I. II. III. IV. V. VI. VII. INTRODUCTION ORIGIN OF THE INVESTIGATION OBJECTIVES OF THE INVESTIGATION NATURE & SCOPE OF THE INVESTIGATION LIMITATIONS & CIRCUNSTANCES AFFECTING AUDIT EXECUTION STAGES OF THE INVESTIGATION 1. COLLECTION OF EVIDENCE 2. ANALYSIS OF DOCUMENTS & MATERIAL COLLECTED 3. TREATMENT OF UNFORESEEN FINDINGS 4. WRITING THE FINAL REPORT REPORT OF PRINCIPAL FINDINGS 1. TRANSITION PROCESS BACKGROUND AND GENERAL INFORMATION ON THE COMPANIES UNDER INVESTIGATION 2. ON THE TRANSITION FILE A. B. 3. 4. 5. 6. ON THE FORMAL COMMENCEMENT OF THE TRANSITION PROCESS AND NON-COMPLIANCES DETECTED IN FORM A.O.11 FOLIO 1 GENERAL CONSIDERATIONS TO ANALYZE TRANSITION PROCESS EVOLUTION AS DOCUMENTED IN FILE ON THE KEEPING OF A TRANSITION FILE AS OF 30 APRIL 2014 ON THE FOLLOW-UP VISIT CARRIED OUT ON 05 AUGUST 2014 BEGINNING OF 2015 ANALYSIS OF THE DEL VALLE VERDE CORP. S.A. CERTIFICATION BY PRIMUS LABS IN MARCH 2015 A. B. C. ON THE INCONSISTENCY DISCOVERED IN TERMS OF THE CERTIFICATION PERIOD ON THE INCONSISTENCY DISCOVERED IN TERMS OF SURFACE AREA ON THE ABSENCE OF EVIDENCE TO SUPPORT KEY AUDIT ELEMENTS GENERAL CONCLUSION ON THE CERTIFYING AGENCY’S WORK D. 7. ON THE EVENTS AND DOCUMENTATION THAT PRECEDE THE EARLY CONCLUSION OF LYL PROYECTOS MMV S.A.’s TRANSITION PROCESS ON 20 MAY 2015 8. ON THE ISSUANCE OF PRIMUS LABS’ PLC-OR-201 CERTIFICATE UNDER THE NOP IN DEL VALLE VERDE CORP. S.A.’S NAME 9. ON THE EVENTS AFTER THE EARLY CONCLUSION OF THE TRANSITION PROCESS ON 01 JUNE 2015 A. Organic certificate PLc_Org_CR_033 is issued to Del Valle Verde Corp S.A. on 22 July 2015 by Primus Labs for a total of 97.86 ha B. On 22 July 2015, Congelados y Jugos del Valle Verde started to export frozen organic pineapple supplied by Del Valle Verde Corp. S.A. C. From 22 July 2015 onwards, Del Valle Verde Corp. S.A. became Congelados y Jugos del Valle Verde S.A.’s main supplier of organic pineapple, which is exported frozen to the US market D. 15 March 2016. Report of unannounced visit to Del Valle Corp. S.A. (Report No. 03-S-2016), to Del Valle Verde Corp. S.A. (Report No. 04-S-2016) and to Congelados y Jugos Valle Verde S.A. (Report No. 05-S-2016) sent to Eng. Francisco Dall´Anese, SFE Director a) Email to Francisco Dall’Anesse Alvarez dated 17 March 2016, with copy sent to Eng. Karla Morales Roman b) Supervision and Follow-up Report 03-S-2016 dated 15 March 2016 c) Supervision and Follow-up Report 04-S-2016 of 15 March 2016 d) Supervision and Follow-up Report 05-S-2016 dated 15 March 2016 H. 29 March 2016. Primus Labs’ response to ARAO reports 03-S-2016 and 04-S-2016 I. 30 March 2016. Official letter ARAO.043.16 signed by Eng. Karla Morales Roman, Head of ARAO J. 19 April 2016. Official letter ARAO.065.16 signed by Eng. Karla Morales Roman, Head of ARAO K. 26 April 2016. Unannounced visit to Del Valle Verde S.A. by this Investigative Body L. 11 July 2016. Request for information sent to Del Valle Verde Corp. S.A. and LyL Proyectos MMV S.A. in order to understand key aspects related to the organic integrity of their operation M. 09 August 2016. Request for information sent to suppliers of organic inputs purchased by Del Valle Verde Corp. S.A. and LyL Proyectos MMV S.A. VIII. IX. 10. FINDINGS RELATED TO FARM IDENTIFICATION AND SIGNAGE OF VALLE VERDE CORP. S.A. PRODUCTION UNIT AREAS (11 July 2016 to 14 September 2016) REGULATIONS POTENTIALLY INFRINGED AND STAKEHOLDER RESPONSIBILITY 1. ON LYL PROYECTOS MMV S.A. 2. ON DEL VALLE VERDE CORP. S.A. 3. ON THE CERTIFYING AGENCY PRIMUS LABS 4. ON ENG. ROBERTO GARCIA SALAZAR 5. ON KARLA MORALES ROMAN ANNEXES I. INTRODUCTION I hereby submit the Final Report with the result of the investigation conducted by me in my capacity as a Unipersonal Investigative Body. This investigation was conducted in an attempt to clarify the facts I was asked to analyze pursuant to Resolution DSFE No. 19-2016 of 23 June 2016 and on the basis of which the objectives and scope of this investigation were defined. (Refer to Annex 1) It should be noted that the aforementioned resolution stipulated that a separate investigation had to be conducted for each company and filed separately. The companies investigated were: Del Valle Verde Corp S.A. with corporate i.d. card No. 3-101-577141 (hereinafter and for the purposes of this report I use the abbreviation “DVVC” to refer to this company) and LyL Proyectos MMV S.A. with i.d. card No. 3-101-410980 (hereinafter and for the purposes of this report I use the abbreviation “LYL” to refer to this company). However, once the investigation concluded, it became evident that for methodological reasons and in order to present facts clearly, in a chronological order, findings needed to be presented in a single report and the investigation had to be documented in a single file. Not only was this done to ensure facts were submitted in chronological order, but also to ensure their visualization as a process, as a continuum, where actions or interventions with regard to both companies occur at different times (or sometimes overlap). The intent of this Report is to clarify the role of both companies under investigation and, in accordance with the mandate and purpose of Resolution DSFE No. 19-2016, ascertain the eventual responsibilities of each of these companies or any other individuals. It is important to reiterate that the principles enshrined in the Constitution to protect individual rights and guarantees as well as the principle of legality were observed throughout the investigation process. The applicable principles of the General Law of Public Administration have also been adhered to. II. ORIGIN OF THE INVESTIGATION This study was conducted pursuant to Resolution DSFE No. 19-2016 of 23 June 2016. III. OBJECTIVES OF THE INVESTIGATION 1. The objective of the investigation: “To determine the existence of supposed irregularities in the production, processing, packaging, commercialization and export of the plant product ORGANIC PINEAPPLE”. 2. In terms of content. Pursuant to the terms of Resolution DSFE No. 19-2016: “The report must clearly detail the facts, date, place, name of participants, assign sequential numbering (document identification, data, persons responsible), location of site(s), dimensions, uses, activity carried out, identification of source of reference: formulas, methods and technical criteria; description of infrastructure, regulations allegedly infringed (explanation of how), specific conclusions, recommendation.” IV. NATURE & SCOPE OF THE INVESTIGATION 1. The investigation included an evaluation of the procedures involved in granting the organic certification issued to DVVC by the Office for Accreditation and Certification in Organic Agriculture (hereinafter and for the purposes of this report I use the acronym ARAO to refer to this office) of the State Phytosanitary Services (hereinafter and for the purposes of this report I use the abbreviation SFE to refer to this service). 2. The investigation also encompasses information related to management plans, risk management plans, analysis of input purchase and application, background verification, historical references of areas of interest, documentary research and data collection through different sources, which are detailed in each case. Sites were visited to cross-check and collect additional first-hand information on some of the facts/aspects. 3. The audit was conducted from 24 April 2014 to 30 August 2016 and, where necessary, was extended in order to attain greater clarity in terms of the existence of conventional pineapple farms trasitioning to organic. V. LIMITATIONS & CIRCUNSTANCES AFFECTING AUDIT EXECUTION The audit faced limitations in terms of the supply of information by both companies investigated. On 11 July 2016, they were asked to provide information related to the object of this investigation; however, this investigative body never received a response. A large amount of evidence and documentation was collected throughout the investigation, which translated into a significant workload for a single investigator. As a public official, I am also required to perform other tasks during work hours. This largely explains the amount of time required to present this report. It should be noted that the certifying agency, Primus Labs, represented in Costa Rica by Mr. Carlos Humberto Gonzalez Guerrero, repeatedly made inquiries regarding a variety of aspects related to the course of the investigation. These were forwarded to the Office of the State Phitosanitary Services and at no time did Primus Labs appear willing to collaborate as should be expected from an entity that is required to provide assistance to the public administration. This situation resulted in significant distractions that hindered this investigation. VI. STAGES OF THE INVESTIGATION Furthermore, it is necessary to point out that this investigation was conducted according to the following work plan: 1. COLLECTION OF EVIDENCE. Documentation related to the legal entities under investigation and in the hands of SFE and ARAO was assessed. Internal databases were analyzed as well as formalities and paperwork associated with these companies. Field visits were made and individuals mentioned in the documentation analyzed were interviewed. The certifying agency, Primus Labs, was asked to provide support. Information was also obtained from third parties that during their normal course of business have some sort of relationship with the facts under investigation. Next is a list of the evidence used by the Investigative Body to prepare this report. Copies of these documents have been attached to this report. 1. Del Valle Corp S.A.’s transtion file. This file is not numbered and begins with an A.O.11 form in LyL Proyectos MMV S.A.’s name. 2. Pages apparently added to the transition file in the month of July 2016 and numbered from 69 (repeated) to 74. 3. Del Valle Verde Corp S.A.’s organic farm registration file. 4. Official letter CF-077-2016 of 27 June 2016 addressed to Humberto Gonzalez, General Manager, Primus Labs Costa Rica. 5. Official letter CF-080-2016 of 01 July 2016 addressed to Eng. Karla Morales Roman, Office for Organic Agriculture Registration, requesting access to Del Valle Verde Corp S.A.’s original transition and organic certification process files. 6. Official letter CF-082-2016 of 06 July 2016 addressed to Eng. Marco Vinicio Jimenez Salas, Executive Director of SFE informing him of the appearance of documentation in Del Valle Verde Corp S.A.’s files and apparent anomalies in their numbering. 7. Official letter CF-086-2016 dated 11 July 2016 addressed to Del Valle Verde Corp S.A. 8. Official letter CF-87-2016 dated 11 July 2016 addressed to LyL Proyectos MMV S.A. 9. Email from Valeria Sanchez, Primus Labs Organic Certification Coordinator, sent to Blanca Castillo Fallas from ARAO on 16 May 2016, with four attached documents: 10. Certification application presented by Del Valle Verde Corp S.A. on 04 March 2015. Total number of ha to be certified: 99.5 ha. 11. Del Valle Verde Corp S.A.’s certification agreement dated 12 March 2015. 12. Usage agreement for the Primus Labs organic logo entered into between this certifying agency and Del Valle Verde Corp S.A. dated 12 March 2015. 13. Service quote presented by Primus Labs to Del Valle Verde Corp S.A. dated 12 March 2015. 14. Email from Valeria Sanchez, Primus Labs Organic Certification Coordinator, sent to Blanca Castillo Fallas from ARAO on 17 May 2016, with seven attached documents: 15. Farm management plan in Del Valle Verde Corp S.A.’s name dated 30 March 2015 and signed by Wilber Chinchilla Bermudez. 16. Cert-16 inspection instructions issued by Primus Labs to Ms. Lorena Carballo Batista dated 06 April 2015. 17. Organic Farm Inspection Report (pursuant to National Regulations 29782) prepared by Ms. Lorena Carballo Batista on the operations of Del Valle Verde Corp S.A. dated 07 April 2015. 18. List of Cert-023 organic products with no date and indicating that Primus Labs is going to certify MD-2 pineapple. 19. Plc_Org_CR-033 certificate dated 22 July 2015 and valid until 21 July 2016 issued to Del Valle Verde Corp S.A. by Primus Labs for a total of 97.86 ha. 20. Cert-15 Decision Letter dated 22 July 2015 signed by Carlos Humberto Gonzalez Guerrero, Primus Labs Certification Director, sent to Mr. Wilber Chinchilla Bermudez from Del Valle Corp S.A. 21. Cert 02 Certification Audit (Evaluation) signed by Silvia Gonzalez from Primus Labs, dated 29 June 2015. 22. Email from Valeria Sanchez, Primus Labs Organic Certification Coordinator, sent to to Blanca Castillo Fallas from ARAO on 17 May 2016, with five attached documents: 23. Cert-16 inspection instructions issued by Primus Labs to Christopher Dye, dated 31 July 2015. 24. Management plan in LyL Proyectos MMV S.A.’s name dated 25 June 2015 and signed by Wilber Chinchilla Bermudez. 25. Organic Farm Inspection Report (pursuant to National Regulations 29782) prepared by Christopher Dye on the operations of LyL Proyectos MMV S.A. dated 08 April 2015. 26. Cert-15 Decision Letter dated 24 September 2015 signed by Carlos Humberto Gonzalez Guerrero from Primus Labs Certification Director and addressed to Mr. Wilber Chinchilla Bermudez from LyL Proyectos MMV S.A. 27. Plc_Org_CR-040 certificate dated 24 September 2015 and valid until 23 September 2016 issued to LyL Proyctos MMV S.A. by Primus Labs. 28. Email from Valeria Sanchez, Primus Labs Organic Certification Coordinator, sent to Blanca Castillo Fallas from ARAO on 17 May 2016, with one attached document: 29. Cert 02 Certification Audit (Evaluation) signed by Christian Thommen from Primus Labs, dated 31 August 2015. 30. Official letter PL-AO-032-16_CF077 from Humberto Gonzalez, Primus Labs Operations Director, dated 04 July 2016 addressed to Jose Miguel Jimenez in response to official letter CF-077-2016. 31. Email dated 22 July 2016 sent by this Investigative Body to Blanca Castillo, ARAO’s secretary and response. 32. Report prepared by Gerardo Quesada, SFE database administrator, on records contained in the surveillance system under Del Valle Verde Corp S.A. and LyL Proyectos MMV S.A. dated 06 September 2016. 33. Production site location slips, waste follow-up slips and crop pest slips (18 slips) all for location code 741 from 09-08-2010 to 07-04-2016. 34. Production site location slips, waste follow-up slips and pineapple crop inspection reports (9 slips) all for location code 10831 and 14935 (the same location according georeferentiation registered). 35. Production site location slips, crop pest slips and pineapple crop inspection reports (8 slips) all for location code 14475. 36. Email from Roberto Garcia sent to this Investigative Body on 14 March 2016 with list of companies registered before ARAO to date. 37. Email sent by this Investigative Body to Karla Morales on 01 September 2016 requesting information related to Del Valle Verde Corp S.A. (attached documents: organic certification Plc_OR_201 dated 10 August 2015, organic certification Plc_Org_CR_033 valid until 21 July 2016, organic certification Plc_Org_CR_033 valid until 21 September 2016 issued by Primus Labs to Del Valle Verde Corp S.A., organic operator registration certificate issued by ARAO valid until 01 March 2017). 38. Email sent to Humberto Gonzalez at Primus Labs on 01 September 2016 asking whether there is a new transition in Del Valle Verde Corp S.A.’s name. 39. Email dated 17 March 2016 sent by Roberto Garcia to Francisco Dall´Anese with regard to unannounced visit to Del Valle Verde Corp and Congelados y Jugos Valle Verde S.A. (attached documents 03-S-2016 Del Valle Verde Corp Farm, 04-S-2016 Comercio Valle Verde Corp and 05-S-2016 Congelados y Jugos Valle Verde). 40. Unnumbered report addressed to Francisco Dall´Anese, SFE Executive Director, on frozen organic pineapple traceability and exports, dated 17 March 2016. 41. Unnumbered report addressed to Francisco Dall´Anese, SFE Executive Director, on the analysis of transition information and organic certification pertaining to Del Valle Verde Corp S.A., LyL Proyectos MMV S.A. and Congelados y Jugos Valle Verde S.A. 42. Official letter CF-054-2016 dated 16 May 2016 addressed to Francisco Dall´Anese, SFE Executive Director, including report of visit conducted at Del Valle Verde Corp S.A. on 26 April 2016, together with sampling logs and laboratory results. 43. Official letter CF-069-2016 dated 06 June 2016 addressed to Eng. Arlet Vargas Morales, Director ad interim of the SFE, including analysis of information presented to ARAO by Primus Labs (documents submitted by Ms. Valeria Sanchez are analyzed), which was initially sent to Francisco Dall´Anese, former SFE Executive Director. 44. Photographic evidence of signage in production areas managed by Mr. Luis Barrantes. 45. Information request dated 09 August 2016 sent to Agrocosta regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 46. Information request dated 09 August 2016 sent to Colono Agropecuario regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 47. Information request dated 09 August 2016 sent to Agricola Piscis regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 48. Information request dated 09 August 2016 sent to PCD Internacional regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 49. Information request dated 09 August 2016 sent to Laboratorio Dr. Obregon regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 50. Information request dated 09 August 2016 sent to Costa Tri S.A. regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 51. Information request dated 09 August 2016 sent to Almacen El Éxito regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 52. Information request dated 09 August 2016 sent to Novagro regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 53. Information request dated 09 August 2016 sent to Bio-Eco regarding sale of organic inputs to Del Valle Verde Corp and LyL Proyectos MMV and corresponding response. 54. Official letter No. 274 (E-716) regarding transfer of documents sent by Eng. Marco Vinicio Jimenez Salas, SFE Executive Director, dated 27 July 2016 and containing a series of documents submitted to the SFE by Lic. Roy Alberto Guerrero Olivares, legal representative of Del Valle Verde Corp S.A. and LyL Proyectos MMV regarding official letters CF-086-2016 and CF-087-2016. This Investigative Body’s response as per the request of the SFE has been attached. 55. Email dated 17 August 2016 sent by this Investigative Body to Humberto Gonzalez and subsequent response emails. 56. Note dated 25 August 2016 from Lic. Jose Pablo Sanchez submitting affidavits by the following persons: Olman Briceño, Evelio Chaves, Leonidas Rojas, Nestor Ramirez and Marc Beesley. 57. Note dated 20 September 2016 from Lic. Jose Pablo Sanchez submitting affidavits by the following persons: Olman Briceño and Evelio Chaves. 58. Document from Primus Labs on Organic Agricultural Systems (ORG-007s). 2. ANALYSIS OF DOCUMENTS AND MATERIAL COLLECTED. The first task was to document and become familiarized with all relevant documentation. Once sufficient documentation had been obtained and all reasonable information sources had been exhausted, the relevant facts were established (some of which were evident from the beginning of this investigation and others that emerged during the course of the investigation), a timeline was created and key circumstances were pinpointed (identitification of key participants, spatial/temporal location). 3. TREATMENT OF UNFORESEEN FINDINGS. It should be noted that during the course of this investigation, a series of anomalous situations were detected that had previously gone unnoticed. These have been summarized to ensure they are handled appropriately. Examples of these situations include: pages of the investigated companies’ transition files that had not been included in the original versions revised by this Investigative Body, and signage in areas located in El Saino de Pital de San Carlos indicating that those were organic or transitioning farms belonging either to the companies under investigation or to a company called “Valle Verde Organic Farms”. 4. WRITING THE FINAL REPORT. Once the information gathered had been systematized, the final report was prepared. Annexes include tables with relevant information/facts presented in chronological order. VII. REPORT OF PRINCIPAL FINDINGS. Following is an overview of the principal findings of this investigation. Sources of evidence appear in brackets. 1. TRANSITION PROCESS BACKGROUND AND GENERAL INFORMATION ON THE COMPANIES UNDER INVESTIGATION. From a chronological standpoint, the exact date on which the companies under investigation first approached ARAO to request that several areas be included under the organic transition regime is unknown; however, this seems to have ocurred in April 2014, before the 24th. This we know because a visit report dated 24 April 2014 and prepared by Eng. Roberto Garcia Salazar from ARAO is included in the transition file. Therefore, it is highly probable that the transition process began at some time before 14 April 2014. (Refer to Annex 2, pages 115 and 116, folios 17 and 18 according to original transition file numbering). The application initially included three areas identified as Farm 2 (13.30 ha), Farm 5 (on folio 4 of the transition file it is referred to as Farm 5 Plot 1, measuring 2.13 ha) and Farm 6 (36.28 ha) for a total initial surface area of 51.71 ha (Refer to Annex 2, folios 1 to 10 according to original transition file numbering, pages 99 to 108). No information is provided regarding property location and registration. Other anomalies are evident in the initial application for these areas. The signature of the company’s legal representative is nowhere to be found. At the time, LyL Proyectos MMV S.A. was the company that initially applied for organic certification before ARAO; however, there is a discrepancy in terms of the company’s corporate i.d. number. The number on form A.O.11 is 3-101-410480 (Refer to Annex 2, folio 1 according to original transition file numbering, page 99), but the correct number is 3-101-410980 (Refer to Annex 2, according to certification on folio 12 according to original transition file numbering, page 110). Eng. Roberto Garcia Salazar was in charge of conducting the study to open the transition process file. LyL Proyectos MMV S.A. and Del Valle Verde Corp S.A., as well as other legal entities whose registered legal representative is Mr. Luis Alberto Barrantes Quesada, have a background as conventional fresh pineapple trading/exporting companies in Pital de San Carlos and have been in the business for more than 10 years. In the beginning, he would buy the fruit he exported and later on, he began small-scale farming. He was always involved in activities related to the production and commercialization of conventional pineapple (refer to documents on farm background and visit reports by employees of the Office of Regional Operations for the Huetar Norte Region included and analyzed in Annex 14, pages 561 to 636, information available in the SFE Phytosanitary Surveillance database, affidavits presented to the SFE made by Marc Beesley Beesley, Leonidas Rojas Boza and Nestor Andres Ramirez Acuña, which are contained in Annex 32). In order to document the producer’s background and validate the contents of the affidavits presented for the purposes of this investigation, this Investigative Body collected the field visit follow-up slips pertaining to the companies under investigation. These were obtained from the SFE Offices in Ciudad Quesada on 31 August 2016 (Refer to Annex 14). Most of these field visit slips refer to conventional pineapple crops. It is evident that Mr. Luis Barrantes Quesada’s line of business and that of the companies under investigation has focused on this type of product. The first production area reported to the SFE Regional Office for the Huetar Norte Region was assigned the code CU SFE 741. A total of 26 ha of conventional pineapple located in El Saino de Pital de San Carlos (1 km north of El Saino Service Station on the highway to Boca Tapada) were registered on 08 September 2010 under LyL Proyectos MMV S.A. i.d. card No. 3-101-410980. After this date, there are no further registrations related to this area. It is not until 27 January 2016 that two four-ha plots of “transitioning pineapple” (Plot 5 and Plot 3) are mentioned in field visit slips under Piña Fria 4 S.A. (i.d. card No. 3-101-577174). These two plots are referred to as Farm No. 6 “in transition” as stated in the slip signed by Mr. Oscar Barrantes Quesada. This seems contradictory since field visit slips dated 11 and 17 February 2016 (two weeks after visit conducted on 27 January 2016) indicate that insecticides were administered to Plots 5 and 3 (Farm No. 6) located in production area CU SFE 741. It should also be noted that Piña Fria S.A. (i.d. card No. 3-101-577174) is not registered as an organic operator of any sort and therefore, cannot have a transitioning or organic production area. Field visit slip dated 03 March 2016 reports use of insecticides in the same production area (CU SFE 741) in Farm No. 7 (Plot 2, Plot 3B and Plot 5). This evidence points to the fact that prohibited substances that endanger organic integrity are used in production area CU SFE 741. It is a well-known fact that an area undergoing transition cannot come into contact with any type of non-organic agricultural inputs, such as insecticides used to control pests attracted by waste. Consequently, the application of this type of agricultural inputs interrupts the organic process making it is necessary to start all over. In field visit slip dated 14 April 2016 and prepared by the inspector of the SFE Regional Office for the Huetar Norte Region, mention is made for the first time of “Farm No. 2 organic” located in production area CU SFE 741 with two plots, Plot 3 (2.99 ha) and Plot 4 (3.43 ha). Additionally, this is the first time the name Del Valle Verde Corp S.A. is mentioned as the operator for production area CU SFE 741. The latter seems impossible since field visit slips (25 February 2016, 03 March 2016 and 19 March 2016) prepared by the SFE Regional Office for the Huetar Norte Region under code CU SFE 741 indicate that this area was identified as a conventional pineapple production area belonging to Piña Fria 4 S.A. This is consistent with the fact that Piña Fria 4 S.A. is not and has never been an ARAO certified organic operator. It is clear that this property (Farm No. 2) could not have transitioned to organic in less than two months. Furthermore, we ask ourselves: Why does Primus Labs’ PLc-OR-201 certificate dated 10 August 2015 contain a list of certified areas that includes five plots for Farm No. 2 (two of which are Plot 3 measuring 2.99 ha and Plot 4 measuring 3.42 ha) if there are later field work slips (February and March 2016) indicating that these same areas belong to an operator (Piña Fria 4 S.A.) that is registered as conventional not organic? It should also be noted that Primus Labs indicates that the owner of production areas F02-L04 and F02-L05 is Del Valle Verde Corp S.A. and not Piña Fria 4 S.A. The latter continues to be reported as the owner before the SFE Office of Regional Operations for the Huetar Norte Region. Likewise, the total area reported by Primus Labs in the PLc-OR-201 for F02 is 12.71 ha. However, this does not match other references made in terms of this farm’s surface area, with the exception of data included in the application (30 March 2015) submitted to Primus Labs by Wilbur Chinchilla and on new signs installed in July 2016 in production areas selfproclaimed as “Valle Verde Organic Farms” (Annex 31). In addition to the aforementioned production area, there are records in the possession of the SFE Office of Regional Operations for the Huetar Norte Region that mention three other production areas in connection with the companies under investigation and belonging to Mr. Luis Alberto Barrantes Quesada. These are conventional pineapple farms (location codes CU SFE 10831, 14935 and 14475), which together have been reported to account for 53.4 ha. Thus, it is clear that the companies being investigated have no background in organic farming. 2. ON THE TRANSITION FILE A series of inconsistencies and anomalies are apparent in the transition file since the very beginning. The A.O.11 form (folio 1 of the transition file) has not been signed by the legally authorized representative. There is no management plan demonstrating that the activity to be carried out by LyL Proyectos MMV S.A. fulfills applicable requirements and procedures, nor are the production areas applying for approval to transition to organic fully identified. The file contains no information on the background for these areas and there is no risk management plan to ensure the organic integrity of crops (only a food safety risk management plan known as GlobalGap, which is typically used in the production of conventional pineapple to ensure compliance with GMP, has been presented). Overall, there is a lack of coherence between the process followed, transition periods, evidence submitted and the apparently hurried manner in which the transition period finalizes. Below are the details of those inconsistencies considered most relevant in terms of the objectives of this investigation: A. ON THE FORMAL COMMENCEMENT OF THE TRANSITION PROCESS AND NONCOMPLIANCES DETECTED IN FORM A.O.11 FOLIO 1 Since the beginning of the transition process, Eng. Roberto Garcia makes a series of specific observations that were not sufficiently addressed throughout the “process”. The file contains evidence of non-compliances in terms of requirements and documentation that forced the postponement of the transition process start date. Eng. Roberto Garcia’s first visit to the project was on 24 April 2014 and he made the following observations: a) The operator was supposed to submit an affidavit sworn before an attorney stating that conventional farming practices had been eliminated and organic transitional farming practices had begun (Art. 21 of visit report prepared by Roberto Garcia in April 2014 named “Organic Agriculture Registration and Accreditation Document” hereinafter “DARAO” folio 14 of file). Similarly, on folio 20 of the transition file, Eng. Roberto Garcia in an email dated 25 April 2014 addressed to Elizabeth Ramirez and cc to Karla Morales expresses, “commencement of this operator’s (referring to LyL Proyectos MMV S.A.) transition process pending suspension of conventional management practices occurring at the time of ARAO’s visit” (this comment is part of the Supervision and Follow-up Report for farms 2, 5 and 6, folios 13 to 16). b) The operator must present a management plan including the inputs to be used and a timetable of agricultural activities, which must include fertilization, weed control and phytosanitary pest control (Art. 13 DARAO, folio 15 of file). c) Eng. Garcia requested indication of risk areas and the corresponding risk analysis (Articles 11, 15 and 26 DARAO, folio 14). Emphasis is made on the fact that a risk analysis must be performed for each farm (Art. 12 DARAO, folio 14 of file). d) Eng. Garcia confirms that during visit conducted on 24 April 2014, he detected use of conventional herbicides, foliar sprays and 10-30-10 fertilization (art. 21 DARAO, folio 14 of file). e) No organic inputs were found on this visit, only conventional (Articles 27 and 28 DARAO, folio 15 of file). f) Eng. Garcia points out in uppercase letters: “THE ORGANIC TRANSITION START DATE DEPENDS ON THE DATE ON WHICH THE OPERATOR SUSPENDS CONVENTIONAL MANAGEMENT PRACTICES AND SENDS THE AFFIDAVIT SWORN BEFORE AN ATTORNEY” (Refer to Annex 2, Articles 71 and 80 DARAO, folio 16 according to original transition file numbering, page 114). g) Eng. Roberto García clearly states that: “The operator must comply with the threeyear transition period, must suspend use of all conventional inputs and must send an affidavit sworn before an attorney stating commencement of organic transition and compliance with National Regulations 29782-MAG.” (Refer to Annex 2, Supervision and Follow-up Report of 24 April 2014, folio 13 according to original transition file numbering, page 111) h) Eng. Garcia also points out the need to: “Commence organic transition management practices, (…) keep raw material control records and product sale records throughout the transition period.” Eng. Roberto Garcia Salazar’s observations under the section on non-compliances are based on the basic principles and regulations of organic farming. Specifically, these are provisions contained in the main protocols governing organic certification processes. These protocols provide the guidelines to be followed by Costa Rican organic farmers whose produce is to be exported as set forth in Article 92 of the Organic Agriculture Rules and Regulations. In this regard, it should be noted that, among others, compliance with the following USDA/NOP (US Deparment of Agriculture/National Organic Program) organic certification criteria is key: A detailed description of the operation undergoing the certification process. All substances applied to soil in the last three years. Full description of organic products cultivated and processed. An organic management plan describing the practices and substances to be used. These criteria are also a key part of organic certification agencies’ evaluation protocol. In the specific case of Primus Labs (Refer to Annex 34), audit checklists are used to ensure operators obtain certification once they have demonstrated compliance and applicable time periods have elapsed. In the case of Costa Rica, Primus Labs, pursuant to USDA/NOP criteria, has a form called “Organic System Plan – Crops” that must be filled in with detailed information on a variety of aspects related to the production area of interest. There are sections that must be filled in with information on organic inputs, their active ingredients, labels and intended market. B. GENERAL CONSIDERATIONS TO ANALYZE TRANSITION PROCESS EVOLUTION AS DOCUMENTED IN FILE. At this point in the investigation, it is clear that file order and numbering is defficient and documents have been filed in no strict order disrupting the chronological order of the file. In order to analyze correction of non-compliances indicated on 24 April 2014, this Investigative Body was forced to ignore the numbering presented in the file and take into account the date and content of each document individually in order to recreate the timeline of events. On Friday, 25 April 2014 (one day after the first inspection carried out by Eng. Roberto Garcia), Eng. Garcia sends an email to Ms. Blanca Castillo Fallas informing her that LyL Proyectos MMV S.A. “has yet to suspend conventional management practices that were being implemented at the time of ARAO’s visit. An affidavit authenticated by an attorney must be sent to ARAO stating that conventional management practices have been suspended and transition management practices are now in place as well as evidence of the implementation of corrective measures specified in this report.” A letter dated 30 April 2014 signed by Wilber Chinchilla B. and included in folio 30 of the file (Refer to Annex 2, page 133) states that LyL Proyectos MMV S.A. “undertakes as of 27 April 2014 to suspend the application of agricultural inputs not permitted in organic pineapple farming”. In this same letter, Mr. Chinchilla also expresses that “this commitment applies to Farm No. 5 Plot 01, a plot transitioning from conventional to organic pineapple, and to any other plots that might eventually be included”. The following should be noted regarding the above letter: a) Mr. Chinchilla is not the company’s legal representative. Consequently, he does not have sufficient legal authority to undertake any commitment with the Public Administration. b) The letter has not been authenticated by an attorney. Therefore, there is no way of knowing whether the signature belongs to Mr. Chinchilla. c) The supposed commitment is written in a confusing manner. On 30 April, Mr. Chinchilla, who is not the company’s legal representative, says that LyL Proyectos MMV S.A. undertakes the commitment to suspend the application of forbiden products as of 27 April. This Investigative Body does not understand how a company or person can commit to doing something that has already taken place. Commitments are typically an agreement to do something in the future. Therefore, if the company Mr. Chinchilla supposedly represents had already initiated the aforementioned suspension of conventional practices as of 27 April 2014, he should have simply indicated this in his note of 30 April 2014 and informed that forbidden products were no longer being used. d) The scope of this commitment is limited to Farm No. 5 Plot 1. Mr. Chinchilla’s letter leads one to believe that the commitment only applies to the area designated as Farm No. 5 Plot 01 (2.13 ha) and no mention is made of the other two areas identified in the application as Farms 2 and 6. This is important since it follows from the list of non-compliances detected on 24 April 2014 (Refer to Annex 2, folio 14, original transition file numbering, page 112) that conventional inputs, herbicides, foliar sprays and 10-30-10 fertilization had been applied throughout the production unit. Thus, since nothing is said to the contrary, Farms 2 and 6 continue to operate under the conventional management practices reported by Eng. Roberto Garcia in his inspection report of 24 April 2014 and are not inlcuded in the process. This conclusion is supported by the fact that the document titled “Guide for Risk Evaluation in New Organic Agricultural Areas” (Refer to Annex 2, folio 31 according to original transition file numbering, page 135) only mentions Farm No. 5. e) The document is not an affidavit sworn before an attorney. It is a letter signed by someone who is not the legal representative of LyL Proyectos MMV S.A. and contains no sworn statement. On the contrary, as was previously explained above, it contains a supposed commitment that applies to a specific area. The document has not been signed by an attorney. The note signed by Wilber Chinchilla seems to be accompanied by a series of documents (Refer to Annex 2, folios 31 to 40 according to original transition file numbering, pages 133 to 152). Documentation was reviewed to determine whether they document correction of noncompliances pointed out by Eng. Roberto Garcia on 24 April 2014. These documents are: a) Guide for risk evaluation in new organic agricultural areas (Refer to Annex 2, folios 31 and 32 according to original transition file numbering, pages 133 to 138) specifically applied to Farm No. 5. This document contains information on a generic risk management plan, which does not address observations made by Eng. Garcia during his first inspection in terms of organic integrity. b) Matrix with types of physical, microbiological and chemical hazards and no indication of its relevance to the matter at hand. (Refer to Annex 2, folios 33 to 34 according to original transition file numbering, pages 139 to 141). This document contains information on a generic risk management plan. It does not address observations made by Eng. Garcia Salazar during his first inspection related to organic integrity. c) Risk evaluation of organic fruit dated 23 May 2014 (?) for Farm No. 5 Plot 1 (Refer to Annex 2, folios 33 to 34 according to original transition file numbering). This document is a matrix that parametrizes factors that have nothing to do with what Eng. Garcia requested. d) Organic development technical package (Refer to Annex 2, folios 35 to 38 according to original transition file numbering, pages 143 to 150). An organic development technical package is one of the components of an organic management plan. In this case, the document analyzed does not consider the full pineapple cultivation cycle, which normally takes at least 395 days from planting to first crop. In the specific case of the information submitted, a description of crop management is only provided for the first 195 days. Additionally, this document does not contain critical crop-related aspects such as floral induction and fruit safety. e) Risk analysis in new areas (Refer to Annex 2, folio 39 according to original transition file numbering, page 151). This document only addresses a chemical risk associated with potential drift and therefore, recommends creating a vegetative buffer; however, there is no mention as to when compliance can be verified. Document does not mention any other types of potential risks inherent to organic farming in new areas. Thus, they did not fully comply with Eng. Garcia Salazar’s recommendation: “Boundary lines must be corrected with conventional manioc Farm 2 Plot 4, Farm 2 Plot 5 southern boundary line, Farm 6 Plot 5, f) Farm 5 eastern boundary line, Farm 6 Plot 5. Prepare croquis plan with neighboring areas and pinpoint risk areas and include the corresponding risk analysis.” Croquis plan of unidentified area subdivided into blocks from 01 to 11 (Refer to Annex 2, folio 40 according to original transition file numbering, page 152). This document appears again on folio 43 according to the original transition file numbering (Refer to Annex 2, page 157); however, this document indicates that it refers to F5-L01. When comparing both documents, it is clear that this croquis plan was created to correct a noncompliance pointed out by Eng. Garcia Salazar requesting that areas adjoining manioc be graphically indicated as well as the location of so-called vegetative buffers. Together, these documents do not constitute a management plan in the strict sense of the term1 and it evident that the operator under investigation failed to adequately address the noncompliances detected, despite the fact that some of these relate to key aspects of organic integrity. The absence of a management plan is a major noncompliance. This plan had to have included inputs to be used and a schedule of agricultural activities including fertilization, weed control and phytosanitary pest control. These noncompliances seem to have not been addressed since file contains no documentation to prove the contrary. 3. ON THE KEEPING OF A TRANSITION FILE AS OF 30 APRIL 2014 As was previously mentioned, the purpose of this report is to establish a timeline for the events of interest to us. Therefore, we must ignore file numbering. Thus, on 02 May 2014, Ms. Blanca Castillo Fallas sent an email to controlcampos@lylproyectos.com cc. Eng. Garcia Salazar with the report of 24 April 2014. The email subject line reads as follows: RV: Transition Report LyL Proyectos “Pending beginning of transition” (Refer to Annex 2, folio 39 according to original transition file numbering, page 151). On Thursday, 19 June 2014 at 3:22 p.m. (Refer to Annex 2, folio 29 according to original transition file numbering, page 132) Wilber Chinchilla sent an email to Eng. Garcia Salazar with no text. The email subject line was “LyL Proyectos”. As indicated, this email is on folio 29; folios 30 to 40 of the transition file contain a series of documents that appear to be a response to noncompliances detected in Eng. Garcia Salazar’s first report and were written by Mr. Wilber Chinchilla on 30 April 2014. 1 Organic agriculture requires a planning system that covers all operations of the production unit. When designing an organic production system, practices, processses and areas that could potentially endanger system processes must be assessed. Therefore, an Organic System Plan (OSP) must clearly explain how the production unit is going to meet organic farming standards. It must explain the operating plan, specific crop characteristics, production cycles, planting and harvesting plans, sales, documentation and registrations, soil management, pest management and any other aspects associated with the activity to be carried out by the operator. The USDA/NOP establishes that OSP validation must be supported by the following documentation and evidence, among others: 1) list of materials and substances used during production including fertilizers, insecticides, fungicides and others; 2) a map of production areas specifying how organic farming areas will be protected from conventional farming areas; 3) a complete background of the production areas including measurements, crops, risks and substances previously used in these plots. This opens the possibility of an alternative scenario that must be considered: these documents of 30 April 2014 (Refer to Annex 2, folios 30 to 40 according to original transition file numbering, pages 133 to 152) could have been sent on 19 June 2014 as an attachment to the aforementioned email. This could explain why on 20 June 2014 at 7:57 a.m. (Refer to Annex 2, folio 29 according to original transition file numbering, page 132) Eng. Garcia resends Mr. Chinchilla’s email to Ms. Blanca Castillo Fallas indicating: “Please attach this evidence sent to us by LyL Proyectos. They began transition in April 2014”. In this same email, Eng. Garcia says, “I’m attaching email to finalize noncompliance findings for LyL Proyectos prior to initiating the transition period. They are eliminating several areas”. Juan Rojas Chaves and Karla Morales Roman were copied on this email and the following files were attached: “Carta ARAO.docx; Evaluación de riesgos en fruta orgánica.xlsx; Formato de Riesgo de Areas nuevas F5-L01.doc; Guia de Evaluación de Terrenos F5.doc; PLAN DE MANEJO ORGANICO.xlsx; Plano F5-L01.jpg”. The list of documents attached to Mr. Garcia Salazar’s email are documents contained in the transition file (folios 30 to 40) and therefore, it would seem that these documents were included in the file on a later date. If this were the case, the following observations should be made: a) Eng. Garcia Salazar informed Ms. Castillo Fallas of the “finalization of noncompliance findings” as if all noncompliances detected during his visit on 24 April 2014 had been satisfactorily corrected by the operator. This is not possible since these documents supposedly submitted by Mr. Chinchilla are insufficient and only refer to some of the noncompliances. In fact, some of the major noncompliances were ignored; for example, there is no management plan, soil analysis, certificate of compliance with the agricultural inputs described. An affidavit sworn before an attorney was never presented and there is no land-use history of the transition area. b) It seems as if Eng. Garcia Salazar interpreted Mr. Chinchilla Bermudez’s message correctly in terms of the surface area that was to undergo the transition process, that is, Farm 5 Plot 01. He pointed out in his email that, “They are eliminating several areas”. Therefore, it seems as if up until then it was clear that the transition process would only apply to the 2.13 ha reported under Farm 5 Plot 01. c) However, in that same email, Eng. Garcia mentioned the“finalization of noncompliance findings” and indicated that LyL Proyectos “began transition in April 2014”. The latter seems to contradict what Eng. Garcia stated earlier on with regard to the fact that the transition process was not going to begin until all noncompliances had been corrected. Therefore, if on that date Eng. Garcia Salazar took for granted that all noncompliances had been corrrected (which is not possible due to insufficient documentation presented by Mr. Chinchilla) then the transition process would have commenced on 20 June 2014. d) It should be noted that Eng. Garcia Salazar conducted the assessment of evidence in record time. He began at 3:22 p.m. on Thursday, 19 June 2014 and had concluded by 7:57 a.m. the next day (20 June 2014). The speed with which this was done makes it difficult to believe that the documentation presented underwent a rigurous and thorough assessment. Additionally, the file contains no document stating the considerations taken into account by Eng. Garcia in order to conclude that all noncompliances had been corrected and apply a retroactive start date for the transition process (April 2014). The latter despite the fact that he himself had advised in an email dated 25 April 2014 that the transition could not begin until all noncompliances had been corrected. 4. ON THE FOLLOW-UP VISIT CARRIED OUT ON 05 AUGUST 2014. The next noteworthy event in the progression of the transition file is the visit log prepared for the visit conducted by Eng. Roberto Garcia and Technician Ronin Hurtado Palacios (folios 19 to 23). Several documents were included in the transition file on 05 August 2014 (folios 21 to 27). The first of these documents is a new A.O.11 form (Refer to Annex 2, folios 24 to 27 according to original transition file numbering, pages 123 to 129). This form is in LyL Proyectos MMV S.A.’s name, has no date and has not been signed. The form only refers to an area that had not been included in Eng. Garcia’s inspection visit on 24 April 2014. This area is designated F01-L01 and described as pastureland that had not been used for farming for several years. This same form specifies that the total surface area of F01-L01 is 12 ha of which 10 ha are transitioning to organic. This area is located N10.56873 O84.29327. It also indicates that there is no soil analysis to confirm land-use history. In addition to form A.O.11 (folio 23 of the transition file), there is a visit log or report. According to this log, a visit was conducted on 05 August 2014. The property visited is located N10.56873 O84.29327 (Farm 1 Plot 1). It should be noted that the aforementioned inspectors made the following recommendations asking LyL Proyectos MMV S.A. to: Updated croquis plan indicating risks Include all farms in a single transition registration form (A.O.11 form) If requesting a transition period analysis, a three-year farm history of agricultural use must be submitted as well as a letter from owner, company, people free of conflicts of interest and/or Ministry of Agriculture and Livestock (MAG) stating land use. Mention was made of the fact that pineapple had not yet been planted. With regard to soil management and land-use history of Farm 1 Plot 1, it should be noted that no soil analysis has been conducted (Refer to Annex 2, folio 25 verso according to original transition file numbering, page 126). Additionally, two pages of a three-page inspection report have been included in the transition file (folios 21 and 22). (Refer to Annex 2, pages 119 to 121). The first page of the report is missing. It should also be noted that nothing is written on the reverse of what should be numbered as folio 21. Roberto Garcia Salazar’s name appears on pages 2 and 3 of the report as well as a signature that seems to be his. This report contains the following noncompliances: “Make adjustments to buffer, drainage and property line. Update OSP so that there is only one Organic Management Plan for both transitioning farms, with their corresponding croquis plans and indication of risk areas. Management Plan must be updated for each plot. Update A.O.11 form” When referring to “both farms”, the inspector is clear on the fact that at that time (05 August 2015) only two farms were included in the transition process, Farm 5 Plot 1 (2.13 ha) and now F1 L1 (10 ha). On 11 August 2014, Ms. Blanca Castillo Fallas of ARAO sent an email to luisb@lylproyectos.com and Eng. Roberto Garcia Salazar was copied on this email. In this email (folio 28 according to original transition file numbering) ARAO gives LyL Proyectos MMV S.A. 10 business days to “submit a corrective measures plan for the noncompliances…”, that is, the noncompliances indicated on 05 August 2014.2 On 27 August 2014, Mr. Wilber Chinchilla sent an email to Eng. Garcia Salazar. (Refer to Annex 2, folio 41 according to original transition file numbering, page 153). The 10-day alloted timeframe given to him by Ms. Blanca Castillo Fallas had expired the day before. In his email, Mr. Chinchilla expresses: “In the event of any error or missing document, please let me know”. This same folio contains an email Eng. Roberto Garcia sent the next day (Thursday, 28 August 2014 at 8:42 a.m.) to Ms. Blanca Castillo Fallas asking her to: “Please place in the LyL Proyectos MMV transition file. It’s part of the correction procedure for one of the noncompliances reported in the visit report”. Eng. Garcia sent an email to Juan Rojas Chaves with an attachment called “Formulario_Registro_Fincas_Transición-1 FOR1.doc”. This attachment is most likely a new A.O.11 form for LyL Proyectos MMV S.A. (Refer to Annex 2, folios 42 to 46 according to original transition file numbering, pages 155 to 163). With regard to the new A.O.11 form, the following information is of interest to this investigation: F01-L01 and F5-L01 are included (Refer to Annex 2, folio 42 verso according to original transition file numbering, page 156). The total surface area is 13 ha of which 12 ha are transitioning to organic. There is no soil analysis (Refer to Annex 2, folio 44 according to original transition file numbering, page 159). This form does not include information about the owner nor does it contain information on previous use given to the transitioning areas by LyL Proyctos MMV S.A. Thus, at this point, LyL Proyectos MMV S.A. had only corrected one of the noncompliances detected by Eng. Garcia on 05 August 2014 and submitted a new A.O.11 form. However, this was done outside the alloted timeframe. The remaining noncompliances were only partially corrected and risks were only briefly mentioned stating that they will be addressed with 2 The fact that this email is placed on folio 28 of the transition file is evidence of what seems to be a very poor handling of the documentation pertaining to this process. Despite being dated 11 August 2014, this document is placed before other earlier documents interrupting the chronological order of the transition file. “vegetative buffers” and a separation distance of two meters between neighbors. No mention is made of when these corrective measures will be implemented so they can be verified, nor is an accurate description offered of these measures to ensure the protection of organic integrity. One noncompliance that was not addressed, not even partially, was the presentation of a three-year history of land use. This was expressly requested by Roberto Garcia Salazar. The letter from the MAG was not presented either. It should be noted that this new A.O.11 form did not result in a visit log or follow-up report to verify the correction of noncompliance findings. The transition file contains no such document. Thus, emphasis should be made on the fact that the names used to identify these areas differ from those used in the A.O.11 form on folio 1 of the transition file. Additionally, on folio 42 verso, the total surface area of the farm (no mention is made of which of the two farms) is indicated as being 13 ha of which 12 ha are transitioning to organic. Farm 5 was also mentioned in that document (it was first mentioned in the A.O.11 form on folio 2) but it was referred to as “Farm 5 Plot 1”. So, this is how things stand at the end of 2014 in terms of the transition file. There are major and minor noncompliances that have not been addressed and it is unclear whether Eng. Garcia Salazar considers the transition period to have begun. However, in his email to Ms. Blanca Castillo Fallas (20 June 2014) there is evidence that he considered the transition period to have commenced. 5. BEGINNING OF 2015. During the course of this investigation, a series of activities and events that do not pertain to the transition file itself have been documented. However, they are evidence of a series of steps taken by the company under investigation, Del Valle Verde Corp. S.A., that finally led to the issuance of the PLc_Org_CR_033 certificate by Primus Labs on 22 July 2015. Next is a timeline prepared based on information submitted to ARAO by Primus Labs. This documentation is contained in Annexes 10 to 13 of this investigation. A. The application for organic certification was submitted to Primus Labs Costa Rica (04 March 2015) by Del Valle Verde Corp. S.A. for a total surface area of 99.5 ha. The contact person indicated on the application form is Mr. Wilber Chinchilla (Refer to Annex 10 containing Primus Labs documents, page XXXX). B. Del Valle Verde Corp. S.A. and Primus Labs signed two documents on 12 March 2015. One is the certification agreement and the other is an agreement to use the Primus Labs certified organic label once the operator is certified. C. On 30 March 2015, Mr. Wilber Chinchilla submitted the NOP certification application on behalf of Del Valle Verde Corp. S.A. The application is for a total of 97.86 ha and the document specifies that this total surface area is divided into six farms (Farm 1, Farm 2, Farm 3, Farm 5, Farm 6 and Farm 7). The following should be highlighted with regard to this document: a. This is the first time that a total surface area of 97.86 ha is mentioned. b. Mention is made of the application of fertilizers and that these are applied based on the results of the soil analyses. However, the transition file indicates that no such analyses exist. (Refer to Annex 2, folio 44 according to original transition file numbering, among others, page 159). c. The document indicates that the owners of neighboring properties were informed of the areas under organic management and signed a letter acknowledging receipt of the information. Letter is not attached to the application. d. Mention is made of the fact that, in order to reduce the length of the transition period, a letter from neighbors who are familiar with the farm’s land-use history and a sworn statement from the former owner were submitted; however, these documents were not presented by Primus Labs. D. On 07 April 2015, Del Valle Verde Corp. S.A. was submitted to a certification field inspection by Ms. Lorena Carballo Batista from Primus Labs and an Organic Farm Inspection Report was issued. The following should be highlighted with regard to this document: a. The report states that certification is being sought for 96.21 ha and that this area has only been devoted to organic farming, with absence of parallel production and the producer has been farming organically for three years. b. The report mentions a previously submitted Organic Management Plan that is described as being complete and accurate. However, among other things, it should remembered that at that point the transition file contained noncompliance findings that had yet to be corrected; the management plan presented to ARAO was in LyL Proyectos MMV S.A.’s name and contained significant deficiencies that were not identified nor treated as such by Eng. Roberto Garcia. c. Section 3 – Farm Plan Information, point 8 sets forth that 96.21 ha are to be certified. A total of 96.21 ha are organic agricultural land and none are identified as transitioning. However, in point 10 of this same section, mention is made of the fact that 96.21 ha of land transitioning to organic will undergo inspection. However, at the time the Primus Labs inspector wrote this, it was unclear whether the transition period had begun or not. d. Land-use history of the farm should have been set forth in Section 3, point 11 including all inputs used and date of application. However, the inspector merely indicated that the total surface area is divided into five farms: Farm 1 (7.79 ha); Farm 2 (15.66 ha); Farm 3 (10.4 ha); Farm 4 (58.4 ha) and Farm 5 (3.96 ha). These areas add up to 96.21 ha. It should be noted that names used to designate each farm and farm dimensions do not coincide with what the operator requested. Additionally, the document states that maps were revised and they coincide with the reported surface area. In terms of inputs used and date of application, nothing is mentioned in Inspector Carballo Batista’s report. e. The report notes that the management plan was sent beforehand and observations made during the inspection visit coincide with the contents of the management plan. However, documents submitted by Primus Labs do not include a management plan. f. In point 46 of the report, the inspector indicates that “all inputs used in the farm were included in the farm plan”. However, as previously noted, a complete management plan does not exist. Section 3, point 11 contains no information on inputs applied and application dates. This omission seems strange if we consider the fact that in Section 9, point 95 regarding land-use history over a period of four years, including dates and amounts of inputs used, Ms. Lorena Carballo indicates that “there is documentation to support the land-use history of the Valle Verde Corp. S.A. farms. Letter from neighbors who are familiar with the land-use history. Affidavit by the producer. Affidavit by the former owners of the farms”. g. She also declares having previous affidavits regarding the land-use history of all the farmland undergoing certification and logs of agricultural inputs used. Likewise, in point 108 of the report, the inspector states that purchase orders and invoices for inputs purchased and product sales invoices are kept. Logs are kept for at least five years (point 112). E. On 22 July 2015, Primus Labs sent a decision letter to Wilber Chinchilla Bermudez granting certification for MD2 pineapple and 97.86 ha were certified. 6. ANALYSIS OF THE DEL VALLE VERDE CORP. S.A. CERTIFICATION BY PRIMUS LABS IN MARCH 2015. There are several aspects of significance related to the Primus Labs certification of Del Valle Verde Corp. S.A. and these should be addressed in order to better understand the facts that will later be presented. A. ON THE INCONSISTENCY DISCOVERED IN TERMS OF THE CERTIFICATION PERIOD. After comparing the dates of the different events, it seems unusual that the Primus Labs certification process should be initiated by Mr. Wilber Chinchilla knowing that the transition application process before ARAO was ongoing and was supposed to take at least three years from the moment of the official start date and once the operator had addressed all noncompliance findings. It must be noted that the operator did not request a shorter transition period, nor had ARAO notified the operator officially that the transition period would be shorter. The situation was quite to the contrary: 1. According to the transition file (Refer to Annex 2, folio 47 according to original transition file numbering, page 164) it was not until 20 May 2015 that Mr. Wilber Chinchilla sent an email to Mr. Juan Rojas Chaves copying Eng. Garcia Salazar. In this email, Mr. Chinchilla expressed his interest in shortening the transition period for organic farm 1 Plot 01 only. However, no formal request was made and the possibility was only mentioned in passing in a one-line email and was limited to Farm 1 Plot 1 (7.79 ha) – as described in the application presented by Chinchilla Bermudez on 30 March 2015. 2. The situation gets even more complicated when we take into account that the transition file contains a Supervision and Follow-up Report prepared by Eng. Garcia Salazar dated 21 May 2015 (Refer to Annex 2, folio 69 according to original transition file numbering, among others, page 190) stating that Farms 1, 2 and 3 must undergo an organic transition study and must comply with a three-year transition period before being able to request the denomination of “organic” (Article 8). This means that ARAO’s technical opinion on this matter was that shortening the transition periods was not feasible, even as of 21 May 2015. Therefore, there is no reasonable explanation as to why Mr. Chinchilla started the organic certification process with the certifying agency when the transition was still underway and there was still considerable time left before it would end. B. ON THE INCONSISTENCY DISCOVERED IN TERMS OF SURFACE AREA. 1. The areas Chinchilla Bermudez submitted for certification by Primus Labs do not match those included in the ARAO transition file. When Mr. Chinchilla submitted his application before Primus Labs, ARAO was conducting a transition study for Farm 1 Plot 1 and Farm 5 Plot 1 only. If the transition process had finalized then, the total surface area would have been 12.13 ha. However, Chinchilla’s application of March 2015 already included these farms as well as three others that had never been mentioned before; these areas totalled 97.86 ha. 2. The areas Chinchilla Bermudez submitted for certification do not match the areas Primus Labs reports having evaluated. The application presented by Chinchilla Bermudez on 30 March 2015 refers to a total of six farms, whereas Primus Labs reported having evaluated five farms. With the exception of Farm 1 Plot 1, farm names and measurements do not match. In fact, Primus Labs indicated that the surface area to be certified was 96.21 ha; however, Mr. Chinchilla mentioned 97.86 ha. The fact that Inspector Carballo Batista reported having revised “maps” of the farmland to be certified and did not detect the aforementioned inconsistencies is of even greater concern. There seem to be at least two possible scenarios to explain this. The first of these being that Mr. Chinchilla provided Primus Labs with maps that do not correspond to the areas that are to be certified and Primus Labs did not realize this during inspection. A second possible scenario is that Mr. Chinchilla provided Primus with maps that match those areas included in the certification application, and Primus Labs did not realize that these areas did not match those included in the transition file and made a mistake when filling out the inspection report. Either scenario casts doubt on the solidity of the study carried out by Primus Labs. 3. Overall, it may be concluded that the areas specified in the application presented to the certifying agency by Mr. Wilber Chinchilla on behalf of Del Valle Verde Corp. S.A. do not match those given to this Investigative Body on 26 April 2016. Additionally, the farms identified as belonging to “Del Valle Verde Organic Farms” in July 2016 (Refer to Annex 31) match the names Mr. Chinchilla gave to Primus Labs and this Investigative Body, with the exception of Farm 8, which had never been mentioned before. Nonetheless, there are significant differences in terms of the areas that at some point were included in the transition file. The areas that were initially included in the transition file become defaced with time and depending on who provides the information. Eventually, there is a point where the original areas disappear (in terms of surface area, status and location) to make way for completely different ones. In other words, the current situation in the field does not coincide with the transition process documented by ARAO. It should be noted that the difference between what was originally submitted for transition and current signage is so marked that comparisons are impossible. This dissociation starts to become evident when, with no explanation at all, Mr. Wilber Chinchilla on behalf of Del Valle Verde Corp. S.A. (a company that was not included in the transition file at this point, nor did it appear in ARAO’s records as a legal entity with organic activity) submits a certification application to Primus Labs for 97.86 ha. This hectarage matches the surface are covered by the Primus Lab certificate issued one month and 21 days after the early conclusion of the transition. (Refer to Annex 2, folio 23, Visit log by Eng. Roberto Garcia, page 122). (Refer to Annex 35 – Summary table of all the different surface areas and documentation). C. ON THE ABSENCE OF EVIDENCE TO SUPPORT KEY AUDIT ELEMENTS. The inspection report asserts the existence of a series of facts; however, the certifying agency did not provide any type of evidence to support these. For example: 1) The report claims that the producer has three years’ experience in organic farming, but no evidence is provided to support this. Additionally, the SFE has no record of this. On the contrary, the land-use history filed with the Office of Regional Operations for the Huetar Norte Region refers to Del Valle Verde Corp. S.A. as a company dedicated to the production of conventional pineapple (Refer to Annex 14). 2) Besides, if we assume that the contents of the inspection report are true, there is no way of knowing where and to what extent does organic farming take place. In fact, there is no way of knowing for certain whether we are referring to Mr. Chinchilla (he presented the application without being the company’s legal representative) or to the company that was finally granted Primus Labs certification. Special attention must also be paid to another remarkable detail: on the date Mr. Chinchilla submitted the application to Primus Labs (30 March 2015), THE INTERESTED PARTY’S BUSINESS NAME IN THE TRANSITION FILE HAD NOT BEEN CHANGED. Thus, at that moment (and until 21 May 2015) LyL Proyectos MMV S.A. and not Del Valle Verde Corp. S.A. was the applicant and holder of the transitional license before ARAO. Therefore, when the inspection was conducted, the visited areas did not belong to the certified company. Furthermore, this company was not even applying for a transitional license with ARAO. This information is public and basic, which is why there is no way to explain why the certifier was unaware of the situation described above and its implications. 3) In the inspection report, the inspector claims to have viewed the management plan for the areas evaluated; however, this document was not included in the documentation provided to the SFE for the purposes of this investigation, nor does ARAO have a copy. To date, there is no proof of its existence. Additionally, a management plan for the areas evaluated makes no sense since these do not match the areas submitted to organic certification by Mr. Chinchilla. A management plan in Del Valle Verde Corp. S.A.’s name is not possible since at that time this company had no organic or transitioning areas registered before ARAO. 4) There is insufficient evidence to identify what land underwent inspection. There is no descriptive or land-registry information to ensure clarity regarding the areas inspected and certified by Primus Labs. Things get even more confusing when Primus Labs Inspector, Carballo Batista, mentions having viewed maps throughout the inspection process; as was previously explained, these maps not only do not exist, but the areas she reported inspecting do not match those detailed in the application signed by Mr. Chinchilla Bermudez. 5) The evaluation template requires documenting land-use history as well as the history of application of agricultural inputs, quantity and application date. Primus Labs Inspector, Carballo Batista, claims to have viewed these historical logs and specifically indicated that these records have been maintained for the last five years. However, no evidence was provided in relation to these records. During the course of this investigation, the operator under investigation was asked to provide these records and never did. Finally, as part of the duty to discover the truth and the principle of objectivity governing the Public Administration’s investigative activity, relevant suppliers of agricultural inputs for the production of organic pineapple were summoned and as a result of this enquiry, it was established that none of the companies under investigation pruchased organic inputs before March 2015. So, what records did the Primus Labs inspector examine in order to certify 97.86 ha? 6) It should be noted that on 02 September 2016 (Refer to Annex 16, pages 645 to 647) in response to a query from this Investigative Body, Eng. Karla Morales Roman from ARAO sent a two-page certification in which Primus Labs grants Del Valle Corp. S.A. organic certification under the NOP. According to this document, Primus Labs conducted the inspection for certification on 25 May 2015 and issued the PLc-OR-201 certificate on 10 August 2015. In order not to interrupt the chronological sequence being followed, this document will be analyzed further on. D. GENERAL CONCLUSION ON THE CERTIFYING AGENCY’S WORK. In summary, Primus Lab’s work is not solid and this compromises the legitimacy of the certification granted. The evaluation is plagued with serious inconsistencies in terms of key data analysis and there is a lack of evidence to support audited facts. In addition to this, the certifying agency’s work makes no sense chronologically when compared with SFE documentation (transition file and other documents related to companies represented by Mr. Luis Alberto Barrantes Quesada). As mentioned previously, the certification application was submitted in the name of a company which at that time was not part of the transition process and there was no certainty as to when the transition process would end. 7. ON THE EVENTS AND DOCUMENTATION THAT PRECEDE THE EARLY CONCLUSION OF LYL PROYECTOS MMV S.A.’s TRANSITION PROCESS ON 20 MAY 2015. Despite the fact that there is no evidence in the transition file that noncompliances detected had been addressed and corrected by the applicant (at the time it was still LyL Proyectos MMV S.A.), a series of movements were included in the transition file on 20 May 2015, a year and one month after the initial visit report was prepared: A. Mr. Wilber Chinchilla sent an email from his controlcampos@lylproyectos.com account on Wednesday, 20 May 2015 at 10:37 a.m. to Marianela Perez Chavarria at LyL Proyectos MMV S.A.’s treasury department indicating: “We need to make a payment to ARAO for an urgent inspection today if possible.” (Refer to folio 51 verso according to original transition file numbering). B. Marianela Perez Chavarria sends an email from her tesoreria@lylproyectos.com account on Wednesday, 20 May 2015 at 11.32 a.m. to Mr Wilber Chinchilla with the deposit slip for a ¢58,828 deposit made on that same day at 11:27 a.m. (Refer to folio 51 according to original transition file numbering). The deposit was made by “Exportadora La Piña Fria Cuatr” in favor of the SFE and the document reads “PAYMENT FOR INSPECTION OF PIA FRIA4” as the reason for payment. There seems to be no reasonable explanation for these documents because “Exportadora La Piña Fria 4” has no involvement in the transition file and is not undergoing any transition. It does not make any sense for Mr. Chinchilla to have asked ARAO to issue a letter certifying that they were undergoing transition to organic because it would seem as if the request was on behalf of the company making the deposit, that is, Exportadora La Piña Fria 4. C. Mr. Wilber Chinchilla sent an email on Wednesday, 20 May 2015 at 11:32 a.m. to Juan Rojas Chaves at ARAO and copied Eng. Roberto Garcia Salazar. The email subject line is “Evidence”. In this email, Mr. Chinchilla said: “I’m sending written evidence for Organic Farm 1 Plot 01 to request a shortened transition period. By mistake I hadn’t sent it to your email.” (Refer to Annex 2, folio 47 according to original transition file numbering, page 164). The email is accompanied by two notes dated 09 February 2015. The first one is signed by Enrique Bolaños (Refer to Annex 2, folio 48 according to original transition file numbering, page 165) and the second is signed by Lizbeth Perez (Refer to Annex 2, folio 49 according to original transition file numbering, page 166). In this email, Mr. Wilber Chinchilla expresses his apparent interest in shortening the transition period for Farm 1 Plot 01; however, the file contains no formal request in this regard. For the sake of clarity, it should be remembered that Farm 1 Plot 1 is an area that was included in the file in LyL Proyectos MMV S.A.’s name. D. Mr. Wilber Chinchilla sent an email on Wednesday, 20 May 2015 at 11:41 a.m. to Juan Rojas Chaves with the “annual payment receipt” and copied Eng. Roberto Garcia Salazar. He also asks him for the letter mentioned above in point b). (Refer to Annex 2, folio 51 according to according to original transition file numbering, page 169). E. Eng. Roberto Garcia sent an email marked as “High Importance” from his controlcampos@lylproyectos.com account on Wednesday, 20 May 2015 at 1:44 p.m. to Blanca Castillo Fallas at ARAO and copied Eng. Karla Morales Romas. In this email, he asks her to “Please include this evidence in the LyL Proyectos transition file”. The email subject line is “RV: Evidence”. This email refers to three attachments: affdavit, letter from Enrique Bolaños and letter from Lizbeth Perez (Refer to Annex 2, folio 47 acccording to original transition file numbering, page 164). It should be noted that the affidavit mentioned in this email is not in the file. The following observations were made regarding the documents attached to this email: a) Documents submitted only refer to Farm 1 Plot 1 and measurements vary from one document to another. For example, in the A.O.11 form (folio 24 verso according to original transition file numbering) 10 ha are transitioning to organic, whereas in the certification application presented by Mr. Wilber Chinchilla to Primus Labs (30 March 2015) 7.79 ha are mentioned. This 7.79 ha land area is the same one Primus Labs reported to have audited on 07 April 2015. However, on 26 April 2016, Mr. Wilber Chinchilla informs this Investigative Body that, according to Del Valle Verde Corp. S.A.’s records, this farm measures 8 ha (Refer to Annex 35). On a visit to this farm on Thursday, 28 July 2016 pictures were taken (Refer to Annex 31) of the farm, which was marked with a sign identifying it as Farm 1 measuring 7.8 ha and organic. b) Though mentioned as having been included in the attached documentation, the affidavit is not in the transition file. We are unable to establish whether this affidavit might bear a relation to the noncompliances detected in April 2014, which needed to be corrected prior to commencement of the transition period. c) Though we do not know what Eng. Roberto Garcia considers to be an “affidavit”, it is clear that the letters from Enrique Bolaños and Lizeth Perez are not affidavits made according to Eng. Garcia’s specifications. Also, they refer to unidentified land areas. Likewise, both individuals indicated being neighbors of Del Valle Verde Corp. S.A.; however, on the date of both letters (09 February 2015) this company was not part of the transition file and no paperwork had been presented to ARAO in this company’s name. d) Interestingly, both letters were signed in Pital de San Carlos on 09 February 2015 and indicate that Del Valle Verde Corp. S.A. “is dedicated to the production of organic pineapple”. This claim is without basis. Del Valle Verde Corp. S.A. is first mentioned in the transition file on 21 May 2015 when Eng. Roberto Garcia informed Ms. Blanca Castillo Fallas at ARAO that “the operator will be handling the entire organic operation under this business name” (Refer to Annex 2, folio 52 according to original transition file numbering, page 171). In fact, on 20 May 2015, the SFE still issued a registration certificate as a transitioning farm to LyL Proyectos MMV S.A. (Refer to Annex 2, folio 50 according to original transition file numbering, page 167). e) It should also be noted that one of the noncompliance findings identified by Eng. Garcia Salazar was that LyL Proyectos MMV S.A. had to present a letter from an individual “free of conflicts of interest” stating land use (Refer to Annex 2, folio 23 according to original transition file numbering, page 122) of Farm 1 Plot 1. However, Mr. Enrique Bolaños mentions in his letter that he rents a piece of land (does not specify what land) from Del Valle Verde Corp S.A. and therefore, it is possible that Mr. Bolaños could have some sort of interest in this process. f) After comparing the documentary evidence analyzed in this section, we are able to conclude that Farm 1 Plot 1 belonged to LyL Proyectos MMV S.A. (A.O.11 forms on folios 24 and 42 according to original transition file numbering), whereas Del Valle Verde Corp. S.A. without being an accredited organic operator was the owner of some other area, which could not have been the same area belonging to LyL Proyectos S.A. as of February 2015. F. On Wednesday, 20 May 2015, the SFE issued a registration certificate as a transitioning farm to LyL Proyectos MMV S.A. This certificate was issued by Eng. Karla Morales Roman, Head of the Office for Organic Agriculture Registration and Accreditation. The registration certificate number is 90 and indicates that the transition process start date is 24 April 2014 and would expired on 24 April 2016 (Refer to folio 50 according to original transition file numbering). It is important to highlight the following with regard to this certificate: a) The transition process was set to start on 24 April 2014; however, this gives rise to a series of issues. First, Eng. Garcia Salazar insisted that the process would only begin after all noncompliances had been corrected. Second, there is a problem related to the production areas. As of 20 May 2015, only two areas were to undergo transition (Farm 5 Plot 1 and Farm 1 Plot 1); of these two, only Farm 5 Plot 1 was inspected on 24 April 2014 because Farm 1 Plot 01 was included in the file on a later date (05 August 2014). Therefore, this farm should not have been included in the certificate as the expiration date would have been even shorter than the first. Third, if the transition process was set to start on 24 April 2014 and end on 24 April 2016, then it is only a two-year transition, which goes against the provision that specifies a three-year duration. In the absence of a justification to shorten the transition period, we are faced with an unjustified administrative action. b) The certificate does not specify areas covered. It should be highlighted that on the date issued, evidence was still being submitted for Farm 01 Plot 01 (Refer to Annex 2, folio 23 according to original transition file numbering, page 122). Additionally, in his followup report of 24 April 2014 (Refer to Annex 2, folio 13 according to original transition file numbering, page 111), Eng. Garcia Salazar indicated that the operator “must comply with the three-year transition period” since “all areas were under conventional management”. c) Therefore, regardless of the analysis conducted in terms of LyL Proyectos MMV S.A. noncompliances and assuming that all these noncompliance findings had been addressed and reported that same day and Eng. Roberto Garcia had been able to analyze them and determine that they have been satisfactorily corrected by the operator, the only thing right and proper to have done on 20 May 2015 would have been to officially declare commencement of the transition period. However, it should have been a three-year period. Thus, the transition period end date would have been 20 May 2018. d) Eng. Roberto Garcia Salazar’s name and signature and the date 05/20/2015 appear on the lower right corner of the registration certificate issued to LyL Proyectos MMV S.A. (folio 50 of the transition file). This leads us to believe that Eng. Garcia first became familiar with the document on the date it was issued. G. On Wednesday, 21 May 2015 between 11:30 a.m. and 3:00 p.m. One day after the registration certificate was issued to LyL Proyectos MMV S.A., Eng. Garcia apparently conducted a visit to what was reported to be Organic Farm 1 (7.79 ha), Farms 2 and 3 measuring 23.67 ha (the surface area of each farm is not indicated). He mentions that Farm 5 Plot 1 (2.21 ha) has begun its second year of the transition process, which ends on 24 April 2017. He goes on to indicate that the transition process for 115 ha will begin on 25 May (does not specify year). The total surface area transitioning to organic declared in this report is 31.46 ha, which is the sum of the above mentioned areas for Farms 1, 2 and 3. It should be remembered that by the aforementioned date, the transition process no longer included a Farm 2 or Farm 3. This means that these two areas were included in the transition file without any explanation. Additionally, this is the first time Del Valle Verde Corp. S.A. is mentioned as the operator applying for a transitional license. This process was originally initiated in LyL Proyctos MMV S.A.’s name. It is worth noting that prior to 21 May 2015, Del Valle Verde Corp. S.A. was not registered before ARAO and there were no properties under organic farming or transitioning to organic reported in its name. This report was included in the file on an unspecified date, but most likely in July 2016 once this preliminary investigation and an administrative proceeding against Congelados y Jugos del Valle Verde S.A. were underway. Several aspects should be underlined in relation to the four documents referenced above that were added to the transition file. Next is an analysis per document highlighting those aspects considered relevant. a) ON THE MANNER IN WHICH THIS DOCUMENT WAS INCLUDED IN THE ORIGINAL FILE AND CHANGES MADE TO THE CONSECUTIVE NUMBERING OF ITS PAGES. This document was added to the original transition file on an unspecified date and by an unidentified person (Refer to Annex 4). It is made up of six folios and its inclusion in the file altered the original numbering of the transition file. It was placed after folio 69 (that corresponds to official letter ARAO.65.15 of 01 June 2015 signed by Eng. Karla Morales Roman informing Del Valle Corp. S.A. that the transition process for those areas transitioning to organic had been completed). However, the assigned folio numbers begin with folio 69 and therefore, the file has two folios identified with the number “69”. The six folios added were numbered from 69 to 74, but the previous file numbering was not corrected. For a time the file went from folio 74 back to 70, because 70 was the original file number. Folio 70 of the original transition file numbering contains sampling log No. 0006141 (21 May 2015) prepared by Eng. Roberto Garcia Salazar. At a later point in time, possibly in July 2016, the numbers stamped were manually corrected and folios were reorganized. Folio 75 contains a repeated copy of folio 69 (official letter ARAO.65.15 of 01 June 2015). Folios 76 to 81 are new, but instead of continuing with folio 82 et seq., the file goes back to 70 and from there to folio 76. This is extremely confusing and serves to highlight the chaos prevailing in the transition file containing documentary evidence for the organic certificate issued to Del Valle Verde Corp. S.A. b) SUPERVISION AND FOLLOW-UP REPORT PREPARED BY ENG. ROBERTO GARCIA SALAZAR DATED 21 MAY 2015. ON THE FIRST VISIT TO “TRANSITIONING AREAS” THE DAY AFTER CHANGING THE INTERESTED PARTY’S BUSINESS NAME FROM LYL PROYECTOS MMV S.A. TO DEL VALLE VERDE CORP. S.A. Despite the absence of a formal request to do so by the legal representative of any of the company’s involved, Eng. Roberto Garcia arranged the change of business name. There is no document certifying transfer of ownership. The supervision and follow-up report, folios 69 to 70 (Refer to Annex 2, page 191 et seq.) indicates that the area visited is located latitude 10,56552, longitude -84,29086. Thus, for the first time, the operator inspected on this visit is Del Valle Verde Corp. S.A. These coordinates match those filled in for Farm 2 Plot 5 in the A.O.11 form (24 April 2014) (Refer to Annex 2, folio 1 according to original transition file numbering, page 99). c) SUPERVISION AND FOLLOW-UP REPORT PREPARED BY ENG. ROBERTO GARCIA SALAZAR DATED 21 MAY 2015. ON THE STATUS OF THE AREAS INSPECTED AND CONFIRMATION OF EXISTENCE OF DOCUMENTARY RECORDS OF ORGANIC INPUTS AS OF 21 MAY 2015 SIGNED BY ENG. ROBERTO GARCIA SALAZAR. It is expressly indicated in the report that Farms 1, 2 and 3 are to transition to organic and “the production area must comply with a three-year transition period” before being able to request the denomination of organic. This is a contradictory assertion since ARAO issued a transitioning farm registration certificate the day before specifying 24 April 2016 as the transition period end date. d) Additionally, there is a scenario that does not seem to make any sense: a) Two farms are mentioned in Garcia’s report (Farm 2 and Farm 3) that were not in the file and apparently a different transition period will apply to these two areas. They will undergo e) f) g) h) i) j) k) a three-year transition period; however, no start date is specified; b) Farm 1 Plot 1 (7.79 ha) continues to be under a three-year transition period, but the transition start date is not indicated in the transition file; c) A different transition period applies to Farm 5 Plot 2 and ends on 24 April 2017, that is, a three-year transition period from the date of the first inspection (which is unacceptable since noncompliances had not been corrected); d) As of 21 May 2015, despite the apparently irregular manner in which the areas now identified as Farm 2 and Farm 3 were included in the transition process, the total surface area undergoing transition only adds up to 33.67 ha. There seems to be no way of explaining the above if we keep in mind that on 30 March 2015 (almost two months before Garcia’s alleged visit on 21 May 2015) Mr. Wilber Chinchilla submitted an NOP certification application on behalf of Del Valle Verde Corp. S.A. for a total of 97.86 ha. And it is even harder to explain if we take note of the fact that on 07 April 2015 Primus Labs reported inspecting 96.21 ha; however, on 25 May 2015 (four days after Garcia’s visit) the same certifying agency reported having inspected 97.86 ha belonging to Del Valle Verde S.A. and included a list of farms inspected with names and surface areas that do not match those reported by Garcia. Farm 5 Plot 1 is the most notorious case. In Garcia’s supervision and follow-up report of 21 May 2015, this transitioning farm is reported to measure 2.21 ha and the transition period end date is 24 April 2017 (Refer to Annex 2, folio 69 according to modified transition file numbering). On 30 April 2015, on behalf of Del Valle Verde Corp. S.A., Mr. Chinchilla reported this same farm as having a 50 ha surface area. On 07 April 2015, Primus Labs reported that this farm measured 3.96 ha, whereas on 25 May 2015 (four days after Garcia’s inspection visit) Primus Labs reported that it measured 50 ha and was 100% organic. Additionally, on 26 April 2016, Mr. Chinchilla informed this Investigative Body that, according to company records, the farm measured 43 ha and called it Finca el Ojoche. A process supervisory body should assess the implications of the supervision and followup report of 21 May 2015 if it had been included in the transition file on the date it was conducted. It is unclear whether the Head of the Office for Organic Agriculture Registration and Accreditation was aware of this supervision and follow-up report on 01 June 2015 when she ordered that the transition file be closed. As mentioned previously, this documentation was included in the file immediately after the official letter in which Ms. Karla Morales finalizes the transition and informs Del Valle Verde Corp. S.A. that “they may proceed to contact the certifying agency deemed appropriate for their certification…” (Refer to Annex 2, folio 69 according to original transition file numbering, page 191). As a result, this Investigative Body is unable to explain the fact that on 30 March 2015 Mr. Chinchilla applied for organic certification by Primus Labs on behalf of Del Valle Verde Corp. S.A. SUPERVISION AND FOLLOW-UP REPORT PREPARED BY ENG. ROBERTO GARCIA SALAZAR DATED 21 MAY 2015. ON DOCUMENT REGISTRATION. The report indicates that at the beginning of the transition process, parallel production was being implemented and conventional farming equipment was shared; however, “the 1) 2) 3) 4) 5) 6) operator is currently transitioning everything to organic and using organic farming equipment”. This statement by Eng. Garcia Salazar seems contradictory. On one hand, he mentions transitioning farms, but at the same time he says that certain conventional methods were still being used. It should be noted that, in the strictest sense, Eng. Garcia’s statement is revealing of the fact that the noncompliance findings made in April 2014 regarding the presence of conventional inputs and activities continued and had not been corrected. This appreciation is confirmed by Mr. Wilber Chinchilla in an undated document sent to Primus Labs as a follow-up to the report of 15 March 2016 prepared by Eng. Garcia Salazar. Mr. Chinchilla’s document says: “There is a small area devoted to conventional farming” (Refer to Annex 5, page 320). Also, we have no idea what Eng. Garcia meant when he said that the operator is currently transitioning “everything” to organic. In his report, Garcia maintains that there is an updated management plan for 20152016. We have been unable to certify the existence of a management plan. Garcia mentions that there is an updated management plan; however, no plan was submitted by the companies under investigation or by Primus Labs and there is no management plan in the transition file. Consequently, we know nothing about its content. The report indicates that the operator keeps detailed records of raw materials, input application records. This is a key issue and it seems as if organic input purchases were only made as of March 2015. Therefore, we do not know what documentation Garcia is referring to nor do we know what company purchased these. When Eng. Garcia states that “The operator has not yet started to produce pineapple and therefore, there are no final product sales records,” this seems to be an observation that is coherent with the fact that organic production at this point would be impossible since organic inputs had been purchased just two months ago. The document also indicates that, “The operator has not yet harvested pineapple and therefore, transport logs do not exist.” He goes on to certify that, “The operator has a list of inputs used to grow pineapple and the application records for all inputs used as well as proof that these have been certified for use in organic farming.” With regard to the latter point, it should be noted that there is no documentation to verify what Eng. Garcia said. The companies under investigation and Primus Labs did not provide this information to the Investigative Body. Likewise, the complete list of inputs used throughout the organic pineapple crop cycle is not included in the transition file. VISIT LOG FOR VISIT CONDUCTED ON 21 MAY 2015. SIGNED BY ENG. ROBERTO GARCIA SALAZAR. (Refer to Annex 2, pages 228 to 233). This document seems to complement the Supervision and Follow-up Report that is being analyzed. This is a handwritten document signed by Eng. Roberto Garcia on 21 May 2015. Time of arrival at site was 10:30 a.m. and time of departure was 15:00. Area location is N10.56552 W84.29086. The name of the producer visited is written by hand: LyL Proyectos MMV S.A. and next to it an asterisk. At the bottom of the document, there is another asterisk and next to it the words “change business name to Del Valle Verde Corp. S.A.”. At the top of the document, in the box with the producer’s i.d. number, there is a note “Change business name”. This is the first time mention is made of changing LyL Proyectos MMV S.A. to Del Valle Verde Corp. S.A. It should be noted that as of this date Del Valle Verde Corp. S.A. was not registered with ARAO as an organic operator and there was no knowledge of an organic farm related to this company. 7) REPRINT OF THE SUPERVISION AND FOLLOW-UP REPORT OF 24 APRIL 2014. ON THE LACK OF DOCUMENT FORMALITY AND ACCURACY. Firstly, this document is a reprint of the document on folio 13 of the file (original numbering). However, there are a large number of handwritten notes on this document that do not appear on the copy on folio 13. The document has Eng. Roberto Garcia’s name on it, but there is no signature. The document basically states that all noncompliance findings made in April 2014 were corrected at some point; there are notes next to each noncompliance stating this. Several questions arise: Who makes these annotations? When were these made? Why are they included in the file until July 2016 resulting in the modification of the file numbering? It would seem appropriate that if this were the document where ARAO Inspector, Eng. Garcia Salazar, approves correction of noncompliances, it should have been expressly written in these terms. Such a document should contain a description of the facts, processes, results and the corresponding evidence. This would seem appropriate as this will determine whether the organic operator registration certificate is issued or not. This certificate not only enables an operator to export goods worth millions of dollars, but also entails the responsibility of representing Costa Rica abroad. It is important to determine why this document was added to the file out of time 8) EMAIL FROM BLANCA CASTILLO FALLAS (ARAO) SENT TO AN EMAIL ACCOUNT BELONGING TO LYL PROYECTOS MMV S.A. ON 26 MAY 2015. This fourth document was included in the file sometime in July 2016 (folio 74). This email was sent to the controlcampos@lylproyectos.com account indicating that a document identified as “Report No. 40 of visit to Del Valle Verde Corp. S.A. farm by Eng. Roberto Garcia on 21 May of the current year”. Given the fact that file numbering and chronological order was modified when these documents were included in the file, there is doubt as to whether the Head of the Office for Organic Agriculture Registration and Accreditation was aware of this email on 01 June 2015 when the transition process was declared to have concluded. Eng. Roberto Garcia Salazar was copied on this email; however, Eng. Karla Morales was not. H. On Thursday, 21 May 2015 at 12:22 p.m. Mr. Wilber Chinchilla sent an email to Eng. Roberto Garcia Salazar specifying “Corporate Acknowledgment Certificate” in the subject line. The email reads: “Attached please find Del Valle Verde Corp. S.A.’s corporate acknowledgement certificate” (Refer to Annex 2, folio 52 according to original transition file numbering, page 171). The next folio contains a corporate acknowledgement certificate dated 30 March 2015 issued by the Public Registry under the name of Del Valle Verde Corp. S.A. I. On Thursday, 21 May 2015 at 8:22 p.m. There is an email from Roberto Garcia sent from a personal email account (rogasacr05@gmail.com) to Roberto Garcia’s institutional email account. The email subject line reads: “Lylproyectos”. This email has no text and indicates no attachments (Refer to folio 54 according to original transition file numbering). J. On Friday, 22 May 2015 at 10:52 a.m. Eng. Roberto Garcia Salazar resent Mr. Wilber Chinchilla’s previous email (dated 21 May 2015 at 12:22 p.m.) to Ms. Blanca Castillo and Karla Morales Roman and Juan Rojas Chavez were copied on this email. The attached file is called "Del Valle Verde – Personería Jurídica PDF”. In his email to Ms. Castillo Fallas, Eng. Garcia asks her to attach this corporate acknowledgement certificate to LyL Proyectos MMV S.A.’s file “since they’re asking for a change of business name; the operator will handle the entire organic operation under this business name” (Refer to Annex 2, folio 52 according to original transition file numbering, page 171). The transition file contains no formal request by none of the companies involved in the change of business name. Consequently, Eng. Garcia seems to have proceeded on his own accord, which goes against the ethical requirements of public officials, that is, observance of the principles of independence and objetivity. In the absence of documentation signed by the legal representatives of the companies involved, there is the danger that no one is taking responsibility before the Administration and third parties. Additionally, it is possible that rights are being granted to an entity that has not formally requested these rights, which enable it to carry out important economic activities. K. On Friday, 22 May 2015 at 11:10 a.m. The email sent on Thursday, 21 May 2015 at 8:22 p.m. was resent to Blanca Castillo Fallas. Karla Morales Roman was copied on this email and 10 attached files were included. This email reads: “Please include this evidence in LyL Proyectos MMV S.A.’s file”. It seems as if these attached documents are those on folios 56 to 67 inclusive. a) The first of these is a letter dated 21 July 2014 from Eng. David Meneses Contreras admitting that organic seed is unavailable. b) Folio 56 according to original transition file numbering is illegible. c) On folio 57, there are instructions to apply agrochemicals to F01-L01 (Piña Fria 4). It should be noted that Exportadora Piña Fria Cuatro is not an organic operator and it is impossible to understand why they would apply agrochemicals to F01-L01 if it is supposedly transitioning to organic. The date at the bottom of this document is “12/09/2014”. There are two things that seem incomprehensible with regard to this evidence. First, these are documents from July and September 2014 that do not provide evidence of noncompliance correction. Second, the application of agrochemicals to F01-L01 one month and one week after Eng. Garcia’s first inspection visit (05 August 2014) reveals that it was still under conventional management. d) A croquis plan (Refer to folio 58 according to original transition file numbering) with no text depicting blocks with numbers; however, its purpose is unclear. e) On folio 59 according to original transition file numbering, there is a document with handwritten annotations. We do not know who made these annotations and when. Document reads: “F Area Transition Start Date 115 – 25-5-2015. 7.79 F01 – June 2014. 23.67 F02 and F02 January. 2.21 HA F5. Plot 1 April 2014”. f) Photographs are attached (Refer to folios 60 to 67 according to original transition file numbering). Photographs depict crops, someone on a farm, a storage area or warehouse, but there is no information on where and when they were taken, nor is there an explanation as to why they were included. L. On 01 June 2015 at 7:58 a.m. Eng. Roberto Garcia sent an email to Karla Morales Roman and copied Blanca Castillo Fallas, Elizabeth Ramirez Sandi and Juan Rojas Chavez. The email subject line: “End of transition period VALLE VERDE CORP. S.A.” In his email, Eng. Roberto Garcia states that: “… On the basis of evidence submitted by the operator for the transition period analysis, in addition to the one-year transition to organic, ARAO’s inspection and the analysis of the pineapple fruit during the initial growth stages (flower and fruit), we are able to bring Del Valle Verde Corp. S.A.’s transition period to an end. We need to send a note to ARAO since the operator has met the requirements and the residue analysis was negative” (Refer to Annex 2, folio 72 according to original transition file numbering, page 209). The following should be underlined: a) There is no indication of what areas (name and size) are to be included. b) Eng. Roberto Garcia mentions a “one-year transition to organic”; however, there is no explanation for this anywhere in the file. In fact, on 21 May 2015, Eng. Roberto Garcia Salazar was referring to a three-year transition period for all areas. He expressly pointed out that Farm 5 Plot 1 would finalize transition until 24 April 2017 (it should be noted that this document had not been included in the transition file as of 01 June 2015). c) When Eng. Garcia states that the transition period has concluded, he is also contradicting the date set forth in the transitioning farm registration certificate signed by Eng. Karla Morales dated 20 May 2015. The expiration date on the certificate was 24 April 2016, which also does not correspond to a three-year transition as described in this investigation. This seems strange given the fact that Eng. Garcia signed this document on the date it was issued (20 May 2015) and therefore, was aware of the transition expiration date specified on the certificate. M. On 01 June 2015, by means of official letter ARAO.65.15 (Refer to Annex 2, folio 69 according to original transition file numbering, page 190; it is also on folio 75 according to modified transition file numbering), Eng. Morales Roman informed Del Valle Verde Corp. S.A. that the company “has corrected all noncompliances and therefore, the transition period is deemed by ARAO to have concluded satisfactorily”. She also added that they may contact the certifying agency of their choice for certification as an organic farm. The following should be noted: a) No specific area or farm name is specified and therefore, it is unclear what areas are included. b) The operator is said to have corrected all noncompliance findings, but there is no evidence in the file to confirm this in all cases. c) There is no formal document to justify the conclusion of the transition process. Therefore, there is no way of knowing for certain whether the operator fully complied with the Administration’s requirements, or if the Administration complied with the corresponding provisions of the General Law of Public Administration in terms of an administrative action. N. On 01 June 2015 at 3:12 p.m. Ms. Blanca Castillo Fallas sent an email to Wilber Chinchilla and copied Roberto Garcia Salazar. In this email, she informs him that she is sending him official letter ARAO 65.15 and asks him to confirm receipt of the email (Refer to folio 73 according to original transition file numbering and folio 79 according to modified transition file numbering). O. On that same day at 4:53 p.m. Mr. Wilber Chinchilla sent an email to Ms. Castillo Fallas confirming receipt of email and copied Eng. Roberto Garcia Salazar. 8. ON THE ISSUANCE OF PRIMUS LABS’ PLC-OR-201 CERTIFICATE UNDER THE NOP IN DEL VALLE VERDE CORP. S.A.’S NAME. This Investigative Body became aware of this certificate on 02 September 2016 in Eng. Karla Morales Roman’s response referring to the existence of a certificate under the NOP issued to Del Valle Verde Corp. S.A. by Primus Labs. It should be emphasized that this section relating to the PLc-OR-201 certificate contains events that occurred at the same time as the early conclusion of the transition process (01 June 2015). With regard to this PLc-OR-201 certificate (Refer to Annex 16, pages 648 and 649), there are two important dates: a) 25 May 2015, which is the date reported on the certificate as the date on which Primus Labs carried out the inspection; and b) 10 August 2015, which is the date on which the certificate was issued. Next are the key points regarding the PLc-OR-201 certificate: A. The total surface area specified in Primus Lab’s PLc-OR-201 certificate is 97.86 ha. This area matches the total area included by Mr. Wilber Chinchilla in the certification application he submitted to Primus Labs on 30 March 2015 in Del Valle Verde Corp. S.A.’s name. Area names used in the PLc-OR-201 certificate are different and each area is divided into plots; however, the sum of plot surface areas matches the area of each farm specified by Mr. Wilber Chinchilla on 30 March 2015. The following table compares the surface areas in question at three different moments in time: a) the certification application submitted to Primus Labs by Mr. Wilber Chinchilla on behalf of Del Valle Verde Corp. S.A. on 30 March 2015 for 97.86 ha of organic agricultural land; b) areas reported as inspected by Primus Labs on 07 April 2015; and c) areas reported as inspected by Primus Labs on 25 May 2015. AREAS INSPECTED AREA FOR WHICH WILBER CHINCHILLA SUBMITTED CERTIFICATION APPLICATION TO PRIMUS LABS (30 March 2015) AREA INSPECTED BY PRIMUS LABS COSTA RICA FOR PLc-Org-CR-033 CERTIFICATE (07 April 2015) AREA INSPECTED BY PRIMUS LABS COSTA RICA FOR PLc-OR-201 CERTIFICATE (25 May 2015) STATUS OF AREAS INSPECTED BY PRIMUS LABS ACCORDING TO PLc-OR-201 CERTIFICATE 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic 100% organic TOTAL (*) Note: Numbers in bold in fourth column (AREA INSPECTED BY PRIMUS LABS COSTA RICA FOR PLc-OR-201 CERTIFICATE) are the sum of the areas itemized on the PLc-OR-201 certificate. B. It is impossible to understand how after visiting the same allegedly organic operation twice, at an interval of only one month and a half, Primus Labs reports completely different things. Differences reported are not only in terms of production area names, but also areas inspected and measurements. As the above table shows, the inspection of 07 April 2015 was of Farm 4 (58.4 ha), which was not mentioned in the application submitted to Primus Labs by Mr. Wilber Chinchilla on 30 March 2015. Additionally, it is impossible to understand why total surface area differs on 07 April and 25 May 2015. The last inspection matches the interested party’s application, whereas the previous inspection conducted by the same certifying agency a month and a half before does not. After going over the list of areas audited by Ms. Lorena Carballo Batista from Primus Labs for Del Valle Verde Corp. S.A. on 07 April 2015, we see that she reported that Farm 5 measures 3.96 ha. Ms. Carballo indicated having seen the maps of the areas assessed (PLc_Org_CR_033 certificate issued on 22 July 2015. Finally, it should be noted that Farm 5 is only mentioned at the beginning of the transition file in April 2014 and was reported to measure 2.13 ha. After analyzing the evolution of the transition file, which finalized early, this would have been the only farm included. 9. ON THE EVENTS AFTER THE EARLY CONCLUSION OF THE TRANSITION PROCESS ON 01 JUNE 2015. There were no more movements after the early conclusion of the transition file. Following is an overview of a series of situations occurring subsequently, which have been documented in order to fulfill this Investigative Body’s mandate. A. Organic certificate PLc_Org_CR_033 is issued to Del Valle Verde Corp S.A. on 22 July 2015 by Primus Labs for a total of 97.86 ha. This certificate does not specify the areas under organic certification. As repeatedly mentioned throughout this document, we have been unable to establish a relationship between the area certified by Primus Labs and the transitioning areas reported to ARAO. At this point, it is important to take note of affidavits by Mr. Evelio Chavez Chaves and Mr. Olman Briceño Fallas and sworn before Milena Hernandez de Mezerville and Jose Pablo Sanchez Hernandez (Notaries Public) on 19 August 2016. They claim to have asked Mr. Humberto Gonzalez from Primus Labs to explain to them where the 97.86 ha included in Del Valle Verde Corp. S.A.’s certificate came from and Mr. Gonzalez responded that these were the result of the transition process (Refer to Annex 32, page 1189 et. seq.). The response given by Primus Labs’ representative is not possible. ARAO did not define any areas and after analyzing the transition file, at the very most, the total surface area adds up to 34.67 ha (according to Eng. Roberto Garcia Salazar’s apparently incorrect calculations in the Supervision and Follow-up Report of 21 May 2015, which was included in the file on folio 69 modifying its original numbering). It should also be highlighted that in his affidavit, Mr. Chaves Chaves indicated having said to Mr. Gonzalez that it was the certifying agency’s duty to verify the information used to certify; however, Mr. Gonzalez responded that he had no reason to doubt ARAO data. The circumstances under which Primus Labs granted the PLc_Org_CR_033 certificate have already been analyzed in detail; therefore, we will not go over this again. B. On 22 July 2015, Congelados y Jugos del Valle Verde started to export frozen organic pineapple supplied by Del Valle Verde Corp. S.A. As documented in the report attached to official letter CF-055-2016 (16 May 2016), on the same day Primus Labs issued organic certificate PLc_Org_CR-033 to Del Valle Verde Corp. S.A., the company exported 16.599 kilos of frozen organic pineapple to FROZSUN FOODS INC. (according to Congelados y Jugos del Valle Verde S.A. export invoice CVV 611) of which 11.050 kilos of raw material were supplied by Del Valle Verde Corp. S.A. (Refer to Annex 22, page 792 et. seq.) C. From 22 July 2015 onwards, Del Valle Verde Corp. S.A. became Congelados y Jugos del Valle Verde S.A.’s main supplier of organic pineapple, which is exported frozen to the US market. In this way, of the 47 containers exported by Congelados y Jugos del Valle Verde S.A. from 19 March 2015 to 06 April 2016, 34 of them contained product that had been produced using Primus Labs-certified organic raw material from Del Valle Verde Corp. S.A. D. E. F. G. Congelados y Jugos del Valle Verde S.A. exported the first 10 of the aforementioned 47 containers prior to the issuance of the organic certificate by Primus Labs on 22 July 2015. Thus, if we focus our analysis on the containers exported as of that date (37 containers), only three of these do not report using organic pineapple supplied by Del Valle Verde Corp. S.A. As was pointed out in report CF-055-2016, Del Valle Verde Corp. S.A. supplied almost 50% of all raw material used by Congelados y Jugos del Valle Verde S.A. for frozen organic pineapple exports. This is not consistent with the fact that this company was granted organic certification on 22 July 2015 and therefore, could not have grown the quantities that were subsequently exported as frozen organic pineapple. 15 March 2016. Report of unannounced visit to Del Valle Corp. S.A. (Report No. 03-S2016), to Del Valle Verde Corp. S.A. (Report No. 04-S-2016) and to Congelados y Jugos Valle Verde S.A. (Report No. 05-S-2016) sent to Eng. Francisco Dall´Anese, SFE Director. On 17 March 2016, Eng. Roberto Garcia Salazar sent an email to the SFE Director with three supervision and follow-up reports and a sampling log, all dated 15 March 2016. In two of these documents, Del Valle Verde Corp. S.A. is included as the organic-certified entity. Location data and entry/exit times are exactly the same in both reports, which makes it impossible to determine whether these reports refer to two different sites or the same one (we must assume the latter). These reports are identified as 03-S-2016 and 04-S-2016. There is a third report identified as 05-S-2016. (Refer to Annex 5, pages 272 to 276). Two of the three aforementioned reports (03-S-2016 and 04-S-2016) are included in a file opened in Del Valle Verde Corp. S.A.’s name, with an A.O.12 form that seems to have been signed by Luis Barrantes Quesada as the legally authorized representative on 02 March 2016 (reports on folios 15 to 17 of this file – Refer to Annex 5). The first of these reports is made up of three pages and the second is made up of two. Report 05-S-2016 attached to email addressed to the SFE Director mentions an unannounced visit to Congelados y Jugos del Valle Verde S.A., which is described as “followup of fruit entering the plant from Valle Verde Corp. and other organic pineapple suppliers”. The following should be noted in connection with the documents sent by Eng. Roberto Garcia Salazar to the SFE Director: a) Email to Francisco Dall’Anesse Alvarez dated 17 March 2016, with copy sent to Eng. Karla Morales Roman. (1) The email asserts: “… During the unannounced visit to Valle Verde Corp., we were able to verify that there are 97 ha of organic certified farmland. Harvest areas were visited; documentation pertaining to harvests, maquila and sales to Congelados y Jugos Valle Verde S.A. were verified. Organic pineapple traceability exercises were conducted; no findings were made concerning volumes harvested, processed and exported by both companies as per the request of an association of organic producers from the country’s northern region that is soon to be established. Findings were made regarding warehouse handling and shared equipment due to risk of contamination; the attached reports were prepared for the corresponding certifying agencies to follow-up on the findings of ARAO. I have attached the reports prepared by ARAO for both visits”. (2) It should be emphasized once again that though both documents (03-S-2016 and 04-S-2016) mention two companies and two visits, it is not possible to conclude from these reports that two different sites were visited. (3) The email claims that documentation pertaining to harvests, maquila and sales to Congelados y Jugos Valle Verde S.A. were verified (Report 05-S-2016), containers exported and organic raw material were examined and organic pineapple traceability exercises were conducted; however, there is no document attesting to these exercises reported by Eng. Garcia. (4) With regard to the visit, this Investigative Body found a visit log dated 15 March 2016 in Congelados y Jugos del Valle Verde S.A.’s file; however, this document was not included in Eng. Garcia’s email to the SFE Director. In this visit log, Congelados y Jugos Valle Verde S.A. appears as the producer; the visit is reported to have been conducted from 11:30 a.m. to 14:00; and N10.50011 O-84.27952 is the reported location. In this log, Eng. Garcia claims to have performed a traceability exercise for fruit purchased by Congelados y Jugos del Valle Verde S.A. (Supervision and followup report 05-S-2016). b) Supervision and Follow-up Report 03-S-2016 dated 15 March 2016. (1) This report mentions a TOTAL SURFACE AREA OF 300 HA OF WHICH 98 HA ARE UNDER ORGANIC CERTIFICATION. This is not coherent with any of the data analyzed by this Investigative Body as of 15 March 2016. This is mentioned because farmland under organic certification belonging to this operator as of this date totaled 97.86 ha. Additionally, no other document mentions that Del Valle Verde Corp. S.A. manages a total of 300 ha. (2) Upon this discovery, on 06 September 2016 we requested a farmland registration certificate for Del Valle Verde Corp. S.A. and LyL Proyectos MMV S.A. The certificate was issued by the SFE IT Surveillance System. Mr. Gerardo Quesada sent the corresponding certificate to this Investigative Body on 06 September 2016 (Refer to Annex 15, page 640). (3) The certificate issued claims that Del Valle Verde Corp. S.A. (location code 11515) owns a 300 ha production area of which 90 ha are under organic management. The physical address recorded under this location code is Saino de Pital de San Carlos, 500 meter north of the gas station. This address corresponds to LyL Proyectos MMV S.A.’s packaging plant. (4) This location code (111515) refers to a single piece of farmland measuring 300 ha within which 98 ha are devoted to the production of organic pineapple. However, the information in our possession dating back to the transition and until July 2016, when signage was discovered in the allegedly organic farms, does not refer to a single production unit, but rather it refers to different areas that have undergone changes in name, size, location and status over time. In his follow-up report of 21 May 2015, Eng. Garcia Salazar reported location N10.56552 W-84.29086 made up of Farm 2 and Farm 3 (23.67 ha). This report was not included in the file in July 2016 and the original numbering of LyL Proyectos MMV S.A.’s transition file was modified. (Refer to Annexes 31 and 35 for an analysis of the mentioned areas). (5) The report states that for the purposes of this report a visit was made to “… the organic farm and the warehouse, logs and harvest and sales volumes were examined and samples of organic fruit were obtained (Log 1243, control label 75166 at processing plant)”. There is a visit log that seems to belong to this Supervision and Follow-up Report; however, it has been included on folio 18 of Del Valle Verde S.A.’s organic farm registration file (02 March 2016) (Refer to Annex 5, page 278). The georeference included in the visit log is N10.53521 O-84.28871; however, these coordinates do not match any of the areas mentioned to date in this file. (6) There are no supporting documents to prove that logs and harvest and sale volumes were examined. The visit log included in the organic trading company registration file (Refer to Annex 5, folio 18, page 278) states that harvest volumes were examined from 04 September 2015 to 04 March 2016 and what seems to be “Farm 3” was included in brackets (illegible). The fact that a Farm 3 is mentioned creates a problem since on 30 April 2014, Mr. Wilber Chinchilla informed ARAO that the only transitioning area would be Farm 5 Plot 2 and therefore, from this moment onwards there is no Farm 3. Thus, on the date of the early conclusion of the transition process (01 June 2015), no Farm 3 was included. Eng. Roberto Garcia mentioned Farm 3 again in the Supervision and Follow-up Report that was included in the file in July 2015 (Refer to Annex 3, folios 69 to 74 according to modified transition file numbering, page 227 et.seq.) when the transition process had already concluded. Additionally, Farm 3 is mentioned together with Farm 2 as if a single mass of farmland measuring 23.67 ha and therefore, it makes no sense that the Supervision and Follow-up Report should mention a total surface area of 300 ha and 98 ha of certified organic farmland. (7) There is no supporting documentation for the warehouse inspection, nor are there any documents proving that logs and harvest and sale volumes were examined. We shall comment on the sampling log further on. (8) Eng. Garcia claims that “The producer has transitioning areas that are under follow-up by the certifying agency”. This claim seems groundless. As mentioned repeatedly in this report, there are no transitioning areas in Del Valle Verde Corp. S.A.’s name reported before ARAO; the same applies to LyL Proyectos MMV S.A. On 01 September 2016, Primus Labs was asked to inform this Investigative Body whether they were providing follow-up support to Del Valle Verde Corp. S.A. in relation to any transitioning areas. On that same date, Primus Labs sent an email indicating that they were providing no follow-up (Refer to Annex 30, pages 1164 to 1166). Mr. Humberto Gonzalez from Primus Labs stated: “I hereby inform you that we are currently not conducting follow-up of any transitioning farmland belonging to the companies mentioned emphasis added in your email pursuant to Executive Decree 29782-MAG”. (9) It is incomprehensible why Eng. Garcia would mention that Del Valle Verde Corp. S.A. has transitioining areas when he himself declared on 01 June 2015 that the transition had concluded. Likewise, it should be noted that after the transition process end date, this company has submitted no new transition applications. In this Supervision and Follow-up Report, Eng. Garcia claims that Del Valle Verde Corp. S.A. has “98 ha of organic farmland and approximately 150 ha of transitioning farmland that is sold as conventional”. This last assertion leaves this Investigative Body perplexed. (10) It seems contradictory that Eng. Garcia should report N10.56552 W-84.29086 as having transitioning areas since in his report of 21 May 2015 (document included in the transition file in July 2016 modifying the original file numbering; refer to Annex 3) he reported this same location as Farm 2 and Farm 3 with a total combined area of 23.67 ha. The Primus Labs PLc_OR_201 certificate claims that the total surface area of F02 and F03 is 20.64 ha, whereas in Primus Labs’ inspection report (07 April 2015) the total combined area of these two farms is 26.06 ha. (11) Eng. Garcia reported the existence of organic inputs in the conventional inputs warehouse. He also reported the presence of inputs that are not in the OSP and for which there is no evidence of approval by the certifying agency. According to Eng. Garcia, inputs not in the OSP were: Sunscreen, L-Large 3.2 SL, Ecofrut 12 DC, Everest, Tech-Flo nutrico and P Micotrhiol Special 80 WG. He also highlighted the presence of organic inputs in the conventional inputs warehouse. In the case of SUNSCREEN, this product was invoiced in Exportadora La Piña Tica 4 de Pital S.A.’s name under organic and conventional inputs. (12) In Eng. Garcia’s visit log (Refer to Annex 5, folio 18 of Del Valle Verde Corp. S.A.’s organic farm registration file, pages 278 and 279) he clearly mentions two warehouses: a conventional warehouse and an organic warehouse. Point 4 of this log reads as follows: “Conventional products are handled in the farm warehouse (Exportadora La Piña Fria 4 de Pital S.A.) and there is shared equipment. There are organic inputs in the conventional warehouse”. (13) The latter suggests that the warehouse visited is located on a farm belonging to “Exportadora La Piña Tica 4 de Pital S.A.” which does not make any sense given the fact that this company is not an ARAO accredited operator. Additionally, the operator under inspection was Del Valle Verde Corp. S.A. and therefore, why inspect the facilities of another company? (14) With regard to the organic warehouse, Everest is the input specifically mentioned by Eng. Garcia. (15) Eng. Garcia’s report of 15 March 2016 resulted in the submission of a letter of explanation to Primus Labs by Mr. Wilber Chinchilla on behalf of Del Valle Verde Corp. S.A. In his letter, Mr. Chinchilla not only provides explanations, but also attaches a croquis plan of the warehouses. It becomes evident that the warehouses are situated in the same building and are separated by what is labeled as “a wall”. Each warehouse has an independent entrance and exit. After analyzing this croquis plan, this Investigative Body concludes that though the areas are clearly demarcated and physically separated, storage protocols are not followed thus endangering organic integrity. (Refer to Annex 5, page 335) (16) Also, an important discovery was made: if the two warehouses are next to each other, that means they are located on the same property. And if this is the case, the “organic” warehouse Eng. Garcia visited would be situated on a farm that, in his own words, belongs to Exportadora La Piña Fria 4 de Pital S.A. As already pointed out, this company is not registered before ARAO as an accredited organic operator. Visit logs prepared by inspectors of the SFE Regional Office for the Huetar Norte Region up until August 2016 describe this company as dedicated to conventional pineapple production. (17) In his undated note addressed to Primus Labs, Mr. Wilbur Chinchilla offers an explanation as to why conventional inputs were found in the organic inputs warehouse. Mr. Chinchilla indicated that the inputs “found in the organic warehouse were donated for testing and have neither been used nor tested. The person in charge of the warehouse mistakenly stored these in the organic warehouse, but they have already been removed from the warehouse. These inputs will be tested in the conventional pineapple area in order to determine whether they will be included in the farm management plan”. (Refer to Annex 5, page 330). (18) This Investigative Body does not understand why Mr. Chinchilla informed Primus Labs that Del Valle Verde Corp. S.A. was waiting for their authorization to include the conventional inputs in the organic farm management plan. We do not understand why the person who has handled the transition and registration process initially on behalf of LyL Proyectos MMC S.A. and then on behalf of Del Valle Verde Corp. S.A. does not seem to understand that it is not possible to apply conventional inputs to organic pineapple plantations. Therefore, it is not a matter of removing these conventional inputs until Primus Labs “authorizes them” because this is simply impossible. (Refer to Annex 5, page 330). (19) In response to Eng. Garcia Salazar’s two reports (03-S-2016 and 04-S-2016) of 15 March 2016, Primus Labs presented two responses to ARAO. We will refer to their response regarding non-compliances mentioned in report 03-S-2016. On 30 March 2016, Ms. Blanca Castillo Fallas informed Mr. Humberto Gonzalez from Primus Labs that the response to report 03-S-2016 “is dependent on the correction of noncompliances”. Mr. Wilber Chinchilla’s note, a spray boom and tank cleaning log in LyL Proyectos MMV S.A.’s name and the SFE matrix for certifying agencies’ response to supervision and follow-up reports were attached to this email under “ANNEX 1”. According to this last document “ANNEX 1”, the certifying agency’s response regarding the presence of conventional inputs in the organic warehouse was that the operator had already taken corrective action “and the certifying agency inspector checked the inputs warehouse and found no unapproved inputs”. (20) “The operator has taken the corresponding corrective action (Refer to Annexes) and the certifying agency inspector checked the inputs warehouse and found no unapproved inputs” (Refer to Annex 5, page 360). In response to Mr. Chinchilla’s note, there is no indication that Primus Labs warned Del Valle Verde Corp. S.A. that conventional inputs cannot be approved for organic use. (21) It should be noted that both Primus Labs and ARAO considered Mr. Chinchilla’s explanations to be sufficient in order to put an end to the noncompliance regarding the presence of conventional inputs in Del Valle Verde Corp. S.A. operations. However, ARAO reports indicate that there is a large amount of SUNSCREEN, which makes us doubt the veracity of Mr. Chinchilla’s assertion that this input had been given to them to test. If this had been the case, the amount of SUNSCREEN would not have been large and would have only been a sample. (22) This is extremely serious because since his first inspection on 24 April 2014 (Refer to Annex 2, folio 13 according to original transition file numbering, page 111) Garcia Salazar indicated that the operator applying for a transitional license (at the time LyL Proyectos MMV S.A.) had to “suspend use of all conventional inputs” (that is, this is a finding that would have prevented the commencement of any transition). This means that in his email dated 17 March 2016 and addressed to the SFE Director, Eng. Garcia was highlighting the fact that a serious non-compliance finding that had been made by him in April 2014 still persisted. (23) Nonetheless, instead of taking immediate action, he decided to delegate this matter to the certifying agency; however, Eng. Garcia also forgot that he himself informed Eng. Karla Morales Roman, Head of ARAO, on 01 June 2015 that the operator had corrected all noncompliances and therefore, the transition process could be deemed to have concluded and the transition file was closed that same day. c) Supervision and Follow-up Report 04-S-2016 of 15 March 2016. (1) This report is part of the documentation contained in Del Valle Verde Corp S.A.’s organic farm registration file (Refer to Annex 5) and seems to refer to a visit to a “processing” and “packaging” company. (2) This Follow-up Report indicates that the property visited is located N10.556552 O84.29086, which is the same location specified in Report 03-S-2016. Both reports are dated 15 March 2016, which also explains why the time of arrival and departure are the same. These coordinates match those contained in the handwritten annotations (24 April 2014) included on folio 2 of the transition file belonging to Farm 2 Plot 5. (3) Eng. Garcia Salazar reports that the property visited measures 300 ha; however this information does not match information presented to ARAO and contained in the transition file. In April 2014, Farm 2 was reported to measure 13.13 ha. Additionally, in the Audit conducted on 25 May 2015, Farm 2 and Farm 2 Plot 5 were reported to measure 12.71 ha and 1.9 ha, respectively (Primus Labs’ PLc-OR-201 certificate). Nowhere is mention made of a 300 ha property matching these coordinates. (4) Likewise, we do not understand why Supervision and Follow-up Report 04-S-2016 specifies that the certified area is 0.00 ha. At the time, Del Valle Verde Corp. S.A. had certified areas as pointed out by Eng. Garcia Salazar in his 03-S-2016 report (both reports have the same date). If the area where Eng. Garcia Salazar was conducting his visit was not certified, it is not possible to have obtained any type of organic product; however, the Report indicates the existence of a pineapple crop. (5) The seriousness of the inconsistencies increases when we compare the information in point 4) against the visit log included in another file in Del Valle Verde S.A.’s name opened on 02 March 2016, Organic Trading Company Registration File (Refer to Annex 5, folio 18, page 278) in which Eng. Garcia Salazar reported having been elsewhere (N10.53521 O-84.28871) on the same day and within the same range of hours (7:30 to 11:00 a.m. of 15 March 2016). There is a 2.5 km distance between these two places. A visit to the crop areas was also recorded in the visit log. (6) The bizarreness of being in two different places at the same time compromises the consistency and credibility of the information reported by Eng. Garcia in both reports (04-S-2016 and 03-S-2016, both reports dated 15 March 2016). (7) There is another apparent contradiction between these two Supervision and Follow-up Reports. In both cases, coordinates are the same, which leads one to believe that it is the same place. However, in report 04-S-2016, Eng. Garcia indicates that organic inputs have been correctly stored, whereas in report 03-S-2016, he reports finding organic inputs in the conventional inputs warehouse as well as inputs that were not authorized by the certifying agency. (8) Additionally, Eng. Garcia stated in this report that “organic crops and sales” were verified and that these have “good traceability”. However, the report does not specify what traceability exercise was conducted, nor does it indicate the time period analyzed. Consequently, we do not know what Eng. Garcia means by “good traceability”. The report should include information on specific areas visited, cultivation and harvest cycles, application of organic inputs, field logs, etc. (9) It also seems contradictory that Del Valle Verde Corp. S.A. and LyL Proyectos MMV S.A. had only started purchasing organic inputs in March 2015 as reported by input suppliers, yet on 15 March 2016 Eng. Garcia reported having analyzed “organic crops and sales”. It makes no sense that only a year after purchasing these inputs, organic pineapple was ready for harvest and sale. To complicate matters even more, Eng. Garcia mentions a 300 ha farm, which this Investigative Body has been unable to pinpoint in the documentation analyzed. (10) On 17 March 2016, Eng. Garcia Salazar sent these reports (04-S-2016 and 03-S2016) together with the pineapple sampling log to the then-SFE Director by email (visit logs were not attached). However, Eng. Garcia stated in his email to the SFE Director that this report had been prepared in response to a “request by the association of organic producers from the country’s northern region that is soon to be established” which makes one think that Garcia conducted the visit with the objective of addressing the concerns raised with the SFE and Eng. Garcia Salazar several days before on 07 March 2016 (meeting between members of CANAGRO and the SFE Director and Eng. Garcia from ARAO in which I was also present). However, both reports seem to have been prepared for the purpose of opening an organic trading company registration file as per request of Del Valle Verde Corp. S.A. on 02 March 2016. (11) In the Supervision and Follow-up Report 05-S-2016, Eng. Garcia points out a noncompliance finding. Additionally, he seems to have been unaware of Primus Labs’ PLc-OR-201 certificate during his inspection on 15 March 2016. On 17 August 2016, this Investigative Body asked Mr. Humberto Gonzalez to explain the PLc_OR_201 code contained in Primus Labs’ records. Mr. Humberto Gonzalez responded that same day explaining that “The PLc_OR_201 code is the 201 certification of the US-Canada Organic Program 7 CFR Part 205 (NOP/USDA)”. The next day, this Investigative Body sent Gonzalez a follow up email asking him to “… send a copy of the supporting documentation for the PLc_OR_201 code and the 201 certification (send copy of the resolution authorizing the issuance of the certificate, as well as a copy of the certificate and any other document deemed important by the certifying agency with regard to this code)”. That same day (18 August, 2016) Mr. Humberto Gonzalez answered, “You may ask the client directly for the PLc_OR_201 certificate. If you wish, we can ask for authorization to give it to you. This document is protected by NOP confidentiality agreements. You can access NOP certification information at the following link https://apps.ams.usda.gove/integrity/ “. (12) However, the aforementioned link does not contain the information we asked for. The USDA website only contains the certificate number, holder and issuance date. Therefore, we did not have access to information allowing us to assess aspects related to the audit process that resulted in the issuance of the PLc_OR_201 certificate. (13) Subsequently, on 01 September 2016, this Investigative Body asked Eng. Karla Morales “for a copy of all information in ARAO’s possession pertaining to the PLc_OR_201 certificate”. Eng. Karla Morales sent the aforementioned certificate3 (a two-page document) to this Investigative Body by email. On 02 September 2016, we sent another email to Eng. Morales asking her to “please inform us whether ARAO has more information and documents related to this certificate and if so, to please send it to us”. (Refer to Annex 16, Email exchange with Eng. Karla Morales regarding Primus Labs PLc_OR_201 certificate). In response to this email, Eng. Morales Roman indicated that “We have sent you all the documentation requested. The file is in the office should you wish to go through it once again”. After looking over all the documentation and all files related to the companies under investigation, the PLc_OR_201 certificate does not appear in any of them. (14) The above raises several questions: 1) How did ARAO get this document? 2) Where is it filed and who knew about it at ARAO? 3) Since when was Eng. Morales aware of this document and its content? 4) Despite being aware of this document and its content as well as knowing that it referred to areas that had not been reported to ARAO and had not been included in any transition process, why didn’t Eng. Morales issue an administrative action to clarify the information being certified by Primus Labs? (15) Reports 04-S-2016 and 03-S-2016 prepared and submitted by Eng. Garcia Salazar led to the exchange of messages between Primus Labs, Del Valle Verde Corp. S.A. (through Mr. Wilber Chinchilla) and ARAO personnel regarding the noncompliances indicated by Eng. Garcia Salazar in these two reports. These will be analyzed in the next section. d) Supervision and Follow-up Report 05-S-2016 dated 15 March 2016. (1) This report refers to an unannounced visit to Congelados y Jugos del Valle Verde S.A. on 15 March from 11:45 a.m. to 2:00 p.m. in order to “follow up on fruit delivered by Del Valle Verde Corp. and other organic pineapple suppliers”. (Refer to Annex 20, page 675) 3 Comments pertaining to Primus Labs PLc_OR_201 certificate were made in point 7) of this report. (2) Eng. Garcia indicated in report 05-S-2016 that the evaluation conducted included the verification of “documents and traceability exercises were performed”. After going through the corresponding visit log, we were unable to determine what exercises were conducted, what documentation was revised and when was this evaluation performed. (3) Eng. Garcia mentions “other suppliers” but does not specify who they are. (4) Eng. Garcia Salazar mentions that “documentation is sufficient and good traceability of raw material and exports is possible”. However, the file contains no supporting documents to validate this claim since Eng. Garcia does not indicate what traceability exercise was conducted, what tests were performed, what documents were revised, supplier certificates, evaluation time period, nor does he mention the destination of the finished product exported by Congelados y Jugos del Valle Verde S.A. (5) Eng. Garcia’s instructions regarding correction of documents to ensure the organic integrity of products supplied by suppliers and later exported by Congelados y Jugos del Valle Verde S.A. contradict the analysis conducted to support report CF-0552016. This analysis consisted of comparing the mass of each container exported from March 2015 to the first week of April 2016 against documentation submitted to the SFE by this company. This analysis evidenced a series of apparent anomalies that endangers the organic integrity of these exports, which led the SFE to initiate an administrative proceeding and suspend Congelados and Jugos del Valle Verde S.A.’s organic certification. (6) As already indicated in Report No. CF-055-2016 of 16 May 2016 (Refer to Annex 22, page 701 et. seq.) a mass balance is attached including container number, commercial invoice number, export date, exported amount in kilos, raw material suppliers and buyers abroad, among others. A mass balance was performed for each container exported by Congelados y Jugos del Valle Verde S.A. from 19 March 2015 to 06 April 2016. This report was prepared using documentation presented by the company at the request of the SFE. The analysis conducted revealed the following inconsistencies that endangered the organic integrity of the product exported: i) use of suppliers not certified as organic; ii) pineapple suppliers did not have the capacity to supply these quantities; iii) information contained in documents analyzed was inconsistent in terms of product yield; iv) a portion of the pineapple was supplied by an unidentified supplier; v) on the same day Del Valle Verde Corp. S.A. obtained organic certification by Primus Labs (22 July 2015), a container with 11,000 kg of raw material supposedly supplied by Del Valle Verde Corp. S.A. was exported. H. 29 March 2016. Primus Labs’ response to ARAO reports 03-S-2016 and 04-S-2016. The Annexes that will be analyzed were not included in Eng. Garcia’s email sent to the SFE Director on 17 March 2016. Despite not having a date, these Annexes are related to Supervision and Follow-up Reports 03-S-2016 and 04-S-2016. The documents analyzed here were presented to ARAO by the certifying agency and are included in Del Valle Verde Corp. S.A.’s file at ARAO. Three of these Annexes refer to five noncompliance findings of interest to this Investigative Body. It should be highlighted that throughout the exchange of messages between Primus Labs and ARAO (from 29 March to 19 April 2016), ARAO made observations and assessments for the first time regarding basic issues related to the organic integrity of the production unit’s processes and inputs. This is surprising given the fact that almost 10 months had elapsed since the early conclusion of the transition process. These Annexes repeatedly mention the same noncompliances as well as a series of supporting documents. The following table summarizes those aspects considered relevant by this Investigative Body. Supervision and Followup Report 04-S-2016 Noncompliances detected by ARAO Primus Labs Response and Evidence Label-related observations: during sampling, labeling on product for export to Canada was checked and the certifying agency’s correct name (as registered before ARAO) was not being used; code PLc_Org_CR-201 appeared on label; in February, Valle Verde Corp. appeared with code PLc_Org_CR_033. Noncompliance 1 during visit to the warehouse, inputs that are not in the OSP were found and there is no evidence of approval by the certifying agency. These inputs are: SUNSCREEN sun block, L-Large 3.2 SL, Ecofrut 12 DC, Everest, Seracsa metabolic activator, Tech-Flo nutrido p20 PCD International and Seracsa Micotrhiol Special 80 WG. “The operator is certified under the NOP, which explains the difference in numbering…” The PLc_OR-201 certification has been addressed elsewhere in the Report. The operator has already implemented corrective measures and removed the questioned inputs from the warehouse. 03-S-2016 Inspection 1 ARAO: During ARAO’s inspection, SUNSCREEN invoices were checked and this input is invoiced for both conventional and organic use. A large amount of this input was found in the warehouse and it is being used in organic farming and is not included in the organic management plan. ARAO wants to know if this input has been approved for pineapple and what it is being used for, since Mr. Luis Barrantes claims it is not being used as a protectant. Pending reponse. “… the operator has taken the corresponding corrective measures (refer to Annexes) and during the inspection, the certifying agency inspector checked the inputs warehouse and found no unapproved inputs”. Primus Labs presented the equivalence certificate to certify that SUNSCREEN had been approved since 10 October 2014. In addition to checking the warehouse, there is no indication whether the certifying agency verified if these products had been approved for organic farming (with the exception of Sunscreen). Nor is there any indication whether the certifying agency assessed if these products had been applied to the crops under transition, which would seem indispensable to ensure their organic integrity. In the specific case of L-Large, there seems to be an error in the name and N-Large is the correct name. NLarge is not approved for organic use; it is a biostimulant that is exclusively used in conventional farming. As mentioned above, evidence suggests that Primus Labs only verified the “approved for organic use” status of SUNSCREEN and did not do the same for the other inputs listed in the noncompliance finding. Likewise, we were unable to determine whether the operator was somehow reprimanded for having purchased and used inputs without the certifying agency’s knowledge. 03-S-2016 Noncompliance During visit to the warehouse, inputs that are not in the OSP were found. Conventional farming equipment was being shared. ARAO did not have access to equipment and tool cleaning logs. “… the operator has taken the corresponding corrective measures (refer to Annexes) and during the inspection, the certifying agency 03-S-2016 Comments The comments above also apply here. It was necessary to have established whether the operator was somehow reprimanded for having inputs not included in the OSP and endangering organic integrity as well as for not demonstrating that inspector checked the inputs warehouse and found no unapproved inputs”. 03-S-2016 Inspection 1 ARAO With regard to the type of log, ARAO considers that this type of equipment cleaning log reveals nothing in terms of equipment cleaning when shared with conventional equipment. If it were necessary to conduct some type of traceability to determine potential risk of contamination, this log is not valid since no mention is made of type of cleaning, duration, among other relevant indicators. ARAO has asked for a log demonstrating that equipment and tools are cleaned in order to help minimize the risk of contamination due to shared equipment. PENDING The certifying agency’s response 2. equipment was not shared with conventional farming or inputs. If after investigating, it had been demonstrated that the operator was at fault, the corresponding measures should have been implemented. Primus Labs’ response to this noncompliance is to refer the reader to another response elsewhere; however, Response 2 contains no explanation. Once again, the comments above also apply here. It was necessary to have established whether the operator was somehow reprimanded for not having a cleaning log that ensured product organic integrity as well as for not demonstrating that equipment was not shared with conventional farming. If after investigating, it had been demonstrated that the operator was at fault, the corresponding measures should have been implemented. With regard to the summary table above, we must point out the following: a) First. The five noncompliance findings made by ARAO are very specific. Four of these were included in Supervision and Follow-up Report 03-S-2016 and endanger the operating unit’s organic integrity. A detailed analysis of the noncompliance mentioned in Report 04-S-2016 regarding Primus Labs’ PLc-Or-201 has already been conducted elsewhere in this document. b) Second. Despite ARAO’s findings, the response given by both Primus Labs and the operator does not seem sufficient. As indicated in the table above, despite the presence of shared inputs and equipment endangering the organic integrity of the operating unit, the withdrawal of these inputs from the warehouse is deemed sufficient in terms of correcting the noncompliance. They seem to have completely overlooked the fact that an occurrence such as the one originating the noncompliace can have implications that merit a more thorough and diligent investigation in order to answer basic questions such as: Were all inputs discovered authorized for organic use? Were these inputs used and in what areas? Did input storage conditions ensure organic input integrity? Might cross-contamination have resulted from shared equipment? The Annexes contain no information to answer these and other mandatory questions that should be answered when faced with findings such as these. c) Third. These noncompliance findings are not new. The analysis of the transition file revealed that in April 2014, Eng. Roberto Garcia Salazar expressly warned the operator that they had to cease management and use of conventional inputs in their production unit. It is disturbing that a Primus Labs certified organic operator should continue to exhibit serious noncompliances, which should have prevented the start of any transition. In the National Organic Program certification application that Mr. Chinchilla presented to Primus Labs on 30 March 2015, he expressly and directly indicated that “seeds are treated one month before harvest with metalaxyl, carbendazim and diazinon”. In other words: he is informing that chemical products that are not authorized for use in organic farming are being used and strangely Primus Labs does not mention this in their inspection report of 07 April 2015. The fact that Wilber Chinchilla informed Primus Labs that ““There is a small area devoted to conventional farming” is overwhelming proof that conventional farming has not ceased. This is extremely serious for several reasons. After going over the files of the companies under investigation, Primus Labs did not report the existence of parallel conventional production by Del Valle Verde Corp. S.A.4 On the contrary, the PLc_OR_201 certificate indicates that all areas covered are 100% organic and the area inspected is one of the areas included in Primus Labs’ NOP/USDA certificate (Farm 2 Plot 5). Additionally, Mr. Wilber Chinchilla once again mentions that “organic inputs are kept in the conventional inputs warehouse…”. Additionally, in Supervision and Follow-up Report 03-S-2016, ARAO pointed out that “If it were necessary to conduct some type of traceability to determine potential risk of contamination, this log is not valid since no mention is made of type of cleaning, duration, among other relevant indicators. ARAO has asked for a log demonstrating that equipment and tools are cleaned in order to help minimize the risk of contamination due to shared equipment”. Mr. Chinchilla got things even more mixed up when - in an attempt to demonstrate the existence of a correction of noncompliance report related to the non-existence of equipment cleaning logs - he presented a document that did not contain the required information titled “SPRAY BOOM AND TANK CLEANING LOG” in LyL Proyectos MMV S.A.’s name. It should be stressed that LyL Proyectos MMV S.A. is not registered with ARAO as an organic operator. Subsequently, another document was added to the documentation. This time in Del Valle Verde Corp. S.A.’s name and titled “Work instructions: SPRAY BOOM, APPLICATION TANK AND MIXING AREA CLEANING”. Apparently, the purpose of this document was to demonstrate the existence of an equipment cleaning log at Del Valle Verde Corp. S.A. However, these are “work instructions” and the document does not contain cleaning dates, equipment, inputs, areas, etc. In fact, there are no annotactions/marks on this document allowing one to conclude that it is a list of procedures that have already been executed by someone at some point. Likewise, the document regarding Spray Boom cleaning (FOR07-VS01) sent to Primus Labs by Mr. Chinchilla in response to the report of 15 March 2016 prepared by Eng. Garcia Salazar indicates that ONLY CONVENTIONAL MANAGEMENT PRODUCTS are applied in the production unit. It should also be noted that the document in Del Valle Verde Corp. S.A.’s name titled “Work instructions: SPRAY BOOM, APPLICATION TANK AND MIXING AREA CLEANING” does not comply with the format they themselves presented and indicated they would be using. 4 In those cases where organic and conventional production coexist, USDA NOP-recommended best practices to ensure crop organic integrity highlight the importance of keeping separate documentation and controls. This minimizes the risk of contaminating organic products with non-organic or prohibited substances. Primus Labs never reported the existence of a parallel operation, which is why we are unable to determine whether any of the risks mentioned might have occurred since Del Valle Verde Corp. S.A.’s certification in July 2015. It is truly remarkable that these issues were still being discussed in March 2016. During inspection carried out on 07 April 2015, Primus Labs reported that cleaning procedures were performed at the end of each week using clean water and activated charcoal. Primus Labs indicated having seen the cleaning logs; however, documents submitted by Mr. Chinchilla are in no way to be considered “cleaning logs”. The Primus Labs inspector also reported that the logs “are classified by farm and placed in Ampus that are stored in the document warehouse”. Therefore, we are unable to explain the existence of an organic-certified operator that has apparently been sharing equipment with another company, does not have cleaning logs for this equipment, has parallel conventional production and its inputs warehouses simultaneously handle both organic and conventional inputs. This operator was under the supervision of a certifying agency and ARAO and yet neither one detected these serious noncompliances. d) Fourth. In terms of the noncompliance findings, its seems as if Primus Labs did not conduct a thorough and careful assessment of these noncompliance risks. Primus Labs deemed it sufficient to have removed the inputs and equipment from the warehouse without assessing the potential impact on the production unit’s organic integrity. Similarly, not all noncompliance findings were clearly addressed and in most cases Primus Labs simply filled in the form by inserting a phrase that referred the reader to another field of the form containing little or no information. e) Fifth. The manner in which Mr. Wilber Chinchilla minimizes the presence of conventional and organic inputs in the same warehouse helps better understand how Del Valle Verde Corp. S.A. operates. “Organic inputs are kept in the conventional inputs warehouse since chemicals are not used after flower induction ”. However, Mr. Chinchilla’s explanation should have been carefully analyzed by both Primus Labs and ARAO. His response seems to suggest that crops at Del Valle Verde Corp. S.A. start out as conventional and the use of chemicals is suspended after the flower induction phase and therefore, the product harvested has no chemical residues. But such a thing is inadmissible in organic farming. An organic product cannot “start out being convetional” and then “become” organic. It must undergo organic management (which excludes the use of unauthorized chemicals) from the beginning and throughout the entire process (planting, harvest, transportation, packaging and commercialization). If the operator under investigation has been operating as described by Mr. Chinchilla, the situation would be very serious. These would be conventional operations that end up being organic, all under the watchful eye of a certifying agency that seems not to have realized anything (this would also include ARAO). I. 30 March 2016. Official letter ARAO.043.16 signed by Eng. Karla Morales Roman, Head of ARAO. One day after receiving the Annexes from Primus Labs, Eng. Karla Morales Roman from ARAO informed Eng. Humberto Gonzalez, Primus Labs CR General Manager, that “ARAO has reviewed your response to the report and the noncompliances of the organic operator Del Valle Verde contained in report 04-S-2016 are deemed to have been corrected”. (Refer to Annex 5, page 338) J. 19 April 2016. Official letter ARAO.065.16 signed by Eng. Karla Morales Roman, Head of ARAO. On the aforementioned date, Eng. Karla Morales Roman from ARAO informed Eng. Humberto Gonzalez, Primus Labs CR General Manager, that “ARAO has reviewed your second response to report 03-S-2016 pertaining to Del Valle Verde and it is considered satisfactory as indicated in the attached document. The noncompliances are deemed to have been corrected. Please take into account both observations made”. (Refer to Annex 5, page 358). The observations mentioned in Eng. Morales Roman’s letter are related to the handling of inputs. Eng. Morales pointed out that “WE’D LIKE TO REMIND YOU THAT INPUTS MUST BE USED AS REPORTED TO THE SFE AND YOU MUST COMPLY WITH DOSE, CROPS AND WAITING PERIODS. THIS FINDING WILL BE VERIFIED DURING ARAO’S NEXT VISIT TO THE OPERATOR” (the original is written in uppercase letters). In her second remark, Eng. Morales indicated that “We spoke with the person in charge, Wilbert Chinchilla, and reminded him that the certifying agency must be informed of the intended use of an input prior to its use, even if it is an approved input”. K. 26 April 2016. Unannounced visit to Del Valle Verde S.A. by this Investigative Body. This visit was held at the facilities of Del Valle Verde S.A. on 26 April 2016. We were received by Mr. Wilber Chinchilla Bermudez and were informed that he was in charge of the company’s organic processes. (Refer to Annex 23, page 1055 et. seq.) Among others, Mr. Chinchilla was asked to specify the organic farms included in Primus Labs’ organic certificate for a total of 97.86 ha. After verifying the information on his laptop, Mr. Chinchilla Bermudez listed the following farms: FARM AND LOCATION REPORTED BY MR. WILBER CHINCHILLA FARM 1 (behind company’s workshop) FARM 2 (behind company’s workshop) FARM 3 (behind company’s workshop) FARM 5 (Ojoche Farm) FARM 6 (Next to La Legua School) FARM 7 (Near the school, further down) TOTAL HA REPORTED FARM SURFACE AREAS REPORTED BY MR. WILBER CHINCHILLA TO THIS INVESTIGATIVE BODY (26 APRIL 2016) 8 13 8 43 7 12.5 91.5 FARMS INCLUDED IN PRIMUS LABS’ PLC_OR_201 CERTIFICATE FARM 1 FARM 2 FARM 3 FARM 5 FARM 6 FARM 7 FARM SURFACE AREAS INCLUDED IN PRIMUS LABS’ PLC_OR_201 CERTIFICATE (10 AUGUST 2015) 7.79 12.71 7.93 50 7.23 12.2 97.86 When we asked Wilber Chinchilla where Farm 5 Plot 1 was located, he answered that this area was still transitioining (26 April 2016). We also asked him why there was no Farm 4 in this list and he answered that Farm 4 was a transitioning farm located in El Palmar de Pital de San Carlos that belonged to Mr. Carlos Monge and they were leasing it. It should be noted that the information provided to us by the company does not match the information that Mr. Chinchilla presented to ARAO for the purposes of the transition file opened in April 2014. As specified in the transition file, the farms originally under transition were those identified as Farm 2 (13.30 ha), Farm 5 (2.13 ha) and Farm 6 (36.38 ha) for an initial total transitioning surface area of 51.81 ha. Another area identified as Farm 1 Plot 1 (7.79 ha) was added in August 2014. The farms now reported by Mr. Chinchilla and listed above do not match those initially included in the transition file. As already mentioned, at the time of the early conclusion of the transition process, there were only 2.13 ha (Farm 5 Plot 1) under transition. It should be noted that at the time of this unannounced visit on 26 April 2016, there were no longer any ongoing transition processes in Del Valle Verde Corp. S.A.’s name. The process that began in April 2014 ended on 01 June 2015. The latter also applies in the case of LyL Proyectos MMV S.A. With regard to Farm 5 included in the ARAO transition file, this farm was originally reported to measure 2.13 ha and not 43 ha as indicated by Mr. Chinchilla Bermudez and according to the company’s records. Also, the name “Finca Ojoche” has never been used in any document to refer to an organic unit. ARAO has no documents identifying this farm as a transitioning farm or an organic farm. This farm is not mentioned in the transition file. There is no croquis plan, its location is not specified and there is no evidence of any inspection by ARAO. In general, there is no information matching the description offered by Del Valle Verde Corp. S.A. Given the above, what did Mr. Chinchilla show Primus Labs in order for this Farm to be included as organic? What did Primus Labs inspect on 25 May 2015? And how can we explain what Primus Labs certified in the PLc_OR_201 certificate if on 07 April 2015, this same agency conducted an inspection that revealed the existence of Farm 5 measuring 3.96 ha.5 Primus Labs claims to have checked maps and documentary evidence. These differences are inexplicable since both inspections were performed by the same certifying agency and involved the same operator (Del Valle Verde Corp. S.A.) and supposedly comprised the same area of productive land. In our inspection report dated 16 May 2016 (Official letter CF-054-2016), we stress the fact that the farm under lease to Mr. Carlos Monge was first mentioned during our interview with Mr. Wilber Chinchilla. This farm was mentioned as being part of Del Valle Verde Corp. S.A.’s portfolio of production areas (he calls it Farm 4; however, this farm was not mentioned at the beginning when he checked the records on his computer). Mr. Chinchilla Bermudez indicated that this property is transitioning to organic. As indicated in Official letter CF-054-2016 “Mr. Monge’s farm is first mentioned during this visit and is not mentioned in any of the documents reviewed for the purpose of this investigation”. ARAO has no information pertaining to this production area. In order to obtain further information on Farm 4, this Investigative Body contacted Mr. Monge twice. We had a face-to-face conversation with him on 29 July 2016 and a phone conversation on 12 August 2016. We were informed that this farm measures 180 ha and the lease began in January 2016. Mr. Monge also indicated that Mr. Luis Barrantes started 5 Farm 4 was also included in this same inspection. This farm was not mentioned by Mr. Chinchilla in the certification application and is not included in Primus Labs’ PLc_OR_201 certification. This farm was inspected just a month and a half after the first inspection. It should be remembered that during the inspection of 07 April 2015, Primus Labs reported that this farm measured 58.4 ha. to take possession of this property as of January 2016 and that the areas under lease will be handed over gradually, that is, the entire production area was not handed over all at once. The aforementioned property is located in El Palmar (Finca Palos Verdes) de Pital de San Carlos. Mr. Carlos Monge also informed me that Mr. Luis Barrantes Quesada is responsible for the use given to the farm and that he has no involvement in the farm as agreed by them in the lease agreement. Based on the information provided by Mr. Wilber Chinchilla, we prepared the following table with comments and remarks pertaining to each area. FARM AND LOCATION REPORTED BY MR. WILBER CHINCHILLA AND CERTIFIED BY PRIMUS LABS’ PLc_OR_201 FARM 1 (behind the company’s workshop) FARM SURFACE AREAS REPORTED BY MR. WILBER CHINCHILLA TO THIS INVESTIGATIVE BODY (26 APRIL 2016) 8 ha. FARM 2 (behind the company’s workshop) 13 ha. FARM 3 (behind the company’s workshop) 8 ha. FARM 5 (Ojoche Farm) 43 ha. FARM 6 (Next to La Legua School) 7 ha. FARM 7 (Near the school, further down) 12.5 ha. COMMENTS The owner of this property is Mr. Enrique Bolaños and it was used for pastureland. In the second semester of 2013, Mr. Barrantes Quesada started work this land. (Refer to Annex 32 Affidavit by Eng. Nestor Ramirez Acuña) Conventional pineapple has been cultivated on this property by Mr. Luis Barrantes for many years and it has been assigned location code 741 by the SFE Office of Regional Operations for the Huetar Norte Region. A neighbor claimed that this property was known to belong to the family of Mr. Barrantes Quesada’s wife. This property has no land-use history as an organic farm. (Refer to Annexes 14, 31 and 35) Conventional pineapple has been cultivated on this property by Mr. Luis Barrantes for many years and it has been assigned location code 741 by the SFE Office of Regional Operations for the Huetar Norte Region. A neighbor claimed that this property was known to belong to the family of Mr. Barrantes Quesada’s wife. This property has no land-use history as an organic farm. (Refer to Annexes 14, 31 and 35) This farm has no documented landuse history related to the cultivation of conventional, in transition or organic pineapple. (Refer to Annexes 14, 31 and 35) This farm has no documented landuse history related to the cultivation of conventional, in transition or organic pineapple. Neighbors claimed that conventional cassava was cultivated here in 2013 and 2014 (Refer to Annexes 14, 31 and 35) This farm has no documented landuse history related to the cultivation of conventional, in transition or organic pineapple. We were told that this property belongs to a family called Salas and Mr. Barrantes Quesada leases it. This property was used for pastureland (Refer to Annexes 14, 31 and 35) It is clear that the farms reported by Mr. Chinchilla and certified by Primus Labs have been mostly devoted to conventional pineapple. Additionally, inconsistencies persist in terms of name, location and status of the areas operated by Del Valle Verde Corp. S.A. L. 11 July 2016. Request for information sent to Del Valle Verde Corp. S.A. and LyL Proyectos MMV S.A. in order to understand key aspects related to the organic integrity of their operation. The analysis of inputs used during the supposed transition and in the different stages of cultivation in areas already established as organic is key.6 This presupposes the existence of an well-structured agricultural management plan for the first harvest (13 months, at least 395 days) and subseqent harvests (12 months, at least 365 days). The operator presented a document titled “Technical Package for Organic Production”, which is merely a list of products and inputs that can be used in organic agriculture; however, no compliance certificates were submitted (Refer to Annex 2, folios 35 to 38 according to original transition file numbering, pages 143 to 149). It should be noted here that this list does not mention whether these products and inputs have already been used or will be used, nor does it indicate where they are being applied. In the absence of complete information, we are unable to understand how this production unit is managed. This list does not allow us to verify whether a management plan is being followed. The information provided by Mr. Wilber Chinchilla does not allow us to verify what is being done in the field, what inputs are being used by the operators under investigation and where. In the absence of sufficient information to correctly interpret the contents of the file, we asked the companies under investigation to supply an assortment of information. Official letter CF086-2016 (Refer to Annex 8, page 397) was sent to Del Valle Verde Corp. S.A. on 11 July 2016 asking them to submit the following information: “1. Please indicate which farms underwent transition, when they started transitioning and submit supporting documentation. Please include total and net areas as well as evidence of correction of noncompliances. 2. Submit the substance application plan for the areas included in the transition. 3. Submit the soil analyses for the areas that underwent transition. 6 This is something the certifying agency should have verified. According to USDA/NOP guidelines, the certifier must ask for information including a history of substances applied to land during the previous three years, and an Organic System Plan describing the practices and substances to be used. The certifier reviews applications to verify that practices comply with USDA organic regulations, and then an inspector conducts an on-site inspection. The certifying agency inspector verifies whether the OSP accurately reflects the operation and confirms OSP compliance. One of the most important responsibilities of the inspector is to examine records that document farming practices. Specifically, the inspector will audit invoices, records of materials, applications, organic sales, harvest, and yield. Source: https://www.ams.usda.gov/services/organic-certification/ 4. Submit land registry information for the transitioning farms (97.86 ha) mentioned in Primus Labs’ certificate. Include cadastral maps of the properties specifying net and gross areas accounting for the aforementioned land area. 5. Georeference the farms and areas described and include a plantation inventory. 6. Export and sales estimates. 7. Invoices for all inputs used in these plantations. 8. A detailed list of purchase invoices and other supportng documents in the event of third-party organic pineapple purchases or sales (including legal and natural persons). 9. List of inputs used in your organic operation and a certificate justifying use in organic farming for export markets. 10. Clearly specify the name of the professional(s) in charge of your company’s organic program and his/her qualifications. Submit follow-up reports pertaining to this project prepared by this person. 11. Inspection reports prepared by the SFE and certifying agency. 12. Receipts for volumes purchased, produced and sold per client together with supporting documentation for each. 13. Copy of labels used to identify the organic product processed and commercialized per client and export market. 14. Specify brands that buy your product as well as direct buyers and points of sale that sell your product.” On that same date, official letter CF-087-2016 (Refer to Annex 9, page 399) was sent to LyL Proyectos MMV S.A. asking them to submit the following information: “1. The company’s current and past organic certificates. 2. Inspection reports by ARAO-SFE and the certifying agency registered before the SFE. 3. A detailed list of purchase invoices and other supportng documents in the event of third-party organic pineapple purchases or sales (including legal and natural persons). 4. Management plan implemented at the organic fruit processing plant. 5. List of inputs used in your organic operation and a certificate justifying use in organic farming for export markets. 6. Copy of labels used to identify the organic product processed and commercialized per client and export market. Attach certifier’s authorization for use of labels. 7. Specify brands that buy your product as well as direct buyers and points of sale that sell your product. 8. List of organic input suppliers specifying products purchased and certifying agency approvals. Submit input invoices and purchase logs from July 2012 to date. If these documents are not submitted, please specify the reason why. 9. Commercial invoices and receipts for the company’s organic pineapple exports for the above stated period. 10. Copy of the operating permit issued by the Ministry of Health. The companies under investigation did not submit any of the above mentioned information. In fact, in response to our request they decided to file an appeal and notified the SFE of their decision in a letter dated 21 July 2016 (official letter LAR-002-2016) (Refer to Annex 25, page 1085). They claim that all the necessary documentation was presented to ARAO and the SFE; therefore, we conclude that other than the documents already gathered, there must be no other evidence. Despite the investigated companies’ refusal to cooperate and in order to fulfill this Investigative Body’s mandate, we resorted to additional sources of information. M. 09 August 2016. Request for information sent to suppliers of organic inputs purchased by Del Valle Verde Corp. S.A. and LyL Proyectos MMV S.A. To find out what inputs the investigated companies might have used, this Investigative Body sent information requests to the following companies on 09 August 2016: El Colono Agropecuario S.A., PCD Internacional S.A., Agrocosta, Costa-tri S.A. Almacén El Exitos, Bio-eco S.A., Laboratorio Dr. Miguel Obregón, Novagro and Agrícola Piscis S.A. (Refer to Annex 27, page 1108) These companies were asked to detail the inputs for the cultivation of organic pineapple bought by Del Valle Verde Corp. S.A. and LyL Proyectos MMV S.A. from 01 March 2014 to 01 April 2016. They were also asked to specify i) product name, ii) date of purchase, iii) quantity purchased and iv) invoice number. All suppliers were also asked to indicate whether the companies under investigation purchased organic inputs from 2012 to 01 March 2014. All the suppliers responded. The following relevant findings were made: a) FIRST. The companies under investigation first purchased organic inputs on 11 March 2015 in Del Valle Verde Corp. S.A.’s name from El Colono Agropecuario S.A. (invoice No 746369) and from PCD International S.A. (invoice No 4235). It should be noted that the suppliers reported no purchases by these two companies before this date. Additionally, we would like to call your attention to the fact that the first purchase of organic inputs made by these companies was only 19 days prior to the date on which Mr. Wilber Chinchilla, on behalf of Valle Verde Corp. S.A. (company that at the time was not registered as an organic operator and historically had been associated with conventional pineapple) asked Primus Labs to audit them in order to certify 97,86 ha (30 March 2015) (Refer to Annex 27, page 1108) (Refer to Annex 32 containing affidavits by Mr. Nestor Ramirez and Marc Beesley, which are consistent with what is mentioned in this section.) b) SECOND. Of the products mentioned in the transition file documentation (folio 35 to 38 according to original transition file numbering), 19 are mentioned in the original plan throughout the first 195 days of the organic pineapple crop cycle. However, of these 19 products listed, the organic input suppliers only reported selling 13 to the companies investigated (this means that there are six products included in the original list for which there is no proof that they were actually purchased). Additionally, the companies under investigation purchased 27 products that were not included in the list presented to ARAO in the transition file. In other words, 67% of the organic inputs purchased as of March 2015 were not included in the list of inputs submitted to ARAO. This fact was reported to some extent by Eng. Roberto Garcia in his report dated 15 March 2016 (Refer to Annex 20, page 675). Garcia reported that, “During visit to the warehouse, inputs that are not in the OSP were found and there is no evidence of approval by the certifying agency..." It should be noted that Eng. Garcia is only referring to six inputs and there is no evidence indicating that he discovered the use of the other 27 inputs purchased that were not included in the list submitted to ARAO for the purposes of the transition process. Interestingly, there is no mention of this in Supervision and Followup Report 03-S-2016 though Eng. Garcia Salazar indicated that, “there are accounting documents for raw material, as well as for the sale of organic and transitioning products”. We have no idea what documentation supports Eng. Garcia’s claim. c) THIRD. Purchases of inputs not allowed in organic farming were made after 27 April 2014, which is the date on which Mr. Wilber Chinchilla stated that, “they would suspend the application of products not allowed in organic farming” (Annex 2, folio 30 according to original transition file numbering, page 133) There are two examples of these purchases. On 09 October 2015, Del Valle Verde Corp. S.A. bought a biostimulant, NLarge, at Almacen Agropecuario El Éxito. On 11 August 2015, Del Valle Verde Corp. S.A. purchased a chitin inhibitor called Dimilin 24 SL against flies. These two products are only used in conventional agriculture and are not certified organic. On the date these conventional inputs were purchased, Del Valle Verde Corp. S.A. had already been granted Primus Labs certification (22 July 2015) and had sold “organic” pineapple to Congelados y Jugos del Valle Verde S.A., which had been processed and exported (as of 22 July 2015) (Refer to Annex 22, page 797) Also, pursuant to the USDA NOP organic regulations (7 CRF 205.601) Synthetic substances allowed for use in organic crop production, Del Valle Verde Corp. S.A. purchased the following unauthorized inputs (as reported by Eng. Roberto Garcia in his Supervision and Follow-up Report dated 15 March 2016): 1. For plant disease control. (10) Elemental sulfur. The operator purchased MICOTHRIOL SPECIAL 80 WG, a formulated inorganic product. 2. Plant growth regulators. Ethylene gas – for regulation of pineapple flowering. The operator purchased N-LARGE 3.2L whose active ingrediente is cyclic lactone and gibberellic acid, which are not allowed in organic agriculture. This Investigative Body also discovered that Del Valle Verde Corp. S.A. purchased KELPMAX from Agrícola Piscis S.A. This supplier reported that the operator bought KELPMAX continuously from 25 June 2015 to 26 February 2016. This input was not included in the list of inputs on folio 35 according to original transition file numbering. It should be highlighted that KELPMAX does not have a certificate of compliance for organic use in the country. Finally, the use of rodenticides should also be checked. Pursuant to the USDA NOP, the authorized input is 1. (g) As rodenticides. Vitamin D3. The operator purchased BRODITOP BLOCK BB (brodifacoum), which is not allowed in organic agriculture. Purchases were made in June, August and September 2015 as well as in February and March 2016. This Investigative Body had previously analyzed the responses to noncompliances contained in the Annexes to Supervision and Follow-up Report 03-S-2016 in which Mr. Wilber Chinchilla mentions the existence of a parallel convention pineapple operation. d) FOURTH. The volume of plastic purchased by the companies under investigation must also be addressed. The graph below summarizes these companies’ purchases over time. Del Valle Verde Corp. S.A. first purchased plastic on 16 March 2015. A total of 20 rolls (1.3mm x 8m x 200m) were bought from El Colono Agropecuario S.A. This amount of plastic is sufficient for two ha of pineapple. Another 20 rolls were bought on 22 April 2015. It should be noted that on this date Del Valle Verde Corp. S.A. was not registered before ARAO at all. PLASTIC PURCHASED FROM MARCH 2015 TO APRIL 2016 This graph shows that as of 30 March 2015 (date on which Mr. Wilber Chinchilla submitted the NOP certification application to Primus Labs for the inspection of Del Valle Verde Corp. S.A. that was registered before ARAO) the company had only purchased 20 rolls of plastic mulch, which would have sufficed for a maximum of two hectares. Likewise, as of 25 May 2015 (date reported on the PLc-OR-201 certificate) Del Valle Verde Corp. S.A. would have purchased a total of 110 rolls of plastic, which would have been enough for a maximum of 11 hectares. The administrative proceeding against the company must establish how Primus Labs refers to the certification of 97.86 ha in the PLc-OR-201 and PLc_Org_CR_033 certificates. 10. FINDINGS RELATED TO FARM IDENTIFICATION AND SIGNAGE OF VALLE VERDE CORP. S.A. PRODUCTION UNIT AREAS (11 July 2016 to 14 September 2016). As part of this preliminary investigation, we visited the areas of interest (Refer to Annex 31). Therefore, on a field visit conducted on 11 July 2016, we detected several signs in different plots identifying these as organic or transitioning farms; however, these areas did not match those mentioned in the documents analyzed. Specifically, we detected the following: A. At the beginning of this investigation, signage in these areas referred to conventional production. B. In these same areas, some time later, signage was installed indicating that these were transitioning areas; however, these areas had either not been documented as transitioning or had already been designated as “organic”. C. These signs indicated that the transition process had supposedly initiated in May 2015; however, no transition process was initiated at that time by the companies under investigation. D. The signs refer to “Valle Verde Organic Farms” and this company has not been registered before ARAO and is not a registered corporation in the country. E. In the specific case of the farm located in El Palmar de Pital, we took a picture in July of the farm identification sign, which indicated that this was a conventional pineapple farm. However, when we returned to this same farm on 14 September, the original sign had been replaced by another indicating that this farm had been transitioning since May 2015. Evidently, this is impossible, and even more so if we keep in mind that this area is still under follow-up by the SFE Regional Office for the Huetar Norte Region (code 14475) in 2016. F. Areas with signs identifying them as organic (Primus Labs’ PLc_OR_201 certificate); however, these areas were never registered before ARAO. The situation in the field is potentially very serious. Areas are being identified as “organic” without any type of technical documentation to support this. This could mislead people visiting these areas. (Refer to Annex 31 for photographs and specific details of each area visited). VIII. REGULATIONS POTENTIALLY INFRINGED AND STAKEHOLDER RESPONSIBILITY After having analyzed the facts considered relevant to this investigation pursuant to the objectives set forth in official letter No. 19-2016, this Investigative Body deems it appropriate to recommend the initiation of administrative proceedings in order to explain the facts, which is of key importance to the State Phytosanitary Services and the public interest. In principle, this Investigative Body believes it is likely that a series of rules and regulations have been infringed, which could entail different consequences and responsibilities for the different natural and legal persons involved. Thus, for the purposes of this preliminary investigation, we consider that administrative proceedings should address the following: 1. ON LYL PROYECTOS MMV S.A. This Investigative Body deems that it is possible that LyL Proyectos MMV S.A. may have committed acts of infringement as a result of its involvement in the matter under investigation. A. To begin, it is important to evaluate the lack of formality with which the transition process file was opened. This was done in the absence of the company’s legal representative. This is a serious infringement, which is made worse when the holder’s corporate name was changed, which also occurred in the absence of the company’s legal representative. In the end, the entire process initiates, elapses and finalizes in the absence of each company’s legal representatives. B. Likewise, the company may have infringed its duty of transparency and clarity set forth in article 4 paragraph d) of Regulations 35242-MAG-H-MEIC in terms of the agro-chain concept. This concept underscores the need for order and clarity throughout all the stages of production and until organic product commercialization in order to ensure traceability. Article 12 establishes that traceability is not solely in terms of product traceability, but also regarding process documentation and production unit identification. During the time that the transition process was in LyL Proyectos MMV S.A.’s name (which finally culminated in Del Valle Verde Corp. S.A.’s name) there was a constant lack of accurate information and transitioning areas were never correctly identified and would vary depending on the source of information (farm names would change without explanation and production areas would be included or removed for no apparent reason). Transitioning area hectarage and location would constantly vary as has been detailed throughout this report. This would appear to infringe article 18 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG. Additionally, it is not clear whether the companies under investigation own, rent or borrow the farmland undergoing transition, certification and follow-up. With regard to these matters, US regulations are very strict and detailed (Regulations of the NOP, Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM) and set forth that: “§ 205.103 Recordkeeping by certified operations. (a) A certified operation must maintain records concerning the production, harvesting, and handling of agricultural products that are or that are intended to be sold, labeled, or represented as “100 percent organic,” “organic,” or “made with organic (specified ingredients or food group(s)). (b) Such records must: (1) Be adapted to the particular business that the certified operation is conducting; (2) Fully disclose all activities and transactions of the certified operation in sufficient detail as to be readily understood and audited; (3) Be maintained for not less than 5 years beyond their creation; and (4) Be sufficient to demonstrate compliance with the Act and the regulations in this part. (c) The certified operation must make such records available for inspection and copying during normal business hours by authorized representatives of the Secretary, the applicable State program's governing State official, and the certifying agent.” Likewise, the CFR Part 205 – National Organic Program stipulates the requirements for the correct identification and delimitation of areas intended for organic agriculture: “§205.202 Land requirements. Any field or farm parcel from which harvested crops are intended to be sold, labeled, or represented as “organic,” must: (a) Have been managed in accordance with the provisions of §§205.203 through 205.206; (b) Have had no prohibited substances, as listed in §205.105, applied to it for a period of 3 years immediately preceding harvest of the crop; and (c) Have distinct, defined boundaries and buffer zones such as runoff diversions to prevent the unintended application of a prohibited substance to the crop or contact with a prohibited substance applied to adjoining land that is not under organic management.” C. It is likely that the company under investigation mislead consumers into believing that their products were organic despite the fact that these products do not seem to have complied with the necessary requirements in order to be considered organic, which infringes article 3 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG. D. Another possible breach or violation of the duties and obligations of a certified organic operator is the lack of sufficient records to ensure traceability of products and operations (article 14, Organic Agriculture Rules and Regulations, Decree No. 29782-MAG). This article expressly provides that, “The producer must maintain records in sufficient detail as to allow the certifying agency to determine the source, type and quantity of all raw materials acquired, as well as how these have been used. Additionally, records must also be kept of all agricultural products sold including type, quantities and to whom these were sold.” This investigation reveals no evidence that this mandate has been fully fulfilled. E. This Investigative Body also considers it necessary to conduct an administrative proceeding to determine whether the company breached or violated its legal and reglamentary obligations with regard to parallel production. It should be highlighted that this practice is forbidden and national legislation grants operators a maximum five-year period to phase out of parallel production. Additionally, pursuant to article 25 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG, operators are only authorized to do this if “capable of providing the certifying agency with documentary evidence to prove the separation between conventional and organic activities”. The latter does not occur in this case as evidenced in writing by Mr. Wilber Chinchilla in March 2016 when he informed Primus Labs and ARAO that they still had a conventional operation – a fact that was ignored and was not documented. F. The transition process was initiated by this company without submitting an organic management plan that complied with national and international rules and regulations. National rules and regulations include article 75 of the Organic Law on the Environment; article 4, paragraph D of the Regulations for the Development and Promotion of Organic Farming (Law No. 8591), Decree No. 35242_MAG-H-MEIC; article 7, paragraphs 25 and 72 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG; and article 5, paragraph C of the Law for the Development and Promotion of Organic Farming (Law No. 8591). In the absence of a documented Organic System Plan for this company, we do not know what the production unit intends to do nor is there any means of following up on what is actually being done. Additionally, there is insufficient documentation to understand the day-to-day procedures that take place in each area to ensure organic integrity. The documentation available does not fully disclose all activities and transactions of the certified operation in sufficient detail as to be readily understood and audited. US regulations are very strict regarding a production unit’s management plan and its content is carefully regulated (Regulations of the NOP, Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM). The management plan is described as: “§205.201 Organic production and handling system plan. (a) The producer or handler of a production or handling operation, except as exempt or excluded under §205.101, intending to sell, label, or represent agricultural products as “100 percent organic,” “organic,” or “made with organic (specified ingredients or food group(s))” must develop an organic production or handling system plan that is agreed to by the producer or handler and an accredited certifying agent. An organic system plan must meet the requirements set forth in this section for organic production or handling. An organic production or handling system plan must include: (1) A description of practices and procedures to be performed and maintained, including the frequency with which they will be performed; (2) A list of each substance to be used as a production or handling input, indicating its composition, source, location(s) where it will be used, and documentation of commercial availability, as applicable; (3) A description of the monitoring practices and procedures to be performed and maintained, including the frequency with which they will be performed, to verify that the plan is effectively implemented; (4) A description of the recordkeeping system implemented to comply with the requirements established in §205.103; (5) A description of the management practices and physical barriers established to prevent commingling of organic and nonorganic products on a split operation and to prevent contact of organic production and handling operations and products with prohibited substances; and (6) Additional information deemed necessary by the certifying agent to evaluate compliance with the regulations. (b) A producer may substitute a plan prepared to meet the requirements of another Federal, State, or local government regulatory program for the organic system plan: Provided, That, the submitted plan meets all the requirements of this subpart.” G. It is also necessary to determine whether the company under investigation applied prohibited substances to the transitioning areas that were later certified, which would entail the infringement of the abovementioned regulatory provisions, particularly article 75 of the of the Organic Law on the Environment. With regard to the application of prohibited substances to organic areas, US law devotes an entire section to the regulation of allowed and prohibited substances (Subpart G – Administrative Issues NATIONAL LIST OF ALLOWED AND PROHIBITED SUBSTANCES § 205.600 Evaluation criteria for allowed and prohibited substances, methods, and ingredients). It is understood that if prohibited substances are applied, the producer will lose its organic status. H. This Investigative Body also recommends establishing whether the company under investigation benefitted from the tax exemptions set forth in articles 27 and 28 of the Law for the Development and Promotion of Organic Farming (Law No. 8591). If so, are these benefits justified under the circumstances described herein. 9. ON DEL VALLE VERDE CORP. S.A. A. To begin, it is important to evaluate the lack of formality with which the transition process file was opened. This was done in the absence of the company’s legal representative. This is a serious infringement, which is made worse when the holder’s corporate name was changed, which also occurred in the absence of the company’s legal representative. In the end, the entire process initiates, elapses and finalizes in the absence of each company’s legal representatives. B. Likewise, the company may have infringed its duty of transparency and clarity set forth in article 4 paragraph d) of Regulations 35242-MAG-H-MEIC in terms of the agro-chain concept. This concept underscores the need for order and clarity throughout all the stages of production and until organic product commercialization in order to ensure traceability. Article 12 establishes that traceability is not solely in terms of product traceability, but also regarding process documentation and production unit identification. There was a constant lack of accurate information and transitioning areas were never correctly identified and would vary depending on the source of information (farm names would change without explanation and production areas would be included or removed for no apparent reason). Transitioning area hectarage and location would constantly vary as has been detailed throughout this report. This would appear to infringe article 18 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG. Additionally, it is not clear whether the companies under investigation own, rent or borrow the farmland undergoing transition, certification and follow-up. With regard to these matters, US regulations are very strict and detailed (Regulations of the NOP, Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM) and set forth that: “§ 205.103 Recordkeeping by certified operations. (a) A certified operation must maintain records concerning the production, harvesting, and handling of agricultural products that are or that are intended to be sold, labeled, or represented as “100 percent organic,” “organic,” or “made with organic (specified ingredients or food group(s)). (b) Such records must: (1) Be adapted to the particular business that the certified operation is conducting; (2) Fully disclose all activities and transactions of the certified operation in sufficient detail as to be readily understood and audited; (3) Be maintained for not less than 5 years beyond their creation; and (4) Be sufficient to demonstrate compliance with the Act and the regulations in this part. (c) The certified operation must make such records available for inspection and copying during normal business hours by authorized representatives of the Secretary, the applicable State program's governing State official, and the certifying agent.” Likewise, the CFR Part 205 – National Organic Program stipulates the requirements for the correct identification and delimitation of areas intended for organic agriculture: “§205.202 Land requirements. Any field or farm parcel from which harvested crops are intended to be sold, labeled, or represented as “organic,” must: (a) Have been managed in accordance with the provisions of §§205.203 through 205.206; (b) Have had no prohibited substances, as listed in §205.105, applied to it for a period of 3 years immediately preceding harvest of the crop; and (c) Have distinct, defined boundaries and buffer zones such as runoff diversions to prevent the unintended application of a prohibited substance to the crop or contact with a prohibited substance applied to adjoining land that is not under organic management.” C. It is likely that the company under investigation mislead consumers into believing that their products were organic despite the fact that these products do not seem to have complied with the necessary requirements in order to be considered organic, which infringes article 3 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG. D. Another possible breach or violation of the duties and obligations of a certified organic operator is the lack of sufficient records to ensure traceability of products and operations (article 14, Organic Agriculture Rules and Regulations, Decree No. 29782-MAG). This article expressly provides that, “The producer must maintain records in sufficient detail as to allow the certifying agency to determine the source, type and quantity of all raw materials acquired, as well as how these have been used. Additionally, records must also be kept of all agricultural products sold including type, quantities and to whom these were sold.” This investigation reveals no evidence that this mandate has been fully fulfilled. In this regard, article 19 of the Organic Agriculture Rules and Regulations, Decree No. 29782MAG, also provides that: “The producer must maintain records in sufficient detail as to allow the certifying agency to determine: 1. The source, type and quantity of all agricultural products entering the processing facility; 2. The type, quantity and recipient of all agricultural products leaving the processing facility; 3. Any other information the certifying agency may require in order to conduct an adequate inspection of the operation, such as the source, type and quantity of ingredients, additives and processing aids entering the facility and the composition of the processed products.” US law also has its equivalent of the above obligation in Title 7 of the Code of Federal Regulations (CFR) § 205.103 Recordkeeping by certified operations, which has already been cited here. E. This Investigative Body also considers it necessary to conduct an administrative proceeding to determine whether the company breached or violated its legal and reglamentary obligations with regard to parallel production. It should be highlighted that this practice is forbidden and national legislation grants operators a maximum five-year period to phase out of parallel production. Additionally, pursuant to article 25 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG, operators are only authorized to do this if “capable of providing the certifying agency with documentary evidence to prove the separation between conventional and organic activities”. The latter does not occur in this case as evidenced in writing by Mr. Wilber Chinchilla in March 2016 when he informed Primus Labs and ARAO that they still had a conventional operation – a fact that was ignored and was not documented. F. The transition process was initiated by this company without submitting an organic management plan that complied with national and international rules and regulations. National rules and regulations include article 75 of the Organic Law on the Environment; article 4, paragraph D of the Regulations for the Development and Promotion of Organic Farming (Law No. 8591), Decree No. 35242_MAG-H-MEIC; article 7, paragraphs 25 and 72 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG; and article 5, paragraph C of the Law for the Development and Promotion of Organic Farming (Law No. 8591). In the absence of a documented Organic System Plan for this company, we do not know what the production unit intends to do nor is there any means of following up on what is actually being done. Additionally, there is insufficient documentation to understand the day-to-day procedures that take place in each area to ensure organic integrity. The documentation available does not fully disclose all activities and transactions of the certified operation in sufficient detail as to be readily understood and audited. US regulations are very strict regarding a production unit’s management plan and its content is carefully regulated (Regulations of the NOP, Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM). The management plan is described as: “§205.201 Organic production and handling system plan. (a) The producer or handler of a production or handling operation, except as exempt or excluded under §205.101, intending to sell, label, or represent agricultural products as “100 percent organic,” “organic,” or “made with organic (specified ingredients or food group(s))” must develop an organic production or handling system plan that is agreed to by the producer or handler and an accredited certifying agent. An organic system plan must meet the requirements set forth in this section for organic production or handling. An organic production or handling system plan must include: (1) A description of practices and procedures to be performed and maintained, including the frequency with which they will be performed; (2) A list of each substance to be used as a production or handling input, indicating its composition, source, location(s) where it will be used, and documentation of commercial availability, as applicable; (3) A description of the monitoring practices and procedures to be performed and maintained, including the frequency with which they will be performed, to verify that the plan is effectively implemented; (4) A description of the recordkeeping system implemented to comply with the requirements established in §205.103; (5) A description of the management practices and physical barriers established to prevent commingling of organic and nonorganic products on a split operation and to prevent contact of organic production and handling operations and products with prohibited substances; and (6) Additional information deemed necessary by the certifying agent to evaluate compliance with the regulations. (b) A producer may substitute a plan prepared to meet the requirements of another Federal, State, or local government regulatory program for the organic system plan: Provided, That, the submitted plan meets all the requirements of this subpart.” G. It is also necessary to determine whether the company under investigation applied prohibited substances to the transitioning areas that were later certified, which would entail the infringement of the abovementioned regulatory provisions, particularly article 75 of the of the Organic Law on the Environment. With regard to the application of prohibited substances to organic areas, US law devotes an entire section to the regulation of allowed and prohibited substances (Subpart G – Administrative Issues NATIONAL LIST OF ALLOWED AND PROHIBITED SUBSTANCES § 205.600 Evaluation criteria for allowed and prohibited substances, methods, and ingredients). It is understood that if prohibited substances are applied, the producer will lose its organic status. H. Apparent incorrect storage of inputs. Article 15 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG requires the separate storage of all organic raw materials and inputs. Additionally, article 20 of the Organic Agriculture Rules and Regulations sets forth that: “In those cases where products that do not comply with the requirements of these rules and regulations are also processed, packaged or stored in the facility: 1. The facility must have separate storage areas for the products, before and after processing. 2. The facility must ensure the implementation of measures necessary to assure correct batch identification and avoid commingling with products that do not comply with the requirements hereunder.” US regulations are very strict regarding this issue, (Regulations of the NOP, Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM) and set forth that: “§ 205.272 Commingling and contact with prohibited substance prevention practice standard. (a) The handler of an organic handling operation must implement measures necessary to prevent the commingling of organic and nonorganic products and protect organic products from contact with prohibited substances…” I. It also seems as if Del Valle Verde Corp. S.A. has not complied with the mandatory period established in the country to transition to organic. As a general rule, the Organic Law on the Environment (Law No. 7574) establishes a three-year transition period provided all regulatory requirements are fulfilled including the cessation of agrochemical use over a period of three years as well as adherence to standards issued by national and international organic farming agencies. Additionally, article 10 of the Law for the Development and Promotion of Organic Farming (Law No. 8591) establishes a three-year transition period as well as stipulating that the MAG shall set the technical basis for shorter transition periods; however, “the rules and regulations dictated by international agencies regarding ecological agriculture must always be taken into account as well as the legislation of the countries of destination”. This same three-year period is set forth in article 8 of the Organic Agriculture Rules and Regulations, Executive Decree No. 29782-MAG, which states that, “In order for a farming product to be granted organic certification, it must come from a system that has adhered to the principles and standards set forth herein over the three-year period established in the Organic Law on the Environment and in accordance with a farm transition plan”. Additionally, in order to request a shorter transition period (which in no case can be less than 12 months), the operator must provide the certifying agency with irrefutable evidence that prohibitted substances have not been used in the area. In this case, there is no evidence of the latter. US regulations also address the above (Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM) in Section §205.202 (b) stating that in order to begin transitioning the field or farm parcel must “Have had no prohibited substances, as listed in §205.105, applied to it for a period of 3 years immediately preceding harvest of the crop; …”. J. Another non-compliance by Del Valle Verde Corp. S.A. could be the fact that the company refused to provide the information requested in official letter dated 11 July 2016. The company justified itself arguing that the requested information was either already in the hands of the SFE or confidential. It should be noted that organic agriculture is a system that requires an open exchange of information between the operator and the state authority that has certified the operator as organic. In this regard, it should be remembered that national regulations require that certified operations maintain records and these must be made available for inspection when necessary by public authorities, as mentioned above. With regard to the above, USDA/NOP rules and regulations (section § 205.103 cited above) are also very clear when they state that certified operations must be open and “fully disclose all activities and transactions of the certified operation in sufficient detail as to be readily understood and audited”. In the case of Costa Rica, organic farming has been declared “of public interest” (article 4 of the Law for the Development and Promotion of Organic Farming (Law No. 8591). K. This Investigative Body also recommends establishing whether the company under investigation benefitted from the tax exemptions set forth in articles 27 and 28 of the Law for the Development and Promotion of Organic Farming (Law No. 8591). If so, are these benefits justified under the circumstances described herein. 12. ON THE CERTIFYING AGENCY PRIMUS LABS A. It seems as if Primus Labs did not review the application for certification submitted by Mr. Wilber Chinchilla on behalf of Valle Verde Corp. S.A. The application was accepted despite the fact that it was not presented by the company’s legal representative. Additionally, the company was not registered as an organic operator. On the date that the application for certification was submitted, the company did not appear in the transition process file opened by LyL Proyectos MMV S.A. It should be noted that Mr. Chinchilla presented the application when the transition process was underway and at the time there was no evidence that the process had concluded. In this regard, US regulations set forth clear guidelines with regard to the obligation to review all applications (Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM): “§205.402 Review of application. (a) Upon acceptance of an application for certification, a certifying agent must: (1) Review the application to ensure completeness pursuant to §205.401; (2) Determine by a review of the application materials whether the applicant appears to comply or may be able to comply with the applicable requirements of subpart C of this part; (3) Verify that an applicant who previously applied to another certifying agent and received a notification of noncompliance or denial of certification, pursuant to §205.405, has submitted documentation to support the correction of any noncompliances identified in the notification of noncompliance or denial of certification, as required in §205.405(e); and (4) Schedule an on-site inspection of the operation to determine whether the applicant qualifies for certification if the review of application materials reveals that the production or handling operation may be in compliance with the applicable requirements of subpart C of this part. (b) The certifying agent shall within a reasonable time: (1) Review the application materials received and communicate its findings to the applicant; (2) Provide the applicant with a copy of the on-site inspection report, as approved by the certifying agent, for any on-site inspection performed; and (3) Provide the applicant with a copy of the test results for any samples taken by an inspector.” B. The certifying agency does not seem to have maintained complete, coherent and rigurous records of the companies investigated, particularly Del Valle Verde Corp. S.A. Had the certifying agency conducted recordkeeping in adherence to national and international regulations, it is likely that many of the supposed irregularities would have been detected in a timely manner. Resolution No. 13-2014 of the State Phytosanitary Services (24 November, 2014) in whereas clause 3 sets forth that all certifying agencies authorized to operate in the the country must keep a complete file of each operator supervised. US regulations provide clear guidelines on recordkeeping in order to be able to monitor the organic integrity of different operators over time: “§205.510 Annual report, recordkeeping, and renewal of accreditation. (…) (b) Recordkeeping. Certifying agents must maintain records according to the following schedule: (1) Records obtained from applicants for certification and certified operations must be maintained for not less than 5 years beyond their receipt; (2) Records created by the certifying agent regarding applicants for certification and certified operations must be maintained for not less than 10 years beyond their creation; and …”. C. The certifying agency seems to have neglected its duty to report the supposed irregularities to the government authorities. “… operators must immediately inform the certifying agency of any irregularities affecting the organic integrity of their production or that of organic products received from other operators. In turn, the certifying agency must immediately inform the relevant authorities when it detects irregularities or violations affecting the organic integrity of the products. Certifying agencies shall keep an updated public list with the names and addresses of the operators monitored. Information must also be submitted on the certified products and certification validity”. D. In accordance with article 5, subparagraph D of the Law for the Development and Promotion of Organic Farming (Law No. 8591), Primus Labs seems to have neglected its duty to audit and monitor in situ. This article highlights the importance of Primus Labs as an attester that must fulfill a delegated public function. “Third-party certification: organic product certification system, which necessarily entails a verification process involving an independent, third-party certifying body. The latter must be accredited under ISO - or any other equivalent approved by an international certification system – to attest to the fact that production adheres to organic agriculture regulations that are officially recognized by a country or region”. Likewise, the Organic Agriculture Rules and Regulations, No. 29782-MAG stipulate that an inspector’s work consists of “evaluating, visiting, monitoring or verifying the organic appropriateness of production, processes and facilities at the request of a certifying agency, the Administration or producer.” The results of the inspection conducted on 07 April 2015 and those contained in Primus Labs’ PLc_OR_201 certificate are contradictory despite the fact that they supposedly refer to the same production unit, areas and procedures. Also, there is a lack of coherence between these results and the remaining information gathered and documented extensively throughout this investigation. US regulations stress the key importance of on-site inspections in order to assess whether a production unit meets the strict standards to ensure organic integrity (Title 7 of the Code of Federal Regulations (CFR), Part 205 – NATIONAL ORGANIC PROGRAM): “§205.403 On-site inspections. (a) On-site inspections. (1) A certifying agent must conduct an initial on-site inspection of each production unit, facility, and site that produces or handles organic products and that is included in an operation for which certification is requested. An on-site inspection shall be conducted annually thereafter for each certified operation that produces or handles organic products for the purpose of determining whether to approve the request for certification or whether the certification of the operation should continue. (2) (i) A certifying agent may conduct additional on-site inspections of applicants for certification and certified operations to determine compliance with the Act and the regulations in this part. (ii) The Administrator or State organic program's governing State official may require that additional inspections be performed by the certifying agent for the purpose of determining compliance with the Act and the regulations in this part. (iii) Additional inspections may be announced or unannounced at the discretion of the certifying agent or as required by the Administrator or State organic program's governing State official. (b) Scheduling. (1) The initial on-site inspection must be conducted within a reasonable time following a determination that the applicant appears to comply or may be able to comply with the requirements of subpart C of this part: Except, That, the initial inspection may be delayed for up to 6 months to comply with the requirement that the inspection be conducted when the land, facilities, and activities that demonstrate compliance or capacity to comply can be observed. (2) All on-site inspections must be conducted when an authorized representative of the operation who is knowledgeable about the operation is present and at a time when land, facilities, and activities that demonstrate the operation's compliance with or capability to comply with the applicable provisions of subpart C of this part can be observed, except that this requirement does not apply to unannounced onsite inspections. (c) Verification of information. The on-site inspection of an operation must verify: (1) The operation's compliance or capability to comply with the Act and the regulations in this part; (2) That the information, including the organic production or handling system plan, provided in accordance with §§205.401, 205.406, and 205.200, accurately reflects the practices used or to be used by the applicant for certification or by the certified operation; (3) That prohibited substances have not been and are not being applied to the operation through means which, at the discretion of the certifying agent, may include the collection and testing of soil; water; waste; seeds; plant tissue; and plant, animal, and processed products samples. (d) Exit interview. The inspector must conduct an exit interview with an authorized representative of the operation who is knowledgeable about the inspected operation to confirm the accuracy and completeness of inspection observations and information gathered during the on-site inspection. The inspector must also address the need for any additional information as well as any issues of concern. (e) Documents to the inspected operation. (1) At the time of the inspection, the inspector shall provide the operation's authorized representative with a receipt for any samples taken by the inspector. There shall be no charge to the inspector for the samples taken. (2) A copy of the on-site inspection report and any test results will be sent to the inspected operation by the certifying agent.” Furthermore, article 18.1 of the Organic Agriculture Rules and Regulations, No. 29782-MAG provides that the certifying agency must “Prepare a complete description of the unit, indicating the facilities used to transform, package and store the agricultural products before and after operations”. However, there is nothing to prove that Primus Labs performed the abovementioned duty. As mentioned before, conventional and organic inputs were being stored in the same warehouse in March 2016; the company was buying and applying conventional inputs and parallel conventional production was being implemented and none of this was detected by the certifying agency. E. It seems as if Primus Labs did not monitor and verify the existence of detailed records as set forth in article 19 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG: “The producer must maintain records in sufficient detail as to allow the certifying agency to determine: 1. The source, type and quantity of all agricultural products entering the processing facility; 2. The type, quantity and recipient of all agricultural products leaving the processing facility; 3. Any other information the certifying agency may require in order to conduct an adequate inspection of the operation, such as the source, type and quantity of ingredients, additives and processing aids entering the facility and the composition of the processed products.” As was explained during the presentation of the findings of this investigation, Del Valle Verde Corp. S.A. only began purchasing organic inputs as of March 2015, which coincides with the dates on which the company submitted the application for organic certification to Primus Labs. Furthermore, the existence of non-regulated parallel conventional production had also been documented before and after this date, which is why the existence of documentation supporting the purchase of organic inputs prior to this date is not possible. This also points to the possibility that the operator under investigation had no ongoing organic processes (or that special care was not being taken to avoid cross-contamination from conventional processes). However, none of the above was reported by Primus Labs. It should be noted that the inspection report of 07 April 2015 indicates that these records were seen by inspector Lorena Carballo Batista; however, the certifying agency and the companies investigated did not provide this Investigative Body with documentation pertaining to this matter. Consequently, at this point there is no evidence that these records exist and meet the previously mentioned requirements. F. Despite the apparent lack of consistency and rigor in terms of Primus Labs’ auditing work, Del Valle Verde Corp. S.A. was granted certification as an organic operator allowing the company to sell its products internationally. Certification was awarded despite the apparent existence of serious inconsistencies, which if confirmed would result in the cancellation of the operator’s organic certification. As already explained in this report, the aforementioned certificate was issued without certainty as to the areas included, land-use history, ownership, location, reason for farm name and surface area variations, absence of records, application of prohibited substances, incorrect input storage, parallel conventional production, etc. As set forth below, US regulations clearly stipulate that Primus Labs should have refused to grant certification and should have communicated this to the SFE. “§205.404 Granting certification. (a) Within a reasonable time after completion of the initial on-site inspection, a certifying agent must review the on-site inspection report, the results of any analyses for substances conducted, and any additional information requested from or supplied by the applicant. If the certifying agent determines that the organic system plan and all procedures and activities of the applicant's operation are in compliance with the requirements of this part and that the applicant is able to conduct operations in accordance with the plan, the agent shall grant certification. The certification may include requirements for the correction of minor noncompliances within a specified time period as a condition of continued certification. (…)” In this same regard, the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG define certification and provide the following definition, “Certification: the procedure by means of which official certifying bodies, or officially recognized certifying bodies, provide a written attestation or equivalent indicating that the products and control systems fulfill the requirements set forth herein”. G. The Phytosanitary Protection Law (Law No. 7664) requires that third parties – and especially certifying agencies – work together with the SFE in terms of the regulation of organic agriculture. This law states, “Mandatory collaboration by public officials. Public officials, as pertains to their functional competencies, shall be obligated to collaborate with the phytosanitary authorities in order to comply with this law. Exceptionally and in duly justified cases, the Ministry of Agriculture and Livestock shall vest other qualified official with phytosanitary authority to perform these tasks.” Additionally, it is important to keep in mind that certifying agencies perform a task related to a matter that has been declared of public interest (article 4 of the Law for the Development and Promotion of Organic Farming (Law No. 8591). “… organic farming is an activity of public interest due to its many benefits and therefore, it shall be included in the National Development Plan”. Furthermore, the Law against Corruption and Illicit Enrichment in the Public Function (Law No. 8422) provides that ensuring probity of action is part of every public official's duty and therefore, they must “… ensure the public interest is upheld. This duty shall entail identifying and addressing priority collective needs in a planned, efficient and continuous manner (…) as well as upholding a standard of rectitude and good faith in the exercise of his powers; ensuring that decisions taken are impartial and adhere to the objectives of the institution represented and, finally, administering public resources in adherence to the principles of legality, effectiveness, economy and efficiency and fully commited to ensuring accountability.” As already mentioned, the certifying agency was uncooperative when asked to provide information and explanations. The agency adopted a position that seemed to respond to its own particular interests and not those of the SFE, that is, to determine whether the procedures followed by operators, certifiers and public officials comply with the principles of legality, effectiveness, economy and efficiency that must prevail in the public function. 13. ON ENG. ROBERTO GARCIA SALAZAR. A. Apparent infringement of the principles of probity and objectivity in the exercise of public functions. As presented in this report, Eng. Roberto Garcia Salazar from ARAO committed a series of actions that are contrary to ensuring probity of action, which is part of every public official’s duty. Furthermore, most of the relevant actions taken by Eng. Roberto Garcia Salazar lack sufficient justification. The above actions vary in nature: acting on behalf of the interested parties despite the absence of a formal request to do so; preparing supervision and follow-up reports containing inconsistent information; and the untidy and disorganized management of the transition process file, which ended up in Del Valle Verde Corp. S.A.’s name. It is important to highlight the manner in which all events pertaining to the transition process took place, third-party interventions, the complacent attitude exhibited towards the companies under investigation in terms of conducting paperwork and procedures on their behalf despite the fact that these could not be delegated, as well as being very permissive regarding requirement fulfilment. Process terms and start dates seem to coincide with the investigated companies’ interests and external activities (especially as of the moment Del Valle Verde Corp. S.A. appears in the transition file, which is almost immediately followed by the issuance of different certificates by Primus Labs). It is important to determine whether the public offical was acting in the public interest or otherwise. If not acting in the public interest, this would likely affect the legal validity of those acts. With regard to the transition process and the many errors contained in the application submitted, the provisions set forth in article 285 of the General Law of Public Administration may apply: “1. The party’s application must contain: a) The name of the office to which it is addressed; b) The full name, residence and address for service of process of the party and its legal representative; c) The claim, specifying damages as well as an estimation of the quantum of said damages, their origin and type; d) The findings of fact; and e) The date and signature. 2. The absence of b) and c) will result in the rejection of the application, unless this information can be clearly inferred from the application itself or attached documentation. 3. The application shall be rejected if unsigned.” B. Infringement of article 21 of the Organic Agriculture Rules and Regulations (No. 29782MAG) for initiating the transition without having met the necessary requirements to do so. According to Eng. Garcia Salazar, the transition process started on 24 April 2014 (a transition process that started out in LyL Proyectos MMV S.A.’s name and concluded in Del Valle Verde Corp. S.A.’s name). Not only was this the date of the first inspection visit, but a series of noncompliances were also detected during this visit. Several of these noncompliances were never corrected and were once again mentioned by Eng. Garcia Salazar in March 2016. Examples of the above have already been described in detail in this report and include: presence of conventional activity in the production unit, incorrect storage of inputs, presence of prohibited and unauthorized inputs, use of different names to identify cultivation areas as well as variations in their location and size, absence of an affidavit sworn before an attorney, absence of soil analyses and management plan, the fact that the investigated companies did not purchase certified organic inputs until March 2015, as well as the incompatibility of information on land-use history with the information that is in the possession of the Office of Regional Operations for the Huetar Norte Region, among others. Another aspect that must be evaluated is the fact that the transition process finalized by ARAO seems to have included a total surface area of 2.13 ha. However, Primus Labs later issued organic certification for 97.86 ha. Eng. Garcia Salazar never issued an alert or initiated administrative action to discover the reason behind this and take the necessary corrective measures if justified. C. Incorrect management of the transition file. As indicated in this report, the transition process file seems to have been managed in a disorganized manner ignoring consecutive numbering and chronological order. Also, during the course of the investigation, we were able to detect the inclusion of documents that should have been included earlier. It is necessary to determine whether the file is complete and accurately reflects the entire process. Public officials’ duty to maintain files strictly organized has been underscored by both the Attorney General’s Office and the Office of the Comptroller General as follows: “According to a formal rule of administrative procedure, the contents of administrative files must be organized chronologically and folio numbered with consecutive numbers. In this regard, Argentinian treatise writer, Escola, points out that administrative files must be arranged in the order in which events, procedures and paperwork occur. With regard to annexes, he indicates that these must be included at the time of receipt and in chronological order, without interrupting evidence of previous or recent procedures and paperwork. According to this author, when incorporating an annex, it is important to refer readers to the portion of the file where this information was requested. He also recommends that actions undertaken be folio numbered in a serial or successive manner. However, there are certain annexes which due to size or nature, cannot be included in the main file and must be considered attachments and folio numbered in a successive manner. With regard to the folio numbering of files, the Attorney General’s Office has declared that this requirement is part of the constitutional guarantee of due process of law (refer to official letters O.J. 060-98 of 15 July 1998 and C-164-99 of 19 August 1999). Along these same lines, the Attorney General’s Office considers that a file that is not folio numbered gives a sense of unreliability regarding the content of the file. Therefore, the folio numbering of a file is a necessary requirement to guarantee due process of law. “In short, portions of a file that are not folio numbered in a successive manner at time of receipt give a sense of unreliability to both the interested party as well as the Administration with regard to the content of the file. Admittedly, omissions of this kind lead to a flawed procedure … as a result of an incomplete and disorganized file, portions of which have not been folio numbered, consubstantial elements of the process are missing seriously affecting the outcome.” Official letter C-2632001 of 01 October 2001. The Attorney General’s Office has also expressed that the purpose of folio numbering documents in administrative files in chronological order is to facilitate the handling of information as well as guarantee the right to adequate defense. Ruling No. C049-99 of 05 March 1999 provides that, “… the orderly manner in which paperwork is processed is part of the aforementioned constitutional right due process of law … Each file must be folio numbered in a consistent manner.” On different ocassions, the Office of the Comptroller General has reprimanded the Administration for errors found in files that are not folio numbered or that have not been foliated consecutively or are not organized chronologically. In this regard, the Office of the Comptroller General considers that a file must be viewed as a whole with a consecutive numbering. (Refer to RSL 118-98 of 06 May 1998 at 15:30, RC-618-2001 of 16 October 2001 at 13:00, RC-41-2001 of 23 January 2001 at 15:00, official letter DGCA-453-98 of 18 May 1998) … On the other hand, in relation to the case in question, the accompanying documentation is made up of a group of different documents and changes in foliation are evident, which is not only an irregular situation, but also makes it impossible for us to determine whether the information is complete”. (Official letter 11585 of 10 October 2001 (DI-AA-2908)). Due to all the above, we are able to reach the preliminary conclusion that administrative files must be folio numbered in chronological order, in the order in which events, procedures and paperwork occur, that is, actions must be folio numbered in a successive manner. Also, the purpose of folio numbering files in chronological order is to facilitate the handling of information as well as guarantee the right to due process of law. A file that has not been foliated gives a sense of unreliability to both the interested party as well as the Administration and therefore, must be folio numbered in a consistent manner. (Official letter 15419 of 05 December 2002 (DAGJ-2011-2002)).” (Source:https://cgrfiles.cgr.go.cr/publico/jaguar/Documentos/contratacion/jurisprudencia /tomo4/exp_administrativo4.htm) D. Serious inconsistencies and flaws in terms of follow up and monitoring of the companies investigated and their activities. An inspector’s work is defined in Article 7, paragraph 15 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG, as “evaluating, visiting, monitoring or verifying the organic appropriateness of production, processes and facilities at the request of a certifying agency, the Administration or producer.” US regulations clearly set forth the tasks and duties of any supervisory body: “§205.403 On-site inspections. (a) On-site inspections. (1) A certifying agent must conduct an initial on-site inspection of each production unit, facility, and site that produces or handles organic products and that is included in an operation for which certification is requested. An on-site inspection shall be conducted annually thereafter for each certified operation that produces or handles organic products for the purpose of determining whether to approve the request for certification or whether the certification of the operation should continue. (2) (i) A certifying agent may conduct additional on-site inspections of applicants for certification and certified operations to determine compliance with the Act and the regulations in this part. (ii) The Administrator or State organic program's governing State official may require that additional inspections be performed by the certifying agent for the purpose of determining compliance with the Act and the regulations in this part. (iii) Additional inspections may be announced or unannounced at the discretion of the certifying agent or as required by the Administrator or State organic program's governing State official. (b) Scheduling. (1) The initial on-site inspection must be conducted within a reasonable time following a determination that the applicant appears to comply or may be able to comply with the requirements of subpart C of this part: Except, That, the initial inspection may be delayed for up to 6 months to comply with the requirement that the inspection be conducted when the land, facilities, and activities that demonstrate compliance or capacity to comply can be observed. (2) All on-site inspections must be conducted when an authorized representative of the operation who is knowledgeable about the operation is present and at a time when land, facilities, and activities that demonstrate the operation's compliance with or capability to comply with the applicable provisions of subpart C of this part can be observed, except that this requirement does not apply to unannounced onsite inspections. (c) Verification of information. The on-site inspection of an operation must verify: (1) The operation's compliance or capability to comply with the Act and the regulations in this part; (2) That the information, including the organic production or handling system plan, provided in accordance with §§205.401, 205.406, and 205.200, accurately reflects the practices used or to be used by the applicant for certification or by the certified operation; (3) That prohibited substances have not been and are not being applied to the operation through means which, at the discretion of the certifying agent, may include the collection and testing of soil; water; waste; seeds; plant tissue; and plant, animal, and processed products samples. (d) Exit interview. The inspector must conduct an exit interview with an authorized representative of the operation who is knowledgeable about the inspected operation to confirm the accuracy and completeness of inspection observations and information gathered during the on-site inspection. The inspector must also address the need for any additional information as well as any issues of concern. (e) Documents to the inspected operation. (1) At the time of the inspection, the inspector shall provide the operation's authorized representative with a receipt for any samples taken by the inspector. There shall be no charge to the inspector for the samples taken. (2) A copy of the on-site inspection report and any test results will be sent to the inspected operation by the certifying agent.” An inspection that is properly conducted includes matters of form and content, which are both very important in organic agriculture and address issues of traceability, auditing and verification to ensure that activities conducted in the production areas truly adhere to national and international organic farming standards. As documented throughout this report, it seems as if Eng. Garcia Salazar ignored the following duties: ensure applications and paperwork had been prepared by a legal representative; verify whether evidence demonstrating compliance correction had been submitted (for example, affidavits, inexistence of a management plan, elimination of parallel conventional activity, input storage non-compliance, use of prohibited and unauthorized substances); check information on land-use history available at the Office of Regional Operations for the Huetar Norte Region; verify information on land-use history from other sources; detect discrepancies in terms of the names and dimensions of the different areas; inexistence of organic input purchases by the investigated companies prior to March 2015; discrepancies between the information in ARAO’s possession and the information detailed in the PLc_OR_CR_033 certificate in terms of surface area certified. Additionally, he failed to provide documentary evidence to support exercises conducted during inspections and findings made; and he informed his immediate superior that the operation was functioning normally despite having detected serious non-compliances that endangered the organic integrity of processes and products. Eng. Garcia did not conduct an integrated analysis allowing us to determine with certainty the track record, dimension, scope and nature of the operations being investigated. Also, there are no elements to justify the fact that Del Valle Verde Corp. S.A. harvested and supplied organic pineapple to Congelados y Jugos del Valle Verde S.A. on the same day it was granted organic certification by Primus Labs (22 July 2015). E. Wrongful early conclusion of the transition process file. Infringement of article 75 of the Organic Law on the Environment; article 5, paragraph C and article 10 of the Law for the Development and Promotion of Organic Farming (Law No. 8591); article 58 of the Regulations for the Development and Promotion of Organic Farming, Decree No. 35242MAG-H-MEIC; and article 7, paragraph 25 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG. The transition process concluded on 01 June 2015 at the initiative of Eng. Roberto Garcia Salazar and was approved by Eng. Karla Morales Roman. However, several serious noncompliances that had been repeatedly pointed out throughout the process had yet to be corrected. There is no evidence in the transition file of a formal assessment/analysis that legally or technically justifies the decision to finalize the process early. According to the abovementioned legislation, the general rule in Costa Rica with regard to organic transitioning is that a minimum of three years are necessary. Exceptions are allowed in exceptional circunstances; however, requirements, terms and conditions must be defined in each case. In this specific case, Eng. Garcia Salazar always maintained that once formally initiated, the transition was to take three years. The transition file contains no documentation requesting that the transition period be reduced, nor are there any technical documents justifying the decision to end the transition earlier. There is no reasoned, formal administrative act in relation to this decision (articles 129 to 132 of the General Law of Public Administration). The motivation (facts) behind an administrative act should not be understood as merely a formal requirement to include any argument in the text of a resolution or filling out a form without conducting any type of analysis. On the contrary, the motivation behind an administrative act must present specific arguments that clearly and accurately describe the reasons why the public entity has issued a specific administrative act. The legal grounds (law) facilitate the interpretation of the administrative act and ensure good government as well as guaranteeing the rights of those governed. In this case, we do not know the arguments of fact and law that led Eng. Garcia Salazar to inform Eng. Karla Morales Roman that the transition process had concluded on 01 June 2015. This decision went against what Garcia had always maintained in terms of process duration, as well as international regulations that specify a three-year duration (NOP/USDA) and the organic transition certificate (folio 50 of the transition file) that specified 24 April 2016 as the end date (an end date that was also never justified). This must all be investigated by the Administrative Body we recommend establishing. 14. ON KARLA MORALES ROMAN. A. Breach of the duty of care in her capacity as head of ARAO. In the public function, the principle of legality means that administrative acts that are not expressly permitted are therefore prohibited. Consequently, all superiors must ensure the legality of actions committed by their subordinates. To do so, they must ensure adherence to the facts and law. Thus, the duty of the head of a department is to strive to ensure the actions of their subordinates, and their own, conform to applicable rules and regulations. As has been previously mentioned, Eng. Morales Roman issued at least two administrative acts despite the fact that the formal and substantive requirements had not been met: the transition certificate (folio 50 of the transition file) and official letter ARAO 65.15 of 01 June 2015 informing that the transition process had been completed. As previously explained, the first administrative act could be declared null and void because the transition did not fulfill the necessary steps and requirements and the transition process file should never have been opened. With regard to the second administrative act, it not only went against what Eng. Garcia Salazar had always maintained that once formally initiated, the transition was to take three years, but also contravened the transition period Eng. Morales Roman herself indicated in the transition certificate (folio 50 of the transition file), which was to expire on 24 April 2016. B. Incorrect management of the transition file. As indicated in this report, the transition process file seems to have been managed in a disorganized manner ignoring consecutive numbering and chronological order. Also, during the course of the investigation, we were able to detect the inclusion of documents that should have been included earlier. It is necessary to determine whether the file is complete and accurately reflects the entire process. Eng. Morales Roman was the head of ARAO at the time the events under investigation took place. She issued the aforementioned administrative acts despite the fact that the status of the transition process file most likely did not allow her to establish with certainty that the acts issued were well-founded and justified in terms of form and content. Public officials’ duty to maintain files strictly organized has been underscored by both the Attorney General’s Office and the Office of the Comptroller General as follows: “According to a formal rule of administrative procedure, the contents of administrative files must be organized chronologically and folio numbered with consecutive numbers. In this regard, Argentinian treatise writer, Escola, points out that administrative files must be arranged in the order in which events, procedures and paperwork occur. With regard to annexes, he indicates that these must be included at the time of receipt and in chronological order, without interrupting evidence of previous or recent procedures and paperwork. According to this author, when incorporating an annex, it is important to refer readers to the portion of the file where this information was requested. He also recommends that actions undertaken be folio numbered in a serial or successive manner. However, there are certain annexes which due to size or nature, cannot be included in the main file and must be considered attachments and folio numbered in a successive manner. With regard to the folio numbering of files, the Attorney General’s Office has declared that this requirement is part of the constitutional guarantee of due process of law (refer to official letters O.J. 060-98 of 15 July 1998 and C-164-99 of 19 August 1999). Along these same lines, the Attorney General’s Office considers that a file that is not folio numbered gives a sense of unreliability regarding the content of the file. Therefore, the folio numbering of a file is a necessary requirement to guarantee due process of law. “In short, portions of a file that are not folio numbered in a successive manner at time of receipt give a sense of unreliability to both the interested party as well as the Administration with regard to the content of the file. Admittedly, omissions of this kind lead to a flawed procedure … as a result of an incomplete and disorganized file, portions of which have not been folio numbered, consubstantial elements of the process are missing seriously affecting the outcome.” Official letter C-2632001 of 01 October 2001. The Attorney General’s Office has also expressed that the purpose of folio numbering documents in administrative files in chronological order is to facilitate the handling of information as well as guarantee the right to adequate defense. Ruling No. C049-99 of 05 March 1999 provides that, “… the orderly manner in which paperwork is processed is part of the aforementioned constitutional right due process of law … Each file must be folio numbered in a consistent manner.” On different ocassions, the Office of the Comptroller General has reprimanded the Administration for errors found in files that are not folio numbered or that have not been foliated consecutively or are not organized chronologically. In this regard, the Office of the Comptroller General considers that a file must be viewed as a whole with a consecutive numbering. (Refer to RSL 118-98 of 06 May 1998 at 15:30, RC-618-2001 of 16 October 2001 at 13:00, RC-41-2001 of 23 January 2001 at 15:00, official letter DGCA-453-98 of 18 May 1998) … On the other hand, in relation to the case in question, the accompanying documentation is made up of a group of different documents and changes in foliation are evident, which is not only an irregular situation, but also makes it impossible for us to determine whether the information is complete”. (Official letter 11585 of 10 October 2001 (DI-AA-2908)). Due to all the above, we are able to reach the preliminary conclusion that administrative files must be folio numbered in chronological order, in the order in which events, procedures and paperwork occur, that is, actions must be folio numbered in a successive manner. Also, the purpose of folio numbering files in chronological order is to facilitate the handling of information as well as guarantee the right to due process of law. A file that has not been foliated gives a sense of unreliability to both the interested party as well as the Administration and therefore, must be folio numbered in a consistent manner. (Official letter 15419 of 05 December 2002 (DAGJ-2011-2002)).” (Source:https://cgrfiles.cgr.go.cr/publico/jaguar/Documentos/contratacion/jurisprudencia /tomo4/exp_administrativo4.htm) C. Wrongful early conclusion of the transition process file. Infringement of article 75 of the Organic Law on the Environment; article 5, paragraph C and article 10 of the Law for the Development and Promotion of Organic Farming (Law No. 8591); article 58 of the Regulations for the Development and Promotion of Organic Farming, Decree No. 35242- MAG-H-MEIC; and article 7, paragraph 25 of the Organic Agriculture Rules and Regulations, Decree No. 29782-MAG. The transition process concluded on 01 June 2015 at the initiative of Eng. Roberto Garcia Salazar and was approved by Eng. Karla Morales Roman. However, several serious noncompliances that had been repeatedly pointed out throughout the process had yet to be corrected. There is no evidence in the transition file of a formal assessment/analysis that legally or technically justifies the decision to finalize the process early. According to the abovementioned legislation, the general rule in Costa Rica with regard to organic transitioning is that a minimum of three years are necessary. Exceptions are allowed in exceptional circunstances; however, requirements, terms and conditions must be defined in each case. In this specific case, Eng. Garcia Salazar always maintained that once formally initiated, the transition was to take three years. The transition file contains no documentation requesting that the transition period be reduced, nor are there any technical documents justifying the decision to end the transition earlier. There is no reasoned, formal administrative act in relation to this decision (articles 129 to 132 of the General Law of Public Administration). The motivation (facts) behind an administrative act should not be understood as merely a formal requirement to include any argument in the text of a resolution or filling out a form without conducting any type of analysis. On the contrary, the motivation behind an administrative act must present specific arguments that clearly and accurately describe the reasons why the public entity has issued a specific administrative act. The legal grounds (law) facilitate the interpretation of the administrative act and ensures good government as well as guaranteeing the rights of those governed. If an administrative act is not supported by adequate findings of fact, the Administration will have no way of knowing why it was issued (which goes against a basic principle of the Administration) and citizens will be unable to defend themselves (which infringes the principle of due process enshrined in the Constitution and the right to adequate defense). In this case, we do not know the arguments of fact and law that led Eng. Garcia Salazar to inform Eng. Karla Morales Roman that the transition process had concluded on 01 June 2015. This decision went against what Garcia had always maintained in terms of process duration, as well as international regulations that specify a three-year duration (NOP/USDA) and the organic transition certificate (folio 50 of the transition file) that indicated 24 April 2016 as the end date (an end date that was also never justified). We do not understand why the Head of ARAO did not analyze this request based on the contents of the transition file and also issued an administrative act without arguments of fact and law. This must all be investigated by the process supervisory body we recommend establishing. D. Ignoring her obligation to warn the Administration, particularly ARAO, about the inconsistencies and contradictions between the PLc_OR_201 certificate issued by Primus Labs and the official information in possession of ARAO, of which Eng. Morales Roman was aware. This may constitute failure to fulfil her duties. This report is submitted on 10 Octobre 2016. Sincerely, Eng. Jose Miguel Jimenez Mendez State Phytosanitary Services This analysis refers to 47 containers exported by Congelados y Jugos del Valle Verde S.A. (corporate ID card number 3-101-586074) (hereinafter “CVV”) from March 2015 to the first week of April 2016. Export invoices for these containers indicate that they contain “frozen organic pineapple”. This report is the third document resulting from an extensive review of frozen organic pineapple exporting companies. Containers were analyzed one by one identifying export invoice, container number, direct and end buyers stated on the invoice, total kilos exported, total raw materials used to produce total kilos exported, percentage yield (expressed as % of kilos of raw materials purchased/kilos exported) and a column for comments and observations has been included for every export invoice. In order to understand comments and observations made with regard to each container, it is important to keep in mind the two reports I previously prepared. These reports contain information that has been analyzed and classified in such a way that brings to light inconsistencies and contradictions related to the behavior of CVV and other associated legal entities represented by Mr. Luis Alberto Barrantes Quesada (ID card number 2-454-329). The complexity of this investigation lies in the large amount of information that had to be analyzed and the matter at hand. 1. Export dynamics. Invoices, BL’s, supporting documents (supplier invoices, entry receipts, raw material payments, etc.) were examined. 2. Information dispersal. It has not been easy to get a better understanding of CVV’s business activity. The following sources of information were used, among others: a. Office for Accreditation and Certification in Organic Agriculture (ARAO) of the Costa Rica Ministry of Agriculture’s State Phytosanitary Services. b. Regional Office of the State Phytosanitary Services in Ciudad Quesada, San Carlos, Alajuela. c. Field visit information. d. Information provided by exporting companies under inspection. e. Information supplied by certifying companies. f. Information provided by raw material suppliers. g. Websites of companies mentioned in documentation analyzed. In summary, the following conclusions should serve as basis for taking appropriate decisions. FIRST. Organic pineapple suppliers that are not certified organic are used. The existence of an “unknown supplier” is disconcerting (there is no information on the supplier nor is there information on the product used). Another case worth mentioning is that of Piña Fría 4 de Pital S.A. (corporate ID card number 3-101-577174). This company is part of the economic interest group led by Luis Alberto Barrantes Quesada and appears as a supplier of organic pineapple for CVV; however, it is not a certified organic pineapple supplier. In fact, two field reports (01/27/16 and 02/19/16) prepared by Ronin Hurtado Palacios from the State Phytosanitary Services during his visit to two different farms (one located in El Palmar and the other in El Saino) state that these are not certified organic farms. One is a conventional pineapple farm, whereas the other is a transitioning farm. The strange thing is that there is no ARAO documentation stating that Piña Fría 4 de Pital S.A. is making the transition to organic farming. SECOND. Organic fruit is supplied by producers who apparently are unable to provide fruit with these characteristics. Del Valle Verde Corp S.A. – part of the economic interest group represented by Luis Alberto Barrantes Quesada – became a supplier as of 22 July, 2015. The organic certificate by PrimusLabs was issued on the same date. This caught my attention since the transition period had only just concluded a month before and only took a year. Additionally, the reported land area under transition was a mere 2,13 hectares. Therefore, how can one explain the large volume of fruit produced for export as of 22 July 2015? Additionally, receipts for Del Valle Verde Corp S.A. fruit deliveries are made out using receipts belonging to LyL Proyectos MMV S.A. Fruit is delivered by LyL Proyectos MMV S.A. and payments are made to Del Valle Verde Corp S.A. In properly organized organic farms, the organic certificate is issued to the crop owner and the crop owner delivers the fruit and receives payment. We do not understand why CVV, a free zone company that exports its products to markets as demanding as the US market, operates in such a peculiar manner. THIRD. The transparency and traceability of fruit purchased and exported is difficult due to the interaction between the companies that make up the economic interest group represented by Mr. Barrantes Quesada. There are inconsistencies and contradictions that make it impossible to know the origin and type of fruit used. This level of informality can also be seen in the ARAO file, in the explanations given by CVV representatives during field visits and in the documentation provided for the analysis of fruit purchased, processed and exported. This situation is inadmissible in a market as sensitive as the organic pineapple market, which must comply with stringent international standards. This is a market with great potential for our country and therefore, strict controls and formality are required. The perfect match between reported and actual export volumes is intriguing. It is possible that significant differences in yields, informal invoices submitted, the existence of unknown suppliers, the participation of companies related to the same economic interest group represented by Mr. Barrantes Quesada serve the purpose of ensuring that volumes of raw materials purchased perfectly match exported volumes. The latter becomes even more evident when analyzing the summary table included in the export accompanying documentation. There are two columns. The one on the left, with the heading MP, contains yield values calculated using 33% as the reference yield. I was informed by four frozen fruit processing plants that 33% is the average industry yield. The column on the right, with the heading MP USADA, shows significant variations in yields reported by CVV in the documentation submitted. CVV’s yield calculations range between 48% and 30%, which is a rather atypical behavior. It is for this reason that I believe that these significant variations are an attempt to hide any differences between raw materials and exported volumes. In fact, 27 out of 47 containers exported (57.45% of the containers) have yields over 36%. FOURTH. When examining the companies that have bought the frozen organic pineapple mentioned in this report, there are two companies that operate in the US which is why we need help from the USDA/NOP: 1. FROZSUN FOODS INC. National Cold Storage 14801 Loring Drive +913 422-4050 Bonner Springs, KS 66012 Contact: Bill Munro email: bmunro@frozsun.com. 2. COSTA DE ORO INTERNACIONAL USA, Inc. USTX08022847252910 Fall Creek Road Spicewood, TX78669, USA +512 264-0195 Contact: Jorn Budde email: jibudde@aol.com FIFTH. Additionally, there are two companies that participate in CVV’s operations scheme and have been integrated into Congelados y Jugos del Valle Verde S.A.: 1. Costa de Oro Internacional, S.A. A Costa Rican company. Tel. (506) 2272-2293 Fax (506) 2272-2636 info@costadeoroexports.com represented by Ronald Fernando Segura Umaña, ID card number 1-864-336, mobile: +506 8932-511. According to its website (http:// www.costadeoroexports.com), it is a vertically integrated fruit and vegetable producing, processing and exporting company. The “Contact Us” section provides basic contact information and refers to Congelados del Valle Verde S.A. We do not know the extent of this company’s involvement with the economic interest group represented by Mr. Barrantes Quesada. This is particularly relevant because in its webpage, Costa de Oro Internacional S.A. states that “processing is carried out in independent processing plants according to our specifications, supervised by our experienced Quality Control team and in adherence to generally accepted food safety programs.” The curious similarity between this company’s name and the name of one of the US buyers, Costa de Oro Internacional USA, does not go unnoticed. 2. Sunrise Growers. An American company. 701 W. Kimberly Ave, Suite 210, Placentia California, +1 714-630-6292. Congelados del Valle Verde is mentioned twice in this company’s website. The description of its processing plants reads as follows: “Our welldiversified, global structure includes a benchmark processing plant in Santa Maria, California; two plants in Oxnard, California; one in Kansas City, Kansas; one in Jacona, Mexico (Alimentos Opus) and another processing plant in San Carlos, Costa Rica (Valle Verde).” Additionally, Mr. Luis Barrantes is included in this company’s organizational chart as Director General, as shown below: Several questions remain and require clarification. Is Luis Barrantes a Sunrise Growers employee? What is this company’s level of involvement in the cases under investigation in Costa Rica? Is Sunrise Growers being affected by the way in which Congelados y Jugos del Valle Verde S.A. operates? We hope that the USDA/NOP will collaborate with this investigation and help us clarify these issues. SIXTH. Costa de Oro International USA and Frozen Foods Inc. are not the only companies in the US buying product exported by CVV through Costa de Oro International USA. These companies are: KHI, WAWONA, PATAGONIA and RADER FARMS. We are not familiar with these companies and therefore, request the help of the USDA/NOP in this investigation. SEVENTH: The total sum of all transactions reported by Congelados y Jugos del Valle Verde S.A. from March 2015 to the first week of April 2016 amounts to $2,229,071.46. EIGHTH: Out of a total of 1,724,585 kilos of raw materials used to export the alleged frozen organic pineapple, 902,009 kilos (52.30%) were supplied by companies that make up the economic interest group represented by Mr. Barrantes Quesada. Additionally, fruit supplied by Jose Castro and reported by CVV amounts to 177,795 kilos (10.31% of total raw materials). It should be noted that most invoices for organic fruit delivered by Mr. Castro do not have his signature and ID card number. The name of a CVV employee, Fernando Solano, appears repeatedly on these invoices. Therefore, we are unable to determine whether Mr. Castro prepared the invoice. I was able to verify this in my visit to the farm with Mr. José Castro. Jose Castro delivered 103,050 kilos of fruit to CVV (amount verified in the field against documentation) during the period under analysis and not the amount reported by CVV. Dispatch receipts for fruit leaving Castro’s farm do not coincide with CVV’s raw materials receipts. Additionally, Jose Castro does not exclusively deliver organic fruit to companies associated with Barrantes Quesada. NINETH. There are inconsistencies in the delivery of fruit for processing and export as frozen organic pineapple. Additionally, informality seems to plague CVV operations as well as the operations of the companies that make up the economic interest group represented by Mr. Barrantes Quesada: 1. Ricardo Rodriguez Blandón. Three issues deserve our attention: • A receipt for raw materials provided by this supplier is attached to CVV export invoice number 516. The receipt is for conventional pineapple that was later exported as frozen organic pineapple. • CVV export invoice number 528 includes pineapple transitioning to organic, which clearly cannot be sold or used as organic raw material. • Prior to obtaining organic certification on 26 May 2015, Mr. Rodríguez Blandón had been delivering organic pineapple. 2. Unknown supplier. I have come across an unknown supplier. This is yet another example of the informality detected throughout this analysis. Documentation does not allow for the transparency and traceability of raw materials used by CVV. 3. Piña Fria 4 de Pital S.A. This company is part of the economic interest group led by Barrantes Quesada and is not an approved organic pineapple supplier. 4. L y L Proyectos MMV S.A. This company is known and registered as a fresh pineapple trading company. However, SAD 040709 (11 March 2016) details that this company exported a container with 18,080 kilos of fresh organic pineapple to Les Aliments Bercy Inc. in the US. 5. Del Valle Verde Corp S.A. Fresh organic pineapples supplied by Del Valle Verde Corp. S.A. were found in Rachelle-Berry supermarket in Vaudreuil, Montreal, Canada. However, the organic certification number issued by PrimusLabs and appearing on the label is incorrect (Plc-OR-201 instead of Plc-Org-CR-033). TENTH. Evidence found in files and documents provided by CVV points to the need to revise the ARAO management and follow-up model. It is imperative that the Government revise and implement new protocols for organic agriculture that adhere to local and international principles and standards. I believe that a “preventive” approach to organic agriculture must be adopted. It is imperative that SEFITO/ARAO/MAG representatives, businesspeople and civil society organizations work together with entities such as USDA/NOP to ensure product traceability for the benefit of producers and consumers. ELEVENTH. After analyzing ARAO documentation, visit reports, interviews and other sources used, I am unable to confirm whether the product exported by Congelados y Jugos del Valle Verde S.A. is organic.