Hong Kong’s experience
Hong Kong’s experience .Perhaps nowhere else in the world is more concerned about China’s food safety than Hong Kong. According to deputy director of the Hong Kong Food Council, its 7 million people rely on daily imports of food, 80 percent of which come from mainland China.[i] Valuable lessons can be learned from Hong Kong’s bittersweet experience working with central government authorities Beijing as well as Guangdong province, through which most of the imports enter Hong Kong. Hong Kong seeks to ensure that only products from reputable food producing companies are eligible to enter into the Hong Kong market by limiting the number of suppliers and requiring health certificates to accompany shipments. This system is enforced by compulsory checks at the point of importation in Hong Kong. Food imports are limited to certain border crossings and wharfs, providing for the concentration of inspection resources.
Hong Kong and Guangdong provincial authorities agreed to establish a food safety notification system, prompted by a widely reported seafood safety crisis in September 2005.[ii] Subsequently, a framework agreement on exchanges and co-operation in food safety was signed in April 2006.[iii] Key points of this agreement include enhancing information exchange, designating liaison points on both sides (the Guangdong Provincial Food and Drug Administration and the Hong Kong Health, Welfare & Food Bureau), holding regular meetings and urgent high-level meetings in the event of significant food safety incidents, as well as technical expert exchange. Some of the major progress during the last two years of cooperation manifests itself in four product categories: vegetables, aquatic products, eggs and egg products.
A key premise of Hong Kong’s imported food safety regime is restricting imports to mainland producers who are certified to provide specified products to the Hong Kong market. All vegetables supplied by the mainland can only be supplied by approximately 190 registered farms and purchasing stations, accompanied by pesticide declaration certificates issued by mainland authorities. Additionally, all vegetable shipments are required to enter Hong Kong by truck through the Man Kam checkpoint.[iv] Freshwater fish can only be provided by registered fish farms licensed by mainland authorities and approved by the Hong Kong Food & Environmental Hygiene Department. Like vegetables, all shipments of freshwater fish are required to be accompanied by certificates guaranteeing the shipment is free from harmful chemical substances.[v] Effective May 1, 2007, all fish tanks carrying live fish from Guangdong to Hong Kong are sealed with Radio-frequency identification (RFID) technology used to trace the point of origin. [vi] All shipments of poultry and poultry products are inspected and tested. Eggs and egg products must carry labels showing details of their farms and companies, production dates and batches for tracking purposes; all are required to bear health certificates.[vii]
Implications of the Hong Kong experience
Hong Kong’s experience establishing an improved import regime with mainland China illustrates the importance of working directly with individual provinces, particularly in the immediate aftermath of a crisis and taking full advantage of the sense of urgency brought on by high-level political and public attention. Hong Kong’s provincial-focused strategy was developed in response to a failure by central government officials to adequately regulate provincial activities. Immediately following a 2005 crisis involving fish farms using malachite green, a carcinogen, central government authorities sought to restore trade and consumer confidence by certifying fish farms and providing a list of 18 approved farms to Hong Kong authorities. However, journalists, followed by Hong Kong inspectors traveled to Guangdong to inspect the 18 farms, but found that among them, two were abandoned, two had their licenses revoked and six were not even in the local phone directory.[viii] Subsequently, Guangdong provincial authorities stepped in, registering all freshwater fish farms exporting to Hong Kong at the end of 2005. [ix]
While the provincial registration system is novel and an improvement over the first attempt, it has proven imperfect. Products containing excessive antibiotics residues were found in fish supplied by registered farms in Guangdong not long after the system was established. However, the registration system did enable authorities to track the sources of suspect fish and expeditiously prevent additional contaminated lots from being shipped.[x]
In addition to designing a more effective import qualification regime for mainland food products, Hong Kong companies can seek legal redress against mainland companies, further increasing the level of responsibility placed on mainland suppliers. Hong Kong has achieved a recent breakthrough in assuring recognition of Hong Kong legal judgments in mainland China, establishing a potentially feasible method of protecting corporate interests against loopholes in Chinese laws. One of the major difficulties that foreign companies have when involved in disputes with Chinese companies whose assets lie in China is that they can rarely avail themselves of the jurisdiction of foreign courts. This is because China has signed very few judicial-assistance treaties and seldom recognizes judgments of foreign courts.[xi] As a result, foreign companies have to take pains to bring a lawsuit in a Chinese court and run the risk of being awarded insignificant compensation either due to the vagueness of Chinese commercial law provisions or the de facto difficulty in enforcing even a favorable judgment.
In 2006, the Chinese Supreme Peoples Court and the government of Hong Kong published the “Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters.” [xii] The arrangement, once it is enforced by a ratifying ordinance in Hong Kong, will enable companies to obtain civil and commercial awards in Hong Kong and have them enforced against assets in China.[xiii] This will potentially reduce transaction costs for foreign companies that are unfamiliar and uncomfortable with Chinese judicial system. This presents a mainland registered supplier or processor a potentially significant disincentive to intentionally “cheat.” A legitimate firm which improperly uses chemicals or makes a false declaration or certification could soon face legal damages awarded by a Hong Kong court.
Updating food safety laws in China
China is not short of food safety regulations. Currently, there are 11 laws, 16 administrative regulations, 78 departmental regulations and a five year plan at the national level. In China, laws, which can only be enacted by the National People’s Congress (NPC) spell out general principles in broad terms. In practice, laws must be supplemented by more detailed administrative or departmental regulations and directives issued by various Ministries or departments under the State Council. Often new regulations are hastily issued by individual departments to deal with particular emerging problems, as is the case with the latest draft food safety law, the revision of which was hastened by the recent crisis.[xiv] As a result, despite numerous laws and regulations, many key technical issues are not effectively covered, and provisions are often not consistently enforced. For example, the current Food and Hygiene Law from 1995 does not include provisions on crop planting or breeding, which are crucial to food safety; nor does a food safety crisis management system or a nationwide recall system exist. [xv] Moreover, the penalty for non-compliance is astonishingly low—a maximum fine of 50,000 RMB is not enough to deter potential offenders who are attempted to cheat customers to increase their profits. A draft of the new food safety law was passed to the standing committee of the NPC in late October 2007 for deliberation. While a timeline was not provided suggesting when the new law might be promulgated, official descriptions of the draft law indicate that it will support an enhanced licensing and registration system and increased fines for violators. The law is also expected to affirm that exported products must comply with standards set by the importing country.[xvi] While an updated national food safety law will hopefully improve upon the current regulations, local officials will still have to consider whether guidances, directives and other regulations issued by various departments under the State Council will take precedence over provincial regulations which might not completely agree or be as up to date.
Provincial governments have extensive law-making power, enabling local officials to adapt broad guidelines set out by Beijing to suit local conditions. According to the “Legislative Law” passed by the NPC in 2000, provincial authorities have clearly defined legislative powers, known as “advanced law-making power” which empowers local authorities to draft and pass laws that suit local conditions, so long as they do not infringe on the broad brief reserved by central government authorities.[xvii] This allows local officials to institutionalize innovative legal solutions at local levels to tackle food safety problems which are otherwise unresolved at the central level.
Provincial laws are vital to establishing a framework that will ultimately improve manufacturing and food safety for three reasons; they are fast, flexible and customized. Provincial laws can be drafted by provincial government offices based on drafts previously issued by the central government. The provincial draft can be passed to the provincial people’s congress for approval, and then rapidly disseminated to provincial bodies that have authority over different food safety sectors. In a conformist system, the existence of a national law forming the base for a provincial law can speed the drafting and approval process. The dissemination process from the province to the prefectures and counties can be slow, but the “distance” in political as well as geographic terms is shorter between the provincial capital and the counties. The NPC’s deliberative process is cumbersome, with many laws taking years to pass. After being placed on the NPC’s legislative agenda as part of the 10th NPC session starting in 2003, the proposed food law received over three thousand recommended motions, with 1,000 members making recommendations during the NPC meeting in May 2007.[xviii] By comparison, Guangdong province began drafting its own food safety law in 2005, which has already come to the final stage of its third review by the provincial People’s Congress and is expected to pass in 2008. While there is no timetable for the national law to pass, the process can take two to three or more years. However, there is precedence for rapid passage of new laws, particularly when spurred by crisis. For example, the revised infectious disease law was squeezed into the NPC’s 2003 legislative agenda due to outbreak of SARS, and was subsequently approved and became effective December 1 2004. [xix]
Provincial food safety laws can be revised and up-dated more easily and more regularly to match changing conditions in individual provinces, particularly as the economy evolves and new industries quickly spring up. For instance, the “blue revolution” and rapid dissemination of aquaculture technology has made a significant impact on many provincial economies. Fish farming and processing has expanded into new rural areas away from the sea coast. The current National Food and Hygiene law, on the other hand, has not been revised since its promulgation in 1995 despite significant changes in food production, infrastructure, and technology since then.
The rapid evolution, expansion and regional specialization that occur in China make regular revision of local laws imperative. A provincial food safety law can be adapted to suit local circumstances, particularly when new technologies and industries emerge. Different provinces produce different food, adopt different means of production, and vary significantly in terms of customs and habits. Local governments are better equipped with relevant knowledge to fully address and tackle specific local problems and set standards that fall within the broader guidelines set out by central government authorities. Provinces can also benefit from the experiences of other provinces and be quick to incorporate successful legislative innovations. Ultimately, these provincial efforts can collectively influence and shape national laws.
The newly proposed draft of Guangdong’s food safety regulation has several facets which, if proven effective, can potentially inform national regulations. The Guangdong law includes detailed provisions for a food recall system, sets up cogent guidelines on inspection of raw materials sourcing processes, and contains strict rules on food production documentation.[xx] Guangdong’s regulation likely inspired other progressive provincial laws, such as the Beijing municipal government’s proposed regulations establishing its own food recall system.[xxi] Following the increased central government attention on food safety spurred by the recalls and seafood import alert in the US, several national-level meetings have been held, providing opportunities for provinces to share experiences, creating greater potential that successful practices will be expanded beyond the initiating province.
Improving Chinese food safety and increasing the quality of exports will be a long-term challenge which likely hinges on the success of local efforts to implement standards and employ new technologies. Focusing resources at local levels to build regulatory capacity as well as the knowledge of individual farmers and processors is one necessary step that will contribute to overall success. For example, in order to improve the safety and reliability of aquaculture, several long-term initiatives will be necessary, each requiring local government cooperation and the commitment and efficient use of resources.
A logical initial step would be a government-sponsored program to raise fish farmers’ awareness and to improve their access to technology. Often, banned and inappropriate therapeutic products are used by fish farmers to increase yields, (frequently in polluted water) without understanding the safety ramifications.[xxii] In some cases, there are affordable substitutes for banned products, but knowledge of these is not diffused effectively.[xxiii] Likewise, many banned substances are widely available, pointing to ineffective oversight and enforcement of existing regulations. While government crackdowns will temporarily cleanse a market of banned products, only the reduction of demand, through farmer and processor education will ensure that banned and inappropriate products are not used. Increased funding and capacity of agriculture extension agencies and farmers associations would contribute to improved food safety and increase processor knowledge of regulations and standards. This increased knowledge would boost rural incomes and local economies as well.
[i] Zhongguo Lianchuan Shiwu An’quan Wenti Rang Gang Ren Hen Gunrao [Unsafe Chinese Food Plagues Hong Kong People], Dajiyuan, August 22, 2005, http://www.epochtimes.com/gb/5/8/22/n1027112.htm.
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