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Monday, 12 August 2013

Regulatory Initiatives: Exemption Clauses are not Escape Provisions

Examples in this discussion are drawn from the US-FDA FSMA and HARPC but a majority of the points discussed apply equally to other countries proposing similar sweeping food regulations changes. The Canadian Safe Food for Canadian Act (SFCA), the European Commission- Review of Regulation (EC)  882/2004, etc., may also be forced to grant some exemptions. Under certain considerations such as small operations that do not have sufficient financial resources, exemptions from some aspects of regulatory enforcement may appear to be reasonable. Exemptions may be positioned in such a way as to allow certain operations to be governed under a different set of rules. The FSMA guidance for registration of food facilities small entity compliance provides an example. The guidance excludes or exempts farms, restaurants and retail food establishments as facilities required to register with FDA:


The exemption maze is bound to get increasingly complex as demonstrated by the definition of a "farm" provided in this:
Mistaken Perceptions and Propositions
Depending on how these exemptions are positioned, businesses may be inclined to see them as the loopholes to pursue or provisions upon which to base compliance avoidance arguments. These kinds of mistaken perceptions or propositions must be recognized and avoided. Besides, businesses must remember that law makers have the right and power to make new rules where old ones do not work. The FSMA and similar initiatives clearly corroborate this fact. They are proposed because old rules are not working. I have the strong suspicion that the intentions of FDA will be undermined if the FSMA and HARPC implementation proceeds with the exemptions as currently proposed.


Inevitable Reactionary Change
The exemptions as currently proposed are likely to be short-lived. Failure to meet the desired expectations will trigger a re-evaluation of the rules and changes will be inevitable. Anyone planning to capitalize on presumed loopholes due to these exemptions needs to re-think that strategy. The presumed loopholes can and will vanish quickly as significant recall events continue to occur following the implementation of the new rules and the associated exemptions.

With the exemptions as currently proposed, some businesses may be led to think that the risks in certain operations are too low to be of concern. Wise and more committed operators do not think this way. They do not focus on the exemptions. Rather, they focus on the applicable rules. A commitment to controlling all applicable hazards must continue to be the focus of every operation.

The implied regulation of farms, restaurants and retail food establishments under a different set of rules signals the implicit message that these establishments are not important enough to be included in what is touted as: “. . .  the most sweeping reform of our food safety laws in more than 70 years”. Operators of such establishments who erroneously see this as a way out will be in for a shock when real outbreak events cause the withdrawal of the exemptions. Some other exemptions of concern are shown in the FDA-FSMA exemptions and modified requirements chart provided below:


FSMA – Exemptions Chart:



A Dangerous Understanding of the HARPC “Risk Based” Proposal:
From the regulators’ point of view, any proposed exemptions on the basis of operation type, size or scope do not overlook or minimizes the importance of applicable hazard control requirements. Any business that attempts to hide behind the subjectivity of what constitutes real risks in its operation will be playing a dangerous game. Rather than find loopholes in the exemptions, businesses will do better to take the “applicable enforcement” route.

The question of inequity in the universal enforcement of the rules to small and large operations is not even to be entertained. It will be a grievous mistake where the proposed exemptions are taken to mean that small operations do not have to meet certain applicable hazard control requirements. Instead of achieving the desired equity, such an understanding of “exemption” does the opposite. It proposes that small operations can sell dangerous products while large operations cannot.

Inequity does not exist. The scale of implemented program will normally take care of size and scope disparity. If necessary, punitive measures may also be based on a percentage of gross sales to compensate for size and scope disparities. Preferably, proportional assistance on the basis of gross sales should be offered to operations struggling to comply.


Please provide comments . . . 


Posted by Felix Amiri
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Felix Amiri is the Food Industry Chair of GCSE-Food & Health Protection



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