Germany-based Global Organic Textile Standards (GOTS) has banned five Indian cotton companies for using fake shipping firms to show transportation of goods and defrauding the GOTS system.
In a notification on certification bans on its website, the organisation, which ensures the organic status of textiles, said it was imposing a certification ban — which means they cannot claim to have got GOTS organic certification — for two years.
Two of the companies — Farmers United House and Om Organic Cotton Pvt Ltd — are based in Odisha, while the other three — Super Cotton Industries, Shri Dwarakish Corporation and Aama Cotton Pvt Ltd — function from Gujarat.
“Investigations revealed that the shipping company did not exist, and no material movement actually took place. Based on the facts despite the company not being currently certified, the Certification Body recommended a ban on this company,” GOTS said.
Spoofed website
In the cast of the Odisha-based companies, the organisation said that based on complaints received and investigations that followed, they were found to have submitted forged National Organic Program (NOP) transaction certificates (TCs) for raw cotton with a QR code that led to a spoofed website, which confirmed that these TCs were fake.
Argentina-based certification organisation Letis SA said it does not work with Om Organic or Jampati Jevik Kisan Kalyan Samiti, whose cotton Farmers United House claimed to have shipped.
The issue was taken up with GOTS, which was told that no physical procurement of cotton took place in the case of both these companies. The cotton was reported to have been transported to Maharashtra from Odisha, which activist Liam Olive claimed was against GOTS policy. Organic raw cotton cannot be transported over 500 km. In this case, the cotton was driven about 800 km.
“They (these companies) are paying huge money to staffs of IDFL, an accredited audit and certifying body, to issue transaction certificates based on fake NOP input. Documents were manipulated and fake transport documents were issued with no e-way bill of GST being paid,” the activist said.
The certification body and multiple operators had allegedly indulged in similar forgery, he said in an email sent to GOTS on August 6, 2024. In the case of Aama Cotton, GOTS said the company “wilfully provided forged input transaction”.
Similar Sept actions
GOTS said it studied the whole issue before imposing the ban. This is not the first instance of the organic textiles organisation taking action on companies claiming to export or trade in organic cotton.
In September, it banned four other Indian companies for two years from certification as they were involved in fraudulent activities.
In the case of Mumbai-based Maruti Fibres, GOTS said it was involved in the multiplication of stock and overselling. In the case of Axita Cotton Limited, Mumbai, and Axita Industries Ltd, Ahmedabad, the firms were found overselling besides being involved in the multiplication of stock. Similarly, Abhishek Organi Farms and Exports, Ahmedabad, was found involved in a similar activity.
