Italy: Operation Vertical bio - 11 suspects under house detention

In December 2011, a big case of organic fraud terrified the public in Europe. It was proved that large amounts of corn, soybeans, wheat and other products came from conventional farms but were sold as organic. Main players at that time were an Italian control body and Italian dealers (see our report). In mid 2012, the first sentences were passed. According to Information from the Italian organic association FederBio, a total of 17,000 tons of goods were involved. The fradulent activities took place between October 2007 and August 2008. A special working group has now found new evidence that shows that over a number of years a gang of criminals was able to undermine regulations and certification systems. Although there had been warnings, the Italian Ministry for Agriculture did not act at that time.

  
(Picture: Paolo Carnemolla, President of FederBio, gives his statement)

The products involved in the organic food mislabelling scandal were apples for puree (1,361 t), barley (80 t), corn (4,613 t), soy beans (4,246 t), sunflower seeds (2,066 t) and wheat (2,066 t). The sentences in 2012 came to a total of 9 years' and 4 months' imprisonment for three men (each at least 3 years) and 2 years' and 3 months' probation for two others (we reported on these developments). 

"Vertical bio" is the name of the operation in which the anti-fraud-working group - a special team* working for the Ministry of Agriculture - and the Guardia di Finanza – the Italian Revenue Inspectorate - intervened in an international criminal conspiracy that, using fake organic certification, imported grain from non-EU countries that was destined for animal feed. (*Central Inspectorate for the Protection of Quality and Repression of Fraud regarding Agricultural and Food Products)

Among the persons subject to provisional measures ordered in late January 2014 (nine under house arrest, four bans of any business activity, seizures of property, real estate, corporate investments and accounts totalling 35 million euros) are not only some notable names among the main importers and processors of cereals and oil seeds but also the management of the control body Biozoo. Biozoo 's control licence was revoked on 24 February 2014. The order refers also to the bribing of some State officials in Moldova, Ukraine, etc.

The operation appears to have finally put an end to the criminal plot that was revealed by the Puss in Boots investigation at the end of 2011. The trial is on-going in Verona, and FederBio, the Federation of Italian Organics, brought a civil action in the criminal proceedings against the perpetrators. Then a second stage called Green War followed in April 2013, with not only the same modus operandi but also mostly the same protagonists.

"This operation confirms that the assumptions underlying the Green War accusations were correct and also confirms that for years a gang was able to undermine regulations and certification systems, entering the European market with a considerable amount of conventional product passed off as organic by using fake certification documents," says Paolo Carnemolla, the President of FederBio. "For this to happen, it means there is not just complicity in the system, that has been detected thanks to self-monitoring by the control bodies and reported to the authorities,  but also a lack of effective coordination of the different actors in the control system operated by the Ministry of Agriculture."
 

Biozoo has never covered more than 200 out of the 50,000 Italian organic farms with its control system. More important, at least for judicial reasons, seems to be its activities in Malta, Romania and Moldova, where it runs the branch ICS Biozoo. The official data of the Moldovian Ministry of Agriculture revealed 28,670 hectares managed organically, but in 2012 four companies certified by Biozoo claimed to farm about 60,000. Equally alarming is the black hole Transnistria, an unconvincing country with half a million inhabitants between Moldova and Ukraine, recognized at international level only by no less convincing Abkhazia and South Ossetia and about whose official documents doubts seem legitimate.
 

Over the years, FederBio had repeatedly reported to the ministry obvious anomalies in Biozoo’s certifications of imports from third countries  - the ministry nevertheless continued to authorize them - and evidence of the unreliability of this control body. The federation alerted Italian operators to avoid products bearing Biozoo certification and about unclear triangulations of non–EU products via Malta and provided investigators with information and documents (made available in particular by the control bodies Suolo e Salute and Ecogruppo Italia). A guideline was issued to strengthen controls on the import of grain and an emergency unit was activated.
 

In May 2013, the control body Suolo e Salute blocked the attempt to let into the European Union a ship of soybeans of Indian origin contaminated with chlormequat, informing the ministry in order to start an OFIS alert procedure, and FederBio informed the international market (see our former article) on 11.06.2013: “No Italian company has marketed these products, but it seems that the still not cleared batches have left the Italian port bound for other European ports; according to rumours, some batches are bound for Canada too. Waiting for the official procedure, the Italian organic industry urges all EU and non-EU operators in the feed sector and control bodies to pay the utmost attention to soybeans, adding chlormequat to the list of active substances to be searched for in analyses”. More information is also available here: http://www.federbio.it/files/879.pdf.
 

"As usual, in the press release issued by the Ministry of Agriculture there is no trace of the close collaboration of the national organic industry, which provided critical support", says Paolo Carnemolla , the President of FederBio. "It’s an Italian anomaly: instead of enhancing public confidence in the organic industry and control system, the ministry prefers to boast of “lengthy investigations and complex methods of investigation”. It should, on the contrary, acknowledge the cooperation of the industry, which was not an accomplice to fraud but, quite the opposite, was the author of the reports to investigators in order to destroy the flow of fake products from Eastern Europe and India with the aim of safeguarding fair competition, honest operators and consumers." According to information gathered by FederBio, products claiming to be organic continue to arrive in the EU from Odessa on the Black Sea, landing in Dutch ports (where customs officers seem not always to ask for certificates of inspection), a spokesman of the Federation says. It is assumed that Ukrainian raw materials are mixed with grain from Kazakhstan and large quantities of Chinese products, whose certification would have to be investigated in debth.

It was, however, quite predictable: the Italian investigation exposed the suspicious supply chains used for years by part of the feed industry, but cows, chickens and pigs cannot be put on a diet - it seems that these sleazy supply chains are being replaced by others that are equally low-cost and equally opaque.