New Food Safety Law: building a modern food safety system in China

Since 2009, the People’s Republic of China has started a process of deep renewal of the legislation on food safety, through the approval of the Food Safety Law, which went into effect on 1st June 2009, consolidating hundreds of previous regulations and replacing the 1995 Food Hygiene Law. The Chinese legislator, inspired by the Rapid Alert System for Food and Feed adopted by European Union, has made great efforts to ensure food security.

In the most recent years, China has experienced many scandals involving infected and spoiled food products.

After over a decade of food-related incidents, Chinese government now considers people’s health to be a high priority, as a fundamental human right guaranteed by Article 21 of the Constitution,[1] and it is making further efforts in restructuring the mechanisms by which it supervises food production and distribution.

Revisions of the Food Safety Law, along with the adoption of new Food Safety National Standards and the recent amendments to Administrative Measures on the Collection of Food, the Consumer Protection Law and the Advertising Law show the purpose to ‘build a modern food safety system’.

The revised Food Safety Law, passed by the Standing Committee of the National People’s Congress (NPC) on 24^th April 2015 after a long drafting process, became effective on 1^st October. With 154 articles, compared with 104 of the previous text, the amended Law adds new provisions aimed at further discouraging immoral commercial practices. The introduction of stricter requirements concerning the circulation of food products has a strong impact not only on domestic food manufacturers but also on foreign companies exporting food products to China.  Therefore, foreign investors should be aware of the new provisions before conducting food business in China.

Harsher punishment for food safety-related violations

First and foremost, the amendments bring harsher civil, administrative and criminal penalties for offenders and their supervisors.

The revised law, called by responsible authorities ‘the strictest in history’, introduces administrative detention for offenders. According to Article 123, person-in-charge and other directly accountable personnel of any company adding inedible substances to food products could be detained for up to 15 days, in addition to fines and revocation of certificates.

The amendment also increases the amount of fines for those business operators who produce or sell food that doesn’t satisfy the necessary nutritional requirements. Producers may be fined up to 30 times the value of their products, (the penalty was previously 10 times the value). If the products value is less than CNY 10,000, then the fine will be up to CNY 150,000, three times the previous amount. Landlords of production sites and suppliers that sell unlawful substances may have revenue confiscated and be fined up to CNY 200,000.

The amendment underlines the importance to supervise the process of food production and distribution by introducing ‘strengthened disciplinary measures for those officials who fail to protect the public community’, by means of special demerit, demotion or removal in gross circumstances, or dismissal in serious circumstances.

Supervision of food production and distribution: inspection and traceability

The Food and Drug Administration under the State Council is in charge of supervision of food production and distribution according to the duties set forth in the Food Safety Law and prescribed by the State Council (Article 5). However, in order to reduce time and costs, the new provisions encourage food producing enterprises to test food produced by themselves or entrust qualified testing agencies (Article 89). Regarding to self-inspections, article 47 states that ‘food producers or distributors shall establish a self-inspection system for food safety (…); in case that food safety requirements are no longer be satisfied due to change of production or distribution conditions, food producers or distributors shall take rectification measures; in case of a potential risk relating to food safety, such producers or distributors shall forthwith cease the production or distribution and report to the food and drug administration of the people's governments in the location where they produce or distribute such food’.

On another hand, in order to prevent food safety incidents, to identify and address risks and to protect public health, the amended law introduces a mandatory traceability system, specifying that it shall be established by the State. According to Article 42, ‘the State shall encourage food producers and distributors to collect and preserve production and distribution information and to establish the traceability system for food safety by means of information technology’.

New safety rules for special foods

Provisions set forth in Section 4 of the new Food Safety Law deal with special foods such as ‘health care food, foods for medical purposes and infant formula food’ (Article 74).

After the 2008 milk scandal, consumers have lost confidence in Chinese dairy industry: the new Food Safety Law introduces strict regulations on infant formula milk. According to Article 81, manufacturers shall implement full-process quality control from incoming materials to outgoing finished products and inspect the outgoing infant formula food, batch by batch, so as to ensure food safety.

Raw materials and food additives in the production of infant formula food must comply with laws, regulations and national standards. For this reason, manufacturers have a duty to notify raw materials and food additives to the Food and Drug Administration under the State Council. They are required to register product receipts of infant formula milk powder with the above-mentioned authority as well.

With regard to products containing genetically modified organisms, the amended law establish that label must be placed on the GMO food product in an clear position; otherwise, business operators may be subjected to severe administrative penalties such as confiscating illegal income and products, fines, suspension of business, and revoking licenses.

The amended law also seeks to strengthen the supervision in relation to health foods. Pursuant to Article 75, the Food and Drug Administration together with the other relevant authorities, will issue a catalogue of health food raw materials, a sort of positive list of functional food ingredients, their dosage and effects. The use of raw materials, listed in the catalogue shall be restricted only in health-care food and not in other food categories. Moreover, Article 26 introduces a more simplified registration system: health food needs just to be notified to the competent authority; pre-market registration is required only in case of health food using raw materials not listed in the catalogue and health food imported to China for the first time.

With regard to food for special medical purposes the new Food Safety Law states that they shall be registered with the competent authority before having access to the market (for more details see Article 80).

New rules for online food platforms

As technology continues to evolve, retail transactions are largely conducted through e-commerce platforms. Therefore, it is essential to strengthen supervision on online food trading platforms and optimize quality control procedures. According to the revised law, online food retailers are required to provide real-name registration of authorised food distributors, to specify their food safety management responsibilities and, if they have lawfully obtained the license, to inspect it (Article 62).

The amended law provides that any consumer whose lawful rights and interests are damaged due to purchase of food via any online trading platform, has the right to claim indemnification against the distributor or producer of the food. If online food retailers fail to provide the required information, they will be held liable and consumers can file a legal action directly against them. After indemnification, online food retailers can recover their loss from the admitted food distributors or food producers (Article 131).

Perspectives on Consumer Protection

In recent years, consumer protection has become increasingly important in China: consumers play a significant role in the economic system and, as the weaker parties in the relationship with enterprises, they need to be protected by laws and regulations. As a consequence, a new Law on Protection of Consumers Rights and Interests was adopted on 15 March 2014. Several provisions of the new Food Safety Law also aim at enhancing consumer protection. This clearly shows that in China laws and regulations are now regarded as the most advisable instruments to restore market stability and to make consumers more confident about the safety and quality of food products.

In order to resolve complaints and meet public expectations, the new Food Safety Law states that any consumer that is damaged by food not complying with food safety standards, may demand reparation of three times the amount of any losses suffered from substandard food; producers or distributors that receive claims for compensation from consumers shall be jointly and severally liable for compensation and may not refuse to compensate (for more details see Article 148).

Conclusions

The amendment of the Food Safety Law, along with the adoption of new strict health safety standards, gives a clear signal that China is finally taking substantial action in its battle against food quality issues. In terms of preventive protection, the Chinese legislator seeks to introduce tougher safety standards, to strengthen supervision on raw materials and food additives, to intensify both inspections and self-inspections on food production and distribution, to use scientific and technological tools to test the quality of food products, etc. In terms of repression of violations, the Chinese legislator seeks to introduce more severe fines and to concentrate administrative powers in one sole authority.

However, since the food quality issues are systemic and complex, it is hard to see progress in the short-term. In order to restore its global reputation, China needs to take further steps. The amended law sets out a new legal framework for food safety in China and will lead to a number of deep changes. The authorities involved in food safety administration are now required to adopt additional implementing measures and the enterprises concerned must take the necessary actions to comply with the new health safety standards. This will improve improving the safety and quality of food products and encourage confidence in China’s food industry.

[1] Article 21 of the Constitution of the PRC reads as follows: ‘The state develops medical and health services, promotes modern medicine and traditional Chinese medicine, encourages and supports the setting up of various medical and health facilities by the rural economic collectives, state enterprises and institutions and neighbourhood organizations, and promotes health and sanitation   activities of a mass character, all for the protection of the people's health. The state develops physical culture and promotes mass sports activities to improve the people's physical fitness’.