19 March 2015

Food released from ACL mandatory reporting regime

This article was written by Scott Bouvier and Melissa Monks.

The Abbott Government is continuing its election commitment to red tape reduction, with the food sector the beneficiary of a bill to remove the need for reporting of food-related deaths, serious illness and injury under the Australian Consumer Law (ACL). However, the mandatory reporting requirements will continue to apply to food businesses in relation to food packaging and promotional items as well as to all other consumer products provided by non-food businesses.

Since 2011, suppliers of consumer goods, which includes all businesses in the food supply chain, have been obliged by section 131 of the ACL to:

  • where they become aware that any person considers that a death or serious injury or illness was or may have been caused by the consumer goods;
  • report the matter within 2 days to the relevant Commonwealth Minister.

In practice this is done by completing a standard form online and lodging it with the Australian Competition & Consumer Commission (ACCC). Around 900 reports have been made to the ACCC since the mandatory reporting regime was introduced, with nearly half of these being food-related.

Bruce Billson, the Small Business Minister who shares responsibility for administering the ACL, said in introducing the bill that the ACCC and food safety regulators find the reports to be of no additional value in regulating food safety and have not led to improved safety outcomes for consumers. Rather, he says that in a food context, the reports take up significant time and resources of regulators and impose an unnecessary burden on food businesses.

The Government is of the view that existing state and territory public health and food laws as well as other provisions of the ACL directed towards product safety (such as the power for the Commonwealth Minister to issue mandatory product recall notices and introduce product bans) provide sufficient tools to deal with unsafe products and ensure food safety.

Gary Dawson, CEO of peak food industry body, the Australian Food and Grocery Council, welcomed the change, noting that the “outdated requirements” have “created significant over lap and complexity” and resulted in “thousands of false alarms that…have done nothing to improve food safety”.

Nevertheless, the timing of the move is somewhat surprising given the contaminated berry incident last month, preceded by the death of a child in relation to the sale of unpasteurised milk late last year, which have each generated considerable community, media and political debate and calls for change to many areas that relate to food safety such as labelling and testing. That said, with the Prime Minster having publically committed and tasked four key Ministers to deliver recommendations for country of origin labelling reform to Cabinet by the end of March, which are expected to result in change and therefore potential increased compliance costs, the removal of ACL mandatory reporting for food businesses could be a sweetener to help get the food sector on board.

Obligations under section 131 will continue for food packaging and promotional items, so food businesses will need to maintain section 131 compliance procedures. If a food business becomes aware that any person considers that a death or serious injury or illness was or may have been caused by its food product, it will need to make an initial assessment whether the injury or illness was caused by the food itself or the food packaging (eg a glass bottle). This may not always be clear.

Obligations under section 131 will also continue for suppliers of consumer products other than food. In our experience, section 131 can be difficult to comply with. The need for businesses to ensure that any form of complaint from any source at any level which has any suggestion that a product may be linked to injury or illness, is captured and escalated to be assessed, can in many cases be practically impossible in the tight timeframe. This is especially so when businesses are faced with issues about the veracity of information or legitimacy of a complaint, or having to try to gather further data (including technical information) internally from multiple stakeholders to assess it all within 2 days.

Further, suppliers not only need to report when they consider that the death or serious injury or illness was caused, or may have been caused, by the use or foreseeable misuse of the consumer goods. The reporting obligation also extends to when the consumer considers that the death or serious injury or illness may have been caused by the use or foreseeable misuse of the consumer goods. The supplier still needs to report the allegation unless the supplier considers that the consumer is clearly wrong.

There is a lot for the supplier to assess in two days so when in any doubt many suppliers are simply filing notices. As a consequence this results in lower quality information and much more of it.

If the Government and ACCC consider that section 131 has an ongoing role for consumer products other than food then the threshold tests should be of a higher standard and the supplier should be given more time to make a proper assessment of the allegation. Consideration should also be given to the definition of serious illness and injury, as the ACCC appears to consider that any ailments that warrants a trip to a doctor is “serious”. Changes of this nature would at least align the regulation imposed by section 131 with the good practices of most manufacturers and focus the regulation more directly on providing the ACCC with higher quality information about product safety hot spots.

The new bill will still need to pass the Senate and it will be interesting to see how the cross benchers react given the public sensitivities about food safety. We expect that the debate will continue and lobbying efforts will be intense.

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