DRC Trading Standards Section 13. Shipper Duties

Continuing with our review of DRC Trading Standards’ articles series, we will now summarize the responsibilities of shippers with growers. Shipper’s responsibilities to their customers depend upon their contracts to sell, consign or joint account produce with dealers on terminal markets.  Shippers shall pay promptly for produce purchased and any deficits incurred on consigned shipments. A shipper who fails to perform any express or implied duty may be held liable for any damages resulting therefrom.  The shipper shall prepare and maintain records which fully and correctly disclose the details of their transactions in accordance with sections 3, 4, 5, 6 and 7 of DRC Trading Standards. These sections have been previously addressed in DRC’s Solutions Blog.

When a shipper enters into a joint account transaction with growers or others, the agreement between the parties should be reduced to a written contract clearly defining the duties and responsibilities of both parties and the extent of the shipper’s authority in distributing the produce.  If a shipper is at the same time handling similar produce not involved in the joint account transaction, a lot number or other positive means of identification shall be assigned to each lot of produce received in order to segregate and identify the various lots of produce.  If a shipper consigns all or part of the produce or employs the services of intermediaries such as brokers, his records shall show the results of these transactions, including the expenses involved and the names and addresses of these intermediaries. The shipper shall render a detailed and accurate accounting and pay promptly the net proceeds due to the joint partner.  The accounting shall disclose the status of all claims collected or filed with the carriers.

Financial Security for Produce Sellers: AKA “A PACA-like Trust” for Canada

From the President

In February, DRC issued a report entitled Benefits to Canadians of Establishing a PACA-like Deemed Trust. That report was sponsored by DRC with collaboration from Agriculture and Agri-food Canada (AAFC), Innovation Science and Economic Development (ISED) and Canada’s fresh produce industry.  The paper was compiled and researched by an Ottawa economic research firm, RIAS Inc.

Collaborators committed to reviewing and editing information regarding a PACA-like trust for the Canadian marketplace. While much good work was done, the group also found instances of factual misinformation and miscommunication which were addressed. In most cases, data was reconciled and resolved. Unfortunately, though, resolving facts and data, and moving a file forward are not the same thing. On the positive side, there is general agreement that we have, in fact, tabled a “made in Canada” version of the PACA Trust that could be implemented in Canada which is compliant with Canada’s Federal-Provincial-Territorial (FPT) division of power.

What remains to be done is to convince government that the challenges and risks faced by our industry warrant protections not available to other unpaid suppliers of insolvent firms. Making that decision will not be done by the public service, it is a political decision to be made by elected officials.

DRC’s role is to advise, research and develop technical guidance demonstrating a compelling rationale with respect to adopting and implementing a financial protection solution. We are working closely with your trade associations to complement efforts through their lobbying activities.

Compliance Desk implemented

In 2018, DRC implemented a Compliance Desk to ensure a single, standard operating procedure when unfavourable information pertaining to a member is brought to our attention.

The Compliance Desk focuses on issues relating to potential violations of DRC By-laws or DRC’s Trading Standards and Rules of Conduct. This may include slow payment, nonpayment, failure to pay an arbitration award or a member’s general unfair behaviour and conduct.

Some complaints brought to DRC, or even generated through its own investigative process as a result of external triggers, result in a Compliance Desk notification to the member advising that DRC has been made aware of a potential violation of their membership agreement with a request to respond within a 10 days period outlining their position regarding the matter at hand and, if appropriate, submitting supporting documentation. Once the member has either replied or failed to communicate, a recommendation regarding membership status is presented to the President for a decision. This may result in termination, expulsion, a requirement to post a bond or the matter may be determined to be resolved. Overall, Compliance Desk activities form a very small, but highly effective, part of DRC daily work and ensure that when issues occur, a positive, timely and remedial approach is taken.

The Compliance Desk process is based on fairness and transparency and ensures that members conduct their business in a way that does not contravene their member obligations or negatively impact other members and the broader trade.

CanadaGAP certification across the Americas

CanadaGAP® is a program developed in Canada to promote Good Agricultural Practices (GAPs) for fruit and vegetable suppliers.

CFIA has recognized CanadaGAP as a model system for food safety preventative controls for the horticulture sector. Based on a complete CFIA-conducted comparison of CanadaGAP with the Safe Food for Canadians Regulations (SFCR), CFIA has determined that the food safety elements of the SFCR are addressed 100% by CanadaGAP program requirements. In other words, there are no food safety preventative controls contained in the SFCR that are not already covered by CanadaGAP program requirements.

CanadaGAP has also achieved international recognition and is officially benchmarked to the Global Food Safety Initiative (GFSI) for certification options B, C, and D (for repacking and wholesaling). GFSI is an international benchmarking scheme that evaluates food safety programs against a set of requirements agreed on by retailers, manufacturers and other stakeholders. https://link.spamstopshere.net/u/49159f5a/DsOmr72d6RGx-HsJh3soMg?u=http%3A%2F%2Fwww.mygfsi.com%2F

GFSI recognition of CanadaGAP was first granted in 2010, renewed in 2013 and re-benchmarking to the latest version of GFSI requirements (Version 7.1) was completed in June 2018.

Launched in 2008, the program has grown to include over 3,100 participating companies from across the Canadian and U.S. fresh produce industry. Audit services are available from two certification bodies operating across Canada and in the U.S. One certification body is also approved to offer CanadaGAP audits in Latin America.

CanadaGAP has maintained an updated a series of resources first published in 2017 on the CanadaGAP website. The purpose of these materials is to help CanadaGAP-certified companies with training employees, interpreting the technical requirements of the program, and understanding how certification can help them to meet regulatory requirements whether in Canada or the U.S. Among the resources available is “Information for Canadian exporters to the United States about the Foreign Supplier Verification Program (FSVP)”, which can be found at  www.canadagap.ca under Tools / “Food Safety Links”.

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