China Food Safety Brief (February, 2015)
Key words: litigation, Shandong garlic, spring festival
1. Society& Supervision
1.1 Multiple public interest cases dealing with food safety were registered
In February, the Ministry of Agriculture Information Disclosure Case and the Lanzhou water contamination case were both registered. From the time the plaintiffs from each case filed the lawsuit to official registration was four months and nine months, respectively. There has been clear incidents of illegal behavior in the courts were these cases are registered. Both cases had to send letters to the Supreme Court before they could be registered. Justice For All, the NGO providing assistance for these two cases, believes that at a particular time, appealing to specific people and/or departments is what caused the cases to experience a turnaround.
The Lanzhou Water Contamination Case: In April of 2014, in one of the Western provincial capitals，Lanzhou，there was a break out of water contamination incidents. Around that time, 14 plaintiffs went to court in order to file civil lawsuits, but they were not accepted. The prospective defendant in this case would be the Lanzhou Veolia Water Service Group. A Sino-French venture, the group has 45% French ownership and 55% Chinese ownership.
The Ministry of Agriculture Information Disclosure Case: In September of 2014, several people opposing genetically modified foods filed a lawsuit against Ministry of Agriculture. The reason for the lawsuit was due to the plaintiff’s call on the Ministry to release a test report on Monsanto herbicides in order to prove that they were non-toxic. However, the Ministry withheld the information on the grounds that it was classified as a “trade secret”.
1.2 Twenty years of professional counterfeiting
One citizen bought over a hundred cakes, but realized that they were not labeled with a production date. According to China’s Food Safety Law, this entitles him or her to compensation of about 60 million RMB.
Although the not explicitly stated by the media, this was an instance typical of “professional counterfeiting fighting”. Professional counterfeiting fighting occurs when a company produces counterfeit products or buys them from somewhere else before selling them to customers under false pretenses. The professional counterfeiting fighters will buy those goods deliberately and sue the company or seller for a compensation. Due to consumer protection laws, consumers are entitled to large sums of compensation, which some are able to live off of.
Professional counterfeiting fighting has been around in China for about twenty years. The first to call out professional counterfeiting was Wang Hai, who even got a chance to meet with former U.S. President Bill Clinton for his efforts. Today, he is still fighting professional counterfeiting, but, though he is not as glamorous as he used to be, because now there are even more people who have emerged to fight counterfeiting professionally.
Unfortunately, however, within the past 20 years, the quality of consumer goods have fundamentally been no change, even though there are a growing numbers of professional counterfeit fighters, especially when it comes to food safety issues. Overall, Chinese society does not have a high opinion of these “professional counterfeit fighters”, and it is also considered a high-risk industry. China has not experienced the same consumer rights movement that occurred in the West. China only has a “professional counterfeit fighting” industry: Wang Hai has already established an anti-counterfeiting company, which has four branches, and earns around 100 million RMB a year. In fact, the “professional counterfeit fighters” have already formed acquaintance-friend relationships with the government and other enterprises.
1.3 The Yellow Salt Case
The core content of the Yellow Salt Case has to do with monopoly of the salt industry and standards of salt production. The focus of the debate is whether the yellow salt is Edible salt or Industrial salt, which determined whether to maintain the adoption of national standards or enterprise standards. In 2007, the Hubei Salt Franchise, in order to prevent the inflow of salt products from other provinces, monopolized the salt market by producing special yellow pickling salt. In this case, the plaintiff was only able to buy his salt from this area. Moreover, after pickling manufactures used this salt, the pickled products all began to stink.
Yellow Salt case is a civil suit involving two lawsuits. Regarding the first lawsuit, it was decided that the salt was actually edible salt, but the added ingredients violated the standard for food additives, and was therefore deemed a substandard product. The result of the second lawsuit was that because the state does not have set standards for pickling salt, the company developed its own standard to determine whether its product is qualified.
Though the lawsuits each had different results, the same court settled them. However, the verdict was detrimental to the plaintiff. Even if the product failed, the plaintiff was unable to prove that there were losses caused by the defective goods.
2. Government & Policy
2.1.1 Food safety liability insurance starts a national pilot
In early February, China’s Insurance Regulation Commission, Office of Food Safety Commission of the State Council, and the State Food and Drug Administration have jointly issued the “Development of Food Safety Liability Insurance Pilot Guide”, which means that food safety liability insurance will spread across the country. Previously, a revision to the Food Safety Law forced companies to pay for the content of food safety liability insurance, but this requirement was later revised to “encourage” companies to pay for the insurance. Nevertheless, forced food safety insurance pilots have still begun in Hunan and other provinces. The pilot has been in effect for less that three months, and formally issued food safety liability insurance on a national scale， but there should be more reasoning behind the decision to not disclose this information. According to media reports, China’s food liability insurance premiums are less than 4 percent of property insurance premiums.
2.1.2 More than half of the national food safety standard integration project had been completed
According to the National Food Safety Risk Assessment Center and the National Food Safety Standards Integration Program, the goal for 2015 is to complete 415 standard integration projects, and to have completed 50 percent of these by the end of 2014. As of February, there are already 228 integrated standards for solicitation for public opinion, including 208 reports from the State Food Safety Standards Review Committee to review the relevant sub-committee, which has already reviewed 204, completing the integrated project requirement for 2014. However, the Health and Family Planning Commission’s Deputy Director said that this mission will be a heavy and urgent task.
2.2.1 Beijing: Street vendors can participate in the Spring Festival Temple Fair
In November 2014, Beijing published a draft of the “Beijing Temple, Garden Parties, Trade Fairs, and Other Food Safety Supervision and Management Activities Law”. According to regulations, kebabs, grilled squid, and other items will not be allowed to be sold at the temple. However, in the final version of the draft, this provision was omitted, and the media reported that kebab stalls had made around 150,000 RMB a day at this year’s Spring Festival Temple Fair. It seems that some of the draft’s provisions go against common sense and will eventually have to be removed. But the real question is why these provisions were included in the first place, a question indeed worth pondering.
Since 2013, there have been many examples of this kind of food safety legislation, which is disturbing. It is worth mentioning that these food stands do not make as much money as vendors themselves would think. One vendor rented a stall for seven days and spent 190,000 RMB, so he did not actually turn a profit until the sixth day, meaning that street vending is a high-risk profession.
3. Events and tracking
3.1 Shandong: Garlic exports to South Korea recalled
Chinese products having to be recalled is not a new phenomenon, but each incident has sparked a heated debate within China. This time, the conflict had to do with China’s best garlic and South Korea. 2200 tons of garlic from Shandong, which led to a loss of at least 8 million RMB. Although Chinese Ministry of Commerce declared the problem to be a matter of commercial contract disputes, the media places the blame on China’s garlic agriculture, because China does not provide products that meet quality standards stipulated in the contracts (subpar garlic cannot exceed 5% of the total supply). However, there is still a mood of turbulent nationalism. The “Korean Wave” has impacted much of China’s younger generation, but many Chinese still hate South Korea. About 220,000 people who participated in an online survey, 62% said that South Korea’s detection results could not be trusted. The other 38% all believed that South Korea’s claims were genuine.