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Here’s How Conventional Cotton Passed for Organic and What GOTS Is Doing to Fix the Fraud

Speaking about the systematic fraud discovered by GOTS in the course of surveillance audits into raw cotton transaction certificates in India, to the tune of 20,000 metric tons, Sumit Gupta, head of quality assurance and implementation, noted that the fraudulently certified seed cotton that was entering GOTS’ supply chain at the ginning stage has stopped.

After due diligence and confirmation of the issue, all 6,400 GOTS certified companies worldwide were directly informed, Gupta told Sourcing Journal.

“The discovery of the fraud was a joint activity by GOTS’ quality assurance team and its main accreditation partner IOAS. The fraudsters had put fake QR codes on the certificate templates of the relevant Indian government agency APEDA (Agricultural and Processed Food Products Export Development Authority), directing suppliers to a cloned government website. With this trick, conventional cotton was smuggled into the GOTS supply chain as organic cotton. All other GOTS criteria were then of course adhered to during further processing,” he said.

More than 51 percent of the world’s organic cotton comes from India.

GOTS is a stringent voluntary global standard for the entire post-harvest processing, with India being among the top of the regions for GOTS certifications.

Asked how GOTS has been able to prevent its labeling from appearing on the products related to this fraud, Gupta said that approved certification bodies are “tracing the material in the textile supply chain and canceling upstream certification issued at next stages, like yarn, fabric, garments, etc. If the material is still in the possession of the processor or manufacturer, they cannot sell it with any GOTS related claims. If the labeled goods are available in stock at the end manufacturer or a company engaged in relabeling, the GOTS label must be removed,” he said.

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Sumit Gupta
Sumit Gupta

Other actions being taken include:

  •  Urging the Indian government agency, APEDA, to investigate and conduct consequent prosecution after the facts were shared.
  •  Sharing the learnings from this fraud investigation with certification bodies, and reiterating the need to implement additional quality assurance measures.
  • Immediately commencing checking all transaction certificates entering the GOTS supply chain for authenticity and credibility.
  • Immediately implemented a permanent data collection system for raw material entering the GOTS supply chain. This is in anticipation of the central database that will monitor all flows and will also be able to automatically check the work of national certification systems for organic cotton production.
  • Enhancing training activities for certifiers and looking for higher cooperation with the bodies which oversee certification.

Explaining the process for compliance with the GOTS criteria Gupta said that “against the background of vague rumors about irregularities in the documentation of raw organic cotton entering the GOTS-certified supply chain,” a surveillance audit was conducted, in which a expert from the accreditation body examines the activities of the certification body on site, specifically by inspecting documents, IT software and other processes as well as interviewing employees.

“During the audit we found evidence that fake raw cotton transaction certificates (TCs) were circulating in India. TCs confirm to a recipient that the material is certified,” he observed.

The withdrawal of these certificates was made at the stage of lint cotton due to irregularities with incoming seed cotton transaction certificates, which were then checked at the point of incoming material at Indian cotton gins.

Issues related to the Covid-19 pandemic also have an affect both in terms of lockdowns and travel restrictions and GOTS teams have been working to circumvent these.

“In view of the difficult situation, GOTS has permitted certification bodies to conduct virtual audits where possible. These bodies continue to be responsible for undertaking risk assessment and their certification decisions. The validity of the certificates has also been extended by three months, where renewal audits could not be done due to Covid-19 related restrictions,” Gupta said.

GOTS was developed by the Organic Trade Association in the U.S., the Japan Organic Cotton Association, the International Association Natural Textile Industry of Germany, and the U.-K-based Soil Association, to define globally recognized requirements that ensure the organic status of textiles, from field to finished product. GOTS is a non-profit, self-financed organization.