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Competition and Consumer Amendment (Australian Country of Origin Food Labelling) Bill 2015

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2013-2014-2015

 

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

 

THE SENATE

 

 

 

 

 

 

 

Competition and Consumer Amendment (Australian Country of Origin Food Labelling) Bill 2015

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

(Circulated by authority of Senators Christine Milne and Nick Xenophon)

 

 

 

 

 



 

 

Competition and Consumer Amendment (Australian Country of Origin Food Labelling) Bill 2015

 

Outline

 

The Competition and Consumer Amendment (Australian Country of Origin Food Labelling) Bill 2015 implements important reforms to the designation and regulation of country of origin labelling for food in Australia. This Bill mirrors one introduced in 2013, which lapsed at the end of the of the 43 rd Parliament.

 

It is widely recognised that Australia’s current country of origin labelling requirements for food are unsatisfactory and include information that confuses and misleads consumers. This was confirmed by the independent review of food labelling law and policy, chaired by Dr Neal Blewett, in the review’s report Labelling Logic (2011), [1] and by subsequent independent research carried out by the consumer advocacy organisation, CHOICE. [2]

 

There are two key parts to the amendments put forward in this Bill. The first enacts Recommendation 41 of the Blewett Review, by creating a specific section in the Competition and Consumer Act 2010 (Competition and Consumer Act) that deals solely with country of origin claims with regard to food.

 

The new provisions create a single regulatory regime for most kinds of unpackaged and packaged food, retaining mandatory labelling requirements, but superseding the country of origin labelling requirements currently in the Food Standards Australia New Zealand Act 1991 .

 

The second part of this Bill enacts recommendations arising from the Senate inquiry into Senator Milne’s private senator’s Bill, the Competition and Consumer Amendment (Australian Food Labelling) Bill 2012. [3] These amendments extend country of origin food labelling requirements to all packaged and unpackaged food for retail sale and clarify and restrict the range of labelling (and the meaning of key terms in country of origin labelling) to three kinds of claim. These changes simplify the system and provide greater transparency for consumers.

 

Key amendments provide new stipulations about the definition and wording of claims regarding food manufacturing in Australia; and are accompanied by a requirement to use the term “Manufactured in Australia” rather than “Made in Australia”. This reflects consumer research that demonstrates that consumers find the words “Made in Australia” confusing and think it refers to the origin of the content that is additional to local manufacture. “Manufactured” is a more clearly understood term that removes this confusion.

 

The Bill also removes the ability to make qualified claims such as “Made from local and imported ingredients” that have been shown to be particularly misleading and uninformative for consumers, and replaces them with the claim of “Packaged in Australia”, which reflects the situation where food has minimal Australian processing.

 

 

NOTES ON CLAUSES

 

Clause 1 - Short Title

 

This is a formal provision specifying the short title.

 

Clause 2 - Commencement

 

This clause provides that the Act will come into effect the day after the end of the period of 12 months after the Bill receives Royal Assent. The 12 month period has been provided to allow sufficient time for affected businesses and organisations to transition to the new labelling requirements.

 

Clause 3 - Schedules

 

This clause provides that an Act that is specified in a Schedule in amended or repealed as set out in that Schedule, and any other item in a Schedule operates according to its terms.

 

 

Schedule 1—Amendments

Competition and Consumer Act 2010

 

Item 1

 

Item 1 inserts a new definition of country of origin labelling requirements in subsection 2(1) of Schedule 2 to the Competition and Consumer Act 2010.

 

Item 2

 

Item 2 inserts a new definition of food in the Competition and Consumer Act 2010 . The definition mirrors the definition of food in the Food Standards Australia New Zealand Act 1991 .

 

Item 3

 

Item 3 inserts Part 3-4A - Country of origin labelling requirements for food, which comprises new sections 137A, 137B and 137C.

 

Section 137A designates two overarching categories of unpackaged and packaged food—that which contains some Australian content or has some level of processing in Australia, and that which does not.

 

Subsection 137A(1) explains that the table in subsection 137A(3) specifies country of origin labelling requirements for particular kinds of packaged and unpackaged food.

 

Subsection 137A(2) specifies that certain packaged and unpackaged food not covered by the items in the table in section 137A may be subject to country of origin labelling requirements in section 255.

 

Subsection 137A(3) includes a table which has 6 items. The items in the table specify country of origin labelling requirements for certain packaged and unpackaged food as follows:

 

·          Item 1 in the table stipulates that packaged food where all the significant ingredients are Australian, and where all processing is in Australia, must be labelled with either “Product of Australia” or “Produce of Australia”. This is the same as the current claim standard for these labelling terms.

 

·          Item 2 in the table stipulates that packaged food that is substantial transformation in Australia by way of processing (see subsection 137A(5)) and where at least 50% of the cost of that transformation is incurred in Australia, must be labelled with “Manufactured in Australia” or “Australian Manufactured”. This replaces the current “Made in Australia” claim with a new term “Manufactured in Australia”, which is a more commonly understood term and is not conflated in a way that conveys the origin of the food ingredients. This item effectively removes the ability to make qualified claims such as “Made in Australia from local and imported ingredients”.

 

·          Item 3 in the table stipulates that all other packaged food that has minimal processing in Australia, but is not substantially transformed in Australia, must be labelled “Packaged in Australia”. This item therefore removes the ability to make qualified and non-specific claims such as “Packaged in Australia from local and imported ingredients”.

 

·          Item 4 in the table makes provision for the labelling of any significant ingredients of Australian origin in the country of origin labelling, for example, “Manufactured in Australia with Australian peanuts”. This item therefore makes specific provision for packaged food with significant Australian content that is unable to make other “Product of” claims for the purpose of highlighting local content.

 

·          Items 5 and 6 in the table extend mandatory country of origin labelling to all unpackaged food for retail sale in Australia, subject to the exemptions detailed in subsection 137A(4). Items 5 and 6 in the table stipulate the country of origin claims available for unpackaged food for retail sale that has been grown in Australia, and for some imported unpackaged food label requirements. In addition to “Product of Australia” and “Produce of Australia” claims, it also allows the term “Grown in Australia” to be used in identifying the country of origin.

 

Subsection 137A(4) provides further clarification to the claims that cannot be made about unpackaged food that is displayed for retail sale.

 

Subsection 137A(5) stipulates a list of processes that do not, of themselves, qualify as substantial transformation of food.





Subsection 137A(6) provides a definition of what is meant by food being grown in a particular country.

 

Section 137B deals with the relationship between amendments in this Bill and other labelling requirements. It specifies that the new country of origin labelling requirements for food prevail over existing requirements under the Food Standards Australian New Zealand Act 1991 and the Trade Marks Act 1995 and details exemptions relating to the Wine Australia Corporation Act 1980 .

 

Section 137C creates new civil penalty provisions for contraventions of the new food labelling requirements, and incorporates exemptions from penalties for food that is supplied or intended to be supplied for immediate consumption by particular institutions such as restaurants and state facilities.

 

Items 4 and 5

 

Item 5 comprises new Part 4-4A (new section 204A), which details new criminal penalties for not complying with food labelling requirements relating to country of origin. These penalties are consistent with penalties for other contraventions of information standards covered by the Competition and Consumer Act 2010 .

 

Item 5 is consequential to item 4.

 

Items 6 and 7

 

Item 6 amends section 210. It extends existing defences in the Competition and Consumer Act 2010 involving goods acquired for the purpose of re-supply to the food labelling requirements offence in section 204A. Item 7 is a consequential amendment.

 

Items 8 and 9

 

Items 8 and 9 amend section 224 to apply pecuniary penalties for contravention of section 137C, and apply the same penalties as apply to other contraventions of information standards in the Act.

 

Item 10

Item 10 amends section 248 to enable a court to disqualify a person from managing a corporation for a period if the court is satisfied that the person has contravened, attempted to contravene or been involved in a contravention of section 137C.

This applies the same power available to the court in relation to other contraventions of information standards covered by the Act.

Items 11, 12, 13 and 14

Section 252 provides a defence for contraventions relating to safety and information standards involving consumer goods acquired for the purpose of re-supply. Items 11 to 14 amend this section to extend the defence to contraventions of food labelling requirements where the food was acquired for the purpose of re-supply.

Item 15

Item 15 inserts a new section 254A to stipulate that, for packaged and unpackaged food not covered by subsection 137A(3), the provisions in section 255 may nevertheless apply.

 

Imported Food Control Act 1992

Items 16, 17 and 18

At present the Imported Food Control Act 1992 reflects the Australia New Zealand Food Standards Code Standard 1.2.11 . As this Bill will over-ride Standard 1.2.11, items 16, 17 and 18 amend the Imported Food Control Act so that its measures pertaining to country of origin food labelling reflect the Competition and Consumer Act amendments in this Bill.

 



 

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Competition and Consumer Amendment (Australian Country of Origin Food Labelling) Bill 2015

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the Bill

The Bill amends the Competition and Consumer Act 2010 to create new provisions specifying new definitions and standards with regard to the country of origin labelling on packaged and non-packaged food.

 

Human rights implications



This Bill engages article 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), which acknowledges the right to an adequate standard of living, including food.



The UN Committee on Economic, Social and Cultural Rights has noted that

'the core content of the right to adequate food implies …[t]he availability of food in a

quantity and quality sufficient to satisfy the dietary needs of individuals, free from

adverse substances, and acceptable within a given culture'.



Providing consumers with detailed information about the origins and content of the food, through clear labelling, should be considered a promotion of the right to food, as well as of the right to health.



The Bill creates the possibility of a new civil offence penalty for a contravention of section 137C of Schedule 2 to the
Competition and Consumer Act 2010 .

 

(1) A person must not, in trade or commerce, supply food of a particular kind if:

(a) a country of origin labelling requirement applies to food of that kind; and

(b) the food does not comply with that requirement.



Note: A pecuniary penalty may be imposed for a contravention of this subsection.

 

(2)        A person must not, in trade or commerce, offer for supply food the supply of which is prohibited by subsection (1).

 

Note:   A pecuniary penalty may be imposed for a contravention of this subsection.

 

(3)        A person must not, in or for the purposes of trade or commerce, possess or have control of food the supply of which is prohibited by subsection (1).

 

Note:   A pecuniary penalty may be imposed for a contravention of this subsection.

The Bill applies the same penalties as those that apply to other contraventions of information standards in the Act.

 

The Parliamentary Joint Committee on Human Rights’ Guidance Note 2 notes that civil penalty provisions may engage criminal process rights under Article 14 of the International Covenant on Civil and Political Rights . The three criteria for assessing whether a penalty could be considered a “criminal” penalty for the purposes of human rights law are:

·          the classification of the penalty in domestic law;

·          the nature of the penalty; and

·          the severity of the penalty.

Classification

The penalty in this Bill is defined as a civil penalty under domestic law. Failure to comply with the civil penalty provisions in the Bill would not result in a criminal conviction and a breach of the civil penalty provisions would not attract the penalty of imprisonment.

Nature of penalty

The purpose of the penalty is to ensure compliance with labelling requirements. It is to be applied to a specific group of people: the vendors and producers of food products within Australia. The Parliamentary Joint Committee considers that penalties directed at regulating members of a specific group are “disciplinary” rather than “criminal”. As such, the nature of the penalty proposed in this Bill should be considered to be civil rather than criminal.

Severity of penalty

The Bill does not set a value on the penalty to be applied, however, it is envisaged that a penalty would be set which is not unduly severe but acts to ensure food vendors and producers comply with the requirements for food labelling. The penalty’s value should not be higher than that for a corresponding criminal offence and the penalty would not carry a sanction.

Conclusion

This Bill is compatible with human rights in that it promotes the rights set out in article 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), and imposes penalties for infringement on this right. The civil penalty included in this Bill is also compatible with human rights.

 

Senators Christine Milne and Nick Xenophon