National Organic Standards Board

Policy Development Committee

Proposed Recommendation

Conflict of Interest

August 28, 2011

Introduction

The National Organic Standards Board (NOSB) seeks to update the Board‟s conflict of 

interest (COI) policy. The major issue for the NOSB„s Policy Development Committee 

(PDC) is to strengthen the NOSB‟s policy on COI. The goals for updating the existing 

NOSB‟s COI policy are (1) to update the COI policy and (2) outline general procedures 

for dealing with a real, apparent, and potential COI by NOSB members, if it arises. The 

proposed recommendations are part of a continued quest by NOSB members in being 

responsive to requests by stakeholders. The proposed policy additions should provide 

for greater transparency of NOSB members‟ work for the greater good of the organic 

community.

Background

The NOSB recognizes that members have been specifically appointed to the NOSB to 

provide advice and counsel to the Secretary of Agriculture concerning policies related to 

the development of organic standards and the creation of amendments to the National 

Organic Program‟s National List. NOSB members have been appointed because they 

have professional expertise that enables them to advise the Secretary of Agriculture. 

The statutory composition of NOSB is composed of 15 members. The federal statutory 

composition of the NOSB provides for:

 four (4) members who own or operate an organic farming operation;

 three (3) members with expertise in areas of environmental protection and 

resource conservation;

 three (3) members who represent the public interest or consumer interest groups;

 two (2) members who own or operate an organic handling operation; 

 one (1) member who owns or operates a retail establishment with significant 

trade in organic products;

 one (1) member with expertise in the fields of toxicology, ecology, or 

biochemistry; and

 one (1) member who is a certifying agent.

Within this statutory framework, the professional expertise may, at times, present an 

inherent COI. To prevent overt advocacy for direct financial gain and the appearance of 

self-interest or the appearance of wrongful activity, the NOSB has adopted a COI policy

(NOSB, Policy & Procedure Manuel, 2010, pg. 9). At this time, the PDC of the NOSB 

seeks to update the Board‟s policy and procedures on COI. The updates are 
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stakeholder driven. Some of the stakeholder advocates, who have expressed a need to 

update the NOSB‟s COI policy, include (1) the National Organic Coalition, (2) Center for 

Food Safety, (3) Cornucopia, (4) Food and Water Watch, and (5) former NOSB Chair

Jim Riddle.

The proposed COI policy will enhance and build upon the existing NOSB‟s COI policy. 

The recommendations include providing a definition for (1) COI (real), (2) apparent COI, 

(3) potential COI, (4) immediate family member, and (5) financial interest. A listing of 

procedural steps is outlined.

Relevant Areas of the Rule

The Organic Foods Production Act (OFPA) establishes the National Organic Standards 

Board at §2119 (7 U.S.C. 6518) (a). It reads, “The Secretary shall establish a National 

Organic Standards Board (in accordance with the Federal Advisory Committee Act (5 

U.S.C. App. 2 et seq.) (hereafter referred to in this section as the "Board") to assist in 

the development of standards for substances to be used in organic production and to 

advise the Secretary on any other aspects of the implementation of this title.” The 2010 

NOSB Revised Policy and Procedures Manual (PPM) dated October 28, 2010, on page

9 sets forth the current NOSB‟s COI policy. The professional conduct of NOSB 

members are alluded to in the PPM on page 8. Therefore, action and activities of the 

NOSB members on matters pertaining to organic should be in the best interest of the 

organic community as a whole. 

Discussion

The benefits of the proposed recommendations are (1) to define terms such as COI 

(real), apparent COI, potential COI, immediate family members, and financial interest,

and (2) suggest procedures for managing COI in the conduct of business by the Board. 

The fruition of an updated COI policy should help provide greater transparency and 

confidence in Board decisions by the organic community. The lack of an updated COI 

policy can give a negative connotation of the Board responsiveness to many constituent 

groups‟ request. 

An alternative approach would be to keep the current COI policy. However, a revised 

Board COI will enhance the Board‟s continued responsiveness to the organic 

community‟s request, in addition to maintaining high professional and ethical standards. 

Previously, the June, 1999 NOSB Procedures Taskforce Report to the Board on COI 

was approved. Ultimately, the Board‟s COI policy was updated to read:

“Members of the Board shall refrain from taking any official Board action from which that 

Board member is or would derive direct financial gain. Board members shall disclose 

their interest to the Board and the public, when they or their affiliated business stand to 

gain from a vote, which they cast in the course of Board business. Under certain 
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circumstances, the Board may determine whether it is appropriate for the member to 

vote. 

That members of the Board shall refrain from promoting for consideration any material, 

process or practice for which the member is or would derive direct financial gain arising 

out of such Board action. The act of promoting such material, process or practice shall 

include private discussion with members of the Board advocating the value of the 

material, public discussion and/or written advocacy.

A "direct financial gain" is defined as monetary consideration, contractual benefit or the 

expectation of future monetary gain to a Board member, including but not limited to, 

financial gain from a party who manufactures, distributes or holds exclusive title to a 

formula for a material or product, process or practice.” [NOSB‟s PPM, 2010, page 9.]

The current document seeks to enhance the existing COI policy. It attempts to do so by, 

(1) proposing definitions for COI (real), apparent COI, potential COI, immediate family 

member, and financial interest, (2) suggesting procedures for dealing with a given COI, 

and (3) developing a Declaration of Interest Form. 

Recommendations

Recommendation #1

The first three paragraphs shown below are on page 9 of the 2010 PPM and will remain 

the same. 

The NOSB recognizes that members have been specifically appointed to the NOSB to 

provide advice and counsel to the Secretary concerning policies related to the 

development of organic standards and the creation and amendment of the National List. 

NOSB members have been appointed because they have professional expertise which 

enables them to advise the Secretary. This professional expertise may, at times, 

present an inherent conflict of interest (COI). To prevent overt advocacy for direct 

financial gain and the appearance of self-interest or the appearance of wrongful activity, 

the NOSB has adopted an updated COI policy.

Members of the Board shall refrain from taking any official Board action from which that 

Board member is or would derive direct financial gain. Board members shall disclose 

their interest to the Board and the public, when they or their affiliated business stand to 

gain from a vote, which they cast in the course of Board business. Under certain 

circumstances, the Board may determine whether it is appropriate for the member to 

vote. 

That members of the Board shall refrain from promoting for consideration any material, 

process or practice for which the member is or would derive direct financial gain arising 

out of such Board action. The act of promoting such material, process or practice shall 
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include private discussion with members of the Board advocating the value of the 

material, public discussion and/or written advocacy.

Recommendation #2

The definitions below are to be inserted before paragraph #4 on page 9 of the 2010 

PPM. 

A “conflict of interest (real)” is defined as a financial or non-financial interest that could 

cause or influence a Board member decision directly or indirectly as it relates to matters 

that are before the Board as a whole or as part of a committee, task force, advisory 

group, public hearing, etc. 

An “apparent conflict of interest” is defined as a financial or other interest that would not 

necessarily influence a Board member, but could result in one‟s objectivity and 

independence being questioned by others. 

A “potential conflict of interest” is defined as a financial or other interest that a 

reasonable person could be uncertain as to whether or not it should be reported. 

An “immediate family member” includes a Board member‟s spouse, children, parents, 

brother, sister, or spouse of a brother or sister.

A “financial interest” is defined as any kind of financial interest. No specific dollar 

amount of the financial interest needs to be disclosed. Some of the examples of 

financial interest include (1) employment, (2) shares, (3) contract, (4) stocks, (5) 

consultancy, (6) paid work, etc.

A “direct financial gain” is define as monetary consideration, contractual benefit or the 

expectation of future monetary gain to a Board member, including but not limited to, 

financial gain from a party who manufacture distributes or holds exclusive title to a 

formula for a material or product, process or practice. 

Conflicts can be real, perceived, and numerous. Below are two examples

 

Example #1 

What is the situation? Board member Z‟s spouse works in sales of Company A. She 

stands to gain a cash bonus if Company A is successful in getting the approval of a 

certain product by the Board. 

Why could this be perceived as a conflict of interest? Board member Z has an 

immediate family member who stands to gain financially by Company A lobbying the 

Board for the approval of a certain product.
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What should be done? Board member Z should abstain from voting due to an 

immediate family member who stands to gain financially from a Board action. 

Example #2

What is the situation? Board member X frequently plays golf with representatives of 

Company A over the last year. Company A is lobbying the Board for the approval of a 

certain material.

Why could this be perceived to be a conflict of interest? The frequent golfing connection 

with Company A could create a perceived conflict of interest. 

What should be done? Board member X should decide if he/she can be objective and if 

he/she has a COI. If no COI, is determined, said Board member can participate in the 

discussion and vote. If not sure, said Board and/or committee should determine if Board 

member X can participate in the discussion and vote on said matter. The final decision 

must be clearly recorded in the minutes.

Recommendation #3

Add the section below:

Procedural Steps for Conflict of Interest Determination and Resolution

Step 1. Annually, each Board member must complete a Declaration of Interest Form 

(DIF). The DIF should show all interests (businesses, investments, and agricultural 

endeavors) of their own, those of immediate family members, and those of the 

companies and/or organizations they have represented over the last 12 months. All 

conflicts regarding substances and practices being considered by the NOSB should be 

declared on the DIF. Each member is responsible for the timely revision of their annual 

DIF, if warranted.

Step 2. The DIF will be compiled annually and given to the Board Chair or Secretary so 

it can be easily referenced during the Board‟s and/or a particular committee discussion 

and voting sessions.

Step #3. Each Board member is mainly responsible for declaring his/her conflict of 

interest (COI) prior to any specific discussion during any committee meeting, public 

hearing, etc. 

Step #4: Prior to each vote, the chair will ask all Board members, if anyone has a COI in 

that particular matter. 
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Step #5. Upon such declaration, the member can either voluntarily refrain from voting, 

or can request that the Board decide if the conflict warrants said member abstaining 

from voting.

Step #6. The ability to participate in a particular discussion and vote must be by a 

majority vote.

Step #7: The Board‟s or committee‟s final decision must be clearly recorded in the 

minutes.

Summary

NOSB members with diverse backgrounds are recruited to provide balance to the 

NOSB. While individual NOSB members represent the segments of the population from 

which they were selected, they also represent the greater good of the population as a 

whole. The revised COI policy and procedures are an attempt to address several 

stakeholders‟ request for updating the Board„s COI policy and provide for a greater level 

of transparency in the deliberation, discussion, and voting on matters pertaining to the 

Board authority for the benefit of the organic community. 

DECLARATION OF INTEREST FORM

Directions: The declaration of interest form must be completed each year. If additional 

space is needed, please continue on a separate sheet of paper. 

Name: ___________________ Period(MM/DD/YYYY): _ _

A. Interest (I and or an immediate family member)

 1. ______________________________________________ works for an 

organization that uses, sells, reviews, or otherwise involves a number of substances or 

topics related to organic production or processing. I do not think that my involvement 

with any of these substances or issues would constitute a conflict of interest and/or

preclude my ability to vote on recommendations that may be on the National Organic 

Standards Board (NOSB) or committee work plans.

2. ________________________________________________ works for an 

organization with a vested interest in a specific substances or topic related to organic 

production or processing. If this substance or issue were to be voted on by NOSB, I will 

declare a conflict of interest and ask the NOSB for an opinion, or recuse myself due to a 

conflict of interest. 

B. Affiliations/organizations (last 12 months)

 1. Provide a listing of affiliations/organizations 
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I hereby declare that the disclosed information is correct. I will inform the Board Chair or 

designee of any change in these circumstances in a timely manner.

Signature ............................................................. Date ............................................

Committee Vote:

Moved: C. Reuben Walker Second: Colehour J. Bondera

Yes: 7 No: 0 Abstain: 0 Absent: 0