USA Peanut Congress June 22, 2009

1. 1 �USA Peanut Congress� June 22, 2009 Craig W. Henry Ph.D. Senior Vice President and Chief Operating Officer, Scientific and Regulatory Affairs Grocery Manufacturers Association Washington, D.C.

2. 2 Key Topics Supply Chain Management Third Party Audits and Facility Certification Summary/Next Steps

3. 3 Supply Chain ManagementThrough Industry Stewardship

4. 4 Supplier Management Practices Consider developing a manual for suppliers outlining your expectations. Incorporate the expectations in your manual (by reference) into contracts. This should include your expectations for how your supplier should ensure the safety of ingredients from another supplier. Require written acknowledgement of the supplier�s intent to comply with your requirements.

5. 5 �GMA Food Supply Chain Handbook�

6. 6 Supplier Management Build in prevention via close interaction with suppliers Establish supplier approval protocols Source only from approved suppliers whenever possible Implement a more stringent oversight process when sourcing from a new supplier or an unapproved supplier

7. 7 Supplier Approval Process Surveys (Supplier pre-assessment survey) Testing (the supplier�s programs and your own verification testing) Audits (2nd and 3rd party)

8. 8 Supplier Approval Process Surveys Processes in place document review (may also be done on-site) Regulatory compliance Specifications Certifications (e.g., ISO 22000, GlobalGAP) Questions specific to concerns Allergens used Environmental monitoring programs Training

9. 9 Supplier Approval Process Testing � review programs in place Environmental monitoring Supplier�s incoming ingredients Supplier�s outgoing products Conduct verification testing as appropriate to the items being purchased from this supplier. Testing for new supplier approval is usually more extensive than for maintenance of approved supplier status.

10. 10 Supplier Approval Process Audits On-site assessments/audits should be conducted for approval of suppliers of high-risk ingredients. Define an audit frequency for approved suppliers based on ingredient risk and performance. Increase the frequency for adverse findings Testing Product issue tied to the ingredient Public information on contaminant in the ingredient from another source Testing Product issue tied to the ingredient Public information on contaminant in the ingredient from another source

11. 11 Supplier Audits May be second or third party audits or both, depending on risk of ingredient. Consider announced and unannounced audits Conduct audit (2nd or 3rd party) when testing indicates there may be deficiencies in the supplier�s control programs. Ensure auditor is knowledgeable about the ingredient being provided by the supplier.

12. 12 Supplier audits Determine whether non-conformances warrant a follow up audit to confirm corrective actions have been implemented. Be prepared to stop buying products from a supplier when major deficiencies are found.

13. 13 Improving Global Food Safety Through Third Party Audits

14. 14 Global Food Safety Initiative GFSI launched at the CIES Annual Congress in 2000, following a directive from the food business CEOs. Food Safety was then, and is still, top of mind with consumers. Consumer trust needs to be strengthened and maintained, while making the supply chain safer. Managed by CIES � The Food Business Forum At this time, food safety was top of mind with consumers due to several high-profile recalls, quarantines, and negative publicity about our industry. The retailers and manufacturing CEOs agreed that consumer trust needed to be strengthened and maintained, while making the supply chain safer.At this time, food safety was top of mind with consumers due to several high-profile recalls, quarantines, and negative publicity about our industry. The retailers and manufacturing CEOs agreed that consumer trust needed to be strengthened and maintained, while making the supply chain safer.

15. 15 GFSI Objectives Convergence between food safety standards through maintaining a benchmarking process for food safety management schemes Improve cost efficiency throughout the food supply chain through the common acceptance of GFSI recognised standards by retailers around the world Provide a unique international stakeholder platform for networking, knowledge exchange and sharing of best food safety practice and information

16. 16 GFSI Foundation Board of Directors Terry Babbs, Tesco, UK Hugo Byrnes, Royal Ahold, The Netherlands Marcos Campos, Bertin SA, Brazil Kevin Chen, China Resources Vanguard, P.R. China D.V. Darshane, Coca-Cola, USA Bryan Farnsworth, Hormel Foods, USA Herv� Gomichon, Carrefour, France Cenk Gurol, Aeon Global, Japan Cory Hedman, Hannaford, USA Cindy Jiang, McDonalds, USA Hans-J�rgen Matern, Metro, Germany Payton Pruett, Kroger, USA Yves Rey, Danone, France Michael Robach, Cargill, USA Rick Roop, Tyson Foods, USA JP Suarez, Wal-Mart, USA Johann Z�blin, Migros, Switzerland Providing strategic direction and supervision of GFSI, and governance to GFSI Technical Committee. The Global Food Safety Initiative Foundation has a Board of Directors which is responsible for providing strategic direction and supervision of the GFSI and governance to the GFSI Technical Committee. The Board is made up of the following individuals�The Global Food Safety Initiative Foundation has a Board of Directors which is responsible for providing strategic direction and supervision of the GFSI and governance to the GFSI Technical Committee. The Board is made up of the following individuals�

17. 17 GFSI Technical Committee An international multi-stakeholder group Over 50 food safety experts Open to key experts by invitation. Works on common-interest projects to ensure continuous improvement in food safety The strength of the GFSI is the GFSI Technical Committee, which is a multi-stakeholder group made up of over 50 food safety experts. Stakeholders include representation by retailers, manufacturers, accreditation bodies, certification bodies, standard owners, industry associations and other technical experts. Membership is open to industry experts via invitation. This group works on common-interest projects to insure continuous improvement in food safety. This group is responsible for making revision recommendations to the Guidance Document to assure it adequately addresses components of effective food safety schemes. The Technical Committee provides technical expertise and advice to the GFSI Board.The strength of the GFSI is the GFSI Technical Committee, which is a multi-stakeholder group made up of over 50 food safety experts. Stakeholders include representation by retailers, manufacturers, accreditation bodies, certification bodies, standard owners, industry associations and other technical experts. Membership is open to industry experts via invitation. This group works on common-interest projects to insure continuous improvement in food safety. This group is responsible for making revision recommendations to the Guidance Document to assure it adequately addresses components of effective food safety schemes. The Technical Committee provides technical expertise and advice to the GFSI Board.

18. 18 Technical Committee Priorities 2008/9 This slide highlights the sort of issues the Technical Committee deals with. This slide highlights the sort of issues the Technical Committee deals with.

19. 19 Convergence means confidence Benchmarking work on four key food safety schemes (BRC, IFS, Dutch HACCP and SQF) reached a point of convergence. All schemes were completely aligned with the GFSI Guidance Document Version 5 requirements. This meant increased confidence in the schemes and comparable audit results. One of the objectives of the Global Food Safety Initiative is convergence between food safety standards. Presently, benchmarking work has been completed on 4 key food safety management schemes. This includes the BRC, IFS, Dutch HACCP and SQF. These schemes have been formally benchmarked and recognized by the GFSI Board. These schemes are completely aligned with the GFSI Guidance Document, Version 5 requirements. NZ GAP and SQF 1000 are also recognised by GFSI at the pre-farm gate level. This results in increased retailer confidence in these schemes and comparable audit results.One of the objectives of the Global Food Safety Initiative is convergence between food safety standards. Presently, benchmarking work has been completed on 4 key food safety management schemes. This includes the BRC, IFS, Dutch HACCP and SQF. These schemes have been formally benchmarked and recognized by the GFSI Board. These schemes are completely aligned with the GFSI Guidance Document, Version 5 requirements. NZ GAP and SQF 1000 are also recognised by GFSI at the pre-farm gate level. This results in increased retailer confidence in these schemes and comparable audit results.

20. 20 Auditor Competence Engagement with the International Accreditation Forum and European Accreditation and their members to solicit acknowledgement and implementation worldwide of GFSI requirements To ensure a consistent and optimal approach by accreditation bodies in their surveillance of certification bodies to satisfy the needs of all end users of accreditation. Creation of a GFSI Accreditation Task Force with involvement of all GFSI recognized schemes. This group is working on the continuous improvement of accreditation with accreditation bodies in order to build a common foundation and harmonise accreditation requirements, ensuring greater consistency in auditor competency across GFSI recognized schemes. Auditor competence is a key factor relating to the integrity of any scheme and has long been recognized by scheme owners as a matter which must be managed and controlled to ensure consistency and fairness. There are a number of things that GFSI has done in the past year in this area and will continue to work with other stakeholders to continue to address the concerns of the Industry. In 2007, the GFSI Technical Committee formed a multi stakeholder Working Group looking at the issue of auditor competence and the recommendations from this Group formed the basis for the complete revision of the section of the GFSI Guidance document relating to auditor qualification, training and experience. Future work includes the creation of a GFSI Accreditation Task Force with involvement of all GFSI recognized schemes. To build a common foundation and harmonize accreditation requirements, ensuring greater consistency in auditor competency across GFSI recognized schemes.Auditor competence is a key factor relating to the integrity of any scheme and has long been recognized by scheme owners as a matter which must be managed and controlled to ensure consistency and fairness. There are a number of things that GFSI has done in the past year in this area and will continue to work with other stakeholders to continue to address the concerns of the Industry. In 2007, the GFSI Technical Committee formed a multi stakeholder Working Group looking at the issue of auditor competence and the recommendations from this Group formed the basis for the complete revision of the section of the GFSI Guidance document relating to auditor qualification, training and experience. Future work includes the creation of a GFSI Accreditation Task Force with involvement of all GFSI recognized schemes. To build a common foundation and harmonize accreditation requirements, ensuring greater consistency in auditor competency across GFSI recognized schemes.

21. 21

22. 22 GFSI Recognized Schemes Current GFSI recognized schemes are : BRC - British Retail Consortium Global Food Standard Version 5 Dutch HACCP Option B IFS - International Food Standard Version 5 SQF - Safe Quality Food 2000 Level 2 SQF - Safe Quality Food 1000 At the present time, GFSI does not formally recognize the ISO 22000 standard; however, work has been undertaken by the GFSI Technical Committee in the last twelve months to identify where the differences between the GFSI Guidance Document and ISO 22000 exist. In September 2007, the GFSI Technical Committee published a paper �What is ISO 22000?�, which has led the way for further work by a number of organizations interested in gaining recognition by the GFSI. There are three main areas where differences exist: The lack of defined pre-requisite programs in ISO 22000 The accreditation requirement for ISO 22000 differs from that specified in the GFSI Guidance Document Ownership and accountability issues The GFSI Board has recognized that ISO 22000 has an important role in global food safety and will consider its recognition, but within the GFSI benchmarking framework. The CIAA (the European Food Manufacturers Trade Body) has developed a pre-requisite program and undertaken work to address ownership issues; this has been subject to discussion with the GFSI. It is hoped that these developments will lead to the opportunity to submit the ISO 22000 standard for recognition by the GFSI in 2008, but utilizing the benchmark framework for the assessment. At the present time, GFSI does not formally recognize the ISO 22000 standard; however, work has been undertaken by the GFSI Technical Committee in the last twelve months to identify where the differences between the GFSI Guidance Document and ISO 22000 exist. In September 2007, the GFSI Technical Committee published a paper �What is ISO 22000?�, which has led the way for further work by a number of organizations interested in gaining recognition by the GFSI. There are three main areas where differences exist: The lack of defined pre-requisite programs in ISO 22000 The accreditation requirement for ISO 22000 differs from that specified in the GFSI Guidance Document Ownership and accountability issues The GFSI Board has recognized that ISO 22000 has an important role in global food safety and will consider its recognition, but within the GFSI benchmarking framework. The CIAA (the European Food Manufacturers Trade Body) has developed a pre-requisite program and undertaken work to address ownership issues; this has been subject to discussion with the GFSI. It is hoped that these developments will lead to the opportunity to submit the ISO 22000 standard for recognition by the GFSI in 2008, but utilizing the benchmark framework for the assessment.

23. 23 GFSI Breakthrough The following companies have come to a common acceptance of GFSI benchmarked standards In June 2007, the following companies announced their common acceptance of GFSI benchmarked standards at post farm gate level, meaning once a facility is certified by any of the benchmark schemes, the results will be recognized uniformly. This was a significant moment for the GFSI, given that the buying power this group represents is enormous, representing approximately 740 billion US dollars across 325,000 stores worldwide.In June 2007, the following companies announced their common acceptance of GFSI benchmarked standards at post farm gate level, meaning once a facility is certified by any of the benchmark schemes, the results will be recognized uniformly. This was a significant moment for the GFSI, given that the buying power this group represents is enormous, representing approximately 740 billion US dollars across 325,000 stores worldwide.

24. 24 GFSI Update on FSSC 22000 May 27, 2009 GGSI has benchmarked FSSC 22000. At the May 2008 meeting the GFSI Board of Directors reviewed the report from the benchmarking committee and concluded, The GFSI Board of Directors has granted conditional recognition of this scheme, based on the content of the scheme meeting the Guidance Document requirements. The Board is now encouraging the Foundation for Food Safety Certification to move the new scheme to full implementation. Certification bodies around the world will be given the opportunity to apply for accreditation against the scope of the scheme, before the operational aspects of the scheme are benchmarked and fully recognized by the Global Food Safety Initiative Board of Directors. At the present time, GFSI does not formally recognize the ISO 22000 standard; however, work has been undertaken by the GFSI Technical Committee in the last twelve months to identify where the differences between the GFSI Guidance Document and ISO 22000 exist. In September 2007, the GFSI Technical Committee published a paper �What is ISO 22000?�, which has led the way for further work by a number of organizations interested in gaining recognition by the GFSI. There are three main areas where differences exist: The lack of defined pre-requisite programs in ISO 22000 The accreditation requirement for ISO 22000 differs from that specified in the GFSI Guidance Document Ownership and accountability issues The GFSI Board has recognized that ISO 22000 has an important role in global food safety and will consider its recognition, but within the GFSI benchmarking framework. The CIAA (the European Food Manufacturers Trade Body) has developed a pre-requisite program and undertaken work to address ownership issues; this has been subject to discussion with the GFSI. It is hoped that these developments will lead to the opportunity to submit the ISO 22000 standard for recognition by the GFSI in 2008, but utilizing the benchmark framework for the assessment. At the present time, GFSI does not formally recognize the ISO 22000 standard; however, work has been undertaken by the GFSI Technical Committee in the last twelve months to identify where the differences between the GFSI Guidance Document and ISO 22000 exist. In September 2007, the GFSI Technical Committee published a paper �What is ISO 22000?�, which has led the way for further work by a number of organizations interested in gaining recognition by the GFSI. There are three main areas where differences exist: The lack of defined pre-requisite programs in ISO 22000 The accreditation requirement for ISO 22000 differs from that specified in the GFSI Guidance Document Ownership and accountability issues The GFSI Board has recognized that ISO 22000 has an important role in global food safety and will consider its recognition, but within the GFSI benchmarking framework. The CIAA (the European Food Manufacturers Trade Body) has developed a pre-requisite program and undertaken work to address ownership issues; this has been subject to discussion with the GFSI. It is hoped that these developments will lead to the opportunity to submit the ISO 22000 standard for recognition by the GFSI in 2008, but utilizing the benchmark framework for the assessment.

25. 25 Structure

26. 26 Summary International trade in foods and agricultural products will continue to increase and traceability is critical Managing the supply chain at every point will be essential to assuring safe products and consumer confidence Both government and private sector entities must possess adequate infrastructure to properly manage supply chain and traceability may be mandated Commitment to training and adoption of new technologies will be essential

27. 27 Next Steps Suppliers must take responsibility for what they buy and sell in the marketplace. The clout of the commercial process must be leveraged immediately to eliminate producers of high risk products leading to recalls and reduced consumer and Congressional confidence. GMA will continue to promote a science based approach to legislative and regulatory initiatives that improves consumer confidence.