After two years of deliberation and review, the Standing Committee of the National People’s Congress of the People’s Republic of China (the “Standing Committee”) has passed the Food Safety Law of the People’s Republic of China (?????, “Food Safety Law”) on 28 February 2009. The Food Safety Law came into effect on 1 June 2009, superseding the 1995 Food Hygiene Law (?????).
The Food Safety Law consolidates the hundreds of disparate regulations and standards that governed the Chinese food industry into one unified, published, national food safety standard. In summary, the new law will strengthen monitoring and supervision powers, toughen safety standards, mandate the recalling of substandard products, and subject offenders to severe sanctions.
Major changes to current requirements and practices
Broader coverage
The Food Safety Law has a much broader scope than the Food Hygiene Law, extending its coverage to:
• food production, processing, distribution and catering;
• production and sale of food additives;
• production and sale of packaging materials, containers, cleansers and disinfectants for food, and tools and equipment used in food production and distribution (“Food-Related Products”);
• the use of food additives and Food-Related Products; and
• safety control of food, food additives and Food-Related Products.
The Food Safety Law broadly defines “Food” as any “processed or unprocessed substance to be eaten or drunk by humans, including beverages, chewing gum and substances added to or residual in foods”, excluding those substances that are used solely as drugs.
All companies producing or selling any food, food additives or Food-Related Products in China, and almost all their relevant operational activities, will fall under the wide ambit of the Food Safety Law.
Centralized administration by Food Safety Commission
The Food Safety Law established a Food Safety Commission(?????? ?)under the State Council to act as a centralized authority that will oversee food safety in China.
The agencies involved in food safety regulation have been drastically cut, and the new law also clarifies the respective roles and functions of the five main authorities currently responsible for food safety control in China, namely: Ministry of Agriculture, General Administration of Quality Supervision,Inspection and Quarantine (“AQSIQ”), State Administration for Industry and Commerce (“SAIC”), Ministry of Health (“MOH”), and State Food and Drug Administration (“SFDA”).
Strengthened control over food additives
Learning lessons from the infamous Sanlu scandal in 2008 – in which melamine-contaminated milk powder led to the death of several babies and the illness of thousands of others – the Chinese government introduced provisions into the Food Safety Law that confirm and strengthen its control over food additives.
Under the Food Safety Law, no company may produce any food additive without obtaining a production permit from a competent authority. Food producers may only add food additives in strict compliance with national food safety standards regarding the type, usage and amount of the food additives. No chemical other than food additives may be added into food products during the production process.
Mandatory internal inspection and record system
According to the Food Safety Law, food producers in China must establish an internal inspection and record system for raw materials and predelivery products. Food distributors must also establish internal systems to record and inspect food products procured from suppliers.
Inspection exemption policy abolished
The Food Safety Law abolished the inspection exemption policy for food products implemented by the PRC State Council in 1999. No food products may now be exempted from government inspection.
Strengthened control over imported foods
Under the Food Safety Law, all imported food products, food additives and Food-Related Products are subject to the national food safety standards of China. No pre-packaged foods may be imported into China without appropriate Chinese labels.
All foreign food distributors and producers that import food products into China are required to register with the State entry-exit inspection and quarantine authorities. Importers must record the foods imported and distributed in China, and must keep the records for at least two years.
Food-related advertisements under stricter scrutiny
Statements regarding the prophylactic, therapeutic or diagnostic functions of products are not allowed in food-related advertisements under the Food Safety Law. No food safety supervision authority, food inspection institution, food industry association, or consumer association may “recommend” any food to consumers by any means. Any entity or individual that endorses any food product that is unsafe will bear joint liability with food producers and/or distributors.
Food recall system introduced
The Food Safety Law establishes a food recall system. The authorities with the power to recall unsafe food products have also been extended from the AQSIQ to other government authorities, such as SAIC and SFDA. The new law also increases the administrative penalties for non-compliance with government-ordered recalls.
Increased penalties for noncompliance
The Food Safety Law significantly increases the administrative penalties and civil liabilities for violations by food producers and distributors. In addition to the normal compensation for their losses, consumers may now claim punitive damages equivalent to 10 times the price of the food product from the producer or seller. If the food production licence of any food producer is revoked due to a violation of the Food Safety Law, the person-in-charge of the producer will be banned from taking up any management position in the food production business for five years.
Criminal sanctions
Apart from administrative penalties and civil liabilities, those who violate the Food Safety Law may also face criminal sanctions where the act of violation constitutes a criminal offence under the PRC Criminal Law.
Conclusion
The Food Safety Law will have significant impact on the Chinese food industry. Food producers, distributors, exporters and importers should take note of the sweeping changes that the Food Safety Law ushers in, and take steps to ensure that their operations comply with the new requirements and procedures. In addition, the severe penalties available under the Food Safety Law will encourage consumer complaints and product liability lawsuits in China. All food producers,distributors, importers and exporters should be on the alert for product defects and take steps to mitigate their exposure to various regulatory, civil and
criminal sanctions.
This article is one of several that appear in China Legal Developments Bulletin, April-June 2009.