Trends in the development and functions of private food safety standards

Having recognised the diversity of private standards and the often blurred distinctions between regulations and private standards, we now turn to the questions of why private standards have emerged as an increasingly dominant mode of governance of attributes such as food safety and what has driven this process. There appear to be four key factors here:²¹⁴

• Business responses to increasing consumer and government concerns about food safety, notably in the wake of a history of food safety scares that have undermined public confidence in established controls in many industrialised countries.²¹⁵

212 Havinga, T., 2006. Private regulation of food safety by supermarkets. Law and Policy 28(4): 515-533.

213 Further, standards such as GlobalGAP involve selected national certification bodies for processes involved in benchmarking of national standards to the global standard (Sheehan, K., 2007. Benchmarking of Gap schemes, EUREPGAP Asia conference, Bangkok, 6-7 September 2007. Available at: http://www.

globalgap.org/cms/upload/Resources/Presentations/Bangkok/3_K_Sheehan.pdf).

214 Henson, S.J. and Humphrey, J., 2010. Understanding the complexities of private standards in global agri-food chains as they impact developing countries. Journal of Development Studies 46(9): 1628-1646.

215 Jaffee, S. and Henson, S.J., 2004. Standards and agri-food exports from developing countries:

rebalancing the debate. Policy Research Working Paper 3348, The World Bank, Washington, DC, USA.

• Progressive changes in the expectations and demands of consumers with respect to the safety and quality attributes of food, reflecting broader demographic and social trends.²¹⁶ These attributes include the manner in which products are produced and the existence of substances in food that are perceived to be risky, including those purposefully used in food production (for example pesticides) and contaminants (for example dioxins). Thus, food safety is no longer defined simply as ‘fit for human consumption’, but rather in terms of a wider array of safety and quality attributes that range from search, through experience, to credence attributes.²¹⁷

• The globalisation of agri-food chains whereby supply chains for agricultural and food products increasingly extend beyond national boundaries, in part facilitated by new food, communications and transportation technologies and a more liberal trade environment.²¹⁸ Global sourcing creates new sources of risk as food is subject to greater transformation and transportation, while supply chains are increasingly fragmented across enterprises, production systems, environments and regulatory frameworks.

• The shift in responsibility for food safety from the public to the private sector, which has both driven and ceded a space for private ‘regulation’.²¹⁹ This reflects a broad political trend towards more liberalised markets in many industrialised countries, and also a change in the philosophy of food regulation.²²⁰

These four trends have combined to create an environment in which businesses are under increasing pressure to deliver food safety and to maintain the integrity of their brands. They need to do this in the face of increasingly globalised and

216 Buzby, J., Frenzen, P.D. and Rasco, B., 2001. Product liability and microbial food-borne illness.

Agricultural Economic Report 828, United States Department of Agriculture, Economics Research Service, Washington, DC, USA; Jaffee, S. and Henson, S.J., 2004. Standards and agri-food exports from developing countries: rebalancing the debate. Policy Research Working Paper 3348, The World Bank, Washington, DC, USA.

217 Reardon, T., Codron, J.-M., Busch, L., Bingen, J. and Harris, C., 2001. Global change in agrifood grades and standards: agribusiness strategic responses in developing countries. International Food and Agribusiness Management Review 2(3): 421-435.

218 Nadvi, K. and Waltring, F., 2003. Making sense of global standards. In: Schmitz, H. (ed.), Local enterprises in the global economy: issues of governance and upgrading. Elgar, Cheltenham, UK; OECD, 2004. Private standards and the shaping of the agri-food system. OECD, Paris, France; Henson, S.J. and Reardon, T., 2005. Private agri-food standards: implications for food policy and the agri-food system. Food Policy 30(3): 241-253; Fulponi, L., 2005. Private voluntary standards in the food system: the perspective of major food retailers in OECD countries. Food Policy 30(2): 115-128.

219 EU, 2002. Regulation (EC) No 178/2002 Laying Down the General Principles and Requirements of Food Law, Establishing the European Food Safety Authority and Laying Down Procedures in Matters of Food Safety. Official Journal of the European Communities, 1 February 2002.

220 For example, the preamble to the European Union’s General Food Law states that: ‘a food business operator is best placed to devise a safe system for supplying food and ensuring that the food it supplies is safe; thus, it should have primary legal responsibility for ensuring food safety.’ (EU, 2002. Regulation (EC) No 178/2002 Laying Down the General Principles and Requirements of Food Law, Establishing the European Food Safety Authority and Laying Down Procedures in Matters of Food Safety. Official Journal of the European Communities, 1 February 2002).

Codex Alimentarius and private standards

complex food supply chains. Private standards are part of the response to this challenge. The key role of standards, whether public or private, mandatory or voluntary, is to facilitate the coordination of agri-food value chains across space and between producers/firms and, in so doing, to transmit credible information on the nature of products and the conditions under which they are produced, processed and transported.²²¹ In other words, one of the primary functions of private standards relating to food safety is risk management. This means providing a level of assurance that a product is in compliance with defined minimum product and/or process requirements.

Many of the assurances over food safety that firms strive to deliver are defined by regulations. This is particularly the case with levels of contaminants such as pesticides, where critical limits are defined by legal Maximum Residue Levels (MRLs), but also more general aspects of hygiene where legal norms allocate liability in the event of food safety failures. Further, private standards can only operate in an environment of credible infrastructure (for example laboratories) and recognised processes (for example HACCP) that are built around public standards at the national and/or international levels. Which begs the question, why are private standards needed at all? And perhaps more critically, why have profit-oriented firms invested resources in their design, adoption, implementation and enforcement?

One explanation for this effort, which ironically is also why national regulators and international standards-setting bodies such as Codex are concerned about their rise, is that private standards lay down requirements that are in some way in excess of legal requirements. Thus, it is important to understand precisely in which respects this is the case in practice. We would suggest that there are three dimensions to this:

• The standard sets stricter requirements with respect to particular food product attributes, whether by extending these requirements and/or by setting lower thresholds. For example, the Field to Fork standard of the UK retailer Marks and Spencer specifically prohibits residues of around 70 pesticides in fruit and vegetables that are sold fresh or used as ingredients in the manufacture of prepared foods to be sold under the firm’s own label.²²² This is the dimension on which critics of private standards tend to focus.

221 Humphrey, J. and Schmitz, H., 2000. Governance and upgrading: linking industrial cluster and global value chain research. IDS Working Paper 120, Institute of Development Studies, Brighton, UK;

Humphrey, J. and Schmitz, H., 2001. Governance in global value chains. IDS Bulletin 32(3): 19-29;

Humphrey, J., 2008. Private standards, small farmers and donor policy: EUREPGAP in Kenya, IDS Working Paper 308, Institute of Development Studies, Brighton, UK; Henson, S.J. and Jaffee, S., 2008 Understanding developing country strategic responses to the enhancement of food safety standards.

The World Economy 31(1): 1-15.

222 Henson, S.J. and Humphrey, J., 2009. The impacts of private food safety standards on the food chain and on the public standards-setting process. Paper prepared for FAO/WHO, ALINORM 09/32/9D-Part II, Codex Alimentarius Commission, Rome, Italy.

• The standard lays down more specific instructions as to how to achieve desired end-product attributes and/or how to operationalise particular process parameters. We would argue that this is the most important function of private standards in the area of food safety. In many cases regulations and/

or international standards lay down the basic parameters of a food safety control system, while private standards elaborate on what this system should

‘look like’ in order to be effective. For example, the Codes of Practice and Guidelines of Codex specify what controls need to be in place in food processing operations, but do not provide specific instructions on what these might look like in practice and/or how they might be monitored so as to ensure effective enforcement. This ‘gap’ is filled by the BRC Global Standard for Food Safety, IFS and SQF 2000 (for example) that lay down very detailed and auditable instructions on the specific controls to be in place. Here, the predominant aim of private standards is to provide for a level of protection against food safety failures beyond that inherent in regulations and associated systems of enforcement, and in a way that is consistent across supply chains that are increasingly global and so traverse regulatory jurisdictions.

• The standard extends the range of process controls beyond that required by regulations, vertically and/or horizontally. Increased vertical coverage, for example, might mean extending traceability requirements beyond the ‘one up, one down’ requirement of legislation. Alternatively, standards can extend requirements horizontally. Thus, GlobalGAP not only lays down requirements for food safety, but also sustainability and worker rights, which lay outside of the purview of current regulatory requirements.

Implementing a system of conformity assessment that provides a greater level of oversight than is afforded by prevailing systems of regulatory enforcement involves two elements. First, the predominant use of third party certification that takes both the standards adopter and the standards implementer out of the conformity assessment process.²²³ This allows for an independent system of conformity assessment against an agreed and objective protocol. Second, the application of a governance structure and support system that ensures this system of third party certification works effectively. Examples include processes for certifier approval, complaint handling, compliance monitoring, etc. The parameters for this governance structure are largely laid down by the international standards developed by ISO.

Thus, we see that private standards in the realm of risk management are multi-layered ‘schemes’ consisting of the standard per se, systems of certification and a standards and conformity assessment governance structure. While private

223 There are some exceptions here. In the case of private standards organisations and companies (see below), conformity assessment tends to be undertaken through second party certification, which is using the certifier’s own auditing staff.

Codex Alimentarius and private standards

standards, notably for food safety, do lay down requirements that are ‘additional’

to legal requirements, the predominant focus of these is regulatory compliance.

At the same time, standards directed at risk management are progressively encompassing a broader range of attributes that may lie outside of the realm of regulatory requirements.

These concerns with regulatory compliance and the mechanisms to achieve them are not, in fact, restricted to the private sector. The EU establishes specific conditions for importing food from Third Countries that require the competent authority in these countries to demonstrate that their food safety systems offer equivalent levels of safety to those provided by EU legislation²²⁴. In so doing, the EU is also going beyond Codex norms. Inspections and subsequent recommendations by the EU Food and Veterinary Office provide for monitoring of the efficacy of the enforcement system in Third Countries and impose penalties for non-compliance.

Here, as with many private standards, the issue is not the process standards themselves, but how effectively compliance is monitored and enforced.

However, private standards can address issues that are not covered at all by public regulations. One motive for doing this is product differentiation. Standards can be adopted to support claims to consumers that products have certain desirable characteristics. Generally speaking, claims about credence characteristics²²⁵ are backed up by standards which provide a credible basis for these claims. Examples include fair trade, animal welfare, etc. There is relatively little evidence, however, that private standards aim to achieve product differentiation on the basis of food safety, except perhaps as part of a blend of product and process attributes cutting across environmental protection, ethical and social issues and food safety. Most of the major European food retailers, for example, recognise that market competition on the basis of food safety is likely to erode consumer confidence. More often, food safety claims are bundled with other claims. For example, Tesco’s Nature’s Choice standard is being used to support a broader branding strategy ‘Nurture’ that differentiates fresh fruit and vegetables from those sold by other UK food retailers, predominantly on the basis of environmental protection.²²⁶ At the same time, private standards can be employed to present additional guarantees to consumers about the safety of the food at the sectoral rather than the firm level. Thus, the origin of produce-origin standards, such as the UK’s ‘Red Tractor’ label, lies in the damage to consumer confidence caused by previous food scares.

224 See for example, EU, 2004. Corrigendum to Regulation (EC) No 882/2004 of the European Parliament and of the Council of 29 April 2004 on Official Controls Performed to Ensure the Verification of Compliance with Feed and Food Law, Animal Health and Animal Welfare Rules. Official Journal of the European Union, 28 May 2004, Article 48.

225 Attributes of a product that cannot be verified through direct examination pre or post-consumption.

226 See http://www.tesco.com/nurture/?page=nurturevalues.

The foregoing discussion suggests that the predominant focus of private standards in the realm of food safety is risk management, predominantly motivated by the need of dominant players in the value chain to achieve a higher level of assurance with respect to regulatory compliance. This generally involves the development and/or adoption of private standards that drive the implementation of more rigorous process controls, either reinforcing regulatory requirements at a particular level of the value chain or extending process controls along the value chain. The main adopters of these private standards are dominant buyers, predominantly large food retailers and food service companies. Where attempts to differentiate on the basis of food safety are observed, private standards are generally developed and implemented further up the value chain, notably in production, as a means to communicate to consumers that food of a particular origin or from a particular system of production is safe. It is not unsurprising, therefore, that private food safety standards have come to be developed collectively.