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DRC’s Help Desk, with services in English, French and Spanish, is your “go to” resource for timely and informed assistance on a wide range of produce trade-related matters.

The most frequent and common inquiries pertain to:

• Government Inspections (CFIA or USDA)
• DRC Good Arrival Guidelines Tolerances
• Does product meet or fail grade?
• Non-payment
• Disagreement over an account of sales or liquidation reports
• Clarification over trade terms
• DRC Member Standing (i.e.: Member, Member in Good Standing, etc.)
• Transportation-related issues

Your membership includes access to the Help Desk, one-on-one professional and confidential consultation, customized seminars, webinars, printable checklists for staff, DRC publications, and much more.

Our website includes a number of tips, including an FAQ document outlining a number of questions and answers that provide information on a variety of subjects related to education, mediation, arbitration and networking for the fresh fruit and vegetable industry. Topics include fair and ethical trade for the produce and transportation industries, import and export of produce, steps to resolve disputes, government guidelines and more (helpful https://fvdrc.com/about/faqs/).

For personal assistance contact us at (+1) 613 234 0982 (ext. 224) between 8:30 am – 5:00 pm (EST) or by email at info@fvdrc.com.

Welcome New Members

 

From June 15 until July 15, 2022, DRC welcomed the following new members:

 

 

2398769 ONTARIO INC.	ON	Canada
B.C. HARVEST FOODS INC. (Also d/b/a BC Harvest Foods)	BC	Canada
F&G TRANSPORTATION AND TRADING INC.	BC	Canada
HOMMAN ORGANIC INC.	BC	Canada
KIKAPO TROPICAL FOODS INC.	AB	Canada
LORD TRADING INC.	ON	Canada
MNH TRADERS INC.	ON	Canada
RED WAGON GROVES, INC. (Also d/b/a Red Wagon Groves)	TX	United States

 

DRC Membership: change in status

 

As of July 15, 2022, the following organizations no longer hold a DRC membership:

 

AGROINDUSTRIAL SAN GERMAN SPA (También haciendo negocios como San German SPA)	Elqui	Chile
BOUCHERIE EL IHCÈNE	QC	Canada
COLOMBIAEXOTIC (A d/b/a of Carolina Velez)	ON	Canada
MAFHH CONSULTANCY INC.	ON	Canada
REAL TRANSPORT (A d/b/a of 3235149 Canada Inc.)	QC	Canada
STELLAR IMPEX INC.	QC	Canada
YIJIE HOLDINGS INC.	BC	Canada
ZYTHAS DYNAMIC INC.	AB	Canada

 

 

For details regarding a change in status, please contact the office.

 

Important note: Following membership termination, the former member remains liable for claims arising prior to their termination if the claim is submitted to DRC by way of a Notice of Dispute within nine (9) months from when the claim arose or within nine (9) months from when the claimant ought reasonably to have known of its existence.

 

 

About DRC

DRC is a non-profit membership-based organization whose core work is business-to-business commercial dispute resolution for produce. DRC is a referee between parties when a purchase and sale do not go according to plan. Members adhere to a common set of trading standards and member responsibilities that promote fair and ethical trading for produce entering the North American marketplace. In Canada, membership in the DRC is a regulatory requirement to trade fresh fruits and vegetables (i.e.: buy, sell, import, export) unless excepted from the regulations. Today, DRC has members in 16 countries outside of North America, and membership continues to grow annually. Anyone exporting fresh fruits and vegetables to Canada must sell to a DRC member.

 

In addition to the DRC’s Operating Rules and Trading Standards, DRC offers a comprehensive, tailored suite of tools to build the knowledge and capacity of members to avoid or resolve disputes, including education, mediation and arbitration. DRC has ability to impose sanctions and disciplinary actions towards members who do not conduct business in accordance with the terms of their membership agreement.

 

To date, DRC has resolved claims in excess of $105 million dollars. Although arbitration is available, 80% of these claims have been settled in an average of 26 days through our informal consultation/mediation services. Arbitration awards are court enforceable in countries that are signatories to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or subsequent conventions.

 

To learn more, reach out to our Help Desk at info@fvdrc.com or (+1) 613-234-0982 or visit us at www.fvdrc.com.

The DRC’s Board of Directors and Annual General Meeting (AGM) was held in Boston, USA, from June 1-3, 2022. There was also the option to attend the AGM virtually. DRC staff reported to the Board on the audited financial statements and key DRC activities including: Membership, Marketing, Compliance, and Trading Assistance. The Board also received updates from the USDA, AMS.

The DRC Board of Directors had approved resolutions on December 2, 2021 to amend the DRC’s Trading Standards and Dispute Resolution Rules to provide clarity and updates to certain terms or concepts. These resolutions were approved by the membership during the AGM.

During the AGM the members elected as Directors Patrice Marchand of Metro Richelieu Inc., and incumbents Gonzalo Aguilar Guizar of Grupo Empaque Roquin S.A. DE C.V., Bret Erickson of J&D Produce Inc., and Mike Stuart representing the Florida Fruit & Vegetable Association.

 

We welcome Patrice as a new board member and look forward to his participation.

 

The DRC welcomes members to participate in the 2023 Annual General Meeting likely to be held in early June 2023.

DRC’s Trading Assistance Staff recently handled a consultation from a receiver regarding an FOB transaction where a government inspection was requested on the same day the load arrived. The load arrived on a Friday afternoon, and the inspector arrived on Monday morning to perform the inspection. The inspection results indicated the product failed to meet DRC Good Arrival Guidelines by 1%. The receiver sent a copy of the inspection to the shipper and advised that they will be claiming damages.  

 

The shipper replied to the receiver indicating that they would not accept a claim given that the inspection was performed 3 days after the product arrived.

 

We advised the receiver that by calling the federal inspection the same day the load arrived, they have followed DRC Trading Standards which requires that receivers request an inspection within 8 hours after the product arrives by land. However, the shipper was right by claiming that the inspection was not performed in a timely manner. An inspection performed two or more days after the product arrives may no longer provide an accurate picture of the quality or condition of the product upon arrival.

 

In the consultation that we received, the product failed DRC Good Arrival by only1%. It is likely that if the product had been inspected on Saturday rather than on Monday, the product would have met DRC Good Arrival Guidelines.

 

We understand the receiver’s frustration on the delayed federal inspection; however, the shipper cannot be held responsible for this situation either. On an FOB sale, the receiver is responsible for everything that happens to the product after the truck leaves the shipper’s dock, including getting things done in a timely manner even if these things are not under the receiver’s control.

 

So, what to do in a situation where a receiver becomes aware that an inspection is not going to be performed in a timely manner?

 

1. Verify if it is possible to have a government inspector work overtime to arrive within 24 hours. While this may result in additional fees, or they may not be available, it is worth trying.
2. Contact the shipper. Let them know what is happening and suggest getting a private inspection performed. Even if the shipper refuses to agree to a private inspection, we recommend that you call for that private inspection to protect yourself. Don’t cancel the government inspection. If the private inspection is similar to the results of the Federal Inspection taken later, you will have more evidence in your favor when you talk with your supplier to amicably resolve this matter.
3. It is important to remember that all parties have a responsibility to minimize losses. If you must sell a portion of the load prior to getting it inspected, talk to the shipper about it. It is not in anyone’s best interest to leave the entire load unsold for an extended period awaiting a Federal Inspection.

 

Good communication between a receiver and a shipper can help avoid a dispute scenario like the one we were consulted on.  

Whether you are the claimant or the respondent, no one likes to lose.  But when a DRC member loses a case simply because they didn’t properly explain and document their position it can be a frustrating experience.

 

In an effort to help DRC members prepare for mediation or arbitration, we have compiled the following list of things that companies frequently overlook or simply do not think are important. We have seen cases that could have gone in a different direction if the parties would have paid more attention and taken the time to explain and document their case better to the arbitrator. Here is our list of top ten mistakes to avoid when preparing or defending your case:

 

• Not including what you’ve learned during the informal mediation process (informal claim) prior to the Arbitration process. Important points are often uncovered during the informal exchange of information.  The arbitrator does not have access to the arguments or submissions from the informal mediation. It is your job to explain every detail of the transaction so that the arbitrator does not have to fill any gaps. 
• Not including a statement or submission from the buyer or salesperson involved in the transaction regarding the events that transpired. If you do not have firsthand information, your comments may be taken as hearsay and not as   firsthand knowledge. 
• Not clarifying or denying the other party’s comments or statements.  You must deny and/or rebut any position you disagree with.  If you are in doubt as to the weight of your evidence (fax, email, etc.) as a response to the other party’s presentation, provide a sworn statement along with it. 
• Not submitting the evidence which supports your allegations. When parties disagree, it is the evidence the arbitrator must look at to reach a decision.
• Not providing legible documents and not labeling exhibits consecutively for easy reference by the arbitrator.  
• Not providing evidence that a document or an agreement was faxed or emailed, such as a fax confirmation, email confirmation, or the reply to it by the other party.
• Not providing an account of sales when product was handled for someone’s account.  We have seen cases where the respondent clearly provided evidence of the breach of contract but failed to provide any basis upon which the remittance was made. 
• Not providing an itemized account of sales. An account of sales must include the date, amount, and price sold for each lot (referencing the invoice or receipt of the sale is a bonus). Failing to provide the bills for the expenses such as freight bill, inspection invoice, warehousing invoice, customs fees, and any other expense agreed upon.
• Not requesting a hearing when you believe you should be heard by an arbitrator.  If you do not believe you can present your case adequately in writing, you have the right to request a hearing on claims over US$15,000.
• Not being willing to pay the undisputed amount before the file goes to arbitration.  This will result in increased filing fees, interest if awarded, and in some cases may influence the arbitrator’s apportionment of fees and interest if he views the amount being withheld as abusive. 

 

Prior to initiating the arbitration process, DRC staff can help with what you need to present or defend your case. Once in arbitration, DRC staff can only provide guidance on procedural questions. On the other hand, in an expedited arbitration (claims less than US$50,000), the arbitrator generally will base his/her decision on the parties’ submissions and rarely will contact the parties for clarification or additional information. However, in Formal Arbitration or when a hearing has been requested, the Arbitrator will give you every opportunity to make a clear and concise case.  If you do not feel you can present or defend your case properly, we highly recommend that you seek legal assistance, or settle the case before it goes to arbitration. 

The Automated Import Reference System (AIRS) is a reference tool that shows the import requirements for Canadian Food Inspection Agency (CFIA) regulated commodities.

If you are planning on importing fresh fruits and vegetables into Canada or are an exporter intending to export fresh fruits and vegetables to Canada, AIRS will provide you with the requirements that a Canadian company must comply with in order for that product or commodity to be able to enter Canada. A few of these requirements are:

• Dispute Resolution Corporation Membership number or exemption
• Safe Food for Canadians License
• Electronic Date Interchange (EDI) – Integrated Import Declaration (IID) or Confirmation of Sale (COS) – Government form
• Labeling
• Phytosanitary if applicable

If you want to learn how to use AIRS, click on the following link and follow the instructions:

Automated Import Reference System

If this would be your first-time using AIRS, we recommend using the following tutorial link:

AIRS Tutorial

If you have any questions about this tool, do not hesitate to contact us at DRC’s Help Desk.

Following a recent Canadian Produce Marketing Association webinar on AR insurance, coupled with increasing questions from members (and some insurance companies), DRC partnered with David Lousky (a trade credit insurance broker) to address some of the main questions we get at DRC and to provide you with some guidance.

 

Question: I have AR insurance coverage. When an account is late or we have a dispute, when should we advise DRC? Should we advise our insurance carrier of DRC?

Answer: DRC:  You should talk with DRC right away for guidance and to ensure you understand your rights and responsibilities.  That first call is called a consultation and DRC does not contact your trading partner at that stage.  Next steps will be explained at that time.

You should and are likely obligated to advise your insurance company of the DRC.  Most policies require you to exhaust your efforts to resolve the issue before a claim is paid.  Your insurer will likely fully support your efforts as they are interested in the debtor paying as well.

David: The policyholder must notify the insurance carrier when a buyer is in a state of default as defined by the trade credit insurance policy as being 60 to 90 days past due.  Furthermore, the policyholder must exhaust all collection efforts via the DRC and a copy of the payment arrangement or DRC Award has to be shared with the carrier.

 

Question:  If we file a DRC claim can we still collect thru our insurance? 

Answer: DRC:  If the claim is disputed, it is likely the insurance carrier will want the dispute resolved before committing to payment, and DRC is the forum to do that.

 

Question: If an insurance claim is paid can we collect the deductible through DRC?  

Answer:   DRC:  In our experience the answer is no.  When the claim is paid by the insurance company it is our understanding you will have transferred all of your rights on the transaction to the insurance company.  Additionally, the insurance company will endeavor to collect the entire claim amount.  This opens the possibility the deductible amount would be collected twice. 

David: In the event of a claim, the insurance carrier will retain 10%-15% of the invoice value and indemnify 85% to 90% of the outstanding invoices.  The subrogation rights (invoices) are transferred over to the carrier.

 

Question: Can the Insurance company use DRC to recover on an account they have paid out on?  

Answer:  DRC: In most cases, the answer will be no.  The DRC Rules, including the arbitration agreement, are binding between members.  If a member has been paid by the insurance company prior to opening a DRC file, they are no longer owed money and would not have a cause of action under our rules.  Since the insurance company is not a member, the debtor is not obligated to enter into a binding arbitration with the insurance company.

The preferred route for you would be to open a DRC file promptly and advise your insurer you have done so.  If the debtor pays the matter is resolved.  

We often receive questions from DRC members asking about how to properly read a CFIA inspection. In this three part series, we will look at the importance of reviewing the information on the inspection certificate. To begin, let’s focus on the elements in the first section as well as the product description section.

The first section of the certificate contains the “requested and performed date and time” for the inspection. This information is important because it helps to establish if the inspection was requested and performed in a timely manner. For example, truck shipments require the inspection to be requested within 8 working hours after the receiver is given notice of arrival and the produce is made accessible for inspection. Boat and rail shipments however allow the inspection to be requested within 24 working hours after the receiver is given notice of arrival and the product has been placed in a location where the produce is made accessible for inspection.

The field “where inspected” indicates the area the inspection took place such as the applicant’s warehouse, the consignee’s warehouse, or any other location. If the product was still loaded when the inspector arrived on site, that information should be noted under the “remarks” section.

An important area to review is the “remarks” section at the bottom of the inspection certificate which will include notes the inspector has made about the location of the load, if it was still loaded on the truck or if it was unloaded. This could help determine if the buyer/receiver still has the right to reject the product. For information on “Acts of Acceptance” please review Section 19.1 of the DRC Trading Standards

Information about the applicant, shipper and consignee

The information in this section identifies the parties involved in the transaction. If there is a name under any of these fields with which you are not familiar, you will want to address this with your customer.

Product description

This section should include detailed information about the load such as product, variety, size, maturity, grade and colour, packages (number of cartons or bags available for inspection), type of count and weight.

This information needs to match your invoice and/or purchase order. For example, if you receive a load of different size mangoes at a different price per unit, a discussion for a request for an inspection by size needs to occur.

Another major issue that we often see is the number of cartons inspected. The entire load should be available for inspection. If not, the buyer/receiver needs to have a valid reason as to why the full load was not available.

As a general rule more than 75% of the load must be available for sampling to be considered representative of the full load.

In part 2 of our series on how to properly read an inspection certificate, we will review temperatures and defects.

The proposed Safe Food for Canadians Regulations (SFCR) are expected to come into force late spring or early summer. Once implemented, a DRC membership is mandatory for Canadians to buy, sell, import or export fresh fruits and vegetables. Under the existing Canada Agricultural Products Act (CAP Act), the current requirement is to secure either a CFIA Produce Licence or a DRC membership to be in regulatory compliance. Under the new regulations, there will only be one option: a DRC membership. This change will require some modifications to the way DRC currently conducts business.

We will be proposing housekeeping changes to the DRC By-laws and related in-house administrative procedures at our next Annual General Meeting (AGM) of Members in June 2018. These changes relate primarily to increasing the transparency of our membership application and membership maintenance processes. As we get closer to the AGM and in keeping with current By-laws, we will provide members with the proposed changes along with explanatory notes to help members understand the new By-law changes and how they will work on a day-to-day basis.

Hopefully you have been able to take part in some of our recent outreach activities. If you haven’t but are interested in learning more about the proposed SFCR, please contact our office we will be happy to help walk you through the draft regulations.

For additional information please contact:

DRC Help Desk | 613-234-0982 | info@fvdrc.com

Implementation of the Safe Food for Canadians Regulations (SFCR) is quickly approaching and with it, the regulatory requirement for a DRC membership for Canadians.

SFCR is expected to come into force late spring or early summer. Once implemented, a DRC membership is mandatory for Canadians who buy, sell, import or export fresh fruits and vegetables with few exceptions (see below for link to determine if you are exempt).

Under the existing Canada Agricultural Products Act (CAP Act), the current requirement is to secure either a CFIA Produce Licence or a DRC membership to be in regulatory compliance. Under the new regulations, there will only be one option: a DRC membership.

When it comes to SFCR, there are important distinctions: the regulations address food safety and traceability (Canadian Food Inspection Agency (CFIA) licence) as well as trade and commerce (a DRC membership is required to engage in the trade of fresh fruits and vegetables). All references to licence in the SFCR pertain to food safety and traceability; reference to a DRC membership pertains to trade and commerce. DRC’s role and responsibility within SFCR relate only to trade and commerce.

What do Canadians need to do?

1. Be aware of, and understand, the SFCR regulatory requirement for a DRC membership to buy, sell, import or export fresh fruits and vegetables.
2. Visit the DRC website and refer to the self-assessment tools to determine whether you are subject to the regulatory requirement or are exempt. https://fvdrc.com/sfcr/

If you are exporting to Canada, ensure that you sell to or buy from a DRC member.

For additional information or to schedule a presentation from a DRC team member, please contact:

DRC Help Desk | 613-234-0982 | afowlie@fvdrc.com