1 Enforcing compliance with food regulation: Modalities in the relationship between public enforcement agencies and private parties Tetty Havinga and Frans van Waarden Draft paper prepared for the ECPR General Conference, Science Po, Bordeaux 4-7 September 2013 Panel Public and Private Food Governance: Politics of Labelling and Food Certification Standards in the section Food Governance. Dr. Tetty Havinga Institute for the Sociology of Law, Radboud University Nijmegen PO Box 9049, NL 6500 KK Nijmegen, Netherlands [email protected], T +31-24-3615915 Prof. Frans van Waarden University College, Utrecht University [email protected]
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Enforcing compliance with food regulation: Modalities in the relationship between public
enforcement agencies and private parties
Tetty Havinga and Frans van Waarden
Draft paper prepared for the ECPR General Conference, Science Po, Bordeaux 4-7 September
2013
Panel Public and Private Food Governance: Politics of Labelling and Food Certification
Standards in the section Food Governance.
Dr. Tetty Havinga Institute for the Sociology of Law, Radboud University Nijmegen PO Box 9049, NL 6500 KK Nijmegen, Netherlands [email protected], T +31-24-3615915
Prof. Frans van Waarden University College, Utrecht University [email protected]
Enforcing compliance with food regulation Modalities in the relationship between public enforcement agencies and private parties
Tetty Havinga and Frans van Waarden
Abstract
The past decades have shown two important transitions in food governance in Europe. First, the
increased role of private actors in global food safety regulation and the development of retail
driven private food safety regulation from the 1990s onwards. Second, the increased role of the
European Union and transnational governmental organisations. These transitions pose
challenges for national food safety authorities. In the Netherlands, the public food authority is
also confronted with limited resources available for enforcement. Food governance is
characterized by multiple regulatory arrangements involving multiple public and private actors
at multiple levels. The past decade we observe new emerging relationships between public
enforcement authorities and private parties. In this paper we will discuss different modalities of
cooperation and collaboration between public food authorities and private parties such as food
firms, certification and auditing bodies and industry associations. We will analyse various forms
of collaboration of the Netherlands Food and Consumer Product Safety Authority (NVWA) with
food businesses and certification industry. This includes public recognition of private norms and
control systems, inclusion of public prescriptions in private food schemes and controls, and
agreements between the public authority and private firms or sectors of industry regulating
reciprocal obligations with respect to compliance and controlling compliance.
1. Globalisation, food scandals and developments in food regulation
In 2013 we were startled by the news that horsemeat was being sold as beef in meat products
like sausages and lasagna. Other recent food scandals involved eggs that were inaccurately
claimed to be organically produced and frozen fish and seafood that were made heavier by
adding water. Some revelations are unfounded, such as the claim that Spanish firms had used
the meat of abandoned cats and dogs in the production of animal feed and meatball. More
serious, however, are food safety incidents where human health is at risk. Well-known incidents
in recent decades include the BSE crisis, the EHEC bacteria, melamine in Chinese milk and
several contaminations with dioxin and aflatoxin. Media reports on these incidents result in
consumer concern about adulteration, food safety and the credibility of both the regulatory
regime and food business operators.
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Food adulteration which can sometimes create human health risks is an age-old phenomenon.
The Romans suffered from water added to wine and the Bavarians from water added to their
beer. The Dutch added water to milk and cheese, and margarine to more expensive butter. The
temptation to add cheap ingredients to more expensive products and to profit from the
adulteration is an age old impulse. And time and again, creative ways to cheat the consumer
have been discovered, with the potential to create not just larger profit margins, but also
greater human health risks.
In response to these adulteration, authorities have attempted to regulate product safety,
quality, and honest trade. So the Romans, the Bavarians and the Dutch created laws against
adulteration such as the 1516 Bavarians Beer Purity Law (‘Reinheitsgebot für Bier). Originally,
food was often regulated by religious laws, e.g. of the Jews and Muslims. Religious authorities
had powerful religious instruments at their disposal to enforce such food standards. Eventually
also secular organizations of civil society got involved. In the medieval period European guilds
mobilized to govern and regulate the safety and quality of food and agricultural products (Hart
1952). Such self-organized and self-regulated private associations disseminated, monitored, and
enforced standards for specific areas of trade and manufacturing, including the oversight of
food safety and quality in order ‘to protect consumers and traders from food products risks and
unsafe commercial practices.’ (Braudel 1982, Carruth 2006, Van Waarden 2006). Public
oversight of this policy sphere ‘blossomed late’. Nevertheless, between the fourteenth and
fifteenth century, regulation by guilds was gradually substituted and complemented by local
ordinances and state laws as the scale and geographies of commerce expanded (Scheuplein
2009). Food scandals fueled such public intervention. As indicated, adulteration of wine had
already induced the Romans to enact quality standards, while beer adulteration led to the
Bavarian Reinheitsgebot for beer.
By the end of the eighteenth century, rampant adulteration of food stuffs by the newly constituted food industry led to consumer demands for increased public oversight. The increasing geographical distance between food production and food consumption provided opportunities for adulteration and the erosion of trust in the food chain. Governments responded with general nationwide legislation prohibiting adulteration, attaching penalties to violations and establishing public enforcement agencies. (Hart 1952, Lyon 1998:744, Scheuplein
1999).1 From here, the nation-state assumed a monopoly over food safety and quality regulation. Thus the Dutch dairy scandals of the early 20th century led to statutory minimum quality standards for dairy products. Yet guild-traditions persisted as well. Enforcement and oversight were delegated to butter- and cheese-control stations run by private trade associations. In the US, John Sinclair’s 1906 widely read novel about the shocking situation in the meat industry ‘The Jungle’, led to the creation of the US Food and Drug Administration FDA.
1 France passed its first general food law in 1851; England passed the Adulteration of Food and Drink Act
in 1860 (see Paulus 1974); the German Empire passed its first general food law in 1879; the United States passed the Pure Foods and Drugs Act in 1906 (see Barton Hutt 1984) and the Netherlands Warenwet was passed in 1919.
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The last decades have seen a growing public concern about food. Better informed and critical
and assertive consumers expect their government to secure safe and healthy food and
protection against all risks. We could speak of a revolution of rising expectations: as food
becomes safer and as knowledge about food risks increases, consumers expect a maximum level
of food safety. Information about potential risks and incidents travels fast around the world
through mass media, social media and internet.
Paradoxically, governments are on the one hand confronted with higher expectations and
demands regarding the safety, quality, and reliability of food product on markets. Yet on the
other hand, the powers of national governments to protect citizens have decreased because of
the globalization of food chains, invisibility of risks and political pressure to reorganize and slim
down inspection organizations. The high expectations for public food authorities and their
limited possibilities to be in full control lead to the need for public actors to rely also on private
food regulation and inspection. Can such public regulatory agencies rely on private actors? The
answer depends on the availability of private controls and on the reliability of private controls.
2. Various modalities of food regulation: public, private, hybrid
In the context of the outlined developments new forms of food governance have emerged,
notably new European Union food law, private food standards, corporate social responsibility
initiatives, and transnational regulation. The current landscape of food governance is rather
crowded and contains a growing diversity of regulatory arrangements: public, private and
hybrid. Actors involved in food regulation can be characterized by their position in food
production and trade. We distinguish four main types (Van Waarden 2011; Havinga & Van
Waarden 2013): First party, second party, third party and fourth party regulation.
1. First party regulation is self regulation of an organization. Most organizations have some
internal quality norms and quality control. All food businesses have an internal food quality
control system. These systems vary strongly in comprehensiveness and structure, from the
company-specific food safety management system (integrated into the quality management
system) of a multinational food manufacturer to the Dutch industry guide to good hygienic
practice for gas stations. One of the main drivers for first party regulations is the commercial
need to protect the company’s reputation. Food safety incidents may damage the firm’s
reputation and cause considerable loss. However, the establishment of internal food safety
management systems is not completely voluntary. All food business operators in the
European Union have to ‘put in place, implement and maintain a permanent procedure
based on Hazard Analysis and Critical Control Point (HACCP) principles’2. So these food
2 Article 5 of Regulation (EC) No 852/2004 of the European Parliament and of the Council
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safety management systems are partly a form of enforced self-regulation (Braithwaite
1982).
2. Second party regulation involves product and process norms and controls imposed by a
customer on the business partner. In particular international supermarket chains are
important second party regulators. Since the 1990s private retail standards have expanded
dramatically. Food retailers joined forces to harmonize supplier standards. Regulation of
food safety by retailers using quasi legislation as an instrument to force trade partners to
take food safety measures, evolved from one supermarket regulating the own supply chain
to regulation of the united supermarkets, monitored by independent certification and
inspection organizations. National private certification schemes have crossed borders and
became global or transnational. Currently dominant transnational retail-driven standards
are British Retail Consortium (BRC), International Featured Standard Food (IFS), Safe Quality
Food (SQF) and GlobalGap (Fuchs cs 2011; Van der Kloet 2011). Although second party
regulation imposed on suppliers is the most common form in food regulation, some
examples of a food firm imposing standards and controls on buyers do exist. For example in
the context of a franchise relationship, such as the Quality, Service and Cleanliness concept
of the fastfood chain McDonald’s (Love 1995). Supplier audits performed by food
manufacturers or supermarkets are also a form of second party regulation. The second party
is just as first parties motivated by prevention of reputation damage.
3. Third party regulation includes imposing and controlling quality norms by a private party
that is not involved in the transactions in the production chain. First and second parties may
turn to a third party for at least three reasons. A third party can specialize in auditing and
control and develop expertise and acquire (the necessary) experience. A third party auditor
can work more cost efficient by combining audits for several standards and because an audit
report may be valuable for several transaction partners. Moreover, a third party audit is
perceived as being more reliable and legitimate; organizational independence should lead to
objectivity and neutrality. An extra advantage for a second party is that it is cheaper: the
costs of the audit system are being transferred to the first party; because it is common
practice that the audit costs are being paid for by the company that is being audited
(whereas the costs of second party controls are usually beared by the second party). There
is an expanded market for auditing, certification and accreditation services, some of them
specialized on the food sector others more general. This auditing industry includes
organizations that set the rules (standard owners), organizations that perform audits,
organizations that issue certificates and organizations that offer assistance and advice in
developing food safety systems or complying with such a system. Many of these
organizations are commercial, some are not for profit.
4. Fourth party regulation is regulation and oversight by national and international public
authorities. Governmental organizations are a special type of third party. The provision of
sufficient and safe food is a public interest. Already in ancient times governments tried to
on the hygiene of foodstuffs.
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control the supply of food. People hold the government responsible for protection against
all types of risks including food borne illness, contaminated food and fraud.
Next to the four main types of regulation we also see many hybrid forms of regulation:
partnerships mixing actors from two or more of the above main types. Public and private forms
of food governance coexist. They operate mainly as separate regulatory regimes next to each
other. This may result in duplication of controls and inefficiency. However, some coordination
between private and public regulation already exists. For example, private regulatory
arrangements may incorporate and adopt public regulations. Many private auditors check
compliance with state laws as part of their auditing work. One of the general requirements of
almost all private food safety standards is compliance with all applicable state laws and
regulations. Non-compliance with legal obligations counts as non-conformity in most schemes.
Furthermore, legal food safety requirements such as regarding the food safety management
system, personnel hygiene, constructional requirements, pest control, traceability and allergens,
are incorporated and implemented in the requirements of the food safety standards such as
GlobalG.A.P., BRC, and IFS. The third party certifiers performing the audits against these
standards are thus controlling compliance with the governmental regulations (as implemented
in the standard).
The history of industry guides to good hygienic practice is an example of a more hybrid form of
food governance in which public and private actors as well as national and international actors
are involved. It all started with some food firms that developed a food safety management
system based on the principles of HACCP (Hazard Analysis and Critical Control Points). In 1993,
the Codex Alimentarius Commission of the World Health Organization endorsed the HACCP
system for ensuring the safety of food.3 Several supermarket chains adopted the system and
required from some of their suppliers to have implemented a HACCP food safety management
system (Havinga & Jettinghoff 1999:612). Next, a HACCP food safety management system
became a statutory requirement in several countries and in the European Union. All food
business operators have to ‘put in place, implement and maintain a permanent procedure based
on Hazard Analysis and Critical Control Point (HACCP) principles’4. A food safety system based on
the principles of HACCP is also legally prescribed in the United States (Spriggs & Isaac 2001; Ten
Eyck et al. 2006, Lytton 2013: 141-143)5 and in many private food safety schemes (Van der
Meulen 2011: 93).
To comply with this requirement of European Union law a food company may adopt an
applicable Guide to Good Hygienic Practice (whether or not specially adapted) or develop and
implement their own company-specific food safety management system (integrated into the
quality management system). The procedure to develop a food industry guide to good hygienic
May 2013). See also FSA Guidelines for the development of national voluntary guides to good hygiene practice and the application of HACCP principles in accordance with EC food hygiene Regulations, April 2013. The UK Food Standards Agency also has developed a range of food safety management packs for different sectors of the food industry to help food business operators manage their food safety management procedures. The Netherlands NVWA left this to the industry sectors. 8 http://ec.europa.eu/food/food/biosafety/hygienelegislation/good_practice_en.htm . See for a complete
list of recognised guides in the European Union and its member states: http://ec.europa.eu/food/food/biosafety/hygienelegislation/register_national_guides_en.pdf
become forms of ‘cooptation’? And if so: who might co-opt whom? I.e. is there a risk of ‘capture’?
Especially if political support of public agencies dwindles (financial cutbacks, mergers, lay offs, etc)
the agency could turn to the private sector for moral, financial, or organizational support (as it may
do when de facto ‘delegating’ regulation or inspection to private sectoral organization). See the older
US literature on capture of regulatory agencies by the (private organizations of the) sector they are
supposed to control.
Private control systems such as BDW include more frequent and more full inspections than the public
authority could perform. BDW inspects all relevant elements of the food safety system at least twice
a year, whereas the NVWA would normally only inspect the sites once in 1-5 years and not inspect all
element. Private control systems are also able to work in global food chains whereas the jurisdiction
of the NVWA is limited to the Netherlands. This advantage does not apply to the BDW case, and in
particular to international accepted food safety certification schemes such as BRC and IFS (until now
the NVWA does not rely on these certifications). Market driven private systems are very powerful
because the loss of market is a strong sanction and because regulatees will accept rules and
instructions as part of a business transaction more easily than from a governmental organization. On
the other hand, third parties do not have a direct interest in transactions although they are directly
interested in keeping the customer satisfied. This points to one of main weak points of private
regulation: the controlling organisation almost always has a financial interest: first and second
parties are involved in transactions, third parties are paid for by the firm under supervision. Another
potential weak point is the lack of transparency and the opportunities for misrepresentation. So far
certification is not always a guarantee for compliance with all regulations: some standards and some
certification bodies seem to be very lenient and not very reliable. Finally, when a public authority
does rely on voluntary private control systems there might be a free rider problem. In the Dutch
cases described this could be the case. Firms that participate in these schemes do pay for controls
and for better performance while firms that do not participate are not confronted with frequent and
vigorous controls by the NVWA.
We conclude with some conditions for public reliance on private governance systems:
- Agreement on minimum norms and requirements between involved public and private
actors
- Knowledge and training of professional staff in both auditing firms and in food industry
- An industrial culture in private auditing firms and in food industry that highly values food
safety
- A system of reputational damage for both auditing firms and food industry in case of bad
performance (a precondition seems to be transparency and public available information
about performance coupled with competent ‘watchers’ (public authority, consumers
organizations or other NGO’s, competing firms and consumers)
- Economic context that enables the promotion of long-term interests such as food safety (in a
highly competitive market where food safety is not valued in money there is always an
incentive to reduce costs by lowering standards or even fraud)
- Free rider-problem could be a problem in case firms that do not voluntary participate in
private certification schemes gain considerable advantages (no costs for auditing and for
adapting to requirements) whereas there are no (or less costly) disadvantages. Because of
this, public enforcement authorities should have the capacity to vigorously control these
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firms, sanction non compliance and make control results publicly available. The costs of
participation in the voluntary systems of BDW and RiskPlaza are rather high, whereas the risk
that non-compliance is detected by NVWA is rather low.
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