Third-Party Audits Aren't a Panacea for Increasing Safety

The third-party audit system, in which private companies take over responsibility for inspecting worksites and production facilities, has been shown to expose Americans to significant health and safety risks while eating, working, and breathing.

A Jan. 10 report placed the blame for the 2011 Listeria outbreak squarely on the third-party audit system that had approved the safety of a Colorado produce processing facility only weeks before the deadliest outbreak of foodborne illness in a decade began. The first page of the third-party auditor's report clearly noted that "[n]o anti-microbial solution is injected into the water" that was used to wash the cantaloupes involved in the outbreak. This directly violated guidance from the Food and Drug Administration (FDA) about how melons like cantaloupe should be processed, yet nothing was done to correct the situation.

The report, prepared by Democratic staff of the House Energy and Commerce Committee, went on to say that the third-party auditor's failure to correct the danger shouldn't have surprised anyone. In fact, third-party auditors have been implicated in a number of other outbreaks:

  • In 2010, a third-party auditor gave an egg company not only a "superior" rating, but also a "recognition of achievement" two months before a Salmonella outbreak sickened more than 1,600 people and led to the largest egg recall in American history.
  • In 2009, a third-party auditor gave a peanut butter company a "superior" rating only six months before Salmonella in its products killed nine people and made 691 others sick.

"Like it or not, our food safety system relies heavily on third-party auditors," Democratic members of the committee wrote in a letter to FDA Commissioner Margaret Hamburg. And third-party audits are not only used by the FDA. They have become standard practice across several agencies and a number of federal programs.

James Belke, a U.S. Environmental Protection Agency (EPA) official, has suggested that EPA might rely on third-party audits in order to supplement the "few government auditors" who are available. Similarly, even though the Food Safety Modernization Act was supposed to increase federal inspections of food producers, FDA still has not been given enough resources to get federal inspectors to each facility more frequently than every three to five years.

In the absence of federal inspections, food retailers often require their production facilities to submit to third-party audits in an effort to ensure the safety of the food supply. Recent foodborne illness outbreaks might be traceable to the conflict of interest inherent in a privatized system: the Colorado cantaloupe producer hired its auditor, which in turn hired a subcontractor, off a list provided by one of its large buyers. In 2010, that auditor issued a passing grade to 98.7 percent of its inspections. It's not difficult to imagine that a third-party audit company that frequently issued failing grades wouldn't be the inspector chosen by either a food producer or a food retailer.

When third-party auditors replace federal inspectors, the quality of the inspection decreases. Third-party auditors do not address the same range of issues that federal inspectors do. In fact, the president of the company that audited the cantaloupe producer indicated that his company's audits only considered whether the producer was in compliance with FDA regulations but would not penalize a producer for failing to comply with guidance. He argued that FDA "guidelines are opinions," but the FDA guidance for melon production is more thorough, more specialized, and more up-to-date than the underlying regulations. He stated that his company conducted a "check-off audit and … if it was not required, there were no deductions [off the score the company received]." To put it more plainly: a federal inspector would have caught the problem and demanded the company conform to FDA guidance standards – which would have rectified the problem that led to the Listeria outbreak.

Even larger problems can result when third-party auditors fail to disclose what they find to federal regulatory agencies. In 2010, EPA used third-party auditors to help companies who had held flexible air permits come into compliance with Clean Air Act requirements. EPA agreed to allow companies who chose to participate in this program to use a third-party auditor that disclosed the results of the audit to the agency as well as the company; EPA then worked with the company to develop a plan to remedy any deficiencies that the audit revealed. In contrast, in July 2011, the Occupational Safety and Health Review Commission ruled that third-party safety and health audits can be protected by attorney-client privilege if they meet certain conditions. This means that the companies do not have to share the results of their private audits with the government agencies responsible for ensuring they are adhering to current standards, even during an investigation into the causes of a serious accident or threat to public health. It is hard to see how the Occupational Safety and Health Administration (OSHA) can fulfill its mission of protecting the health and welfare of American workers without some access to information collected on how workplace hazards are being managed.

In a perfect world, federal agencies charged with protecting our well-being would have all the resources they need to protect our food, water, air, workplaces, and children's toys. In the current world, however, Congress all too often cuts inspection budgets. The third-party audit system could help to supplement public inspections – but only if these parties are holding companies accountable to the highest standards. Otherwise, a third-party auditor's "seal of approval," bought and paid for by the company producing the goods, tells us nothing about the safety of the product it has purportedly inspected.

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