Export Certification; Accreditation of Non-Government Facilities

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 353

[Docket No. 95-071-2]

RIN 0579-AA75

Export Certification; Accreditation of Non-Government Facilities

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are amending the export certification regulations to

provide for the establishment of a program under which non-government

facilities may become accredited to perform specific laboratory testing

or phytosanitary inspection services that may serve as the basis for

the issuance of a Federal phytosanitary certificate, export certificate

for processed plant products, or phytosanitary certificate for

reexport. Prior to this rule, only tests conducted by public

laboratories or inspections carried out by Federal, State, or county

inspectors or by agents could be used as the basis for the issuance of

Federal certificates. The accreditation criteria for particular

laboratory testing and phytosanitary inspection services will be

developed by the Animal and Plant Health Inspection Service in

cooperation with other interested government, industry, academic, or

research entities. The accreditation program will provide a mechanism

for qualified non-government facilities to become accredited to perform

testing or inspection services that may be used as supporting

documentation for the issuance of certificates for certain plants or

plant products.

EFFECTIVE DATE: February 8, 1999.

FOR FURTHER INFORMATION CONTACT: Mr. Narcy G. Klag, Accreditation

Program Manager, Phytosanitary Issues Management, PPQ, APHIS, 4700

River Road Unit 140, Riverdale, MD 20737-1236; (301) 734-8469.

SUPPLEMENTARY INFORMATION:

Background

The export certification regulations in 7 CFR part 353 (referred to

below as the regulations) set forth the procedures for obtaining

certification for plants and plant products offered for export or

reexport. Under the regulations, tests conducted by public laboratories

or inspections carried out by Federal, State, or county inspectors or

by agents may be used as the basis for the issuance of Federal

certificates. Export certification is not required by the regulations;

rather, it is provided by the Animal and Plant Health Inspection

Service (APHIS) as a service to exporters who are shipping plants or

plant products to countries that require phytosanitary certification as

a condition of entry. After assessing the condition of the plants or

plant products intended for export, relative to the receiving country's

regulations, an inspector will issue an internationally recognized

phytosanitary certificate (PPQ Form 577), a phytosanitary certificate

for reexport (PPQ Form 579), or an export certificate for processed

plant products (PPQ Form 578), if warranted. The regulations also

provide for an industry-based certification, under certain conditions,

of certain low-risk plant products such as kiln-dried lumber offered

for export.

On November 25, 1997, we published in the Federal Register (62 FR

62699-62707, Docket No. 95-071-1) a proposal to amend the regulations

to provide for the establishment of a program under which non-

government facilities could become accredited to perform specific

laboratory testing or phytosanitary inspection services that could

serve as the basis for the issuance of a Federal phytosanitary

certificate, export certificate for processed plant products, or

phytosanitary certificate for reexport.

We solicited comments concerning our proposed rule for 60 days

ending January 26, 1998. We received 34 comments by that date. The

comments were from processors and distributors of agricultural

commodities, State and county agricultural agencies, a seed trade

association, seed companies, crop improvement associations, a

university laboratory, private testing and certification services, an

association of State agricultural officials, laboratory accreditation

organizations, a foreign plant health agency, and an association of

seed certifying officials. Although all of the commenters supported the

concept of an accreditation program, all but six of them had specific

concerns, questions, or suggestions regarding the proposed

accreditation program. The comments are addressed below.

[[Page 1099]]

Role of Accredited Facilities

Several commenters referred to accredited facilities as ``private

certifiers'' or as having responsibility for the issuance of

phytosanitary certificates. We wish to make it clear that accredited

facilities will not be ``certifiers,'' nor will accredited facilities

issue phytosanitary certificates. Rather, an accredited facility would

perform specific tests or inspections that would serve as the basis for

phytosanitary certification; phytosanitary certificates will continue

to be issued by Federal, State, or county-level inspectors, as provided

by the regulations.

Handling of Samples

Two commenters raised the issue of the handling of samples

submitted for testing or inspection. The commenters were concerned that

the proposed rule did not address issues such as who would collect and

prepare samples for testing or inspection and how the integrity of

samples would be maintained during movement and while at the accredited

facility. One of the commenters stated that APHIS should specify how

all samples are to be collected and handled, while the second commenter

suggested that a sample handling accreditation program be made part of

the regulations.

We agree with the commenters that the proper handling of samples is

important to any laboratory testing or inspection program. Because the

procedures and requirements for the collection and handling of samples

will likely vary to some extent from plant to plant or product to

product, we believe that sample collection and handling should be

addressed in each set of specific accreditation standards as they are

prepared, rather than in a general way in the regulations. Further,

because the sample handling requirements will be part of each set of

specific accreditation standards, we do not believe that it is

necessary to establish a separate sample handling accreditation

program.

Conflict of Interest

Two commenters suggested that APHIS or State agencies should act as

an intermediary between accredited laboratories and their customers,

serving as the conduit for contracting and payment for services and the

submission of samples for testing. Two other commenters stated that

APHIS must ensure that laboratory analyses are not performed by anyone

having an interest in the product to avoid conflicts of interest. These

four commenters sought to separate the entity performing an inspection

or test from the entity for whom the work is performed in order to

prevent any influence or bias. One of them noted that the current

regulations in Sec. 353.6(a)(3) prohibit agents from performing

inspections of any plants or plant products in which they or a family

member are directly or indirectly financially interested, and stated

that the same conflict of interest rules should apply to accredited

facilities. Two different commenters foresaw the possibility that an

accredited facility might be a division or affiliate of a company that

would use its testing or inspection services and asked how APHIS would

deal with the potential conflicts of interest inherent in a facility

testing or inspecting its own plants or plant products.

The issue in all of the comments summarized in the previous

paragraph appears to be whether or not an accredited facility that is

connected in some way to a commercial entity for which it is performing

a service will be able to conduct unbiased tests or inspections and

accurately report the results of those tests or inspections. The

commenters appear to be worried that an accredited facility might

tailor test protocols or alter results in order to get the ``right''

answer that will please the commercial entity with which the facility

is associated.

We acknowledge that it is possible that an accredited facility

could attempt to provide inaccurate information to an inspector in

order to secure a phytosanitary certificate. However, given the

investment of time, money, and other resources that becoming accredited

would require, we do not believe that an accredited facility would risk

having its accreditation withdrawn by falsely certifying that a

specific test or inspection had been conducted and its results

faithfully reported.

Falsified test or inspection results can be detected by inspectors

conducting post-accreditation reviews or audits of facilities or

through random checks by certifying officials of plants or plant

products for which a phytosanitary certificate is sought. Under

Sec. 353.8(b)(4), facilities must agree to be periodically assessed and

evaluated by means of proficiency testing or check samples in order to

retain accreditation. Further, the tests or inspections that accredited

facilities will perform are for pests or diseases that are likely to

manifest themselves at some point. Presumably, an importing country is

asking for a phytosanitary certificate because a certain pest or

disease that may be present in the United States does not exist or is

not widely prevalent in that importing country; if the pest or disease

is detected in the importing country following the receipt of a

shipment certified on the basis of falsified test results, it is likely

that the pest or disease will be traced to that shipment. If it can be

confirmed that the exporting company, through its accredited facility,

used false test results to obtain a phytosanitary certificate, several

consequences are possible: The facility's accreditation could be

withdrawn, the facility or its parent company could be subject to civil

or even criminal penalties in the United States or the importing

country, and the parent company would likely lose the trust--and the

business--of its customers. We believe that the likelihood of detection

and the consequences associated with falsifying results will serve as a

deterrent in those cases where such deterrence is necessary.

Composition of Assessment Teams

One commenter asked if competitors of a facility seeking

accreditation would be involved in a facility's pre-accreditation

assessment. The commenter stated that such participation would be

inappropriate because the assessment team members must be completely

impartial and assess the facility on the standards established by the

rule without any appearance of bias. Another commenter asked if State

plant regulatory agencies would be involved in the pre-accreditation

assessment process and post-accreditation activities.

We do not anticipate that we will seek the participation of

operators or employees of commercial laboratories or inspection

services in the pre-accreditation assessment process. We do expect that

there will be instances when we will seek the formal assistance of our

cooperators in State plant regulatory agencies in the pre-accreditation

assessment process or in post-accreditation facility visits and

reviews. In addition, we would welcome the participation of our State

cooperators in any accreditation activities being conducted in their

respective States.

Post-Accreditation Supervision

One commenter stated that his organization could support the

concept of accreditation only if APHIS maintained continuous, day-to-

day oversight of the program through the appointment of an

accreditation manager who would administer the application procedures

and audits, arrange for proficiency testing, develop and provide

training for seed health tests and field inspection procedures, issue

accreditation credentials, maintain accreditation records, and

establish

[[Page 1100]]

standard tests for laboratory and field inspection procedures.

The need for program management such as that described by the

commenter was recognized by APHIS at the time the proposed rule was

being prepared, so there are already plans to appoint an accreditation

manager within APHIS' Plant Protection and Quarantine program to

perform the tasks identified by the commenter.

Another commenter questioned whether APHIS had sufficient staff to

implement and adequately monitor the accreditation program. The

commenter stated that there are universities and State departments of

agriculture that could serve as accreditors to more efficiently perform

the actual accreditation work for APHIS; APHIS' role could be purely

administrative, with the bulk of operational work being accomplished by

the State-level accreditors.

As noted above, an accreditation manager will be appointed in APHIS

to oversee the program's operation. We anticipate that the

accreditation manager will work closely with the export certification

program's traditional cooperators at the State and county level,

relying on them for advice and assistance with regard to accreditation

activities in their geographic area or within their realm of expertise.

As with other aspects of the program, the extent to which State

cooperators will become involved in accreditation-related activities

will depend largely on demand for accreditation and the number of

facilities that become accredited.

One commenter had several questions regarding post-accreditation

supervision of facilities: What will be the frequency of post-

accreditation audits or inspections? Will State plant regulatory

agencies be able to request an audit or inspection if an irregularity

is noted or a complaint is received? Will State plant regulatory

agencies be notified of the results of those audits or inspections?

The frequency of post-accreditation audits and inspections will be

determined, at least in part, by the type of service a facility becomes

accredited to perform. The performance of field inspections and even

some types of laboratory testing will be subject to seasonal changes

and other variables, so it would be difficult to prescribe a universal

audit schedule as part of this final rule. Thus, the frequency of post-

accreditation audits and inspections for a particular area of

accreditation will be determined at the same time the specific

standards for accreditation in that area are developed.

We would encourage State plant regulatory agencies, as well as

other entities that have dealings with an accredited facility, to

report any observed deficiencies or irregularities in an accredited

facility to the APHIS accreditation manager or to an inspector. APHIS

will review all reports received and, as appropriate, will perform an

inspection or audit in order to resolve any issues that arise regarding

accredited facilities. As cooperators in APHIS' phytosanitary export

certification program, State plant regulatory agencies will be kept

informed of developments in the program, including those related to

accredited facilities.

One other commenter was concerned that the quality of inspection

could suffer under an accreditation plan. Although he offered no

specific examples, the commenter stated that in some situations where

self-inspection has been performed, quality problems such as

overlooking specific infestations or diseases have manifested

themselves. If the quality of inspection is reduced or is unacceptable

to an importing country, the commenter concluded, the U.S.

phytosanitary inspection system as a whole may come under scrutiny.

We agree with the commenter's assertion that the quality of

inspection must be maintained to ensure the continued confidence of our

trading partners. We believe that the accreditation program provided

for by this final rule, with its focus on standards and required levels

of performance, will preserve--and even enhance--the quality and

credibility of the U.S. phytosanitary certification program.

Issuance of Certificates

One commenter asked if accredited facilities would apply to APHIS

or to State cooperators for export certificates and, if application for

a certificate was made to a State cooperator, whether the State

cooperator would be required to issue a certificate.

The regulations in Sec. 353.7 state that phytosanitary certificates

are signed and issued by inspectors; an inspector, as defined in

Sec. 353.1, could be either an APHIS employee or a State or county

plant regulatory official designated by the Secretary of Agriculture to

inspect and certify to shippers and other interested parties as to the

phytosanitary condition of plant products. Any shipment offered for

certification that meets the requirements of the importing country and

is in compliance with the regulations is expected to be certified; to

do otherwise would be a disservice to--and likely challenged by--those

individuals seeking a certificate.

On a similar note, a commenter from a county agricultural agency

stated that she was concerned about the possibility of placing the

county in a position of greater liability if she had to issue a

phytosanitary certificate based on laboratory analysis or field

inspections completed by a private company rather than a public agency.

No liability should attach to a certifying official as long as the

certification is made in accordance with the regulations. The

certifying statement on the phytosanitary certificate states that

``This is to certify that the plants or plant products described below

have been inspected according to appropriate procedures and are

considered free from quarantine pests * * *'' Using test or inspection

results provided by an accredited facility is an appropriate and

defensible procedure.

Costs of Accreditation

Several commenters were opposed to the provisions of the proposed

rule that would require the operator of a facility seeking

accreditation to enter into a trust fund agreement with APHIS prior to

accreditation. Several commenters stated that private entities need to

know in advance what the costs associated with the accreditation

process will be in order to be able to accurately calculate all costs

and benefits of the system. The commenters further stated that the

failure to accurately calculate all costs of accreditation, at all

levels of administration, could lead to an accreditation system that is

not viable, cost effective, or competitive in delivering phytosanitary

certification services. The commenters suggested that the trust fund

requirement apply only to entities that have not completed the

necessary cost analyses for implementing an accreditation scheme for

their constituents, or for entities that have not established a cash

reserve to cover the startup and long-term administration costs of

accreditation.

Given the tenor of those comments, it appears that the purpose and

scope of the trust fund agreement may not have been fully explained in

the proposed rule. We do not intend for the trust fund to be a single

pool of money funded by a particular industry segment from which APHIS

will draw to fund its activities in a certain area of accreditation.

Associations representing certain industry sectors may certainly play a

role in helping to develop accreditation standards that will be applied

to facilities within their industry, but when it comes to the actual

accreditation of facilities, those

[[Page 1101]]

facilities will individually enter into trust fund agreements with

APHIS to cover the costs of their accreditation.

Under a trust fund agreement, APHIS will, in advance, provide the

facility's operator with an estimate of the costs it expects to incur

through its involvement in the pre-accreditation assessment process. As

particular standards are developed, we will be better able to forecast

that cost and the costs of the maintenance of the facility's

accreditation. The operator of the facility would then deposit a

certified or cashier's check with APHIS for the amount of the estimated

costs, and the pre-accreditation assessment process would begin. If the

deposit is not sufficient to meet all costs incurred by APHIS, the

facility operator, under the terms of the trust fund agreement, would

deposit another certified or cashier's check with APHIS for the amount

of the remaining costs before APHIS' services would be completed. After

a final audit at the conclusion of the pre-accreditation assessment,

any overpayment of funds would be returned to the operator of the

facility or held on account until needed for future activities related

to the maintenance of the facility's accreditation.

Because this is a new program, we cannot say with certainty what

all the costs will be and whether this trust fund agreement process

will be the best way of handling the recovery of the costs of our

participation in the accreditation process. Trust fund agreements have

been used successfully in other APHIS programs, and we believe that

they will be useful in this accreditation program. However, if the

agreement process proves unwieldy or unworkable, we will propose to

amend the regulations to modify the way in which APHIS recovers its

costs.

Costs of Services

One commenter was concerned that APHIS' intention to recover all

costs associated with its administration of the accreditation program

would result in fees that would be so high that they would render the

program infeasible.

As explained in the proposed rule, the administrative expenses that

we expect to incur and recover will be for items such as laboratory

fees for evaluating check test results and all salaries, travel

expenses, and other incidental expenses incurred by APHIS in performing

the pre-accreditation assessment. As long as we could determine that it

would be feasible and practical to establish an accreditation program

in a particular area to begin with, we do not expect that costs related

to those activities would be prohibitive. To make that consideration

clear, we have amended Sec. 353.8(b)(1) in this final rule to provide

that APHIS will make a determination regarding the practicality of

establishing an accreditation program in a particular area before

beginning the process of developing the standards that would be

applicable to accreditation in that area. Further, participation in the

accreditation program will be voluntary, and an estimate of costs will

be provided to each applicant before APHIS begins any accreditation-

related activities, so there will be ample opportunity for the

applicant to consider whether accreditation will be desirable from a

cost perspective.

One commenter stated that the services of accredited facilities

could become very expensive for industry if private entities providing

services charged enough to cover their expenses. The commenter

concluded that because some State agencies charge less than what is

actually necessary to cover their expenses, the fees charged by private

facilities will likely exceed the fees charged by government

facilities. Although it is possible that an accredited entity could

charge a higher fee than a public agency, a customer may still choose

to use the accredited entity's services if the customer receives an

added benefit such as faster reporting of results. However, if an

accredited entity charges fees that are perceived to be too high by

prospective customers, it is likely that those customers would take

their business elsewhere, i.e., to a government facility or other

accredited facility. Private entities providing inspection or testing

services will be subject to the same market forces as any other entity

providing services and will have to maintain a competitive fee schedule

to remain in business.

Standards for Field Inspection

One commenter agreed that the four major accreditation assessment

areas (physical plant, equipment, methods of testing or inspection, and

personnel) were appropriate, but stated that quality control is more

problematic regarding the accreditation of field inspectors. The

commenter noted that an accreditor cannot place a diseased or infested

plant in a field as part of a pre-accreditation assessment to see if it

is detected and reported. The commenter concluded by stating that

special attention must be given to the need for credible assessment

mechanisms when standards are set for accrediting private entities to

perform field inspections.

We acknowledge that assessing proficiency in the area of field

inspection may prove to be more of a challenge than assessing

proficiency in the somewhat more easily quantifiable area of laboratory

testing. The development of specific standards for accreditation to

conduct field inspections (as well as all other specific standards)

will be a collaborative process, as APHIS will seek the input,

cooperation, and comments of industry, academic, government, or other

personnel with expertise or interest in the areas that will be

assessed. We are confident that this collaborative process will result

in field inspection accreditation standards that will provide an

accurate assessment of an individual or entity seeking accreditation in

that area.

Withdrawal or Denial of Accreditation

One commenter was concerned that the 10 days that would be provided

for the operator of a facility to appeal a denial or withdrawal of

accreditation would not allow enough time to develop an adequate

appeal. The commenter stated that 30 days should be provided to file an

appeal, and that the Administrator's decision regarding an appeal

should also be made within 30 days, rather than the proposed ``as

promptly as circumstances permit.''

We do not believe that it is necessary to extend the time for a

person to submit an appeal. To appeal a denial, the operator must

provide the reasons why he or she believes that accreditation was

wrongfully denied; to appeal a withdrawal, the operator must provide

all of the facts and reasons upon which he or she relies to show that

the reasons for the proposed withdrawal are incorrect or do not support

the withdrawal. Because APHIS will inform the operator of all of the

reasons on which it based its denial or withdrawal of accreditation,

and the appeal is, in essence, the operator's specific response to each

of those stated reasons, we believe that 10 days is a sufficient amount

of time for an operator to prepare an appeal. Although the

Administrator will, in most cases, be able to respond to an appeal in

less than the 30-day limit suggested by the commenter, we have retained

``as promptly as circumstances permit'' as the time frame for the

Administrator's decision so as not to limit our ability to investigate

or review the circumstances surrounding a withdrawal or denial in light

of the information provided in the appeal.

Two other commenters were concerned about the length of time that

could potentially pass before the withdrawal of a facility's

accreditation became effective due to the proposed provisions for the

operator to appeal the withdrawal. Both commenters stated

[[Page 1102]]

that allowing an accredited entity to continue to perform phytosanitary

work while an appeal was filed and heard could result in the issuance

of additional invalid phytosanitary certificates. One of those

commenters further stated that the proposed provision for immediate

withdrawal to protect ``public health, interest, or safety''

constituted a high legal standard that might be easily and often

challenged.

As noted by one of the commenters, the regulations will provide for

the withdrawal of a facility's accreditation to become effective

immediately when the Administrator determines that an immediate

withdrawal action is necessary to protect the public health, interest,

or safety. The withdrawal will be effective upon oral or written

notification, whichever is earlier, to the operator of the facility and

will continue in effect pending the completion of the proceeding, and

any judicial review of the proceeding, unless otherwise ordered by the

Administrator. Because a credible phytosanitary export certification

program, which greatly facilitates U.S. export trade in plants and

plant products, is clearly in the public interest, we believe that we

can justify the immediate withdrawal of a facility's accreditation when

circumstances warrant.

Accreditation of Government Facilities

Several commenters discussed the apparent disparity between the

requirements for government and non-government facilities, each making

an argument for a different degree of uniformity between the public and

private facilities. One commenter stated that APHIS should provide

government facilities with copies of the standards and procedures and

minimum recordkeeping guidelines, and should provide training in the

standards at no charge to the government facility as part of the

cooperative agreement between APHIS and the States. A second commenter

stated that APHIS should require all entities, both government and non-

government, to conduct their diagnostic tests or field inspections in

accordance with the standards and procedures. A third commenter

suggested that government facilities should be able to become

accredited if they choose to do so, while a fourth commenter stated

that accreditation should be required for both government and non-

government facilities. Another commenter stated that the draft North

American Plant Protection Organization (NAPPO) accreditation standards

mentioned in the proposed rule clearly state that all personnel

carrying out the same phytosanitary certification inspection functions,

be they government or non-government personnel, must meet the same

standards, so government facilities should be required to be

accredited. All of these commenters cited the need for standard testing

and inspection protocols and warned that failure to provide for

coordination in that area could result in discrepancies in the U.S.

phytosanitary certification system and a subsequent erosion in the

confidence of importing countries with regard to that system.

The accreditation provided for by the final rule is, in essence,

the means by which APHIS can approve a non-government facility to

perform, in an official capacity, the same tests or inspections that

Federal and State laboratories and personnel currently perform in

support of the phytosanitary export certification program. As such,

there is no reason to require facilities operated by a State or other

governmental entity to become accredited. That being said, we do agree

with those commenters who have pointed out the need for standardization

and uniformity in phytosanitary testing and inspection. When developing

specific standards for a particular area of accreditation, we will

solicit and encourage the participation of all interested parties in

the public and private sectors and academia, and we expect the

resulting standards will reflect the best available science, processes,

and methods. Once completed, those standards will be used not only to

evaluate facilities seeking accreditation, but will be distributed to

Federal and State facilities performing phytosanitary certification

work to ensure that they are using the best available science,

processes, and methods.

Promulgation of Standards

Several commenters were concerned that the specific standards for

accreditation would be subject to notice and comment rulemaking after

they had been developed and before they could be applied to the

accreditation of non-government facilities. These commenters stated

that having to publish standards in the Federal Register would result

in delays that would have a negative effect on the entire accreditation

program. Most of these commenters stated that APHIS must make a clear

distinction between those standards that would require publication in

the Federal Register and those that would not, suggesting that basic,

generally applicable standards might be promulgated through rulemaking,

while items with more limited applicability, such as the protocols for

a specific test, could be made available as part of the guidelines that

apply to a specific area of accreditation.

We recognize the commenters' concerns and agree that the

development and promulgation of specific standards must be accomplished

in a manner that will allow the program to grow and adapt to new

technologies without undue process-driven delays. At the same time,

however, we must balance that desire for responsiveness and flexibility

with the need for program standards that are enforceable and that have

been developed with the necessary level of public participation.

Because this final rule only makes specific accreditation programs

possible and does not itself contain any specific standards, it is

difficult to conclusively define what will and will not be included

when standards are published. As an example, an accreditation standard

might call for a particular test to be performed; while the type and

purpose of the test will be published with the criteria for

interpreting test results and other aspects of the standard, the

detailed instructions and protocols for conducting the actual test

itself would not necessarily have to be published. Our goal is to

develop and promulgate standards in a manner that will allow the

process to be responsive and flexible while ensuring that the standards

themselves are fair and enforceable.

Use of Subcontractors

Four of the commenters were concerned about the provisions of the

proposed rule that would allow the use of subcontractors by accredited

facilities. One comment, from a foreign agricultural agency, stated

that his agency viewed the use of subcontractors as a further

delegation by APHIS of its phytosanitary certification duties. The

commenter closed by saying that APHIS must negotiate such delegations

with its foreign counterparts before proceeding with allowing the use

of contractors. The second commenter noted that although the proposed

rule would provide for a review of a subcontractor's qualifications,

there are no limits placed on the services the subcontractor could

provide. The commenter was concerned that an accredited facility might

use a subcontractor to, for example, entirely conduct a test that the

facility had been accredited to conduct. The commenter also pointed out

that the proposed rule did not prohibit a subcontractor to itself use a

subcontractor. The third commenter was concerned that an

[[Page 1103]]

accredited facility that was facing the withdrawal of its accreditation

might attempt to shift the blame for their shortcomings to a

subcontractor and simply fire one subcontractor and hire another in an

effort to retain accreditation. The fourth commenter stated that

allowing the use of subcontractors by accredited facilities would make

it very difficult to maintain program credibility and would allow for

too much extended liability.

We believe that all four of the commenters have made valid points

that bring into question the advisability of allowing accredited

facilities to use subcontractors. Therefore, in this final rule, we

have eliminated the reference to the use of subcontractors that had

been in Sec. 353.8(b)(3)(iv) of the proposed rule.

Use of International Standards

Two of the commenters recommended that APHIS utilize private sector

accreditation services for government and non-government laboratories.

These commenters stated that accrediting laboratories in accordance

with the International Standards Organization's (ISO's) internationally

recognized ISO Guide 25 would be a more reasonable and less burdensome

approach to accreditation and would be more easily recognized

internationally. One commenter noted that other Federal agencies accept

third-party laboratory accreditation in areas such as environmental

lead and asbestos or electromagnetic compatibility testing.

Additionally, that commenter stated, Public Law 104-113 mandates the

utilization of private sector laboratory accreditation services.

As explained above in the response to a previous comment, the

accreditation program provided by this final rule is a way for APHIS to

approve a non-government facility to perform tests or inspections in

support of the phytosanitary export certification program. The program

is not intended as, nor has it been presented as, a full-blown

laboratory evaluation and accreditation program such as those provided

under the auspices of the ISO. The underlying principles of ISO

certification, such as quality documentation and accountability,

certainly will be applied when specific standards are developed, but we

do not believe that it is necessary for a non-government facility to

receive ISO 25 certification before it can perform testing or

inspection services under the phytosanitary export certification

program.

Qualifications

One commenter asked what the minimum qualifications for the

accreditation of these private phytosanitary services would be, and how

and when the standards would be established. Two other commenters

stated that the minimum qualifications for accredited inspectors must

be established and should be at least equal to the minimum

qualifications required of county, State, or Federal inspectors.

Specific qualifications for personnel involved in any particular

area of accreditation are not within the scope of this final rule. As

discussed in the proposed rule, personnel standards are one of the

areas in which non-government facilities will be assessed and will,

therefore, be one of the areas for which specific standards will be

developed. Generally speaking, the qualifications of employees of non-

government facilities will be similar to those of government laboratory

personnel and inspectors. The draft NAPPO standard for accreditation

mentioned in the proposed rule states that accredited personnel should

not be held to standards that are higher than those for government

personnel, a concept with which we agree.

Availability of Information

Two of the commenters wanted to know if the information generated

by accredited facilities in the course of their inspection or testing

activities would be available for review by APHIS or its State

cooperators. One of the commenters stated such data must be available

for review to ensure the validity of the testing process. The other

commenter stated that because State plant regulatory agencies are

cooperators with APHIS in both pest detection and export commodity

certification, it is essential that States have access to such

information in order to maintain the credibility of their own

activities in those areas.

As standards are developed for specific areas of accreditation, we

will ensure that recordkeeping is addressed in a manner appropriate to

each area of accreditation. In general, we expect to require that

records related to a facility's area of accreditation be made available

to APHIS during the pre-accreditation assessment and during subsequent

post-accreditation reviews or audits. Similarly, the specific standards

will include, as appropriate, provisions for each accredited facility

to report pests and diseases to APHIS or the State plant health agency

for further action.

Notification of Changes

Two commenters noted that the proposed regulations call for a

facility to notify APHIS ``as soon as circumstances permit'' when there

is a change in key management personnel or facility staff, or when

there is a change involving the location, ownership, physical plant,

equipment, or relevant conditions at the plant. Both commenters stated

that ``as soon as circumstances permit'' was too vague a time frame

given the potential importance of such changes. One of those commenters

suggested that a facility should be required to notify APHIS within 48

hours of such changes, while the other recommended that notice be given

to APHIS within 10 days. We agree with the commenters that a more

concrete time frame for notification is desirable given the potential

impact of such changes, so we have amended paragraphs (b)(4)(v) and

(b)(4)(vi) of Sec. 353.8 to require the operator of a facility to

notify APHIS as soon as possible, but no more than 10 days following

its occurrence, of any change in the elements set forth in those

paragraphs.

Therefore, based on the rationale set forth in the proposed rule

and in this document, we are adopting the provisions of the proposal as

a final rule with the changes discussed in this document.

Executive Order 12866 and Regulatory Flexibility Act

This rule has been reviewed under Executive Order 12866. The rule

has been determined to be significant for the purposes of Executive

Order 12866 and, therefore, has been reviewed by the Office of

Management and Budget.

This rule amends the export certification regulations to provide

for the establishment of a program under which non-government

facilities may become accredited to perform specific laboratory testing

or phytosanitary inspection services that could serve as the basis for

the issuance of Federal phytosanitary certificates, phytosanitary

certificates for reexport, or export certificates for processed plant

products. The accreditation criteria for particular laboratory testing

and phytosanitary inspection services will be developed by APHIS in

cooperation with other interested individuals or government, industry,

academic, or research entities. As specific accreditation criteria are

developed, the accreditation program will provide a mechanism for

qualified non-government facilities to become accredited to perform

testing or inspection services that may be used as supporting

documentation for the

[[Page 1104]]

issuance of certificates for certain plants or plant products.

The regulations in this rule are intended only to provide a

framework upon which accreditation programs for specific functions may

be established, so they will not, in and of themselves, entail any

costs to APHIS or any non-government facility. However, any specific

accreditation program that is established under these regulations will

entail costs to both the entities being accredited and the accrediting

body, i.e., APHIS. Because the accreditation program is expected to be

self-supporting, the costs to APHIS will be recouped through

accreditation fees. The fees charged by APHIS in connection with the

initial accreditation of a non-government facility and the maintenance

of that accreditation will, therefore, have to be adequate to recover

the costs incurred by the government in the course of APHIS'

accreditation activities. We expect that the costs that will be

reimbursed will be largely attributable to the cost of transportation

for the assessors to travel to the site of the facility, lodging for

the assessors, their salary and per diem, any laboratory fees charged

for evaluating check test results, and administrative expenses. Costs

for specific accreditation programs will vary depending on the range of

activities for which a facility seeks accreditation, the number of

assessors needed to adequately conduct a pre-accreditation assessment,

the type and number of any proficiency tests that will have to be

conducted, and the frequency with which post-accreditation evaluation

activities such as check tests and site visits will have to be

conducted.

The regulations stipulate that APHIS will provide an estimate of

its anticipated fees to the operator of the facility prior to

undertaking any activities that will result in fees being charged to a

facility. Participation in any accreditation program developed under

these regulations will be voluntary. At this time, we estimate that 15

individual non-government facilities are likely to seek and maintain

accreditation annually on about 82 accredited procedures, as long as

the costs of participating in an accreditation program are lower than

the benefits they receive from the program. As a result, this program

will have to meet the test of the marketplace.

The domestic seed industry, through the American Seed Trade

Association, has indicated its interest in establishing an

accreditation program for seed health testing and field inspection of

seed, so we have used the domestic seed industry to illustrate the

potential benefits that may result from the establishment of specific

accreditation programs.

The seed industry is expected to benefit from the establishment of

an accreditation program because domestic seed exporters routinely

require the services of inspectors and agents in order to obtain the

phytosanitary certification required by most, if not all, importing

countries; benefits can be realized in terms of more timely

certifications, which in turn can lead to reduced costs as well as

increased U.S. exports.

The value of seed exported from the United States to other

countries continues to grow rapidly, from $665 million in 1994-95 (July

to June), to $705 million in 1995-96, to more than $800 million

projected for 1996-97. There has been a concomitant rise in demand for

laboratory testing and phytosanitary inspection services to meet other

countries' import requirements. The ability of Federal, State, and

county testing and inspection services to meet this growing demand will

be increasingly strained. Already there are instances in which the

accreditation of non-government facilities would have prevented the

loss of export sales.

For example, some seed export opportunities have been forfeited

because the results of pre-harvest field inspections are usually not

known until after harvest. It is common for seed from several fields to

be blended before shipment. If the sample from one field is

subsequently reported to contain an actionable pest, then none of the

blended seed--which may have been harvested from as many as eight or

nine fields--could be exported. In one case in which this occurred, the

affected seed company lost foreign sales worth $250,000. Such losses

are much less likely to occur if there is more timely reporting of pre-

harvest inspections; accredited non-government inspection facilities

may be able to make such timely reports. In general, non-government

testing and inspection services are expected to be completed with

minimal delay, leading to greater marketing flexibility and lower risk

of lost sales.

Additional benefits, of even greater potential significance, can be

gained through the standardization of testing and inspection protocols

that will result from the establishment of accreditation standards,

particularly when internationally recognized standards are used. Major

seed trading partners of the United States, such as Canada, France, and

The Netherlands, have national seed health organizations that address

seed health issues in part by employing laboratory accreditation

protocols. The standards that will underlie the accreditation of non-

government facilities in the United States can help reduce the

differences among international phytosanitary regulations, thereby

expediting U.S. seed exports.

Accreditation of non-government facilities, by promoting more

streamlined exports based on internationally recognized standards, can

also be expected to benefit exports outside of the seed industry. As a

self-supporting system, private firms that expect benefits in excess of

costs of accreditation are likely to participate. In addition to the

net benefits received by these firms directly, society as a whole will

benefit from enhanced trade.

Under these circumstances, the Administrator of the Animal and

Plant Health Inspection Service has determined that this action will

not have a significant economic impact on a substantial number of small

entities.

Executive Order 12372

This program/activity is listed in the Catalog of Federal Domestic

Assistance under No. 10.025 and is subject to Executive Order 12372,

which requires intergovernmental consultation with State and local

officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule: (1) Preempts all State and local laws and

regulations that are inconsistent with this rule; (2) has no

retroactive effect; and (3) does not require administrative proceedings

before parties may file suit in court challenging this rule.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

3501 et seq.), the information collection or recordkeeping requirements

included in this rule have been approved by the Office of Management

and Budget (OMB) under OMB control number 0579-0130.

Regulatory Reform

This action is part of the President's Regulatory Reform

Initiative, which, among other things, directs agencies to remove

obsolete and unnecessary regulations and to find less burdensome ways

to achieve regulatory goals.

List of Subjects in 7 CFR Part 353

Exports, Plant diseases and pests, Reporting and recordkeeping

requirements.

[[Page 1105]]

Accordingly, we are amending 7 CFR part 353 as follows:

PART 353--EXPORT CERTIFICATION

1. The authority citation for part 353 continues to read as

follows:

Authority: 7 U.S.C. 147a; 21 U.S.C. 136 and 136a; 44 U.S.C. 35;

7 CFR 2.22, 2.80, and 371.2(c).

2. In Sec. 353.1, a definition of non-government facility is added,

in alphabetical order, to read as follows:

Sec. 353.1 Definitions.

* * * * *

Non-government facility. A laboratory, research facility,

inspection service, or other entity that is maintained, at least in

part, for the purpose of providing laboratory testing or phytosanitary

inspection services and that is not operated by the Federal Government

or by the government of a State or a subdivision of a State.

* * * * *

3. In Sec. 353.7, paragraphs (a)(4), (b)(4), and (c)(4) are each

amended by adding a new sentence at the end of each paragraph to read

as follows:

Sec. 353.7 Certificates.

(a) * * *

(4) * * * The Administrator may also authorize inspectors to issue

a certificate on the basis of a laboratory test or an inspection

performed by a non-government facility accredited in accordance with

Sec. 353.8.

* * * * *

(b) * * *

(4) * * * The Administrator may also authorize inspectors to issue

a certificate on the basis of a laboratory test or an inspection

performed by a non-government facility accredited in accordance with

Sec. 353.8.

* * * * *

(c) * * *

(4) * * * The Administrator may also authorize inspectors to issue

a certificate on the basis of a laboratory test or an inspection

performed by a non-government facility accredited in accordance with

Sec. 353.8.

* * * * *

4. A new Sec. 353.8 is added to read as follows:

Sec. 353.8 Accreditation of non-government facilities.

(a) The Administrator may accredit a non-government facility to

perform specific laboratory testing or phytosanitary inspection

services if the Administrator determines that the non-government

facility meets the criteria of paragraph (b) of this

section.1

---------------------------------------------------------------------------

\1\ A list of accredited non-government facilities may be

obtained by writing to Phytosanitary Issues Management, PPQ, APHIS,

4700 River Road, Unit 140, Riverdale, MD 20737-1236.

---------------------------------------------------------------------------

(1) A non-government facility's compliance with the criteria of

paragraph (b) of this section shall be determined through an assessment

of the facility and its fitness to conduct the laboratory testing or

phytosanitary inspection services for which it seeks to be accredited.

If, after evaluating the results of the assessment, the Administrator

determines that the facility meets the accreditation criteria, the

facility's application for accreditation will be approved.

(2) The Administrator may deny accreditation to, or withdraw the

accreditation of, any non-government facility to conduct laboratory

testing or phytosanitary inspection services upon a determination that

the facility does not meet the criteria for accreditation or

maintenance of accreditation under paragraph (b) of this section and

has failed to take the remedial action recommended to correct

identified deficiencies.

(i) In the case of a denial, the operator of the facility will be

informed of the reasons for the denial and may appeal the decision in

writing to the Administrator within 10 days after receiving

notification of the denial. The appeal must include all of the facts

and reasons upon which the person relies to show that the facility was

wrongfully denied accreditation. The Administrator will grant or deny

the appeal in writing as promptly as circumstances permit, stating the

reason for his or her decision. If there is a conflict as to any

material fact, a hearing will be held to resolve the conflict. Rules of

practice concerning the hearing will be adopted by the Administrator.

(ii) In the case of withdrawal, before such action is taken, the

operator of the facility will be informed of the reasons for the

proposed withdrawal. The operator of the facility may appeal the

proposed withdrawal in writing to the Administrator within 10 days

after being informed of the reasons for the proposed withdrawal. The

appeal must include all of the facts and reasons upon which the person

relies to show that the reasons for the proposed withdrawal are

incorrect or do not support the withdrawal of the accreditation of the

facility. The Administrator will grant or deny the appeal in writing as

promptly as circumstances permit, stating the reason for his or her

decision. If there is a conflict as to any material fact, a hearing

will be held to resolve the conflict. Rules of practice concerning the

hearing will be adopted by the Administrator. However, withdrawal shall

become effective pending final determination in the proceeding when the

Administrator determines that such action is necessary to protect the

public health, interest, or safety. Such withdrawal will be effective

upon oral or written notification, whichever is earlier, to the

operator of the facility. In the event of oral notification, written

confirmation will be given as promptly as circumstances allow. This

withdrawal will continue in effect pending the completion of the

proceeding, and any judicial review thereof, unless otherwise ordered

by the Administrator.

(3) The Administrator will withdraw the accreditation of a non-

government facility if the operator of the facility informs APHIS in

writing that the facility wishes to terminate its accredited status.

(4) A non-government facility whose accreditation has been denied

or withdrawn may reapply for accreditation using the application

procedures in paragraph (b) of this section. If the facility's

accreditation was denied or withdrawn under the provisions of paragraph

(a)(2) of this section, the facility operator must include with the

application written documentation specifying what actions have been

taken to correct the conditions that led to the denial or withdrawal of

accreditation.

(5) All information gathered during the course of a non-government

facility's assessment and during the term of its accreditation will be

treated by APHIS with the appropriate level of confidentiality, as set

forth in the U.S. Department of Agriculture's administrative

regulations in Sec. 1.11 of this title.

(b) Criteria for accreditation of non-government facilities. (1)

Specific standards for accreditation in a particular area of laboratory

testing or phytosanitary inspection are set forth in this part and may

be obtained by writing to APHIS. If specific standards for

accreditation in a particular area of laboratory testing or

phytosanitary inspection have not been promulgated by APHIS, and the

Administrator determines that accreditation in that area is practical,

APHIS will develop appropriate standards applicable to accreditation in

the area for which the non-government facility is seeking accreditation

and publish a notice of proposed rulemaking in the Federal Register to

inform the public and other interested persons of the opportunity to

[[Page 1106]]

comment on and participate in the development of those standards.

(2) The operator of a non-government facility seeking accreditation

to conduct laboratory testing or phytosanitary inspection shall submit

an application to the Administrator. The application must be completed

and signed by the operator of the facility or his or her authorized

representative and must contain the following:

(i) Legal name and full address of the facility;

(ii) Name, address, and telephone and fax number of the operator of

the facility or his or her authorized representative;

(iii) A description of the facility, including its physical plant,

primary function, scope of operation, and, if applicable, its

relationship to a larger corporate entity; and

(iv) A description of the specific laboratory testing or

phytosanitary inspection services for which the facility is seeking

accreditation.

(3) Upon receipt of the application, APHIS will review the

application to identify the scope of the assessment that will be

required to adequately review the facility's fitness to conduct the

laboratory testing or phytosanitary inspection services for which it is

seeking accreditation. Before the assessment of the facility begins,

the applicant's representative must agree, in writing, to fulfill the

accreditation procedure, especially to receive the assessment team, to

supply any information needed for the evaluation of the facility, and

to enter into a trust fund agreement as provided by paragraph (c) of

this section to pay the fees charged to the applicant facility

regardless of the result of the assessment and to pay the charges of

subsequent maintenance of the accreditation of the facility. Once the

agreement has been signed, APHIS will assemble an assessment team and

commence the assessment as soon as circumstances permit. The assessment

team will measure the facility's fitness to conduct the laboratory

testing or phytosanitary inspection services for which it is seeking

accreditation against the specific standards identified by the

Administrator for those services by reviewing the facility in the

following areas:

(i) Physical plant. The facility's physical plant (e.g., laboratory

space, office space, greenhouses, vehicles, etc.) must meet the

criteria identified in the accreditation standards as necessary to

properly conduct the laboratory testing or phytosanitary inspection

services for which it seeks accreditation.

(ii) Equipment. The facility's personnel must possess or have

unrestricted access to the equipment (e.g., microscopes, computers,

scales, triers, etc.) identified in the accreditation standards as

necessary to properly conduct the laboratory testing or phytosanitary

inspection services for which it seeks accreditation. The calibration

and monitoring of that equipment must be documented and conform to

prescribed standards.

(iii) Methods of testing or inspection. The facility must have a

quality manual or equivalent documentation that describes the system in

place at the facility for the conduct of the laboratory testing or

phytosanitary inspection services for which the facility seeks

accreditation. The manual must be available to, and in use by, the

facility personnel who perform the services. The methods and procedures

followed by the facility to conduct the laboratory testing or

phytosanitary inspection services for which it seeks accreditation must

be commensurate with those identified in the accreditation standards

and must be consistent with or equivalent to recognized international

standards for such testing or inspection.

(iv) Personnel. The management and facility personnel accountable

for the laboratory testing or phytosanitary inspection services for

which the facility is seeking accreditation must be identified and must

possess the training, education, or experience identified in the

accreditation standards as necessary to properly conduct the testing or

inspection services for which the facility seeks accreditation, and

that training, education, or experience must be documented.

(4) To retain accreditation, the facility must agree to:

(i) Observe the specific standards applicable to its area of

accreditation;

(ii) Be assessed and evaluated on a periodic basis by means of

proficiency testing or check samples;

(iii) Demonstrate on request that it is able to perform the tests

or inspection services representative of those for which it is

accredited;

(iv) Resolve all identified deficiencies;

(v) Notify APHIS as soon as possible, but no more than 10 days

following its occurrence, of any change in key management personnel or

facility staff accountable for the laboratory testing or phytosanitary

inspection services for which the facility is accredited; and

(vi) Report to APHIS as soon as possible, but no more than 10 days

following its occurrence, any change involving the location, ownership,

physical plant, equipment, or other conditions that existed at the

facility at the time accreditation was granted.

(c) Fees and trust fund agreement. The fees charged by APHIS in

connection with the initial accreditation of a non-government facility

and the maintenance of that accreditation shall be adequate to recover

the costs incurred by the government in the course of APHIS'

accreditation activities. To cover those costs, the operator of the

facility seeking accreditation must enter into a trust fund agreement

with APHIS under which the operator of the facility will pay in advance

all estimated costs that APHIS expects to incur through its involvement

in the pre-accreditation assessment process and the maintenance of the

facility's accreditation. Those costs shall include administrative

expenses incurred in those activities, such as laboratory fees for

evaluating check test results, and all salaries (including overtime and

the Federal share of employee benefits), travel expenses (including per

diem expenses), and other incidental expenses incurred by the APHIS in

performing those activities. The operator of the facility must deposit

a certified or cashier's check with APHIS for the amount of the costs,

as estimated by APHIS. If the deposit is not sufficient to meet all

costs incurred by APHIS, the operator of the facility must deposit

another certified or cashier's check with APHIS for the amount of the

remaining costs, as determined by APHIS, before APHIS' services will be

completed. After a final audit at the conclusion of the pre-

accreditation assessment, any overpayment of funds will be returned to

the operator of the facility or held on account until needed for future

activities related to the maintenance of the facility's accreditation.

Done in Washington, DC, this 5th day of January 1999.

Craig A. Reed,

Administrator, Animal and Plant Health Inspection Service.

[FR Doc. 99-396 Filed 1-7-99; 8:45 am]

BILLING CODE 3410-34-P