- PDF Version (105K) - Print Friendly - Help

Guideline for Industry on the New Zealand Food Safety Authority Verification Agency

4 In what circumstances does the VA engage with industry?

The following sections outline the circumstances in which the VA provides services to industry operators.

4.1 Involvement of the VA required by overseas markets

The VA provides services to food and food-related industry sectors to facilitate access for export products to overseas markets.

For example, both the United States and the European Union operate a mandatory market access requirement that the supervision of meat hygiene activities and verification be undertaken by Government employees who form part of a Government “competent authority”. This requirement for Government control is long standing.

As it is an integral part of NZFSA, the VA is able to fulfill this overseas market requirement for Government involvement. As a result, more than 75% of the work undertaken by the VA relates to the export meat sector. This work is non-contestable, as there is no possibility at this time of it being undertaken by an alternative private sector or non-Government third party agency.

NZFSA is committed to advancing international acceptance of the principle that sanitary and phytosanitary trade measures, including supervision of meat hygiene activities and verification, should focus on the minimum requirements necessary to meet food safety objectives. This includes being committed to advancing relevant standards. However in recent years, developments in the international trading environment for food and food-related products have slowed the path to international reform. These developments include the impact of high profile plant, pest or animal disease incidents (such as bovine spongiform encephalopathy (BSE) and avian influenza), and fears of bioterrorism and other security concerns.

4.2 The VA as a default supplier

For some industry sectors, the VA acts as a default supplier. Sometimes the term “provider of last resort” is used to describe this circumstance. This can occur when:

1. domestic and/or importing country requirements allow for verification and related services to be provided by third party agencies (that is, agencies or individuals from the private sector, territorial authorities (providing a discretionary service), or other interests which are not part of central government) but no third party agency comes forward to provide these services either to an industry sector as a whole, or to individual industry operators within a sector. In such circumstances it has, to date, fallen to the VA to supply the industry operator/s concerned with the verification and related services which are required; or

2. domestic and/or importing country requirements allow for verification and related services to be provided by third party agencies and one or more third party agency(ies) does come forward to provide these services but the Chief Executive of NZFSA directs the VA to provide the verification and related services which are required. Circumstances where such direction may be given include where NZFSA assesses the services available from third party agency(ies) to not be capable, competent or performed acceptably; or where it would be impractical or disadvantageous for an industry operator to use the available third party agency services.

Whilst it is an important goal for industry operators to have a choice of service providers, using the VA as a default provider will not disadvantage industry operators. The VA strives to provide high quality and cost-conscious services to industry.

The VA currently acts as a default supplier for a number of New Zealand industry sectors. These include dual operator butchers, eggs and pet food, also venison, meat, poultry and seafood products sold only in the New Zealand domestic market. Each of these sectors is contestable because domestic requirements allow for third party agencies to provide verification and related services but no third party agency is at this stage available to provide these services.

A number of factors can contribute to the VA being called upon to act as a default supplier. These include:

• the limited numbers of verifiers in New Zealand, which is a reflection of population and industry demographics; and

• the characteristics of some of the sectors which require a default supplier. These sectors are often comprised of:

o only a small number of operators. (For example, very few meat or venison operators sell their product only on the domestic market. Most also export product and therefore need to use the VA to meet overseas market requirements); and/or

o operators who are geographically very widespread; and/or

o a high proportion of operators whose businesses are of a small scale; and who may have limited experience of risk-based management principles.

As a result, third party agencies may consider that such sectors do not offer sufficient incentive to warrant their involvement.

Whilst the VA has the capacity to act as a default supplier when required, NZFSA remains committed to the goal of fostering contestability in service provision, wherever this is possible and practical. As a result, NZFSA takes steps to encourage growth in the numbers of competent third party agencies. It employs its various communications, contacts and networking systems to inform potential and existing third party agencies about opportunities to service contestable sectors.

4.3 Circumstances where the VA can be directed by the Chief Executive of NZFSA to provide services alongside third party agencies

In certain circumstances, the VA will be directed by the Chief Executive of NZFSA to provide verification or related services (for example evaluation) to industry operators in a particular sector, even though a third party agency might also offer services to the sector concerned.

In these circumstances, operators may ask that the VA verify their risk-based management plans, or carry out related services for their plans, because:

• the alternative third party agency(ies) may not be able, or willing, to service all operators within a sector;

• the industry operator already employs the VA to verify other food types and/or activities. Efficiencies can be gained from dealing with a single verifier rather than multiple verifiers; and

• the industry operator has a strong preference for, and can justify the need for, a government verifier. This might arise, for example, if the product/s and processes covered in the industry operator’s risk-based management plan are of high risk, or because of the specific characteristics of the market/s to which product is destined.

Examples of such circumstances have occurred in:

• the bee products sector, where AsureQuality is the main provider of verification but a small number of operators have asked to use the VA;

• the dairy sector, where the VA, AsureQuality and SGS New Zealand Limited operate as recognised evaluators and verifiers of Risk Management Programmes for stores, transporters and specialist categories; and

• some operations covered by the Food Act 1981, as the VA is an approved Food Safety Programme Auditor pursuant to the Act.

It is not a priority for the VA to provide services to industry where an alternative third party agency is available². Instead, the focus of the VA is on the provision of mandatory services to the export sector and the need to discharge its responsibilities as a default supplier when no alternative third party agency is available.

If the VA is directed to provide services even though an alternative third party agency might be available, it operates in a controlled environment and follows strict procedures. These procedures include that:

• the VA does not prospect or advertise for work;

• the VA gives priority to developing networks with industry bodies, which it uses to help raise awareness about alternative third party agencies;

• if approached directly by an industry operator, VA staff inform the operator that an alternative third party agency is available;

• the NZFSA website identifies the third party agency as a verifier for the sector concerned and can indicate that it is NZFSA’s expectation that the majority of operators will employ the third party agency;

• the VA is at all times rigorous in its approach to verification and related services; meaning there is no possibility that it can be viewed as a less thorough alternative to a third party agency;

• the hourly charge rates for the VA are prescribed by regulation and are therefore transparent to all interested parties; and

• all requests for VA involvement are considered by NZFSA on a case by case basis and, when a decision is made that the VA should be directed to provide services, this decision is reviewed regularly.

The VA also has an interest in developing communications with third party agencies to facilitate procedures for hand over and ongoing consistency of service when operators change from the VA to a third party agency.

Some commentators see benefits in having the VA available to provide services alongside third party agencies. This is especially the case if only one third party agency is available. These benefits include that the VA’s involvement can give industry a choice of service provider and provide some relief at times of urgent commercial need, for example at peak processing times.

² This is in accordance with Principle 8 of the Market Access and Official Assurances Principles approved by the SPS Forum which states that third parties will be used at the verification step in the provision of official assurances wherever possible.