Managing and executing an effective global product recall can be a complex exercise from a logistical, reputational, and financial point of view. It requires input from a variety of different business departments, intense communication with different external stakeholders, such as regulators, consumers, and distributors, and a thorough consideration of a variety of different legal obligations arising in multiple jurisdictions. It’s therefore important for organisations to have established systems and procedures in place so they are able to act decisively and cohesively when it appears they may be dealing with an emerging global product safety incident that may give rise to a recall.
In this article we discuss what organisations can do to make sure they are sufficiently prepared to manage a global product recall in an efficient and effective manner. This issue is becoming increasingly important in light of the ever increasing complexity of both product supply chains and product safety regulation. We will first consider what an organisation can do proactively to prepare for a global product safety incident leading to a product recall, and then discuss the steps it should take once it is clear that recall action will be necessary.
Product safety incidents
Product safety incidents can arise in a variety of situations. A product may be identified as defective within a few days of it being placed on the market meaning there is a large amount of product with distributors and held in stock but very little has actually passed to the consumer. Alternatively, a defect could arise after a much longer period of use by consumers, meaning large volumes have been sold and have dispersed through the consumer market as opposed to being within the supply chain. It’s therefore important that organisations have product safety incident management plans in place that can be applied to a variety of different factual scenarios and provide a framework, as opposed to a prescriptive plan, as to how safety incidents should be managed.
Product safety incident management plans
So, what should the product safety incident management plan consist of?
1. Know your products and internal processes
One of the most important parts of the safety incident management plan is to ensure there are mechanisms to enable the immediate collation of certain critical information, such as the quality, compliance, risk assurance and risk assessment information held for the product, the number of products sold or distributed, the economic operators within the supply chain, and information regarding the manufacturing history of the product. This will allow the organisation to identify the magnitude of the potential recall and provide it with the vital information required, such as the jurisdiction-specific standards with which the product was assessed as compliant and in how many jurisdictions the product has been sold.
2. Identify internal stakeholders
It should also establish clear lines and systems of communication between internal stakeholders to enable the effective exchange of information and to ensure decisions can be made quickly and efficiently. This may include, for example, establishing a core group of personnel from the quality assurance, legal, and media and communications teams to allow input from all necessary departments and ensure competing interests are considered prior to important decisions being made. The product recall process cannot be considered in isolation as only a quality assurance or legal problem, as it has the potential to massively impact an organisation’s market reputation and goodwill.
3. Re-test and re-assess
The safety incident management plan should also facilitate the rigorous re-testing of the product to enable the organisation to confirm the existence and origin of the defect and to undertake risk assessments relating to the risk posed by the defect and the harm it could cause. This should occur immediately to ensure real-time information is being provided in respect of the seriousness of the safety incident, as this will necessarily inform the steps that the organisation should take by way of response.
Managing a global recall process
Once it has been established that the relevant product is defective and that a global product recall process is required, the organisation will need to take a number of steps to ensure the recall process is implemented quickly and effectively. The recall plan should be applied consistently across different jurisdictions so far as is possible, but will naturally have to be adapted to ensure compliance with local regulatory requirements. Experienced counsel who are familiar with global recalls and local requirements are an important component of managing this balance.
1. Forming a global incident management team
This team should include representatives from various departments within your organization, such as quality control, legal, media and communications, and supply chain management. Appointing a recall coordinator to oversee the entire process is crucial for effective communication and decision-making. Global leads should be able to quickly identify and liaise with local counterparts to ensure a coordinated action and local accountability. Global or local counsel should be engaged to help mitigate against potential regulatory and liability risks that may be unique to each jurisdiction.
2. Identifying the relevant regulator in each jurisdiction and local notification requirements
Different jurisdictions will have different product safety legislation that sets out the circumstances in which notifications must be made and recall action must be taken. As such, it is important to identify the relevant regulator and legislation in each jurisdiction and ensure it is understood and complied with. In some regions, regulators may want to sign off on a corrective action plan before implementation while others are satisfied with a company undergoing a recall action and assessing the adequacy of the plan on a rolling or ongoing basis. Engaging with local regulatory personnel and experienced global or local counsel helps to ensure the best strategy to implement in each jurisdiction.
3. Clear and consistent communication with local economic operators (distributors and suppliers)
Identifying and coordinating a global recall with distributors presents a unique set of challenges. Local distribution records and supply chain data should be easily accessible to ensure that the recall can be effectively communicated in each jurisdiction. Information should include details about which distributors received the affected products, quantities, dates of delivery, and destinations.
Distributors typically require clear instructions on whether to quarantine, return or otherwise correct a product prior to further distribution and sale. In addition, they may be approached by regulators who may feel they have stronger enforcement measures against local distributors. Therefore, distributors should be provided with detailed information about the issue, instructions for handling the recalled products, and a point of contact within the organisation for any questions or concerns. Encouraging distributors to cooperate fully in the recall process can be a vital part of ensuring it is effective.
Since a successful recall depends on distributors implementing the recall plan, organisations should keep detailed records of communications with distributors, including the date, time, and content of each conversation or email exchange. This documentation will be valuable for tracking progress and ensuring compliance.
4. Clear and consistent communication strategy with consumers to protect brand and reputation
Craft clear and consistent messages to customers that explain the safety issue, the potential risks, and the steps they should take to comply with local recall requirements. Ensure that these messages are easy to understand and are translated into multiple languages if necessary. Organisations should consider using a variety of communication channels, including press releases, social media, email, and the company website, to reach a broad audience. Different customers prefer different channels, so using multiple ensures wider coverage. In some jurisdictions, the use of multiple communication channels may even be a necessity, and so this should always be considered as part of a global recall plan. The scope and nature of the recall plan should also be considered with reference to potential litigation risks that may arise in the future.
Many organisations may choose to use third-party services to carry out a communications plan and contact consumers or distributors. These companies are trained in handling customer inquiries and may simplify the communication and record-keeping process for large recalls. In other cases, an organisation will need to train employees, especially those in customer-facing roles, on how to handle customer inquiries and provide accurate information about the recall. Where appropriate, pre-formulated FAQs and responses should be created, reviewed and approved to ensure the communications team can quickly respond to questions and provide updates as the recall progresses. For longer recalls, establish a dedicated hotline or email address for customer inquiries. Documentation on the scope and effectiveness of the recall process should be kept.
5. Post-recall management
Returned or quarantined product may need to be reworked or destroyed. In some jurisdictions, regulators may insist on witnessing destruction or approving any refurbishment plans prior to resale. It is also important to make sure that that any post-recall filings with a regulator are filed within the prescribed timelines.
Managing a global product safety incident and recall process is a complex and challenging endeavour, but with careful planning, effective communication, and adherence to regulatory requirements, organisations can navigate it successfully. By establishing a dedicated recall team, developing a comprehensive plan, and prioritizing transparent communication, a brand's reputation will be protected and the safety of consumers will be ensured. A well-executed recall demonstrates commitment to safety and responsibility, ultimately strengthening customer trust in the brand.