UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING SERVICE 

BEFORE THE ADMINISTRATOR 

) 

)

) 

) 

) 

 ) 

 

In re: 

 

Dialinspec S.A. Administrator’s Decision 

Machala, El Oro, Ecuador APL-021-20

This Decision responds to an appeal (APL-021-20) of a Notice of Proposed Suspension 

under the National Organic Program (NOP) issued to Dialinspec S.A. (Dialinspec) by Quality 

Certification Services (QCS), a USDA accredited certifying agent. The operation has been 

deemed not in compliance with the Organic Foods Production Act of 1990 (Act)1

 and the U.S. 

Department of Agriculture (USDA) organic regulations.2 

BACKGROUND 

The Act authorizes the Secretary to accredit agents to certify crop, livestock, wild crop, 

and/or handling operations to the USDA organic regulations (7 C.F.R. Part 205). Certifying 

agents also initiate compliance actions to enforce program requirements, as described in section 

205.662, Noncompliance procedure for certified operations. Persons subject to the Act who 

believe they are adversely affected by a noncompliance decision of a certifying agent may appeal 

such decision to the USDA Agricultural Marketing Service (AMS) pursuant to § 205.680 

1

 7 U.S.C. 6501-6522 

2

 7 C.F.R. Part 205 

Page 1 of 8 
 

 

 

 

 

 

 

 

Adverse Action Appeals Process – General, and § 205.681, Appeals of the USDA organic 

regulations. 

FINDINGS OF FACT 

1. On March 15, 2019, QCS issued a Notice of Noncompliance and Proposed Suspension citing 

to numerous noncompliances. 

2. On April 15, 2019, Dialinspec filed an Appeal. 

3. On November 8, 2019, Dialinspec entered into a Settlement Agreement with NOP setting 

forth requirements to resolve the prior Notice of Noncompliance and Proposed Suspension. 

4. On December 23, 2019, QCS issued a Notice of Proposed Suspension. 

5. On January 7, 2020, QCS denied Dialinspec’s request for mediation. 

6. On January 8, 2020, Dialinspec filed an Appeal. 

DISCUSSION 

The USDA organic regulations at 7 CFR §205.103, Recordkeeping by certified 

operations, state that, “(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:... (2) Fully disclose all activities 

and transactions of the certified operation in sufficient detail as to be readily understood and 

audited;... (4) Be sufficient to demonstrate compliance with the Act and the regulations...” 

The organic regulations at §205.201, Organic production and handling system plan, state 

that, “(a) The producer or handler of a production or handling operation....must develop an 

organic production or handling system plan that is agreed to by the producer or handler and an 

Page 2 of 8 
 

 

 

 

 

 

 

accredited certifying agent...An organic production or handling system plan must include: (1) A 

description of practices and procedures to be performed and maintained...; (2) A list of each 

substance to be used as a production or handling input...(3) A description of the monitoring 

practices and procedures to be performed and maintained...(4) A description of the 

recordkeeping system implemented to comply with the requirements...(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...” 

The organic regulations at §205.272, Commingling and contact with prohibited substance 

prevention practice standard, state that, “(a) The handler of an organic handling operation must 

implement measures necessary to prevent commingling of organic and nonorganic products and 

protect organic products from contact with prohibited substances...” 

Certifier QCS issued a Notice of Proposed Suspension after Dialinspec failed to comply 

with the terms of the November 8, 2019 Settlement Agreement between the operation and the 

USDA. Specifically, Dialinspec failed to submit a revised Organic System Plan (OSP) and 

related plans, i.e. Organic Trade Plan, as well as provide relevant details on all producers from 

which Dialinspec purchases fruit, and all subcontractors and collection centers it utilizes, within 

30 days of the Settlement Agreement execution. 

Dialinspec submitted an Appeal stating that it was unable to comply with the terms of the 

Settlement Agreement because QCS didn’t respond to their December 12, 2019 request for 

updated formats of the organic marketing plan. Dialinspec states it submitted an updated OSP on 

December 24, 2019. 

Page 3 of 8 
 

 

 

QCS previously issued Dialinspec a Notice of Noncompliance and Proposed Suspension 

on March 15, 2019 for various noncompliances. A review of QCS’s adverse action notice, 

Dialinspec’s Appeal in that case, and submitted documentation substantiated that Dialinspec’s 

recordkeeping was not compliant with the organic regulations. QCS identified several other 

noncompliances including an incomplete OSP; lack of information on Dialinspec’s fruit 

suppliers, subcontractors, and collection centers and failure to maintain copies of subcontractor 

contracts; failure to address the implementation of corrective actions or identify measures to 

reduce the risk of contamination or use of pest control measures by its producers; and the lack of 

records on inputs used by its producers. However, QCS failed to provide any details or evidence 

to substantiate these other allegations. 

Therefore, NOP offered Dialinspec a Settlement Agreement whereby Dialinspec would 

correct the various noncompliances and be able to maintain its organic certification. Pursuant to 

the Agreement executed on November 8, 2019, Dialinspec agreed: 

1.) To respond to all QCS’s requests for information and documentation by the deadline 

set by QCS; 

2.) That within 30 days of execution of the Settlement Agreement, Dialinspec would 

update and revise its OSP and all related plans, i.e. Organic Trade Plan, to identify 

and provide relevant details on all producers from which Dialinspec purchases fruit, 

and all subcontractors and collection centers it utilizes; 

3.) Within 60 days of execution of the Settlement Agreement, Dialinspec would provide 

to QCS fully executed written contracts between Dialinspec and its subcontractors 

which delineate the services provided by the subcontractors; 

Page 4 of 8 
 

 

 

 

 

 

4.) To maintain documentation substantiating the origin of all purchased fruit, including 

documentation necessary for QCS to conduct a successful traceability exercise; 

5.) Within 60 days of execution of the Settlement Agreement, Dialinspec would revise its 

OSP to address how corrective actions would be implemented and what 

documentation would be used to support a closing of QCS findings; identify pest 

control measures and measures to reduce the risk of contamination in subcontractor 

and collection centers it utilizes; and establish tests to determine if producers have 

used pesticides, as well as maintain records on inputs utilized by producers from 

which it purchases fruit. 

6.) To undergo an unannounced inspection by QCS, to include all subcontractor sites, 

within 1-year of executing the Settlement Agreement, at Dialinspec’s expense. 

However, as QCS stated in its December 23, 2019 Notice of Proposed Suspension, 

Dialinspec breached the Settlement Agreement by failing to submit a revised OSP and related 

plans, i.e. Organic Trade Plan, as well as provide relevant details on all producers from which 

Dialinspec purchases fruit, and all its subcontractors and collection centers, within 30 days of the 

agreement execution, which was December 8, 2019. These were the first 2 terms of the 

Settlement Agreement. QCS stated in the Notice of Proposed Suspension that as of December 

23, 2019, it hadn’t received the updated OSP or any of the other listed documentation. 

Dialinspec argued that it couldn’t comply with the terms of the Settlement Agreement because 

QCS didn’t respond to their December 12, 2019 request for updated formats of the organic 

marketing plan. However, the documentation listed in the Notice of Proposed Suspension was 

identified in Term 4B of the Settlement Agreement and was due by December 8, 2019, prior to 

Dialinspec’s email. Although Dialinspec subsequently submitted an updated OSP on December 

Page 5 of 8 
 

 

 

 

 

 

 

24, 2019, this was after the agreed upon deadline. Further, QCS states that Dialinspec named (b) (

new suppliers in the updated OSP but didn’t provide complete information on the suppliers or 

their organic certificates. 

Additionally, Dialinspec has not met other terms of the Settlement Agreement, which 

require submission of all contracts between Dialinspec and its subcontractors delineating the 

services provided by the subcontractors; maintaining documentation substantiating the origin of 

all purchased fruit; revision its OSP to address how corrective actions would be implemented and 

what documentation would be used to support a closing of QCS findings including identifying 

pest control measures and measures to reduce the risk of contamination in subcontractor and 

collection centers it utilizes; and establishing tests to determine if producers have used pesticides, 

as well as maintaining records on inputs utilized by producers from which it purchases fruit. 

These are terms 3, 4, and 5 of the Agreement and were to have been met by January 8 2020. As 

Dialinspec failed to comply with all the above-listed terms, it wasn’t necessary for QCS to 

conduct the agreed-to unannounced inspection. 

Clause 3D of the November 8, 2019 Settlement Agreement states that, “Dialinspec 

withdraws its appeal and waives further appeal rights in this matter. Failure to comply with the 

settlement agreement shall automatically void paragraph 2 above.” Paragraph 2 states, “USDA, 

AMS agrees not to issue a formal Administrator’s Decision charging Dialinspec with alleged 

violations of the OFPA and the USDA organic regulations for any actions disclosed by the 

investigation which gave rise to this agreement.” The Settlement Agreement was entered into in 

resolution of the March 15, 2019 Notice of Noncompliance and Proposed Suspension issued to 

Dialinspec by QCS, and Dialinspec’s April 15, 2019 Appeal thereto. 

Page 6 of 8 
 

 

 

 

 

 

 

 

 

CONCLUSION 

The USDA organic regulations assure consumers that products with the USDA organic 

seal meet consistent, uniform standards. Key to these standards is that products with the USDA 

organic seal are produced and handled in accordance with the organic regulations. As evidence 

substantiates that Dialinspec breached the terms 1 – 5 of the Settlement Agreement, paragraph 2 

of the agreement is voided. The March 15, 2019 Notice of Noncompliance and Proposed 

Suspension is ‘revived,’ and Dialinspec is found to have violated the organic regulations at 7 

CFR §205.103; 7 CFR §205.201; and 7 CFR §205.272. Therefore, Dialinspec can’t remain 

certified at this time. 

DECISION 

Dialinspec’s January 8, 2020 Appeal is denied and the December 23, 2019 Notice of 

Proposed Suspension is affirmed. Due to Dialinspec’s breach of the NOP Settlement 

Agreement, the original March 15, 2019 Notice of Noncompliance and Proposed Suspension is 

revived and is also affirmed. Dialinspec’s certification is suspended. Pursuant to the organic 

regulations at 7 CFR §205.662(f), Dialinspec may apply for reinstatement at any time. The 

request for reinstatement must be accompanied by evidence demonstrating correction of each 

noncompliance and corrective actions taken to comply with and remain in compliance with the 

Act and the regulations. While suspended, Dialinspec may not sell, label, or represent any 

product as organic. Pursuant to 7 CFR §205.100(c), “Any operation that: (1) Knowingly sells or 

labels a product as organic, except in accordance with the Act, shall be subject to a civil penalty 

of not more than the amount specified in §3.91(b)(1) of this title per violation.” 

Page 7 of 8 
 

 

 

 

 

 

 

_________________________________ 

Attached to this formal Administrator’s Decision denying Dialinspec’s appeal is a 

Request for Hearing form. Dialinspec has thirty (30) days to request an administrative hearing 

before an Administrative Law Judge. If Dialinspec waives the hearing, the Agricultural 

Marketing Service will direct QCS to issue a suspension notice to Dialinspec. 

Done at Washington, D.C., on this _____

 day of ________________, 2020. 

BRUCE Digitally signed by BRUCE 

SUMMERS 

SUMMERS Date: 2020.06.10 21 30:49 -04'00' 

Bruce Summers 

Administrator 

Agricultural Marketing Service 

Page 8 of 8