This contribution aims to provide you with a brief overview of the EU Organic legislation and recent developments. Being able to market products as ‘organic’ could be a plus for the food business operator (FBO) as the demand for sustainable production and organic food increases. This contribution focuses on the EU-system of organic certification of food products and will specifically look at the position of organic microalgae manufactured in the EU. Under the current legislative framework, these could not be marketed as such in the EU. This has changed since an interpretative note of the Commission of last summer. If you are an FBO interested in marketing organic microalgae, this for sure is of interest to you.
Organics Regulation – scope
First of all, what is ‘organic production’? According to recital 1 of the Organics Regulation organic production is: “(…) an overall system of farm management and food production that combines best environmental practices, a high level of biodiversity, the preservation of natural resources, the application of high animal welfare standards and a production method in line with the preference of certain consumers for products produced using natural substances and processes” (see also the definition in Article 2(a)).
What is covered by the Organics Regulation? Only agricultural plants, seaweed, livestock, aquaculture and animals are regulated under the Organics Regulation. For example, if an FBO wants to produce organic seaweed, all the processes have to be in compliance with the Organics Regulation. This approach is known as the ‘farm to fork approach’, which means every step in the production process throughout the supply chain has to comply with the Organics Regulation.
Organics Regulation – structure
The Organics Regulation has a layered structure. The following three layers of provisions can be found:
- General production rules (articles 1, 7 – 10), which apply to all forms of organic production.
- Production rules for different sectors (articles 11 – 21): general farm production rules and production rules for specific categories of products and production rules for processed feed and food.
- Detailed production rules (article 42).
If there are no production rules for the sector (layer 2), only the general production rules (layer 1) apply.
Compliance with the Organics Regulation has to be demonstrated by obtaining certificates from a certification body. (See the following link for a list of competent certification bodies in different Member States). In the event a certification body audits the FBO marketing organic products and it encounters violations of the Organics Regulation, it can decide to block certain non-compliant batches of products pending an investigation. Depending on the outcome, the certification body can subsequently decide to withdraw the certificate. If the certificate is withdrawn, the FBO is no longer allowed to market the products as ‘organic’. In case of severe violations, the competent authority may impose a recall of the products. In the Netherlands, Skal Biocontrole is the designated Control Authority responsible for the inspection and certification of organic companies in the Netherlands, within the context of Regulations: (EC) Nr. 834/2007 (Organics Regulation), (EC) Nr. 889/2008 and (EC) Nr. 1235/2008 (import of organic products from third countries). Skal monitors the entire Dutch organic chain on behalf of the Dutch Ministry of Economic Affairs.
The EU organic logo
The EU logo is regulated in a separate Commission Regulation. The main objective of the European logo is to make organic products easier identifiable by the consumers. Furthermore it gives a visual identity to the organic farming sector and thus contributes to ensure overall coherence and a proper functioning of the internal market in this field. For practical information regarding the EU logo, see this link and this link.
Prior to July 2015, FBO’s could not obtain an organic certification for microalgae manufactured within the EU for the use in their food products. FBO’s from third countries (non-EU) could market their products in the EU based on either the import procedure as set out in Article 33 (2) (import from recognised third countries) or the import procedure laid down in Article 33 (3) of the Organics Regulation (import of products certified by recognised control bodies). The strange situation was created where ‘organic’ microalgae could only be imported into the EU and not be produced within the EU.
How come? All agricultural products were considered to fall within one of the different production rules for specific categories of products (layer 2) and microalgae for food production were not included. Furthermore, detailed EU production rules for microalgae were absent (layer 3). (Article 42 (2) Organics Regulation).
The Interpretative note of the European Commission (Directorate-General for Agriculture and Rural Development) of July 2015 opened up the possibility for companies in both EU Member States and third countries to produce microalgae, which can be marketed as ‘organic’ and carry the EU organic logo. Both the existing production rules for plants (Article 12 Organics Regulation) and seaweed (Article 13 Organics Regulation) could be suitable for microalgae.
‘Until an implementing act adopted on the basis of Article 38 (of Regulation 834/2007) has clarified the situation, operators producing organic micro algae (except for use as feed for aquaculture) have therefore to comply with the general production rules, which apply to all forms of organic production (“layer 1”) and with the production rules for the sector of plants or seaweed (“layer 2”).’
The use of microalgae as feed for aquaculture is not covered in the Interpretative note, as microalgae as feed are already subject to the detailed production rules. The rules for the collection and farming of seaweed apply according to Article 6a of Commission Regulation (EC) No 889/2008.
The interpretation opens up the possibility to certify microalgae to be used as food (or as an ingredient in food) as being organic. When an implementing act will be published and enter into force is still unknown. A proposal for a new Regulation repealing the Organics Regulation has been published. On 5 November 2015 a report from the Committee on Agriculture and Rural Development on the proposal was published, introducing 402 amendments. The current status of the proposal is available through this link.
Aside from enforcement by a national control authority in case of non-compliance with the Organics legislation, consumers and other interested parties often also have the possibility to lodge a complaint relating to advertising of organic products. However, advertising of (organic) products is a topic to be covered in another contribution on Food Health Legal. Stay tuned!
On 11 September 2015 new legislation amending the current Commodities Act (in Dutch: Warenwet), partly entered into force. Under the new legislation the maximum administrative fine to be imposed on Food Business Operators (hereinafter: ‘FBO’s’) by the Dutch Food Safety Authority (NVWA) is increased dramatically compared to the prior maximum fine. The Dutch legislator has clearly increased existing fines to make them stronger and more effective to increase compliance with food safety regulations. The NVWA has more teeth, but will it bite?
The rationale behind the increased fines
A reason to increase the maximum fines can also be found in the battle against food fraud in general. Until recently the NVWA could impose a fine on an FBO on the basis of Article 32 of the Commodities Act. The maximum fine was set at € 4.500. According to its latest annual report, the NVWA imposed 2808 fines on FBO’s in 2014. The average amount of a fine was € 1.206,– and the total amount of imposed fines was € 3.413.893,–. Considering the costs of compliance with hygiene and administration standards, these penalties are merely peanuts for the average FBO and do not have the desired effect of contributing to compliant behavior as is confirmed by the statement further down in this post.
Fines linked to system under Dutch Penal Code
Fines in other areas such as data protection law are also subject to revision and they will both increase and expand (meaning an increased number of provisions will be subject to potential fines in case of non-compliance and those fines tend to increase as well). With a political climate both in the EU and in the Netherlands that leans towards stronger enforcement instruments, it was just a matter of time before the fines under the Commodities Act would be increased. The Dutch legislator seems to try to harmonize the several fines in different legal acts by referring to the categories of fines specified in the Dutch Penal Code. These categories are linked to the severity of the violation. The first category is the lowest and the sixth category the highest. The maximum fines are now set at the maximum of the sixth category: € 810.000,– (or 10% of the annual turnover). This means a 180 fold higher maximum fine!
In relation to the increase of administrative fines politician Sjoera Dikkers (Dutch Labour Party – PVDA) stated: “it is clear that a fine of € 4.500,– is cheaper for practically every company, then acting in compliance with hygiene practices in the Netherlands. For a fine of € 81.000,– this can be similar for big companies, depending on the nature of the infringement. That is why we would like to further increase the maximum penalty to the sixth category. This is the only way to scare companies enough to make sure they comply with hygiene requirements.”
The exact amount of the fine will have to be proportionate and therefore depend on factors such as the number of employees, the degree of culpability, the severity of the violation and/or the turnover of an FBO. The NVWA has to assess all individual circumstances in order to establish the amount of the fine.
Although relatively low fines indeed might give rise to profit for FBO’s from non-compliance and fraudulent behavior, drastically increasing the fines could have a downside for both the NVWA and the FBO’s. Imposing higher fines requires more effort and expertise from the NVWA. For fines that exceed the amount of € 340,– additional procedural requirements, similar to criminal law, have to be met by the NVWA. For FBO’s a high fine could indeed have a significant impact and even potentially mean bankruptcy. As we have seen in Dutch cases relating to the horsemeat crisis, the NVWA can impose the execution of a recall that can lead to bankruptcy. We will keep you informed on how this potential powerful enforcement instrument of high fines in the hands of the NVWA is handled in practice and dealt with in court. Hopefully, this will serve FBO’s in establishing what should be done to avoid or annul the decision of the NVWA to impose such fines, which is a part of our active practice.
The author is grateful to Floris Kets, trainee at Axon Lawyers, for his valuable contribution to this post.
In a previous post from January last year I wrote about country of origin labelling (COOL). I mentioned that the Commission was expected to adopt implementing rules on mandatory COOL for unprocessed meat of sheep, goat, pig and poultry, based on the Food Information to Consumers Regulation. A nice infographic about the new EU food labelling rules can be found here.
And now there is ‘COOL’ news: rules on origin labelling for meat apply from 1 April 2015. Which rules? The Commission adopted Regulation 1337/2013 on the indication of the country of origin or place of provenance for fresh chilled and frozen meat of swine, sheep, goats and poultry.
Background and scope
As from 1 April 2015 no packaged unprocessed meat product from abovementioned animals may be lawfully placed on the market in the European Union without a label indicating where the animal was reared and slaughtered. An exception applies to meat that was lawfully placed on the Union market before 1 April 2015. This may be sold until the stocks are exhausted, provided of course that the best before date/use by is not exceeded.
The European COOL rules do not apply to processed meats. In December 2013 the European Commission published a report concerning mandatory country of origin labelling (COOL) for meat as an ingredient. The overall conclusion of the report is that consumer interest in COOL is strong, but this is not reflected in the willingness pay for the extra costs for FBOs and an additional administrative burden. Read this post if you want to recall the discussion on the December 2013 report. Click here for the response (in Dutch) from the Dutch Food Industry Federation (FNLI) on the resolution and here for an article on this topic on the website of EurActiv. Until now, COOL has not been extended to processed meats, however this may change. In this resolution from February 2015, the European Parliament urges the Commission to follow up its report with legislative proposals making the indication of the origin of meat in processed foods mandatory. It is expected that this will ensure greater transparency throughout the food chain and it will rebuild consumer confidence in the wake of the 2013 horsemeat scandal, and other food fraud cases. This seems contrary to the outcome of the report in terms of feasibility as COOL for processed meats means higher costs for the industry and an increased administrative burden.
Now let’s have a look at the new rules. What is meant with ‘country of origin’ and what information should be placed on the label? Continue reading to find out!
The core provision of the new Regulation is Article 5, which lays down the COOL rules for the meats covered by the Regulation. Either the indication (i) ‘origin’, (ii) ‘reared in’ + ‘slaughtered in’, or (iii) a list of different indications should be placed on the label according to Article 5.
What is meant with ‘country of origin’ for meat products?
Recital 3 of Regulation 1337/2013 refers to the concept as set out in Articles 23 to 26 of Council Regulation 2913/92 (Customs Code). For meat products the country of origin means the country in which the animal was born, reared and slaughtered. Only in this situation the following indication may be placed on the label as far as the food business operator is able to prove the correctness of the statement to the competent authority:
- ‘Origin: (name of Member State or third country)’
But what if the meat comes from animals, which were born, reared and slaughtered in different countries? In that case in indication of the country (Member State or third country) where the animal was reared and the country where the animal was slaughtered have to be specified on the label.
Article 5 of the Regulation gives specific criteria to determine the correct indication for the country where the animal is ‘reared in’ related to the rearing period of the animal in a country. If the specified rearing period is not attained in any country the label must show one of the following indications:
- ‘Reared in: several Member States’
- ‘Reared in: several non-EU countries’
- ‘Reared in: several EU and non-EU countries’
- ‘Reared in: (list of Member States or third countries where the animal was reared)’
The last option may only be used if the FBO is able to prove this to the competent authority.
The Member State or third country in which the slaughter of the animal took place has to be indicated as follows:
- ‘Slaughtered in: (name of the Member State or third country)’
If pieces of meat, of the same or different species, are packed together and correspond to different labelling indications, the label has to indicate the list of relevant countries for each species (see Article 5(3)).
Furthermore, the batch code identifying the meat supplied to the consumer or mass caterer should be placed on the label.
If you are a FBO operating both in the EU and the US you might be interested in COOL in the U.S. Like Europe, the U.S. COOL statute defines multiple origins for muscle cuts of meat, depending on where the animal was born, raised and slaughtered. This is pretty much in line with Europe, which defines “born, reared and slaughtered” as the origins that must be placed on the label. Do you want to learn more about COOL in the US and how the new EU rules are perceived in the U.S.? Here is an article.
The United States Department of Agriculture (USDA) Agricultural Marketing Service has published a practical COOL labelling guide for the industry with specific examples of appropriate COOL language for the U.S. market. You can find it here.
Cool with COOL?
What is the potential impact of the new rules on your business? With an increased complexity of the label this is likely to increase the costs for compliance. Consumers will receive extra information, but will they see this as an improvement? With regards to food safety, the Regulation prescribes the use of an identification and registration system to ensure traceability (Article 3). The system has to particularly record the arrival at and the departure of animals, carcasses or cuts from the establishment of the FBO. Also a correlation between arrivals and departures has to be ensured. Aside the mislabelling issue, the horsemeat scandal clearly showed that the current traceability systems are not adequate in case of incidents. More detailed rules on traceability are aimed to contribute to food safety and protection of food safety is also an important interest for the food industry. Compliance is serious business as non-compliance can lead to administrative sanctions. Furthermore, fraudulent labelling constitutes a criminal offence and an offender can be prosecuted under criminal law. This is what happened to Dutch meat trader Selten. Last week he has been sentenced to 2.5 years in prison. According to the court he is guilty of forgery. He has sold horsemeat as beef. Click here for the newsitem (in Dutch).