STANDARTIZATION AND METROLOGY REFORM

FROM THE REDACTION

NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them.

Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.
FROM THE REDACTION
NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them. Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.
FROM THE REDACTION
NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them. Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.
FROM THE REDACTION
NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them. Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.
FROM THE REDACTION
NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them. Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.
FROM THE REDACTION
NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them. Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.
FROM THE REDACTION
NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them. Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.
FROM THE REDACTION
NON-gOvErNmENTal OrgaNizaTiON – ThE iNSTiTuTE OF FrEE ECONOmY aNd buSiNESS PrESENTS For the world community the XX century was the epoch searching for balance – on the one hand creation of conditions for business undertakings and technological progress, free market development, and one the other hand – protection of safety of consumers, city-dwellers in the process of delivery of products of this progress to them. Technological progress gave rise to the system of influence over the nature and humans. its different forms are: chemical, biological, etc. On the one hand there are huge enterprises with their lobby that create products for people, be it food products, pharmaceutical or technical means. On the other hand people are helpless in relation to theses giants’ activities, the main purpose of which is gaining of profits, since there is a danger that both people and the nature may become victims of technological process. On the other hand, both the nature and people need products made by industry. That is why at the beginning of the century they started to introduce regulations of technical specifications. These are units – centimeter or decimeter, inch or meter, Celsius or Fahrenheit, indicator of radiation or ph, etc. They drew boundaries inside of which various substances were acceptable and created the calibration standard for making of size standard. Then they created a table of products’ content and uniformity of data, which was called standards, was formed as well as technical parameters in order to compare the measured with them. There emerged the issue concerning technological compatibility and safety measures in food industry and personal consumption. There appeared the third subject between the customer and the seller – special firms that carried out measurements and issued a special document – a certificate which confirmed that the product is harmless and acceptable in accordance with the corresponding parameters. There appeared accredited certification bodies and international associations iSO and Codex alimentarius and others. The state assumed obligation to protect nature and people against harmful influence, and business – against unnecessary regulation and barriers. in georgia, that was a part of the uSSr metropolitan country, there was the soviet system of metrology and standards as well as the state control system. The all-union State Standard and completely centralized certification system were introduced. after gaining independence, georgia started reformation of the state standard system and a few years later, when entering wTO, georgia assumed obligations to this organization that it will alter the soviet system and make certification a voluntary one till 2003, will establish technical parameters in metrology, create institutes of standards, or conclude an agreement with this kind of institution of some neighboring country (for instance Turkey which, with the assistance of the uS and Japan created it which cost 70 million USD), adopt a law on safety of food and pharmaceutical products, and create western accreditation and control system. It is beyond doubt that the state standard system often had a formal character and was a hotbed of corruption. But it is clear that this hasty and thoughtless reform in such an important sector as well as incompetence may cause serious problems to the country. There are so many blank spots in the adopted laws that all entrepreneurs turned out to be guilty, and the population – unprotected. The following was institutionally created as a result of the reform: – a single accreditation body in the Ministry of Economy; – standardization and metrology agency in the Ministry of Economy; – a body carrying out control and monitoring in the food production sector will be created in the Ministry of Agriculture. What is going on in this sector and what we are doing or cannot do, and what is to be done. Non governmental organization “The Institute of Free Economy and Business” has held a round-table discussion on this issue with participation of experts, businessmen and representatives of the authorities. ThE hiSTOrY OF ThE iSSuE How standardization was created, what was going on in metrology during the soviet period, since we were a part of it. What have we achieved, what is the situation so far, what we have disestablished, how it happened that we found ourselves in the vacuum, how our new legislation makes difficulties or novelties, and how it facilitates or complicates doing business? Professor Jemal Manjgaladze – the point is that standardization problem emerged in the world after international economic integration took place, as well as after technological boom in industry. Development of standardization and its inculcation in Georgia (since Georgia was a part of the empire then) was implemented by the famous scientist Mendeleev who established Board of Weights and Measures in Georgia in 1906. It was one of first state institutions in Georgia. It is clear that little was being done at that period in Georgia, though during the communist period Board of Weights and Measures was developing, and 1926 – metrology, first in Transcaucasia and then in Georgia; all this a basis of standardization. Metrology s provision of uniformity in measurement; measurement of water, food products, oil products, electric power, chemical composition, time, size, etc. is implied by metrology. Among other things, the first certification was made for metrology, and even now metrology or metrological means represent the basic part of certification abroad. whaT iS gOiNg ON iN ThE wOrld markET SuPErviSiON iN bElgium In Belgium protection of products’ safety and consumers’ rights is implemented in a centralized way at the federal level, mainly by the two ministries – the Ministry of Economy and the Ministry of Health. Additional supervision over the imported products is implemented by the customs service, over telecommunication installations – by post service and telecommunications institute (BIPT), and over personal protective equipment and machinery used in work – by the Ministry of Employment and Labor. The above-mentioned bodies are entitled to take practical and penalty measures in relation to suppliers of hazardous products and services to the market. Withdrawal of hazardous products from the market takes place based on the information of RAPEX system. Presently, restructuring is being carried out at the Ministry of Economy, the purpose of which is more effective realization of European directives concerning safety of products. In particular, in the Ministry there created a department – federal service on the issues related to economy, small and mediumscale enterprises, individual entrepreneurs and energy (SPF Economie, PME, Classes moyennes et en Energie), which, besides other functions, has the function of general protection of consumers in Belgium. Out of SPF’s 7 general Directorates, 4 directly deal with the issues related to protection of consumers’ rights; including the General Directorate which coordinates supervision over quality and safety, as well as over safety of the market’s total produce. (Note: all Belgian metrology and accreditation bodies, as far as quality and safety issues are concerned, are subordinate to the General Directorate). markET SuPErviSiON iN grEaT briTaiN Great Britain has a decentralized market supervision system, which is based on the concluded agreement (Enforcement Concordat) between the central government and local government bodies on the issues of realization of laws on safety of products and protection of consumers’ rights. In Great Britain, in the sphere of protection of consumers’ rights and safety of products (including food ones), responsible for control over observing legislative acts are Trading Standards Departments under the local government bodies that are conferred supervisory functions by the government department for industry (DTI) based on the above-mentioned agreement. Trading Standards Departments are independent organizations with highly professional specialists which are employed by the local government for carrying out of supervisory functions, and are accountable to this government (Trading Standards Departments also deal with metrology issues, which are listed in the chapter Metrology in Great Britain). Office of Fair Trading (OFT) is a body that carries out supervision over observing of consumers’ economic interests (consumer credit, tempting advertising, real estate trading, etc) and fair competition. Supervision over healthcare and labor protection is carried out by environmental departments existing under local government. In this sphere of supervision, local government is accountable to Health & Safety executive – HSE government agency. Environmental department also deals with issues related to safety of food products. baSiC lEgiSlaTivE aCTS 1. 1987 “Law on Protection of Consumers’ Rights” 2. 1990 “Law on Safety of Food Products” . 1994 “Decree on General Safety of Products” 4. 1998 “Law on Competition” markET SuPErviSiON iN liThuaNia Lithuanian market supervision system acquired the present shape in 2000 after inculcation of EU’s recommendations on effective control over safety of products (particularly food ones) on the market. The “Law on protection of consumers’ rights” (1994) and the “Law on safety of products” (1999) have been polished up this year, and the law on food products was also adopted. At the given below chart there shown the structure of market supervision system, and the institutional changes introduced in 2000 are also given in it. It should be pointed out that, in accordance with the law on competition, market supervision is implemented by the Board on Competition (which is directly subordinated to the prime-minister), while control over pharmaceutical products, their putting on the market, etc – by the sate agency for control over medicaments under the Ministry of Health. lEgal baSE 1. 01.06.1999 “Law on Safety of Products” 2. 10.11.1994 “Law on Protection of Consumers’ Rights” . 10.10.1998 “Law on Compliance Appraisal” 4. 04.04.2000 “Law on Food Products” 5. 2 .0 .1999 “Law on competition” markET SuPErviSiON iN POlaNd ThE PrOCESS OF TraNSFOrmaTiON OF ThiS SYSTEm Proceeding from the fact that the purpose of market supervision is protection of safety of citizens and their economic interests, in 1995 European Union imposed the following obligations on the countries-candidates for membership in the EU: 1. Inculcation of EU laws in Polish legislation in, first of all, the following spheres: . Safety of such goods as cosmetics, toys and bakeries; . Economic safety of consumers particularly in such issues as false advertising, price indication rules, consumer credits, unfair terms in contracts, distance trade, tourism services, rights for real estate temporary use; 2. Creation of an institutional structure for effective protection of consumers’ rights (taking into account participation of consumer organizations) so that the following be implemented: . Market monitoring from the viewpoint of compliance with product safety requirements; . Taking of corresponding measures in case of discovering of discrepancy. The first step for creation of the institutional structure for creation of consumers’ rights was reorganizing in 1996 of Anti-Monopoly Bureau functioning since 1990 (that included consumers’ protection department) into Bureau for Protection of Consumers and Competition (UOKiK) and putting of trade inspection (it used to be a part of the trade department) under its supervision. The 1998-2002 national program (in the sphere of consumer protection) for preparation of Poland’s entry into the EU determined legislative and institutional changes, and allocation of funds for their introduction under the leadership of UOKiK was carried out by the Ministries of Justice, Finance and Health, as well as by Physical Training Bureau and other bodies. During the following years, the basis of legislative system for consumers’ protection was created and the competence of UOKiK and trade inspection increased. The system of meeting of consumers’ legal requirements was improved, in particular, for this purpose amendments were introduced into the legislative act (199 – the law on struggle against 8 unfair competition), in 1998 the Anti-Monopoly Court was created, consumer mediation courts were created under the Trade Inspection, the institute of regional protector of consumers was created under the local government bodies, etc. Professor Tamaz Agladze: The world knows two principal models of metrology and certifi- cation – a centralized one existing in the US and a decentralized one existing in Europe. According to both of them, certification is voluntary, and metrology is a state priority. – Do different countries have single compatible technical parameters, metrology, and whether they use common standards or the ones of some country? Jemal manjgaladze: – Yes, the do. Metric systems are uniform but their units, such as Fahrenheit and Celsius, differ. What was the main essence? For instance, if one country produced something, how it could be used with another part of the product manufactured in another one. Here arises the issue of compatibility. At the same time, if two countries simultaneously manufactured products, will the product produced in the first country prove useful to the second one – all this is called a standard. Unfortunately, at that time the Soviet Union isolated itself from the European countries and started to inculcate state and basic standards (the Soviet Union’s system of standards, technical specifications and control) which, to a certain extent, were stricter than the European ones. For instance, my field of activity was radiation control; I am the author of one of the works and participated in making of the standard concerning it. We used to have rather strict sanitary codes. Even now some state standards are stricter than the ones known as ISO or EN. – what is iSO and EN? J.m. – ISO is the International Standardization Organization. Georgia became its member in 1998 and I exerted every effort so that it would happen. EN is European standardization organization, it has a five digit number that determines a specific standard. ISO is marked by two basic directions – 14 000 is environmental protection standards, and 9 000 – products’ protection standards in general. Now their unification is being carried out and soon both of them will be included in the statute on the single standard. These standards are divided in accordance with different directions – these are norms of products’ safety, the qualitative part. If we consider the standard as consisting of two integral parts, the first one – protection part and the second one – general part that does not determine effect on a human or the environment, but correspondence and acceptability, we can consider it as a qualitative indicator. But if we determine quality as the unity of these two parts, then it is necessary that both elements should be observed. Europeans say that any standard is a voluntary one and worked out technical regulations in which safety indicators are determined and are obligatory for all producers, that is they already include units of the effect on a human and the environment. Now, as to how protective functions of technical regulations correspond to the units of the former Soviet Union’s system of state standards. In the all-Union State Standard there were indicated both the safety indicator and the qualitative indicator which has no effect on human health and the environment; the methods in accordance with which the analysis had to be carried out were determined as well. Though the Europeans have said that the standard is a voluntary one, but technical regulations are obligatory for all producers, and they already give methods of how various analyses for all safety indicators should be carried out. Our main task was to follow the European path and introduce technical regulations. However, we should not have accepted them in direct way the way the Baltic countries have done. During the negotiations with the WTO, which had three main aspects – standardization, customs duties and a single standard, I laid down a condition, because of which I had big disagreement, since we said that we would not follow the path of direct taking over of the standards and the technical regulations. In this case reformation of our industry would have been necessary, that is, we would have had to reequip our enterprises, which requires billions. That is why I said that we should take the path of harmonization. We would have adapted those terms to local production, that is what harmonization is. iNTErNaTiONal liabiliTiES – how are our liabilities from the viewpoint of standardization included in the final document? J.m. – The above-mentioned negotiations were held in 1997-1999. The main principle of the WTO is as follows: a member-country should in no circumstances come out against any country, which is acceptable for this organization. For instance, if we come out against admittance of Russia, as this country puts obstacles in the way of our produce, it will not be admitted to the organization, since the main function of the WTO is promotion of trade. Unfortunately, according to the information that I have, the negotiations with Georgia are over, Georgia has put its signature and the issue that used to be spoken about so much is not remembered at all. Gref does not recall Georgia at all. Four countries did not put their signatures to agree with admittance of Russia. Out of these four countries an agreement with Columbia and the US has not been reached. He says that he will do his best to achieve Russia’s admittance to the WTO. EU has one representative that speaks on behalf of all membercountries, that is why it was very difficult for us to hold negotiations with them in which I took part in Geneva. However, we had such a strong supporter as the US, which finally stipulated for our admittance to the organization in spite of the fact that we were not ready for membership in the WTO. It was written in the document that Georgia admits that certi- fication will not be obligatory since the main mechanism of certification is the obligatory standard, and if it is obligatory, correspondence to the standard will become apparent in certification. In case of voluntary certification there arises the issue of technical regulations – that is what safety indicators an entrepreneur should protect: products that will have a negative effect on health must not be supplied to customers. I asked for 5 years but they gave only 1 year. But then they gave years so that by July 200 we should switch to voluntary standards and, correspondingly, to voluntary standardization. – were technical regulations worked out or not? J.m. – No technical regulations were worked out. – however the government is preparing the list of OECd countries the products from which will automatically be recognized in georgia by both technical parameters and harmlessness (see inset 1). it turns out that we are breaking the law. what other article of it do we break? J.m. – The article on certification. In the law for which I had a real battle. I signed this law and made Niko Lekishvili sign it too. It is the “Law on Certification of Products” and services. At first no one considered it as a law. No developed country of the world has such law. They have a law on corroboration, but corroboration differs from certification the way the earth differs from the sky. – it turns out that we have returned to bureaucratic principles. J.m. – Yes, it is so. We have introduced awful regulation instead of deregulation. Finally, we studied this article to the end when there was no article on obligatory certification in the general provisions. I worked with the Ministry of Economy, there were agreements with Bendukidze, three meetings were held, we wrote a 12 sheet conclusion. At the committee’s session he rose his hands and said that he agreed with all our conclusions. I improved this good-for-nothing law and reshaped it, and, what is most important, I made them introduce the voluntariness principle into it. On Friday, when the parliament was to submit the law with its chairman’s signature to the President, there were four articles in it, and the fifth one was missing in the general provisions. I asked Eter Svanidze, who sends laws to the President, whether it was the finial variant, and she confirmed the final one. She said that I had to sign it since the law was to be submitted to the President at seven o’clock. At ten minutes past six I took the law to Niko Lekishvili and said that it was possible to sign the law, though there were lapsuses in it which could be corrected later on. Then we signed the law. At twenty minutes past six I handed over the law to Svanidze. At seven o’clock the fifth article was introduced in it. – What is this fifth article? J.m. – This is an article in accordance with which obligatory certification will be made possible only in cases envisaged by the law, and will be implemented by a corresponding administrative body. On the whole, what is certification? Certification is a fundamental standard which is used in this system and should not have any other definition except this one and this is obligatory for all laws of this kind. In accordance with ISO299 , it is 9 a procedure by means of which a third party confirms in written form that products, process, services comply with the requirements, that is this independent third party should confirm it. It is written in our law that confirmation is given by the state administrative body. In short, the principle of certification is violated. – who could have written it and why? J.m. – I know who did it, it was written by Kublashvili. However, I do not know either the reason for that or the customer. – maybe it was ordered by a person who does not want regulation to be eradicated. J.m. – I was surprised when I saw this law, since we repealed it because it envisaged obligatory certification. So, it turns out that we have done the same thing but in a worse form since, in accordance with the previous law, any body that was accredited was entitled to do it, but the new law prohibits this. – does bendukidze know about it? J.m. – Of course he knows, I have spoken to him. It turned out that over the two months since the autumn session began, the Ministry of Agriculture submitted a law in accordance with which all agricultural produce was liable to obligatory certification. What is this? Has it been done on purpose?! – And finally, what is the difference between these two laws – “On harmlessness and Quality of Products” (27.12.05) and “On standardization and certification” (24.06.05) with new amendments? and why is this law bad? J.m. – Here there is a mistake in the definition. I can say only one thing – this law is not a law on certification at all. This is rather a law on confirmation. I have written concerning it and Bendukidze has these notes in which I say that we have assumed an obligation to WTO in accordance with which we have to repeal the law on certification and introduce a law on confirmation instead of it. I told Bendukidze that this law contains compliance conformation clauses and he replied to me I or Niko Lekishvili could offer a suggestion at the committee’s session since, according to his words, repealing of the law and adoption of the new one would be more difficult. I made a mistake when I agreed with this proposal. I am worried about this issue because it is my profession and I do not want to look ridiculous in the eyes of the future generation. Then, at the second session I submitted the law for the second hearing since its initial version was unacceptable and did not look as a law at all. For the second hearing I made a suggestion that, since this law basically determines compliance of products to confirmation, the name of the law showed be removed and that a law on confirmation of products’ compliance should be written, but my suggestion was turned down. Three laws are united in this law. It turns out that this is neither a law on confirmation of products’ compliance nor a law on certification, since here there is both accreditation and control, which is quite another sphere. – what are other omissions of the law? J.m. – Our “clever” lawyers added the article amended to this law to the law on standardization as well. It is absolutely unclear what is the relation between obligatory certification and standardization when it is written in the introduction that standardization is voluntary. – in accordance with article 7 – “Obligations of Producers and distributors”, a producer is obliged to put safe products on the market and in doing so he is obliged to give corresponding information to the customers so that they have an opportunity to assess the unanticipated risk and take precautionary measures taking into account the product’s serviceable life, etc. J.m. – It is not an article any more, it is a rule and it should be adopted as a rule. It is a by-law, it is a legislative act. – it turns out that this is an omission too. J.m. – Of course it is. Do you know what the point is? It includes the rules that should be considered as a legislative act. – it means that a product must have an inscription in georgian language, a passport, and it is good for a consumer… J.m. – This is regulated by other law and it is not necessary to write it in this law. – There are also incomprehensible and general words. what does “absolutely safe” product mean? J.m. – The law on consumers’ rights contains a warning, that is for whom the given product cannot be acceptable. Let us cite sugar as an example. Must there be an inscription that a diabetic should not eat it? It is absurd. – The objectives of the law: Article 2 – “To determine mechanisms for adoption of technical regulations concerning the product”, and Clause b – “To secure safety of the product put on the market, determine basic principles of market supervision and control”. i, personally, do not think it right that determination of adoption of technical specifications should be “secured”. J.m. – There are no problems in the general part, though this by-law could be freely regulated by the way of presentation of technical specifications in the technical regulations. – There is again accreditation in chapter four, while issues related to metrology, accreditation and certification should be presented separately. J.m. – The main thing here was confirmation of compliance which this law directly concerns, but it has another name as well. – The following paragraph – harmful products, the products that do not meet the requirements of products’ safety envisaged by this law, here quality is envisaged by the law. J.m. – It should not be so. We live in a country with free economy. Anyway, we think so. There is Article 1 in the adopted law, in accordance with which, all products that will be imported and exported is liable to certification, this is obligatory certification. And secondly – quality checking was added to the law on harmlessness of products from the viewpoint of falsification, which approximately means that half of Georgia will be arrested, since if an entrepreneur infringes upon the chosen standard by at least 2% he will already be a criminal. Mrs. Lili Begiashvili: – That is absolutely right, since this is a violation of consumers’ rights. Though the changes that envisage administrative and penal sanctions have not been worked out yet but we continue this work, and these sanctions will be submitted by the parliament’s spring session. as to article 13, it says that quality of imported products should comply with the requirements envisaged by the law, that is, here there is no talk on obligatory certification, requirements can be different, these are technical regulations, harmlessness parameters. as to exported and re-exported products and fodder, it is clear that they also comply with the requirements envisaged by the law, except for the cases when something is required by the receiving party, that is if the country to which you export a product asks for a sanitary or ordinary certificate. Then it is clear that the demands of the country should be met. Otherwise it just will not receive your products. l.b. – There is a talk that Article 1 has already come into force, and when a product is imported a customs officers asks for a certificate. Here the law on licenses and permissions is implied, in which it is written that import of products that require veterinary control requires a permission. – That is a permission is required. l.b. – Of course, it is. Can you imagine a country where they export veterinary produce without requiring a permission? Everything is simple, we do not set new requirements by this law. – It is clear, but if a certificate or its con- firmation are voluntary, then a certificate 10 becomes necessary for import. l.b. – No, the word “certificate” is not written here, it is written “compliance with the requirements envisaged”. I repeat once more that this does not imply a certificate. It is right that products must comply with the requirements envisaged by the law. Is it all the same to you what you eat? – The right of choice is most important for me. l.b. – This law envisages it as well, and it will be written in the nearest government’s resolution, which will lead to recognition of technical regulations. It is also written in the “Law on Standardization” and the “Law on Products and Certification services” which says that if it is technical regulations, observing of them is obligatory. Bu if it is a standard, choosing of it is voluntary. This resolution recognizes technical regulations which means that an entrepreneur is free to choose any technical regulation, and make products in accordance with it. – according to experts, that direct recognition of technical regulations is impossible since we cannot directly take over their regulations. l.b. – Those regulations that are recognized in other countries do not inflict harm to human health. – What does the following article – “Registration in accordance with the established rules” – mean? l.b. – It is very important since the only thing we have left after liquidation of licenses on products and permissions is simplification of the law. This new law is a simplification of this process and only certification remains as obligatory, that the Ministry of Agriculture should know and register all the enterprises that produce and distribute food products and fodder. In the nearest future we are going to put on the agenda a project that establishes registration rules. Entrepreneur fills in a registration card where they indicate the location and the type of the manufactured produce, and whether the enterprise is equipped with machinery necessary for manufacturing concrete products. He must make a declaration and then we carry out registration based on it. This registration is not an act that later on gives an enterprise the right to launch its activities; we just have to know that you manufacture a concrete product, since either European regulations or our law on harmlessness of products envisage that the state should periodically implement control over securing of harmlessness of products. It is natural that we shall not be able to control anything if we do not know what an enterprise produces. We should take into account that any information obtained as a result of registration is a commercial classified information for us. Both the resolution and the registration card indicate that any information submitted by an entrepreneur will not be disclosed and that activities of any enterprise will not be called in question. After this procedure an entrepreneur is given a three year transitional period. It is very important – we understand what entering European or any other market means for the country and the products produced in the country if it does not comply with harmlessness parameters. We also know that if we enable the obligations envisaged by this law now, it will make manufacturers stop production. This is unacceptable for us and that is why we have introduced a ,4 and 5 year transitional periods. Thus, changes should be made for the enterprises with high rate of risk, for example manufacturing industry, production of agricultural products, etc. Then everything becomes obligatory at primary production and starting from 2011 it becomes obligatory for the enterprises producing fodder. It is very important that the law does not apply to personal consumption and sub-products. – does it apply to a peasant that sells ham? l.b. – It does. It does not apply to him if he produces products for personal consumption. – It is written in Article 14 that storage or packing of food products can be implemented only if it is registered in accordance with the established order. Should, for example, “lagidze” khachapuri cafes or producers of “Nikora” sausages permanently check the quality of their products in accordance with Article 14. l.b. – Of course they have to check the quality of their produce. There is the same order in Europe as well, a producer systematically checks the quality of its produce. – is a laboratory needed for that? l.b. – It is a disputable question. Of course, if an enterprise has an ability to have a laboratory of its own it is all right. But we cannot demand that a producer should have a laboratory, however, a laboratory system by means of accreditation is already being inculcated in Georgia, so an enterprise can from time to time submit samples of its produce to an accredited laboratory. An entrepreneur himself is obliged to provide for putting harmless food products on the market. – This article has been criticized by entrepreneurs, experts and owners of laboratories. They say that the state excludes the third party, that is a laboratory, and directly obliges entrepreneurs to carry out quality checks. l.b. – No, it is an entrepreneur’s obligation but he is entitled to apply to a third party. This law establishes a direct obligation of an entrepreneur, and it makes clear what he is obliged to do. Though it is the state’s obligations to take samples of food products from the market and check them in a laboratory. – There is also an article here in which “a well-founded doubt” is mentioned, but it is not interpreted and raises many questions. l.b. – We also had a dispute over these terms. But there is the same practice all over the world, it is the issue when the state has no time to make a check, the wait for the results of the laboratory analysis and finally present a well-founded conclusion. We just cannot allow such luxury when a poisoned product is on the market and health and life of people are in danger. In this case necessary measures should be taken quickly. Along with “a well-founded doubt” the law contains a clause that the measures take should correspond to the existing danger. The function of our ministry is not only in establishing relations with producers, but with scientists and international organizations as well, since this issue is very important for all humankind. In the whole world, it is enough for “a well-founded doubt” to withdraw products from turnover and arrest them. – however, based on “a well-founded doubt” the customs detained the products, wurst and sausages, of one austrian producer… l.b. – Is it unjust from your point of view? – Then it turned out that the products were harmless. L.B. – If the documents certifying harmlessness of the products had been produced, they would not have been detained. – But they had all necessary certificates except for the permission of our veterinary department which directly stipulated for “a well-founded doubt”. l.b. – I am not well-informed about this matter, but it would not have happened because of this law since it has not come into force yet. – One question concerning definitions and explanations. according to experts, iSO compiled an international dictionary and there the definition of food product’s quality written there differs from the one given in this law. The term “customers’ economic interests” is written in this law concerning the quality of food products. what does it mean? l.b. – It is clear that the quality of food products is related to customers’ economic interests. We imply that quality includes both harmlessness parameters, which are established by technical regulations, and the element of quality. ISO parameters include size, weight and other parameters. When an entrepreneur writes 200gr instead of 150gr, it will not be harmful for health, but it will inflict economic loss to a customer. In accordance with our law, everyone should observe the harmlessness parameters. – And again, as to the definitions. In the law there mentioned the term “assortment of food products” in relation to falsification. In my opinion, that is not right. l.b. – All the information will be indicated on the label. – Yes, but the assortment will not be indicated there. l.b. – We tried to observe all the parameters. – Based on this term, it is difficult to accuse an entrepreneur of falsification. does it turn out that infringing upon the assortment is falsification? This is a blunder. There is also a note that a special accreditation body was created, that is, the state both establishes technical specifi- cations and becomes a certificate issuing and controlling body. l.b. – I consider this argument as groundless. First of all this law envisages creation of a single controlling body in the food products’ sphere, which cannot contradict the law on products and certification. Not a single lawyer has established this fact so far. We do 11 not carry out accreditation of anything. We control food products. – They say that it is not right to hand over veterinary service to the customs department. l.b. – It will not be handed over. Here the talk is of implementation of veterinary and sanitary control at custom houses. The customs will just carry out administration of these issues since, in accordance with our legislation, there must be a customs officer at a custom house. Professor Tamaz agladze – I shall draw you an example that I witnessed in the US. Chromium coverings are very important for workshops and they are obtained by means of hexavalent chromium solution which is very toxic and destroys genetics. In the US there is no law that prohibits it, but there is a law that concentration of hexavalent chromium in run-off water should be of 10-6 quality. If the concentration in the workshop is higher, it will pay a large fine. Technologies are managed this way, and a corresponding technology for concentration reduction should be worked out. Giant companies have switched to trivalent chromium solution. The state does not limit production but promotes modernization of technologies in order to protect the society. On the whole, all the standards are progressive ones and are aimed at production of high quality products. – how does the same take place in Europe? T.a. – The same processes are underway in Europe as well. The principal difference is that the US and Russia centralized systems. They constantly carry out investigations in order to determine the rate of hazard to human health and the environment, which requires large sums of money. But Europe does not have a centralized system. In other countries these systems are national ones and envisage their own specificity. – and what about our country? we have adopted the law that will become effective on February 1, in accordance with which in fact the whole food industry has to be brought to a stop in spite of the fact that transitional periods are envisaged. what would you, as an expert, say on this issue? T.a. – The question consists in a different thing. What do we want? The system adopted in WTO member-countries is as follows – certification is voluntary. The main thing is most important: if an entrepreneur produces a low-quality wurst, he should indicate that it is of low quality. – how many accredited laboratories are there in georgia now? T.a. – There are several normal ones. But how well they work is a different point. – Everybody says that 9000 are accredited by iSO. T.a. – This is, of course, a good system. – it is written in the law on food products that all organizations producing food products should permanently carry out laboratory checks. – T.a. It is in the interests of producers themselves. – i think that this law complicates the situation. how much does a laboratory check cost, and to what extent it can be implemented? T.a. – In general, a normal company controls its produce itself since it is in its interests. No one has the right to enter a company’s laboratory, since an entrepreneur may have a secret related to product manufacturing. – The ministry of agriculture says that the secrets of all companies will be kept after they have been registered. in my opinion, conditions for business are being complicated. T.a. – What is registration needed for? It is absolutely useless procedure. No one has the right to check the product without my request. – in accordance with the new law, this right is given to the ministry of agriculture. T.a. – An enterprise’s laboratory is an entrepreneur’s secret and not a single company will ever let somebody enter it. An accredited laboratory is quite another matter. Checking of manufactured products at the expense of the controller is possible, however, an enterprise’s laboratory cannot be checked, it is a violation of the law. We always want to control something, but we cannot understand what. As soon as a law gives us an opportunity of double interpretation, we can conclude that the law is bad. – This law contains the term – “a wellfounded doubt”. T.a. – It is already impossible to speak about it. Generally speaking, the interests of a businessman and the society should be protected. One must not inflict a loss to a businessman under the pretext of “a wellfounded doubt”. all ENTrEPrENEurS arE OFFENdErS – In accordance with this article, an entrepreneur is obliged to put such products on the market that complies with the requirements of the technical regulations adopted at his enterprise. Are there recognized technical regulations in Georgia? J.M. – No, there are not. – it turns out that any entrepreneur in georgia is guilty today. That is a beforehand doomed law was adopted and the uS, Japan should have helped us in elaboration of the technical regulations and large sums of money should have been spent. J.m. – I repeat once more, in no circumstances by means of direct taking over. Today we do not have the industry and businessmen that will invest tens of millions in production so as to directly take over the technical regulations. That is why there is an obligation that all enterprises should have laboratories of their own. By the way, this is envisaged by the law on harmlessness of products, in accordance with which a laboratory should have a Pelki Nermel spectrometer, this spectrometer costs 250 000 USD. Let us say that at the same time I have an old Russian SF4 with which I will get the same result. However, this law obliges me to buy an expensive spectrometer. – how long will it take to equip our production? J.m. – Five or six years. Besides time, it will require tens and hundreds of millions. If I were I a head of the control service I could stop any producer. – in accordance with one of the articles, before putting the product on the market, a producer is obliged a producer is obliged to draw up and sign a declaration on compliance of the product with the requirements of the technical regulations. J.m. – Here there arises the notion of con- firmation of products’ compliance. Certification also belong here. – according to the law, an entrepreneur fills a declaration concerning quality and harmlessness of the product. how can one fill in a declaration when technical regulations have not been adopted in the country? Shalva melkadze: – There is a note here that it is possible to use any body during the transitional period. J.m. – I had to introduce this clause when I could not do anything else. It is written here that in the part of the existing safety standards there are the norms be means of which regulation takes place. But for them, this law would be a law on arresting of entrepreneurs. If I have a device detecting cadmium, lead, heavy metal or other toxic substances affecting human health, in accordance with this law’s article I can use them pursuant to medical norms. – let us go back to consumers’ interests and falsification.Here falsification is explained as “non-compliance of a food product’s characteristics, as well as of the assortment and origin with the established standards.” what does “non-compliance of the assortment” mean? Sh.m. – I repeat it once again that it is very easy to bring an action against an entrepreneur, and besides quality systems are not introduced at our enterprises, that is why qualitative changes are sure to take place. As to the word “assortment”, I can tell you anything about it. You should ask the one who wrote it. Secondly, since we are speaking about food products, the law explains to us – “identified quantity of products of one type and name produced by the same enterprise during the same shift and registered by a label.” If we 12 consider food products more carefully, we shall see that each kind of products has its specification: sausage have its specification, lemonade has its own, etc. and all of them were indicated in the state standards. When I worked in Sakstandard I wanted to form a batch of products and here it is, though it is possible to produce different products in one shift, that is why during the soviet period specification for each product was different. Problems of Metrology – i would like to go back to metrology. The government created a technical specifi- cation in metrology. T.a. – A laboratory accredited in accordance with the standards has an opportunity to control it, and this laboratory issues a conclusion on it. – according to experts, metrology can be a source of large incomes for the state. For instance, let us set up a regional center of Turkish metrology institute in Tbilisi for the whole Caucasus region. how is money made out of it? T.a. – In this case we shall be able to render services to our enterprises, as well as to Armenian and Azerbaijani ones. J.m. – Money is not made. But, to be more exact, they are made. If you do not fulfill this condition I shall close my eyes at this violation and get money in return. Let us draw as an example the law on securing of uniformity of measurement, it is directly written there that petrol pumps at filling stations should be secured and calibrated. – Does a private firm, a laboratory take money for that? J.m. – Of course. The state does not control it any more. Everywhere in the world the state appears as a fourth party that is a controlling one. According to the fifth paragraph of our law, the state is a conductor of policy, it determines the norms, carries out work and is a controller. It turns out that four functions are united in one hand, which is in no way permissible. CONTrOl J.m. – Now as to control. This law does have the clause concerning control. This law was adopted earlier than the law on harmlessness of products (note: here the talk is of the changes to the “Law on certification and standardrzation). When this law was submitted in the first reading, another law worked out at the Ministry of Agriculture was submitted as well, and this is the law on quality of products. One cannot understand anything. The government does one thing and the parliament another. I wrote a note on this law, and made 12 pages of notes for 12 pages of the law. Then Zura Tskitishvili told me that the authors of the law would come to me. Then one little girl accompanied by a lawyer came to me. I am sure that she has no idea what control is. I showed them my conclusion and said that if they did not agree with it and were able to explain why, I would agree. What is most important, the government and the parliament do not know anything about each other’s activities, since two similar laws are passed, which contain similar control systems. I always had conversations on this issue, and had my first disagreement with Shevardnadze because of it, that is control is not Sakstandard’s business. However, I did not come to an agreement with the former president. – and who must carry out control? J.m. – In general, the control system should be a single one and it should not be subordinated to any department, that is it should be absolutely independent. Non-governmental organizations play an important role in it. For instance, in France non-governmental organizations determine a policy. If we say that we are following the European path, we have to accept their rules. The authors of the law say that this is an American model. In America there are two controlling bodies – FDA for control over food products and drugs quality, and the second one, controlling the quality of industrial produce which is controlled by certification since it is mainly the issue of metrology. Metrology is a state system, metrological control cannot be a non-governmental one. It determines the general certification policy. – let us continue. “To submit to the market supervision body…” what is “the market supervision body”? J.m. – If we judge by this law, the Ministry of Agriculture is the market supervision body. And do you know what is the point? There is an article in this law that envisages a single control system, but then a separate law on harmlessness of food products was adopted. It is like FDA, however, it envisages issues related not only to food products but drugs as well. In this law they singled out food products, and indicated in a separate article that it does not concern drugs and other industrial produce, but food products only. It is another issue whether these food products are liable to certification or not. It is not obligatory. That is why the word “confirmation” is written there. Confirmation has two directions: 1. when a producer has a laboratory of its own and he can secure this safety indicator and the general indicator, which we conditionally called “quality”, since quality is a unity of safety and other indicators. A producer himself can draw up a statement which he is obliged to submit at the first request of the body controlling the market. – The controlling body is the Ministry of Agriculture. In accordance with other constitution, it is an economic function. Does this article contradict the constitution or not? J.M. – Of course it does. We have left out what is mentioned in determination of food products – any product intended for human nutrition, processed or liable to processing. Food products include all kinds of beverages, chewing gum and all substances that are packed and used in products, including water which is added to product’s ingredients on purpose. As we know, water should be controlled by the Ministry of Health. Let us take, for instance, “Natakhtari”beer. It turns out that water in the beer should be checked by the Ministry of Agriculture. All right, let us continue. Food products does not include fodder and pharmaceutical preparations. On the whole, this law on harmlessness and quality was ordered and financed by USAID, and this law was called “The Law on Risk”. However, since some agreements has taken place, this law was fully applied to food products. And now let us see what “processing” means in accordance with Paragraph B – any process that considerably changes the primary product, including warming, smoking, canning, drying, pickling, cooling or any combination of them. Now I tell you that pasteurization of milk is the same as warming. There are two methods of canning – the method of Koch and pasteurization. Food products containing protein it begins denaturalization at temperatures higher than 640, that is why it is warmed only for a short period of time so that protein should not decompose and so that bacteria should die. I do not say anything about cooling in the process of which nothing changes. – As to Article 1 . As far as I know we have cancelled obligatory certification, but it is written in this article that food products and fodder should comply with the requirements established by the Georgian legislation. Exported and re-exported from Georgia food products and fodder should comply with the requirements envisaged by this law. Does this article mean that at the border a customs officer will require the obligatory certificate? Sh.M. – Of course, it does. It is directly indicated and we have not canceled records concerning food products and tobacco. All food products, both exported and imported ones, require a certificate. This article is allegedly introduced here because of the name, but the state should find a name based on the law. However, the Deputy State Minister for reforms Mr. Vato Lezhava said in this regard that a by-law has been worked out which facilitates importers’ activities, and that we switch to the recognition principle in relations with the main trade partners, with the exception of Russia. You can see this in the enclosure that is given below. 1 The Prime Minister of Georgia Zurab Nogaideli Enclosure 1 (Project) Country membership in international organizations Code 1 Australia A member of the Organization for Economic Cooperation and Development (OECD) 0 6 2 Austrian Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 040 New Zealand A member of the Organization for Economic Cooperation and Development (OECD) 554 4 The USA A member of the Organization for Economic Cooperation and Development (OECD) 840 5 The Kingdom of Belgium A member of the Organization for Economic Cooperation and Development (OECD) and the EU 056 6 The UK A member of the Organization for Economic Cooperation and Development (OECD) and the EU 826 7 German Federal Republic A member of the Organization for Economic Cooperation and Development (OECD) and the EU 276 8 The Kingdom of Denmark A member of the Organization for Economic Cooperation and Development (OECD) and the EU 208 9 Spanish Kingdom A member of the Organization for Economic Cooperation and Development (OECD) and the EU 724 10 Republic of Estonia A member of the EU 2 11 Republic of Turkey A member of the Organization for Economic Cooperation and Development (OECD) 792 12 Republic of Iceland A member of the Organization for Economic Cooperation and Development (OECD) 52 1 Ireland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 72 14 Republic of Italy A member of the Organization for Economic Cooperation and Development (OECD) and the EU 80 15 Japan A member of the Organization for Economic Cooperation and Development (OECD) 92 16 Republic of Cyprus A member of the EU 196 17 Canada A member of the Organization for Economic Cooperation and Development (OECD) 124 18 Republic of Korea A member of the Organization for Economic Cooperation and Development (OECD) 410 19 Republic of Latvia A member of the EU 428 20 Republic of Lithuania A member of the EU 440 21 Grand Duchy of Luxemburg A member of the Organization for Economic Cooperation and Development (OECD) and the EU 442 22 Republic of Malta A member of the EU 470 2 Mexican United States A member of the Organization for Economic Cooperation and Development (OECD) 484 24 The Kingdom of Netherlands A member of the Organization for Economic Cooperation and Development (OECD) and the EU 528 25 The Kingdom of Norway A member of the Organization for Economic Cooperation and Development (OECD) 578 26 Republic of Poland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 616 27 Republic of Portugal A member of the EU 620 28 Republic of Greece A member of the Organization for Economic Cooperation and Development (OECD) 00 29 Republic of France A member of the Organization for Economic Cooperation and Development (OECD) and the EU 250 0 Republic of Slovakia A member of the Organization for Economic Cooperation and Development (OECD) and the EU 70 1 Republic of Slovenia A member of the EU 705 2 Republic of Hungary A member of the Organization for Economic Cooperation and Development (OECD) and the EU 48 Republic of Czechia A member of the Organization for Economic Cooperation and Development (OECD) 20 4 Republic of Finland A member of the Organization for Economic Cooperation and Development (OECD) and the EU 246 5 The Kingdom of Sweden A member of the Organization for Economic Cooperation and Development (OECD) and the EU 752 6 Swiss Confederation A member of the Organization for Economic Cooperation and Development (OECD) 756 7 United Arabian Emirates 784 8 Israel 76 14 Accreditation and Institutional Issues J.m. – The work on introduction of accreditation of laboratories and bodies is already underway. Two basic standards will be used, these are ISO17025 and ISO17011. This is a determination, international standard for accreditation of laboratories and bodies, which is obligatory for all accreditation systems. It determines how accreditation of laboratories and bodies should take place. We received the 45 004 EN standard in due time. Then the standard was formed which was united in ISO 9001. That is why the elements of ISO 17025 are included in ISO9001. When a laboratory receives a certificate, the standard is determined there, but if it concretely goes through accreditation, it should go through it in accordance with ISO17025. In short, this is a complicated system and it does not give the right to everybody unless they have order in everything, staring with personnel and ending with lavatory. – Natia Turmava – This kind of body was created in the Ministry of Economy. The ministry has carried out institution reformation and two bodies that are independent of each other were formed: – The United National Certification Center; – The agency of Standardization and metrology. Sh.m. – I say it once again since it is important – on December 27, 2005 the Georgian parliament passed the “Law on safety and quality of food products” that came into effect in February of the current year except for some articles. According to experts, some international organizations, including USAID worked at the law. It was adopted in accordance with EU “Decree on food products’ safety and risks” and it is very necessary for our country. But the subject of quality was added in the title of the final variant, and besides there are a lot of lapsuses in definitions, including the most eye-catching one in the definition of falsification, in which infringing upon the assortment is considered as falsification, and, correspondingly is punished in accordance with the Criminal Code. Also, the notion “economic interest” is introduced in the explanation concerning quality of products. And the Ministry of Agriculture is mentioned as a controlling body. And also, in accordance with Article 1 : “Food products and fodder imported to Georgia should comply with the requirements established by the Georgian legislation.” In experts’ opinion, it means that they must have a document confirming it. Thus, in fact we introduce obligatory certification again and contradict the requirements of WTO. v.l. – Automatic confirmation of products imported from certain countries will take place, and this problem will be eradicated by this. The list that will facilitate importers’ activities concerns not only food products but all products in general, and apprehensions of experts that business will be complicated and the deregulation process will be slowed down are groundless. Sh.M – Poducers of food products should go through a special registration at the Ministry of Agriculture, and produce a declaration of harmlessness of products. At the same time they should permanently check their produce in the laboratory. For instance, “Lagidze” should check their khachapuris, and “Nikora” – its sausages. L.B. – Registration would be of formal character and its purpose is monitoring, and declaration is made at the discretion of a producer. But those who will make it are obliged to be responsible for the parameters they have declared and should not cheat customers. T.A. – It is right and adequate to the international practice. Here the principle of a customer’s free choice is observed. An entrepreneur is obliged to observe only those parameters that are indicated on the product. An entrepreneur can manufacture products of high or low quality. No one prohibits him to do it if they are not harmful for health. The main thing is supply a customer with what is written on the product, and there should be a strict control over it. – Sh.M – Paragraph 2 of Article 15, in which “a well-founded doubt” and control without the court’s decision are mentioned, causes a grounded agitation. L.B. – These are very important clauses, since, when it comes to safety of people, one cannot do nothing and wait for the court’s decision. This practice is commonplace everywhere. J.M. – But, in this case, entrepreneurs have another controller – the Ministry of Agriculture. – It’s a violation that a state administrative body is introducing obligatory certi- fication again. Secondly, the obligatory certificate will be required only in cases directly envisaged by the law, and based on it we plan to make something similar to American FDA. Besides, the Ministry of Agriculture prepared the law on harmlessness and quality of food products, and the Ministry of Health is preparing a new law, and all this is called protection of customers’ rights. Sh.M. – Protection of customers represents an important sphere of modern market economy. It includes a wide range of activities: rules, regulations, as well as voluntariness of policy implementation by sellers and service providers. The uniting factor of these activities is their protective effect in relation to the persons that buy goods or use services both in everyday life and during vacation or travels. Protection of customers can be achieved in different ways, and it includes many spheres of the legal and social systems. The distinction is drawn according to the fact whether protection of customers is regulated in accordance with the legal system. First of all let us explain the term “customers’ protection law”. It represents the right of the society to determine the terms of buying and using by individual consumers of some property or services. It is clear that all laws related to protection of con- sumers’ rights have a certain effect on the choice of an individual consumer. The resolution adopted by the UN General Assembly – “The guidelines for protection of consumers’ rights” – contains eight basic principles of protection of consumers’ rights: . The right to safety; . The right to information; . The right of choice; . The right to hearing out; . The right to compensation; . The right to education; . The right to healthy environment; . The right to meeting of basic requirements. In the following article we shall consider one basic aspect of consumers’ protection in Georgia based on the UN resolution – the law on consumers’ protection in Georgian legislative sphere. It is also noteworthy, that consumer’s rights in the country will not be protected unless producers feel protected as well. We shall consider structural changes in the legislation and in corresponding state structures that were carried out in Georgia in 2005 from the viewpoint of interests of these two subjects of market relations – consumers and producers. Maybe we shall first draw attention to the issue of food products’ harmlessness and quality. I would like someone to explain to me, as a producer, whether it is also liable to control if my wurst contains 82% of meat instead of 80% as it is indicated on the label. If we attain to the level of Europe, then we should do the way it is done there – product should be harmless and it should be written on it what it contains. We shall see in this law that it is mentioned there that the state structure implements quality control again. According to the changes adopted in 2005, implementation of the law on consumers was suspended till January 1, 2006. Now it automatically came into force. Who controls it and why it has come into force without changes? T.A. – It is controlled by consumers and by you – non-governmental organizations. J.M. – So called quality, since the notion of quality is not determined in the right way. Quality includes both obligatory requirements and the indicators that are not harmful to a human and the environment. Sh.M. – Let us take a look at definitions. In the definitions there is food products’ quality and we are told that this is the unity of those characteristics of harmless food products that are related to ultimate consumers’ economic interests, that is, here the talk is only about economic interests, while in accordance with ISO9202 standard dated 1994, quality is defined the unity of those characteristics of the object, that are related to its ability to meet the established and presumable requirements, and here, as you can see, nothing is said concerning economic interests. Based on it we can draw a conclusion that definition of quality was given in an absolutely wrong way so that it would be easier to approach a producer. – First of all, this definition is not right if there is no falsification. CONSumErS’ iNTErESTS aNd a POSSibiliTY OF a TEChNOPark Sh.M. – One more thing, here a consumer is determined as well – “An ultimate consumer of a food product that will not use it for production of other products”. An entrepreneur that buys raw materials is at the same time a consumer of these raw materials. Then he processes and sells them. While, in accordance with this law, “a consumer is a recipient of products supplied by a provider”. One cannot define only the consumer of the final product. Paragraph 4 envisages basic principles of securing harmlessness; the basic principles of food products’ harmlessness are: risk analysis, notification, transparency and protection of consumers’ interests. Sh.M. – On the whole, a consumer will not be protected unless a producer feels protected. The adopted laws envisage protection of consumers, and nothing is said concerning protection of producers. The parliament introduced changes in the “Law on protection of consumers’ rights” in accordance with which the effect of Articles 0 and 1 has been suspended till January 1. These articles determined the activities of the Antimonopoly Service, Sakstandard, Veterinary Service. Now that these services does not exist, it is not clear whom a consumer should apply to in case of infringing upon these articles. That is to say, the law made a distinction between a natural person and a provider, but left out the fact that he is a provider at that. Sh.M. – Let us consider the definition of falsification – “Non-compliance of a food product’s content, characteristics, assortment and origin to the established requirements”. I may infringe upon the production specifications and produce a non-standard product. In this case it will be a non-standard product but not a falsified one. Falsi- fied is the product whose content differs by its properties from what is indicated by the producer, that is when it is written on aerated lemonade that it contains sugar but in fact it contains sweetener. Or if I declared that it was a diabetic one but in fact it was produced with sugar – it is also a falsification. In accordance with this law, it is very easy to accuse an entrepreneur of criminal activities, that is, from the civil law sphere we pass on to the sphere of criminal law. The law on harmlessness of food products is very important, however our food industry will not be ready to implement it for at least or 4 years. That is why it would be better to postpone implementation of this law for this period. At the same time we would settle the issue of technical specifi- cations and standards. During this period we would also be able to create a necessary network of laboratories and the controlling mechanism would be institutionally formed. In view of this issue’s relevance, maybe it is necessary to hold a conference on this subject since it concerns all Georgians, both consumers and producers. We should find a balance between safety of our citizens and the interests of producers and importers.