Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 54 2017-2018 1.7.3. Operational risks The risk mapping review carried out during fiscal year 2017- 2018, in a bottom-up process, starting with the collection of information from each operating unit, provides a new perspective on operational risks. It highlights either new risks or risks that are perceived as being more critical. This complementary analysis of the field and operations made it possible to highlight the risks described in this paragraph and categorized into 10 operational risk areas. Vilmorin & Cie’s operational risk areas Product quality Safety of persons and property Procurement Security of persons and property Image Information systems Legal Environment Human resources Ethics 1.7.3.1. Risks related to product quality Identification of the risk Once created and registered, seed varieties are produced in the fields. In order to produce its seeds (conventional or genetically modified field seeds, conventional vegetable seeds), Vilmorin & Cie makes use of a vast international network of seed multiplication farmers*. The production of seeds is presented in detail on page 35. Vilmorin & Cie must respect its obligations with regard to legislation, to its contracts and to customer requirements. Regulatory obligations exist in most countries; these concern in particular health (1) , technology and seed purity aspects in order to guarantee the identity, specific purity and germinative faculty of seeds (2) . Vilmorin & Cie also has internal requirements to reduce its exposure to risks of product non-conformities. Product non-conformities can have serious financial consequences, which may be amplified when the seeds are disseminated in different countries in the world, and by the complexity of regulations. Moreover, Vilmorin & Cie’s reputation, its financial results, and the market value of products could be negatively affected in cases of: contamination of seed lots by parasites (insects, fungi or bacteria), physical mixing or contamination by pollen flows between conventional seeds and genetically modified seeds, non-compliance of the quality requirements laid down by suppliers of GM* traits (these requirements concern, for example, the implementation of the Quality Management System in accordance with the ETS - Excellence Through Stewardship (3) program, the implementation of a control plan in accordance with the requirements of the supplier of the trait*, the running of training courses, etc.). Managing the risk Firstly, in order to control the quality of its seed production, Vilmorin & Cie secures, on the basis of contracts and detailed specifications, relations with its network of seed multiplication farmers*. These are rigorously selected in a vision of partnership in the medium to long term. At the same time, Vilmorin & Cie has quality management systems, deployed in its operating structures, in order to ensure the compliance of its conventional and GM* products for its activities of research, production and sales. With regard more specifically to the GMO* quality management system, a document system (guidelines, procedures, control plans, etc.), supported by a documentary management tool, is deployed and transmitted to colleagues, in particular through internal training courses. GMO risk mapping* is also carried out by country and crop to assess the different levels of risk, determine priorities and update control plans as necessary. Regular audits validate the system’s implementation, the traceability of research processes, testing, production, processing and sales processes in order to limit the risks of unwanted mixes, seed non- conformity and mislabeling. In order to guarantee the quality and reliability of the products sold, a quality control system has been set up as well as control plans to be followed (depending on crop and country). These specific analytical controls are carried out by accredited laboratories, regularly tested and validated by the quality management department, in order to guarantee the reliability of the results. Overall, in 2017-2018, 59 employees from the Field Seeds and Vegetable Seeds divisions were trained on the guidelines, and 33 audits were carried out by the network of internal quality auditors. Eight audits were also carried out to ensure that the contractual quality requirements of suppliers of GM traits* were met. A marked decrease in the number of non-conformities detected during internal audits, and a decrease in their criticality*, were noted compared to the previous fiscal year. In addition, since 2012, Vilmorin & Cie has been a member of the international ETS (Excellence Through Stewardship) program, (1) Sanitary quality is harmonized by the International Plant Protection Convention (IPCC): https://www.ippc.int/en/core-activities/governance/convention-text. (2) Seed quality controls are carried out in the laboratory, usually using internationally harmonized procedures of the Organisation for Economic Co-operation and Development (OECD), following the guidelines of the International Seed Testing Association (ISTA: https://www. seedtest.org/en/home.html ). (3) Reference system created at the initiative of the international seed industry. 1.7. Risk factors