GOTS, through own investigation, has obtained substantial documentary evidence confirming rumours about systematic fraud abusing the Indian government certification system of organic cotton production.
In the course of surveillance audits by GOTS accreditation body IOAS – a regular part of the GOTS quality assurance – attended by GOTS experts, they detected fake Raw Cotton Transaction Certificates (TCs). These TCs had been created by fraudsters using APEDA (Agricultural and Processed Food Products Export Development Authority of the Indian Government) templates with fake QR codes which led to a cloned APEDA website to pretend the TCs were authentic. GOTS has assured knowledge of 20,000 metric tons of fake material.
GOTS accepts raw organic cotton if it is certified to any of the IFOAM Family of Standards. In India, the nodal agency to certify organic raw cotton for export is APEDA. Their system is similar to GOTS’, where TCs are issued by their Certification Bodies (CBs) and carry information about certified produce (volume, transport details, buyer, seller, etc.).
GOTS has instructed its approved CBs to cancel all upstream TCs issued based on wrongly issued TCs in order to prevent affected goods being sold with GOTS labels. A Certification Ban on 11 companies was imposed and the contract with one approved CB was terminated. GOTS has submitted all facts to APEDA urging investigation, criminal prosecution and improvement. All GOTS certified organisations have been informed on the matter and are being provided guidance accordingly.
Being a processing standard and thus having so far relied on national law based and governmentally supervised organic cotton production, GOTS, in addition, introduced own measures to secure against such fraud: Henceforth, all incoming TCs (for organic raw material) into the GOTS supply chain will be checked by GOTS itself for authenticity and credibility. A system for permanent data collection for raw material entering the GOTS supply chain and checks and reviews of CBs is being developed.
GOTS strongly believes that while these steps are strict, they are inevitable and will in the long run, strengthen the credibility of organic fibre production and GOTS.