Discussion Paper

Voluntary GM-Free Labelling 

April 2003

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8. Factors for Assessing Options for a GM-Free Labelling System

• 8.1 Overview: Ownership and Administration Issues
• 8.2 Technical Expertise
• 8.3 Consumer Confidence
• 8.4 Flexibility
• 8.5 Ongoing Support
• 8.6 Dispute Resolution
• 8.7 Funding

Summary

The options for a labelling system discussed in the previous section, and the identification of consumer and industry "drivers", raise a number of issues that will have to be addressed during the development of the system. They are effectively questions for its developers that cover the areas of:

• ownership and administration
• technical expertise
• consumer confidence
• flexibility
• ongoing support
• dispute resolution
• funding

8.1 Overview: Ownership and Administration Issues

Previous sections have set out some of the "drivers" that stakeholders may have for the development of a GM-free labelling system, and the type of self-regulatory options that are available.

The labelling system will need to be owned and administered by some organisation that retains the confidence of consumers and suppliers. The central question is what form should that organisation take? The options identified in Section 7 posed a mix of ownership and administrative choices: independent third party (for example, a standards organisation), industry or consumer association, or a mix of stakeholders.

This section now looks at a number of factors that will have to be taken into account in developing a self-regulatory GM-free labelling system. The varying degrees of emphasis given to these factors by stakeholders will help in assessing the various options available and in determining the eventual ownership and administrative "shape" of any labelling system that emerges from this process.

8.2 Technical Expertise

The development of a structure to support a GM-free label is inherently technical, and will revolve around identity-preservation processes and tracing mechanisms. The technical expertise available to the labelling system's owners and administrators is an important issue. In particular, whether this expertise should be "in house" or contracted from quot;outside" as and when required.

The expertise available through the formation of an expert committee to develop a consensus-based national standard, or the use of a specialist organisation to develop a third-party standard, may have advantages over the expertise available to a stakeholder association.

8.3 Consumer Confidence

In Section 4 the relationship between consumer perceptions about the source of information and consumer confidence in a label was introduced. To build consumer confidence, a labelling system could be designed around the following principles:

• Participation - consumers participate in the development of a system and are widely consulted in decision making.
• Representation - consumers are represented in the decision-making forum. As the end users of a product, consumers can improve the quality of decision making by bringing their perspectives and experiences into a labelling system.
• Transparency - decisions on the scope, management, operation, and specifications of a system are made readily available to consumers.

Working from these principles, there is obvious merit in the development of a consensus-based national standard by an expert committee that is representative of interested stakeholders. Equally, however, the principles could be incorporated into a code of practice that supports a labelling system, including a third-party accreditation system by an inddustry association.

8.4 Flexibility

There is no agreed international interpretation of what GM-free means. A "GM-free" labelling system developed for New Zealand suppliers may need to change in response to international developments, such as the development of a GM-free definition by the Codex Alimentarius Commission. Other issues that may necessitate change include improvements in the sensitivity of testing procedures to detect GM material and genetic modification processes, and the decreasing availability of "GM-free" food if genetic modification techniques are adopted more widely. To accommodate change, a labelling system will need to have a degree of flexibility.

The ownership and administration of a labelling system will have a bearing on how quickly a system can be amended to respond to change. For example, convening an expert committee and reviewing a national standard may take longer than amending a code of practice.

8.5 Ongoing Support

A number of the labelling system options identified in this paper require some form of ongoing support, such as:

• monitoring and reviewing the system's specifications
• auditing suppliers against specifications
• accrediting suppliers
• publicity and marketing.

Many of these ongoing support requirements are administrative, and may need to be performed by a standing body. A code of practice requires both an executive to manage the code and a secretariat for day-to-day administration. Others, such as third-party certification, require continuing technical support.

Ongoing support requirements for a labelling system have funding implications that go beyond initial development costs. Funding may need to be recouped through a cost-recovery system, and so requirements for ongoing support will need to be considered at an early stage in the system's development.

8.6 Dispute Resolution

A dispute resolution process would provide an additional level of scrutiny and add "teeth" to a GM-free labelling system. It would help build and maintain consumer confidence, as consumers could take action against suppliers who are suspected of non-compliance with the system's specifications. Suppliers would also be able to take action against non-compliant competitors.

Some of the options for a labelling system identified in Section 7, such as a New Zealand Standard, are unlikely to be able to accommodate a dispute-resolution process. Whether a labelling system should include dispute resolution will, therefore, need to be considered before a system is developed.

A process for dispute resolution would also require ongoing support to ensure that decisions are fair, and that the process is efficient and accessible. Support is likely to include an executive to manage the system, a forum to hear complaints, and possibly an office. All of this suggests that the incorporation of a dispute-resolution process will impose significant administrative costs on a labelling system.

8.7 Funding

The question of who will fund development of a labelling system is an obvious hurdle to development.

Two main funding options have been identified:

• Cost recovery - the use of levies or licences on suppliers using the system or label could be used to recover development costs. An administrative structure may be necessary to manage cost recovery, which suggests that a labelling system would need to be based around a code of practice or a stakeholder association that provides third-party certification.
• One-off costs - stakeholders could contribute one-off costs to the development of a labelling system, for example, through the development of a national standard or a third-party standard owned by a specialist organisation.

The funding option that is eventually chosen will be influenced by the various factors that have been discussed in this section and the different weights that stakeholders give to them.

Questions for Submitters

• What technical expertise is available to develop a labelling system?
• Does the labelling system provide processes that will build consumer confidence?
• How flexible is the labelling system to change (for example, if an international definition of GM-free is developed, or improvements are made in the sensitivity of tests for detecting the presence of GM material or genetic modification processes)?
• What ongoing support structures does the labelling system require (for example, monitoring, auditing, licensing, or marketing requirements)?
• Should a labelling system provide for a dispute-resolution process?
• Who will contribute to the funding of a labelling system, and what form should this take?
• What ownership and administrative structure is most likely to take account of all the factors involved in developing a GM-free labelling system?