Greentrade OFA August 2006

Organic Federation of Australia

Organic Update August 2006

Standards Australia Update
The OFA has been consulting with organic organisations and government on a range of regulatory options that can protect the organic products from fraud and misrepresentation.

An Australian Standard for Organic and Biodynamic Produce with Standards Australia is the favoured option. Standards Australia agreed to start on this standard in June this year.

Recently there has been a debate and documents expressing concern about the proposal for an Australian Standard for Organic and Biodynamic Produce. This newsletter aims to clarify some of the incorrect and misleading information and provide the organic sector with the reasons why the Standards Australia route was chosen as the best option.

Concerns
The main concerns were:

1. Concern about Standards Australia Owning the Copyright of the Standard
2. Maintaining Organic Sector Control over the Standard
3. Cost of the Standards Australia process
4. The Exploration of Other Options

1. Concern about Standards Australia Owning the Copyright of the Standard
Standards Australia is an independent, non-profit organisation owned and run by its members. Its sole function is to develop credible standards, in an impartial and professional manner that can be used by industries, governments and regulatory authorities. Australian State and Federal Government regulatory authorities recognise these Australian Standards and can call them up into regulation where needed, whereas the existing organic standards are unlikely to be called up as they are private standards.

Standards Australia participation is in the administration of the process, including public consultation and secretariat functions. The copyright of the Standard is held by Standards Australia to recoup the expenses of these functions that are provided at no cost to the sector.

The best analogy to understand this process is the relationship between a book author and a publishing company. The author writes the book, has control over the information/content of the book. The publishing house sells the book, but the publishing house has no hand in the author’s intellectual content of the book.

The Standards Australia license agreement that has been quoted in one of the circulated documents has to be understood in this context. It is an agreement that the purchaser does not alter or breach copyright. It has nothing to do with the development of the standard.

2. Maintaining Organic Sector Control over the Standard
The organic sector will have control of the content of the organic standard. The contents of all Australian Standards are developed by the sector concerned. The members of the technical committees are sector representatives - not Standards Australia staff.

1. Representative Process
   The selection process is skills based with a committee selected on their knowledge of organic systems and standards. For the first time the standards development process will be fully representative with skilled participants along the whole supply chain, including producers, traders, consumers and certifiers. No single interest group will be able to dominate or take control.
2. Fully Open and Transparent Process
   It will be a fully open and transparent process where the whole sector will have the opportunity to comment on the draft standard and future changes through a consultation process.

   This means that the actual wording of the standard, how the standard functions and how and when the standard is altered is controlled by the organic sector. In other words the integrity and functioning of any Australian organic standard would be determined by the Australian organic sector not Standards Australia or any other interest groups.

3. Cost of the Standards Australia process
The Standards Australia process is the most cost effective of all the regulatory options considered in recent years.

Standards Australia provides all the management and secretarial support for free. The only cost to the organic sector is paying the travel expenses for the participants on the technical committee. Many of these meetings can be conducted by teleconference at no cost to the participants.

The organic sector currently has this arrangement with AQIS. However, as well as paying the travel expenses for their representatives, there are extra costs paid to AQIS to manage the secretariat for the National Standard. Certified producers pay for this. Standards Australia will result in a saving to certified producers, as AQIS will call up the Australian Standard for exports.

1. Cost of the Standard
   Concern has been raised that buying the new standard will be a significant cost to producers and industry. An Australian Standard does not preclude other standards.

   The current arrangement where certifiers have their individual standards and certify their clients to their own standard that they provide at no cost, can still apply. Just as the 2000 or so certified operators in Australia do not have to hold a copy of the National Standard, they will not have to buy a copy of the Australian Standard

   The critical issue is that the standards used by organic certifiers will have to comply with the Australian Standard as a minimum. Individual certifiers will be able to have additional requirements that are ‘above’ the Australian Standard, however they will not be able to allow practices or inputs that are not permitted or do not comply with the standard.

4. The Exploration of Other Options.
Before deciding to support the Standards Australia process the OFA investigated the other available regulatory options.

1. FSANZ
2. ACCC
3. Specific Legislation

1. FSANZ
It has been suggested that the organic sector continue to pursue a mandatory Food Standard Code under Food Standards Australia and New Zealand (FSANZ). FSANZ is the main food regulatory authority in Australia. Food labelling, ingredients, colourings, additives, pesticide levels and food hygiene requirements are some of the areas regulated by this federal government authority.

1. FSANZ Does not Want a Food Standard Code for Organic Produce
   The Australian organic sector has tried unsuccessfully for over 14 years to get a mandatory Food Standard Code under FSANZ. The main reasons for rejection are:
   1. The current National Standard for Organic and Biodynamic Produce (NS) is a production standard, not a food safety standard.
   2. The political climate in Australia is one where the major political parties favour deregulation and mostly regulate only when there is evidence of widespread failure in the existing self-regulation systems. Consequently the Federal Government has stated that the organic sector should use the existing self-regulation mechanisms rather than mandatory government regulation such as FSANZ.
   3. The support of New Zealand and all the States and Territories is needed for a mandatory Food Standard Code under FSANZ. This is unlikely at present or in the foreseeable future.
   4. FSANZ stated in a media release on March 17 2006 "…this isn’t a safety issue for inclusion in the Food Standards Code…"
2. Organic Sector Loses Control
   A mandatory Food Standard Code under FSANZ means that the organic sector would have a limited part in the process of developing the standard as FSANZ would control and own it. While it is likely that the sector would be consulted during the preparation of the various stages of the standard development, the shaping of the standard would not necessarily be in accordance with the sector preference. The primary point for sector comment (and any other interested parties) is at the release of initial, draft and final assessment reports.

   The current NS is a living document that can be and is changed as the need arises. Changes to a FSANZ standard require an application for a variation. Each variation would "take its place in the queue". This means that it could take years to change a standard under FSANZ. Also the organic sector would have virtually no control over the process or the outcome.

   A real concern is that the organic sector may not be the only party interested in applying for variations to the standard. Any interested party can put in an application for change and the decision will rest with FSANZ, not the organic sector. This means under the FSANZ system, Australia could be facing the same types of issues and pressures for dilution of the standard as we are seeing in the USA.

3. Costs
   Based on the experience of other industries the cost of a Food Standard Code under FSANZ would be in the hundreds of thousands of dollars
4. MOU Between Standards Australia and FSANZ
   Under a memorandum of understanding between Standards Australia and FSANZ, an Australian Standard can be called up into a FSANZ Food Standard Code. This is by far a better option than a dedicated organic Food Standard Code. It will give the organic sector the continuing control over the contents of the standard with the regulatory muscle of FSANZ

2. ACCC
The OFA investigated an Australian voluntary code of conduct under the Australian Competition and Consumer Commission (ACCC). This is the main regulatory authority that deals with issues of consumer and corporate fraud. This option was not pursued because it was:

1. Complicated – A code of conduct is not a standard, cannot be a substitute for the NS for exports and usually only applies to the businesses that are signatories.
2. Costly process – several hundred thousand dollars
3. Very little support from most of the certification organisations

Developing an Australia Standard does not preclude developing a code of conduct under the ACCC, in the future, if the organic sector sees a need for it. The advice from the ACCC is that an Australia Standard is sufficient for them to prosecute fraud.

A recent document being circulated confuses a Code of Conduct under the ACCC with a code of conduct for the organic certification organisations. The latter was developed by the Organic Food Chain to ensure better cooperation between the certifiers. The only other certifier who provided input and agreed to adopt this was NASAA, with the other 5 ignoring it.

3. Specific Legislation
There have been calls for the Australian Government to enact specific legislation for the organic sector similar to the USA and Europe.

In 2005 the OFA wrote to Senator the Hon. Richard Colbeck, The Parliamentary Secretary for Agriculture who had the ministerial responsibility for the organic sector at the time.

The government response was consistent with earlier responses. The government would be unwilling to introduce special regulations for the organic sector until it had utilised the existing self regulatory systems used by most industries to stop fraud and misrepresentation. The government recommended that the organic sector went down the Standards Australia approach.

The government has advised us that if the organic sector finds that there are significant problems with the Standards Australia process to stop fraud and misrepresentation, we will have a valid argument to government for specific regulation.

An Australian Organic Standard has many benefits

The organic sector has tried, without success, since 1992 to get either legislation or a mandatory Food Standard Code under FSANZ to prosecute fraud and misrepresentation. We are finally in a situation where we have the Minister, the Parliamentary Secretary and the two Commonwealth departments involved with the organic sector (DAFF and AQIS) prepared to work with us to achieve a domestic standard that can be called up by regulatory agencies like FSANZ. This gives us the best of both worlds - control over our standard and enforcement by regulation.

For more information please see our website: http://www.ofa.org.au/newsletter_menu.html

Organic Update is a publication of the Organic Federation of Australia
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PO Box 369 Bellingen NSW 2454 Australia
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