Paticipatory Guarantee Systems - a nice governance model

In 2004, when I was the President of the International Organic Agriculture Movement, IFOAM, I had the pleasure to be instrumental in the first global meeting for the furthering of what is called Participatory Guarantee Systems for organic markets. Those systems developed primarily in Latin America as alternatives to the third party certification model, which has dominated the organic market place since the mid eighties. I have myself been very active in building up this third party certification model, e.g. as the founder of KRAV in Sweden and founding president of the International Organic Accreditation Services, IOAS. Because of that, I also knew its weaknesses and shortcomings....

The workshop was hosted by one of the pioneers, Ecovida.

Presently Ecovida encompasses 180 municipalities and approximately 2,400 families of farmers (around 12,000 persons) organized in 270 groups, associations and cooperatives. They also include 30 NGOs and 10 ecological consumers’ cooperatives as well as several professionals’ partnerships and supporting organizations. All kinds of agriculture products are cultivated and sold by the Ecovida members, for example vegetables, cereals, fruits, juice, fruit-jelly, honey, milk, eggs and meat. In 2003 the sales amount was 13 750 000 USD; 27 % of the sales was to free markets, 20 % for export, 19 % to the institutional market and 34 % for other markets like supermarkets, shops, agro industries etc.You can access more information (in Portuguese) about the Ecovida network on http://www.ecovida.org.br/

I was sick in malaria and spend all the time in a hospital in Porto Alegre instead of participating in the workshop. Nevertheless, or perhaps as a result of my absence(!), the workshop was a great success. And from then on PGS has developed a lot.
IFOAM defines PGS like this:

Participatory Guarantee Systems are locally focused quality assurance systems. They certify producers based on active participation of stakeholders and are built on a foundation of trust, social networks and knowledge exchange

PGS has got a lot of positive attention lately, and it has been recognised as a relevant and legal method for guaranteeing organic products in several Latin American countries as well as in India.There are several reasons for this: one is cost and bureaucracy involved in the traditional certification. But even more important is the ownership of the process and the results. To undergo impartial third party certification with its increasingly bureaucratic procedures, standardized globally, is a rather alienating process. The first organic certification bodies where either farmer organizations or established by associations working closely with farmers, also taking on a promotional and educational role. With the introduction of adherence to the ISO 65 norm, government regulation and internal professionalization of the service, the distance between the certification body and the "subject of certification" has grown tremendously. Organic farmers today always refer to certifers as "them", never as "us".

While there are some strong sides in a third party certification system it also has a lot of weaknesses. The PGS system also has it strong and weak sides. As things stand now, third party certification is the model preferred for the anonymous mass-market, especially when distance between producers and consumers are big and PGS is the choice for direct marketing situations.

For me the thing that makes PGS most interesting is that it is based on a different paradigm and a participatory model of governance. As such it merits attention not only as a method of guarantee of organic quality. The notion that we create credibility by having supposedly "independent" organizations doing "objective" and "impartial" assessment is at best just one way of creating credibility or at worst an illusion.

The PGS models certainly are not perfect. Also, it lies in their nature that they are different and not globally standardized. Some of them may be defunct, some of them may be inefficient or ineffective. But the idea behind them is sound and could be a building block also for strengthening local democracy and building new types of institutions.

P.S. IFOAM has a lot of valuable resources for Participatory Guarantee Systems. 

Where does the buck stop?

‘Passing the buck’ is an English expression. It means letting someone else take care of a problem or take on the responsibility. The former US President Truman famously had a sign on his desk saying that ”the buck stops here”. Clarifying that he was ultimately in charge.

Who is really in charge? Who is to blame? These are questions that come into mind when reading the European Court of Auditor’s report on the EU organic system. Some of their conclusions could have been drawn directly from earlier leaders of The Organic Standard...

The EU system is built on competing national certification bodies – in some countries up to thirty certification bodies – with oversight by a plethora of national and sometimes regional authorities, accreditation by national accreditors ( only one per country because they have been granted monopoly by the European Union) and oversight by the European Commission. The system has developed not based on the needs of the sector but on the needs and habits of the governments. That is the only reason why authority for approval of certification bodies follows the divisions of the governments. And it is why in some countries regional authorities are in charge and in most countries several authorities are in charge.

Because of an, unfortunate, reference to the EN 45011 (ISO 65) in the EU Regulation back in 1997, national accreditation bodies came into the game, bringing little added value, but increasing cost and increasing focus on rather unimportant procedures. As they were given a monopoly of accreditation, they also swayed the EU that they should have the monopoly of interpreting the EN 45011, a rather outrageous claim.

All of the actors in the system have resource constraints, and will only do what they are forced to do. Most of them also lack competency. Some of the authorities are even hostile to the organic sector despite it being within their mandate to supervise and approve the certification bodies. How does that make the certification bodies and producers feel? The EU has rarely conducted any supervision of what the Member States do. And the ‘transaction costs’ of keeping all in the systems up to date and informed are astronomical. But the biggest problem is that nobody takes responsibility. A concerned consumer in an EU country or a food processor that suspects you’re a competitor is cheating, has nowhere to go with a query because nobody is in charge.

This mess is likely to lead to calls for more controls and more supervision, probably by strengthening the Commissions oversight, and increased reporting upwards by all concerned. But that is the wrong way to go.

What the system needs is rationalisation and fewer actors. There are several options for this. By integrating organic controls into the normal food control system, like in Denmark, both certification and accreditation can be eliminated, and accountability is clear. The same can be accomplished by having a national monopoly for certification, like in the Netherlands. By recognising one international accreditation system for all certification bodies, such as the IOAS, certification bodies could operate freely within all the European territories. In any case, the national approvals of certification bodies are antiquated and could be abolished; a certification body is approved in one country it should be allowed to operate freely in the other countries.

This is not the place to make the blueprint for a new system, but any new system should be built on fewer actors and fewer layers and clearer lines of responsibility, and as much as possible responsibility should be at the ‘lower’ levels, i.e. with the producers and the certification bodies.

The danger of predictable procedures

Days go by. Years go by. A new procedure is added to an old one, the system expands and it becomes more and more difficult to manage. Special systems are developed to manage the more and more complex system, and others are put there to monitor that the system to manage the system is systematically and consistently applied.

We all know the story. We have seen it. Some even claim that this increasing complexity
brought down empires. When the purpose is to protect citizens from ills it is even easier to accept that there is no end to what can be done and, therefore, has to be done. Airport security is a very clear example in point. However, now after a decade of ever increasing scrutiny and more procedures, not only passengers, but also security officials, question the wisdom of this. In a poll reported by The Economist, 87% of the respondents thought that changes implemented since 2001 had done more harm than good.

Kip Hawley, the former head of the US Transportation Security Administration (TSA), says in an article in the Wall Street Journal that the system needs reform. Two of the issues he singled out are also of particular relevance to the organic inspection and certification system. By checking a multitude of minute details, focus is easily lost
from the really important issues. Tests conducted by the TSA itself show that when officers are busy hunting cigarette lighters and pocket knives they may very well overlook
the dummy bomb parts placed next to them. And by making the system predictable and rigid, terrorists are helped more than deterred.

Organic operators are not airline passengers and the odd fraudster in the organic sector is not a terrorist; it is likely there are many more organic fraudsters in my plane than terrorists. Nevertheless, these observations may well hold for the organic inspection
and certification system. I have come across certification bodies, and regulatory authorities for which ‘annual inspection’ meant literally every 12 months, making it completely predictable when the next inspector will come. The minute detail that is recorded and made an issue of – largely a result of standards and certification requirements growing exponentially – substantially reduces the attention that is given to
more important things, and in particular to any kind of qualitative evaluation. The word ‘evaluation’ is probably missing from most audit forms.

Instead of helping, quality management systems used by certification bodies, aggravate the problem. The main tool for quality management is a standard operating procedure, which essentially means actions are predictable – for fraudsters as well as all other operators. Creativity and acting on a hunch or intuition are largely banned from such a system. But making imaginative, unprecedented effort can yield a lot more than following a prescribed course. For instance, in most cropping systems, there is a specific period when fertilisrs are applied. However, a few weeks after an application it is basically impossible to determine whether a fertiliser has been used or not. Despite this, most farms are never visited at those times. Certification bodies could redirect their effort one year to visit most or all farms at the critical time – or the time of sowing to detect treated seeds, or the time of insect attacks to determine use of a pesticide. But it would not be possible to conduct full inspection visits because that would be too resource demanding. Likewise,
to make a full, comprehensive (on site and crosschecking information) audit of a whole supply chain of products randomly selected (or based on a suspicion) in shops could disclose fraud in a way that routine audits hardly ever do.

There are many good and creative measures that can be taken to improve the organic certification system, and there are many good ideas among the talented people working within the system. But the attention of certifiers, accreditors and regulators is far too
often directed at the management of a system of ever increasing complexity. Unfortunately, when systems are too rigid they also drive away creative people, as they can’t flourish. In this way, the system produces people who believe there is only one right way of doing the job. And that is not a good starting point – neither for disclosing organic fraud nor for detecting terrorists in the making.

Published as Leader in The Organic Standard issue 133

How quality Management can result in low quality....

"In 2004, a new FSC [Forest Stewardship Council] accreditation standard was introduced in order to bring FSC’s certification system in accordance with ISO’s international standards for certification. Now after 6 years there is clear evidence that this ISO-fixation is undermining the integrity of the FSC system, by shifting the focus away from improving field performance to evaluating systems. Stakeholders, however are not interested in systems, but verification that good forest management is happening and that claims are really trustworthy."

writes Peter Feilberg, CEO of NEPCon in a recent post.  

I concur in his critical view on the ISO "quality management systems approach".In theory it sounds good, but the reality is quite different. 


Micheal Power has written a book: The Audit Society: Rituals of Verification which draws largely from financial audits. His conclusions are largely that the audit explosion is driven by vested interest and a failed attempt to minimize risk by focusing systems rather than actual performance. (a review of the book can be found on http://www.developmenteducationreview.com/issue11-review2 )

I have myself criticized the ISO inspired development of organic certification for almost twenty years now. And it is certainly an area I have a lot of insight in. I have helped a handful organic certification bodies to get accreditation and helped another handful to install "quality management systems". I have also worked as an auditor for the same period of time. I summarised some impressions of the accreditation process in a Leader in The Organic Standard November 2009

How valuable is accreditation?
A survey on accreditation, recently conducted by TOS, shows that there is considerable discontent with how accreditation systems are operated. In particular, respondents criticised national accreditation bodies within the EU for their high fees, the poor correlation between fees charged and work done, bad service and the low level of competence. Compulsory accreditation for organic certification bodies is fairly new in the EU system. The EU has maintained a policy of national monopoly in accreditation. The logic behind this policy is that if there was competition between accreditation bodies, a super accreditation system would be needed to monitor them – another body that determines which are reliable. Many question the wisdom of this monopoly. A critical voice in the TOS survey described the EU model as having ‘only God above the accreditors and God doesn’t care a lot about accreditation’.

Controversially, the EU has never been able to explain why a single monopolistic accreditation body is more reliable than competing ones. Admittedly the accreditation bodies have a certain self control, peer-review, in the International Accreditation Forum. But it is hard to understand why the EU policy can accept the  relevance of peer-review on the accreditation level and not on the certification level? All the arguments for maintaining an accreditation monopoly can be applied just as well to certification, making accreditation itself redundant. There is one question that was never asked, and which the TOS survey did not answer: ‘is there value in the accreditation?’. Such a question has many facets. One is whether accreditation is of direct value to the development of the organic market. Most likely the answer to this is ‘no’. Consumers have no understanding about these issues, and the fact that the certification body is accredited is of no relevance in the marketplace.

Regarding competition between certification bodies, in situations where accreditation is not compulsory, accreditation might bestow a certain market advantage. This would not be towards consumers, but towards the clients, who might want to know that their certification body is reputable and reliable. IFOAM accreditation has its main function here. If accreditation improves the credibility and reliability of the certification process it might have long-term positive effects. But in reality does it? We do not know. It is obvious that some kind of supervision of certification organisations provides a certain guarantee against direct fraud, but it is an untested assumption that accreditation is the most efficient process. Other untested options include direct control by the authorities and a peer-review system, or even much simpler measures such as increased transparency in the certification process.

One aspect that influences the reliability and usefulness of accreditation are the norms that are the basis for accreditation. The norms currently in use, such as the ISO 65, have been developed with quality management systems as models. However, it is not difficult to find ISO 9001 certified companies that offer very poor services or produce inferior products, and it is not difficult to find ISO 14001 certified companies that are damaging their environment. It is also not at all hard to find ISO 65 accredited certification bodies that are doing a bad job and whose certification decisions are dubious. The TOS survey indicates that part of the problem might be the competence of the accreditation bodies to interpret the norm. But the problem is probably deeper than that. The adoption of the quality system model in organic certification has hardly led to a measurable increase in reliability. At least thereis no research to support the claim – admittedly there is also no research that points to the contrary. While a quality management perspective and procedures certainly can be valuable, there are three disadvantages. First, these systems are resource-intensive, and to design, implement and maintain such a system would take a lot of resources away from other necessary work. Secondly, attempting to correct everything by stressing the system and the procedures disregards the human factor. It expresses a view of humans as automata. But we are not that, and real people simply do not always follow procedure. Sometimes they cheat and other times they have a bad day. Finally, a quality management perspective takes the focus away from what is actually happening and emphasises the written plans and procedures. The accreditation process is mainly designed to identify missing policies or procedures and not to detect faulty certification decisions, or sloppy inspections. The focus on the quality management system needs to be put under scrutiny, and those that promote it should come up with evidence that it delivers what we want at a reasonable cost.
(from The Organic Standard)