Case Study
Establishing the Central Role of Conformity Assessment in Digital Supply Chains
Summary
As incentives increase for organisations to demonstrate the validity of claims regarding environmental/social/governance (ESG) attributes for products/services, so too will the incentives increase for falsifying such attributes.
Based on initial work undertaken during 2021-22 by the Australian accreditation body, NATA, an international work program commenced mid-2022 under the auspices of the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). This UN/CEFACT activity involves development of an electronic protocol – the Digital Product Conformity Certificate Exchange (DPCCE) protocol – which is designed to deliver digitally verifiable assurances over conformity attestations.
A general data structure has been created for the data elements and linkages that can enhance confidence and utility in the attestations issued by conformity assessment bodies (CABs). Specifically, the presence or absence of data elements exposed during discovery of a conformity attestation provides insights, such as verifiable connection to the physical product of interest as well as revealing the status of an issued attestation and the authority under which it was issued (typically an accreditation authority). The protocol is seen as complementary to numerous other digitalisation initiatives within the conformity and accreditation sectors.
The concept does not replace any of the existing governance structures within the conformity assessment community but simply proposes a means for adapting these to a digital context. The described approach recognises the role of CABs as the valid custodians of the data they produce and their authority over any revisions to such data. At the same time, the obligation of CABs to respect and implement the confidentiality requirements of their customers remains central to the work.
The described approach does not preclude other concurrent processes for conformity data exchange, so the adoption of this model by individual parties may occur on any timeframe without disrupting existing trade provisions. Also, since the provision of conformity assessment data is a relatively self-contained aspect of trade, it is intended that the approach could be adopted as a modular component of any comprehensive digital trade process.
This work is expected to be delivered for Public Review in Q1 2024 and represents an opportunity for the conformity community to consider the merits of a future digital trade environment in which conformity assessment plays a central role.
Background
Conformity assessment processes are a key mechanism for providing global product assurance, however, conformity attestations that result from conformity assessment processes are still largely paper-based, or in electronic formats which do not cater for easy data processing due to the lack of agreements on commonly used data elements and definitions. This has implications for both product quality and safety and is a longstanding problem.
However, the emergence of regulatory drivers in the ESG space brings new urgency to the matter. As incentives increase for organisations to demonstrate the validity of claims regarding ESG attributes for their products and services, so too will incentives increase to falsify such attributes. Addressing this problem is central to many government and private sector initiatives, including those aimed at delivering objectives aligned with UN Sustainable Development Goals (SDGs) 9, 12 and 13.
As an important caveat to the DPCCE protocol, in cases where legislative processes exist for establishing product conformity within a jurisdiction (such as CE Marking, to take one example), this work only seeks to describe the exchange of CAB outputs up until the point in the value chain at which a regulator, or other authority, takes control of product conformity. Any further exchange of CAB outputs beyond that point would occur in a manner defined by the legislator. Outside of the defined jurisdiction, the DPCCE protocol may still have relevance for the purpose of export (that is, to address overseas market requirements). Also, even within the jurisdiction, products may still be subject to voluntary conformity assessment processes that relate to product attributes not covered by legislative approvals and so there may remain some relevance for the DPCCE protocol, for example, to ESG-related conformity assessment for products subject to CE Mark approval.
The ideas being developed by the DPCCE team have found fertile ground in related United Nations initiatives, most notably the United Nations Economic Commission for Europe (UNECE) Recommendation #49 – Transparency at Scale1. This initiative is an ambitious project aiming to provide an end-to-end supply chain traceability protocol and it draws heavily on the ideas being developed by the DPCCE project.
Strategy
The strategy to date has been to consult as widely as possible and to welcome all relevant expertise. Prior to the establishment of the UN/CEFACT DPCCE project, a global discussion paper was circulated and a public forum hosted to present and explore the key ideas.
The initial phase of the DPCCE activity, commencing in mid-2022, comprised development of a White Paper2, mapping out a potential pathway for handling trade-related conformity data in a digital setting. Following a Public Review period for this White Paper in Q1 2023, the paper proceeded to publication in August 2023.
Phase 2 of the project (‘Business Requirements Specification’) launched in October 2023 and the initial results of this work are expected to be presented for Public Review during Q1 2024. It is hoped this will generate constructive international discussion among key quality infrastructure institutions, relevant representative bodies and the wider conformity assessment community regarding the merits of such an approach.
Such international engagement is important in helping to define and shape the role of conformity assessment in a future digital trading environment.
Results and impact
The DPCCE activity is proving valuable in bringing attention to the importance of conformity assessment and accreditation in global trade. It is also making clear the need to properly account for conformity assessment as international organisations set about establishing uniform processes for the digital exchange of trade-related data.
The UN/CEFACT setting has proven a useful vehicle for exchange and debate regarding the future of trade-related conformity data. Entities such as IAF, ILAC, ISO/CASCO, individual CABs, national accreditation bodies (ABs) and specific digitalisation initiatives such as the global Digital Calibration Certificate collaboration and the Digital Certificate of Conformity project at the Physikalisch-Technische Bundesanstalt (Germany) are all involved in the discussions in some manner. The UN/CEFACT project team is hopeful that 2024 may prove a significant milestone in the adoption of interoperable exchange protocols for conformity data, ensuring that CABs and ABs continue to fulfil their important role as ‘anchors of trust’, as the world transitions to a digital trading environment.
Expressed in terms of UN SDGs, the project impacts are seen as follows:
- UN SDG 9 This work is intended to help to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation” (SDG9) by providing a blueprint for a key element of “quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure” (Target 9.1) that also provides buyers, sellers, consumers and regulators with “affordable and equitable access” (Target 9.1) while assisting with “their integration into value chains and markets” (Target 9.3).
- UN SDG 12 This work is intended to help “ensure sustainable consumption and production patterns” (SDG12) by more clearly establishing the basis of any claims made regarding sustainable production and then providing a mechanism for this information to be reliably accessed by responsible consumers. By improving the visibility and reliability of sustainability information, this will incentivise companies to “reduce waste generation through prevention, reduction, recycling and reuse” (Target 12.5) and to “encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle” (Target 12.6).
- UN SDG 13 This work is intended to assist in the delivery of “urgent action to combat climate change and its impacts” (SDG 13) by ensuring that sustainability initiatives can be built on reliable processes for sustainability assessment. Such transparency regarding sustainability claims will help improve “human and institutional capacity on climate change mitigation, adaptation, impact reduction” (Target 13.3).
Contact:
Brett Hyland, Project Lead at UN/CEFACT
Email Brett.Hyland@nata.com.au
