[Federal Register Volume 64, Number 110 (Wednesday, June 9, 1999)]
[Rules and Regulations]
[Pages 30861-30869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14688]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 37
[Docket Number LS-99-04]
RIN 0581-AB58
Program to Assess Organic Certifying Agencies
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule establishes a voluntary, fee-for-service program,
under the Agricultural Marketing Agreement Act of 1946, to verify that
State and private organic certifying agencies comply with the
requirements prescribed under the International Organization for
Standardization/
[[Page 30862]]
International Electrotechnical Commission Guide 65 ``General
Requirements for Agencies Operating Product Certification Systems''
(ISO Guide 65). Assessments are to be conducted by the Livestock and
Seed Program of the Agricultural Marketing Service (AMS).
This assessment program is established to enable organic certifying
agencies to comply with European Union (EU) requirements beginning on
June 30, 1999. This assessment program will verify that State and
private organic certifying agencies 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. This action also establishes fees for the
services provided and announces that AMS has obtained, on an emergency
basis, approval from the Office of Management and Budget (OMB) of the
information collection requirements contained in this rule.
DATES: This rule is effective June 10, 1999. Comments must be received
by August 9, 1999. The incorporation by reference of the International
Organization for Standardization/International Electrotechnical
Commission Guide 65, ``General Requirements for Agencies Operating
Product Certification Systems'', Ref. No. ISO/IEC Guide 65:1996, listed
in this rule is approved by the Director of the Federal Register as of
June 10, 1999.
ADDRESSES: Interested persons are invited to submit written comments
concerning this interim final rule. Comments must be sent to Larry R.
Meadows, Chief, Meat Grading and Certification Branch, Livestock and
Seed Program, AMS, USDA, STOP 0248, 1400 Independence Avenue, SW.;
Washington, D.C. 20250-0248. Comments also may be sent by fax to (202)
690-4119. Additionally, comments may be sent via E-mail to
larry.meadows@usda.gov. Comments should make reference to the date and
page number of this issue of the Federal Register and they will be made
available for public inspection in the above office during regular
business hours.
Pursuant to the Paperwork Reduction Act of 1995 (PRA), also send
comments regarding the merits of the burden estimate, ways to minimize
the burden, including through the use of automated collection
techniques or other forms of information technology, or any other
aspect of this collection of information, to the above address.
Comments concerning the information collection and recordkeeping under
the PRA should also be sent to the Desk Officer for Agriculture, Office
of Information and Regulatory Affairs, Office of Management and Budget,
Washington, D.C. 20503.
FOR FURTHER INFORMATION CONTACT: Larry R. Meadows, Chief, Meat Grading
and Certification (MGC) Branch, (202) 720-1246.
SUPPLEMENTARY INFORMATION:
Background and Discussion
This action establishes a voluntary, user-fee funded program under
which AMS would assess State and private agencies in the United States
that meet the requirements of ISO Guide 65, which has been incorporated
in this rule by reference. This assessment will facilitate
uninterrupted imports of U.S. organic products to countries in the EU
by enabling organic certifying agencies to comply with EU requirements
beginning on June 30, 1999.
This program does not provide for national standards governing the
marketing of agricultural commodities or products as organically
produced and therefore differs substantially from the proposed National
Organic Program (NOP) under the Organic Foods Production Act of 1990.
The 1990 Act requires the establishment of national standards governing
the marketing of certain agricultural products as organically produced.
A proposed rule concerning the NOP was published in the Federal
Register at 63 FR 65850 on December 16, 1997. The Department is
currently drafting a revised proposed rule for publication in the
Federal Register.
This program is established under the Agricultural Marketing Act of
1946 and provides only for the voluntary assessment of State and
private certifying agencies to verify compliance with the requirements
of ISO Guide 65. To be assessed under this program, an organic
certifying agency would submit an application requesting such
assessment from AMS and also submit to AMS for review and evaluation, a
manual documenting the organic certifying agency's quality system and
associated quality certification procedures used to certify organic
producers and handlers of organically produced agricultural commodities
(including those involved with wild crop harvesting) in accordance with
applicable industry standards.
According to the most complete data available to AMS, there are 11
State and 33 private organic certifying agencies currently providing
organic certification for agricultural commodities in the United
States. These certifying agencies provide service to approximately
4,000 organic producers and 600 handlers of agricultural commodities in
the United States. ISO Guide 65 assessment will ensure that State and
private organic certifying agencies operating third-party certification
systems are doing so in a consistent and reliable manner; thereby,
facilitating their acceptance on an international basis. Assessing
organic certifying agencies under ISO Guide 65 would enable U.S.
organic producers and handlers of U.S. organically produced agriculture
commodities to continue to export to the EU.
In crafting the provisions of a service program to assess State and
private organic certifying agencies, we have turned to the
comprehensive scheme that appears in ISO Guide 65 and incorporated by
reference its provisions in this rule. The ISO, itself, is based in
Geneva, Switzerland, and coordinates development and maintenance of
numerous international consensus standards and guidelines frequently
referenced in trade and international agreements.
As noted in ISO Guide 65, the guide provides for the general
requirements that a certifying agency would be required to meet so that
the certifying agency is recognized as competent and reliable. ISO
Guide 65 includes provisions that address a certification agency's
organization and structure; operations; subcontracting; quality system
and documentation of that system; conditions and requirements regarding
certification; internal audits and management reviews; documentation
and records; and confidentiality. Provisions of ISO Guide 65 also
include requirements for personnel and their qualifications; the
procedures to be followed by a certification agency in providing
certifications, including evaluations; and decisions on certification
and surveillance.
Because this action establishes a voluntary, user-fee service based
upon and similar to the Quality Systems Certification Program (QSCP)
established pursuant to 7 CFR Part 54, this program would be
administered by the AMS, Livestock and Seed (LS) Program, Meat Grading
and Certification (MGC) Branch. The QSCP is an audit-based program
administered by AMS 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. The services provided for in this rule would utilize
experienced QSCP auditors to assess organic certifying agencies to ISO
Guide 65. AMS has developed, tested,
[[Page 30863]]
and implemented QSCP procedures to verify quality systems and this
knowledge and experience is readily adaptable to reviewing and
assessing quality systems of organic certifying agencies pursuant to
the requirements of ISO Guide 65.
Interested State or private organic certifying agencies can apply
to be assessed under ISO Guide 65 by completing Form LS-314,
Application for Service and submitting the completed and signed Form
LS-314 to the address listed on the form. Upon approval of a request
for service, an applicant would be required to submit a copy of its
quality manual used for conducting certification.
AMS auditors would review the quality manual for conformance with
requirements set forth in ISO Guide 65. Upon AMS approval of the
quality manual, AMS auditors would schedule and conduct an onsite audit
of the certifying agency's operation which would include confirmation
that the provisions of the quality manual have been implemented and
that the applicant complies with the requirements of ISO Guide 65. Upon
verification by AMS of the organic certifying agency's compliance with
ISO Guide 65 requirements, AMS would issue a certificate of compliance.
Those organic certifying agencies determined to not meet applicable
assessment program requirements would be provided with a written
summary of observed program deficiencies. These organic certifying
agencies would have the opportunity to implement the required
corrective actions needed to receive a certificate of compliance or
appeal the determination to the LS Program Deputy Administrator. Once
corrective action has been taken, the organic certifying agency may
contact the MGC Branch to schedule another audit for assessment.
Each assessed organic certifying agency would be provided official
documentation of their compliance with ISO Guide 65 in the form of a
certificate of compliance. The names of assessed certifying agencies
would be posted for public reference on the LS Program's website at:
http://www.ams.usda.gov/lsg/. AMS would conduct periodic reassessment
audits to ensure continued compliance with all applicable program
requirements.
This section establishes and adds a new Part 37 to Title 7 of the
Code of Federal Regulations. In addition to fees, those provisions and
procedures that would be the same or similar to the provisions of Part
54 are included in this rule in order to provide a complete voluntary
service program under the Agricultural Marketing Act of 1946.
Accordingly, the regulations include provisions for appropriate
definitions; description of services; the incorporation by reference of
the requirements of ISO Guide 65; how to apply for service; when an
application may be withdrawn; access to establishments and records;
reassessment of approved certification programs; suspension or denial
of program assessment; appeals and termination.
Under the Agricultural Marketing Act of 1946, AMS is required to
collect hourly fees for providing official services under 7 CFR Part
54, including services provided under the QSCP, to cover as nearly as
practicable AMS costs for performing the service including related
administrative and supervisory costs. Since the procedures used for
assessing State and private organic certifying agencies are similar as
those used to certify other types of product or system certification
programs under the QSCP, AMS has decided to charge the same hourly fees
for assessing organic certifying agencies as are charged for services
currently provided under QSCP. QSCP services are based on the hourly
rate for applicants who request services on an hourly or daily basis
and appear at 7 CFR Part 54 as published in the Federal Register at 63
FR 32965 on July 17, 1998. The current base hourly rate for such
service is $42.20 per hour for 8 hours or less of work performed
between the hours of 6 a.m. and 6 p.m., Monday through Friday, except
on legal holidays. The premium hourly rate for all applicants is $47.80
per hour charged to users of the service for the hours worked in excess
of 8 hours per day between the hours of 6 a.m. and 6 p.m.; for the
hours worked between 6 p.m. and 6 a.m., Monday through Friday; and for
any time worked on Saturday and Sunday, except on legal holidays. The
holiday rate for all applicants is $79.60 per hour charged to users of
the service for all hours worked on legal holidays. Travel costs, per
diem costs, and other administrative costs are in addition to the
hourly charges. The estimated average total cost for assessment would
be approximately $2,000 plus associated travel expenses. These fees are
currently under review and any changes deemed necessary will be subject
to a separate rulemaking action.
Executive Order 12866
This rule has been determined to be significant for purposes of
Executive Order 12866 and, therefore, has been reviewed by the Office
of Management and Budget. The EU regulatory framework permits
assessment to ISO Guide 65 by competent government authorities or by
internationally recognized private accreditation agencies such as
European Accreditation or the American National Standards Institute.
National governments are recognized as competent authorities and in
matters pertaining to agriculture USDA is the competent authority for
the United States. At this time, USDA believes there are no domestic
private official accreditation agencies which perform ISO Guide 65
assessments for agriculture-related third party certification programs.
Thus, pending implementation of this rule there is no domestic supply
of ISO Guide 65 assessments for organic certifiers.
A U.S. certification agency may obtain assessment to ISO Guide 65
from a private entity sanctioned by a government agency within a
individual EU member state. This approach allows products to be
imported only into the EU Member State that provides oversight to the
private entity. This approach would potentially require each certifier
to negotiate 15 separate agreements, one for each member state.
Therefore, country-by-country recognition is inefficient. ISO Guide 65
assessments conferred by the competent authority of a third country,
USDA for the United States, would be more efficient because under the
EU regulatory framework such assessments would be recognized by all EU
Member States, enabling direct trade with all 15 Member States.
Alternatively, USDA could establish through rulemaking a process to
approve private parties who could then perform ISO Guide 65 assessments
acceptable to the EU at large. However, given the small universe of
potential clients--11 State programs and 33 private certifying
agencies--it is unlikely that economic returns would be sufficient for
a competitive system to develop. Also, establishing a program to
approve a private party to perform conformity assessments to ISO Guide
65, would take more time than is available before the announced EU
deadline for such assessments, and does not ensure these services are
available.
This regulatory action directly affects organic certifying agencies
and indirectly affects producers and handlers of organic goods. The
rule provides a mechanism for certifying agencies to be assessed for
conformance to ISO Guide 65 guidelines. The benefit of the assessment
to the certifiers is their clients will satisfy the EU requirement that
producers and handlers of organic goods exported to
[[Page 30864]]
the EU must be operating under a certifying agency that conforms to ISO
Guide 65. Certifying agencies will choose to be assessed against ISO
Guide 65 if they perceive that it will benefit their clients and if the
certifying agency expects to be able to recover the costs of an ISO
Guide 65 assessment. This is the case where their clients are or may
anticipate exporting to the EU, or the certifier hopes to attract new
clients that wish to export to the EU.
Organic producers and handlers in the United States will demand
that their certifying agency undertake an ISO Guide 65 assessment if it
benefits them. The benefit to organic producers and handlers derives
from access to the EU market for organic goods. It is difficult to
quantify the value of access to the European market because suitable
statistics on organic goods exported to Europe are not available. U.S.
exports of organic goods are estimated at a retail value of $300
million. It is not known what share of these exports go to the EU.
The immediate benefit of this rule is that it maintains the access
that the U.S. organic industry has to the European market. Without the
rule, U.S. producers and handlers would incur economic loses resulting
from the sale of their organic goods in less remunerative markets.
If EU markets were no longer available, organic goods would be
marketed in the domestic organic market or in other foreign organic
markets. This would preserve part of the price premium for organic
goods. Returns would fall as product is shifted into other markets,
first because producers were presumably selling into their most
profitable markets and secondly because increased supplies to other
markets will depress prices. Another marketing alternative is to sell
organic goods in the conventional market. Unlike organic markets which
are relatively thin, little price impact would be expected from shifts
to conventional markets. In the longer run, U.S. organic production
could decline if producers perceived that the European market were
lost.
The difference in net returns between sales to the EU organic
market and sales to the conventional market is the maximum loss to the
organic industry. There is insufficient data to estimate this
difference. Data on the volumes of particular organic goods exported,
their value as organic goods in Europe, and their value if sold into
conventional markets would be needed. However, it is possible to
illustrate the difference in net returns.
Retail price premiums for organic products vary by commodity,
region, and season. Case studies suggest a range of premiums from 5
percent to over 200 percent.1 In the following illustration,
a 100 percent premium is assumed. The impact on organic products from
shifting sales to the conventional market cannot be directly computed
by applying the lost premium to the retail value. The aggregate loss to
producers is much smaller because the farm share of value of retail
sales is only a fraction of the retail value. In aggregate, the farm
share of retail value is about 22 percent, but this could be different
for organic goods.2 The farm share is slightly smaller--18
to 20 percent--for fresh fruits and vegetables which are important
organic commodities and much smaller, around 5 percent for highly
processed goods like breads and cereals. The highest farm shares are
for eggs and meats which can run from 30 to almost 60 percent. Thus,
shifting the sales of organic goods from markets where they are valued
at $1 million retail to conventional markets would involve a decrease
in revenues to organic producers of about $110,000 (a decrease from
$220,000 to $110,000). This assumes the average 22 percent farm share
of value and an organic price premium of 100 percent that carries
through from retail to farm.
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\1\ Harris J. Michael, ``Consumers Pay a Premium for Organic
Baby Foods,'' Food Review, USDA, Economic Research Service, May-
August 1997.
Glazer, Lewrene, et al, ``Demand for Frozen Vegetables: A
Comparison of Organic and Conventional Products,'' Vegetables and
Specialities, VGS-276, USDA, Economic Research Service, Nov. 1998.
Dobbs, Thomas L. ``Price Premiums for Organic Crops,'' Choices,
American Agricultural Economics Association, Second Quarter, 1998.
\2\ U.S. Department of Agriculture. Agricultural Outlook,
Economic Research Service. Table 8, page 37, May 1998.
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Handlers and processors between the producer and retailer would
also see lower revenues from shifting sales to conventional markets.
However, it is difficult to describe quantitative relationships for
intermediary handlers because they engage in a wide range of activities
including substantial processing of some commodities.
Certifying agencies that choose to be assessed with regard to ISO
Guide 65 will face the direct cost of fees for the assessment service
and any ancillary costs to bring their business practices into
conformity. Ancillary costs might include costs to create or modify
business records and policy documents so that they meet ISO Guide 65
standards. AMS has already provided training regarding ISO Guide 65 to
interested organic certifiers and believes industry participants are
already in or very nearly in conformity with ISO Guide 65. Thus,
ancillary costs are expected to be minor. The cost of providing and
obtaining information for AMS review is $590 per certifying agency and
discussed in detail under the Paperwork Reduction Act.
Some State organic certifying agencies which subsidize activities
associated with providing organic certification services may not pass
assessment costs on to users of their organic certification. Likewise,
some of the larger organic certifying agencies may absorb the
assessment costs because they are able to spread their fixed costs over
a larger number of clients. However, given that there are approximately
4,000 organic farmers and 600 handlers in the United States, the Agency
anticipates that any increase in fee rates based solely on recovering
assessment costs would be minimal.
This rule is not intended to have any effect on consumers. The
costs to certifying agencies for ISO Guide 65 assessment would be
passed on to their clients. Organic producers and handlers could pass
some of these costs on to consumers depending on the elasticity of
demand and supply.
Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.), AMS has considered the economic
impact of this rule on small entities. The purpose of the RFA is to fit
regulatory actions to the scale of businesses subject to such action so
that small businesses will not be disproportionally burdened.
Accordingly, we also have prepared an initial regulatory flexibility
analysis.
This action establishes, under the authority of the Agricultural
Marketing Act of 1946, a voluntary, user-fee funded program under which
the AMS would accredit State and private organic certifying agencies in
the United States that meet the requirements of ISO Guide 65, which has
been incorporated in this rule by reference. This assessment will
facilitate uninterrupted imports of U.S. organic products to countries
in the EU by enabling organic certifying agencies to comply with EU
requirements beginning on June 30, 1999.
To be assessed, an organic certifying agency would submit an
application requesting such assessment from AMS and also submit to AMS
for review and evaluation, a manual documenting the organic certifying
agency's quality system and associated quality certification procedures
used to certify organic farms and handlers of organically produced
agricultural commodities (including those involved in wild crop
harvesting).
[[Page 30865]]
According to the Standard Industrial Classifications (SIC) (13 CRF
Part 121) which are used by the Small Business Administration (SBA) to
identify small businesses, nearly all of the entities affected by this
proposed regulation would be considered small businesses. According to
the SIC, a small business in the agricultural services sector, such as
organic certifying agencies, includes firms with revenues of less than
$3.5 million (SIC Division A Major Group 07).
According to the most complete data available to AMS, there are 11
State and 33 private organic certifying agencies currently providing
organic certification services in the United States. While they vary in
size, they all have fewer than 499 employees and earn annual revenues
of less than $3.5 million. These agencies certify approximately 4,000
farmers and 600 handlers in the United States. In crop production, the
SIC definition of a small business includes all farms with annual crop
sales of under $500,000 (SIC 0111-0191). Most of the farms currently
certified have less than $25,000 in gross sales of organic production.
However, many farms combine organic and conventional production on the
same operation, some with total sales that may exceed $500,000. In
handling operations, the SIC defines a small business as having fewer
than 500 employees (SIC Division D. Mayor Group 20). In the absence of
definitive data on organic handling operations, AMS believes that no
handling operation employs more than 499 employees.
Except for an application form, no new forms will be required in
connection with requests for assessment service or the assessment
audit, review and approval process. Although, ISO Guide 65 requires
that certifiers maintain a variety of records and documents, AMS
believes many of these records and documents are already being prepared
and maintained as a standard operating practice necessary for organic
certifying agencies to support certification of organic farms and
handling operations. However, it is possible that organic certifiers
may need to refine their recordkeeping process and improve their
documentation. We estimate that the cost of providing and obtaining the
information required in this rule to assess State and private organic
certifying agencies is $590 per certifying agency. The paperwork burden
that may be imposed on organic certifying agencies is further discussed
in the section entitled Paperwork Reduction Act that follows.
In addition, we have not identified any relevant Federal rules that
are currently in effect that duplicate, overlap, or conflict with this
rule.
Interested State or private organic certifying agencies would be
able to apply for assessment under ISO Guide 65 in accordance with the
provisions of this rule. Accordingly, this rulemaking action
establishes and adds a new Part 37 to Title 7 of the Code of Federal
Regulations. In addition to fees, those provisions and procedures that
are the same or similar to the provisions of Part 54 are included in
this rule in order to provide a complete voluntary service program
under the Agricultural Marketing Act of 1946. The regulations include
provisions for appropriate definitions; description of services; the
incorporation by reference of the requirements of ISO Guide 65; how to
apply for service; when an application may be withdrawn; access to
establishments and records; reassessment of approved certification
programs; suspension or denial of program assessment; appeals and
termination.
Under the Agricultural Marketing Act of 1946, AMS is required to
collect hourly fees for providing official services under 7 CFR Part
54, including services provided under the QSCP, to cover as nearly as
practicable AMS costs for performing the service including related
administrative and supervisory costs. Since the procedures used for
assessing State and private organic certifying agencies are similar as
those used to certify other types of product or system certification
programs under the QSCP, AMS has decided to charge the same hourly fees
for assessing organic certifying agencies as are charged for services
currently provided under QSCP. QSCP services are based on the hourly
rate for applicants who request services on an hourly or daily basis
and appear at 7 CFR Part 54 as published in the Federal Register at 63
FR 32965 on July 17, 1998. The current base hourly rate for such
service is $42.20 per hour for 8 hours or less of work performed
between the hours of 6 a.m. and 6 p.m., Monday through Friday, except
on legal holidays. The premium hourly rate for all applicants is $47.80
per hour charged to users of the service for the hours worked in excess
of 8 hours per day between the hours of 6 a.m. and 6 p.m.; for the
hours worked between 6 p.m. and 6 a.m., Monday through Friday; and for
any time worked on Saturday and Sunday, except on legal holidays. The
holiday rate for all applicants is $79.60 per hour charged to users of
the service for all hours worked on legal holidays. Travel costs, per
diem costs, and other administrative costs are in addition to the
hourly charges.
AMS estimates that the average assessment service would cost $2,000
plus travel costs for the required documentation review and onsite
audit required for verifying compliance with ISO Guide 65. These fees
are currently under review and any charges deemed necessary will be
subject to a separate rulemaking action.
Further, in assessing alternatives to the scheme provided for in
Part 37, we believe that the provisions contained in the rule would
best accomplish its purpose of this rule and at the same time minimize
any burden that might be placed upon affected parties. Nonetheless, we
invite comments concerning the potential effects of this rule on
affected parties, including more information on the benefits or burdens
that small entities may incur as a result of implementation of this
rule.
Executive Order 12988 and 12898
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform and is not intended to have retroactive effect. This
rule would not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule. There are no administrative procedures that must be exhausted
prior to any judicial challenge to the provisions of this rule.
Pursuant to Executive Order 12898, ``Federal Actions to Address
Environmental Justice in Minority Populations and Low Income
Populations,'' AMS has considered the potential civil rights
implications of this rule on minorities, women, or persons with
disabilities to ensure that no person or group shall be discriminated
against on the basis of race, color, sex, national origin, religion,
age, disability, or marital or familia status. This included those
persons who are employees, program beneficiaries, or applicants for
employment or program benefits in this voluntary program to assess
organic certifying agencies. This rule does not require certifying
agencies to relocate or alter their operations in ways that could
adversely affect such persons or groups. Nor would it exclude any
persons or groups from participation in the voluntary assessment
program, deny any persons or groups the benefits of the assessment
program, or subject any persons or groups to discrimination.
Paperwork Reduction Act
This interim final rule contains recordkeeping and submission
[[Page 30866]]
requirements that are subject to public comment and to review by the
Office of Management and Budget under the Paperwork Reduction Act of
1995 (PRA) (44 U.S.C. Chapter 35). In accordance with 5 CFR Part 1320,
we included the description of the reporting and recordkeeping
requirements and an estimate of the annual burden on organic certifying
agencies. Because there is insufficient time for a normal clearance
procedure, AMS has received temporary approval from OMB for the use of
the information collection and recordkeeping requirements that we used
to implement the assessment program for organic certifying agencies on
an expedited basis.
Title: Program to Assess Organic Certifying Agencies.
OMB Number: New collection.
Expiration Date of Assessment: Three years from date of assessment.
Type of Request: New.
Abstract: The information collection and recordkeeping requirements
in this regulation are essential to establishing and implementing a
voluntary program which verifies State and private organic certifying
agencies compliance with the requirements of the International
Organization for Standardization (ISO) Guide 65.
Based on information available, the Agency has determined that
there are currently 11 State and 33 private organic certifying
agencies. These certifying agencies conduct their certification of
organic farms and handling operations in a similar manner and have
similar recordkeeping systems and business operation practices. The
agency also determined that most of the information required under this
rule to conduct the assessment process could be collected from
certifying agencies' existing materials without creating new forms, and
that the information currently used by certifying agencies to certify
organic producers and handlers could be adapted to comply with this
rule. The PRA also requires the agency to measure the recordkeeping
burden. These organic certifying agencies have documented review and
auditing procedures and maintain appropriate records and documents for
up to 5 years on each certified organic farm or handler of organic
products. The recordkeeping burden is the amount of time needed to
store and maintain records. The agency estimated the number of program
participants who would be required to either create, submit, or store
documents as a result of this rule. The estimated annual cost of
providing and obtaining the information needed is estimated to be
$25,980 or $590 per each certifying agency. Records are required to be
retained for 5 years.
The information collection requirements in this interim final rule
include: (1) Submission of an application requesting to be assessed to
ISO Guide 65, (2) the preparation and submission of a quality manual
documenting the procedures that certifying agencies use to provide
certification services, and (3) an on-site audit of certifying agencies
certification operation programs to determine whether the certifying
agencies have implemented the provisions of the quality manual and are
in compliance with the requirements of ISO Guide 65. These information
collection requirements have been designed to minimize disruption to
the normal business practices of organic certifying agencies.
The application form requires the minimal amount of information
necessary including: (1) Firm name, address, telephone number, and
other information necessary to identify the certifying agency and its
location, and (2) other pertinent information to determine that a firm
is eligible to apply and receive services available through the program
to assess organic certifying agencies. Such information can be supplied
without data processing equipment or outside technical expertise.
Based on available information, AMS has determined that all State
and private certifying agencies develop and maintain as a normal
business practice the records and documents necessary to prepare the
quality manual required by ISO Guide 65.
The onsite audit would consist of a review and evaluation of a
certifying agency's process for certifying organic farms and handlers.
Verifying implementation of the provisions of a certifying agency's
quality manual and compliance with the requirements of ISO Guide 65
would include a review and evaluation of existing records and documents
described in the quality manual, interviews of certifiers' employees
and customers, and observation of certification activities.
1. Application for Service--Form LS-314.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average .25 hours per response.
Respondents: State and private organic certifying agencies.
Estimated Number of Respondents: 44.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 11 hours.
Total Cost: $220.
2. Quality Manual.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 23.28 hours per response.
Respondents: State and private organic certifying agencies.
Estimated Number of Respondents: 44.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 1024 hours.
Total Cost: $20,480.
3. Maintenance of records for on-site audit.
Estimate of Burden: Public recordkeeping burden for keeping this
information is estimated to average 6.0 hours per recordkeeper.
Recordkeepers: State and private organic certifying agencies.
Estimated Number of Recordkeepers: 44.
Estimated Total Recordkeeping Hours: 264 hours.
Total Cost: $5,280.
The total average cost of the estimated annual reporting burden per
certifying agency would be approximately $590.
We are soliciting comments from the public (as well as affected
certifying agencies) concerning the information collection and
recordkeeping requirements contained in this interim final rule.
Comments are specifically invited on the following: (1) Whether the
proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; (2) the accuracy of the
agency's burden estimate of the proposed collection of information
including the validity of the methodology and assumptions used; (3)
ways to enhance the quality, utility, and clarity of the information
collected; and (4) ways to minimize the burden of the collection of
information on those who are to respond, including through the use of
appropriate automated, electronic, mechanical, or other technological
collection techniques or other forms of information technology.
Comments concerning the information collection and recordkeeping
requirements contained in this action should reference OMB number 0581-
0183 and the Program to Assess Organic Certifying Agencies, Docket
Number LS-99-04, together with the date and page number of this issue
of the Federal Register. Comments should be sent to Larry Meadows,
Chief, Meat Grading and Certification Branch,
[[Page 30867]]
Livestock and Seed Program, AMS, USDA, STOP 0248, 1400 Independence
Avenue, SW., Washington, D.C. 20250-0248; telephone: (202) 720-1246 or
Fax: (202) 690-4119. Comments should be sent to the Desk Officer for
Agriculture, Office of Information and Regulatory Affairs, Office of
Management and Budget, Washington, D.C. 20503.
All comments received will be available for public inspection
during regular business hours at the same address.
All responses to this rule will be summarized and included in the
request for OMB approval. All comments will become a matter of public
record. Comments are best assured of having full effect if they are
received within 30 days after publication of the rule in the Federal
Register.
Pursuant to 5 U.S.C. 553, it is found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register.
This action establishes a voluntary, fee for service program, under the
Agricultural Marketing Act of 1946, to assess State and private organic
certifying agencies as meeting the requirements prescribed under ISO
Guide 65. Providing this assessment, which must be conducted by a
competent authority, is necessary to comply with EU requirements that
organic certifiers must be compliant with the ISO Guide 65 which EU
plans to enforce after June 30, 1999. This assessment will ensure
uninterrupted imports of U.S. organic products to countries in the EU.
Accordingly, this rule would benefit certifying agencies as well as
producers and handlers of organically produced agricultural commodities
(including those involved with wild crop harvesting). This program is
similar to other audit-based programs in the Department. Given the
current need for an ISO Guide 65 based program at the USDA governmental
level and the expectations of EU countries, it is necessary to
implement these regulations as soon as possible. A 60-day period is
provided for interested persons to comment on this rule.
List of Subjects in 7 CFR Part 37
Administrative practice and procedure, Agriculture, Assessment of
organic certifying agencies, Incorporation by reference, Organically
produced agricultural commodities, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, Title 7 of Chapter I of
the Code of Federal Regulations is amended as follows:
1. Part 37 is added to read as follows:
PART 37--PROGRAM TO ASSESS ORGANIC CERTIFYING AGENCIES
Sec.
37.1 Definitions.
37.2 Services.
37.3 Availability of service.
37.4 How to apply for service.
37.5 Order of furnishing service.
37.6 When application may be withdrawn.
37.7 Authority to request service.
37.8 Financial interest of official.
37.9 Access to establishments or records; record retention.
37.10 Official assessment.
37.11 Publication of program assessment status.
37.12 Reassessment.
37.13 Suspension or denial of program assessment; appeals and
termination.
37.14 Fees and other charges.
37.15 Payment of fees.
37.16 OMB assigned numbers.
Authority: 7 U.S.C. 1621-1627.
Sec. 37.1 Definitions.
Words used in this part in the singular form shall be deemed to
impart the plural, and vice versa, as the case may demand. For the
purposes of such regulations, unless the context otherwise requires,
the following terms shall be construed, respectively, to mean:
Assessment services. The services provided by the Meat Grading and
Certification Branch in accordance with the regulations that may result
in assessment of an organic certification program that certifies
agricultural commodities to established specifications or standards.
Act. The Agricultural Marketing Act of 1946 (Title II of the act of
Congress approved August 14, 1946, 60 Stat. 1087, as amended by Pub. L.
272, 84th Cong., 69 Stat. 553, 7 U.S.C. 1621-1627).
Agricultural commodity. Any agricultural commodity or product, raw
or processed, that is used for human or animal consumption or use.
Agricultural Marketing Service. The Agricultural Marketing Service
of the Department.
Applicant. Any person who applies for service under the
regulations.
Audit. A systematic review of the adequacy of program or system
documentation, or the review of the completeness of implementation of a
documented program or system.
Auditor. Person authorized by the Branch to conduct official
assessments of agricultural commodity product certification programs.
Branch. The Meat Grading and Certification Branch.
Branch Chief. The Chief of the Branch, or any officer or employee
of the Meat Grading and Certification Branch, Livestock and Seed
Program, Agricultural Marketing Service, to whom authority has
heretofore been delegated, or to whom authority may hereafter be
delegated, to act in his or her stead.
Department. The United States Department of Agriculture.
Deputy Administrator. The Deputy Administrator of the Livestock and
Seed Program of the Agricultural Marketing Service or any officer or
employee of the Livestock and Seed Program to whom authority has
heretofore been delegated, or to whom authority may hereafter be
delegated to act in his or her stead.
Legal holiday. Those days designated as legal public holidays in
Title 5, United States Code, Section 6103(a).
Livestock and Seed Program. The Livestock and Seed Program of the
Agricultural Marketing Service.
Part. The program to assess organic certifying agencies in the
regulations.
Person. Any individual, partnership, corporation, or other legal
entity, or Government agency.
Quality Manual. A manual documenting an organic certifying agency's
quality system and associated quality certification procedures used to
certify organic producers and handlers of organically produced
agricultural commodities in accordance with established specifications
or standards.
Regulations. The regulations in this part.
Sec. 37.2 Services.
Organic certifying agencies requesting assessment services under
this Part shall conform to the provisions of the regulations and the
requirements of International Organization for Standardization/
International Electrotechnical Commission (ISO/IEC) Guide 65--General
Requirements for Bodies Operating Product Certification Systems, Ref.
No. ISO/IEC Guide 65:1996, or other internationally recognized
guidelines or requirements. The Director of the Federal Register
approves the incorporation by reference of ISO/IEC Guide 65 in
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You may obtain a
copy from the American National Standards Institute, 11 West 42nd
Street, New York, NY 10036. You may inspect a copy at USDA, AMS, LSP,
MGCB; STOP 0248, Room 2628-S; 1400 Independence Ave., SW., Washington,
DC 20250-0248 or at the Office of the
[[Page 30868]]
Federal Register, 800 North Capitol Street, NW, Suite 700, Washington,
DC 20488.
(a) Assessment services provided under the regulations shall
consist of:
(1) Review of the adequacy of an applicant's quality manual against
the requirements of ISO Guide 65; and
(2) Onsite auditing of an applicant's organic certification program
to ensure implementation of the provisions of the quality manual and
the applicant's compliance with the requirements of ISO Guide 65.
(b) Organic certifying agencies also may request assessment
services under other international recognized guidelines or
requirements. Developmental assistance in the form of training to
explain requirements for quality system assessment is available upon
request.
Sec. 37.3 Availability of service.
Service under these regulations is available to State and private
organic certifying agencies.
Sec. 37.4 How to apply for service.
(a) Application. Any organic certifying agency may apply to the
Branch Chief, Meat Grading and Certification (MGC) Branch, Livestock
and Seed (LS) Program, AMS, P.O. Box 96456, Room 2628-South,
Washington, D.C., 20090-6456 for assessment service. The application
shall be made on Form LS-314, Application for Service. The applicant
shall provide the following:
(1) The name and address of the establishment at which service is
desired;
(2) The name and post office address of the applicant;
(3) The financial interest of the applicant in the program, except
where application is made by an official of a State Government agency
in their official capacity;
(4) The type of business and services provided;
(5) The type of commodity certified; and
(6) the signature of the applicant (or the signature and title of
his representative). The application shall indicate the status of the
applicant as an individual, partnership, corporation, or other form of
entity. Any change in such status, at any time while service is being
received, shall be promptly reported to the Department by the person
receiving the service.
(b) Notice of eligibility for service. The applicant will be
notified whether its application is approved, and the request for
service deemed made under the regulations. Upon approval of a request
for service, the applicant shall provide a copy of its quality manual.
(c) Applicants requiring additional assessment audits who have
already submitted Form LS-314 are not required to submit an additional
Form LS-314: Provided that, the required information on the original
Form LS-314 remains unchanged.
Sec. 37.5 Order of furnishing service.
Service under the regulations shall be furnished to applicants in
the order in which requests for service therefore are received, insofar
as consistent with good management, efficiency, and economy.
Sec. 37.6 When application may be withdrawn.
An application or a request for service may be withdrawn by the
applicant at any time before the application is approved or prior to
performance of service: provided that, the applicant shall pay any
expenses which have been incurred by the Department in connection with
such application.
Sec. 37.7 Authority to request service.
Proof of the interest of an applicant involved in the request for
service, or of the authority of any person applying for the service on
behalf of another may be required, at the discretion of the reviewing
official.
Sec. 37.8 Financial interest of official.
No auditor or other Department official shall review any programs
or documents concerning a certification program in which the official
is directly or indirectly financially interested.
Sec. 37.9 Access to establishments or records; record retention.
The applicant shall cause records and documents, with respect to
which service is requested, to be made easily accessible for
examination. Supervisors and other employees of the Department
responsible for maintaining uniformity and accuracy of service shall
have access to all parts of establishments covered by approved
applications for service under the regulations, during normal business
hours or during periods of production, for the purpose of evaluating
systems or processes associated with an approved certification program.
Records and documents shall be retained for at least 5 years beyond the
date of the applicant's request for service.
Sec. 37.10 Official assessment.
Official assessment of an applicant's certification program shall
be granted upon successful completion of a two-step review process, as
provided for in Sec. 37.2.
(a) Documentation approval. Documentation approval will be provided
by the Branch Chief regarding the adequacy of an applicant's quality
manual with respect to ISO Guide 65 requirements upon completion of an
adequacy audit by the auditors.
(b) Program assessment. Assessment of a certification program will
be issued by the Branch Chief by written memorandum or other approved
method of assessment upon successful completion of an onsite audit
conducted by the auditors of an applicant's organic certification
program ensuring that the provisions of the applicant's quality manual
have been implemented and that the applicant's certification program
complies with the requirements of ISO Guide 65.
(c) Disapproval and corrections. An applicant determined not to
meet applicable assessment requirements shall be provided by the Branch
Chief with a written summary of observed program deficiencies. The
applicant may appeal such a determination in accordance with the
provisions of Sec. 37.13 or implement required corrective action. After
completion of the corrective action, the applicant may contact the
Branch Chief to schedule another audit for assessment.
Sec. 37.11 Publication of program assessment status.
(a) The names of assessed certifying agencies shall be posted for
public reference on the Livestock and Seed Program's website at: http:/
/www.ams.usda.gov/lsg/. Such postings shall include: certifier's name
and contact information; referenced specification or standard(s)
covered under the scope of assessment; effective date of assessment;
and control number(s) of official certificate(s), as applicable.
(b) The names of assessed certifying agencies posted on the
Livestock and Seed Program's website may be removed from the website
upon suspension or termination of assessment for noncompliance with the
regulations pursuant to Sec. 37.13.
Sec. 37.12 Reassessment.
Approved certification programs shall be subject to periodic
reassessment to ensure ongoing compliance with the regulations,
including the requirements of ISO Guide 65. The frequency of such
reassessment shall be based on the relative risk associated with the
certification program's integrity, as determined by the Branch Chief.
[[Page 30869]]
Sec. 37.13 Suspension or denial of program assessment; appeals and
termination.
(a) Suspension or denial of assessment. When a review of a
certification program by auditors finds noncompliance with the
regulations, including the requirements of ISO Guide 65, the Branch
Chief may suspend or deny assessment until subsequent audits show the
noncompliance has been corrected.
(b) Appeals. Appeals of adverse decisions by an auditor or the
Branch Chief may be made in writing to the Livestock and Seed Program
Deputy Administrator at Room 2092-South, 1400 Independence Avenue, SW.,
Washington, D.C. 20250-0249.
(c) Termination. If noncompliance with the regulations remains
uncorrected beyond a reasonable amount of time, as determined by the
Livestock and Seed Program Deputy Administrator, an application may be
rejected or program assessment terminated.
(1) Procedure. Actions under this subparagraph concerning rejection
of an application or termination of assessment shall be conducted in
accordance with the Rules of Practice Governing Formal Adjudicatory
Proceedings Instituted by the Secretary Under Various Statutes set
forth in Secs. 1.130 through 1.151 of this title.
(2) [Reserved]
Sec. 37.14 Fees and other charges.
Fees and other charges equal as nearly as may be to the cost of the
assessment services rendered under the regulations, including
reassessments, shall be assessed and collected from applicants in
accordance with the following provisions.
(a) Fees for Service. Except as otherwise provided in this section,
fees-for-service shall be based on the time required to render the
service provided calculated to the nearest 15-minute period, including
auditor's travel, review and approval of quality manual, the conduct of
the onsite audit, and time required to prepare reports and any other
documents in connection with the performance of service. The base
hourly rate for such service is $42.20 per hour for 8 hours or less of
work performed between the hours of 6 a.m. and 6 p.m., Monday through
Friday, except on legal holidays. The premium hourly rate for all
applicants is $47.80 per hour charged to users of the service for the
hours worked in excess of 8 hours per day between the hours of 6 a.m.
and 6 p.m.; for the hours worked between 6 p.m. and 6 a.m., Monday
through Friday; and for any time worked on Saturday and Sunday, except
on legal holidays. The holiday rate for all applicants is $79.60
charged to users of the service for all hours worked on legal holidays.
(b) Travel charges. When service is requested at a place so distant
from an auditor's headquarters, or place of prior assignment on
circuitous routing, that a total of one-half hour or more is required
for the auditor to travel to such place and back to the headquarters,
or to the next place of assignment on a circuitous routing, the charge
for such service shall include mileage charge administratively
determined by the Department, and travel tolls, if applicable, or such
travel prorated against all the applicants furnished the service
involved on an equitable basis, or where the travel is made by public
transportation (including hired vehicles), a fee equal to the actual
cost thereof. However, the applicant will not be charged a new mileage
rate without notification before the service is rendered.
(c) Per diem charges. When service is requested at a place away
from the auditor's headquarters, the fee for such service shall include
a per diem charge if the employee performing the service is paid per
diem in accordance with existing travel regulations. Per diem charges
to applicants will cover the same period of time for which the auditor
receives per diem reimbursement. The per diem rate will be
administratively determined by the Department. However, the applicant
will not be charged a new per diem rate without notification before the
service is rendered.
(d) Other costs. When costs, other than costs specified in
paragraphs (a), (b), and (c) of this section are associated with
providing the services, the applicant will be charged for these costs.
The amount of the costs charged will be determined administratively by
the Department. However, the applicant will not be charged for such
cost without notification before the service is rendered of the charge
for such item of expense.
Sec. 37.15 Payment of fees.
Fees and other charges for service shall be paid by the applicant
to the Livestock and Seed Program, AMS, P.O. Box 96456, Room 2628-
South, Washington, D.C. 20090-6456, with a check made payable to the
Agricultural Marketing Service.
Sec. 37.16 OMB assigned numbers.
The information collection and recordkeeping requirements contained
in this part have been approved by the Office of Management and Budget
(OMB) under the provisions of the Paperwork Reduction Act, 44 U.S.C.
Chapter 35 and have been assigned OMB Control Number 0581-0183.
Dated: June 4, 1999.
Enrique E. Figueroa,
Administrator, Agricultural Marketing Service.
[FR Doc. 99-14688 Filed 6-7-99; 10:53 am]
BILLING CODE 3410-02-P
