Ensuring trustworthiness

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  • Between January 2006 and February 2008, AMS Compliance provided its results from five investigations of certified organic operations to NOP. Although they recommended that NOP officials take enforcement actions against these operations, we found that NOP did not respond to these in a timely or effective manner. In addition, in those cases where enforcement actions were issued, NOP did not monitor the organic operations to ensure compliance with those actions.

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  • NOP is responsible for enforcing standards of production, handling, and labeling for farming and handling operations that are certified to market their products under USDA’s organic label. Audit Report 01601-03-Hy 8 17 Some actions, up to and including the revocation of an operation’s certified organic status, may be taken by the accredited certifying agent without direct involvement by NOP. However, through its enforcement actions, NOP plays a central role in maintaining the validity of the program and ensuring public trust in USDA’s certified organic labels.

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  • In a decentralized-decisions economic environment, agents consider the risk that others might unfairly exploit informational asymmetries to their own advantage. Incomplete trust, affects, in particular, financial transactions whereby agents trade current real claims for promises of future real claims. Agents thus invest considerable resources to assess the trustworthiness of others with whom they know they can interact only under conditions of limited and asymmetrically distributed information, and to ensure compliance with contractual obligations.

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