April 15, 2015

BEWARE of Non-Government (Private) Inspection and Survey Reports

By: Tom Oliveri

For those shippers who export, you are undoubtedly familiar with receiving survey reports from foreign overseas markets shipped usually by ocean carrier. It is important to remember that these third party surveys or non-government inspections must meet certain criteria in order to be considered as evidence of the condition and quality of the product at contract destination. The criteria that the PACA would look at in determining whether or not to accept a foreign survey as supporting evidence of the condition of the product upon arrival would be, an adequate sampling taken by the surveyor, documented pulp temperatures as well as percentages and a thorough explanation of condition defects. Should the survey lack any one of these items, the survey may be ruled as inadequate evidence for the purpose of determining if the load meets contract terms and may result in the PACA rejecting the survey or non-government inspection report as suitable evidence in a PACA reparation proceeding.

As it relates to non-government private inspections performed in Canada, the Fruit & Vegetable Dispute Resolution Corporation (DRC) will not recognize private inspections when adjudicating DRC complaints unless both seller and buyer have agreed that a private inspection will be acceptable. I would strongly suggest that a shipper always insist on a Canadian Food Inspection Agency (CFIA) inspection when determining quality and condition of your product. Because of streamlined efficiencies, the CFIA have inspectors available to perform timely inspections in both the Toronto and Montreal markets. The CFIA has stringent performance measurements connected to turnaround time and written procedures to follow when performing and submitting a written summary of the inspection, thus making it in almost all circumstances not necessary to seek a non-government inspection alternative. As a shipper, always ask yourself the upside benefit to your company of acquiescing to a non-government private inspection service in Canada?

So when you have an export shipment, in which you invoiced a PACA licensee and the buyer is submitting a foreign survey report, make sure the inspection document has the key provisions of pulp temperatures and sufficient sampling percentages for condition defects that are consistent with the USDA protocols. If the survey is missing any one of the mentioned requirements, the entire survey could be inadequate evidence in a PACA reparation proceeding. Additionally, non-government private inspections are only recognized in a DRC action when both parties agree to it.

I encourage you to review all inspections closely and should you have any questions or concerns regarding USDA inspections, Canadian Food and Inspection Agency, Survey Reports or private inspections please contact me directly at TommyO@wga.com or 949-885-2269 and I will be happy to discuss your exact issue or concern.