fao/who specifications: how well do they serve as standards?

FAO/WHO Specifications: How well do they serve as standards?

8th Joint CIPAC-FAO-WHO Open Meeting

Beijing, P.R. ChinaJune 13, 2011

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Agenda

• Specifications as international standards

• Violation of WTO Agreements

• Where specifications end up

• Time for practical solutions

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FAO/WHO specifications: International standards of quality for pesticides evaluated and published by FAO/WHO. (Page 245, Appendix C, Glossary of Terms)

In 2001, the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization (WHO) agreed to develop specifications for pesticides jointly, thus providing unique, robust and universally applicable standards for pesticide quality. (first page; not numbered in the Manual; also page 285)

1.5.5 Role of specifications in the world marketHarmonization of relevant national and/or international standards through the use of FAO and WHO specifications should facilitate world trade in pesticides. FAO and WHO specifications are designed to reflect generally acceptable product standards. (page 6 of the Manual)

The Manual makes it very clear that FAO/WHO pesticide specifications are meant to serve as international standards of quality

Intention stated in the ManualSpecifications as international standards

Source: http://whqlibdoc.who.int/publications/2006/9251048576_eng_update2.pdf

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• Transparency

• Impartiality and Consensus

• Effectiveness and Relevance

The WTO has developed principles that standards and the standard-setting process should abide by. Among others, these are:

Source: Decision of the TBT Committee on principles for the development of international standards, guides and recommendations with relation to Articles 2, 5 and Annex 3 of the Agreement (G/TBT/1/Rev.8)

Principles developed by WTO for standards

Specifications as international standards

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• Transparency

• Proposals for standards should be made easily accessible to all interested parties in the territories of at least all WTO Members.

• Provision of an adequate period of time for interested parties in the territory of at least all members of the international standardizing body to make comments and have these taken into account in further consideration of the standard.

• Prompt publication of a standard upon adoption.

FAO/WHO pesticide specifications should be assessed according to their consistency with important WTO principles regarding standards:




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• Impartiality and Consensus

• Consensus procedures should be established that seek to take into account the views of all parties concerned and to reconcile any conflicting arguments.

• Impartiality should be accorded throughout all the standards development process with respect to, among other things:

1. Access to participation in work2. Submission of comments on drafts3. Consideration of views expressed4. Revision of the international standard





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• Effectiveness and Relevance

• International standards need to be relevant and to effectively respond to regulatory and market needs.

• International standards should not distort the global market, have adverse effects on fair competition, or stifle innovation and technological development.

• Whenever possible, international standards should be performance based rather than based on design or descriptive characteristics.

• International standardizing bodies should put in place procedures aimed at improving communication with the World Trade Organization.





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• Regarding Transparency:

•FAO/WHO specifications under the “new procedure” contain secret information (non-relevant impurities) that is only known to the JMPS and the company that proposes the standard.

•FAO/WHO specifications are only partially published due to the inclusion of undisclosed information in the international standard.

Regarding Impartiality and Consensus:

•FAO/WHO specifications, intended to serve as international standards, contain information claimed as intellectual property by the company proposing the standard.

• FAO/WHO standards and the standard-setting process are captured by a single company.

FAO/WHO specifications fail WTO principles in the Code of Good Practice for the Preparation, Adoption and Application of Standards by Standardizing Bodies

How well to FAO/WHO specifications perform?Specifications as international standards

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• Regarding Effectiveness and Relevance:

•FAO/WHO specifications do not respond effectively to regulatory and market needs for practical standards

•FAO/WHO specifications distort the global market and have adverse effects on fair competition by introducing market-access barriers into regulations that serve as market gate-keepers, such as pesticide registrations

FAO/WHO specifications fail WTO principles in the Code of Good Practice for the Preparation, Adoption and Application of Standards by Standardizing Bodies


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• Member States have requested the WTO Committee on Technical Barriers to Trade to examine how patents and other intellectual property rights might become technical barriers to trade.1

The Standing Committee on Patents of the World Intellectual Property Organization (WIPO) has also been requested and has started to address these issues.2

An UNCTAD-ICTSD report warned about the anti-competitive behavior that may be promoted when a standard “has become closed (or captured) by a limited number of producers with a high level of market control.”3

The legitimacy of technical standards that incorporate items protected by intellectual property rights has been challenged in the context of the WTO


Source: 1 WTO documents G/TBT/W/251 of 2005 and G/TBT/W/251 add1 of 2006.2. WIPO Secretariat, Standards and Patents, document SCP13/2, March 2009.3 UCTAD-ICTSD, Addressing the Interface between Patents and Technical Standards, Policy Brief No. 3, p. 5.

http://www.unctad.org/en/docs/iprs_pb20093_en.pdf

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Response from the European Commission

The above legislation is substance- and not company-related. Since FAO moved from generic to company-related standards (the so-called "new procedure", laid down in the 5th edition of the Manual on the development and use of FAO specifications for plant protection products, which became of application in 1999), it was considered inappropriate to continue to use such specifications in support of the EU-legislation and in a future revision of the data requirements for the dossiers to be submitted to theassessment, any reference to FAO will be deleted.


Source: Letter from the European Commission Health and Consumers Directorate General; Ref. Ares(2011)354640 - 31/03/2011

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• The 2005 World Trade Report states:

The degree to which the assessment of conformity with a regulation may act as a trade barrier hinges critically upon the flexibility provided to exporters in choosing conformity assessment providers, activities and procedures.1

The only entity in the world that can assess the conformity of a second manufacturers product with an FAO/WHO specification is the JMPS. Therefore, the JMPS essentially has a global monopoly as a conformity assessment provider.

Limitations in the available options for conformity assessment providers has also been highlighted by the WTO as a major trade barrier


Source: 1. World Trade Report 2005 “Exploring the Links Between Trade, Standards and the WTO, 75 (2005).”http://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report05_e.pdf

0

5

10

15

20

Spec

ifica

tions

def

ined

per

yea

r

1971 1975 1980 1985 1990 1995 2000 2005

13Source: http://www.fao.org/agriculture/crops/core-themes/theme/pests/pm/jmps/ps/ps-old/it/

FAO SpecificationsAt the current rate of definition of specifications under the “New” procedure, it will take approximately 60 years just to replace the “Old” specifications

Old Procedure

New Procedure


“Old” Procedure: 5.26 / year“New” Procedure: 2.5 / yearReplacement time: 59.6 years

Yearly rate

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How will the previous chart look once we include the following additional tasks of the JMPS?:

1.New active ingredients requiring specifications

2.Equivalence assessment of second manufacturers

3.Periodic 10-year review of existing “new procedure” specifications


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Standard-setting process Standard

Transparency No No

Impartiality and Consensus No No

Effectiveness and Relevance No No

Flexibility in conformity assessment N/A No

How well do FAO/WHO specifications perform?Specifications as international standards

Do FAO/WHO specifications meet WTO principles for standards?

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Agenda





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The “new procedure” specifications, as currently implemented, may induce Member States that incorporate such FAO/WHO recommendations into their technical regulations to violate multilateral WTO Agreements, such as:

1. Technical Barriers to Trade (TBT Agreement)

2. Sanitary and Phytosanitary Measures (SPS Agreement)

Although FAO and WHO, as international organizations, are not subject to WTO disciplines, they have similar Member States and must contribute in a coherent mannerto the realization of principles enshrined in the WTO system, namely transparency and impartiality.1

Are FAO and WHO inducing Member States to clash with WTO?

Violation of WTO Agreements

Source: 1 Decision of the TBT Committee on principles for the development of international standards, guides and recommendations with relation to Articles 2, 5 and Annex 3 of the Agreement.

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TBT and SPS Agreements


FAO/WHO specifications, if adopted by Member States, induce countries to violate the TBT and SPS Agreements

• The Committee on Technical Barriers to Trade places a high importance on transparency. The inclusion of undisclosed non-relevant impurities in the “new procedure” clearly fails the requirement that standards be published upon adoption.1

•The assessment of non-relevant impurities, as implemented by the FAO/WHO “new procedure”, is unlikely to successfully pass the “necessity test” as elaborated under WTO law.

•The “new procedure” fails to comply with Article 5.2.1 of the TBT Agreement since there is a monopoly in conformity assessment.

•The conformity assessment monopoly of the JMPS clashes with Article 1(a), Annex C of the SPS Agreement.

Source: 1 WTO TBT Decisions and Recommendations Adopted by the Committee since 01 January 1995, G/TBT/1/Rev 8, 23 May 2002.

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TBT and SPS Agreements


FAO/WHO specifications, if adopted by Member States, induce countries to violate the TBT and SPS Agreements

•Harmonization is a key target in both TBT and SPS Agreements. The use of individual companies´ product profiles as the basis of international standards runs counter to the adoption of harmonized and impartial standards that are essential to facilitate trade.

•WTO Members that follow FAO/WHO recommendations regarding “new procedure” specifications may be liable to challenges under existing multilateral trade agreements as consistently interpreted by WTO case law.

•The burdensome and disproportionately time-consuming conformity assessment of non-relevant impurities based on secret information from a single company is unlikely to survive such challenges.

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Agenda





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Technical regulations

Where specifications end up

FAO/WHO Pesticide

Specifications

FAO/WHO recommended standards appear throughout technical documents issued by FAO and WHO, as well as in national and international regulations

Manual onFAO/WHO

specifications

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Agenda





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Standards should be fully published

Time for practical solutions

•Limit standard to public information (purity of a.i. and relevant impurities) in order to ensure open standards not linked to companies

• Such standards will serve their purpose for Quality Assurance and Control, and can be referred to in national and international laws and regulations

•FAO/WHO specifications system worked this way for decades, and most specifications available today were defined under the “old procedure ” and are still in effect

•WHO successfully uses this system in its “Drug Monographs” (International Pharmacopeia)

•For the evaluation of the full composition (equivalence) refer to the next slide

FAO/WHO specifications should only consist of publicly disclosed information in order to guarantee transparency

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Share information with Member States


The conformity assessment monopoly must be addressed with a pragmatic approach in order to provide all Member States of FAO and WHO with access to the necessary information

•Make all necessary information for conformity assessment accesible to all Member States of FAO and WHO upon review of the composition profile.

•Such access to the necessary information can be physical or electronic.

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WTO Open Forum


AgroCare submitted a proposal to address this issue in the context of the WTO Open Forum in Geneva. This proposal was accepted and the panel discussion will take place on September 20, 2011 at the WTO (Geneva).

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Agenda

Additional Information

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Although FAO and WHO, as international organizations, are not subject to WTO disciplines, they have similar Member States as WTO and must contribute in a coherent manner to the realization of the principles enshrined in the WTO system.

Not in FAO

Brunei DarussalamHong KongLiechtensteinMacauMyanmarSingaporeTaiwan

Of 153 Full WTO Member States

Not in WHO

European UnionHong KongLiechtensteinMacauTaiwan

Of 31 WTO Observer States

Not in FAO

Vatican

Not in WHO

Vatican


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Agenda

European Crop Care Association

Latin American Association of the National Agrochemical Industry

China Crop Protection Industry Association

Pesticides Manufacturers and Formulators Association of India

865 different individual companies

fao/who specifications: how well do they serve as standards?

Documents

standards specifications

faowho specifications

applicable standards

agenda specifications

role of specifications

standards development

international standardssource

acceptable product standards