A Handbook of Food Crime

Immoral and Illegal Practices in the Food Industry and What to Do About Them

Allison Gray, Ronald Hinch, Gray, Allison, Hinch, Ronald, Allison Gray, Ronald Hinch

• Publisher: Policy Press
• Year: 2018
• eBook ISBN: 9781447336037
• Edition: 1
• Topic: Social Sciences
• Subtopic: Agricultural Public Policy
• Index: Social Sciences

Food today is over-corporatized and under-regulated. It is involved in many immoral, harmful, and illegal practices along production, distribution, and consumption systems. These problematic conditions have significant consequences on public health and well-being, nonhuman animals, and the environment, often simultaneously.

In this insightful book, Gray and Hinch explore the phenomenon of food crime. Through discussions of food safety, food fraud, food insecurity, agricultural labour, livestock welfare, genetically modified foods, food sustainability, food waste, food policy, and food democracy, they problematize current food systems and criticize their underlying ideologies.

Bringing together the best contemporary research in this area, they argue for the importance of thinking criminologically about food and propose radical solutions to the realities of unjust food systems.

Section IV

Corporate food and food safety

10

Regulating food fraud: Public and private law responses in the EU, Italy and the Netherlands

Antonia Corini and Bernd van der Meulen

Introduction

The horsemeat scandal in 2013 brought food fraud to the attention of both the public and authorities in the European Union (EU). 'Food fraud' is used to indicate a wide variety of violations of food law, such as the use of non-authorised ingredients, adulteration of food substances, and irregular labelling or counterfeiting of geographical indications. Such violations may affect consumers' economic interests or health. Depending on the intention of the perpetrator, some distinguish 'food fraud' (economic gain) from 'food defence' (harmful effects) (Spink and Moyer, 2011). The distinguishing factor between these involves their objective: economic gain or damage, respectively. In this chapter, food fraud is understood as any intentional violation of food laws.

In most EU member states, food fraud may be subjected to either civil or criminal prosecution. In Italy, for example, some violations (for example, incomplete labelling) are punished via administrative fines (see Article 18 of Act 109/1992), while in other cases (Article 440 on adulteration and counterfeiting of food substances) they are subject to criminal sanctions. Similarly, the Netherlands does not specifically define food fraud, but Article 32a of Warenwet (The Commodities Act) does refer to intentional or reckless infringements that may cause harm to public health or safety.

To contribute to conceptualising food fraud, this chapter analyses public law and policy responses to the horsemeat scandal, both at EU and member state levels (in the Netherlands and Italy), as well as by private standards enforced by food businesses themselves. The chapter is organised as follows. First, it sets out a brief history of approaches to food fraud developed in the EU. Next, the political and legislative responses to the horsemeat scandal are assessed, followed by a presentation of private schemes, including a discussion of their relevance to prevent food fraud. Finally, the added value of private schemes in dealing with food fraud is investigated.

The EU framework, 'mad cow disease' and the horsemeat scandal

In the countries that later formed the EU, falsification of food (now called 'food fraud') was a significant matter of concern, even prior to the formation of the EU. The first half of the 20th century involved periods of food shortages. Unscrupulous businessmen took advantage of this situation by selling counterfeit foods, and governments responded by legislating for the proper composition of food products and enforcing compliance with these standards. At the end of the 1950s, several countries set out to create a supra-national organisation to facilitate a joint market where goods could freely circulate. The mass of differing national food standards created big challenges. Initially, the European legislature tried to overcome this challenge by harmonising product standards at a European level. This was not possible. Food cultures differed too much to bring even the most basic concepts under common denominators. As travellers may experience, even common foods like bread, cheese and beer differ significantly from one country to the next. The vast quantity of products made harmonisation of product standards unattainable.

The European Court of Justice (ECJ) provided a solution. In its landmark judgment Case 120/78 'Cassis de Dijon' [1978], the ECJ articulated the principle of 'mutual recognition' where products adhering to national standards of particular member states cannot be denied access to the EU market if they do not meet compliance standards of other members states. With one stroke of the pen, the ECJ appeared to solve the problem of barriers that food standards presented to trade. As a consequence, national standards could no longer be utilised in attempts to protect consumers from fraudulent practices.

The European legislature took a different approach to protecting consumers by requiring businesses to declare all ingredients on the label of the product (Directive 79/112/EEC), thus enabling consumers to make informed choices. However, in practice, consumers may not read or understand the label, and are therefore not effectively aware of the food that they buy.

Additionally, a series of food safety crises broke out (including bovine spongiform encephalopathy [BSE] or mad cow disease and dioxin) which emphasised risk-based public health concerns, rather than the fraudulent nature of the events. At the beginning of the 21st century the main concern was establishing a legal framework to prevent such crises in the future. As the BSE problem was deemed an unintentional outcome, the reform focused on hazards rather than criminal intent (van der Meulen, 2015). In Article 3(14) of the General Food Law (GFL), the EU legislature defines the concept of 'hazard' to present micro-organisms, toxins and physical agents as the 'enemies' that EU Food Safety Law must overcome, rather than people (van der Meulen, 2015).

The regulations aiming to govern food safety are contradictory. For example, Article 14(1) of the GFL, as the core provision of EU food law (van der Meulen, 2012), states that food shall not be placed on the market if it is unsafe, which, according to Article 14(2), is when it is injurious to health or unfit for human consumption. However, according to the ECJ, a food can be unfit for consumption – that is, unsafe – without being injurious to health (C-636/11). For example, this can occur in case of contamination with non-pathogenic micro-organisms causing an off-flavour or smell, or other failures to meet food safety requirements.

Although there have always been food safety problems, the BSE crisis elevated awareness and put food safety concerns at the top of the political agenda. However, the focus placed on eliminating food safety incidents in EU food law came at the expense of attention to the criminal intent of people. In contrast, the horsemeat scandal redirected awareness to fraud (Poudelet, 2014). Why this particular fraud issue had this impact on food fraud awareness is unclear, but it was certainly significant across the EU as well as within the member states. The remainder of this chapter focuses on the events surrounding the horsemeat scandal and the various responses to them.

The horsemeat scandal and responses

In 2012, horse DNA was found in prepackaged beef lasagne in Ireland. Soon thereafter, throughout much of the EU, horsemeat was found mixed in with or sold as beef in food products. This highlighted the weakness of the system in dealing with problems other than those derived from the presence of measurable hazards. As the most important instruments of EU food law are its enforcement mechanisms, such as withdrawal and recall measures to be taken by food business operators (FBOs) in accordance with Article 19, the question arose as to whether these instruments could be used to deal with this particular situation (van der Meulen, 2014b). Article 19 of the GFL requires FBOs to take the prescribed measures when they consider food products not to be in compliance with food safety requirements. This raises the question: do situations of deceptions come within the ambit of what Article 19 of the GFL has in mind where it refers to 'food safety requirements'?

EU member states took different positions. Ireland and Italy argued that Article 19 requirements had not been met, so they did not recall the involved food products (van der Meulen et al, 2015). A similar position was taken by Germany and France, although they imposed recalls based on national legislation. Greece, the Netherlands and Portugal, on the other hand, considered Article 19 applicable to the horsemeat scandal (van der Meulen et al, 2015). Thus, although EU food law applies uniformly in all member states, its scope and meaning was understood very differently in the face of this new challenge. Essentially, the horsemeat scandal showed weaknesses in the current legal framework, both in its ability to deal with fraud and in terms of law enforcement. The following section looks at the consequential developments and debates in three specific spaces – the EU, Italy and the Netherlands.

The EU

As indicated, no provisions specifically addressing food fraud exist in EU food law. Article 17(1) of the GFL establishes that compliance with food law is the responsibility of FBOs, while Article 17(2) indicates that enforcement of food law is the responsibility of member states. Thus controls are performed by both private and public actors. FBOs must ensure that food satisfies the requirements of food law, and verify that such requirements are met, and member states are responsible for enforcement by organising a system of official controls and designate authorities enabled to verify compliance with food-related rules.

The EU institutions reacted in various ways to the horsemeat scandal. The European Parliament (2013) focused on the causes of the food fraud, and identified elements that may have facilitated it, such as weaknesses within food chains, their complexity and cross-border character, lack of methods to detect fraud and fraudsters, and the fact that there is no unified framework to target food fraud. This led to the 'development of risk profiles and vulnerability assessments for each supply chain and food product' (para 54). The Council of the EU (2014) emphasised the role of public law in combating food crime, such as the use of rules aiming to facilitate an exchange of experience between member state authorities during investigation and prosecution processes, or organising control competent authorities (CAs) which are responsible for the enforcement of food law requirements. Along with these two institutions, the European Commission further discussed the need to provide a harmonised definition of food fraud (Garau, 2014), while the European Parliament considered a uniform definition essential for developing a European approach to combating food fraud, to be based on discussions with member states, stakeholders and experts (European Parliament, 2013).

The European Commission, by recalling the definition provided by the Food Fraud Network – an organisation set up between the Commission and member states – proposed an operational definition for food fraud as 'intentional violation of the rules covered by Regulation 882/2004 (the Official Controls Regulation) which are applicable to the production of food and feed, motivated by the prospect of economic or financial gain' (Garau, 2014, p 3). The Food Fraud group was created in 2013 within the Official Controls Experts group with the purpose of gathering member state representatives in charge of food fraud issues and to promote a dialogue with the European Commission. They proposed adding to the operational definition terms such as 'possible intentional violation' and 'deceit to consumers' in order to better determine the remit of the investigations to carry out and identify the most suitable tools to use. Ultimately, however, no agreement on a definition was reached.

Awareness and concern surrounding food fraud continued to grow. The food industry involved itself by acknowledging food fraud as an increasing concern for society, including the food industry (FoodDrinkEurope, 2016). Additionally, food fraud was understood as the basis of many food scares, regardless of whether it had an impact on human food safety (Eurocommerce, 2015). Developing anti-fraud strategies, including the use of private quality schemes, became of paramount importance (Eurocommerce, 2015).

The European Commission acknowledged system shortcomings in managing food fraud and introduced several tools to combat it. The Food Fraud Network functions to provide connection and administrative support, especially in cases of fraud in the market concerning different member states. The Administrative Assistance and Cooperation (AAC) system was also created, a computer tool to assist in cases of fraud through data and information sharing. The Food and Veterinary Office (FVO), recognising that at present there is no provision for unannounced FVO audits to detect any possible food fraud, argued that several challenges have to be faced to 'give high priority to fraud' (Scannell, 2013). The FVO is now called Directorate F, for Health and Food Audits and Analysis.

Shortly after the horsemeat scandal, a proposal was presented to the European Parliament for a new Official Controls Regulation (OCR). This opportunity led to the inclusion of anti-fraud controls. Tonio Borg, Health and Consumer Commissioner at the time of the proposal, highlighted the economic importance of the agri-food industry for the EU, as well as the high level of EU food safety standards, and argued that 'the recent horsemeat scandal has shown that there is room for improvement, even if no health risk emerged' (European Commission, 2013). The proposal was adopted on 15 March 2017 and published in the Official Journal on 7 April 2018 as Regulation (EU) 2017/625. It will be in force 20 days after publication, yet most of its provisions will only be applicable from December 2019.

This new regulation aims to simplify and clarify by creating a single framework for coordinated and rationalised official controls along the agri-food chain. The most important changes regarding fraud are the planning of controls both to verify compliance with food safety requirements and also to detect other possible violations. Several provisions envisage the inclusion of controls to fraudulent or deceptive practices that affect food trade. For example, Recital 32 states that the frequency of official controls shall be established in regards to the need to detect possible violations perpetrated through fraudulent or deceptive practices, while Article 9(2) makes reference to possible intentional violations perpetrated through fraudulent or deceptive practices. Another change is the creation of an Information Management System (IMSOC), a computerised system through which data, information and documents concerning official controls are managed and automatically exchanged.

The Netherlands

In the Netherlands, enforcement of food law is centralised at the national government level. The Minister of Public Health and the Minister of Economic Affairs have powers to impose remedial measures (such as recalls) and administrative fines. On behalf of the ministers, these food chain-wide inspection powers are executed by the Nederlandse Voedsel- en Warenautoriteit (NVWA) (Food and Consumer Product Safety Authority). The NVWA applies a risk-based enforcement policy by taking account of the performance of private controls systems. This approach is known as 'meta supervision' (Verbruggen and Havinga, 2014; van der Meulen and Freriks, 2006). Businesses are colour-coded, as a result of risk measurements based on types of products and the business's history of compliance, ranging from green, amber, orange and red, or low risk to high risk respectively. The higher the risk, the higher the number and intensity of official controls, and the better the performance of the private controls system in place, the lower the priority that is given to official controls. Businesses can improve their colour code through prolonged compliance and certification.

The Netherlands has a special relation to the horsemeat scandal as two of the slaughterhouses that committed the fraud are located there. As the horsemeat fraud events were taken up in the media, the NVWA produced an enforcement policy to prioritise food safety issues. Initially the horsemeat fraud was considered not to cause human food safety concerns, and thus no action was taken. Under media pressure, however, this position became untenable. When the NVWA decided to act, it first considered the fraud a potential safety issue as it might have brought residues of illegal veterinary m...

Table of contents

• Coverpage
• Title page
• Copyright
• Contents
• List of tables and figures
• Contributors
• Introduction
• Section I: Thinking about food crime
• Section II: Farming and food production
• Section III: Processing, marketing and accessing food
• Section IV: Corporate food and food safety
• Section V: Food trade and movement
• Section VI: Technologies and food
• Section VII: Green food
• Section VIII: Questioning and consuming food