This would not
include varieties of EPA List 4 substances such as corn starch,
lecithin, or citric acid that are the product of excluded methods.
Additionally, the term inert is restricted to nonactive ingredients in
pesticides. Synthetic nonactive ingredients in formulated products used
as production inputs, including fertilizers, animal drugs, and feeds,
must be included the National List. While the OFPA prohibits using a
fertilizer containing synthetic ingredients or a commercially blended
fertilizer containing prohibited materials, the requirement does not
apply to synthetic substances included on the National List. The NOSB
recommended and the Secretary concurs that certain synthetic substances
used in fertilizer-formulated products should be included on the
National List. We have retained the provision from the first proposal
prohibiting the use of any formulated product containing a EPA List 1
Inert. Using the criteria established in the OFPA for evaluating
synthetic substances, the NOSB may review inert ingredients on EPA List
2 or 3 as well as other synthetic, nonactive substances used in
formulated products for inclusion on the Proposed National List it
forwards to the Secretary.
We recognize that inert ingredients in pesticides and similar
substances in other formulated products pose one of the most
problematic examples of the use of synthetic materials in organic
production. For example, verifying the use of inerts and similar
substances such as fillers, carriers, additives, and excipients has
been difficult because they are not required to appear on ingredient
labels, and formulators typically treat product formulas as
confidential information. At times, certifying agents have been unable
to determine the exact composition of formulated products proposed for
use in organic production. In other instances, organic producers have
applied formulated products containing inert ingredients and similar
substances that are not specifically allowed. We are challenged with
balancing standard practice with the strict statutory requirement that
producers and handlers apply only those synthetic substances added to
the National List. As sanctioned by OFPA, synthetic substances can be
used in organic production as long as they appear on the National List.
The development and maintenance of the National List has been and will
be designed to allow the use of a minimal number of synthetic
substances that are acceptable to the organic industry and meet the
OFPA criteria.
Two principles will be essential for responding to this challenge:
greater disclosure of the contents of formulated products and an
expedited review of inert ingredients and other nonactive substances.
The OFPA recognized the need for disclosure by requiring the NOSB to
work with formulators to obtain a complete list of ingredients in their
products. The NOSB has initiated this work, and its effort is ongoing
as of the date of this publication. It is our understanding from the
comments, hearings, and information considered by the NOSB that the
organic industry has made considerable progress on disclosure of inert
ingredients since the passage of OFPA. Formulators have responded to
the incentive to provide products using EPA List 4 inert ingredients,
and certifying agents have
[[Page 13590]]
gained greater access to information on product composition. EPA has
expressed its willingness to expedite the review of its List 2 and 3
inerts, which the NOSB identifies as particularly important in
formulated products widely used in organic operations. The organic
industry should clearly understand that NOSB evaluation of the wide
variety of inert ingredients and other nonactive substances will
require considerable coordination between the NOP, the NOSB, and
industry. Materials review can be anticipated as the NOSB's primary
activity during NOP implementation. Considering the critical nature of
this task, the organic industry should make a collaborative effort to
prioritize for NOSB review those substances which are essential to
organic production and handling.
We recognize that more work is needed for this policy to satisfy
the needs of organic producers and handlers, product formulators, and
consumers. We are requesting comment on the proposed requirements for
inert ingredients in formulated products. We are sensitive that an
abrupt prohibition on synthetic substances which may have knowingly or
unknowingly been used in the past but which are not added to the
National List may disrupt many well-established and accepted production
systems. However, our assessment is that the benefits of a clear policy
consistent with the OFPA, NOSB recommendations, and public comment
outweigh the costs. The net effect will be greater consumer confidence
in USDA's organic label and more products that are tailored to the
needs of organic producers.
(7) Use of Veterinary Medicines. The OFPA prohibits certain routine
uses of veterinary medications (specifically subtherapeutic doses of
antibiotics) but allows their administration in the presence of
illness. The first proposal added antibiotics to the National List
because their use had been evaluated and approved by applicable
regulatory agencies, pursuant to FDA requirements, and because they had
to be included on the National List to be used in organic livestock
production.
We received many comments opposing the use of antibiotics in
organic livestock production. Commenters expressed general concern over
microbial resistance to antibiotics and expressed a desire to source
food products without antibiotics. This proposal removes antibiotics
from the National List of approved synthetic substances for livestock
use.
(8) Removal of Substances from the National List. The first
proposal outlined a petition process for amending the National List and
included an extensive list of information to be provided for reviewing
a substance. Some commenters recommended that this section be amended
to include procedures for deleting substances from the National List.
The OFPA and the first proposal indicated that the NOSB would review
substances added to the National List at least on a 5-year basis and
recommend to the Secretary any substances that should be removed. We
concur with commenters that removal of a substance should not have to
wait for such a review cycle. Thus, a petition to remove a substance
from the National List may be filed at any time. The information
contained in the petition for removal of a substance will be provided
by AMS upon request. The NOSB will evaluate substance removal petitions
and forward a recommendation to the Secretary. Commenters suggested
that any changes to the National List be published in the Federal
Register for public comment. All proposed changes to the National List
will be published in the Federal Register.
(9) Use of Sulfur Dioxide. The first proposal allowed the use of
sulfur dioxide in crop production and as an ingredient in or on organic
processed products. The NOSB had recommended that sulfur dioxide be
permitted in the processing of organic wine and for smoke bombs used
underground to control rodents. Numerous commenters opposed the use of
sulfur dioxide in organic wine because its use produces sulfites, which
are prohibited in the OFPA, as a by-product. We concur with the
commenters and further believe that the trend in the organic industry,
as evidenced by the California Department of Food and Agriculture's
Preliminary Organic Materials List of September 1998, is to prohibit
all uses of sulfur dioxide except in underground rodent control.
Therefore, we are proposing to allow sulfur dioxide for underground
control of rodents and to prohibit its use as an ingredient in or
processed food including the production of organic wine.
National List--Additional Provisions
Upon further review of the provisions in the first proposal, we
have decided to propose the following additions and changes.
(1) New Additions to the National List. During the October 1999
meeting, the NOSB reviewed substances and made new recommendations to
the Proposed National List. The Secretary concurs with the
recommendations from that meeting and this proposal adds those
substances with the applicable annotations to the National List. These
substances are: Potassium Bicarbonate (205.601(d)), Glycerin
(2005.603(a)), Phosphoric Acid (205.603(a) and 205.605(b)), Ivermectin
(205.603(a)), Chlorhexidine (205.603(a)), and Ethylene (205.605(b)).
This proposal establishes conditions that allow producers to administer
the parasiticide Ivermectin to breeder stock and dairy stock in organic
livestock operations. Treating organically managed slaughter stock with
Ivermectin is prohibited. These provisions are based on the
recommendations developed by the NOSB at its October 1999 meeting. The
NOSB's recommendations from that meeting were derivative of many years
of work addressing how to establish and enforce the conditions allowing
use of synthetic parasiticides. The OFPA identifies livestock
parasiticides as a category of substances which may be included on the
National List and also prohibits the use of synthetic internal
parasiticides on a routine basis. The determination of what constitutes
a routine basis for parasiticide use has been challenging given the
diversity of animals, production systems, and environmental factors
which are covered by a national organic standard.
In this proposal, the conditions under which Ivermectin may be used
apply to the health care history of the animal prior to treatment and
the certification of products derived from the animal after treatment.
The pretreatment conditions are designed to ensure that the producer is
using a comprehensive management system to prevent the introduction and
transmission of parasites among the animals in his or her care.
Producers must document in their organic system plan preventative
practices such as quarantine and fecal exams for all incoming stock,
appropriate pasture rotation and management, culling of infested
livestock, and vector and intermediate host control. A producer may
administer an allowed synthetic parasiticide only after all applicable
management practices and nonsynthetic treatments have been employed. A
producer must receive the approval of their certifying agent before
using a synthetic parasiticide. In collaboration with the NOSB, we will
be developing program manuals detailing preventive management practices
for specific livestock species to assist producers and certifying
agents in determining when the use of synthetic parasiticides is
allowable.
This proposal also contains provisions addressing the posttreatment
condition of livestock which are administered Ivermectin. These
conditions are included as an
[[Page 13591]]
annotation to Ivermectin on the National List and are consistent with
the requirements contained in Sec. 205.238(b)(1)(2) of the regulatory
text for administering any allowed synthetic parasiticide. In
compliance with the recommendations of the NOSB, we are proposing that
a producer may not administer Ivermectin to breeder stock during the
last third of gestation if the progeny is to be sold, labeled, or
represented as organically produced. Additionally, a producer must
observe a 90-day withdrawal period before selling milk or milk products
produced from an animal treated with Ivermectin as organically
produced. The Food and Drug Administration exercises responsibility for
determining and enforcing the withdrawal intervals for animal drugs. No
food safety arguments are used or implied to support the use of
extended withdrawal periods. Rather, we determined that extended
withdrawal periods are more compatible with consumer expectations of
organically raised animals.
Ivermectin is the first synthetic parasiticide that the Secretary
has proposed adding to the National List, and allowing its use could
significantly affect organic management practices. The FDA has approved
18 animal drugs containing Ivermectin that are labeled for use on one
or more animals including beef and dairy cattle, sheep, swine, and
several minor species. A total of 11 of these drugs are not covered by
this proposed rule: three have additional synthetic active ingredients
not on the National List and eight others are labeled for nonfood uses.
(They are used on horses not for food use, dogs, and cats.) While there
are no approved uses of Ivermectin on lactating dairy animals, the
remaining seven food-use products could be administered to breeder
stock and dairy stock either prior to lactation or during a dry period.
Future NOSB meetings will consider new proposals of substances to
be added to the National List.
(2) Petition Process to Amend the National List. We are modifying
the contents of the petition for amending the National List that was
contained in the first proposal. We are proposing that any person
requesting a change in the National List should request a copy of the
petition procedures from the NOP Program Manager. The procedures will
include a list of information that has to be provided for consideration
of a change in the National List. Under the provisions in the first
proposal, the NOP would be required to go through rulemaking every time
it sought to update contents of the petition. Under this proposal, the
NOP will amend the requirements of the petition process and publish the
changes in the Federal Register. This revised process will help to
expedite amending the National List and keep the National List more
current. We anticipate that amendments to the National List will be
made on an annual basis, depending upon the number of substance
petitions filed. Substances petitioned for inclusion onto the National
List will be reviewed by the NOSB, which will forward a recommendation
to the Secretary. All amendments to the National List will be published
for comment in the Federal Register.
State Organic Certification Programs
The Act provides that each State may implement a certification
program for producers and handlers of agricultural products that have
been produced and handled within the State, using organic methods that
meet the requirements of this regulation. Each State organic
certification program must be approved by the Secretary. A State
organic certification program's organic standards and requirements
cannot exceed these National Organic Program (NOP) regulations unless
the State petitions for, and the Secretary approves, more restrictive
requirements. The sections covering State programs, beginning with
Sec. 205.620, establish: (1) The requirements for a State organic
certification program and amending such a program; and (2) the process
for initial approvals of programs and program amendments. A process for
review and approval of a State's organic certification program every 5
years will be addressed in subsequent rulemaking.
Proposal Description
There are a wide variety of organic certification programs now
operating in different States. Approximately 31 States currently have,
or are developing, their own State organic certification programs. At
least 13 of those use State government agencies or contracted private
certifying agents to certify organic operations in the State. Thus, at
least 19 States do not have State organic programs and approximately 37
States do not have State Government or State-designated private
certifying agents. Under this proposal, States may utilize these NOP
standards and requirements and not have State oversight or
responsibility for administration of the NOP in the State. On the other
hand, a State may petition the Secretary for approval to add its unique
State requirements to the NOP and agree to administer the national
program in the State.
Requirements of a State Organic Certification Program. Under the
Act and the NOP, a State, through the State program's governing State
official, must submit to the Secretary a copy of the proposed State
organic certification program. The governing State official must submit
an affidavit or memorandum of understanding agreeing to meet the 11
general requirements of an organic program, as specified in section
6506(a) of the Act. Specifically, the governing State official must
agree to: (1) Require that product sold or represented as organic must
be produced and handled only by certified organic operations; (2)
require that participating organic producers and handlers establish
organic plans for their operations; (3) allow certified producers and
handlers to appeal adverse decisions under appeal provisions of these
regulations; (4) require that certified operations certify annually
that they have complied with the NOP; (5) provide for annual on-site
inspections of certified operations by certifying agents; (6) require
periodic residue testing by certifying agents; (7) provide for
appropriate and adequate enforcement procedures which are consistent
with the NOP; (8) protect against conflict of interests as specified in
these regulations; (9) provide for public access to certification
documents; (10) provide for collection of reasonable fees; and (11)
require other terms and conditions as may be established by the
Secretary. The NOP will assume these responsibilities in States that do
not have an approved State organic certification program.
Supporting materials must be submitted addressing these general
requirements, including such documentation as: authorizing State
statutes, program goals and objectives, a description of the State's
organic program office, codified compliance and appeals processes, and
other information as may be requested by the Secretary. Written
material must assess the State organic certification program's ability
and willingness to administer the 11 general requirements for organic
programs. Administration of these general requirements may require
development of a unique working relationship between the State organic
program and the NOP.
With the approval of its State organic certification program, the
State must assume responsibility for administration of these 11 general
requirements and any approved, more restrictive requirements in the
State. For instance, a State's responsibilities will include oversight
of certified organic production and handling operations to ensure that
[[Page 13592]]
products sold or represented as organic are produced and handled
pursuant to these regulations. A State's organic certification program
must include noncompliance and appeals procedures similar in force and
effect to those outlined in the Compliance and Appeals provisions of
this subpart. We expect that every State has in place official
compliance procedures and formal appeal procedures which are used to
enforce the State's regulatory programs. Those procedures should
provide opportunity, as do the procedures in this subpart, for entities
that may not be in compliance with State regulations, to come into
compliance with those regulations. Such procedures should be clearly
addressed in the State's organic certification application.
A proposed State organic certification program and any proposed
amendment to such a program must be approved by the Secretary prior to
being implemented by the State. A State may have other organic State
sponsored projects, such as research and promotion programs, tax
incentives, or transition assistance for organic producers within the
State. Such programs would not be subject to the Secretary's approval,
provided they do not conflict with the purposes of the Act.
Under certain circumstances, a State organic program may have more
restrictive requirements in the State than corresponding NOP
requirements for production and handling of organic product and
certification of organic production and handling operations. These more
restrictive requirements must be based on unique environmental
conditions or specific production or handling practices particular to
the State or portion of the State. Any environmental condition cited in
the proposed amendment must be of a nature that implementation of these
NOP regulations will be insufficient to correct the condition. The
environmental condition must necessitate use of more restrictive
practices or requirements rather than the corresponding practices and
requirements provided in these regulations. Any such condition that is
limited to a specific geographic area of the State will be required of
organic production and handling operations active only in that
geographic area. If approved by the Secretary, the more restrictive
requirements will become the NOP regulations for appropriate organic
producers and handlers in the State or area of the State.
We do not expect that a State's request for more restrictive
requirements will cover a wide range of organic production and handling
standards. Rather, the increased requirements are likely to be limited
to a specific production or handling practice or a more restricted use
of approved National List substances to address needs or critical
conditions in a specified geographic area(s). For instance, to protect
an endangered lake or estuary, a State may have more restrictive buffer
zone requirements than are provided in this regulation. Such a State
may request that its more restrictive buffer zone requirements be
established as the minimum buffer zone requirements of this regulation.
A State's more restrictive standards will not be applied to
production and handling activities outside the State or a specified
geographic area in the State. Further, the more restrictive standards
do not apply to marketing of organic product and, thus, will not be
used to restrict access of organic product produced in other States.
Section 205.621 provides that a State program's governing State
official will submit to the Secretary a copy of a proposed State
organic program or request for approval of any substantive amendment to
a State's approved program.
State Program Approval Process. We envision the request and
approval process will occur during the period between publication of
the final rule and the projected effective date of the this national
program (which will be announced in the final rule). Because
requirements of a State organic program cannot exceed the requirements
of this program unless warranted by unique conditions in the State,
some State organic programs currently in effect may elect to
discontinue their programs when the NOP becomes effective. Those
programs simply will not request approval of their programs and their
State organic requirements, in effect under the State program, will be
superseded on the effective date of the NOP. State organic
certification programs which seek approval of their programs will
submit the required material and continue operations until the
effective date of the NOP. We envision that all approved State organic
certification programs will become effective under the NOP on the day
the program becomes effective. A State wishing to establish a new State
organic certification program under the NOP may submit the State
program request and supporting material at any time. New programs
submitted after this program becomes effective will be subject to the
same review and approval process.
The submitted copy of the State organic certification program must
be in its final form and ready for implementation. It cannot be altered
by the State during the review process unless the change is cleared
with the Secretary.
Amendments to State Programs. For amendment of a State organic
program, the State program's governing State official must submit a
copy of the proposed amendments and justification for them. The
supporting material must document the unique environmental or
ecological conditions or production practices in the State that
necessitate use of more restrictive organic requirements. The
supporting material must also explain how the more restrictive
requirements will address the environmental condition. Likewise, the
supporting material must explain how the increased requirements are
better suited to agricultural conditions in the State.
Because State organic certification program requirements cannot be
less restrictive than NOP requirements, any amendment to lower such
requirements could only entail a relaxation of a more restrictive
requirement previously approved by the Secretary. Thus, an amendment to
relax a State program's requirement also must be reviewed by the
Secretary. A decrease in a State organic certification program's more
restrictive requirements must be justified, based on documented changes
in the unique conditions or practices which warranted the increase in
requirements.
Written materials supporting an amendment must assess how the more
restrictive requirements further the purposes of and are consistent
with the Act and these regulations. The written material should
acknowledge that the more restrictive State requirements will not be
used to limit or restrict access of organic products produced in other
States or foreign countries to markets in the State. Also, supporting
materials must explain how the amended requirements would affect the
State program's governing State official's ability to administer the 11
general requirements. A request to relax a requirement also must
address these issues.
The Secretary will review each State's application based on how
closely it complies with the purposes and intent of the Act and the
provisions of the NOP and how well its administrative capabilities and
processes match up with the needs of the State's program.
The Act provides that the Secretary's review and determination of a
new State organic certification program or a
[[Page 13593]]
program amendment will take no more than 6 months. AMS will notify the
public upon approval of each State program. The public information will
be made available to national agricultural news media and to all news
media in the State. AMS will identify, among other things, any more
restrictive certification requirements that are included in the
approved State program.
A denial of a new program or program amendment will include a
written explanation of why the proposal is denied and what changes will
be needed for the program to be approved. The State may implement
needed changes and submit a new program or program amendment.
Section 205.622 establishes that State organic certification
programs will be reviewed at least once every 5 years by the Secretary
and that a determination will be made within 6 months of the
anniversary date as to continuation of the State organic certification
program. We will issue appropriate procedures regarding this
requirement at a later date, after AMS and the States have had an
opportunity to administer the NOP and State programs.
State Programs--Changes Based On Comments
There are no changes based on comments.
State Programs--Changes Requested But Not Made
(1) Allowing more restrictive State standards. About a third of
those commenting on State organic certification program provisions
complained that the first proposal gave USDA complete control over
State organic standards. A few suggested that a State with higher
organic requirements should be able to prohibit the in-State sale of
products certified only to the NOP or other State organic program
requirements. Another commented that the NOP should ``defer'' to other
State organic certification programs with higher standards.
While paragraph (b)(1) of section 6507 of the Act provides that
States may establish more restrictive organic certification
requirements, paragraph (b)(2) establishes parameters for those
requirements. More restrictive State organic program requirements must:
Further the purposes of the Act; be consistent with the Act; not
discriminate against other States' agricultural commodities; and be
approved by the Secretary before becoming effective. As noted above, we
expect that a State's more restrictive requirements are likely to cover
specific production or handling practices such as more restricted use
of approved National List substances or farming practices to address a
State or area's particular environmental conditions.
The Secretary must employ some consistent and common criteria for
approving States requests for more restrictive State organic programs.
The criteria for establishing such requirements must be consistent with
the purposes of the Act. We believe the need to preserve, protect, and
enhance unique environmental or farming conditions is a common
criterion for all States. We believe such criteria are consistent with
the stated goals of most, if not all, State organic programs and
organic trade and farming organizations.
The more restrictive standards will not be applied to production
and handling activities outside the geographic area of the State.
Further, the more restrictive standards do not apply to marketing of
organic product and, thus, will not be used to restrict access of
organic product produced in other States. Clearly, prohibiting the sale
of other States' products is prohibited by the Act as well as other
national laws covering interstate commerce in the United States. If
some States were to restrict access to State markets, the purposes and
the benefits of the national program would be lost.
Discriminatory marketing practices are prohibited under section
6507(b)(2)(c) of the Act. Thus, the purpose of more restrictive State
organic requirements cannot be, as the commenters suggest, to allow
claims of more organic or purer product. States will not be able to
promote their products as being more organic because their products
were produced under more restrictive State requirements. More
restrictive State organic requirements will be authorized only as
needed to respond to special environmental or production conditions in
the State which necessitate more restrictive requirements. Any State's
request for less restrictive or lower organic standards than are
required under this program will not be approved by the Secretary.
(2) Treatment of private and State certifying agents. Some private
certifying agents commented that the first proposal would permit
accredited State certifying agents to establish more restrictive
standards than these regulations but prohibit private certifying agents
from establishing their own more restrictive requirements. Under this
program, State certifying agents will not unilaterally establish
organic standards or requirements in a State. A State program's
governing State official may, upon approval of the Secretary, establish
a State organic certification program as an entity of the State's
department of agriculture or other similar State government agency. The
Act provides this authority to the State government and does not
provide similar authority to private certifying agents. Private
certifying agents are not government entities and have no official
regulatory or administrative authorities over agricultural activities
in the State. State certifying agents as well as private certifying
agents will act as service providers, certifying to national and, where
applicable, to particular State organic requirements.
Again, commenters appear to miss an essential point of this
national program. The only mandatory organic standards and requirements
are those of the NOP and the unique requirements approved for a State
organic certification program by the Secretary. A private certifying
agent may believe its more restrictive requirements result in a more
organic or purer product and may want to certify producers and handlers
only to those requirements. However, neither State certifying agents
nor private certifying agents will be able to require that client
operations or organic product be certified to more restrictive
standards than the standards of this program or approved State
standards. The only other more restrictive requirements that may be
certified to may be requirements made at the request of handlers or
manufacturers who are purchasing the organic product or ingredient. For
example, a producer could request a certifying agent to certify certain
production practices required for export to a foreign manufacturer.
Such certification can be made only at the request of the producer or
handler being certified. Both State and private certifying agents may
certify to the requested more restrictive contract requirements,
provided those more restrictive requirements are consistent with these
regulations and provided the certifying agents have the necessary
technical qualifications to carry out the certification.
Similarly, one commenter stated that the NOP should not prevent a
private certifying agent from having and advertising its own higher
organic standards. While a private certifying agent may have the
capability to certify to certain higher organic requirements, a handler
certified by the certifying agent may not claim on product labels or in
market information that its products are more organic, purer, or better
than product certified by other certifying agents or State organic
programs.
[[Page 13594]]
In this regard, certifying agents, whether they are State or
private certifying agents, may not use different seals, logos, or other
identifying marks to distinguish between organic operations certified
to NOP requirements and a State's approved more restrictive
requirements, the certifying agent's preferred requirements, or the
client's requested higher requirements. We believe that if certifying
agents were allowed to use more than one seal or identifying mark,
based on various standards certified to, the marketplace would be
inundated with a variety of different certifying agent seals, logos,
and identifying marks. This would add to consumer confusion, complicate
the marketplace, and jeopardize benefits of this program.
(3) Private certifying agent concerns. Several commenters expressed
concern that private certifying agents are at a disadvantage vis-a-vis
State certifying agents. They stated that a State organic program or a
State certifying agent could initiate policies that would limit the
activities or effectiveness of private certifying agents. However, this
proposed program does not alter the current situation in that State and
private certifying agents operate in the same States. If a requested
State organic certification program proposes a requirement or procedure
that will have a negative affect or discriminate against private
certifying agents operating in the State, the Secretary will not
approve the requirement or procedure.
Some commenters asked whether these national regulations will
affect a State's accreditation of private certifying agents operating
in the State. A few believe that States should be allowed to continue
or establish separate accreditation programs for private certifying
agents.
We believe accreditation of certifying agents is a core
responsibility for USDA. Establishment of a single national
accreditation program is an essential part of the NOP. States will not
accredit private certifying agents. As stated elsewhere in this
proposal, any accreditation responsibilities of a State's current
organic certification program will cease with implementation of this
program. Pursuant to the Compliance provisions of this subpart, the
governing State official or designee charged with compliance oversight
under the State program may investigate and notify the NOP of possible
compliance violations on the part of certifying agents operating in the
State. However, the State may not pursue compliance actions or remove
accreditation of any certifying agent accredited by the Secretary. That
authority is the sole responsibility of the Secretary.
If more restrictive State requirements are approved by the
Secretary, we will review certifying agent qualifications in the State
and determine whether they are able to certify to the approved, more
restrictive requirements. Our accreditation responsibilities must
include oversight of both State and private certifying agents,
including any foreign certifying agents that may operate in a State,
and to monitoring their compliance with accreditation requirements.
(4) Public comment on State applications. One commenter suggested
that USDA publish for comment in the Federal Register, a summary of
each State's proposed organic program and any requested program
amendments. The commenter claimed that an approved State organic
certification program will effectively substitute the State's program
for the NOP in the State. Thus, the commenter contends, those proposed
State programs and program amendments should be made available for
public comment. After consideration of the implications of the comment,
we do not believe that the Federal Register notification process is the
proper venue for receiving comments on a proposed State program which
is applicable only to residents and business entities in the State. We
assume that the governing State official is submitting the request on
behalf of the organic producers and handlers in the State. Further, the
appropriateness of the State's requested more restrictive requirements
should stand on the merits of each proposal and not on whether
commenters in other States believe the proposed requirements are
warranted. Certified organic producers and handlers outside the State
will not be subject to the more restrictive standards or requirements
of the State program. The more restrictive standards will not be used
to restrict market access of organic product produced in other States
or countries. Thus, there is no reason to receive public comment on
requested State requirements from individuals not directly affected by
the proposed requirements.
The commenter suggested that AMS also publish a summary of each
proposed program and any amendments to a program in a newspaper of
general circulation in the State. AMS will issue a public information
notices which will announce each approved State organic certification
program and any approved amendments of a State program. The notices
will identify the unique characteristics of the approved State program
that warranted the more restrictive organic production or handling
requirements. We also will include a summary of the new program on the
NOP homepage.
(5) State program consistencies. Several commenters asked for
clarification of the first proposal's terms, ``consistent'' and
``substantive amendments,'' used in regard to State programs operating
under the NOP. Being ``consistent'' with the NOP means that a State
program's written standards or requirements must be at least equal to
the standards and requirements of the NOP. This is provided for in the
Act. Further, in allowing State organic programs to have more
restrictive or higher standards, the Act requires that those more
restrictive standards and requirements be consistent with the purposes
of the Act. To be ``consistent'' with the purposes of the Act means
that the requested, more restrictive standards or requirements are of
such a nature that they do not undermine the application of uniform
national organic standards. Thus, if a request for more restrictive
State organic standards is determined to not be consistent with uniform
national organic standards, the State program will not be approved by
the Secretary. The administrative procedures used by the State in
administering the 11 general requirements of the State's organic
program should have the same force and effect of the procedures use by
AMS in administering this program.
The same commenters asked for clarification of the term,
``substantive amendments,'' in obtaining USDA approval of more strict
amendments for one State's organic certification program. ``Substantive
amendments'' means changes that would increase the quantitative or
qualitative standards or specific requirements for an operation's or a
product's certification under the State organic program. Once this
national program is operating, if a question arises as to whether a
desired change in a State organic certification program is considered
substantive or not, the State program's governing State official should
raise the issue with the Secretary.
State Programs--Additional Provisions
(1) State program responsibilities. This subpart establishes that a
State organic certification program which petitions for approval by the
Secretary will have increased responsibilities under the NOP. Our first
proposal did not suggest qualifying factors or other information that
had to be submitted by the State program's governing State official.
This proposal specifies the 11 general requirements, addressed above,
and the needs-based environmental
[[Page 13595]]
conditions or special production practices for establishing more
restrictive requirements. Those factors establish our revised position
that a State must agree to incurring increased responsibilities and
obligations to be approved as a State organic certification program
under the NOP. For instance, as discussed above, a State with an
approved organic certification program will oversee compliance and
appeals procedures for certified organic operations in the State. Those
procedures must provide due process opportunities such as rebuttal,
mediation, and correction procedures in this proposal. Once approved by
the Secretary, the State governing official or designee must
effectively administer the State's organic certification program in a
manner that is consistent and equitable for the certified parties
involved in compliance actions.
A State's organic certification program may include other programs
and projects which the State government may conduct to promote or
increase organic production and handling in the State. Such programs
may include organic promotion and research projects, transition
assistance, a directory of organic production and handling operations
in the State, a consumer referral program, or certifications given to
retail operations which market organic foods. This proposal will not
prohibit such State activities, provided those activities do not
establish production or handling standards that work against the
purposes of the NOP. Such programs may not advertise, promote, or
otherwise infer that the State's organic products are more organic or
better than organic product produced in other States. Such programs and
projects should be beyond the scope of this national program and, if
so, will not be subject to the Secretary's review.
(2) Renewal of State program. The final section provides that
reviews of State organic certification programs will be conducted at
least once every 5 years, as required in paragraph (c) of section 6507.
The intent of the provision is not changed in this proposal. We will
provide further information regarding reviews of State programs before
the first 5-year period is completed. We expect that, with experiences
gained from a few years of program operation, we will be able to
propose more appropriate procedures, guidelines, and requirements to
assure proper reviews of operating State organic programs.
Fees. This portion of subpart G sets forth the regulations on fees
and other charges to be assessed for accreditation and certification
services under the National Organic Program (NOP). These regulations
address the kinds of fees and charges to be assessed by the Department
for the accreditation of certifying agents, the level of such fees and
charges, and the payment of such fees and charges. These regulations
also address general requirements to be met by certifying agents in
assessing fees and other charges for the certification of producers and
handlers as certified organic operations. Finally, these regulations
address the Secretary's oversight of a certifying agent's fees and
charges for certification services.
Proposal Description
Fees and Other Charges for Accreditation. Fees and other charges
will be assessed and collected from applicants for initial
accreditation and accredited certifying agents submitting annual
reports or seeking renewal of accreditation. Such fees will be equal as
nearly as may be to the cost of the accreditation services rendered
under these regulations. Fees-for-service will be based on the time
required to render the service provided calculated to the nearest 15-
minute period. Activities to be billed on the basis of time used
include the review of applications and accompanying documents and
information, evaluator travel, the conduct of on-site evaluations,
review of annual reports and updated documents and information, and the
preparation of reports and any other documents in connection with the
performance of service. The hourly rate will be the same as that
charged by the Agricultural Marketing Service (AMS), through its
Quality System Certification Program, to certification bodies
requesting conformity assessment to the International Organization for
Standardization ``General Requirements for Bodies Operating Product
Certification Systems'' (ISO Guide 65).
Applicants for initial accreditation and accredited certifying
agents submitting annual reports or seeking renewal of accreditation
during the first 18 months following the effective date of subpart F
will receive service without incurring an hourly charge for such
service.
Applicants for initial accreditation and renewal of accreditation
must pay at the time of application, effective 18 months following the
effective date of Subpart F, a nonrefundable fee of $500.00. This fee
will be applied to the applicant's fees-for-service account.
When service is requested at a place so distant from the
evaluator's headquarters that a total of one-half hour or more is
required for the evaluator(s) to travel to such place and back to the
headquarters, or at a place of prior assignment on circuitous routing
requiring a total of one-half hour or more to travel to the next place
of assignment on the circuitous routing, the charge for such service
will include all applicable travel charges. Travel charges may include
a mileage charge administratively determined by the Department, travel
tolls, or, where the travel is made by public transportation (including
hired vehicles), a fee equal to the actual cost thereof. If the service
is provided on a circuitous routing the travel charges will be prorated
among all the applicants and certifying agents furnished the service
involved on an equitable basis. Travel charges will become effective
for all applicants for initial accreditation and accredited certifying
agents on the effective date of subpart F. The applicant or certifying
agent will not be charged a new mileage rate without notification
before the service is rendered.
When service is requested at a place away from the evaluator's
headquarters, the fee for such service shall include a per diem charge
if the employee(s) performing the service is paid per diem in
accordance with existing travel regulations. Per diem charges to
applicants and certifying agents will cover the same period of time for
which the evaluator(s) receives per diem reimbursement. The per diem
rate will be administratively determined by the Department. Per diem
charges shall become effective for all applicants for initial
accreditation and accredited certifying agents on the effective date of
subpart F. The applicant or certifying agent will not be charged a new
per diem rate without notification before the service is rendered.
When costs, other than fees-for-service, travel charges, and per
diem charges are associated with providing the services, the applicant
or certifying agent will be charged for these costs. Such costs
include, but are not limited to, equipment rental, photocopying,
delivery, facsimile, telephone, or translation charges incurred in
association with accreditation services. The amount of the costs
charged will be determined administratively by the Department. Such
costs will become effective for all applicants for initial
accreditation and accredited certifying agents on the effective date of
subpart F.
Payment of Fees and Other Charges. Applicants for initial
accreditation and renewal of accreditation must remit the nonrefundable
fee along with their application. Remittance must be made payable to
the Agricultural Marketing Service, USDA, and mailed to: Program
Manager, USDA-AMS-TMP-NOP,
[[Page 13596]]
Room 2945-South Building, PO Box 96456, Washington, DC 20090-6456 or
such other address as required by the Program Manager. All other
payments for fees and other charges must be received by the due date
shown on the bill for collection, made payable to the Agricultural
Marketing Service, USDA, and mailed to the address provided on the bill
for collection. The Administrator will assess interest, penalties, and
administrative costs on debts not paid by the due date shown on a bill
for collection and collect delinquent debts or refer such debts to the
Department of Justice for litigation.
Fees and Other Charges for Certification. Fees charged by a
certifying agent must be reasonable, and a certifying agent may charge
applicants for certification and certified production and handling
operations only those fees and charges that it has filed with the
Administrator. The certifying agent must provide each applicant with an
estimate of the total cost of certification and an estimate of the
annual cost of updating the certification. The certifying agent may
require applicants for certification to pay at the time of application
a nonrefundable fee of no more than $250.00 which must be applied to
the applicant's fees-for-service account. The certifying agent must
provide all persons inquiring about the application process with a copy
of its fee schedule.
Fees--Changes Based on Comments. This portion of subpart G differs
from our first proposal in several respects as follows:
(1) Application and Administrative Fees. We have removed the
provisions which required certifying agents to pay application and
administrative fees. These fee provisions have been replaced with
provisions for the assessment of fees for service equal as nearly as
may be to the cost of the accreditation services rendered under these
regulations. In other words, we will be assessing fees and charges only
for activities related to accreditation. These fees and charges will be
assessed and collected from applicants for initial accreditation and
accredited certifying agents submitting annual reports or seeking
renewal of accreditation. The balance of costs incurred by the NOP will
be funded through appropriations. We have retained the requirement,
with modification, that certifying agents reimburse the Department for
travel, per diem, and related other costs associated with providing
accreditation services. We have taken these actions in an attempt to
minimize the cost of this program on certifying agents. Certifying
agents will be charged for the actual time and travel expenses
necessary for the NOP to perform accreditation services.
This proposed program is similar to the Quality Systems
Certification Program (QSCP) established pursuant to 7 CFR part 54. The
QSCP is an audit-based program administered by AMS through its
Livestock and Seed Program, which provides meatpackers, processors,
producers, and other businesses in the livestock and meat trade with
the opportunity to have special processes or documented quality
management systems verified. Since the procedures used for accrediting
State and private entities as accredited organic certifying agents are
similar to those used to certify other types of product or system
certification programs under the QSCP, we have decided to use this
existing program and its staff in examining certifying agents'
operations and evaluating their compliance with the Act and these
regulations. Using the QSCP and its staff will enable the NOP to
provide the necessary services without creating a separate bureaucracy.
Hourly fees to be charged for services under this program will be the
same as those under the QSCP, currently estimated at $95.00 per hour.
This fee of approximately $95.00 is greater than the $42.20 base
rate charged under the voluntary user-fee-funded program established by
AMS to verify that State and private organic certifying agents in the
United States comply with the requirements prescribed under ISO Guide
65. This program, administered by the AMS Livestock and Seed Program,
applied the aggregate meat grading rate for services to this ISO Guide
65 verification program for State and private organic certificating
agents. The grading rate of $42.20 was the only rate for which AMS was
authorized to charge at the time that the program to assess ISO Guide
65 conformity by organic certifying agents was implemented. This was
not the actual audit rate of approximately $95.00 for such services.
The AMS Livestock and Seed Program will engage in rulemaking to
establish audit fees for its QSCP. As noted above, those fees are
expected to be approximately $95.00 per hour. The NOP will notify
accredited certifying agents of proposed rate changes and final actions
on such rates by AMS.
To minimize the economic impact of implementing the NOP on
certifying agents, we have decided to provide services for
accreditation during the first 18 months following the effective date
of new subpart F without an hourly charge for all applicants for
initial accreditation and accredited certifying agents. This represents
full subsidization of the hourly costs for accreditation by the
Department during the first 18 months of operation. This 18-month
subsidization of the hourly costs will prove especially beneficial to
any applicant for accreditation that submits a substandard application
or has difficulty establishing eligibility for accreditation.
Certifying agents will be charged for accreditation service at the
published hourly rate on the first day of the nineteenth month
following the effective date of subpart F.
Over 15,000 comments were received on fees, with all opposing the
first proposal's fee provisions. In addition to comments from
consumers, comments were received from State agencies, organic growers,
grower associations, and certifying agents. Most of these commenters
expressed the belief that the proposed fees would price small
certifying agents out of the organic industry. Almost half of the over
15,000 comments suggested a sliding-scale fee system, rather than the
flat fee system in the first proposal, to accommodate the economic
needs of small certifying agents. We have not accepted the concept of a
sliding-scale fee system. Rather, as noted above, we are proposing that
certifying agents be charged for the actual time and travel expenses
necessary for the NOP to perform accreditation services. Under this fee
system, smaller certifying agents should pay less in hourly charges to
obtain and maintain certification than larger certifying agents. This
assumption, however, is contingent on the quality of all documentation
submitted to the Department, certifying agent recordkeeping, and the
efficiency of the certifying agent in meeting the requirements of this
part. The fees and other charges for accreditation regulations are
found in Sec. 205.640.
(2) Payment by Certified Check. We have removed the requirement
that the payment of fees and charges to the Department be by certified
check or money order. We have made this change because we agree with
commenters that this requirement is unnecessary and potentially
burdensome.
Nearly all industry commenters opposed the form and method of
payments stated throughout the original fee sections. Commenters stated
that payment by certified check or money order was unnecessary and
would create an additional burden on individual producers, handlers,
and private certifiers. A few State commenters stated that it was
insulting for the U.S. Department of Agriculture (USDA) to require a
State government agency to pay for its accreditation with a certified
check.
[[Page 13597]]
(3) Producer and Handler Fees to the Department. We have removed
the provisions which required the payment of certification fees by
producers and handlers to the Department. We have taken this action
because we believe that the goal of recovering program costs through
fees and other costs charged to producers and handlers for
certification as certified organic operations should be balanced
against the Act's purpose to facilitate interstate commerce in fresh
and processed food.
We received over 15,000 comments all opposing the first proposal's
fee provisions for producers and handlers. Comments were received from
consumers, State agencies, organic growers, grower associations, and
certifying agents. Most of these commenters stated that the proposed
fees would price small producers and handlers out of the organic
industry. Hundreds of these commenters stated that the proposed fees
favor large production operations. Almost half of the over 15,000
comments suggested a sliding-scale fee system, rather than the flat fee
system proposed in the first proposal, to accommodate the economic
needs of small producers and handlers. Hundreds more suggested that
small producers and processors be exempt from the payment of fees.
Most of the State agency, organic grower, grower association, and
certifying agent (industry) commenters spoke to the very small size and
family-farm nature of the average organic production operation and how
those operations would be affected by the proposed fees. Commenters
from this group who offered estimates suggested that one-third to over
one-half of organic producers in their area or State are very small
organic producers operating at or near the exemption level of $5,000 in
annual sales. They said those operating just above the exemption level
could be forced out of organic production by the extra fee and the
increased certification charges passed down by certifying agents who
would have to pay the proposed accreditation charges.
Commenters, industry and consumer, stated that, rather than
encouraging growth and new participation in organic agriculture, the
costs of certification would stifle growth and discourage small
producer participation in organic agriculture. An industry commenter
stated that exempt producers who might want to be certified so they
could market their product as organic would be dissuaded from doing so
because of the cost of certification. Industry commenters also stated
that the additional USDA fee on small handlers would make small organic
handling operations marginal. A few State agencies commented that many
small organic producers also conduct their own on-farm handling and
that these operations would be forced out of the organic industry by
the excessive handler fee and reporting burdens.
The comment, that exempt producers who might want to be certified
so they could market their product as organic would be dissuaded from
doing so because of the cost of certification, requires clarification.
It may be true that such producers would be dissuaded from seeking
certification because of the cost of certification. It is not true,
however, that exempt producers must be certified to sell or label their
production as organic. The Act exempts small producers, those who
produce no more than $5,000 in agricultural products, from the
requirement that a person may sell or label an agricultural product as
organically produced only if such product is produced and handled in
accordance with the Act.
Industry commenters recommended complete changes to the proposed
fee structure. Most, like the consumer commenters, suggested a sliding
scale for fees based on either size or sales volume. Several industry
commenters stated that the Act does not require that USDA recover all
program costs from assessments on producers, handlers, and certifying
agents. They cited section 6522 of the Act as authorizing the use of
appropriated funds to carry out the program. Some industry commenters
suggested that appropriated funds should be used to cover all
administrative and overhead costs and that fees collected from the
industry should only be used for specific program activities such as
accreditation. A few industry commenters suggested that organic farmers
not be charged an AMS fee but that each be required to sign an
affidavit of compliance with program requirements.
After further discussions within the Department and review of the
comments, we have determined that the fee structure for the NOP should
be modified to reduce costs to all organic sectors. We acknowledge that
the fees proposed in the first proposal might have discouraged industry
growth and might not have facilitated interstate commerce of organic
products. Because we believe that fees and other costs charged to
producers and handlers for certification as certified organic
operations should be kept to a minimum to encourage industry
participation and growth, we have removed the regulations which
provided for the payment of fees to the Department by certified
production and handling operations.
(4) Estimated Cost of Certification. We have added, at
Sec. 205.642, the requirement that the certifying agent must provide
each applicant with an estimate of the total cost of certification and
an estimate of the annual cost of updating the certification.
Additionally, the certifying agent must provide all persons inquiring
about the application process with a copy of its fee schedule. We have
added these provisions to ensure that producers and handlers have early
and ready access to the information they need to consider cost in
selecting an agent to certify their production or handling operation.
We consider this to be especially important because, as noted in the
preamble to subpart F, we have removed the requirement that the
certifying agent charge only such fees to applicants for certification
and operations it certifies that the Secretary determines are
reasonable. We have removed this requirement because we concur with
those commenters who expressed the belief that certifying agents should
be permitted to set their own fees without the approval of the
Secretary. We have also removed this requirement because we concur with
the commenters' belief that production and handling operations are free
to consider cost in selecting an agent to certify their production or
handling operation.
Fees--Changes Requested But Not Made. This subpart retains from our
first proposal regulations on which we received comments as follows:
(1) Accreditation Charges Billed to State Certifying Agents.
Several State certifying agents stated that State certifying agents
should not be assessed accreditation charges. Commenters stated that
most State certifying agents could face large accreditation costs
because they have many county or regional offices which would be
considered subsidiaries of the headquarters office. They stated that
these charges would have to be passed on to producers and handlers or
paid with supplemental State funds. A few State certifying agents
stated that USDA should pay the States, rather than vice versa, because
of the State organic programs' contributions to the national program.
At least one State representative commented that accreditation fees for
State certifying agents should be less than for private certifying
agents because State certifying agents should require less review and
oversight by AMS.
We disagree with those commenters who recommended that State
certifying agents not be assessed accreditation
[[Page 13598]]
charges, be charged less for accreditation, or be paid to certify
production or handling operations. We view such actions as constituting
unacceptable preferential treatment of State certifying agents to the
detriment of private-entity certifying agents. Accordingly, under this
proposal, State-entity certifying agents will be assessed fees for
accreditation under the same fee structure as private-entity certifying
agents.
(2) Subsidization. Some industry commenters stated that national
governments in Europe provide direct subsidies and other economic
incentives for their farmers to grow organic. A few questioned why the
organic industry would be charged for services while some USDA programs
are provided without cost to other agricultural sectors, and USDA
actually pays some farmers not to grow some commodities. Industry
commenters and many consumer commenters stated that it was unfair for
this proposed program to charge all costs to a fledgling agricultural
industry composed mostly of small, family farmers and marginal
operations. Finally, a few industry commenters proposed the
philosophical argument that program fees penalize those who protect the
earth and that USDA should charge traditional producers who damage the
earth with chemical applications and nonsustainable cultural practices.
AMS is primarily a user-fee-based Federal agency. The Act at
section 6506(a)(10) requires the collection of fees from producers,
handlers, and certifying agents. We are, therefore, unable to provide
for the full subsidization of producers, handlers, and certifying
agents as espoused by some commenters. Accordingly, this proposal
provides for the payment of fees by producers, handlers, and certifying
agents. We have, however, proposed regulations in this proposal which
we believe will minimize the economic impact of the NOP on producers,
handlers, and certifying agents.
Fees--Additional Provisions. Upon further review of the fee
provisions in the first proposal, we have decided to propose the
following additions.
(1) Certification Fees Charged by Certifying Agents. We have added,
at Sec. 205.642, regulations addressing general requirements to be met
by certifying agents in assessing fees and other charges for the
certification of producers and handlers as certified organic
operations. First, fees charged by a certifying agent must be
reasonable, and a certifying agent may charge applicants for
certification and certified production and handling operations only
those fees and charges that it has filed with the Administrator. This
is a general requirement for accreditation and is also found at
Sec. 205.501(a)(15) in subpart F on accreditation. This regulation does
not prohibit certifying agents from providing and charging for services
outside the NOP. Services that certifying agents might provide outside
the NOP include in-house publications, conferences, workshops,
informational meetings, and field days. Certifying agents cannot
require participation in such activities by certified operations or
applicants for certification as a condition of certification.
Second, the certifying agent may require applicants for
certification to pay at the time of application a nonrefundable fee of
no more than $250.00 which must be applied to the applicant's fees-for-
service account. We believe that this fee will help ensure that
certifying agents are compensated for certification services provided
to an applicant that is found to be not qualified to receive
certification as an organic production or handling operation.
(2) Fees Charged to Foreign Certifying Agents. We have removed the
provisions which required the payment of fees for import programs. We
have taken this action because this proposal includes foreign State
entities and foreign private entities which provide certification
services under the accreditation requirements of this part.
Accordingly, such entities are covered under the fees for accreditation
provisions of Sec. 205.640.
Compliance
This portion of subpart G sets forth the enforcement procedures for
the National Organic Program (NOP). These procedures describe the
compliance responsibilities of the Secretary, USDA, and Agricultural
Marketing Service (AMS) officials acting on behalf of the Secretary.
These procedures also describe responsibilities of State programs'
governing State officials (governing State officials) and State and
private certifying agents for compliance under the NOP. The NOP is the
AMS office that reviews applications and initiates approvals of
accreditation of new certifying agents, conducts oversight of
accredited certifying agents, and reviews and recommends continuation
of accreditation of certifying agents. These provisions also address
the rights of certified production and handling operations and
accredited certifying agents operating under the NOP. Approval or
denial of applications for certification and accreditation are
addressed under subparts E and F, respectively.
Proposal Description
The Secretary is required under the Act to review the operations of
State organic certification programs, accredited certifying agents, and
certified production or handling operations for compliance with the Act
and these regulations. The Program Manager of the NOP may carry out
oversight of compliance proceedings on behalf of the Secretary and the
Administrator. However, most reviews and analyses of certification
noncompliance will be conducted by the certifying agent which certified
the operation. With regard to certifying agents, the Program Manager
may initiate proceedings to suspend or revoke the accreditation of a
certifying agent for failure to conduct accreditation activities or
maintain accreditation requirements pursuant to subpart F of this
regulation.
In States with an approved State organic certification program, the
State program's governing State official is responsible for
administration of the State's compliance program for certified
operations. Governing State officials also may review and investigate
complaints of certifying agents operating in the State who may not be
in compliance with the accreditation requirements of the Act and these
regulations. They must notify the Program Manager of such noncompliance
activities and make information regarding the violation available to
the NOP for appropriate action.
The Program Manager may initiate proceedings to suspend or revoke a
certified operation's certification if a certifying agent or State
program's governing State official fails to take appropriate
enforcement action or if an operation is found to be erroneously
certified by a certifying agent whose accreditation has been suspended
or revoked.
The compliance provisions of the NOP are consistent with the
requirements of the Administrative Procedure Act (APA) (5 U.S.C. 553-
559) in that this program provides for due process including an
opportunity for hearing, appeal procedures, written notifications of
noncompliance, and opportunities to demonstrate or achieve compliance
before any suspension or revocation of organic certification or
accreditation is invoked. An exception to the initial due process steps
under the APA is provided in instances of willful violations. However,
willful violations may be appealed pursuant to
[[Page 13599]]
the Appeals procedure in this subpart. A compliance action regarding
certification carried out under an approved State program's compliance
procedures will have the same force and effect as a certification
compliance action carried out under these NOP compliance procedures.
The notification process for denying applications for certification and
applications for accreditation is laid out in subparts E and F
respectively.
Noncompliance Procedure for Certified Operations. The Act provides
for the enforcement of certified operations. Statutory oversight of
production and handling operations by certifying agents includes review
of organic plans, residue and tissue testing, authority to conduct
investigations, and responsibility to report violations. Applicants for
certification must meet certification requirements of the NOP, as
determined by certifying agents.
Notification of Noncompliance. As noted above, the Program Manager
or the governing State official may review and investigate a certified
operation based on complaints and may initiate noncompliance
proceedings established in this subpart. However, we expect that most
compliance procedures will begin with a certifying agent's inspection,
review, or investigation of such certified operation. Thus, this
noncompliance procedure is proposed based on that process.
A written notification of noncompliance will be sent to the
certified operation if a certifying agent's inspection, review, or
investigation reveals any noncompliance with the Act or these
regulations. Noncompliance may include, among other things, production
or handling practices or conditions, use of substances, or labeling
which are not in compliance with subparts C, Production and Handling,
or E, Certification, of this regulation. The results of a residue test
may trigger a noncompliance notification. A noncompliance notification
may encompass the entire operation or a portion of the operation. For
instance, a violation at one farm may not warrant loss of certification
at other farms of the certified operation not affected by the
violation.
A notification of noncompliance will provide: (1) A description of
each condition, action, or item of noncompliance; (2) the facts upon
which the notification is based; and (3) the date by which the
certified operation must rebut the notification or correct the
noncompliance. A certified operation may continue to sell its product
as organic upon receiving a notification of noncompliance and
throughout the noncompliance proceeding and any appeal procedure which
might follow the compliance proceeding.
All written notifications sent by certifying agents and governing
State officials, as well as rebuttals, requests for mediation, and
notices of correction of deficiencies sent by certified operations will
be sent to the addressee's place of business by a delivery service
which provides dated return receipts. This will help assure completed
communications and timely compliance procedures.
If a certified operation believes the notification of noncompliance
is incorrect or not well-founded, the operation may submit a rebuttal
to the certifying agent, providing supporting data to refute the facts
stated in the notification. Rebuttals are provided to allow certifying
agents and certified operations to informally resolve noncompliance
notices. Rebuttals should be helpful in resolving differences which may
be the result of misinterpretation of requirements, misunderstandings,
or incomplete information. Alternatively, the certified operation may
correct the identified deficiencies and submit proof of such
corrections. When the operation demonstrates that each noncompliance
has been corrected or otherwise resolved, the certifying agent will
send the certified operation a written notification of noncompliance
resolution.
Proposed Suspension or Revocation of Certification. If the
noncompliance is not resolved and is not in the process of being
resolved by the date specified in the notification, the certifying
agent will send the certified operation a written notification of
proposed suspension or revocation of certification for the entire
operation or a portion of the operation affected by the noncompliance.
The notification will state: (1) The reasons for the proposed
suspension or revocation; (2) the proposed effective date of the
suspension or revocation; (3) the impact of the suspension or
revocation on the certified operation's future eligibility for
certification; and (4) that the certified operation has a right to
request mediation or to file an appeal. The impact of a proposed
suspension or revocation may include the suspension period or whether
the suspension or revocation applies to the entire operation or to a
portion or portions of the operation. A governing State official may
not suspend or revoke certification of an entity's certified operations
in other States. Likewise, a certifying agent may not suspend or revoke
certification of an entity's operations which the certifying agent does
not certify.
If a certifying agent determines that correction of a noncompliance
is not possible, the notification of noncompliance and the proposed
suspension or revocation of certification may be combined in one
notification of proposed suspension or revocation. The certified
operation will have an opportunity to appeal that suspension or
revocation decision.
Mediation. A certified operation may request mediation of any
dispute regarding denial of certification or proposed suspension or
revocation of certification. Mediation is not required prior to filing
an appeal but is offered as an option which may resolve the
noncompliance more quickly than the next step, which is filing an
appeal. If a State program is in effect, the mediation procedures
established in the State program, as approved by the Secretary, must be
followed. Mediation will be requested in writing to the applicable
certifying agent. The dispute will be mediated by a qualified mediator
mutually agreed upon by the parties to the mediation. The parties to
the mediation will have no more than 30 days to reach an agreement
following a mediation session. If mediation is unsuccessful, the
certified operation will have 30 days from termination of mediation to
appeal the proposed suspension or revocation to the Administrator.
Any agreement reached during or as a result of the mediation
process must be in compliance with the Act and these regulations. Also,
the Secretary reserves the right to review any mediated settlement to
assure that the terms of the settlement conform with the requirements
of the Act and the NOP.
Suspension or Revocation. The certifying agent will suspend or
revoke the certified operation's certification when the operation fails
to resolve the issue through rebuttal or mediation, fails to complete
needed corrections, or does not file an appeal. The operation will be
notified of the suspension or revocation by written notification. The
certifying agent must not send a notification of suspension or
revocation to a certified operation that has requested mediation or
filed an appeal.
The decision to suspend or revoke certification will be based on
the seriousness of the noncompliance and on whether the noncompliance
is a willful action by the certified operation. Such decisions must be
made on a case-by-case basis. Section 6519 of the Act establishes that
willful violations include making a false statement, knowingly affixing
a false label, or
[[Page 13600]]
otherwise violating the purposes of the Act. Certifying agents are
responsible for investigating whether a violation is a willful act and
advising the Program Manager or governing State official of the results
of such investigation. However, only the Program Manager or governing
State official may make the final determination that a violation is
willful.
If a suspected willful noncompliance is not a serious violation, a
proposed suspension rather than revocation may be issued. Revocation is
reserved for serious instances of willful noncompliance and other
serious violations.
The certifying agent may determine that a lesser penalty of
suspension is warranted by the noncompliance. A proposal to suspend
certification may be issued for violations that are inadvertent or
cannot be proven to be willful. A suspension may be applicable only to
one area of operation or one field or farm unit where the noncompliance
occurred.
A certified operation that has had its certification revoked will
not be eligible to receive certification for an operation in which such
operation or person has an interest for 5 years following the date of
revocation. If an individual is the owner of a certified operation or
is the principal officer or director of operations who is fully
responsible for complying with certification requirements of this part,
a suspension or revocation could be issued in the individual's name.
The effect would be that another operation would be ineligible for
organic certification if that individual is listed as a principal in
the operation. The Secretary may waive an ineligibility period when it
is in the best interests of the certification program.
Noncompliance Procedure for Certifying Agents. The Program Manager,
on behalf of the Secretary, may initiate a compliance action against an
accredited certifying agent who fails to carry out responsibilities
entrusted to the certifying agent or maintain resources sufficient to
meet accreditation requirements in subpart F. Compliance proceedings
may be initiated as a result of annual reviews for continuation of
accreditation, as a result of site visits, or as a result of
investigations initiated in response to complaints of noncompliant
activities. Compliance proceedings also may be initiated on
recommendation of a governing State official.
A written notification of noncompliance will be sent by the Program
Manager to an accredited certifying agent when an inspection, review,
or investigation of such person reveals any noncompliance with the Act
or these regulations. A notification of noncompliance will provide a
description of each noncompliance found and the facts upon which the
notification is based. Additionally, the notification will provide the
date by which the certifying agent must rebut the noncompliance notice
or correct each noncompliance described.
When documentation received by the Program Manager demonstrates
that each noncompliance has been resolved, the Program Manager will
send the certifying agent a written notification of noncompliance
resolution.
If a noncompliance is not resolved by rebuttal or correction of
violations, the Program Manager will issue a proposed suspension or
revocation of accreditation. The notification will state whether the
certifying agent's entire business, field office, or offices in a
geographic area or in a specified technical field of accreditation are
to be suspended or revoked. For instance, if a private certifying agent
with field offices in different geographic areas is cited for a
compliance violation in one area, the Program Manager could determine
that only the accreditation of the noncompliant operation should be
suspended or revoked.
If the Program Manager determines that the noncompliance cannot be
immediately or easily corrected, the Program Manager may combine the
notification of noncompliance and the proposed suspension or revocation
in one notification. The notification of proposed suspension or
revocation of accreditation will state the reasons and effective date
for the proposed suspension or revocation. Such notification will also
state the impact of a suspension or revocation on future eligibility
for accreditation and the certifying agent's right to file an appeal.
If the Program Manager has reason to believe that a certifying
agent has willfully violated the Act or regulations, the Program
Manager may issue a notification of proposed revocation of
accreditation. The proposed revocation may be for the certifying
agent's entire accreditation business, a particular field office, or a
specified technical area of accreditation. This notification, because
it involves a willful violation, will be sent without first issuing a
notification of noncompliance.
The certifying agent may file an appeal of the Program Manager's
determination, pursuant to Sec. 205.681. If the certifying agent fails
to file an appeal of the proposed suspension or revocation, the Program
Manager will suspend or revoke the certifying agent's accreditation.
The certifying agent will be notified of the suspension or revocation
by written notification.
A certifying agent whose accreditation is suspended or revoked must
cease all certification activities in each area of accreditation and in
each State for which its accreditation is suspended or revoked. Any
certifying agent whose accreditation has been suspended or revoked must
transfer to the Secretary all records concerning its certification
activities that were suspended or revoked. The certifying agent must
also make such records available to any applicable governing State
official. The records will be used to determine whether operations
certified by the certifying agent may retain their organic
certification.
A certifying agent whose accreditation is suspended by the
Secretary may at any time submit a new request for accreditation. Such
request must be accompanied by evidence demonstrating correction of
each noncompliance and actions taken to comply with and remain in
compliance with the Act and regulations. A certifying agent whose
accreditation is revoked by the Secretary will be ineligible to be
accredited as a certifying agent under the Act and regulations for a
period of not less than 3 years following the date of revocation.
State Programs' Compliance Procedures. A State program's governing
State official may initiate noncompliance proceedings of certified
organic operations operating in the State. Such proceedings may be
initiated for failure of a certified operation to meet the production
or handling requirements of this part or the State's more restrictive
requirements, as approved by the Secretary. The governing State
official must attempt to resolve the compliance violations through
State mediation and reviews of corrections to operations.
The governing State official must promptly notify the Program
Manager of commencement of enforcement proceedings initiated against
certified operations. An enforcement proceeding, brought by a governing
State official against a certified operation may be appealed in
accordance with the appeal procedures of the State organic
certification program. There will be no subsequent rights of appeal to
the Secretary.
Compliance--Changes Based On Comments
This portion of subpart G differs from our first proposal in
several respects as follows:
(1) Authority of certifying agents. We have provided accredited
certifying
[[Page 13601]]
agents with authority to initiate noncompliance proceedings which may
result in suspension or revocation of producer and handler
certifications. A certifying agent's notification of proposed
suspension or revocation of certification provides an opportunity for
the certified operation to file an appeal in accordance with the appeal
provisions of Sec. 205.681. If a noncompliance procedure initiated by a
certifying agent is not corrected, remains unresolved, and is not
appealed, the certified operation's certification will be suspended or
revoked. If the certified operation files an appeal, the action is
turned over to the Program Manager or applicable governing State
official for further resolution. The suspension or revocation will not
become effective unless upheld by a ruling on the appeal.
Commenters expressed opposition to the notification of
noncompliance with certification requirements and termination of
certification provisions of the first proposal. Those provisions
required a certifying agent to submit to the Administrator a notice of
its recommendation to terminate the certification of a certified
operation or any portion of a certified operation if the certifying
agent had reason to believe the operation had ceased to comply with the
Act and regulations. The commenters were opposed to the Secretary
assuming authority for suspension or revocation of certification. The
commenters stated that such decisions are the duty and responsibility
of certifying agents, with the Secretary providing for appeals. Some
commenters expressed the belief that the certifying agent's position is
undermined by not having authority to suspend or revoke a certification
for cause. Many commenters stated that certifying agents must have such
authority in order to: (1) Achieve producer and handler compliance with
the regulations; and (2) expedite the enforcement process. They believe
that providing certifying agents with the authority to suspend or
revoke a certification will preserve the NOP's integrity and increase
consumer confidence in the quality of the organic products they
purchase. Commenters stressed that, in addition to providing procedures
for producer and handler appeals, the Department provides a system of
checks and balances through the accreditation program.
We agree that certifying agents should have an important role to
play in the suspension or revocation of the certification of production
or handling operation that they certify. This proposal will enhance the
certifying agent's authority to ensure that any production or handling
operation it certifies is in compliance with the Act and regulations.
We also agree that providing certifying agents with a more direct role
in suspension or revocation proceedings will shorten the compliance
process.
Accordingly, as noted above, we have provided accredited certifying
agents with increased authorities in enforcement proceedings. They will
make determinations to accept or reject rebuttals submitted in response
to notifications of noncompliance. They will be responsible for
defending their determinations, which must be consistent with the
position of the NOP, in mediation processes. Finally, their decisions
to propose suspension or revocation of producer and handler
certifications will become effective unless appealed by the certified
operation. Authority for certifying agents to take enforcement actions
against certified operations is found in Sec. 205.662.
(2) Mediation. We have added a new section authorizing certified
operations to request mediation of any dispute regarding denial of
certification or proposed suspension or revocation of certification.
This section addresses the request for mediation, selection of the
mediator, the time period for reaching an agreement, requirements of an
agreement, and appealing a noncompliance decision if mediation is
unsuccessful. The parties in the procedure must make administrative
arrangements for the mediation and arrange for payment of any costs
involved in the mediation. The Department will not finance or
participate in such mediation. This additional provision is found at
Sec. 205.663.
Commenters requested that the Department authorize the use of
alternative dispute resolution procedures and mediation. We support the
idea of using mediation to resolve disputes with respect to denial of
certification or proposed suspension or revocation of certification.
Some States use mediation as a component of their appeal process. We
believe mediation could prove effective in resolving many of the
possible disputes between applicants for certification or certified
operations and certifying agents. Without mediation, such disputes
would probably be referred to the Administrator in the form of appeals.
Mediation in some cases, however, may be of limited value because all
agreements reached during mediation or as a result of the mediation
process must be in compliance with the Act, these regulations, and any
policies or procedures governing the NOP. While we presume a mediated
settlement will be in accordance with the Act, the Secretary has
authority to review and overrule a mediated settlement if the Secretary
determines the settlement is not in accordance with Act and these
regulations.
(3) State certification program. Commenters generally requested
that States administer and enforce their own organic certification
programs. We have added regulations in these provisions addressing
States' enforcement of their programs regarding certified producers and
handlers operating in the State. These regulations clarify a State's
responsibility to provide for enforcement and appeal proceedings which
are consistent with these regulations and for keeping the Secretary
informed of such proceedings. We have added these regulations because
we believe that a State must have the authority to initiate compliance
actions to enforce its organic certification program. The regulations
are found at Sec. 205.668.
Regarding accreditation authorities, commenters stated that a State
program's governing State official should have authority to suspend or
revoke the accreditation of private certifying agents operating within
the State. Sections 6515(j) and 6519(e) of the Act address suspension
and revocation of accreditation by the Secretary or governing State
official. While the Act may provide for the possibility of such
authority being used by governing State officials, it also requires the
Secretary to establish a workable accreditation program and it grants
sole authority to the Secretary to accredit certifying agents.
Therefore, the Secretary must have sole authority to suspend or revoke
that accreditation.
This does not mean that governing State officials are denied a role
in oversight of certifying agents operating in their States. If a
governing State official believes a certifying agent operating in the
State is not in compliance with the accreditation requirements of the
Act or is not properly certifying producers or handlers to NOP and the
State's approved unique organic certification requirements, the
governing State official must investigate the possible noncompliance.
If evidence of noncompliance is found, the governing State official
must notify the Program Manager of such noncompliance activities and
document those activities. The Program Manager will investigate such
complaints of noncompliance.
[[Page 13602]]
(4) Right of appeal. We have added the requirement that any
notification of proposed suspension or revocation must include a notice
to the certified operation's or certifying agent's of its right to file
an appeal. Commenters requested that the notification of proposed
suspension or revocation provisions for certifying agents reference the
appeals section. We agree with the commenters' request and add that all
recipients of a notification of proposed suspension or revocation
should be made aware of their appeal rights. Notification of appeal
rights is found in Sec. 205.662 for certified operations and
Sec. 205.665 for certifying agents.
Compliance--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Revocation period. Commenters stated that a 5-year period of
ineligibility for certification after revocation of certification is
too harsh a punishment to apply in all cases. Some commenters suggested
that ``shall not be eligible'' should be replaced with ``may be deemed
ineligible'' so that the penalty provision would be available for
flagrant violations of the Act but would not have to be applied to all
violations. A commenter suggested a maximum period of ineligibility of
3 years be established for certified operations. The commenter's
justification was that organically produced agricultural products must
be produced on land to which no prohibited substances have been applied
for 3 years prior to harvest. This commenter also stated that the
ineligibility waiver should be a local decision with notice to the
Administrator.
Section 6519(c) of the Act requires certification ineligibility for
5 years unless reduced or eliminated by the Secretary. Revocation of a
certification is a serious action subject to due process for the
accused certified producer or handler. We believe that any
noncompliance action, combination of noncompliance actions, or history
of noncompliance activities deemed to warrant the revocation of
certification also warrants ineligibility from certification for 5
years unless reduced or eliminated by the Secretary. If the
noncompliance is not significant enough to warrant revocation of the
operation's certification, the certifying agent, State program's
governing State official, or Secretary may choose to suspend the
operation's certification for a period of time less than the 5-year
revocation period. We disagree with the suggestion that ineligibility
waivers should be decided at the local level. Actions which are
finalized by the governing State official, Administrator, or Secretary
cannot be subject to reversal or waivers by certifying agents.
Additionally, a national program such as this must have uniformity in
application, which would be less likely if individual certifying agents
were permitted to establish their own criteria for ineligibility
waivers. Accordingly, the ineligibility and waiver provisions are
unchanged in this proposal.
(2) Accreditation sanctions. Commenters stated that suspension and
revocation of accreditation should be applied fairly to both private
and State certifying agents. Governing State officials do not have any
accreditation authorities under this proposal--which may reduce private
certifying agents' concerns of unfair or unequal treatment.
Accreditation compliance actions by the Program Manager and the
Administrator will be conducted impartially and in accordance with the
Administrative Procedure Act and Department policies.
Revocation would be based on a determination that a private
certifying agent willfully violated the Act or these regulations or
falsely or negligently certified a production or handling operation as
an organic operation. The Act does not authorize the revocation of a
State certifying agent's accreditation. However, because suspension of
such entity can be established for any period of time, a suspension can
be effectively equivalent to a revocation of accreditation.
Accordingly, this proposal retains the provisions for the suspension of
accreditation for private and State certifying agents and the
revocation of accreditation for private certifying agents.
Compliance--Additional Provisions
Upon further review of the accreditation provisions in the first
proposal, we have decided to propose the following additions and
changes.
(1) Enforcement rights of the Secretary. We have added a general
section addressing specific enforcement rights of the Secretary. First,
this section clarifies that the Program Manager on behalf of the
Secretary and the Administrator may inspect and review State organic
certification programs, accredited certifying agents, and certified
production or handling operations for compliance with the Act or
regulations. The Program Manager has this oversight authority in States
with State organic certification programs as well as in States without
such programs.
Second, this section provides that the Program Manager may initiate
proceedings to suspend or revoke a certified operation's certification
when a certifying agent or governing State official fails to take
appropriate enforcement action against a certified operation that is
not in compliance with the Act or these regulations. We have added this
provision because this proposal provides certifying agents and
governing State officials with enforcement authorities, including the
suspension and revocation of certifications. However, we believe the
Secretary, through the Program Manager, must have authority to take
such actions if a certifying agent or governing State official fails to
carry out its responsibilities.
Third, this section provides that the Program Manager may initiate
proceedings to suspend or revoke a certified operation's certification
upon suspension or revocation of the operation's certifying agent's
accreditation. We have added this provision to enable the Program
Manager to suspend or revoke certification of any operation that a
certifying agent certified following procedures or practices that are
not in compliance with the Act or these regulations. This addition is
found at Sec. 205.660.
(2) Certifying agent investigations. We have added a section to
clarify that certifying agents may investigate complaints of
noncompliance with the Act or regulations concerning operations that
they have certified. This section does not authorize a certifying agent
to investigate certified operations that the certifying agent has not
certified. Such complaints should be reported to the certifying agent
that certifies the operation in question. This addition is found at
Sec. 205.661.
(3) Certified operation rebuttals. We have added a certified
operation's right to rebut any noncompliance described in a notice of
noncompliance. We believe this provision is necessary to clarify that
certified operations should be able to present facts or arguments
refuting the certifying agent's findings. We see this as an informal
process between the certified operation and the certifying agent to
clarify possible misunderstandings or misinterpretation of
requirements, data, or information. The APA requires such opportunities
prior to suspension or revocation. Certified operations that
successfully refute a finding of noncompliance will receive a
notification of noncompliance resolution. Any certified operation
unable to successfully refute a finding of noncompliance must correct
the
[[Page 13603]]
noncompliance or face possible suspension or revocation of its
certification. This addition is found at Sec. 205.662(a)(3).
(4) Certifying agent rebuttals. We also have added a certifying
agent's right to rebut any accreditation noncompliance described in a
notice of noncompliance issued by the Program Manager. This also will
be an informal process and is consistent with the intent of the APA. We
believe this provision is necessary to clarify that certifying agents
should be able to present facts or arguments refuting the Program
Manager's findings. Certifying agents that successfully refute a
finding of noncompliance will receive a notification of noncompliance
resolution. Any certifying agent unable to successfully refute a
finding of noncompliance must correct the noncompliance or face
possible suspension or revocation of its accreditation. This addition
is found at Sec. 205.665(a)(3).
(5) Willful noncompliance. We have also added authority for
certifying agents and governing State officials to move directly to a
notice of proposed revocation if a certification noncompliance is a
willful, serious violation of these regulations. This will allow
expedited action in dealing with serious violations of certification.
The due process provisions of the APA provide an exception in cases of
willful violations. Even though a noncompliance may be a willful act,
the certified operation maintains the right to file an appeal of a
proposed suspension or revocation of certification. Revocation of
certification is reserved for serious instances of willful
noncompliance and other serious violations. If a suspected willful
violation is deemed not serious, a proposed suspension of certification
rather than revocation may be issued.
Inspection and Testing, Reporting, and Exclusion From Sale
This portion of subpart G sets forth the inspection and testing
requirements for agricultural products that have been produced on
organic production operations or handled through organic handling
operations.
Based on comments received regarding the first proposal, we have
modified and restructured our residue testing requirements. Commenters
were concerned about the cost of residue testing to certified
operations and certifying agents, the determination of detectable
levels of prohibited substances, and the exclusion of contaminated
products from sale as organically produced.
Residue testing plays an important role in organic certification by
providing a means for monitoring compliance with the National Organic
Program (NOP) and by discouraging the mislabeling of agricultural
products. This testing program provides State programs' governing State
officials and certifying agents with a tool for ensuring compliance
with three areas for testing: (1) Preharvest residue testing, (2)
postharvest residue testing, and (3) testing for unavoidable residual
environmental contamination levels.
Proposal Description
Under the residue testing requirements of the NOP, we propose that
all agricultural products sold, labeled, or represented as organically
produced be available for inspection by the Administrator, State
program's governing State official, or certifying agent. Organic farms
and handling operations must be made available for inspection under
proposed Subpart E, Certification. In addition, products from the
aforementioned organic operations may be required by the State
program's governing State official or certifying agent to undergo
preharvest or postharvest testing when there is reason to believe that
agricultural products to be sold or labeled as organically produced
have come into contact with prohibited substances. The cost of such
testing will be borne by the applicable certifying party and is
considered a cost of doing business. Accordingly, certifying agents
should make provisions for the cost of preharvest or postharvest
residue testing when structuring certification fees.
Preharvest and Postharvest Residue Testing. The main objectives of
the residue testing program are to: (1) Ensure that certified organic
production and handling operations are in compliance with the
requirements set forth in this proposal; and (2) serve as a means for
monitoring drift and unavoidable residue contamination of agricultural
products to be sold or labeled as organically produced. Any detectable
residues of a prohibited substance found in or on samples during
chemical analysis will serve as a warning indicator to the State
program's governing State official or certifying agent.
The request for preharvest or postharvest residue testing is based
on the Administrator's, State program's governing State official's, or
certifying agent's belief that an agricultural product has come into
contact with one or more prohibited substances. The ``reason to
believe'' could be triggered by various situations, for example: (1)
The applicable authority receiving formal written complaint regarding
the practices of a certified organic operation; (2) an open container
of a prohibited substance found on the premises of a certified organic
operation; (3) the proximity of a certified organic operation to a
potential source of drift; (4) suspected soil contamination by
historically persistent substances; or (5) when the product from a
certified organic operation is unaffected when neighboring fields or
crops are infested with pests. These situations do not represent all of
the possible occurrences that would trigger an investigation.
Preharvest or postharvest residue testing will occur on a case-by-case
basis.
In each case, an inspector representing the Administrator,
certifying agent, or State program's governing State official will
conduct sampling. Testing for chemical residues must be performed in an
accredited laboratory, defined as a laboratory that has met and
continues to meet the requirements specified in the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 138) (FACT Act) for
pesticide residue analyses of fresh fruit and vegetables and/or
pesticide analysis of products derived from livestock and fowl. AMS is
currently developing a regulation for the National Laboratory
Accreditation Program (NLAP), which will accredit laboratories under
the FACT Act. We expect that the NLAP will be implemented before or at
the same time as the NOP. When conducting chemical analyses, the
laboratory must incorporate the analytical methods described in the
16th edition of the Official Methods of Analysis of the AOAC
International or other applicable validated methodology for determining
the presence of contaminants in agricultural products.
When testing indicates that an agricultural product to be sold or
labeled as organically produced contains residues of prohibited
substances, certifying agents will compare the level of detected
residues with a national mean of detection for the specific commodity/
pesticide combination generated by the U.S. Department of Agriculture's
(USDA) Pesticide Data Program (PDP). This national mean is defined as
the mean level of detected pesticide residues as described in certain
pesticide/commodity pairs or combinations established by USDA's
Pesticide Data Program. The national mean for specific commodity/
pesticide combinations will serve as a standard for the Administrator,
State programs' governing State officials, and certifying
[[Page 13604]]
agents to assist in monitoring for illegal use violations. This
information will be made available by USDA to aid State programs'
governing State officials and certifying agents in making sound
evaluations and decisions regarding detected levels of prohibited
substances.
In addition, levels of unavoidable residual environmental
contamination will be determined for crop-and site-specific
agricultural commodities to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).'' These levels will represent limits at which the
Department may take compliance action to suspend the use of the
contaminated area for organic agricultural production. Initially,
unavoidable residual environmental contamination levels will be set for
persistent prohibited substances (aldrin, dieldrin, chlordane, DDE,
etc.) in the environment. In time, they may become more inclusive of
prohibited residues as additional information becomes available.
Unavoidable residual environmental contamination levels will be based
on the unavoidability of the chemical substances and do not represent
permissible levels of contamination where it is avoidable. Historical
residue data gathered from Federal and State monitoring and testing
programs will be used to determine these levels. They will be set by
the Administrator, in consultation with the Food and Drug
Administration (FDA) and Environmental Protection Agency (EPA).
After all tests and analyses have been concluded, the results must
be provided to the Administrator. The results of analyses and tests
will be available, kept on record, and reviewed by the Department to
evaluate concentration levels of prohibited substances for specific
regions and agricultural crops. Analyses and test results will also be
available for public access, unless the residue testing is part of an
ongoing compliance investigation. Information relative to an ongoing
compliance investigation will be confidential and restricted to the
public.
Detection of Prohibited Substances. In the case of residue testing
and the detection of prohibited substances in or on agricultural
products to be sold, labeled, or represented ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients),''
detectable residues of prohibited substances that exceed the national
mean of detection for the respective commodity/pesticide combination or
unavoidable residual contamination levels cannot be sold or labeled as
organically produced. When such an agricultural crop is in violation of
these requirements, the certification of that crop will be suspended
for the period that the crop is in production. Certifying agents must
follow the requirements specified in Secs. 205.662 and 205.663 of
Subpart G, Compliance. In addition, when a State program's governing
State official or a certifying agent detects a prohibited substance in
or on agricultural products to be sold or labeled as organically
produced, the State program's governing State official or certifying
agent may conduct an investigation to determine the cause of the
prohibited substance.
If the investigation into the cause of a detectable residue level
in a product indicates that the residue was the result of an
intentional application of a prohibited substance, the Administrator is
authorized to initiate proceedings to revoke or suspend the
certification status of an operation or portion of that operation. When
testing indicates that an agricultural product contains prohibited
substances that exceed either the EPA tolerance level or FDA action
level, as applicable, for the prohibited substance, the data revealing
such information will be promptly reported to the appropriate
regulatory health agencies.
Emergency Pest Eradication or Disease Treatment Programs. When a
prohibited substance is applied to an organic production or handling
operation due to a Federal or State emergency pest eradication or
disease treatment program and the organic handling or production
operation otherwise meets the requirements of this proposal, the
certification status of the operation shall not be affected as a result
of the application of the prohibited substance, provided that: (1) Any
harvested crop or plant part to be harvested that has contact with a
prohibited substance applied as the result of a Federal or State
emergency pest eradication or disease treatment program cannot be sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients)'; and (2) any livestock
that are treated with a prohibited substance applied as the result of a
Federal or State emergency pest or disease treatment program or product
derived from such treated livestock cannot be sold, labeled, or
represented as ``100 percent organic,'' ``organic,'' or ``made with
organic (specified ingredients).''
However, milk or milk products may be labeled or sold as
organically produced beginning 12 months following the last date that
the dairy animal was treated with the prohibited substance.
Additionally, the offspring of gestating mammalian breeder stock
treated with a prohibited substance may be considered organic if the
breeder stock was not in the last third of gestation on the date that
the breeder stock was treated with the prohibited substance.
Residue Testing--Changes Based on Comments
This portion of subpart G differs from our first proposal in
several respects as follows:
Residue Testing. (1) We have revised the first proposal's section
on residue testing and repositioned it under Sec. 205.670(b).
Commenters disagreed with the provisions in the first proposal
which required certifying agents to conduct residue testing of products
produced and handled on operations that they had certified not less
frequently than every 5 years. They stated that the first proposal's
requirements for residue testing: (1) Were in excess of what the Act
actually requires; (2) were more stringent than that of the industry
norm; (3) would create an unnecessary burden on certifying agents and
organic production and handling operations; and (4) would increase
costs for certified production and handling operations. The commenters
stated that the NOP's residue testing requirements should utilize
existing Federal and State testing programs for the detection of
pesticide residues. They also stated that residue testing should only
be required when it is known or suspected that prohibited substances
have been applied to organic products.
We disagree with the commenters' assertions regarding the first
proposal's requirements for residue testing. However, in an attempt to
minimize the burdens of residue testing, we have proposed that State
programs' governing State officials and certifying agents may test
agricultural inputs used for organic production and require preharvest
or postharvest testing of any agricultural product to be sold, labeled,
or represented as ``100 percent organic,'' ``organic,'' or ``made with
organic (specified ingredients)'' when there is reason to believe that
the agricultural product has come into contact with prohibited
substances. This change allows State programs' governing State
officials and certifying agents to perform preharvest and postharvest
residue testing on a case-by-case basis.
Commenters requested that the rule specify which laboratories are
authorized to perform residue testing and what tests each laboratory
would be accredited to perform. We have defined
[[Page 13605]]
an accredited laboratory as a laboratory that has met and continues to
meet the requirements specified in the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 138) for pesticide residue analyses of
fresh fruit and vegetables and/or pesticide residue analysis of
products derived from livestock and fowl. Any laboratory that meets the
specified requirements therein may be used in conducting residue tests.
We have required that accredited laboratories be used to ensure
consistency among data, testing methodology, reporting procedures, and
other testing criteria needed to maintain analytical uniformity in the
residue testing program. Validated analytical methodologies for
determining the presence of contaminants in agricultural products, such
as those described in the 16th edition of the Official Methods of
Analysis of the AOAC International, may be used.
Tolerance Levels for Pesticide Residues. (2) We have prohibited the
sale and labeling of agricultural products as organic when such
products have been tested for prohibited substances and found to
contain residues of prohibited substances at levels greater than the
national mean of detection for the specific commodity/pesticide
combination or levels greater than the unavoidable residual
environmental contamination. Such agricultural products cannot be sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients).'' The Administrator, State
program's governing State official, or certifying agent may conduct an
investigation of the applicable production or handling operation to
determine the cause of the presence of any prohibited substance. If the
investigation reveals that the presence of a prohibited substance was
the result of intentional application of the prohibited substance, the
Administrator may initiate proceedings to suspend or revoke the
production or handling operation's certification.
(3) Commenters suggested that USDA adopt a uniform standard for the
maximum allowable residue levels. Some commenters expressed the belief
that it is impractical or too expensive to establish site-specific,
unavoidable residual environmental contamination levels for every
commodity/pesticide combination in every growing area. Others argued
that the cause of contamination is irrelevant and that crops that
exceed the maximum residue levels should not be allowed to be sold as
organic. Finally, others argued that a single standard was needed
because contaminated products would not be removed from the market
immediately, pending determination of cause.
Organic standards, including provisions governing prohibited
substances, are based on the method of production, not the content. The
primary purpose of the residue testing approaches described in this
proposal, then, is to provide an additional tool for State programs'
governing State officials and certifying agents to use in monitoring
and ensuring compliance with the NOP. We acknowledge that consumers
have a reasonable expectation that organic products will contain
minimal residues of prohibited substances. We are not allowing the use
of prohibited substances. We are making provisions for the unavoidable
occurrences of prohibited substances while ensuring that residue levels
are consistent with consumer expectations.
This proposal adopts PDP's national means of detected residue for
specific commodity/pesticide combinations and the unavoidable residual
environmental contamination levels. Both standards have been adopted
for the purpose of determining excessive prohibited substances on
agricultural products to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).''
The national mean of detected residue for a specific commodity/
pesticide combination is derived from detections in the PDP monitoring
program. As a result of mean values being based on conventional
substances, we believe that residue values that fall above this mean,
then, would be beyond reasonable consumer expectations for minimal
residues. The situation is very similar with respect to unavoidable
residual environmental contamination levels. Even though the presence
of residues of certain persistent substances may not be the result of
intentional application, we believe that excessive residue levels would
not be consistent with the intentions of the Act. Accordingly, when
levels of a persistent substance are detected above the unavoidable
residual environmental contamination level, the product cannot be sold
or labeled as organically produced.
Some commenters suggested that we use a percentage of the EPA
tolerance of FDA action level, such as 5 or 10 percent, as a uniform
standard for the maximum allowable residue level. We considered the
comments but decided not to adopt them for the following reasons. The
EPA tolerances for pesticides are defined as the maximum legal level of
a pesticide residue in or on a raw or processed agricultural commodity,
as set by the Environmental Protection Agency under the Federal Food
Drug and Cosmetic Act, section 408. FDA action levels represent limits,
at or above which FDA will take legal action against a food product to
prevent poisonous or deleterious substances from entering the food
supply. Both EPA tolerances and FDA action levels are public health-
based standards. Our rationale for residue testing, as a tool for State
programs' governing State officials and certifying agents to monitor
compliance with the NOP, is different from these public health
programs.
Accepting a percentage of EPA tolerance or FDA action levels could
also pose a significant problem for analytical laboratories trying to
analyze for prohibited substances. In some cases, pesticides have
tolerances that are set near their analytical method's Limit of
Quantification (LOQ). The LOQ is defined as the lowest level where
analytical measurement becomes quantitatively meaningful. If the EPA
tolerances are near the analytical method LOQ's, accurate determination
of the levels at 5 to 10 percent of the tolerance may not be attainable
for analytical instrumentation currently employed. Therefore, the
Department could be setting a level of concern below the LOQ for some
substances if it adopted this recommendation. As a fundamental
principle, we have chosen not to set an enforcement level that could be
below detection limits for some substances. As an alternative, we are
proposing to use the PDP national mean of detected residues for
specific commodity/pesticide combinations.
Other commenters suggested that USDA adopt a ``zero tolerance'' for
residues of prohibited substances. Under this suggestion, products
containing any detectable residues of a prohibited substance would not
be allowed to be labeled as organically produced. This proposal does
not adopt this suggestion. While standards strictly prohibit use of any
substance not found on the approved National List, we recognize that
some minimal residues may still be found in organic foods. We believe
our proposed residue testing system and compliance provisions should be
adequate to protect the integrity of agricultural products sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients).''
Several commenters expressed opposition to the first proposal not
requiring residue testing in the event of drift. These commenters
stated that organic producers should report all incidences of drift to
their certifying agent. The commenters further stated that a crop
should be tested for the
[[Page 13606]]
presence of prohibited substances when drift has or is suspected to
have occurred. They also stated that when the test indicates levels of
residues of prohibited substances that exceed 5 percent of the EPA
tolerance level, the crop should be prohibited from being sold or
labeled as organically produced.
In response to commenters' concern about contamination from drift,
we have used some of their reasoning in the development of our residue
testing program. Drift is defined as the physical movement of
prohibited substances from the intended target site onto an organic
production operation or any portion thereof. The National Organic
Standards Board (NOSB or Board) recommended that agricultural products
exposed to drift not be sold, labeled, or represented as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' or fed to livestock on organic operations. The NOSB also
recommended that preharvest tissue testing of crops suspected of
receiving drift be required to verify the presence or absence of
prohibited substances. This proposal addresses the problem of drift
through the use of preharvest testing of crops suspected of receiving
drift of a prohibited substance. Although drift may occur, especially
in those agricultural regions where pesticide use on nonorganic lands
is routine and heavy, exposure to drift does not constitute use of a
prohibited substance. Therefore, preharvest testing provisions have
been established for State programs' governing State officials and
certifying agents to test when there is a reason to believe that
agricultural products intended to be sold or labeled as organically
produced have come into contact with prohibited substances. This will
allow a State program's governing State official or certifying agent to
determine whether the integrity of the product has been affected. We
believe our proposed residue testing program and compliance provisions
should be adequate to protect the integrity of agricultural products.
Residue Testing--Changes Requested but Not Made
(1) The original proposal provided that land subject to a Federal
or State emergency disease or pest treatment program should not lose
its organic certification and should not be required to be withheld
from organic production for a period of 3 years. A few commenters
stated that a field treated under such emergency situations should lose
its certification and should be restricted for organic use for 3 years
following the emergency treatment. The commenters stated this is
necessary to maintain consumer confidence in organically produced
products. We believe the first proposal is consistent with the
requirements of the Act. The proposal provided that crops and livestock
that had contact or been treated with a prohibited substance under such
an official emergency treatment program could not be sold or labeled as
organic. This proposal retains that prohibition.
Commenters suggested that producers work with the Federal or State
agency which requires an emergency treatment program and arrange for
use of materials that are compatible with organic production. While
this may be possible under certain emergency treatment situations, it
cannot be relied on as a solution to every emergency treatment
situation. Appropriate alternative treatments may not be available, or
the jurisdiction requiring the emergency program may not grant
alternative treatments. Commenters also suggested that producers avoid
planting crops that might be subject to pests or diseases targeted by
emergency treatment programs to avoid emergency treatments. We do not
believe that is a reasonable solution for producers. Emergency
treatment programs are used in response to unforeseen infestations and
diseases. Only hindsight would help organic producers determine which
crops to produce. Further, the possibilities of damaging insect
infestations or plant or animal diseases warranting an emergency
treatment program are so numerous that an organic producer could be
left with few or no alternative crops or livestock to produce. Cultural
conditions and market factors also would limit selection of alternative
organic production. Accordingly, the commenters' recommendation that
loss of organic certification and an automatic 3-year prohibition on
organic production from land or livestock treated under an official
emergency treatment program is not accepted.
Residue Testing. (2) Commenters suggested that some of the
responsibility of residue testing be removed from certifying agent
responsibilities. They also suggested that residue testing requirements
take into account current Federal and State testing requirements
already in place for the detection of pesticide residues.
We have not adopted language that the Department would use current
Federal and State testing requirements for the detection of pesticide
residues in the residue testing program. Although State and Federal
testing provide good sources of data on pesticide residues, the data
may reflect criteria developed for different sampling purposes, showing
wide variations in sample selection and indicating different laboratory
capabilities and different levels of quantification between and within
laboratories.
Residue Testing--Additional Provisions
Section 205.670(a) has been added. It provides that the
Administrator, the State program's governing State official, and the
applicable certifying agent have access, for inspection purposes, to
all agricultural products being sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).'' In addition, the organic products must be made
available for examination by said authorities in the manner that they
prescribe.
Public comments did not suggest this action. However, we believe it
is necessary to officially grant the Administrator, the State program's
governing State official, and the applicable certifying agent the
authority to access all agricultural products subject to inspection
under this section. This authority will help resolve conflicts that may
arise regarding product accessibility during inspection and testing.
Adverse Action Appeal Process. This portion of subpart G sets forth
the general framework for an appeal process for persons subject to
compliance determinations under the National Organic Program (NOP). In
this proposal, we are empowering certifying agents with the authority
to make decisions concerning denial of certification and the suspension
or revocation of certified operations. This empowerment of certifying
agents makes the appeal process very important.
We envision two kinds of appeals will be filed under these
procedures: (1) Producers and handlers appealing denial of
certification and proposed suspension and revocation of certification
decisions by certifying agents; and (2) certifying agents appealing
denial of accreditation and proposed suspension and revocation
decisions by the NOP Program Manager. The Administrative Procedure Act
(APA) (5 U.S.C. 553-559) provides that entities such as certified
operations and accredited certifying agents have the right to appeal
any adverse actions taken against their certification or accreditation,
respectively. Applicants for certification and applicants for
accreditation who receive a denial of certification or accreditation
may appeal that denial following this appeal
[[Page 13607]]
procedure. The appeal process is the same for applicants as for
certified operations and accredited certifying agents.
The informal appeal process described in this section is an
extension of the noncompliance proceeding outlined in the Compliance
section of this subpart.
For certification proceedings, the NOP and the Administrator will
oversee compliance proceedings and handle certification appeals from
operations in States that do not have an approved State organic
certification program. The Administrator will issue decisions to
sustain or deny appeals. If an appeal is denied, the Secretary will
initiate a formal administrative review process, which includes a
hearing before an administrative law judge and review by the
Department's Judicial Officer. The formal administrative review process
will be conducted pursuant to the Department's Uniform Rules of
Practice, 7 CFR 1.130 through 1.151. The formal administrative review
will be the Department's final determination on the noncompliance
proceeding. That decision may be appealed to the District Courts. This
section addresses the informal appeal process which is used to arrive
at the Administrator's decision to sustain or deny an appeal.
In States with approved State organic certification programs, the
governing State official or designee will oversee certification
compliance proceedings and handle appeals from certified operations in
the State. The governing State official or designated appeals official
will rule on appeals filed under a State organic certification program.
Further appeal of that decision may be made to the district court
system.
Proposal Description
These appeal procedures provide that persons subject to the Act who
believe that they are adversely affected by a noncompliance decision of
a certifying agent, Program Manager, or governing State official may
appeal such decision to the Administrator or to the applicable State's
appeal process. Under Compliance provision in this subpart, accredited
certifying agents initiate noncompliance proceedings. If an appeal of a
certification decision is filed, the process is referred to the
Administrator or governing State official or designee, as applicable,
to the State where the applicant or certified operation resides.
Certification Appeals
Applicants for certification may appeal a certifying agent's denial
of certification. Certified operations may appeal a certifying agent's
notification of proposed suspension or revocation of the operation's
certification. These appeals will be made to the Administrator or to
the applicable governing State official or designated official in the
approved State organic certification program.
Certification appeals may be filed only after an applicant or a
certified operation has been given opportunity to come into compliance
with these regulations or otherwise resolve the specified
noncompliance. Prior to filing an appeal, the applicant or certified
operation must have failed in rebuttal, refused to make specified
corrections, or made corrections which the certifying agent
subsequently determined to not meet certification requirements of the
NOP.
If the Administrator or governing State official sustains an
appeal, the applicant or certified operation will be granted
certification or continued certification, as applicable to the
operation's status. The applicant or certified operation will not be
required to correct the actions or conditions cited in the
noncompliance notification. The act of sustaining the appeal will not
be considered an adverse action and may not be appealed by the
certifying agent which issued the notification.
If the Administrator or governing State official denies an appeal,
a formal administrative proceeding will be initiated to deny, suspend,
or revoke the certification. Such proceeding will be conducted pursuant
to the Department's Uniform Rules of Practice or pursuant to the
State's formal appeal procedures. Certified operations may continue to
operate throughout this informal appeals process and the formal
administrative proceedings.
Accreditation Appeals
Pursuant to Sec. 205.665 of this subpart, all accredited certifying
agents are subject to the Program Manager's review of their operations
and any noncompliance actions resulting from such reviews. As provided
in Sec. 205.668, a State program's governing State official must advise
the Program Manager if an investigation of a certifying agent reveals
that the certifying agent is not in compliance with the Act or these
regulations. The appeal process for applicants is the same as for
accredited certifying agents.
An appeal may be filed with the Administrator only after the
certifying agent fails to rebut the noncompliance notice and fails to
correct the noncompliance specified. If the Administrator sustains an
appeal, the applicant or certified operation will be granted
certification or continued certification, as applicable to the
operation's status. The applicant or certified operation will not be
required to correct the actions or conditions cited in the compliance
notification. If the appeal is denied, a formal administrative
proceeding will be initiated to deny, suspend, or revoke the
accreditation.
The certifying agent may continue to operate as a certifying agent
throughout the informal appeals process and the formal administrative
proceeding.
All appeals to the Administrator must be filed in writing and sent
to: Administrator, USDA-AMS, Room 3071-S, PO Box 96456, Washington, DC
20090-6456. An appeal must include a copy of the adverse decision to be
reviewed and a statement of the appellant's reasons for believing that
the decision was not proper and not made in accordance with applicable
program regulations, policies, or procedures. A certified operation
must send a copy of its appeal, to its certifying agent. All written
communications between parties involved in appeal proceedings must be
sent to the recipient's place of business by a delivery service which
provides dated return receipts. Appeals under a State's procedure will
be filed pursuant to the State's appeal process, which should include
addresses and filing periods, etc.
An appeal must be filed within the time provided in the letter of
notification or at least 30 days from the date of receipt of the notice
to deny, suspend, or revoke certification or accreditation. The appeal
will be considered ``filed'' on the date received by the Administrator
or, when applicable, the State program's governing State official or
such official's designee. The Administrator will notify the appellant
and the appellant's certifying agent that the appeal was received.
Unless appealed in a timely manner, a notification to deny, suspend, or
revoke a certification or an accreditation will become final. The
applicant, certified operation, or certifying agent that does not file
an appeal in the time period provided waives the right to further
appeal of the compliance proceeding.
Appeals--Changes Based On Comments
These appeal regulations differ from our first proposal as follows:
(1) Decision-making. We have clarified who will be making decisions
that may be appealed to the Administrator. This proposal provides that
persons subject to the Act who, during noncompliance proceedings
described in this subpart, believe that
[[Page 13608]]
they are adversely affected by a noncompliance decision of a certifying
agent, Program Manager, or governing State official may appeal such
decision to the Administrator or the State's designated appeals
official. This clarification is found in Sec. 205.680.
Commenters stated that the proposed appeals procedures limited
appeals to decisions of the NOP staff. Commenters requested that the
appeals procedures be available for decisions by the Secretary, any
representative of the Secretary, and decisions by any certifying agent.
What we meant in the first proposal was that appeals would be filed on
decisions made by the Program Manager and certifying agents.
As noted above, we are empowering certifying agents to make
decisions concerning denials of certification and suspension or
revocation of certified operations' certifications. Certifying agents
accredited under this program act on behalf of the Secretary and the
Administrator to carry out certification services, including
noncompliance actions. The Administrator or designated governing State
official will make decisions to either sustain or deny appeals by
certification applicants and certified operations, as applicable to the
State.
The Program Manager will make decisions to deny applications for
accreditation and to suspend or revoke certifying agents'
accreditations. The Administrator will make all decisions to either
sustain or deny appeals by accreditation applicants and certifying
agents.
(2) Appeal procedures. Commenters requested detailed appeal
procedures or the use of citations to identify existing Departmental
appeal procedures which would be used for appeals filed under this
program. We acknowledge that the first proposal lacked detailed appeals
provisions. However, we believe this explanation is more informative
and helpful for the commenters. The formal administrative procedure
following the Department's Uniform Rules of Practice is required under
the APA. The rules of practice are not included in individual
rulemaking actions but may be found under 7 CFR 1.130 through 1.151.
The combination of this informal appeal procedure followed by the
formal administrative proceeding assures applicants, certified
operations, and accredited certifying agents that they will be given
full opportunity to respond to any noncompliance proceeding brought
against their application or operation. Individual State programs will
have their own, approved appeal procedures.
Commenters also recommended that the Department should use an
independent USDA appeals division to avoid conflict of interest by the
Program Manager or the Administrator in the handling of appeals. We
believe this proposed appeal procedure ensures that appeals will be
administered by persons not involved in the decision being appealed.
This appeals procedure is consistent with the requirements of the APA.
Paragraph (a)(1) of Sec. 205.681 provides that if the Administrator
sustains an applicant's or certified operation's appeal of a certifying
agent's noncompliance decision, the act of sustaining the appeal shall
not be an adverse action subject to appeal by the affected certifying
agent. We have included this provision because, as noted above,
certifying agents are accredited by the Secretary to provide
certification services as agents of the Secretary and the
Administrator. Therefore, if the Administrator overrules a decision of
an accredited certifying agent, that certifying agent cannot request an
appeal of the Administrator's decision.
Appeals--Changes Requested But Not Made
None.
Appeals--Additional Provisions
(1) State appeals procedures. We are proposing that appeal
proceedings in States with organic certification programs approved by
the Secretary will be carried out in accordance with the official
administrative appeal proceedings in each State. A State's appeal
process will be included as part of the State's organic certification
program. Because a State's appeal procedure is approved by the
Secretary, the final determination for a certification appeal arrived
at under that procedure is considered to have the effect of a decision
by the Secretary. Approved State appeal processes are unique to each
State and are not included in this regulation.
Certification appeals are made to the State program's governing
State official or such official's designee. The governing State
official or designee will administer the appeal pursuant to appeal
procedures which have been approved by the Secretary. Rulings on such
appeals, as noted in Sec. 205.668, may not be appealed to the
Secretary. The certification applicant or certified operation may make
subsequent appeal to the Court of Appeals of the United States for the
circuit in which such applicant or certified operation carries on
business or in the United States Court of Appeals for the District of
Columbia Circuit.
(2) Accreditation appeals. This proposal provides that the Program
Manager carries out all compliance proceedings on accredited certifying
agents. The Secretary has sole authority for accrediting certifying
agents and, therefore, must retain sole authority for suspending or
revoking that accreditation. A State program's governing State official
must investigate any complaints of noncompliance on the part of a
certifying agent operating in the State. If noncompliance activities or
conditions are found, the governing State official must notify the
Program Manager of those compliance violations or suspected compliance
violations.
Miscellaneous
Section 205.690 provisions the Office of Management and Budget
control number assigned to the information collection requirements of
these regulations. Sections 205.691 through 205.699 are reserved.
List of Subjects in 7 CFR Part 205
Administrative practice and procedure, Agriculture, Animals,
Archives and records, Foods, Imports, Labeling, Organically produced
products, Plants, Reporting and recordkeeping requirements, Seals and
insignia, Soil conservation.
For the reasons set forth in the preamble, it is proposed that
Title 7, Chapter I of the Code of Federal Regulations be amended as
follows:
1. Parts 205 through 209 which are currently reserved in subchapter
K (Federal Seed Act), are removed.
2. A new subchapter M consisting of part 205 through 209 is added
to read as follows:
SUBCHAPTER M--ORGANIC FOODS PRODUCTION ACT PROVISIONS
PART 205--NATIONAL ORGANIC PROGRAM
Subpart A--Definitions
Sec.
205.1 Meaning of words.
205.2 Terms defined.
Subpart B--Applicability
205.100 What has to be certified.
205.101 Exemptions and exclusions from certification.
205.102 Use of the term, ``organic.''
205.103 Recordkeeping by certified operations.
205.104 Foreign applicants.
205.105-205.199 [Reserved]
Subpart C--Organic Crop, Wild Crop, Livestock, and Handling
Requirements
205.200 General.
[[Page 13609]]
205.201 Organic production and handling system plan.
205.202 Land requirements.
205.203 Soil fertility and crop nutrient management practice
standard.
205.204 Seeds and planting stock practice standard.
205.205 Crop rotation practice standard.
205.206 Crop pest, weed, and disease management practice
standard.
205.207 Wild-crop harvesting practice standard.
205.208-205.235 [Reserved]
205.236 Origin of livestock.
205.237 Livestock feed.
205.238 Livestock health care practice standard.
205.239 Livestock living conditions.
205.240-205.269 [Reserved]
205.270 Organic handling requirements.
205.271 Facility pest management practice standard.
205.272 Commingling and contact with prohibited substance
prevention practice standard.
205.290 Temporary variances.
Subpart D--Labels, Labeling, and Market Information
205.300 Use of the term, ``organic.''
205.301 Product composition.
205.302 Calculating the percentage of organically produced
ingredients.
205.303 Packaged products labeled ``100 percent organic'' or
``organic.''
205.304 Packaged products labeled ``made with organic (specified
ingredients).''
205.305 Multiingredient packaged products with less that 50
percent organic ingredients.
205.306 Labeling of nonretail containers used for only shipping
or storage of raw or processed agricultural products labeled as
``100 percent organic,'' ``organic,'' or ``made with organic
(specified ingredients).''
205.307 Agricultural products in a form other than packages at
the time of retail sale that are labeled or represented as ``100
percent organic'' or ``organic.''
205.308 Agricultural products in a form other than packages at
the time of retail sale that are sold, labeled, or represented as
``made with organic (specified ingredients).''
205.309 Agricultural products produced on an exempt production
operation.
205.310 USDA Seal.
Subpart E--Certification
205.400 General requirements for certification.
205.401 Application for certification.
205.402 Review of application.
205.403 On-site inspections.
205.404 Approval of certification.
205.405 Denial of certification.
205.406 Continuation of certification.
205.407-205.499 [Reserved]
Subpart F--Accreditation of Certifying Agents
205.500 Areas and duration of accreditation.
205.501 General requirements for accreditation.
205.502 Applying for accreditation.
205.503 Applicant information.
205.504 Evidence of expertise and ability.
205.505 Statement of agreement.
205.506 Approval of accreditation.
205.507 Denial of accreditation.
205.508 Site evaluations.
205.509 Peer review panel.
205.510 Annual report, recordkeeping, and renewal of accredition.
205.511-205.599 [Reserved]
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
205.600 Allowed and prohibited substances and ingredients in
organic production and handling.
<ls-thn-eq>205.601 Synthetic substances allowed for use in
organic crop production.
205.602 Nonsynthetic substances prohibited for use in organic
crop production.
205.603 Synthetic substances allowed for use in organic livestock
production.
205.604 Nonsynthetic substances prohibited for use in organic
livestock production. [Reserved]
205.605 Nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic,'' or
``made with organic (specified ingredients).''
205.606 Nonorganically produced agricultural products allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic ingredients.''
205.607 Amending the National List.
State Programs
205.620 Requirements of State organic certification programs.
205.621 Submission and determination of proposed State organic
certification programs and amendments to approved State organic
certification programs.
205.622 Review of approved State organic certification programs.
Fees
205.640 Fees and other charges for accreditation.
205.641 Payment of fees and other charges.
205.642 Fees and other charges for certification.
205.643-205.649 [Reserved]
Compliance
205.660 General.
205.661 Investigations of certified operations.
205.662 Noncompliance procedure for certified operations.
205.663 Mediation.
205.664 [Reserved]
205.665 Noncompliance prodcedures for certifying agents.
205.666-205.667 [Reserved]
205.668 Noncompliance procudures under State organic
certification programs.
205.699 [Reserved]
Inspection and Testing, Reporting, and Exclusion from Sale
205.670 Inspection and testing of agricultural product to be sold
or labeled ``organic''.
205.671 Exclusion from organic sale.
205.672 Emergency pest or disease treatment.
205.673--205.679 [Reserved]
Adverse Action Appeal Process
205.680 General.
205.681 Appeals.
205.682--205.689 [Reserved]
Miscellaneous
205.690 OMB control number.
205.691--205.699 [Reserved]
Authority: 7 U.S.C. 6501-6522.
Subpart A--Definitions
205.1 Meaning of words.
For the purpose of the regulations in this subpart, words in the
singular form shall be deemed to impart the plural and vice versa, as
the case may demand.
205.2 Terms defined.
Accredited laboratory. A laboratory that has met and continues to
meet the requirements specified in the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 138) for pesticide residue analyses of
fresh fruit and vegetables and/or pesticide residue analysis of
products derived from livestock and fowl.
Accreditation. A determination made by the Secretary that
authorizes a private, foreign, or State entity to conduct certification
activities as a certifying agent under this part.
Act. The Organic Foods Production Act of 1990, as amended (7 U.S.C.
6501 et seq.).
Action level. The limit at or above which the Food and Drug
Administration will take legal action against a product to remove it
from the market. Action levels are based on unavoidability of the
poisonous or deleterious substances and do not represent permissible
levels of contamination where it is avoidable.
Administrator. The Administrator for the Agricultural Marketing
Service (AMS), United States Departure of Agriculture, or the
representative to whom authority has been delegated to act in the stead
of the Administrator.
Agricultural inputs. All substances or materials used in the
production or handling of organic agricultural products.
Agricultural product. Any agricultural commodity or product,
whether raw or processed, including any commodity or product derived
from livestock that is marketed in the United States for human or
livestock consumption.
Allowed synthetic. A substance that is included on the National
List of synthetic substances allowed for use in organic production, or
handling.
Agricultural Marketing Service (AMS). The Agricultural Marketing
Service of the United States Department of Agriculture.
[[Page 13610]]
Animal drug. Any drug as defined in section 201 of the Federal
Food, Drug, and Cosmetic Act, as amended (21 U.S.C. 321), that is
intended for use in livestock, including any drug intended for use in
livestock feed but not including such livestock feed.
Annual seedling. A plant grown from seed that will complete its
life cycle or produce a harvestable yield within the same crop year or
season in which it was planted.
Area of operation. The types of operations: Crops, livestock, wild-
crop harvesting, handling, or any combination thereof that a certifying
agent may be accredited to certify under this part.
Audit trail. Documentation that is sufficient to determine the
source, transfer of ownership, and transportation of any agricultural
product labeled as ``100 percent organic,'' the organic ingredients of
any agricultural product labeled as ``organic'' or ``made with organic
(specified ingredients)'' or the organic ingredients of any
agricultural product containing less than 50 percent organic
ingredients identified as organic in an ingredients statement.
Biodegradable. Subject to biological decomposition into simpler
biochemical or chemical components.
Biologics. All viruses, serums, toxins, and analogous products of
natural or synthetic origin, such as diagnostics, antitoxins, vaccines,
live microorganisms, killed microorganisms, and the antigenic or
immunizing components of microorganisms intended for use in the
diagnosis, treatment, or prevention of diseases of animals.
Breeder stock. Female livestock whose offspring may be incorporated
into an organic operation at the time of their birth.
Buffer zone. An area located between a certified production
operation or portion of a production operation and an adjacent land
area that is not maintained under organic management. A buffer zone
must be sufficient in size or other features (e.g., windbreaks or a
diversion ditch) to prevent the possibility of unintended contact by
prohibited substances applied to adjacent land areas with an area that
is part of a certified operation.
Bulk. The presentation to consumers at retail sale of an
agricultural product in unpackaged, loose form, enabling the consumer
to determine the individual pieces, amount, or volume of the product
purchased.
Certification or certified. A determination made by a certifying
agent that a production or handling operation is in compliance with the
Act and the regulations in this part, which is documented by a
certificate of organic operation.
Certified operation. A crop or livestock production, wild-crop
harvesting, or handling operation or portion of such operation that is
certified by an accredited certifying agent as utilizing a system of
organic production or handling as described by the Act and the
regulations in this part.
Certifying agent. Any entity accredited by the Secretary as a
certifying agent for the purpose of certifying a production or handling
operation as a certified production or handling operation.
Certifying agent's operation. All sites, facilities, personnel, and
records used by a certifying agent to conduct certification activities
under the Act and the regulations in this part.
Claims. Oral, written, implied, or symbolic representations,
statements, or advertising or other forms of communication presented to
the public or buyers of agricultural products that relate to the
organic certification process or the term, ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients),'' or, in
the case of agricultural products containing less than 50 percent
organic ingredients, the term, ``organic,'' on the ingredients panel.
Commercially available. The ability to obtain a production input in
an appropriate form, quality, or quantity to fulfill an essential
function in a system of organic production or handling, as determined
by the certifying agent in the course of reviewing the organic plan.
Commingling. Physical contact between unpackaged organically
produced and nonorganically produced agricultural products during
production, transportation, storage or handling, other than during the
manufacture of a multiingredient product containing both types of
ingredients.
Compost. The product of a carefully managed process through which
microorganisms break down plant and animal materials into more
available forms suitable for application to the soil. Compost used in
an organic operation must be produced in a facility in compliance with
the Natural Resource Conservation Service's practice standard for a
composting facility (Code 317) and must use methods to raise the
temperature of the raw materials to the levels needed to stabilize
nutrients and kill pathogens.
Control. Any method that reduces or limits damage by populations of
pests, weeds, or diseases to levels that do not significantly reduce
productivity.
Crop. A plant or part of a plant intended to be marketed as an
agricultural product or fed to livestock.
Crop residues. The plant parts remaining in a field after the
harvest of a crop, which include stalks, stems, leaves, roots, and
weeds.
Crop rotation. The practice of alternating the annual crops grown
on a specific field in a planned pattern or sequence in successive crop
years, so that crops of the same species or family are not grown
repeatedly without interruption on the same field. Perennial cropping
systems employ means such as alley cropping, intercropping, and
hedgerows to introduce biological diversity in lieu of crop sequencing.
Crop year. That normal growing season for a crop as determined by
the Secretary.
Cultivation. Digging up or cutting the soil to prepare a seed bed;
control weeds; aerate the soil; or work organic matter, crop residues,
or fertilizers into the soil.
Cultural methods. Methods used to enhance crop health and prevent
weed, pest, or disease problems without the use of substances; examples
include the selection of appropriate varieties and planting sites;
proper timing and density of plantings; irrigation; and extending a
growing season by manipulating the microclimate with green houses, cold
frames, or wind breaks.
Detectable residue. The amount or presence of chemical residue or
sample component that can be reliably observed or found in the sample
matrix by the current approved analytical methodology.
Disease vectors. Plants or animals that harbor or transmit disease
organisms or pathogens which may attack crops or livestock.
Drift. The physical movement of prohibited substances from the
intended target site onto an organic operation or portion thereof.
Emergency pest or disease treatment program. A mandatory program
authorized by a Federal, State, or local agency for the purpose of
controlling or eradicating a pest or disease.
Employee. Any person providing paid or volunteer services for a
certifying agent.
Estimated National Mean. The mean level of detected pesticide
residues as described in certain pesticide/commodity pairs or
combinations established by USDA's Pesticide Data Program.
[[Continued on page 13611]]
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