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Food SafetyEU-Vietnam Free Trade Agreement

Opportunities and Challenges for the Food, Agri and Aqua Sector

Food, Agri and Aqua Business Sector CommitteeAlexander Kliegl / Chairman

Managing Director at DKSH Technology Vietnam

Content

Introduction of Food, Agri and Aqua Business Sector Committee Potential for Vietnam and issues Issues when exporting Issues when exporting and importing products Impact on the export potential of Vietnam Actions by the Vietnamese authorities: import and export Challenge and possible solutions to address the issues Recommendations: short term Recommendations: long term Results Conclusion Dialogue in Hanoi

Introduction

FoundedApril 2013

Members 14 (13 companies: Control Union Vietnam, De Heus LLC, Fresh Studio, FrieslandCampina Vietnam, Invivo Lab, DKSH Technology Co. Ltd., KD Feddersen, Yara Vietnam, SafViet JV Co. Ltd., Les Vergers du Mekong, DSM Nutritional Products, Gide Loyrette Nouel, Unilever Vietnam and 1 individual member: Mr Thierry Rocaboy)

Objectives• Improve Food Safety;• Promote a level playing field for all types of companies; and • Develop a sustainable Food, Agri and Aqua Business Sector in Vietnam.

Potential for Vietnam and issues

Vietnam ranks high for exports of • black pepper;• cashew nuts;• coffee and tea;• fish and seafood and• rice.

But, Vietnamese products are • perceived as of lower quality and value;• competitive on price but not on quality; and• mainly commodities and not high-end manufactured.

This needs to be changed as it does not do justice to the Vietnamese products and limits export opportunities.

Vietnam should shift from commodities to high-end manufactured products.

Issues when exporting

Salmonella in frozen shrimps from Vietnam.

Unauthorised pesticide in frozen eel from Vietnam.

Residue levels above MRL for veterinary medicinal products in frozen white tiger prawns from Vietnam.

Norovirus in frozen precooked clams in shell from Vietnam.

Unsuitable organoleptic characteristics of frozen tilapia processed in Slovakia, with raw material from Vietnam.

Prohibited veterinary medicinal products in frozen shrimps from Vietnam. Mercury in frozen

swordfish fillets and marlin steak from Vietnam.

Too high levels of or incorrect use of• additives (saccharin, sodium cyclamate, carmine, amaranth, sulphur dioxide);• pesticides;• antibiotics; and• certain heavy metals.

Use of• methanol;• growth hormones;• bleaching chemicals;• potassium bromate; and• toxic packaging material.

Breaking cold-chain during transport, storage and at customs check-points.

Presence of mycotoxins or mould.

Issues when exporting and importing

Issues when exporting and importing(continued)

Quality of labs and testing• Contradicting test results;• Tests from foreign labs are not accepted; and• Labs (appointed by law for import) and testing are not up-to-global-standard.

Enforcement and lengthy administrative procedures• No uniform application and enforcement of regulations on local and provincial

level;• Documents are required that cannot be obtained from the country of origin;• No good traceability system in place;• Fines are too low: so profitable to continue violating regulations; and• Food safety management responsibilities divided over different ministries and

departments.

Consequences• It limits the possibility to import ingredients and raw materials used to produce

products for export or local use; and• The lack of an effective mechanism limits the possibilities for local producers to

export their products, as importing countries often have higher applicable standards.

Impact on the export potential of Vietnam

US imposes tough standards for Vietnam’s food imports.

Agricultural products draw repeated warnings from importers.

Agricultural products to Saudi Arabia warned for quality, hygiene violations.

EU warns Vietnamese seafood exporters about antibiotics residue.

Food safety vital to win EU market.

RoK issues ‘Warning Letters’ to seafood exporters. One producer and one

shipment blocked can ruin the reputation of all Vietnamese producers and products.

Actions by the Vietnamese authorities: import and export

Thanh Hoa: producers fined for adding growth hormones in animal feed.

VASEP: Vietnamese exporters should limit antibiotic residues in seafood, find new markets.

Vietnam, New Zealand keen to boost food safety cooperation.

Vietnam: not issue certificate of food safety to Ghanaian toxic palm oil.

Supervision over bivalve mollusc processors intensified.

Administrative reforms stepped up in tax and customs fields.

Ministry: Vietnam produce exports should meet food hygiene, safety requirements in overseas markets: ministry.

Challenge and possible solutions to address the issues

Challenge• Legal framework exists, but responsibility divided.

Solution• Create a centralised Food Safety Agency under one ministry to harmonise food

safety management responsibilities and:- incorporate current national and local structure(s) in the new structure- harmonise and coordinate local and provincial level; and- cooperate with neighbouring countries to address cross-border food safety issues.

• Improve quality of (appointed) testing facilities to global standards;• Accept lab results of foreign accredited labs (in or outside Vietnam) without the

need for retesting;• Apply and enforce regulations in a uniform way on local and provincial level;• Enforce existing regulations on production and import of fake pesticides and

fertilisers and raise awareness;• Enforce the obligation to have a traceability system in place; and• Raise the fines, as now profitable to continue violating regulations.

Establish a working group consisting of relevant ministries/agencies, the FAASC and other relevant organisations;

Topics to discuss by the working group:• how to establish a Food Safety Agency under one ministry;• other issues related to the Food, Agri and Aqua Business Sector;

Amend the Law on Food Safety and create a centralised Food Safety Agency; Improve the quality of laboratories and testing methods; Make clear and consistent rules and enforce them; Focus on the development and application of internationally accepted

practices for key agri-food products to help ensure food quality and safety.

Recommendations: short term

A centralised Food Safety Agency could• Advise policy makers;• Be involved in import, export and transhipment of food requirements related to

inspection, certification and control; food labelling and advertisement;• License and register food traders and establishments, food processors and food

warehouse;• Organise inspections and provide input for criminal investigations related to feed

and food safety;• Report on food alerts related to the food supply chain including pesticide, fertiliser,

feed, etc.;• Provide education and trainings on food safety and food safety awareness.

Recommendations: long term

A centralised Food Safety Agency and good testing facilities would• Improve the management and quality of food safety control;• Improve and boost the reputation of Vietnamese products for consumption in

Vietnam and internationally;• Reduce costs for companies and improve (international) competitiveness;• Reduce health risks;• Support more sustainable and fair trade; and• Take full responsibility for food safety cases and implement the rules and

regulations transparently.

Results

The Free Trade Agreement is an opportunity to• Upgrade quality standards;• Improve and upgrade laboratories and testing;• Improve food safety;• Increase the probability to successfully meet foreign standards;• Drive the upgrade of the agriculture sector to ensure the quality of processed food

products and the productivity; and• Reduce barriers for import and export.

The Food, Agri and Aqua Business Sector Committee is willing to share experiences and best-practices with Vietnamese authorities and companies.

Conclusion

A dialogue on food safety: importance of laboratories and testing for import and export.

Participants: • VASEP, BIPEA, FAPAS, DSM Nutritional Vietnam, Yara Vietnam, InvivoLabs Vietnam,

FAASC, UNIDO, Prof.Dr. Chu Pham Ngoc Son, and Associate Professor Dzung Hoang Nguyen.

When: 4 November 2015 from 13.30-17.30.

Where: Intercontinental Hotel Hanoi Westlake.

Organiser: The Food, Agri and Aqua Business Sector Committee.

Sponsor: InvivoLabs Vietnam.

Dialogue – 4 November – 13.30-17.30 – Hanoi

Please join us in this important dialogue