Safe Food Production

Queensland Business Plan

2016-2017 Version 1.0

Publish Date

April 2016

Safe Food Production Queensland Business Plan 2016-2017 Purpose

This Plan meets accountability requirements under Section 16E of the Food Production (Safety) Act 2000 and the corporations law, and implements the Safe Food Production Queensland (Safe Food) Statement of Strategy 2015-2020.

Results from the activities under this plan are reported quarterly to the Safe Food Board and the Minister for Agriculture and Fisheries, on the Safe Food website and to all stakeholders in the Safe Food Annual Report.

The plan:

Facilitates provision of safe food to meet consumer needs

Develops capability to respond to food safety incidents

Provides for flexible arrangements when regulatory requirements are implemented

Maintains confidence in the integrity of the food supply chain

Management of Key Business Risks

Safe Food has risk management processes in place consistent with Australian and New Zealand Standard (AS/NZS ISO 31000:2009). Internal control systems are in place to enable Executive to understand, manage and satisfactorily control risk exposure.

This approach is linked to the Statement of Strategy 2015-2020 and documented in “Managing Risk” – Safe Food’s Risk Management model version 1.3 (reviewed annually).

Contents

Executive Summary………………………………………………………………………………….………4

Business Plan Objectives………………………………………………………………………….………6

Applying a Risk Based Regulatory Approach…………………………………………………….7

Food Safety Schemes……………………………………………………………………………………….8

Business Context……………………………………………………………………………………………13

Business Environment……………………………………………………………………………………14

Promoting Food Safety Culture……………………………………………………………………..19

Stakeholder Engagement……………………………………………………………………………….21

Funding and Financial Sustainability………………………………………………………………22

Organisational Structure and Corporate Governance…………………………………….23

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Executive Summary Safe Food’s role is to ensure that

Queensland’s food production systems meet national food safety standards

Businesses along the food supply chain know and understand their responsibilities

Potential threats to the integrity of food supply are identified and dealt with decisively

Consumers maintain their confidence in the food produced in Queensland

A regulatory agency that understands its role After 15 years of operation, Safe Food is a mature regulatory agency with a sound record of achievement in food regulation across a number of food production and processing fields. It is expected that innovation and process re-engineering will drive further improvement in the results obtained from engagement between Safe Food and its customer base.

Planned activities Safe Food’s Business Plan optimises available resources by achieving a balance between responsible regulation and business needs. Implementation of standards by Safe Food recognises that it is the individual responsibility of each food business to protect and manage food safety within their business and to maintain the integrity of their products.

This Business Plan sets out simple outcomes that can be measured and reported quarterly to the Minister and the range of stakeholders who interact with the agency on a day-to-day basis. The plan outlines a ‘steady as she goes approach’ for the next two years. This reflects the stability of systems that have already been implemented, including Food Safety Schemes for a range of commodities (Meat, Dairy, Seafood, Eggs and Horticulture).

Red Tape The best way to reduce red tape is not to introduce it in the first place. Therefore, Safe Food applies a minimalist approach to ensure regulation is used as a last resort. Regulation within established industry compliance systems is preferred.

Safe Food is conscious of the impact of any form of regulation on industry. Therefore, Safe Food’s processes are simplified to minimise regulatory impost. Re-engineering business processes within Safe Food means that accreditation holders

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are not exposed to the complexities of the bi-national food regulation arrangement. Safe Food is committed to work with all businesses to improve the value of their investment in food safety compliance.

Legislation The food chain in Queensland is administered by three agencies –

1. Safe Food 2. Queensland Health 3. Department of Agriculture and Fisheries

Legislation regulating food activities is managed by the Food Act 2006 and Food Production (Safety) Act 2000. The legislation is harmonised through-chain. Amendments proposed for the Food Act 2006 may trigger consequential amendments to the Food Production (Safety) Act 2000. Safe Food will ensure the legislation remains harmonised with requirements through-chain.

Forecast for 2016/17 Some increase in activity to address risks in the horticulture sector and in the management of contaminants (such as residues in food) will be necessary to address emerging risks and to ensure that Queensland’s food supply chain continues to meet the needs of both domestic and global markets.

Safe Food’s participation in standards development and issues management at a national level, assists Queensland to present a strong platform for trade and for consumer protection.

The financial position of the agency is strong and will remain stable during the life of the Business Plan, with cost recovery targets met and expenditure levels managed to achieve a balanced budget.

The skills and knowledge of the collective of employees at Safe Food represent a unique combination of practical skills and experience. It is anticipated that these skills will continue to be in demand in the food sector. Whilst some staff turnover is expected, the ongoing program of training and knowledge transfer from experienced to new staff will continue, along with outsourcing for specific skills, to ensure the resources are available to execute the tasks in the Business Plan.

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Business Plan Objectives Activities to be undertaken by Safe Food during 2016-17 to achieve the strategic priorities in Safe Food’s Statement of Strategy 2015-2020 are:

1. Applying a risk-based regulatory approach to the supply chains for:

o Meat and meat products o Milk and milk products o Eggs and egg products o Seafood o Horticulture, particularly ready-to-eat products

2. Promoting a culture that facilitates food safety and compliance with

regulatory requirements 3. Engaging and working with accredited businesses, industry sectors and other

stakeholders on compliance and monitoring 4. Developing and improving systems that support business priorities 5. Securing and maintaining current and projected funding to support Safe

Food’s operations

A Strong Track Record

Each year Safe Food:

Issues and renews in excess of 8,000 accreditations for processing, producing and other food

related activities.

Assesses around 1,000 new applications for accreditation.

Responds to over 100,000 telephone calls and emails, and manages more than 600 notifications

from industry and consumers about food safety issues.

Assesses and reports on compliance across Queensland’s accredited food businesses, including the

results of over 7,000 on-site audits and assessments. Compliance rates exceed 95% across all food

safety schemes.

Conducts surveys, through-chain investigations and analysis of laboratory testing and baseline data

to ensure that potential food safety issues are identified and addressed.

Collaborates with a network of around 90 agencies and organisations working in food safety.

These Activities are Expected to Continue for 2016-2017

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Applying a Risk Based Regulatory Approach Government and industry share a common goal to ensure the safety of food. To achieve this outcome, each must fulfil separate but complimentary roles. Industry has the primary responsibility to deliver safe food to the market. Government’s role is to verify that industry is fulfilling its responsibility. Under the Food Production (Safety) Act 2000 (the FPS Act), Safe Food is the statutory body responsible for regulating food safety in the food production and processing sectors. Safe Food implements national standards and monitors food safety controls for specific food production and processing sectors, which are prescribed under industry specific Food Safety Schemes. All of the Food Safety Schemes administered by Safe Food are based upon nationally agreed standards that are incorporated into the Food Production (Safety) Regulation 2014 (the FPS Regulation). Currently there are Schemes under the FPS Regulation for food production and processing activities associated with meat, dairy, eggs, seafood and horticulture. Food Safety Schemes are based on best practice principles of through-chain, risk-based regulation. Each scheme is tailored to address specific risks generated by business activities specified in the legislation (production, processing, transport, handing distribution etc). The Schemes are developed in close consultation with industry. Activities, such as risk profiling and identification of appropriate mandatory regulatory controls, are applied in a manner consistent with internationally-agreed principles. Therefore, the application of food standards in the domestic market forms the basis of overseas market access. A short summary of the Food Safety Schemes is provided in Figure 1.

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Food Safety Schemes The following graph provides a summary of activities accredited under each of the Food Safety Schemes as at 31 March 2016.

Figure 1: Proportion of Accreditations by Activity

Meat Scheme History

The Meat Food Safety Scheme, which became effective under Queensland law on 1 January 2003, replaced and expanded upon the existing regulatory arrangement under the Meat Industry Act 1993.

Scope

The scope of the Scheme encompasses red and white meat (excluding seafood) and smallgoods intended for human consumption. It also covers pet meat, pet meat products and rendered products intended for animal consumption.

Processing, 21%

Wild Game Processing, 13%

Processing on Boats, 17%

Producing9%Wild Animal Harvesting

4%

Temperature controlled storage, 3%

Transporting, 33%

Processing Wild Game Processing Processing on Boats

Producing Wild Animal Harvesting Temperature controlled storage

Transporting

Processing equals 51%

of all accreditations

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Projection/Trend

It is anticipated that there will be a gradual decline in small to medium size retail premises processing meat, however such businesses will continue to diversify and focus on value adding to products. It is also expected that the number of wild game harvesters will continue to decrease unless there is a positive change in export markets.

Egg Scheme History

The Egg Food Safety Scheme was introduced on 1 January 2005. In November 2012 Food Standards Australia and New Zealand (FSANZ) incorporated Standard 4.2.5 Primary Production and Processing Standard for Eggs and Egg Products into the Australia New Zealand Food Standards Code (‘the Code’). This Standard was modelled on the Queensland Food Safety Scheme.

The Egg Scheme makes it unlawful to supply cracked and/or dirty eggs, supply unpasteurised egg pulp and supply eggs and egg products without an accreditation.

Scope

The Egg Scheme encompasses both egg producers (i.e. egg farms) and egg processors. Egg processors include businesses which process eggs from other producers and those which manufacture egg products.

Projection/Trend

In 2015 egg production in Queensland grew by approximately 20% with small egg producers identified as the fastest growing sector. This trend is expected to continue over the next few years, with the shift to the production of free range eggs from caged eggs also anticipated to continue. It is also anticipated that there will be a gradual increase in the manufacture of pre-prepared egg products and pasteurised egg pulp in line with demands from the food service and catering sector. Export of eggs and egg products is also forecasted to increase.

Introduction of the Free Range Standard (ACCC) over the next two years will impact both large and small producers. Compliance with this standard will be policed by the ACCC.

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Dairy Scheme History

The Dairy Food Safety Scheme commenced on 1 January 2003 and replaced the arrangements administered under the Dairy Industry Act 1993.

Scope

The Dairy Scheme covers activities associated with dairy producers (i.e. dairy farms) and dairy processors, such as milk factories, dairy manufactures and cheese makers.

Current regulatory requirements under the Scheme reflect national standards and require all food businesses to ensure public health and safety and take responsibility for food safety using risk management principles.

These standards support market access for primary products both domestically and overseas.

Projection/Trend

It is expected that the ongoing gradual decline in the number of dairy farms will continue. However, it is expected that there will be an increase in small artisan dairy processors in regional areas, producing a variety of specialised cheeses and other dairy products. Consolidation of dairy farms into larger herds with modern milking and storage facilities is a trend that is expected to continue.

Horticulture History

The Horticulture Scheme commenced in July 2015 and gave effect to the Production and Processing Standard for Seed Sprouts under the Food Standards Code (Standard 4.2.6).

Scope

The Horticulture Scheme covers activities associated with the processing of seed sprouts, such as decontamination, soaking, germination, growth and harvesting.

Projection/Trend

Safe Food is also collaborating with FSANZ and other regulatory partners regarding the control of risks in horticulture, particularly fresh cut and ready to eat products.

The small number of seed sprout processors in Queensland is not expected to change. However, there is potential in the future for other horticulture activities to

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be encompassed by the Scheme, subject to national developments relating to food safety controls within the broader horticulture industry.

Seafood Scheme History

The Seafood Food Safety Scheme commenced on 1 July 2009. The Scheme implements Standard 4.2.1 - Primary Production and Processing Standard for Seafood of the Code and sets out basic food safety requirements for the production and processing of all seafood.

Scope

The Seafood Scheme encompasses commercial fishing boats, land-based seafood processors, oyster farms and aquaculture farms.

The number of oyster leases remains stable. Seafood processors are also regulated by the Department of Agriculture and Water Resources if they hold export registration. Safe Food will be visiting all processors and aquaculture farms in Queensland in 2016/2017 to assess compliance with the Seafood standard.

Projection/Trend

There is potential for a decline in the number of commercial fishing vessels due to a reduction in commercial fishing licences issued and the possible buy back of existing licences.

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Safe Food implements a science and risk based regulatory framework to deliver cost effective regulation across the food production and processing sectors throughout Queensland.

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Business Context Safe Food is a leading practitioner in the implementation of outcomes based legislation. The bi-national framework supporting food regulation in Australia and New Zealand involves more than 90 agencies. Safe Food is a proactive rather than reactive regulator.

National Regulatory Framework Food regulation is aimed at achieving predetermined food safety outcomes. The alignment of these outcomes across jurisdictions is achieved through a national framework involving Australian state, territory and local government agencies. National Standards, which are included in the Australia New Zealand Food Standards Code (the Code) are developed by Food Standards Australia New Zealand (FSANZ). Primary Production and Processing (PPP) Standards are included under Chapter 4 of the Code. Safe Food participates in the national food regulatory framework through contributions to and membership on a range of committees and other groups, such as the Food Regulation Standing Committee (FRSC), which is the national forum and co-ordinating body for food regulatory matters. Safe Food is represented on both the FRSC and its subcommittee, the Implementation Subcommittee for Food Regulation (ISFR). Safe Food senior staff also participate in a range of other committees and working groups to promote better regulatory practices. Adoption of National Standards into State law require action by each of the individual jurisdictions. In Queensland, the Food Production (Safety) Act 2000 and Food Act 2006 legislation provide a framework to do this, as well as reflecting current government policy and addressing emerging issues that may impact on food safety.

State Regulatory Framework Safe Food’s key priorities are to promote food safety and seek to prevent food-borne illness, and these priorities will be pursued during the 2016-2017 period. Translating the priorities into action is a process that needs to be carefully managed and Safe Food has a very good track record of achievement in this area.

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As the State Regulator for food safety in food production and processing, Safe Food works in partnership with other State agencies to secure outcomes for businesses along the food safety chain. Safe Food works in partnership with the Queensland Department of Health (Queensland Health) and the Department of Agriculture and Fisheries (DAF) to ensure the food chain is effectively monitored. Each agency is committed to maintaining Queensland’s reputation for providing safe and suitable food. In addition to monitoring the supply chain, the goals of this multi-agency approach are to explain in simple terms Queensland’s food safety model, improve collaboration amongst regulatory partners, introduce practical reforms and reduce any potential overlap of agency efforts to improve the delivery of minimal, yet effective, regulation. The Queensland Senior Officers’ Working Group (SOWG) proactively promotes the smooth operation of existing regulatory controls across agencies to ensure public health and safety. SOWG is made up of a senior representative from Queensland Health, the Department of Agriculture and Fisheries and Safe Food. SOWG develops strategies and approaches to reduce potential agency overlap and introduce practical reforms to improve the delivery of best practice food regulation.

Business Environment: Low cost of Compliance for Industry Safe Food provides businesses with options for demonstrating compliance with national food safety requirements.

Businesses incur relatively small costs to meet and demonstrate their commitment to food safety regulation. Consumers pay a small amount to support this regulatory compliance within the cost of goods. Independent estimates of the cost of food safety amount to approximately 1% of the retail price.

Food supply chains are subject to fluctuations in supply, cost demands, natural hazards and competition. Regulation must be flexible enough to allow businesses to adapt and develop resilience.

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Safe Food operates an ongoing program of reducing compliance costs through administrative efficiencies, in line with the 2015-2020 Statement of Strategy. The majority of food production businesses accredited by Safe Food are small to medium enterprises (SME’s), with more than 90% of businesses paying less than $500 in annual accreditation fees to Safe Food. Figure 2 below provides a representation of annual accreditation fees paid to Safe Food. Figure 2: Annual Fee Amounts Paid By Businesses for Accreditations

Further, more than 90% of accredited businesses pay combined annual accreditation, assessment and/or audit fees of less than $950. Figure 3 provides a breakdown of these amounts. Figure 3: Total Annual Fees Paid By Businesses to Safe Food

8%

92%

Accred Feegreater than$500

Accred Fee lessthan $500

8%4%

88%

Accred and Auditfee greater than$950

Accred and Auditfee from $800 to$950

Accred and Auditfee less than $800

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Safe Food has a role in mitigating food safety risks across the supply chain by dealing directly with relevant businesses and stakeholders where there is an incident and by working with our accredited businesses to ensure they adopt preventative measures around significant food safety risks. As previously noted, businesses accredited by Safe Food achieve consistently high rates of compliance under this regime. As such, audits of food businesses have been reduced and other compliance methods, such as assessments, are being employed. These assessments highlight the businesses awareness of, provision for and commitment to food safety. The application of these simple criteria as part of the assessment process enable the business to showcase the practices used within the business to support food safety, including the businesses food safety culture. Enforcement is used as a last resort but is required in some instances to protect public health and address consumer concerns about food safety.

Figure 4 provides an overview of the number of Corrective Action Requests (CARs) issued each year to accreditation holders. This indicates a significant decline in the combined annual number of CARs issued since 2010. CARs are issued when non-conformances are observed during food safety audits.

Performance of a business from a food safety perspective is a determining factor in the cost of compliance.

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Figure 4: Number of Corrective Action Requests Issued Per Year (2005-2015)

During this period different compliance assessment approaches have been employed in addition to traditional methodologies, such as auditing. Whilst the annual number of CARs has decreased, Safe Food has maintained the necessary focus on assessing food safety compliance across all accredited food businesses, indicating continually improving levels of compliance across all sectors. The reduction is due, in part, to the change in regulation philosophy of encouraging a business culture that supports food safety and acknowledgment of response from industry. The introduction of engagement arrangements, such as the electronic Central Information Monitoring System (CIMS), improves the efficiency and reliability of information that is shared between businesses and the regulator. CIMS is a significant initiative that Safe Food has developed and implemented as a compliance monitoring tool. CIMS is designed to analyse data supplied by industry against agreed performance targets at key points in food production systems.

Collectively, this approach describes and monitors performance against a food safety baseline that represents a stable and consistent individual food production system. CIMS facilitates the through-chain monitoring of production systems and allows industry to demonstrate that it is meeting key targets in production systems. By utilising information that has already being collected, it also serves to minimise compliance costs as much as and wherever possible.

0

500

1000

1500

2000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Number of CARs 2005-2015

CARS Minor Major Critical

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During 2016-17, Safe Food will continue using baseline studies and reporting against industry baselines, through systems such as CIMS, to encourage businesses to monitor and improve their food safety reputation for product integrity and food safety.

Assessments versus Audits

Food business are subject to a range of audits throughout the year, conducted to satisfy commercial arrangements, as well as regulatory requirements. However, audits can be costly in terms of time and money, and have limitations as a method of indicating sustained compliance or in identifying poor behaviour, especially lack of food safety culture. Figure 5 provides a summary of audits, non-conformance audits and compliance assessments undertaken since 2005. As indicated above, in recent years Safe Food has employed other forms of monitoring compliance in place of audits. The overall number of food safety audits conducted by Safe Food has been reduced over the period indicated in Figure 4. Actual compliance rates have increased during this period.

Simple, more reliable measures of assessment have been introduced to monitor compliance.

Changes in regulatory philosophy that encourage changes in food safety culture lead to a reduced requirement for compliance based response.

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Figure 5: Number of Audits and Assessments Conducted Per Year (2005-2015)

Promoting Food Safety Culture

Since its establishment, Safe Food has continued to adapt its approach to regulating and monitoring accredited business, in close consultation with industry. Over time, this has led to a greater focus on the food safety culture of a business. A culture that supports food safety is built on a set of shared values that business owners and their staff follow to produce and provide safe and suitable food. It’s the food safety behaviours that they routinely practice and demonstrate. An organisation with a strong commitment to food safety demonstrates to its employees and customers that making safe food is an important commitment for the business. Strong leadership is key to good food safety culture. During 2016-2017 Safe Food will focus on ensuring a shared understanding of culture with the businesses it accredits. This will involve communicating food safety expectations with the management of a business and creating an expectation that employees will be enabled to voice their concerns and suggestions for improvements. The focus will be more proactive than reactive. A culture that supports food safety requires application of the best science, together with good business practices. Businesses must be able to demonstrate that they possess a good food safety culture through behaviour. This behaviour should include:

0

2000

4000

6000

8000

10000

12000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Audits and Assessments 2005-2015

Total Audits Assessments Non-conformances

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Awareness – of risks, legal and customer requirements, as well as understanding why these are important to the business.

Provision – appropriate equipment, programs, training and environment, as well as access to self-assessment tools that are in place and being used effectively.

Commitment – is demonstrated throughout the organisation (e.g. when the boss, manager or the QA person are not there, the same standards are maintained).

Environment – will influence how individuals within the organisation think about food safety, their attitude towards food safety, their willingness to openly discuss concerns and share differing opinions. An emphasis is placed on food safety.

Characteristics – accountability at all levels, sharing of knowledge and open communication, best practices.

Through such behaviour businesses can demonstrate to their staff and customers that they are aware of current food safety issues and that all staff:

Know the risks associated with the products or meals they produce;

Know why managing the risks is important; and

Effectively manage those risks in a demonstrable way.

Organisations with a positive food safety culture are characterised by communication founded on mutual trust, by shared perceptions of the importance of safety and by confidence in the efficacy of preventative measures. Effective communication is key and sharing information regularly is important to maintain an awareness of food safety expectations. Safe Food will use the assessment of behaviour to reinforce the food safety messages in this Business Plan.

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Stakeholder Engagement Engagement with accredited businesses, industry sectors and regulatory partners is at the core of Safe Food’s approach to food regulation.

Engagement with businesses supplying food products is the basis of the compliance assessment approach undertaken by Safe Food. Through-chain monitoring of food production systems involves meeting with stakeholders to provide collaborative solutions using open and transparent communication methods.

Under its Engagement Model, Safe Food has developed a cooperative working relationship with food production businesses. During 2016-17, Safe Food will continue to engage with accredited businesses, industry sectors and regulatory partners through a variety of avenues including:

Monitoring information provided by each business, with lesser reliance on audit and site visits;

Using social media to achieve timely and reliable information exchange through networks and intermediaries, and faster communication with businesses;

Using baseline studies and reporting against industry baselines through systems such as CIMS;

Directly engaging with businesses, industry groups, regulatory partners and other stakeholders on a range of platforms including:

o Safe Food’s regular industry meetings and regional workshops on topical and emerging issues;

o National committees, meetings and workshops held to inform the Queensland and/or National food regulatory frameworks; and

o Contributing to food industry conferences and workshops.

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Funding and Financial Sustainability Safe Food has consistently achieved the financial objectives set out in its Business Plans with funding coming from two sources - a shared funding arrangement with the Queensland Government and fee for service charges and charges for accreditations.

Safe Food has a strong history of financial sustainability. Food businesses are required to pay an annual accreditation fee. However, as indicated in Figure 2 above, over 90% of businesses accredited by Safe Food are charged accreditation fees of less than $500 per year.

Income received from fees will be sufficient to sustain the activities planned for 2016-17, as outlined in Figure 6 below, but does not cover unforeseen emergencies.

Figure 6: Safe Food Financial History from 2009-2010 to Forecast 2018-2019

The Business Plan 2016-17 acquits the governance requirements under the Financial Accountability Act 2009 and the Statutory Bodies Financial Arrangements Act 1982. Results of activities under the Business Plan will be reported quarterly to the Board and the Minister and annually in the corporate Annual Report to Parliament. Activities are subject to external review by the Queensland Audit Office and by an auditor approved by the Safe Food Board. *Sustainability = where revenue covers expenditure. And revenue provisions are made to cover routine, planned and contingent activities.

SUSTAINABILITY*

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Organisational Structure and Corporate Governance Safe Food, subject to the provisions of the Food Production (Safety) Act 2000, is obliged to be independent in the exercise of its functions.

The environment in which Safe Food undertakes its functions is as follows:

Safe Food has a five person Board consisting of three independent directors with expertise in various fields, appointed by the Governor in Council, along with representatives of the Chief Executives of Health and the Department of Agriculture and Fisheries. Safe Food has 40 Full Time Equivalent (FTE) staff and is managed by a Chief Executive Officer (CEO), who is recommended by the Board and appointed by the Governor in Council.

Our people have a great deal of experience in dealing first hand with the business of food – the people, the process and the product. We understand how these elements fit together to make food safe.

Minister

Safe Food Board

Executive Management

Safe Food Staff