How To Prevent Food Fraud

Transcription

1 THE LATEST FRAUD DETECTION AND PREVENTION MODELS AND TOOLS Carole Payne

2 A growing problem but will angst turn to action? What information should U.S. regulators seek and from what sources to help predict and prevent EMA? What further steps can U.S. regulators take to predict and prevent EMA..Lutter US FDA 2009

3 Angst to Action? Fraud increasingly on the political agenda in the western world Global social media.brands have no where to hide Profits can be huge similar to narcotics in some cases Growing regulator and trade concern.individual incidents damaging entire sectors Current system of control isn't working or robust enough Its going to get worse Its not just about money there are health risks Consumer confidence trust low Leadership is needed

4 Why we need the 7 Step Model THERE NEEDS TO BE A PARADIGM SHIFT FROM DETECTION AND MITIGATION TO PREDICTION AND PREVENTION

5 Food Fraud Awareness, Detection & Prevention STEP 1 Horizon Scanning, intelligence & data gathering & sharing STEP 2 Use NSF Model to identify high risk product areas & likely forms of fraud STEP 3 Assess Culture across commercial & technical functions STEP 7 Supply Chain Assurance Programme inc forensic analysis STEP 4 Deliver training & joined up approach & processes for product dev t & supply STEP 6 Risk Based controls - testing and specifications STEP 5 Work with suppliers develop long term sustainable relationships

6 Step 1 Horizon scanning, intelligence & consumer response Horizon Scanning Known Unknowns Known Knowns Unknown Unknowns NSF CONSUMER RESPONSE PREDICTION Bespoke and event based reporting & advice Quarterly Key Issues Report Issue/event based reporting & advice Together Informs Risk Framework Supply Chain & Food Safety policies CSR Policy Strategy

7 Horizon Scanning - NSF Future Foresight Unknown Knowns (things we don t know we know or refuse to admit that we know) NSF expert Known Knowns report plus (things that we know quarterly we know about) updates Unknown Unknowns (things NSF that emerging we don t know crisis we don t briefing know during ie absence and post of evidence event advisory not evidence reports of absence) Known Pre- preparation Unknowns (things & post we know event that we don t analysis know) reporting

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9 Step 2 The NSF Fraud Model

10 Step 3 Assess Corporate Strategy & Culture in relation to Supply Chain An assessment of CSR commercial pressures culture and motivations within the supply chain team internal relationships with technical, marketing & operations. This would also consider whistle blowing, supplier relationships, KPI s measures, rewards and recognition, processes and procedures, policy development, menu claims Project Scope Marker Assessments Current State 3 Year Plan Development Client Interface Scoping Exercise Cost Estimate & Budgeting Planning/Logistics Stakeholder Interviews Structure & Process Review Findings Draft Report Mapping Presentation 3 Year Plan Resource requirements Services Quarterly updates Annual reviews Tactical services Interim report

11 Step 4 - Awareness Training Developed in conjunction with University of Portsmouth Centre for Counter Fraud Studies, with experts from City of London Police and BDO. Covering fraud awareness, counter fraud measures, what to do when you detect fraud and thinking like a criminal. Exec Food Fraud Awareness 2 hour introductory briefing C Suite or Executive Board Ensure systems in place to reduce/inform of potential fraud Technical Team briefing 1 day course food fraud awareness Includes practical exercises in recognising red flags of fraud Delivered through BRC ATPs network Buyers, Mkt g & Supply Chain Food Fraud awareness Half-day briefing, awareness building & best practice If it seems to good to true- then it is! Focus on reducing complexity in supply chain

12 Step 5 Work with supplier base to develop long term sustainable trusted relationships The concept of approved supplier based upon due diligence requirements, needs to be developed to : Core supplier base with long term, sustainable, trusted supply relationships Approach needs to go beyond GFSI audit standards and involve: Proactive product development Bespoke product specifications Attendance at first production runs Long term supply agreements Sharing of sales data and agreeing forecast and production schedules Open and mutually beneficial commercial terms, risk and reward An understanding on the need for return on investment by the supplier

13 Step 5 Work with supplier base to develop long term sustainable trusted relationships Food Fraud operates on a continuum from what can be loosely described as commercial through to criminal activity. It is important to understand the key drivers of the commercial behaviour. There is a fundamental difference between an approved and core supplier base, and one that meets due diligence requirements compared to the development of long term, sustainable, trusted supply relationships. Availability 24/7/365 Marketing & CSR policy decisions on supply chain Pressures on Food Cost Criminal Commercial Motivated by profit /ease/not getting caught No consideration of potential harm Specification abuse Varietal Substitution Freshness Provenance claims Motivated to maintain supply relationship, avoid penalties and keep costs down Justifies decisions on the basis of little or no potential harm

14 Step 6 Risk-based Testing & Specifications Use output of the risk based assessment of products:- Identify High and medium risk suppliers Conduct verification of product specification compliance Establish risk assessed product testing programme for speciation & authenticity testing Validate suppliers own testing programmes and cross reference results Cross species contamination testing using DNA testing -PCR techniques Use of other techniques ie (SIRA) isotope mapping to validate claims All testing carried in out in accredited and approved laboratories Approved testing methodologies and criteria for detection

15 Step 7 Supply Chain Assurance NSF has experience of supporting work with supplier base to develop long term sustainable trusted relationships as part of the overall supply chain assurance programmes Whole Chain Approach Supplier Audit & inspection Complaints Management Product Specifications Product Testing Incident Procedures Emergency Exercise Management Review

16 Recent Developments GFSI GFSI Food Fraud Think Tank initiatives to be rolled out over next 2 years: 1. Require a company to provide a food fraud vulnerability assessment; 2. Have a fraud vulnerability control plan in place.

17 BRC Issue Product authenticity, claims and chains of custody 5.4 Systems shall minimise the risk of purchasing fraudulent or adulterated food raw materials and ensure that all claims are legal, accurate and verified. Threat assessment Vulnerability assessments Appropriate testing/assurance procedures

18 BRC Issue 7 Vulnerability Assessment Published Jan for implementation July 2015 New clause documented vulnerability assessment - All raw materials to assess potential risk of adulteration / substitution covering: - historical evidence of substitution - economic factors - ease of access to raw materials - sophistication of routine testing - nature of raw material New Agents & Brokers Standards launched to cover that part of the supply chain

19 Step 7 Risk Assessment & Forensic Analysis This needs to go further - current BRC audits do not cover in depth assessment for food fraud Conduct Integrity and Traceability audits using the NSF Integrity and Traceability Audit Standard (IAT) annually/ 6 monthly to include mass balance Conduct fraud identification assessment to identify areas of vulnerability Carry out forensic analysis which is accounting led Appoint a multi-disciplinary team consisting forensic accountants, counter fraud & food safety experts to conduct fraud assessments Fraud assessments should be unannounced Read the NSF white paper on food fraud -

20 Thank you for listening! Question & Answer session Read our fraud whitepaper: