The U.S. Department of Agriculture’s oversight of country of origin labeling (COOL) is riddled with inconsistencies between state officials conducting the audits, problems with how retailers are selected for review and delays in communicating results of the audits.

Those are just a few of the shortfalls detailed in a report from the USDA’s Office of Inspector General concerning the agency’s role in enforcing country of origin labeling laws.

The report, issued in mid-August, says the USDA’s Agricultural Marketing Service has made some strides in implementing enforcement of the law since the it went into effect in March 2009. According to the report, the AMS has cooperative agreements with all 50 states to conduct reviews of PACA-licensed retailers to ensure they adhere to COOL regulations, including recordkeeping.

Items covered by COOL include:

  • Fresh and frozen fruits and vegetables;
  • Beef;
  • pork;
  • fish; and
  • peanuts.

The USDA has implemented a complaint system, allowing customers to file complaints how products are labeled.

However, the report said AMS needs to make many improvements in its oversight of COOL.

“Specifically, AMS needs to strengthen its process for selecting retailers for review, strengthen the review process itself, and improve the timeliness with which AMS evaluates retailer documentation and issues noncompliance letters,” Gil Harden, assistant inspector general for audit for OIG, said in the report.

“AMS needs to vigorously enforce COOL requirements, provide better oversight of the state agencies tasked with conducting the retailer reviews, and improve the way it communicates with and provides program guidance to retailers,” Harden said in the release.

Wide variations seem to exist between COOL reviewers in different states, and sometimes within the same state.

“For example, only 18% of the reviews completed in Kentucky during CY 2009 identified one or more noncompliances, while 96% of those conducted in Missouri during the same period identified noncompliances,” Harden said in the report.

Mike Jarvis, spokesman for the AMS, said Sept. 9 that the agency has made progress in implementing the relatively new law.

“We continue to improve oversight on it, as well as the enforcement,” Jarvis said. “We’ve got some protocols to enforce COOL recordkeeping provisions of the supply chain, we have traceback audits to establish the chain of custody to ensure accuracy of the COOL declarations.”

According to the report, AMS also failed to notify retailers of noncompliance in a timely manner. The OIG found that in 1,719 of the 5,528 reviews conducted during 2010 with identified noncompliances, AMS did not formally notify retailers that they were out of compliance for at least 60 days following the completion of onsite reviews.

In addition, the OIG report said AMS has not yet issued any civil penalties to retailers, which are allowed up to $1,000 per violation, even though these may have been warranted in some cases.

“By analyzing the 1,005 followup reviews AMS initiated between February 2010 and September 2010, we identified 21 retailers who had more instances of recorded noncompliances at the time of the followup than were noted in the initial visits, and whose noncompliances repeated those noted previously,” Harden said in the report.

“While these represent only a small portion of the total followup reviews, they do indicate the possibility that some retailers may be deliberately violating regulations, which may require monetary penalties.”

The OIG report made 14 recommendations to AMS about COOL oversight, and the report indicates that AMS told the OIG that the agency generally agrees with those recommendations.

Jarvis said the USDA plans to enforce fines soon on retailers who are willful violators.

“Right now (USDA) is putting together language that will come out in the final rule that will allow the imposition of fines,” he said.

The USDA Office of General Counsel will impose the fines, he said. Jarvis said he could not say when the rule will be published.