Secret Three:
Government Is In Partnership
With Business


The relationship goes way back. In the early 1800s, the U.S. government drew on the resources of Saint Simons Island off the southern coast of Georgia its tough live oaks made the sides of the frigate USS Constitution withstand cannonballs like iron. Almost a hundred and fifty years after Saint Simons made "Old Ironsides" famous, a group of island entrepreneurs turned the tables and drew on the resources of the U.S. military they leased large freezers from the local Navy base that was closing and became SeaPak, the nation's first commercial producer of breaded shrimp. Today, half the nation's retail frozen breaded shrimp, millions of pounds of breaded fish filets, onion rings, French toast sticks and cheese sticks come from Rich-SeaPak, whose corporate offices are still on Saint Simons Island. (1) The long relationship with the government has had its ups and downs.

"The seafood industry traditionally had very adversarial dealings with the FDA" (Food and Drug Administration), says Ray Jones, SeaPak's corporate director of quality assurance and regulatory affairs. "In the early days, it was all small, independent producers -- basically fishermen -- who didn't want anything to do with the government. It was a matter of getting away with whatever you could. So when bigger companies like SeaPak started to be formed, the residue of that adversarial relationship was still around.

"When I came here nine years ago, our lawyers were telling us, Don't talk to them, don't give them anything.' We could do that legally. The law says that we have to let FDA come into the plant and go anywhere they want. But, we don't have to give them our production records or consumer complaints or let them take pictures. So we didn't.

"One of the things the food industry has always feared is giving FDA access to customer complaints. Most customers give us good, legitimate feedback on what they think about our product, but there are some complaints that we get that may not be legitimate -- such as where a customer alleges they found something in a package of shrimp or fish. We were afraid that FDA might misinterpret or overreact to the complaints, so we chose not to let FDA see them. They would come in, ask for the customer complaint file or some other records, we'd refuse, and things would go downhill from there.

"The thing FDA did that hurt us the most was taking samples of our product. They would take the samples and send them off for analysis. Sometimes it could take weeks to get the results back. We were not required to hold the product off the market until the testing was finished, but we almost always did. So sometimes we might have to hold two or three days production until we got the results back. Even if we were sure the product was in compliance, we did not want to risk the possibility that FDA might find a problem and then we would have to recall the product if we had already shipped it. So we would hold the product and wait.

"Keep in mind that, all this time, SeaPak was running a clean operation. We're very careful about the wholesomeness of our product. Not just when the FDA shows up, but all the time. The only thing that was coming between us and them was a bad attitude. Ours, at least as much as theirs.

"In 1992, I sat down with our CEO, Frank Holas, and looked at our latest inspection report. We agreed it was ridiculous. We had set high standards of quality for ourselves -- that's what our customers demanded. We exceeded the regulatory requirements as we understood them. So why were we always at odds with the FDA? We were as ethical or more ethical than anybody else we knew in the business. FDA should have had us up on a pedestal as an example. But it was the pits.

"At any rate, we got tired of the old adversarial relationship at just about the same time Clinton and Gore started pushing the agencies to try partnership. It all worked together in parallel. We called the FDA and said we'd like to talk. So we went up to Atlanta (FDA's regional office) and all the players were there -- including our local inspector from Savannah. We asked them what we had to do to change things. They said, How about knocking off all these refusals when we ask for files and records.' We said we would if they would work with us to solve any minor violations they might find. We wouldn't expect them to ignore real safety issues -- we didn't think we had any of those anyway -- but we didn't want them to punish us for minor paperwork problems we could quickly fix, or force us to recall a product due to an obviously phony customer complaint."

"Well, no more than 30 days after we got back from Atlanta, they came to inspect us. I guess they wondered if we were for real. We let them see everything they asked to see. Our lawyer almost had a heart attack. The key to this whole approach is one-to-one relationships. I told their inspector Look, my job is on the line here. We got to have trust on both sides.' We came out of that with the best inspection report we ever had. And they've been back three times to inspect us since and it keeps getting better."

All the time SeaPak was changing its combative attitude, FDA was changing, too. FDA's field investigators traditionally have been rewarded for detecting violations and levying fines. But FDA has begun to emphasize public safety over disciplinary action. This reorientation encourages more open communication between FDA and industry. For example, FDA recently inspected a food-canning operation and found a malfunction in the sealing equipment, a serious problem that could have led to a botulism outbreak. Instead of launching a lengthy, formal enforcement action, FDA inspectors quickly recommended to the cannery owners that they destroy all cans in the lot and repair the sealing equipment. They agreed and the problem was resolved immediately. This on-the-spot teamwork saved the agency and the company thousands of dollars and immediately protected consumers from dangerous products. That's the way of the future for FDA.

What does Ray Jones at SeaPak see in the future? One word: "HACCP." Ray's not clearing a fish bone. He's talking about the Administration's new scientific way to insure the safety of our food.

"It means Hazard Analysis Critical Control Point,' and basically, it's the same method the Japanese used to beat the pants off our auto industry in the seventies and eighties. You build in quality all along the line -- don't wait til the end and just spot check the product. It's a much better way to ensure food safety. In simple terms for the seafood industry, it means making sure cooked fish stays hot enough long enough that no germs could possibly still be alive -- and for raw fish, that it stays cold enough until you're ready to cook it, so that no germs can grow. The FDA will be looking at our production control records to make sure we get things hot enough, or keep things cold enough. They'll check the product randomly to verify the other checks. But the quality's built in. We think it's great. In fact, I'm training to become a certified HACCP instructor so I can teach our suppliers and even our competitors the new techniques."

Ray explains why SeaPak welcomes a new regulation that gives FDA access to production records. "We think it will improve the consumer's confidence in seafood. Seafood's taken a bad rap because of things like raw oysters. But shrimp and breaded fish filets are the safest foods you'll ever eat. This new scientific inspection will boost confidence. Five years ago, we would have been worried about letting more government in the door. But we're not afraid of that anymore. We trust each other. We have the same goal -- top quality food for our customers. We're partners."

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