Elliott Review into the Integrity and Assurance of Food Supply Networks – Final Report

Background

The long awaited Elliott review was finally published on 4 September 2014. The review was commissioned in the spring of 2013 in the wake of the horse meat scandal under wide reaching terms of engagement which included:

• To advise the Government on the present weaknesses in the regulatory/enforcement framework that leaves the food system exposed to fraud;
• How best to support consumer confidence in the integrity of their food;
• To advise upon the audit, testing and other verification within supply networks by regulatory and enforcement authorities;
• To advise upon the roles and responsibilities of food businesses including manufacturers, catering suppliers and retailers throughout food supply networks to consumers

And importantly to recommend

• “Any changes required to the current regulatory framework and its implementation by the UK government…..”

The review took a systems approach based on the 8 pillars of food integrity, which Professor Elliott feels would result in a robust system and which includes: putting the consumer first; adopting a zero tolerance approach, improving intelligence gathering; supporting laboratory services; enhancing audit; proactively investigating and tackling food crime, acknowledging government support and having strong leadership and crisis management.

Whilst the Government appears to be taking the report seriously just how seriously will be determined in time and will undoubtedly be heavily informed by cost. Elizabeth Truss, Environment Secretary said on the publication of the report:

“We’re taking action to make sure that families can have absolute confidence in the food that they buy. When a shopper picks something up from the supermarket it should be exactly what it says on the label, and we’ll crack down on food fraudsters trying to con British consumers”

Professor Elliott started the report by acknowledging that UK consumers are fortunate to have “perhaps the safest” food in the world and that all those in the supply and regulation of the industry should be commended for what had been achieved. He pointed out however that much less had been done about food crime, fraud and authenticity. His recommendations seek, he says, to enhance that reputation.

The report emphasises food fraud and crime and is concerned to remove any notion that this concept suggests a low level infraction of the law. Professor Elliott points out that the consequences of food fraud can range from ill health, death and the organised end can result in substantial profits. At first blush you could be forgiven for thinking that the report principally concerns “serious and organised” food fraud and whilst there is much reference to this end of the criminal spectrum, the implications of the recommendations are likely to be felt across the food sector from small to large organisations.

Unfortunately, the exact extent of food fraud or crime in the UK has not been measured and the recommendations include the collection of data through surveys to plug this intelligence gap. Interestingly of the 18 police forces that responded to information requests 12 had recorded no incidents of food crime and a number of other forces indicated that they were unable to extract data from Home Office systems as there is no crime code for food contamination.

Key Findings & Recommendations

Consumers first

The report states that food crime tends to be identified too late, principally after food is distributed and eaten. By then the harm may well have occurred particularly, says Professor Elliott, in respect of allergens. He feels that deterrence starts with an educated consumer and providing them with the ability to take action when they suspect a problem.

Report Recommendations: maintain consumer confidence in food; make food crime as difficult as possible to commit; educate consumers on food crime, fraud and the implications; implement an annual targeted testing programme based on horizon scanning and intelligence and data gathering.

Zero tolerance

Elliott suggests that the food sector is one where margins are tight. The consequence of this is that the potential for food fraud will be high. He indicates that there is a need to adhere to the principal of zero tolerance and suggests “minor dishonesty should be discouraged and the response to major dishonesty deliberately punitive”.

Report Recommendations:

• Earned recognition for those already compliant with food law through accredited assurance schemes and primary authority relationships;
• Information sharing by regulators. Given the failings in the present system this could potentially be a quick win for the Government and the suggestion of a central register of food law convictions is a good idea;
• Industry wide cultural changes involving businesses identifying food crime prevention as part of their social responsibility. Elliott identified a number of business concerns that might inhibit cultural change but also acknowledged the efforts industry is making to tackle the problem.
• Whilst whistleblowing is acknowledged as an effective means of intelligence gathering, much could be done to improve whistleblowing processes;
• The education of industry in terms of potential criminal liability for ignoring attempted or actual fraud is starkly pointed out and reinforced by reference to the potential use of the Proceeds of Crime Act 2002 as additional incentive to change, where it can be shown that an organisation may have profited or benefitted from an offence. What is not mentioned is the added concern that regulators may seek to recover this benefit/profit from the offending organisation through confiscation proceedings;
• Improvement of procurement practices through proper rewarding of responsible programmes. He warns against procurement of goods at what might be considered to be a less than recognised reasonable price.

Intelligence gathering

The report states that no effective system for gathering intelligence on potential and actual food fraud presently exists. Intelligence is key to Elliott’s proposals and would be central to any Food Crime Unit moving forward. He suggests that intelligence may act as a deterrent but should primarily be used as an aid to fraud disruption. The issue of deterrence in this context in my view is questionable.

Report Recommendations:

• Industry Safe Haven: to enable the collection and sanitisation of intelligence (information and intelligence on food crime) from industry which, the report says, should be funded directly by industry. Interestingly Professor Elliott suggests that any information would be held in a way where legal privilege can be used to prevent unnecessary disclosure and maintain confidentiality. An interesting concept but one where it is difficult to envisage legal professional privilege applying. This concept will need further consideration;
• FSA intelligence hub: Professor Elliott comments that the FSA have already been investigating and developing new arrangements for intelligence gathering and sharing. As such, he suggests they should be the lead in the collection, analysis and distribution of such intelligence, acting as an “intelligence hub”.

Laboratory Services

The report calls for a “resilient laboratory service using standardised, established approaches [as] a key part of multi-agency collaboration needed to prevent food crime.” This will require significant investment and ironically the review almost coincided with the closure of the last publically run food testing centre in Wales due to a lack of resource.

Report Recommendations:

• Standardise approach used by laboratories testing for food authenticity;
• Develop centres of excellence;
• Develop guidance on surveillance programmes;
• Work in partnership with public sector organisations currently undertaking surveillance and Public Health England and Local Authorities.

Audit

A large section of the report and a large number of recommendations are given over to the issue of audit. Professor Elliott is critical of the current audits commissioned by retailers and believes they are not achieving the intended purpose. He argues there is a need to streamline auditing which, he says, has proliferated to the point where there is often duplication of audits, which unnecessarily increase the costs to industry.

Professor Elliott goes further and argues that current food safety audits are not designed to assure the authenticity of food products nor identify fraudulent practices. The report argues for the rationalisation of the audit process and states that after engagement with industry the preferred way forward was the introduction of a modular system of unannounced auditing involving a core food safety and integrity audit recognised by the Global Food Safety Initiative and agreed by major retailers. In addition to which, individual retailers would design their own specific modules focussing on their business priorities but also including a module on food fraud prevention and detection which, interestingly, should include elements of forensic accountancy. In light of the horsemeat incident, particular emphasis has been given to “supply chain checks” emphasising the key risk areas as:

• Storage
• Meat commodity market, traders and brokers
• Transport
• Frozen blocks of meat trim

Perhaps an area of concern is whether the degree of collaboration and co-operation between food businesses and regulators and between scheme holders envisaged as necessary in order to achieve these changes is realistic in the current competitive market place.

Report Recommendations:

• Support industry to develop a modular approach to auditing. Modules to include core food safety and integrity audit to agreed standards and criteria;
• Support work of standard owners to develop additional audit modules for food fraud prevention & detection;
• Encourage industry to conduct fewer but more effective unannounced audits;
• Encourage third party accreditation bodies undertaking food sampling to incorporate surveillance sampling in unannounced audits;
• Work with industry and regulators to develop specialist training and advice on critical control points for detecting food fraud and dishonest labelling;
• Encourage industry to recognise risks of food fraud in storage facilities and during transport;
• Support development of new accreditation standards;
• Work with industry and regulators to introduce anti-fraud auditing measures.

Government Support

Professor Elliott says that “Government support for the integrity and assurance of food supply networks should be specific, measurable, attainable, realistic and timely (SMART)”.

He examines the role of the FSA and Local Authorities in the regulation of the food industry. He rightly identifies the complicated local authority landscape and the fact that enforcement activity has been greatly affected by cuts due to austerity measures. He warns against cutting resources intended for food law enforcement to the point where they can no longer protect consumers.

As for the FSA, he suggests that this organisation take the role as lead agency but does not advocate any new statutory powers. The report suggests clarification of regulator responsibilities and advocates a stronger partnership between Government agencies – in particular DEFRA and the FSA which could be achieved through the creation of a National Food Safety and Food Crime Committee for example.

Report Recommendations:

• Support the FSA’s strategic and co-ordinated approach to food law enforcement, deliver guidance and training to LA Officers;
• Support the FSA to develop a model for co-ordination of high profile investigations and enforcement and facilitate arrangements to deal effectively with food crime;
• Ensure that research into authenticity testing, associated policy development and operational activities about food crime become more cohesive, where responsibilities are clearly identified, communicated and understood;
• Ensure that oversight of the “Authenticity Assurance Network” becomes a role for the “National Food Safety and Food Crime Committee”;
• Re-affirm commitment to an independent FSA;
• Ensure that food crime is included in the work of the Government Agency Intelligence Network and involves the FSA as lead agency;
• Support the creation of a new Food Crime Unit hosted by the DSA;
• Support the FSA to take a lead role on national incidents, reviewing where existing legislative mechanisms exist, while arrangements are being made to create the Food Crime unit; and
• Engage regularly with the FSA at senior level through the creation of a National Food Safety and Food Crime Committee.Require that the government lead on Operation Opson passes from the Intellectual Property Office to the FSA.

Leadership

Perhaps the most controversial and certainly the most expensive recommendation is the establishment of a food crime unit. Professor Elliott believes that whilst existing legislation provides for enforcement measures, this does not mean they are effective. Often the enforcement process does no more than disrupt activity which, he says, is an incentive for the commission of this type of offending. He also points to the low level of sanctions imposed following formal action by local authority enforcement officers. He also refers to engagement with the Sentencing Council over the low level of court imposed penalties for food crime. The Sentencing Council is to review the sentencing guidelines in order to produce a food offences guideline.

The review examined domestic investigation arrangements including Police and the Environment Agency, before looking at Food Crime Units in Europe and felt that the Dutch model was one that the UK should follow. Such a unit would be established within the FSA and become the lead agency for food crime investigation and enforcement. Professor Elliott argues that the unit should have genuine professional investigative capability with the development of covert intelligence, but acknowledges this could take 3 – 4 years to develop costing about £2–4m per year.

Report Recommendations:

• Ensure that food crime is included in the work of the Government Agency Intelligence Network and involves the FSA as lead agency;
• Support the creation of a new Food Crime Unit hosted by the DSA;
• Support the FSA to take a lead role on national incidents, reviewing where existing legislative mechanisms exist, while arrangements are being made to create the Food Crime unit; and
• Require that the government lead on Operation Opson passes from the Intellectual Property Office to the FSA.