April 30, 2003

A Food Safety Network Backgrounder
University of Guelph

April 30, 2003

Introduction

In July 2001, New Zealand's Royal Commission on Genetic Modification presented a comprehensive report to government based on the results of their 14-month inquiry into the various aspects of genetic engineering (GE) technology and the potential impact of its use in New Zealand (NZ). Charged with the responsibility of providing advice to government regarding regulatory and policy changes that would be required to ensure that the technology was used safely and in a manner that would be beneficial to the country as a whole, the Commission presented 49 recommendations in a variety of areas: research, crops and future uses, food, medicine, intellectual property and liability, and also identified a number of
'major conclusions' that the Commission believed were integral to the effort to preserve opportunities for New Zealand through the responsible implementation of GE technology.

Although Commission members concluded that NZ should proceed towards adopting GE technology, they were also adamant that mechanisms must be in place to ensure the successful co-existence of a variety of production systems - conventional, organic and integrated pest management production as well as GE.

Based on the report's recommendations, the NZ government has continued to investigate the implications of the use of GE technology. At this point in time, GE technology in New Zealand is limited primarily to research in the form of contained field trials of plants and animals. No genetically engineered organisms can be approved for release into the environment in NZ at least until the current moratorium is lifted late in October 2003.

In April 2003, the NZ government released two studies examining areas designated as critical by the Royal Commission: one on coexistence - the ability to preserve the integrity of various other production systems while also implementing GE production - and the other on the economic risks and opportunities resulting from the release of GE plants or other organisms in New Zealand. As well, the government has released a discussion paper on a supplementary 'GE-free' food labeling system to enhance information currently provided to consumers regarding the use of GE technology in food products.

Coexistence of GE and Non-GE Production

Context

For New Zealand, as for most countries that have a diversified agricultural industry, the coexistence of various primary production systems is not a new concept. Although NZ does not currently use GE production systems, organic, conventional and integrated pest management systems coexist successfully. High purity seed production and production geared to specific (often international) market access requirements can also be viewed as distinct systems, given their more explicit production protocols and quality expectations.

In many of these situations, segregation and tracking are integral to meeting the requirements imposed by the chosen production system. Careful management is essential, and potential conflicts can arise even among various types of non-GE production systems. For example, organic producers must be concerned about potential spray drift or pesticide residues resulting from conventional production practices, and conventional producers may need to contend with the effects of pests or weeds that occupy nearby organic production areas. Quality demands for high purity seed production can potentially be compromised by pollen drift from neighbouring fields.

Productive coexistence of the various production systems requires the institution of both effective regulation and careful management. The potential addition of GE production adds further challenges.

In their 2001 report, the Royal Commission emphasized the need to preserve opportunities for New Zealand through the development of mechanisms to ensure successful coexistence of the various production systems.

Government Response

In response to the recommendations of the Royal Commission, New Zealand's Ministry of Agriculture and Forestry undertook a study on managing the coexistence of GE and non-GE organisms in primary agricultural production. Papers released in April 2003 confirm that the coexistence of the production systems is theoretically possible, and address several of the technical issues involved, including codes of practice for GE crops and managing risks for beekeepers and users of Bt insecticide.

Also included in the government's response was a public consultation process on amendments to New Zealand's Hazardous Substances and New Organisms (HSNO) Act to include a new 'conditional release' approval category, whereby controls can be placed on how new organisms, including GE organisms, released to the environment are managed.

Unique Challenges Posed by GE Production

The greatest problem identified to date in the co-existence of GE and non-GE production results from the unintended presence of GE material in products that are intended to be non-GE. In order to prevent the potential occurrence of such unintended presence, it is essential to establish proper segregation practices during planting, harvesting and transport.

According to the report, organic producers are particularly concerned about the introduction of GE production systems because of their fear that the potential presence of GE material will negate their organic status. Researchers point out, however, that organic products are generally certified on the basis of how they are produced (production standards) rather than on the characteristics of the product itself. The only exception in New Zealand is organic honey, which must be tested annually to verify the absence of a number of chemicals.

The unintended presence of GE material in organic products is not addressed by organic rules in New Zealand, Japan or the U.S.; although EU organic regulations provide for the implementation of a threshold for such material, it has not been developed.

As a result, researchers believe that the unintended presence of GE material should not automatically affect organic certification but may affect marketability if organic products are marketed as 'GE-free'.

Drawing on international experience, researchers also point out that most of the countries that grow GE crops also have expanding areas of organic production, indicating that challenges to successful coexistence can be resolved. Argentina, for example, is both the 2nd largest producer of GE crops and has the 2nd largest area of certified organic production in the world. The main market for Argentina's products, both GE and organic, is the EU.

Achieving Successful Coexistence

Based on their study, researchers identified three essential elements for successful coexistence:

· a robust regulatory approach that protects environmental & human safety by preventing or managing adverse effects, and makes clear where responsibilities for managing and enforcing any conditions lie;
· a case-by-case approach that responds to the specific characteristics of each GE organism; and,
· a farm-to-fork production chain approach to address any identified concerns from seed production and crop management to post-harvest handling, marketing and distribution.

Public consultation regarding proposed amendments to the HSNO Act showed strong support for the institution of controls on releases as needed, with mechanisms in place to ensure that designated controls are enforced.

Under the proposed 'conditional release' amendment, New Zealand's Environmental Risk Management Authority (ERMA) would be empowered to impose controls on how new organisms (including GE organisms) released to the environment are managed: controls could include, for example, where a crop or animal is to be located, conditions under which it could be grown or used, required activities for monitoring environmental impacts, etc.

The proposed amendment includes a strict liability rule and civil penalties for non-compliance. Further amendments to provide better capacity for protecting human and environmental safety are also under consideration.

Although it is believed that this additional regulatory rule is essential for achieving successful co-existence of GE and non-GE production systems, it is also important to note that the proposed amendment can be applied to the release of ANY new organism, whether or not it is GE.

Such an approach is consistent with the report's emphasis on the need to consider the use of GE organisms on a case-by-case basis, responding to its specific characteristics, rather than to the fact that it was produced through GE technology. This approach is explored further in the second of the two coexistence papers: "Practicalities of Specific Issues".

Managing Specific Issues Related to Coexistence

1. Managing Adverse Effects

The report concludes that ERMA's case-by-case consideration of applications for new releases can effectively address issues related to managing adverse effects, including any risks related to the unintended presence of GE material. For example, separation distances required for coexistence of crops grown under different production systems will vary depending on the nature of the crop: crops that readily cross-pollinate will require greater separation to ensure seed purity. Unmanaged cross-pollination between GE and non-GE plants would be unacceptable for either GE or non-GE growers in cases where high purity levels are required. In the recognition that each specific application of a crop poses its own issues, officials have suggested that a universal code of best practice covering all issues associated with separation distances at the crop level is impractical, despite the Royal Commission recommendation that such a code be developed.

2. Impacts on Bee Products

Although NZ's beekeeping sector had requested that regulators refuse to allow the release of GE flowering plants in order to ensure that honey remain free from GE content, the study concludes that strategies can be developed and implemented to mitigate the impacts on bee products arising from the release of flowering GE crops.

Officials prefer an approach where the costs, risks and benefits of a GE organism, including possible effects on the market for bee products, are considered on a case-by-case basis. Possible risk management options include providing for a geographic concentration of GE crop-planted areas or requiring growers to prevent flowering in cases where it is not essential for the intended use. The report also suggests that beekeepers could potentially manage hives and bee products in accordance with potential risks by tracking the location and flowering times of GE crops or filtering honey to remove
some of the pollen. It is expected that regulatory authorities will be able to provide information about the location of GE crops of concern to beekeepers to allow for additional management as required.

3. Preserving the Long-Term Effectiveness of Bt Insecticide

The report indicates that mandatory insect resistance management strategies, such as those used in Canada in the production of Bt-producing crops, can effectively manage the risk of the development of resistance in target species, thus allowing for continued use of Bt as an insecticide in organic and conventional production systems as well.

Under the proposed 'conditional release' amendment to the HSNO Act, ERMA could require compliance with such a strategy as a condition of release of Bt-producing crops.

4. Labelling GE Seeds and Nursery Plants

The study points out that the debate on labelling GE organisms has focused almost exclusively on GE foods, with little debate regarding the labelling of GE seeds and nursery plants at point of sale. It is believed that such labelling is required in order to provide 'buyer choice'. The report suggests that existing seed industry models could be used to develop a nursery and seed industry-wide code of practice for facilitating a voluntary identification system, and recommends the development of an industry code of practice for labelling of GE propagative material at point of sale.

5. Facilitating Cooperation and Mediation on Coexistence Issues

Based on public consultations held on this issue, officials have concluded that there is no strong demand at this time for developing a nation-wide network to facilitate communication between parties potentially affected by the release of GE crops, although there is recognition that some issues will need to be addressed collectively. It is believed that the ERMA process will address the most contentious issues relating to coexistence on a case-by-case basis, with existing networks (formal and informal) and other mechanisms fulfilling the role of information networking. It is believed that programmed events for sharing information could be beneficial in some cases, and the report suggests that they be considered at a later date.

6. Other Issues

The report points out that achieving successful coexistence involves managing conflicting value systems as well as managing technical issues. In this regard, a Bioethics Council was established in December 2002 to enhance New Zealand's understanding of the cultural, ethical and spiritual aspects of biotechnology, and to ensure that the use of biotechnology takes into account the values held by New Zealanders.

Economic Risks and Opportunities of GM Production

Commissioned by New Zealand's Treasury and Ministry for the Environment, a study on the economic risks and opportunities of releasing GE crops in New Zealand was released in mid April 2003.

According to the analysis provided by Business and Economic Research Limited (BERL), the most likely economic impact from the release of GE organisms in NZ will be a small increase in GDP over 10 years, compared to a small decrease in GDP that would be likely to occur should NZ decide to forego the technology in order to remain 'GE-free'.

Researchers contend that potential negative economic impacts in New Zealand can be minimized through a robust regulatory regime, a case-by-case approach to applications, and the achievement of successful coexistence, which must be maintained in order to maximize producer returns (so producers can choose to produce for either a non-GE market that may provide a premium, or a GE market).

The report encourages significant investment in biotech research within New Zealand, pointing out that domestic development of the technology is likely to provide more substantial economic gains.

In terms of perceived economic risks related to diminished marketability as a result of GE production in New Zealand, researchers found that the majority (55%) of survey respondents' image of NZ would either not change or would improve as a result of a release of GE technology. Most international consumers surveyed indicated that their purchasing of NZ commodities would remain unchanged. The majority of international consumers surveyed indicated that their purchasing behaviour would be based on price - if the use of GE technology reduced the prices of NZ products, they would buy more.
If adopting a non-GE brand meant that prices of NZ products increased, they would buy less.

Providing Consumer Choice in the Marketplace - 'GE-Free' Labels

In addition to the coexistence and economic impact studies on GE production, the New Zealand government has also proposed a new, voluntary 'GE-Free' labeling system to meet consumer demands for information. Developed by an interdepartmental working group from the Ministry of Consumer Affairs and the New Zealand Food Safety Authority, a discussion paper released on April 11, 2003 outlines issues that need to be addressed in such a labeling system. Public submissions on the discussion paper will be accepted until May 30, 2003.

The proposal for a voluntary 'GE-Free' labeling system results from a recommendation of the Royal Commission on Genetic Modification. In their report, the Commission recognized the need for such labeling, given that mandatory labeling requirements do not meet consumer demands for information about food that does not contain genetically engineered material and has not been manufactured with ingredients obtained from genetically engineered material.

The paper is available at: http://www.consumeraffairs.govt.nz/discussion_papers/dp-vol-gm-free-lab/


References

Business and Economic Research Limited (BERL). Report to Ministry of the Environment and Treasury of Economic Risks and Opportunities from the Release of Genetically Modified Organisms in New Zealand. April 2003. http://www.treasury.govt.nz/gmeconomic

Crop Biotech Update. New Zealand's 'GM-Free' Labelling System. April 15, 2003. http://www.isaaa.org/kc 

GM Labelling Discussion Paper Released, Newsroom, April 11, 2003
From Agnet: http://131.104.232.9/agnet/2003/4-2003/agnet_april_11.htm 

Government of New Zealand. Economic Study into GM Published. News Release. April 17 2003.
http://www.Beehive.govt.nz

Government of New Zealand. Treasury Report: Briefing on Genetic Modification Economic Analysis Cabinet Paper
http://www.treasury.govt.nz/gmeconomic/tr2003-461.asp

Greens Call GE Free Labelling Regime a Copout, Newsroom, April 11, 2003
From Agnet: http://131.104.232.9/agnet/2003/4-2003/agnet_april_11.htm

Life Sciences Network. LSN Welcomes Outcome of Research. News Release. April 17, 2003.
From Agnet: http://131.104.232.9/agnet/2003/4-2003/agnet_april_17.htm

Ministry of Consumer Affairs. New Zealand. Discussion Paper on Voluntary GM-Free Labelling.
http://www.consumeraffairs.govt.nz/discussion_papers/dp-vol-gm-free-lab/
 
Office of the Minister of Agriculture. Government Response to the Royal Commission on Genetic Modification: Report on managing the effects of GM organisms and coexistence in primary production. Paper 1: overview. 
http://www.maf.govt.nz/mafnet/rural-nz/research-and-development/biotechnology/gm-coexistence-decision/index.htm

Office of the Minister of Agriculture. Government Response to the Royal Commission on Genetic Modification: Report on managing the effects of GM organisms and coexistence in primary production. Paper 2: Practicalities of specific issues.
http://www.maf.govt.nz/mafnet/rural-nz/research-and-development/biotechnology/gm-coexistence-decision/index.htm

Report of the Royal Commission on Genetic Modification, July 2001
http://www.gmcommission.govt.nz/RCGM/index.html 

Toi Te Taiao: The Bioethics Council
http://www.gm.govt.nz/topics-bioethics.shtml

United Future. United Future Slams 'Selective' GM Opponents. News Release. April 17, 2003.
From Agnet: http://131.104.232.9/agnet/2003/4-2003/agnet_april_17.htm