Lessons From The Peanut Salmonella Outbreak: Audit System Broken

Source of Article:  http://www.perishablepundit.com/#1

February 19, 2009 —
Perishable Pundit Overview

 

Of all the millions of words that have been written and broadcast regarding the Peanut Corporation of America and the salmonella outbreak with which it is associated, the most utterly astounding were spoken by James Munyon, President of AIB International, and recorded for posterity in a news story written by Andrew Martin and published in The New York Times titled Peanut Plant Says Audits Declared It in Top Shape.

The piece included this utterly revealing bit of investigative reporting:

Kellogg, one of the companies that recalled peanut products, received reports of third-party independent audits of Peanut Corporation of America in 2007 and 2008. The audits, paid for by the peanut company to meet food manufacturers’ requirements, were intended to assess its compliance with federally mandated manufacturing practices, including the condition of the plant and equipment and cleanliness, said Kris Charles, a spokeswoman for Kellogg.

Audits are also supposed to review the supplier’s food safety program, microbial test results and internal audit results.

Each audit, conducted by AIB International, gave the Blakely plant a “superior” rating. “We are looking into whether the third-party auditor reviewed state inspection reports or the plant’s test results,” Ms. Charles said by e-mail. “It is certainly something we would have expected them to do because it is an audit requirement.” Kellogg also received written test results from Peanut Corporation of America that the peanut paste it had supplied Kellogg showed no positive salmonella results, she said.

Had Kellogg known of the problems at the plant that the Food and Drug Administration detailed recently, “we would have discontinued the relationship with P.C.A. immediately and would not have accepted any ingredients from them,” she said.

Jim Munyon, president of AIB International, based in Manhattan, Kansas, said he could not release details of the peanut company’s audit because of confidentiality agreements. He said the company would not have received a superior rating if his auditors had seen the filth the federal government described.

“It would mean that we didn’t see it on the day we were there,” he said of the rating. “What goes on the rest of the time, we don’t know.”

He said his company relies on his customers to provide details of internal microbial tests. Had the peanut company divulged the presence of salmonella, he said, “We would have had a discussion about those failures.”

AIB International is the lineal descendent of the old American Institute of Baking. Although the organization is not the most used third-party auditing firm in the produce field, it does have programs for agricultural crops, fresh produce packinghouses, fresh-cut processing, and it is one of the largest and most respected auditing organizations and also offers a Gold Standard Certification Program.

So it is not inconsequential when the CEO of such a prestigious and respected auditing firm says these words:

“Jim Munyon, president of AIB International, based in Manhattan, Kansas, said …the company would not have received a superior rating if his auditors had seen the filth the federal government described.

“It would mean that we didn’t see it on the day we were there,” he said of the rating. “What goes on the rest of the time, we don’t know.”

He said his company relies on his customers to provide details of internal microbial tests. Had the peanut company divulged the presence of salmonella, he said, “We would have had a discussion about those failures.”

We’ve read the line 50 times and the words still ring in our ears: “It would mean that we didn’t see it on the day we were there,” he said of the rating. “What goes on the rest of the time, we don’t know.”

It is a shocking admission because, of course, the logical question is to ask is, “If this is true, what is the point of third party audits?”

We all know that as a matter of fact no audit can provide perfect assurance of food safety. Even if perfectly accurate and comprehensive in scope, there is always the possibility of a dramatic change the day after the audit is conducted.

This is true of all sorts of certifications and is a risk. But such sudden declines are rare and none is alleged in this situation. It is also true that AIB — and other such organizations — hardly represent their work in this way. In its web page on its Good Manufacturing Practices (GMP) audits, AIB explains itself this way:

Some companies require that all of their suppliers, whether they make hamburger buns or napkins, be audited by AIB. Scoring high on an AIB audit shows that a supplier complies with food safety regulations and is committed to providing safe, high quality food products to consumers.

Other companies, such as packaging suppliers, become AIB audit customers because they are committed to doing all they can to provide clean, safe products. For them, scoring well on an AIB audit is something that warrants a press release and often provides them with a competitive advantage. Sharing their AIB audit results with a potential customer demonstrates their dedication to providing safe, superior products.

Of course, there is nothing here about AIB not knowing what goes on except on the day they happen to be inspecting. In fact Mr. Munyon’s comments clearly indicate he himself is confused as to the difference, by AIB’s own definitions, between an audit and an inspection:

At AIB, we define an Audit as:

• A systematic evaluation to determine if programs and related activities achieve planned expectations

• The review or challenging of written programs; documentation of activities; corrective actions; trends

• An aid to determining the correlations between documented procedures and activities and actual execution

• A potential assistance in identifying root cause, which can lead to long term corrective action

In contrast, at AIB we define an Inspection as follows:

• An assessment at a “moment in time” which identifies positive and negative conditions

• An extensive physical examination of a facility and its equipment and observation of practices in order to collect information to determine compliance with plant programs

• Structured to initiate immediate corrective action, when it is required

• Structured to often lead to an evaluation of programs and systems

So, yes, if you want to get just a physical inspection, that is just a ”moment in time” and the facility could well be gussied up for that inspection.

An audit, however, is not just an inspection. It is an evaluation that procedures are established and being followed that “achieve planned expectations.”

Beyond what AIB claims itself, the simple logic of the role of third-party auditors in the food industry indicates that what Mr. Munyon said simply cannot be the basis for the existence of third-party auditors.

The logic behind these organizations is really quite simple: In some cases because they do not have the expertise, in other cases because they don’t have the scale, companies turn to third-party auditors to get the kinds of assurances they are incapable of producing for themselves.

Since nobody cares solely about the “day we were there,” an audit must represent something more comprehensive, at very least, a judgment that the procedures of this company mean it is likely to meet food safety expectations.

Now, of course, auditing organizations can certainly be defrauded. Yet Mr. Munyon’s statement seemed carefully worded not to allege such a thing:

He said his company relies on his customers to provide details of internal microbial tests. Had the peanut company divulged the presence of salmonella, he said, “We would have had a discussion about those failures.”

This raises two questions. First, did the audit standard require microbial testing? The Kellogg representative seems to imply it did. Yet we don’t know what information was, in fact, provided to AIB. Second, did AIB ask if microbial testing was done and if there were any positives?

These questions are crucial because if AIB were actively defrauded, that speaks to a different vulnerability of the food safety system than if AIB just didn’t ask the right questions or enforce the rules on its books.

There is a lot of information still to be learned, but we know enough to identify a few clear lessons from this situation that should be adopted as a matter of public policy and by all third-party auditors.

1) Public Records for Promoters

In The New York Times article, Mr. Munyon indicated that because audits are confidential he couldn’t speak to details of the Peanut Corporation of America audit. This is absurd. Yes, we believe it important that audit information be kept confidential. This ability of a company to call in an auditor and not wash its dirty linen in public is important to get companies to improve their food-safety practices and begin a journey of continuous improvement. A simplistic demand that everything be public will lead companies to avoid auditing. This would hurt food-safety efforts in the country and around the world.

The exception, though, is if a company publicizes its audit status. The minute a company starts telling buyers, “You can buy from us with confidence because we are AIB-certified,” that is the moment that all audit reports should become public records, posted on the Internet for all to see.

2) Simplify and Clarify

One of the problems with AIB and many auditors is that commonly used phrases such as “AIB-certified” actually have no specific meaning. These organizations offer hundreds of different programs. One could say one’s organization is AIB-audited and be speaking the truth, but it may be an Allergen Audit or an Occupational Safety Audit or many other types of audits, assessments and inspections.

This is too confusing, and if you read AIB’s own literature you see that there is significant market confusion with many FAQs on its website asking about an “AIB certification” that doesn’t actually exist.

Although all these different programs doubtless were developed to meet market demand, we should not allow auditing organizations to enable such market confusion. If you Google “AIB Certified” you get about 2,950 references. Although some have nothing to do with the organization we are discussing, you get vendors from Soy Beginnings to Kenny’s Candy Company and on to packaging and pest control companies all declaring they have a “certification” that AIB claims doesn’t exist. Yet AIB doesn’t seem to be issuing cease-and-desist letters to all these organizations to preserve the integrity of the AIB brand.

Interestingly enough, the two most rigorous programs, the Bakers Quality Seal and Gold Standard Program, have very few companies participating.

It looks like McCain Foods and Amcor PET Packaging around the world, Charcuterie La Tour Eiffel, Fres-Co System, Safries down in Australia and East Bait in Chicago and Denver are the only ones that submit to the rigor of this program.

One of the dirty little secrets of the industry is that many big buyers don’t want to pay for the gold standard. Why didn’t Kelloggs, for example, insist that its suppliers be Gold Standard members?

There is nothing wrong with AIB offering training programs and specialized inspection services. We think it is terrific that AIB offers a correspondence course for pest control contractors. But there should be a specific name and logo reserved for a comprehensive, gold standard audit. Everything else can be building blocks to the audit or something completely separate, but the branding is now designed to create confusion.

3) Clarification of Purpose

Audits are not designed to solely be a picture in time. Audits are designed to provide reassurance that the food the consumer is about to eat has, with a high degree of likelihood, been produced according to the expected standards.

What follows from this are all kinds of implications. For example, every employee should have a toll-free number and an e-mail address and website in which he can report anonymously any deviation from audit standards.

Although it is fine to do practice audits as planned events, actual audit visits should always be unannounced. The point is to determine if procedures have been properly established and are regularly being followed — not if they can polish up the brass for a big visit.

4) Fraud

It may be that auditors — be they financial or food safety — will never catch all cases of intentional fraud. That is, however, a far cry from saying, as Mr. Munyon did, that they are dependent on the company to provide details such as on internal microbial tests.

The audit can require the tests, it can dictate what is an acceptable lab to do the test, financial records can be audited to see what and who paid for tests, and employees can sign sworn affidavits as to test results. Many things can be done that will significantly reduce the likelihood of such fraud.

5) Switch the Payee

In fact, companies should not pay for their own audits. Let an industry organization on the buy-side, say the Grocery Manufacturers of America, put together a pool organization, define an acceptable standard and pay for an acceptable audit.

There is always an implied threat when an auditor comes in that the company will switch and decide not to be IAB audited but, instead to be BBC or SQF or something else. This causes auditors to be too concerned with the feelings and thoughts of the manufacturer.

6) Watch the Individual

AIB has its own list of full time auditors. What it doesn’t clarify is how they are assigned. At our bank, we can never tell you who the branch manager or commercial loan officer is, because they change them constantly. The last thing the bank wants is these folks giving out loans because they are chummy with someone.

Some auditing organizations use sub-contractors and some divide the work regionally. It is important that the opportunities be minimized for collusion. Generally auditors should never have client contact alone and there should often be new blood rotating in.

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We are sure there are more points to be drawn from this, yet these six strike us as a very good start.

The third-party audit system is the lynchpin of our food safety system. Thanks to an aggressive reporter we now know that the system is really broken and must be fixed right away.

 

 

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