Today’s sessions opened with a keynote addressfrom Cass Sunstein, Robert Walmsley University Professor at Harvard. Sunstein is also the founder and director of the Program on Behavioral Economics and Public Policy at Harvard Law School.
Sunstein addressed a wide variety of in-depth issues in his talk on “Choosing Not to Choose.”
In the beginning of the talk, heprovided three objections to the argument that active choice-making is a muscle and should not be interfered with. First, people often choose not to choose, and forcing them to do active choice-making is “part of the family” instead of an alternative to default rules. It is also a form of libertarian paternalism. Second, in thinking about active choosing and default rules, we should bear in mind a basic evaluation framework that helps to minimize sum of decision costs and error costs. Third, sometimes it is best to choose not to choose. In many case we should honor people’s choice not to choose when it minimizes decision costs and reduces the magnitude and number of errors (especially when people are forced to choose, they may go in the direction that is wrong or not in their best interest).
Sunstein went on to three examples on the ground to orient the audience:
Case 1: A private company isdeciding among three options: (1) automatic enrollment in insurance unless opt out, (2) opt in to insurance, or (3) as condition for starting work, forced choice of whether to be insured and which insurance plan (active choosing).
Case 2: A utility company is deciding between a green default, a grey default for its consumers, or to force them to decide which source they prefer (no service until you decide).
Case 3: A doctor is dealing with patient facing difficult medical situations, and could decide among: (1) present array of options, (2) default (“if it were me I would/most patients do”) with opt out.
All three cases have an institution considering requiring active choice instead of default rules.Sunstein played with the meaning of “requiring” in order to unsettle the opposition and to suggest that it is often illusory. He briefly reviewed claims such as that doctors and policymakers are prone to error as well (behavioral biases), that governments lack knowledge as well, that behavioral findings can compound the problem, or that even when people are likely to err, their autonomy to choose should be respected. He argued that the distinction between active choosing and default is rather illusory because people often want to choose not to choose (for reasons like limited bandwidth, find choosing unpleasant, don’t want to take responsibility or regret, or know they are biased). When people don’t want to choose and are forced to do active choosing, we forbid their choice not to choose. “Choice requiring paternalism is not an oxymoron.”
The U.S. Court of Appeals for the District Columbia Circuit recently ruled against the meat industry’s challenge to stop the United States Department of Agriculture’s (USDA) implementation of the amended Country of Origin Labeling (COOL) rules. The current COOL regulations (amended in May 2013) require retailers to identify several types of information on beef, pork, and poultry products that were previously not required. It now requires labeling of the country where the animals were born, raised, and slaughtered along with the prohibition of the commingling of meat muscle cuts from different origins.
The old and less stringent version of the COOL regulations was published in 2009 by the USDA’s Agricultural Marketing Service (AMS) based on the 2008 Farm Bill (Food, Conservation, and Energy Act of 2008) amending the Agricultural Marketing Act of 1946. In the same year, Canada and Mexico brought a case in front of the World Trade Organization (WTO) Dispute Settlement Body (DSB), arguing that the old COOL requirements violated relevant WTO rules. The WTO DSB found that the old COOL requirements were inconsistent with the US’s obligations under Article 2.1 (national treatment principle) of the WTO Agreement on Technical Barriers to Trade (TBT Agreement) as well as Article X:3(a) (uniform, impartial, and reasonable administration) of the General Agreement on Tariffs and Trade (GATT 1994).
China’s highest executive organ, the State Council, put out the Food and Nutrition Development Outline 2014-2020 (the Outline) in February of 2014. The Outline was jointly drafted by China’s Ministry of Agriculture (MOA) and National Health and Family Planning Commission. The Ministry of Finance, Ministry of Education, Ministry of Commerce, Ministry of Science and Technology, and National Development and Reform Commission also participated in its development. Based on a review of China’s growth and problems in food and nutrition, the Outline sets a seven-year plan that highlights basic policy objectives. The areas of focus are food supply systems, nutrition intake and balance (especially amongst population sub-groups), regulatory and surveillance mechanisms, industry development, research, and education.
The Outline lays out its “guiding strategy” that the government should regard the effective supply of food, balanced nutritional profile, and production-consumption coordination as its chief missions. To execute these missions, the government identifies certain key products (quality agricultural products, convenient processed foods, and dairy and soy foods), key areas (poor, rural, and newly urbanized areas), and key population groups (the pregnant women and nursing mothers, infants and children, and the elderly) as starting points to promote better food and nutrition development patterns. Such points are further elaborated in the document. The guiding strategy ultimately aims to improve public health and a well-off society.
Last month, the Food and Drug Administration (FDA) published a draft methodological approach for designating high-risk foods (HRFs) as required by section 204(d)(2) of the Food Safety Modernization Act (FSMA). HRFs identified by the FDA are subject to additional record-keeping requirements, and more frequent foreign inspections and mandatory third-party certification requirements. The FDA is seeking comments, scientific data, and information from stakeholders to revise this draft HRF approach and to create a preliminary HRF list.
Among many available risk tools (e.g. qualitative, semi-quantitative, and quantitative methods), a semi-quantitative risk ranking model has been selected by the FDA as the most appropriate methodology for the HRF list. There are many reasons for choosing this model, including the fact that – as explained by the FDA – it is “data-driven and comprehensive, using explicit criteria related to public health risk; … adaptive to a variety of hazards; and … flexible to consider different foods or categories of food.”
Based on the draft semi-quantitative risk ranking model, the FDA is considering and evaluating a set of seven criteria that match the factors specified in section 204(d)(2)(A) of FSMA: Continue reading →
On February 21, a group of scholars gathered at HLS to discuss new directions for food safety and challenges to the implementation of the 2011 Food Safety Modernization Act (FSMA). The conference featured a keynote speech delivered by Peter Barton Hutt, who is commonly recognized as the food and drug law expert in this country.
Hutt is a senior counsel at the Washington, D.C. law firm Covington & Burling. He also served as chief counsel for the Food and Drug Administration (FDA) from 1971 to 1975. Hutt has taught a full course at HLS on food and drug law for over 20 years and has co-authored an influential casebook in this area.
Bringing in his expertise in the historical development of food law, Hutt began with what he called “still the best statute” from the English experience in 1266. At around that time, the English Parliament codified some early regulatory statutes (assizes) that prohibited the sale of any “corrupted wine” or of any meat, fish, bread, or water that was “not wholesome for Man’s body.” These laws continued to (with amendments and supplements) be of reference power in England until 1884. As articulated by Hutt, it would be sufficient for the FDA to do what it needs to do even when we take the core principle “not wholesome for Man’s body” and get rid of the entire rest of the food law.
Hutt then turned to another landmark development in the history of food law. In 1820, Frederick Accum, a German chemist working in England, published Treatise on Adulteration of Food and Culinary Poisons. The treatise had an immediate impact worldwide and triggered the modern development of food regulatory statutes in the United States and Europe. Indeed, the languages used in such statutes (such as prohibitions against adulteration) are reflected in the design of the 1906 and 1938 legislations in the United States.
The Food and Drug Administration’s (FDA) proposed rule on Accreditation of Third Party Auditors to implement the Food Safety Modernization Act (FSMA) has given rise to many questions on both domestic and international levels. The proposed rule is intended to establish a program for recognition of accreditation bodies and accreditation of third-party auditors to provide the FDA with a more efficient tool to regulate imported food products. In this regard, §307 of the FSMA and its implementing rule are generally seen as necessary to assist the FDA in regulating food imported from foreign jurisdictions, as the FDA is currently administratively and financially unable to ensure import safety on its own.
Again, the proposed rule on Accreditation of Third-Party Auditors is designed to cope with import food safety, and works in an inter-related manner to another proposed rule for Foreign Supplier Verification Programs (FSVP) for Importers of Food for Humans and Animals. However, many have expressed concerns about the possible trend toward such “import” rules – which embrace private regulatory participation – becoming de facto “domestic” rules. Although the legal effects of private certification against FDA standards of domestic products are yet to be clarified, the FDA indicated that such an introduction of rules to the domestic sphere may be desirable in the proposed rule on Accreditation of Third-Party Auditors:
This conference will bring together scholars to discuss a range of issues related to the Food Safety and Modernization Act, including FSMA and risk regulation strategy; regulating farm production; benefits, challenges, and gaps in FSMA’s approach; and international issues and trade implications.
KEYNOTE: Peter Barton Hutt, Harvard Law School/Covington & Burling – The Food Safety Modernization Act in Historical Perspective
About a month ago, Jensen Farms pleaded guilty to federal criminal charges for introducing adulterated food into the nation’s food supply via interstate commerce. In 2011, cantaloupes produced by Jensen Farms resulted in a listeria outbreak that spread across 28 states, killed 33 people, and sickened hundreds. The now bankrupt and out of business owners—brothers Eric and Ryan Jensen—are to be sentenced in January 2014.
The Jensens took responsibility for one of the deadliest food safety outbreaks in the United States, but they also turned around to sue Primus Labs, a food safety audit firm. The brothers allege that Primus Labs acted negligently, breached its contractual obligations, and engaged in deceptive trade practices in performing third-party audits on the farmlands and packing house. Merely weeks before the outbreak, Primus Labs sent one of its subcontractors (Bio Food Safety) to Jensen Farms to perform a third-party audit. After the audit, Bio Food Safety gave Jensen Farms a “superior” rating with an almost impeccable score of 96 out of 100, which was later found by the Food and Drug Administration (FDA) to be “seriously deficient in its inspection and findings.” As claimed by the Jensens, Bio Food Safety failed to observe several practices that were in violation of Primus Labs’ standards and relevant FDA guidelines or to inform them of any microbiological risk. Despite these deficiencies, Jensen Farms cantaloupes were “Primus Certified” and entered into the retail market.
The Jensen Farms case raises questions on the credibility of third-party audits and certifications in the area of food safety.
Earlier this year, the Food and Drug Administration (FDA) published for public comment the proposed rule to implement §307 of the FDA Food Safety Modernization Act (FSMA). The proposed rule is to establish a program for accreditation of third-party auditors to provide the FDA with a more efficient tool to regulate food products. Particularly, it assists the FDA in regulating food entering the United States via international trade, as it is recognized by the FSMA that the FDA is administratively and financially unable to ensure the safety of imported foods solely on its current system of border inspection. Under the new program, the FDA would recognize accreditation bodies, which would in turn accredit third-party auditors. These third-party auditors would then conduct onsite food safety audits in foreign jurisdictions and issue certifications for foreign food producers. According to the FSMA and the proposed rule, an accreditation body can be a foreign government/agency or a private third party, and a third-party auditor can be a foreign government, foreign cooperative, or a private third party. Both are required by the proposed rule to meet standards for legal authority, competency and capacity, impartiality/objectivity, quality assurance, and records procedures.
Will such a multilayer delegation structure result in dilution of accountability and effectiveness?
Congress -> FDA -> Accreditation Body -> Third-Party Auditor -> Producer
The FSMA seems to have created a regulatory dilemma for the FDA in terms of addressing imported food safety. The dilemma results from a structural mismatch between the broad scope of power granted to the FDA and the long chain of delegation to foreign/private actors as primary “regulators.” The FSMA instructs the FDA to delegate its regulatory authority to foreign governments and/or private third parties, aiming to largely increase the effectiveness of regulation along the global supply chain. However, the FSMA does not give the FDA adequate capacity to closely oversee such foreign/private regulatory agents along the delegation chain. Thus, the FSMA cannot hold foreign/private regulatory agents fully accountable for their failures in ensuring food safety.
At the World Trade Organization (WTO) committee dealing with food safety and other issues under the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) held approximately three weeks ago, China raised several trade concerns about the Food Safety Modernization Act (FSMA). Other WTO members, such as Brazil, Belize, and Korea, supported China’s concerns. One of the major points of contention was the FSMA’s import certification requirements and whether its outsourced third-party auditors will conduct food safety inspections in a manner consistent with the SPS Agreement.
Before we dig into the trade implications of the FSMA, two important questions must first be answered. What are the FSMA import food safety requirements? And what is the underlying rationale for such requirements?
In response to the melamine-tainted milk scandal in 2008, China replaced its outdated Food Hygiene Act with the Food Safety Law, which came into effect in 2009. The 2009 Food Safety Law includes provisions on risk assessment methods, establishment of a food safety committee, mandatory product recall requirements, and unification of food safety standards. However, this legal reform has left many key areas of the regulatory framework intact—such as industry compliance and law enforcement.
First, the crucial problem of overlapping competencies among responsible authorities is not addressed in the 2009 Food Safety Law. Although the Ministry of Health (MOH) is mandated to take the lead on food safety regulation, the current state is flawed as multiple agencies are only organized in a loosely coordinated system. For example, the State Food and Drug Administration (SFDA), the Ministry of Agriculture (MOA), the State General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), and the Ministry of Commerce (MOC) all take part in the regulation of the entire food supply chain. The result is a fragmented regulatory environment, which creates blind areas for agencies to push responsibility away, and therefore, perpetuate rather than alleviate loopholes in routine control. Thus, timely response and cooperation is difficult.
Why should we be concerned about China’s food safety problem? A recent opinion by Adam Minter on Bloomberg offers yet another tough criticism on China’s food system: “For more than a decade, China has earned a reputation as one of the world’s worst food-safety offenders.” Melamine-tainted milk, rat meat sold as lamb, recycled “gutter oil” for cooking, and most recently, juice made from rotten fruit, Chinese food producers never cease to surprise us with their “creativity” in economic adulteration. The Chinese government, however, has failed to establish an effective regulatory system beyond executing violators and political campaigns. The Chinese consumers continue to react with desperation to these endless food safety crises, smuggling bunks of infant formula from Hong Kong and other countries.
But why should we care?
According to testimony before a subcommittee of the House Foreign Affairs Committee in May, food products of Chinese origin have dominated the U.S. food market in areas such as tilapia (77.5%), apple juice (65.2%), cod (52.7%), processed mushrooms (34.1%), garlic (27.4%), clams (16.1%), frozen spinach (16.0%), and salmon (12.7%). The Chinese food imports are also expected to increase by about 10% annually until 2020. Faced with the huge volumes of foods imported into the US every year, the Food and Drug Administration has only been able to inspect about 2.3% of the total imports from China in 2011 (which is, well, an improvement compared to 1.3% in 2007). Moreover, the U.S. Department of Agriculture announced last month that China’s poultry processing inspection system is equivalent to its US counterpart. That is, processed chicken from China is determined as meeting US food safety standards (even if there are no on-site USDA inspectors in the processing facilities) and granted it access to the US market.
In an interdependent world trading system, regulatory failure in one country can spill over to many others, resulting in adverse public health repercussions in the latter country. We should take China’s food safety problem seriously.
In a congressional letter last month, 76 House Members urged United States (US) Trade Representative Michael Froman to push for strong and enforceable sanitary and phytosanitary (SPS) measures in the proposed Transatlantic Trade and Investment Partnership (TTIP). SPS measures – which have been viewed as an area with very little room for convergence between the two sides – cover animal health, plant health, and food safety law and regulation. The differences are evidenced by previous politically salient disputes over hormone-treated beef, genetically modified organisms (GMOs), and more recently, ractopamine in pork. Indeed, given the cultural and institutional divergences between the US and the European Union (EU) food safety regulatory systems, many doubt the possibility that TTIP can come up with an SPS chapter (or an SPS-Plus chapter) that strikes a proper balance between public health and international trade.
As noted by some commentators, given the relatively low tariffs between the EU and US, the chief focus will center upon reducing non-tariff barriers to trade in numerous sectors, including agricultural products, biotechnology, and food safety regulation. The Food and Drug Administration (FDA) has also established a special public health and trade team within its Office of International Programs to take a more active role in the negotiation. Yet the negotiation over such a “sensitive” area has been considered unpromising—transatlantic deadlock, cooperation failure, and several deal breakers (especially regarding GMOs)—because the differences in food safety regulation between the US and EU seem not only significant but also persistent.
However, the outlook may not be as pessimistic as the common understanding.
The Petrie-Flom Center is pleased to welcome our 2013-2014 Student Fellows. During the coming year, each of the fellows will pursue independent research under the supervision of Center faculty and fellows. They will also be regular contributors at the Bill of Health on issues relating to their research.