The Fruit & Vegetable Dispute Resolution Corporation (DRC) was founded in Ottawa, Ontario in 2000 as a private, nonprofit membership organization with a goal of facilitating trade in the fresh produce industry throughout North America.
Following the implementation of the North American Free Trade Agreement in 1994, fresh produce was flowing freely between Canada, the United States, and Mexico. An unfortunate yet inevitable byproduct of the increased trade was a growing number of disputes, including condition complaints and rejected shipments, slow-pay and no-pay situations, and myriad other issues.
At this time, the produce industries in the United States and Canada had already been in discussions to more closely align their respective produce regulations and practices, according to Fred Webber, the DRC’s president and chief executive officer. Mexico was also starting to expand its presence across North America. “This was an opportunity to open the door with Mexico to build a tri-national model,” Webber says.
The situation was further complicated by the 1974 case of Steve Dart Co. vs. Canada (Board of Arbitration), which had limited Agriculture Canada’s ability to resolve disputes, and since then there had been no dispute resolution mechanism in place in Canada. Andrea Bernier, DRC’s manager of communications and membership, says the case “created a dramatic increase in no-pay and slow-pay situations.” In turn, this affected both the domestic produce industry as well as companies from the United States and Mexico shipping into Canada.
Birth of the DRC
The formation of the DRC in 2000 was the result of a four-year, industry-led process involving the produce industry in all of Canada’s provinces, as well as the United States and Mexico. The three governments supported and facilitated the initiative, with Canada and the United States contributing finances, technical assistance, and personnel to the effort. The goal was to create a Canada-based dispute resolution mechanism that would serve the needs of produce suppliers in all three North American countries.
After an analysis of the best of all three countries’ systems, it was decided to use the U.S. Department of Agriculture’s dispute resolution system, in place under the Perishable Agricultural Commodities Act (PACA) and overseen by the Agricultural Marketing Service, as a template.
Similar to PACA’s system, the DRC works to resolve disputes among its members quickly and cost effectively through consultation, mediation, and arbitration. It also strives to prevent disputes in the first place by educating and updating its members on best practices and harmonizing standards from country to country.
In addition, the DRC advises the industry and governments on legislation and inspections.
