Earlier this year in May, 36 participants from 12 East, South-East and South Asian countries attended a workshop on harmonisation and equivalence for organic agriculture in Asia,  The participating countries were Bhutan, China, Cambodia, India, Indonesia, Japan, Laos, Malaysia, Myanmar, Philippines, Thailand and Vietnam. At the workshop the delegates declared their intent to move forward on tangible measures that will reduce and avoid barriers to trade of organic products within their region. One of those measures is the development of an Asian Organic Standard.

Organic is growing

The workshop was organised by the GOMA project, a joint FAO, IFOAM and UNCTAD initiative (see www.goma-organic.org). Held on 27-29 May at the site of the BioFach China 2010 trade fair, the workshop delegates represented countries that constitute more than one-third of the world’s population. In addition, this region has the most rapidly developing organic sector, said Andre Leu, IFOAM representative on the Steering Committee of the GOMA project. He advised the organic sector in the region not to repeat past mistakes of other regions, but rather to develop open markets from the start.
Discussions in the workshop covered several important issues, which included the need for national registration of inspectors, restricting the practice of sub-contracting inspectors, and the importance of collaboration between certification bodies in the region. The South Korean, as well as the Chinese, requirements for national registration of inspectors (organic and other sectors) were mentioned. However, as the South Koreans are currently revising their system, there was nothing definite to base any discussions on. It was discussed how having different national competent authorities, requiring separate accreditations and registration of inspectors can cause problems for foreign certification bodies as well as restrict collaboration between certification bodies.
Several speakers from the trade confirmed that imports play a big role in the development of the local markets. For example, of the 53 organic brands on sale in the Philippines in 2007, 41 were imported and 12 were domestic, according to Girlie Sarmiento, Director of the Organic Trade Association. Selina Gan from Country Farm Organic, Malaysia said they import from 21 countries. Some of the products marketed contain a mix of ingredients that come from different certifications, and this is problematic if just one of the certification fails. Other obstacles for market development are the high price differential for organic produce, which can be up to 500%, and logistical and scale related problems.

Ong Kung Wai, member of the GOMA Steering Committee, gave a presentation on the Scoping Study for Equivalence and Harmonisation of Organic Standards and Technical Regulations in the Asia Region. The study highlighted the importance of imports: ‘Domestic market growth is now also dependent on import of ingredients and finished products not available locally.’ In Japan, Malaysia and Vietnam the organic market  is dominated by imports (see table below). Imports compliment local products by helping them to meet demand and this means that a wider range of products can be sold. Local processors are stimulated from seeing products imported that they could produce themselves. Limited quantities can be imported, which means that many processed products can be tested in the market without local manufacturers having to take the risky step of developing a new product line.

Regulation can help or raise barriers

Even where imports create competition for local producers, by and large, they will mostly stimulate the sector. However, governments can stifle this development as explained by the Scoping Study: ‘Although market size is still relatively small, the high value and profile associated with organic is precipitating civil society (consumer) calls and governments’ interest to regulate the sector. Ironically, government regulations initiated to assist development of the sector may become an inhibiting factor. Without a recognition framework in place, intra trade and regional sector development is in danger of being constrained as import rules add more complication, bureaucracy and costs to trade in organic but not for conventional agriculture products.’

Last year South Korea, which was not present at the workshop, launched a regulation containing strict requirements for imports. These have not come into force, and currently the country has separate authorities and accreditation for primary and processed products. There was no delegate at the workshop as the country is in the midst of revamping its system and was not sure who should represent it. The report by Ong Kung Wai did not include details of the South Korean regulatory requirements for this reason.

The report outlines the options for harmonisation and equivalency in the region. It states, ‘With a diverse mix of scenarios, from highly developed regulatory frameworks to non-regulated developing markets, including government certification programmes, as well as international and local certification bodies operating to national requirements and/or private standards, no mechanism is applicable on its own to facilitate recognition of imports throughout the region and beyond.’ The report continues by proposing a combination of two mechanisms:

Systems Recognition mechanisms for regulated markets including those with national standards and accreditation systems in place. This could work between Japan, China, South Korea, Taiwan, Philippines as well as India, Thailand and Indonesia. It could be a multi-party negotiation process based on the ITF tools for reciprocal equivalence or unilateral acceptance by each authority of the others’ system.

Recognition of certification mechanisms for products from non-regulated markets. This could be based on authorities in regulated markets mandating certification bodies under their supervision the right to recognise equivalent certification conducted by certification bodies in non-regulated markets, or the use of either prior inspection reports for re-certification, or contracted inspections through government and local private certification bodies. The recognition of government or private inspection/certification process could cover Malaysia, Nepal, Sri Lanka, Vietnam and products from elsewhere where a qualified credible government or private certification body operates.

Hong Kong, despite being a part of China, has not implemented any mandatory certification for organic production, but relies on voluntary schemes. False organic labelling is still dealt with by the Customs and Excise Tax Department. The Indian regulation for organic products is for exports only, but a regulation for the domestic market that would include imports is under way.

In Thailand, under existing proof of labelling rules, importers must demonstrate that the organic products they import are compliant with the Thai national organic standards in order to use the Thai word for ‘organic’ in the required Thai text label. This has to be conducted on a batch-to-batch basis. However, as there is no clear way to demonstrate such compliance, importers normally choose not to apply to use the Thai term for ‘organic’ on the Thai label. Products are, nevertheless, sold as organic based on the original foreign labels, which includes the term ‘Organic’ in English.

Japan has granted equivalence to USA and it can also accredit certification bodies according to the US NOP. It also recently concluded mutual recognition with the EU. India is considered equivalent by the EU and may accredit to the NOP. Taiwan has approved Canada, USA and New Zealand for imports. So far, China and South Korea have not recognised any other countries. China and Thailand have initiated equivalence talks and India has contacted South Korea. Indonesia and the Philippines have expressed their interest to initiating mutual recognition at the meeting.

The report outlines eight different models/levels for facilitation of international acceptance:

1. Equivalence agreements between governments.
2. Unilateral acceptance of products from equally credible systems.
3. Foreign government as agents.
4. Acceptance of International Accreditation.
5. Direct approval/accreditation of foreign certification bodies.
6. Recognition between accreditation bodies.
7. Mandate authority to certification body.
8. Recognition/collaboration agreements between certification bodies

Specific examples of each of these models can be found in the report. Their respective application is schematically shown in the box below.

Forging ahead

The workshop participants agreed on establishing a regional working group of interested parties to progress harmonisation and equivalency. The working group will develop a regional organic standard through a public-private consultative process. This Asian Organic Standard will be based on core international norms and regional minimum requirements. The standard could be adopted by several or all of the countries as a harmonised standard and/or serve as the basis for equivalence of organic standards within the region. The working group will also identify opportunities to initiate multi-lateral and/or bilateral equivalence discussions in the region using the two ITF Tools: the Guide for Assessing Equivalence of Organic Standards and Technical Regulations (EquiTool) and the International Requirements for Organic Certification Bodies (IROCB). An initial meeting of the working group will be held in Mumbai at BioFach India/India Organic in December 2010.

Source: Scoping Study for Equivalence and Harmonisation of Organic Standards and Technical Regulations in the Asia Region

Gunnar Rundgren

More information as well as the study can be found at the GOMA website