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Executive Summary: Imported Food Review
The Imported Food Control Act Review is part of the comprehensive examination of legislation being undertaken by the Commonwealth Government to ensure compliance with the National Competition Policy. The principle behind National Competition Policy, as stated in the Hilmer Report, is that it "seeks to facilitate effective competition to promote efficiency and economic growth while accommodating situations where competition does not achieve efficiency or conflicts with other social objectives". This Review focuses on those parts of the Imported Food Control Act 1992 which restrict competition or which result in costs or benefits for business.
The Review initially received 28 written submissions from a broad cross-section of the food importing and processing industry, government departments and consumer representatives. In addition, the Review Committee consulted with food importers and customs brokers, peak industry and consumer organisations, relevant government instrumentalities and health experts. The Review Committee undertook industry site visits and held discussions with policy and operational staff of the Australian Quarantine and Inspection Service (AQIS) responsible for the Imported Food Inspection Program (IFIP). The Committee released its Draft Report at the beginning of October, and nineteen responses were received.
Approximately ten percent of the food consumed by Australians is produced overseas. Because Australia had no direct control over food production in exporting countries, a system was introduced to ensure that imported food complied with Australian public health and food standards. To achieve that objective the Imported Food Control Act has relied, in the main, on barrier inspection and end-point testing.
The Review has occurred at a time when food safety regulation and food safety practices in Australia and overseas are undergoing major change. At the same time, there is rapid growth in world food trade, Australian food consumption patterns are changing and there is increasing consumer concern about food safety. Much of the food now consumed by Australians is relatively underprepared or "fresh" compared to the traditional thoroughly cooked or salted foods. Such foods come with higher inherent risk if not prepared under adequate safety plans. However, the emergence of new preservation and processing techniques result in process controls being more effective in verifying the safety of the product when compared to traditional end-product inspection and testing.
The Review Committee has examined the nature of the food market and identified a number of factors pertinent to the food industry which can lead to market failure and impede the efficient operation of the market. Government regulation through the setting and enforcement of food standards provides confidence to consumers that commonly available foods are safe for human consumption and requires manufacturers to identify the contents of their food. Another major source of market failure in the food sector results from the costs arising from the sale of contaminated food not being fully borne by the suppliers of the food but spilling over to the wider community.
The Review Committee examined the costs and benefits of the Imported Food Control Act and, where possible, attempted to quantify them. The costs of the scheme were estimated to be in the order of $9 million annually, representing 0.25 percent of the value of food imported into Australia. These costs are largely borne by the importing industry and consumers. Where imported foods are used as ingredients for further processing, export competitiveness may be affected. Benefits relate mainly to the reduction in costs of illness. Based on only three bacterial contaminants in imported food detected by IFIP in 1997, the scheme is estimated to have potentially saved Australians at least $21 million for that year in medical expenses and lost production. The estimate of the benefits is considered conservative because it does not take into account all failures detected by the program or the educative and deterrent effects of the scheme. In the absence of such a scheme, it is likely that the incidence of sub-standard or unsafe food entering the Australian market would increase. The Review Committee recommends that the Imported Food Control Act be retained and that changes be made to the legislation and the operation of the scheme to increase its effectiveness and efficiency.
In developing its recommendations, the Review Committee was cognisant of the need for the Act to be consistent with Australia's international obligations and trade objectives, and for it to be compatible with advances in food processing and food safety. The Committee's recommendations reinforce the conformity of Australia's controls on imported foods with the principles of the Agreement on the Application of Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade. In order to maintain the relevance and effectiveness of the Act, it is important that the Act allows the delivery of a program that adheres to scientific risk-management principles, and is performance-based, transparent and flexible, consultative, efficient and effective.
On the basis of its analysis and consultation with stakeholders, the Review Committee concluded that the best way to ensure that imported food complies with Australian public health and safety standards is to develop a partnership (or co-regulatory) approach between industry and government. The partnership approach will encourage industry to take greater responsibility for ensuring food safety while, at the same time, retaining government control over the food importing system through regular government-controlled audits. The changes recommended will lead to:
- increased industry responsibility and the use of compliance agreements with the importer, based on quality assurance-type systems;
- greater flexibility to adopt the method of compliance which best suits an importer's operations;
- improved targeting of resources through greater use of risk profiling and performance-based testing;
- simplification of the inspection system by reducing the inspection classifications (categories) from three to two;
- reduction in incorrectly referred food through improved methods of dealing with labelling failures and enhancement of the tariff code system;
- increased contestability in the market for laboratory services;
- improved communication through a reconstituted consultative body and enhanced communication strategies;
- better management and operational effectiveness through the development of performance indicators and improved training of staff; and
- more appropriate enforcement.
The Review Committee's recommendations provide the basis for a more effective and efficient imported food safety system to ensure the safety of imported food and to provide the flexibility to respond to the changing food safety environment.
11 Dec 2007