Chapter I: Introduction

Developing countries used their agricultural production as means of earning revenue for
their countries. To ensure food safety, and to avoid the introduction of diseases and pests
through trade, countries imposed regulations to protect human and animal health and
plant health. Unlike most manufactured products, agricultural output requires additional
care. In the case of agricultural products, apart from the productivity and quality
considerations at the production level, there are some necessary precautions that need to
be taken when the product is stored and transported. Absence of such kind of vigilant
measures would have adverse effects on the quality of the product, resulting in increased
wastage and decreased market value. Further, this holds true for both row and processed
food products. Thus it is in the self interest of the producers as well as the exporters to
ensure that certain hygienic and other safety conditions are met. The GATT, since its
inception, emphasised on national food safety, animal and plant health. The original
GATT of 1947 gave WTO members the right to impose SPS restrictions but it also
provided that “such measures are not applied in a manner which would constitute a
means of arbitrary or unjustifiable discrimination between countries where same
conditions prevail or a disguised restriction on international trade.”
The Agreement on Sanitary and PhytoSanitary Measures is complementary to the AoA as
mentioned in Article 141 of the AoA text. The SPS restrictions have been imposed to
protect human, plant and animal life and health. They are in reality trade barriers
approved by the WTO because they seek to benefit consumers.

The objective of SPS measures were to protect

1. Human life from the risks arising from additives, toxins and plant & animal borne
diseases.
2. Animal life from the risks arising from additives, toxins, pests, diseases, disease
causing organisms.
3. Plant life from the risks arising from pests, diseases, disease causing organisms.

1Article 14:Sanitary and Phytosanitary Measures - "Members agree to give effect to the
Agreement on the Application of Sanitary and Phytosanitary Measures.”
 4. A country from the risks arising from damages caused by entry, establishment or
spread of pests.
Thereafter, in the Tokyo Round of multilateral trade negotiation held during the years
1974-79, an Agreement on TBT was negotiated often referred to as the ‘Standards Code’
which covered technical requirements resulting from food safety and animal & plant
health measures including pesticide residue limits, inspection requirements and labelling.
The SPS and TBT agreements that came into being in the Uruguay Round were derived
from this. The Marrakech Agreement provides for the establishment of the Agreement on
the Application of Sanitary and Phytosanitary Measures in Annex 1A.
 Chapter II: Legal Analysis
The legal text of the Agreement on Sanitary and PhytoSanitary Measures consists of 14
articles and 3 Annexures. At the outset the agreement on SPS measures asserts that all
members of the WTO can adopt or- enforce measures necessary to protect human, animal
or plant life and health provided they are not arbitrary or unjustifiably discriminatory
between members or are disguised restrictions on international trade. The SPS measures
are often applied on the basis of bilateral agreements or protocols. The SPS restrictions
are set on the basis of the international standards, guidelines and recommendations
developed by relevant international organizations. These measures however do not seek
to change the appropriate levels of protection to human, animal or plant life or health
provided by the members.
The agreement recognises the difficulties that developing country members may
encounter in complying with the SPS measures set by the importers and desires to assist
them in this regard. The provisions of Art XX (b) of GATT 1994 emphasised on SPS
measures for the first time and this agreement elaborates rules for the application of the
provisions.

Art 2 of the agreement on ‘Basic Rights and Obligations’ provides for the application of
the SPS measures based on scientific principle and maintenance of the same with
sufficient scientific evidence unless as provided in Art 5.7. It reasserts that SPS measures
cannot arbitrarily or unjustifiably discriminate between members where identical or
similar conditions prevail including between their own territory and that of other
members. It also prevents countries from using trade restrictions in the guise of SPS
measures.
Art 3 gives members the authority to introduce or maintain SPS measures that result in
higher level of protection than achieved by international regulations that are scientific.
The members are also allowed to play full part in the standard setting international bodies
but within the limits of their resources. This would involve not only development of
standards and guidelines but also their periodic review and coordination among
organisations.
Art 5 is entitled ‘Assessment of Risk and Determination of the appropriate Level of
Sanitary and PhytoSanitary Protection’. It seeks to ensure that SPS measures are based on
the risk assessment techniques developed by international organisations. In assessing
risks, members are to take into account available scientific evidence, relevant processing
and production methods, inspection, sampling and testing methods, prevalence of specific
diseases or pests, existence of pest free or disease free areas, relevant ecological and
environmental conditions and quarantine and other treatment. The members are also
required to account for economic factors like potential damage in terms of loss of
production or sales in the event of entry, establishment or spread of a pest or disease, cost
of control or eradication in the territory ofthe importing member.

Apart from solving inconsistencies that may arise from the application of the SPS
protection against risks to human life or health, exceptional character of human
health risks to which people voluntarily expose themselves must be accounted for.
It asserts that SPS measures that are technically and economically feasible should
not be unduly trade restrictive and should minimize negative trade effects. This
article gives members the right to seek explanation from the importer if the SPS
restriction imposed is found to be unsatisfactory.

Art 6 is on ‘Adaptation to Regional conditions, including Pest-Disease Free Areas and

Areas of Low Pest or Disease Prevalence’. This provides for eradication and control of
specific diseases or pests, demarcating areas free from them and giving reasonable access
to the importer for inspection, testing and other relevant procedures.
Art 9 on ‘Technical Assistance’ provides for members helping one another especially the
developing countries in areas of processing technologies, research and infrastructure, in
establishing national regulatory bodies, in advising, giving credit, donations and grants,
technical expertise, training and equipment necessary to comply with SPS measures.
Art 10 on Special and Differential Treatment seeks to help developing countries and least
developed countries by imposing SPS measures in a phased manner, longer time period
for compliance or exceptions for certain time on the obligations under the agreement on
the basis of their respective financial, trade and development needs. It also seeks to
encourage and facilitate active participation of developing countries in relevant
international organisations.
Art 14 entitled ‘Final Provision’ allows least developed countries to delay application of
provisions by 5 years from the date of entry into the WTO. The developing countries can
do the same by 2 years apart from Art 5.8 and Art 7 provided application of new SPS
measures are prevented by lack of technical expertise, technical infrastructure or
resources.

Annex A provides ‘Definitions’.

Annex B deals with ‘Transparency of Sanitary and Phytosanitary Regulations’ and
Annex C deals with ‘Control, Inspection and Approval Procedures’. The three annexes
are very important in terms of implementation guidelines.

In the part on ‘Harmonisation’ in Annex A of the agreement, governments are to

establish national SPS measures consistent with international standards.
The WTO members participate in the work of these organisations including work on risk
assessment and scientific determination of the effects of pesticides, contaminants or
additives in food on human health or the effect of pests and diseases on animal and plant
health.
The SPS agreement covers measures protecting human, plant and animal health. They
involve risk assessment. The agreement on TBT on the other hand consists of technical
regulations, voluntary standards and procedures that are to be applied on a MFN basis.
The TBT standards must also necessarily comply with the international standards.
The SPS Committee established by the agreement is open to all member countries as
observers. The committee also invites representatives of several international
intergovernmental organisations like Codex, OIE, IPPC, FAO, WHO, UNCTAD, ITC,
ISO as observers.

The Dispute Settlement Body of the WTO is also responsible for resolving disputes
among member countries arising from the SPS restrictions imposed by one on another. In
case of a dispute, the panel first seeks scientific advice from a group of technical experts.
If the panel concludes that a country is guilty then it recommends the country to bring its
measures in conformity with its obligations. This could involve procedural changes in the
application of the SPS measure, its modification or elimination altogether. A number of
trade disputes alleging violation of SPS agreement have been brought to the Dispute
Settlement Body since 1995.
 Chapter III: Indian Scenario
India has managed to create suitable position for itself in the global food market and is
currently amongst the largest producers for some food products in world. These include
production of grains like wheat and paddy, dairy, fruits and vegetables, marine products
etc. The size of the Indian food market is well above INR 250 billion and it exports goods
worth INR 1450 million, contributing around 10 percent of the country’s total exports.2 A
large domestic demand ensured that there was a ready market and thus an incentive for
the producers to employ efficient means of production resulting in a larger quantity and
better quality of output. As a result the processing industry has a growth rate of around 15
percent per annum. Agricultural growth though has been much less. Yet there remains a
large untapped potential of growth which if exploited can help us emerge as the largest
producer of major food items on the domestic front, better technology in all spheres of
production and processing can result in greater efficiency. Better transportation and
storage facilities are also required to mitigate the losses arising from spoilage and
wastage of food. “Some estimates suggest that currently around 20 percent of all foods
produced in India are wasted. Further, easy credit availability is necessary, absence of
which creates a bottleneck in addressing other issues. On the international scene, focus
has shifted to two themes. Firstly, the country would be better off if it exports processed
food items, instead of primary output. India is the second largest producer of fruits and
vegetables in the world, but only about 2 percent of it is processed. Similarly, even
though we are the largest producer of milk, only about 15 percent of it is processed by the
organized sector. On an average, value addition to the raw produce in India is only 7
percent. This is much less as compared to 23 percent in China, 45 percent in Philippines,
and 88 percent in United Kingdom. Secondly, there is a need to prevent the import of
sub-standard products from other countries. There have been incidents in past when
developed countries exported low quality food products to from other countries. There
have been incidents in past when developed countries exported low quality food products
to India, which were considered unfit even for their domestic market. Now with a greater

2 Ministry of Commerce, “India and the WTO”, also available at http://commerce.nic.in/wto oct.htm.
last visited on 12 January, 2019.
awareness and better bargaining power, India can hope to prevent its domestic markets
being used as dumping grounds by the developed countries”. As mentioned earlier, one
big challenge before the country is to encourage the exports of processed food products.
Thus in the following section, we take a look at the issues involved with the compliance
of SPS Agreement in India, the measures taken and the agencies responsible for it. In the
recent past awareness regarding importance of health measures and fear of health hazard
has shown a definite upward trend even in not-so developed countries like India.3 Food
products Orders, Essential Commodities and the Prevention of Food Adulteration Acts
specify the bindings for the producers and sellers of foodstuff. These aim at regulating
sanitary and hygienic conditions at all levels of supply chain, and lay down the minimum
requirements for:
 Sanitary and hygienic conditions of premises, surrounding environment and
personnel.
 Water to be used for processing
 Machinery and equipment
 Product standards
Besides this, maximum limits of preservatives, additives and contaminants have also
been specified for various products. Ministry of Food Processing Industries, Ministry of
Agriculture and some other agencies are responsible for implementing these legislations.
In fact this multiplicity of regulating agencies is one of the problems of implementation.
The producers are not sure which institute to approach for guidelines, and which institute
has the authority to conduct inspection. A repetition of the process by more than one
agency would result in waste of time and resources.

SPS barriers faced by India

Rice is one of the area where India faced trouble in exporting its food products to other
members. India’s exports of rice face SPS‐related problems in countries, such as the EU,
the USA, Japan, the Middle‐East and Russia. In June 2007, Russia banned import of rice
(along with sesame and groundnuts) from India on the grounds of detection of pests in

3
Annual Report, (1999-2001) Ministry of Food Processing, Government of India.
rice Consignments. The problems in the EU and Japan largely relate to pesticide residues,
frequent changes in standards and lack of clarity on the scientific justification of the
standards. The difficulties of exporting to the Middle East arise primarily from a lack of
clarity in the specification of standards and the extensive documentation required from
their embassies. In the case of the US, Basmati rice is found to face more problems than
other categories of rice. This sometimes gives rise to the suspicion that SPS issues are
being used to protect domestic producers of high‐cost rice in the USA, that are often
‘passed‐off’ as ‘Basmati’ (rice), disregarding the fact that the name and reputation of
‘basmati’ is linked to its geographical origin in the Greater Punjab region, situated in the
foothills of the Himalayas, now divided between India and Pakistan. The need to comply
with stringent US standards significantly increases production costs. Moreover, there are
problems relating to delays in clearing consignments, repeated tests, and bidding down of
prices. As a result of all this, the incentive to export rice to the USA is very low.4

4
Export Inspection Council's Certificate Recognized for: Basmati Rice by the EU; Black Pepper by the
United States Food & Drug Administration; Fish & Fishery Products by the EU; Fish and Fishery Products
by the Australian Quarantine and inspection Service, etc.
 Chapter IV: Judicial Review

M/S Nestle India Limited v. The Food Safety and Standards Authority of India
(FSSAI)
The Nestle India Limited challenged the order of FSSAI for the withdrawal and recall of
nine variants of Maggi instant noodles due to the presence of impermissible level of
monosodium glutamate and lead. In this case the y High Court of Bombay pronounced
following judgement: (a) the orders were set aside and for protecting the health of
consumers, samples were sent to food laboratories; (b) the company was directed to start
the manufacturing of Maggi instant noodles and sell it only when the content of lead was
within permissible limit; (c) the company was also directed to delete the declaration “No
Added MSG” from Maggi packets; and (d) the court also held that the FSSAI had acted
in an arbitrary manner. The FSSAI challenged the judgement of Bombay High Court in
the Supreme Court questioning the sanctity of the samples submitted to the food
laboratories further SC overruled Bombay High Court’s decision.5

Union Distributors Incorporation v. Union of India

The chocolates from Belgium were found to be non compliant with the provisions of the
Food Safety and Standards (Food Products Standards and Food Additives) Regulations,
2011. The court in this case stated that the chocolate shell in itself does not contain any
vegetable fat. The vegetable fat was present in the filling and it is because of this reason
that FSSAI has found these goods to be inconsistent with the given regulations. The court
held that the decision of FSSAI was arbitrary as the given regulations clearly states that
in case of filled chocolates “the coating shall be of chocolates that meets the requirement
of one or more of the chocolate types”. It was also held that labelling on the package
should be in conformation with the labelling regulations, so that it is ensured that that the
consumer is informed about the product which he is purchasing and consuming.

5Food Safety and Standard Authority of India v M/S Nestle India Limited, Special Leave Petition to
Appeal (C) No. 33251 of 2015.
 Chapter V: Conclusion & Suggestions
From the perspective of the developed countries, they may have to adopt a more
sympathetic approach to the whole issue. “Simply imposing less stringent standards
would not suffice. It is equally important to give equal weights to the voices being raised
from the developing countries. Another issue to be addressed by the developed countries
is regarding the availability of timely and complete information. This would surely lessen
some unnecessary hassles for the exporting countries. Further, imposition of trade
barriers under the disguise of SPS Agreement is something that should be condemned in
all circumstances. This would surely impede the growth of ‘fair and free’ trade in
world”.6 As the developing countries, if they want to survive in the highly competitive
world of international food trade then they need to update themselves. India as a
developing nation does not have to update its processing systems to meet the hygiene
requirements of Europe or USA, it has to think in a way that the benefit will ultimately
goes to its consumers who have an equal right to consume food which is rich in nutrients
and free from any contaminants. “In order to achieve the objectives of SPS agreement the
developing countries, including India, have to bring in some domestic reforms. They
have to focus on training their personnel in post harvest quality management practices
and food processing activities. Another important reform in this direction with great
significance is awareness and imparting education to citizens from school level regarding
human, animal and plant health”. Apart from it, transparency in the WTO system is also a
urgent necessity for better harmonisation. However, the SPS agreement has succeeded in
providing a strong platform for trade in agricultural and marine products between nations
and helped to some extent in harmonising the standards set by different countries but
what is lacking is that while food laws are dynamic in nature the SPS has still not been
modified to come in line with these dynamic food security regulations. It should be keep
up with the changing needs of the countries.

6 Jayanti Bagachi. “World Trade Organisation: An Indian Perspective” (Eastern Law House Private
Ltd. 25(2000).