Legal news and trends for Canadian in-house counsel and c-suite executives
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FEATURE process of determining how to do a recall once a defect has been found is starting far too late." — PETER PLISZKA, FASKEN MARTINEAU DUMOULIN LLP He says it's simply not worth it from a long-term reputation point of view to try to sweep a problem under the rug. "We did the right thing on behalf of our customers because of the potential danger. We learned new things working through something like this, about un- derstanding customer needs, about be- ing a good corporate citizen, and about being a leader in a time when it wasn't always good news," he says. Bruce Bowman, vice president of legal and general counsel at Canada Safeway Limited, agrees. He says the Calgary- based grocery takes recalls very seriously, particularly when there are potentially life-threatening issues, such as peanut al- lergies, at hand. "If you're not diligent and you risk the health and safety of your customers, it's going to damage your reputation and lead to potential liability," he says. While it is best known as a retailer of a wide variety of food and food products, Canada Safeway is also a manufacturer. It operates a meat plant that cuts and pro- cesses meat for not only its own locations but other stores, too. It also has milk, ice cream, vegetable processing, and cheese cutting plants. Bowman says recalls are much easier to handle when you're the middle man be- tween the manufacturer and customer. "You just yank it off the shelf. When you are a supplier and wholesaler, as we are, it's more complicated. You have inde- pendent retailers and mom & pop shops who might also have the product on their shelves," he says. Bowman's responsibilities include regulatory compliance, which involves dealing with mandatory recalls or- dered by the Canadian Food Inspection Agency (CFIA). He says having the ap- propriate processes in place helps reduce headaches in the long run. That's why Canada Safeway has compliance inspec- tors who visit the chain's stores to ensure offending products are no longer on the shelves. "It's one thing to send a message (to our stores), 'Please remove such-and- such a product.' It's another to ensure that it actually happens," he says. Bowman says much of in-house coun- sel's recall work is a result of scientific ad- vances that can identify health and safety issues that would have gone unnoticed 10 or 20 years ago. That's good news for everybody, he says. "With a recall of ground beef in the old days, the CFIA didn't have the ability to trace the strain of the bacteria. By testing the strain of E. coli, it's much easier for health organizations to trace the source and limit the damage," he says. He says E. coli has been the major re- call issue for grocery retailers over the past few years and he makes sure to work closely with the CFIA, particularly in terms of relaying the news to the public, whenever a product needs to be pulled from the shelves. "Timing is everything on a recall. It's desirable from the retailer's perspective to have the recall and news release done 10 FEBRU AR Y 2008 C ANADIAN Lawyer INHOUSE voluntarily and co-operatively from a PR and reputation point of view. It's always better to take the high road and confront issues," he says. Bowman says its processes also call to err on the side of caution, especially if there's any uncertainty about the breadth of a particular problem. "We take the product off the shelf and wait until we know the situation better," he says. The increasing incidence of product defects has convinced one Canadian law firm to launch a practice area dedicated specifically to recalls. Penny Bonner, Toronto-based leader of Ogilvy Renault LLP's recall and crisis management prac- tice, says there's no doubt that recall work is "very intense." "You've got to drop everything you're doing, particularly for the first 72 hours. When a recall is issued, businesses need to act responsibly. They need to deal with it quickly and efficiently to protect the safety of the public and the future of their business," she says. The first 12 hours are focused on try- ing to find out the extent of the problem, how dangerous it is, how much of the product has been sold, how much of it is still within the company's control and how to identify consumers who have purchased it. "Sometimes by the time you do the recall, all of the product has been con- sumed by the public. With a food recall, that's often the case," she says. Next, a decision has to be made on "Any company that starts the