Voluntary GM-Free Labelling
April 2003
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7. Self-Regulatory Options for a
Labelling System
Summary
Three self-regulatory options have been identified for the
development of a labelling system:
- National standard - a standards committee would develop
technical specifications around identity-preservation and
product-tracing mechanisms to support GM-free claims and
the use of an identifying label.
- Code of practice - developed by stakeholders or a
standards organisation and setting out industry best
practice, including mechanisms for identity preservation,
product tracing, labelling, publicity, and (possibly)
disputes resolution.
- Third-party certification - carried out by a stakeholder
organisation or a specialist certification organisation to
provide independent verification of a supplier against a
set of specifications.
7.1 Overview
The development of a voluntary labelling system is a form
of self-regulation for suppliers who wish to make GM-free
claims, and who see that there is an advantage in using a
shared system.
In its barest form, a labelling system could set out the
industry guidelines that suppliers should follow before making
a "GM-free" claim, which may reduce the risk of
action under the Fair Trading Act. Consumers and suppliers
may, however, have greater confidence in the accuracy of
labelling claims where a system provides an administrative
structure that has the role of auditing, monitoring and
certifying suppliers against the system's requirements. For
example, an independent third party could audit and certify
suppliers against the system's requirements - failure to meet
these requirements could result in censure.
As a mandatory requirement of a labelling system,
third-party certification would provide consumers and
suppliers with independent assurance that all of the suppliers
using the system were meeting its requirements. As a voluntary
requirement, individual suppliers could use third-party
certification to assure themselves that they met the system's
requirements.
Depending on the standards that the owners of the labelling
system wish to promote, a system could provide a forum for
resolving disputes. Providing a disputes-resolution process
would respond to any consumer concern over the integrity of
the system and could also extend to suppliers who object to
the outcome of an audit, certification process or act of
censure.
The three main options for a self-regulatory labelling
system are a national standard, a code of practice or
third-party certification. All of these options are discussed
below, but they are clearly not exhaustive. An alternative
may, for example, be the establishment of a public database
that includes information on the source of foods, food
ingredients and their genetic status. As well, any combination
of these options could be used for a labelling system.
7.2 Standards
Standards are generally an agreed set of specifications
and/or outcome-based statements, such as:
- the kind, grade, quantity, origin, performance, care,
composition, contents, manufacture, processing, design,
construction, use, finish, or packaging of goods
- the testing of the goods during and/or after
manufacturing or processing
- the form and content of markings, warnings or
instructions to accompany the goods.
Standards can be developed by an industry association, an
industry sub-sector, or by groups with a common interest in a
product or process.
7.2.1 National Standards
Standards New Zealand (SNZ) is the trading arm of the
Standards Council, a Crown entity with the responsibility for
developing national, regional and international standards
(often jointly with Australia). Where appropriate New Zealand
Standards are based or developed around similar or equivalent
international standards. This assists suppliers in gaining
access to export markets, and can assist in enabling imports
to New Zealand through harmonisation of Standards.
When a New Zealand Standard is developed, revised or
amended SNZ would generally secure funding for the project
based on the defined scope and the timeframe for delivery. SNZ
is obliged under the Standards Act 1988 to consult with all
interested parties and to establish a technical committee
under the project management of SNZ to develop the standard.
Membership of the committee is drawn from a balanced
cross-section of all those organisations who may potentially
use, or have an interest in, the Standard. Generally, this
will mean representatives from: consumer, industry,
professional and technical associations; research and testing
bodies; and regulators. SNZ retains ownership of the standard
and is responsible for managing revisions based on time or
need.
All the parties involved must agree upon the final content
and shape of a national standard. Wider public comment is
sought and considered by the committee during the development
stages. Claims of compliance with a national standard may be
made by self-declaration (to make a false claim would breach
the Fair Trading Act) or a third party can certify compliance.
An example of a national standard that has been developed
to support a label requirement is summarised in the box below.
Textiles - Care Labelling
The Consumer Information Standard (Care Labelling)
Regulations 2000 is a mandatory standard under the Fair
Trading Act 1986. The regulations require suppliers of textile
articles to provide information to consumers on the correct
way to care for articles, including dry-cleaning and washing.
The regulations also prescribe the form of symbols and
terminology on the label.
A voluntary joint national standard has been developed, AS/NZS
1957:1998 "Textiles - Care Labelling", to assist
suppliers in meeting the Care Labelling Regulations. The
standard sets out a procedure for suppliers to determine how a
textile product should best be cleaned, dried and pressed -
which then enables them to correctly disclose this
information.
The standard uses a series of procedures for determining
the correct care-labelling instructions, which are summarised
in a flowchart. Some of the procedures include classification
of the textile article by fibre type, reference tables on the
end use of products, and a reference table on the appropriate
care-labelling information and performance tests to verify
that the care-labelling instructions are accurate.
7.2.2 GM-Free National Standard
Standards New Zealand could be commissioned by stakeholders
to develop a national standard to support a
"GM-free" label. The standard could address
technical issues surrounding the verification of
"GM-free" food, such as detailing processes for
tracing food and food ingredients.
Suppliers who purchase the standard and follow its
provisions could label food as being "GM-free". They
could then substantiate this by referring to their use of the
standard and/or by evidence of third-party certification. The
standard could prescribe the form of a GM-free label for
suppliers to use. In either case, representations by suppliers
that they have met the GM-free standard could always be
"tested" by someone bringing a claim of
misrepresentation under the Fair Trading Act.
7.3 Code of Practice
A code of practice is a set of principles, rules and
procedures that regulate those suppliers who agree to be bound
by its provisions. Codes are generally developed by an
industry sector or a standards body, in consultation with
consumer and government stakeholders, and are owned and
administered by those suppliers who subscribe to it.
A code of practice will generally provide a set of rules
similar to a standard, but the rules are normally developed by
the owners of the code. An administrative body is usually
established to support a code and may be responsible for
monitoring and auditing compliance with the code, reviewing
it, and undertaking dispute resolution between consumers and
participating suppliers.
Examples of codes of practice include the Electricity
Complaints Commission and the Insurance and Savings Ombudsman
scheme, both of which are established for the purpose of
dispute resolution. The Juice Association Code of Practice,
summarised in the box below, is an example of a code that
focuses on processing procedures and the validity of claims
made by suppliers.
Code of Practice and Administration Rules for the New
Zealand Juice Industry[10]
The Juice Industry Code of Practice applies to all members
of the New Zealand Juice Association (NZJA) and other
subscribers approved by the NZJA. The purpose of the Code is
to assist industry compliance with New Zealand's food and
dietary supplement regulations and the Fair Trading Act.
Members of the NZJA, and other subscribers to the Code,
agree not to engage in misleading or deceptive conduct
(prohibited under the Fair Trading Act). Misleading or
deceptive conduct includes the adulteration and dilution of
juice; misrepresentation about juice composition, grade and
contents; and misleading packaging or advertising.
The Code is administered by the NZJA, which is responsible
for promoting, financing and reviewing the Code. It also
conducts an ongoing juice monitoring and testing programme.
Individual members of the NZJA, and other subscribers to the
Code, may also conduct testing of competitors' juice products.
Results of the NZJA's monitoring programme and complaints
about breaches of the Code by competitors or from the public
are referred to the New Zealand Industry Compliance Committee.
The committee is appointed by the NZJA, and includes
representatives from the NZJA, consumers and the juice
industry. Depending on the significance of the breach, the
committee may issue warnings, publish test results, notify
retailers or government enforcement agencies, or institute
legal proceedings itself.
7.3.1 GM-Free Code of Best
Practice
A labelling system could be based on a code of practice
that codifies industry "best practice" for the
supply and labelling of "GM-free" food. The code
could be developed by an industry association, or even a group
of suppliers within an industry, in consultation with consumer
organisations and other interested stakeholders. The code
could include rules relating to:
- sourcing identity-preserved food and food ingredients
- documentary evidence to support "GM-free"
claims
- labelling (labels, logos or other insignia that certify
a supplier to be a subscriber to the code)
- publicising and marketing the label
- disputes resolution.
7.4 Third-Party Certification
Third-party certification schemes generally involve an
independent party auditing suppliers for compliance to a set
of specifications or standards (national or international).
The specifications may be a national standard or similar in
scope to a national standard, and set out procedures for
tracing food and food products, record keeping and segregating
"GM-free" foods. They could also prescribe the form
and circumstances in which a supplier could use a
"GM-free" label, although certification schemes
usually require suppliers to have had their product or
production processes certified before making a claim.
Three immediately apparent options for the development of a
third-party certification labelling system are:
- specialist certification organisation
- stakeholder association
- certified standard.
7.4.1 Specialist Certification
Organisation
Stakeholders could approach an organisation that
specialises in the development of specifications, and the
certification of suppliers, to develop a GM-free labelling
system. AgriQuality - a state owned enterprise specialising in
agricultural and production procedures - offers certification
and quality-management systems across the agricultural and
food industries. AgriQuality retains ownership of the
specifications it develops and recoups costs by charging
suppliers a fee for certification.
An example of an AgriQuality system is their Organic
Standard, which is summarised in the box below.
AgriQuality - Organic Standard
The AgriQuality organic standard is based on the Codex
Alimentarius Commission international food standards, EU
Regulations and Australian National Standards. It specifies
minimum compliance requirements to gain certification for the
production and labelling of organically produced foods. The
aims of the standard are to protect consumers against
misleading information in the market; protect producers of
organic produce against misrepresentation of other
agricultural produce as being organic; and to ensure that all
stages of food production, preparation, storage, transport,
and marketing comply with the standard.
Certenz, an independent business group set up by
AgriQuality, certifies organic products and businesses to the
AgriQuality Standard. The Joint Accreditation System of
Australia and New Zealand (JAS-ANZ) has accredited Certenz for
compliance with ISO 65 ("Certification of organic foods
and organic food production systems").
In addition to developing the standard and
certification, AgriQuality provide services to assist
suppliers wishing to produce organic foods. These services
include training, testing, gap analysis, and auditing.
7.4.2 Stakeholder Association
A third-party certification scheme could also be developed
and operated by an industry association, group of industry
members, or interested stakeholders. Development of
specifications and supplier certification may be the sole
purpose of an association - making it similar to the
development of a code of practice. An association could recoup
the cost of establishing and administering a labelling system
through certification fees, levying members, or licensing
suppliers to use the label.
The National Consumers Food Safety Network have done some
initial work around developing a GM-free labelling system
similar to the Heart Foundation's "Pick the Tick".
The system would be based on an identity-preservation system
and supported by testing. It would be owned by a consumer
trust and use a logo. Suppliers using the logo would incur
charges to pay for verification, promotion and maintenance of
the system.
Two associations that have certification systems, BIO-GRO
and the Heart Foundation, are summarised in the box below.
BIO-GRO Organic Standard
BIO-GRO is the trading name for the non-profit organisation
New Zealand Biological Producers and Consumers Council Inc. It
is funded through membership and inspection fees, licensing
levies, donations, and grants.
BIO-GRO is an accredited member of the International
Federation of Organic Agricultural Movements. BIO-GRO has
developed its own standard that meets EU, US and Japanese
regulations governing the use of the "organic"
label. This standard is reviewed every two years.
BIO-GRO certifies both primary and non-primary production
against its standard. The certification process includes
testing, annual auditing and random auditing on a 3-4 yearly
basis. If non-compliance with the BIO-GRO standards occurs,
additional follow-up documentation or audits may be required
to provide evidence that non-compliance has been corrected.
Suppliers that meet the standard, and pass the certification
process, are licensed by BIO-GRO to use its trademark.
Heart Foundation - "Pick the Tick" Trademark
Symbol
The "Pick the Tick" symbol is part of the Heart
Foundation's nutrition programme aimed at improving New
Zealander's eating patterns. Foods carrying the symbol are
lower in total fat, saturated fat, and sodium than comparable
products.
Suppliers seeking to use the symbol must submit their
product for assessment against the Foundation's guidelines.
Suppliers with foods that meet the guidelines must pay a
royalty and enter into a licensing agreement to use the
symbol. Product packaging and advertising must also be
approved by the Foundation.
Suppliers that enter into the licensing agreement with the
Foundation agree to have their product and packaging randomly
tested against the guidelines.
7.4.3 Certified Standard
A third-party certification scheme could also be built on a
national standard, with suppliers becoming certified against
the standard by an accredited certification body. For example,
Bureau Veritas, AgriQuality and SGS International
Certification Systems audit and certify an organisation's
systems and processes against agreed specifications and
standards. Certification bodies have in turn been accredited
by an accreditation body such as International Accreditation
New Zealand (IANZ), or JAS-ANZ as recognition of their ability
to provide this certification.
Similar to the way in which the "S" mark is used,
certified suppliers could use a symbol or logo specified in
the standard to indicate that their product and process is
GM-free, and has been certified as such.
Questions for Submitters
- What option appears most suitable for a labelling
system? What are its advantages and disadvantages?
- Which option would provide suppliers with the most
confidence to make "GM-free" claims?
- Which option is likely to gain the most consumer
support?
- What other options could be developed?
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