2nd Report of the Market Access Ombudsman Council (March 14, 1995)

1-(1) Improvement of the plant quarantine system and others relating to the import cut flowers

1. Complainant: European Business Council

2. Ministry concerned: Ministry of Finance, Ministry of Agriculture, Forestry and Fisheries, Ministry of Transport

3. Complaint:

Regarding imports of cut flowers into Japan, the complainant has raised the following six issues relating to the plant quarantine system and others which it believes should be changed.

(1) Elimination of zero tolerance

Japan applies quarantine to all insect pests, including those found in Japan, and adopt zero tolerance standard, under which any tolerance levels are accepted, for insect pests found in samples selected for inspection.

However, most industrial countries have already adopted the concept of PRA (Pest Risk Analysis) system, which is going to be internationally standardized by the United Nations Food and Agriculture Organization (FAO) and single out for quarantine only specific insect pests. Some countries have also adopted a plant quarantine system establishing tolerance levels for the number of insect pests found.

The complainant therefore holds that Japan should also adopt PRA and target only specific insect pests for quarantine, and that at least as far as pests found in Japan are concerned, minimum tolerance standards should be adopted (establishing standards for permissible ratio of pests detected in extracted samples).

(2) Extending plant quarantine and Customs inspection hours

Regular working hours for plant quarantine and Customs officers are from 8:30 a.m. to 5:00 p.m.

However, the plant quarantine station at Narita Airport is open until 9:00 p.m., and Customs officers there are on duty 24 hours a day.

At Nagoya and Fukuoka airports, on the other hand, the plant quarantine stations carry out inspection until 5:00 p.m. (until 6:30 p.m. if a prior request is received). Customs officers work overtime if a request is made by 5:00p.m. The last international cargo flight arrivals at Nagoya and Fukuoka airports are at 9:00 p.m. and 8:00 p.m. respectively. This means that under present working hours, there are cases where quarantine and Customs inspections cannot be carried out and importers must keep shipments in bonded warehouses overnight or time cargoes to arrive the next day.

Storing and refrigerating cut flowers until the next day means increased expense and since the flowers lose freshness, their quality is impaired and their product value deteriorates.

Accordingly, hours of operation of the quarantine stations and Customs at these airports should be extended so that the last flights of the day can be cared.

(3) Simplifying and speeding up plant quarantine procedures, increasing quarantine officers

In Japan, Fridays and Mondays are the main days for sales of cut flowers and most importers time their imports of cut flowers to arrive two days earlier (Wednesdays and Saturdays). If shipments arrive in late afternoon, however, it often happens that they cannot be inspected before noon the following day and as a result the flowers go on sale three days after import (on the days - Saturdays and Tuesdays- following the main flower selling days), meaning that their product value declines substantially.

The reason for this situation is the extreme shortage of plant quarantine inspectors at Narita Airport, the airport with the largest number of flights and the main port of entry for cut flower imports, which limits the volume of inspections which can be carried out in one day.

Another problem which all airports have in common is that plant quarantine procedures are not computerized and there is no interface between the plant quarantine and Customs clearance systems, which causes delivery delays.

Accordingly,
1) the number of plant quarantine inspectors at Narita Airport should be increased;
2) plant quarantine stations and Customs should be linked by an online computer system to speed up procedures.

(4) Simplifying verification procedure for cut flowers having undergone pre-shipment inspection

Cut flowers imported from the Netherlands are inspected in the country Holland before export by Japanese quarantine officers inspecting under Japanese standards, according to the pre-shipment inspection system, but the samples of all shipments are subjected to confirmation inspections after arrival in Japan. This means additional time is necessary before shipment, and random checks should be carried out instead of checking all shipments.

(5) Expanding warehouse and sorting facilities

Cut flowers arriving at international airports are usually kept in some part of the international cargo sheds (warehouses, sorting areas) at each airport designed as a bonded warehouse until completion of the usual import procedures, and are shipped out from there once procedures are completed.

However, warehouse space is shortened, which means that it takes time to sort cargo, slowing down the entire shipping process, and since the areas are not temperature-controlled, product quality of the cut flowers deteriorates. Refrigerated facilities are available but temperature control is not appropriate (there are no 15-deg. C facilities), and they are too small and too expensive.

The sorting areas are also shortened so that efficient (low-cost) and rapid labeling of boxes is impossible, which is often responsible for problems in connecting with domestic shippers.

The sorting areas also lack temperature control, and in many cases are not even covered.

Accordingly, improvements to international cargo sheds are needed, especially at Narita Airport, which is the largest port of entry for cut flowers.

(6) Reducing fumigation fees by competition

If pests are found after cut flowers are inspected, the shipment in question must either be disinfected or destroyed, as directed by plant quarantine inspectors under the Plant Quarantine Law. Fumigation is one disinfecting method, and fumigation is carried out at each international airport by fumigation companies which are registered to the Agriculture, Forestry and Fisheries Minister under the Pesticides Control Law.

Fumigation fees at Narita Airport are extremely expensive compared to those in other countries. The reason for this is considered to be lack of competition as there are only two fumigation companies at Narita Airport. Therefore, the fees should be reduced by stimulating competition between the fumigation companies.

4. Results of deliberation:

Establishing a rapid and low-cost system for completing import procedures after arrival is an important issue where commodities, such as cut flowers, to which freshness is essential are concerned.

Accordingly, the following measures are necessary to eliminate holding over of cargo at airports until the following day for the sake of import procedures.

(1) The FAO is currently working toward establishing international standards for Pest Risk Analysis (PRA) by 1997. A study of measures is needed to ensure rapid response to the establishment of the standards, including a study of risk assessment measures for insect pests, for the purpose of clearly indicating pests which are not subject to be quarantined in Japan.

The concerned ministry is currently working on developing methods to prove that insect pests are of the same type as those found in Japan. Regarding pests for which methods have already been developed, the countries where the insect pests are found will be asked for their understanding regarding the methods used by bilateral discussion.

Regarding disposal of shipments in which insect pests have been found, the system currently used by Japan is intended to keep the financial burden to a minimum. On the other hand, it can lead to a higher defective product rate estimate for shipments than other methods.

But if other methods were to be adopted, more time might be needed for inspection. Therefore, to ensure efficient examination and reduce the burden on applicants, a further study of sampling methods is needed, in consultation with experts.

(2) Hours of operation of the plant quarantine stations and duty hours for Customs officers at Nagoya and Fukuoka airports should be arranged to permit appropriate handling up to the last international cargo flight of the day.

Accordingly, to improve administrative efficiency, the plant quarantine stations should extend hours for inspections done on request. Regarding Customs, the ministry concerned is currently studying extending the duty hours of Customs officers, taking into consideration demand for work outside of regular hours to handle import procedures for goods including cut flowers and available staff, and these measures should be supported.

Specific measures to improve these systems should be studied immediately.

(3)
1) At Narita Airport, the port of entry for the largest volume of cut flowers, leaving cargo unprocessed until the next day increases costs and causes product quality to deteriorate, as the complainant claims. Therefore, plant quarantine inspection must be carried out quickly.

Accordingly, increasing the number of plant quarantine officers should be studied based on the volume of work and of imported cargo handled. In addition, the possibility of re-hiring retired quarantine officers on a non-regular basis, or of contracting with private sector technicians, should be studied.

2) The ministries concerned are working to develop an interface between the computer systems for plant quarantine stations and Customs, and efforts must be continued to make the system operative at an early date.

(4) Since there have been many cases of infringement regarding cut flowers examined under the pre-inspection in the Netherlands, the ministry concerned has ruled that inspection of every shipment is necessary. But the reasons for the occurrence of infringements should be clarified through discussions by Japanese and Dutch experts. Based on the conclusions reached, bilateral consultations will be needed to discuss the possibility of using random checks.

(5) Space for international cargo sheds at Narita Airport will be expanded with the completion of a Cargo Building No.4 (44,000 square meters, with about half the space for import cargo) during FY1995, and the specific layout should reflect users' needs.

Therefore, the ministry concerned should urge the parties concerned to provide opportunities for users to state their opinions, including improvement of refrigeration facilities requested by the complainant, in the near future. Based on the outcome of these meetings, the necessary improvements to warehousing and sorting areas should be made respectively.

All areas used as bonded warehouses have also been covered, and the Cargo Building No.4 will also have covered areas. These measures are positive and early consideration should also be given to providing covered areas for leaving samples awaiting testing.

(6) Although fumigation fees at Narita Airport are a contractual matter between fumigation companies and importers, the concerned ministry should encourage the users and fumigation companies to discuss the matter and study ways of improving the situation so that the complaint about fumigation fees should be lowered.

Regarding the improvement of sheds, the concerned ministry should urge the related parties so that more space for fumigation warehouses are secured.

Government decision (March 28, 1995)

1-(1) Improvement of the plant quarantine system and others relating to the import of cut flowers

(1) The Food and Agriculture Organization of the United Nations is currently working toward establishing international standards for Pest Risk Analysis (PRA) by 1997. A study of measures to ensure rapid response by Japan will be undertaken, including a study of risk analysis measures for pests, for the purpose of classifying the pests which are not subject to quarantine.

Methods of proving that pests are of the same strain or bio type as those distributing in Japan will be developed. After the method is developed, bilateral negotiations will be held one by one as soon as possible in order to acquire the understanding of the countries where the pests occur.

Further study of sampling methods to reduce the burden on applicants , while keeping inspection efficiency, is being undertaken, in consultation with experts.

(2) When the increase of the number of quarantine officers is considered, the possibility of re-hiring retired quarantine officers on a non-regular basis, or of contracting with private sector technicians, will be considered as soon as possible.

(3) Necessary measures will be taken to interface the computer system for plant quarantine offices with the customs clearance system of Customs at an early date after FY1997.

(4) Regarding cut flowers examined under the prior quarantine arrangement, reasons why infringements have occurred will be clarified through discussions with experts. Based on the conclusions reached, bilateral consultations will be held to discuss the possibility of random checks for inspection.

(5) Space for international cargo sheds at Narita Airport will be expanded with the completion of a Cargo Building N0.4 during FY1995. In order to have the specific layout reflect users' needs, the parties concerned will be urged to provide opportunities for users to state their opinions, which will include the demand for the improvement of refrigeration facilities, in the near future. Based on the outcome of these meetings, the necessary improvements to warehousing and sorting areas will be made respectively. Areas covered with roof will also be provided for leaving samples awaiting inspection.

(6) Regarding fumigation fees at Narita Airport, users and fumigation companies will be encouraged to hold discussions and consider how to improve the situation. Regarding the improvement of international cargo sheds, the parties concerned will be urged to provide more space for fumigation warehouses.

Follow-up (May 27,1996)

1-(1) Improvement of the plant quarantine system and others relating to the import cut flowers

(1)
1) Based on the Agreement on the Application of Phytosanitary Quarantine Measures (SPS Agreement) concluded at the Uruguay Round talks, the FAO adopted international guidelines on Pest Risk Analysis (PRA) in October 1995 to specifically determine pests subject to quarantine inspection in each country (*Note 1). With these guidelines in mind, Japan will conduct PRA and determine the quarantine measures based on its findings in Japan, and will submit an amendment (*Note 2) to the Plant Quarantine Law to the current session of the Diet. When this amendment is approved, the opinions of academic experts will be heard and studied, and after the related public hearings held the Ministry will determine which insect pests and plants require quarantine measures. After the related public hearings held.
2) When undertaking PRA, bilateral information exchanges will be conducted successively, and methods to prove that insect pests are of the same type found in Japan will be developed. And the countries where the insect pests are found will be asked for their understanding of the methods used. Bilateral information exchanges are currently taking place with the United States, Australia, the Netherlands, and New Zealand.
3) Studying sampling methods led to the conclusion that introducing a twice-sampling inspection method should be studied to avoid taking quarantine measures for cargoes with few insect pests. Experts agreed with this point on certain conditions. However, when examining a twice sampling inspection method to large volumes of import cargo requiring rapid inspection, it was concerned that cargoes with few insect pests would have to be re-inspected, which would increase the time for inspection and risk for damage to freshness. Some cut flower importers also have opinion worried about damages to freshness of cut flowers by re-inspection and would be impose substantial burden. Therefore the ministry reached the conclusion that the twice-sampling inspection method would be difficult to implement.

(2)
1) Hours of operation for the plant inspection stations at Nagoya and Fukuoka airports will be extended in FY1996 to permit appropriate handling up to the last international cargo flights of the day.
2) Since April 1995, measures have been in effect to allocate Customs officers on duty after regular hours to the last international cargo flights of the day at Nagoya and Fukuoka airports.

(3)
1) The number of plant quarantine officers on duty at Narita Airport will be increased FY1996 in response to extended operating hours to handle the last international cargo flight of the day. For the time being, therefore, it is not necessary to hire officers on a non-regular basis or to contract with private technicians to handle inspection of cut flowers.
2) Regarding interfacing the plant quarantine station computer system with the Customs computer system (NACCS), requisite reformative work on NACCS is under way and will be completed by January 1997. Equipment needed for the plant quarantine computer system will be acquired during FY1996.Therefore, the mutual interface will be created in FY1997 between both systems.

(4) Due to outcome of a meeting with experts from the Netherlands in March 1996 at the Japan-Netherlands Plant Quarantine Conference, the Netherlands authorities have understood that infringements are still continuously observed and that it is impossible to switch to a random check system.

(5)
1) Before the completion of Cargo Building No. 4, a meeting was held in June 1995 attended by the Japan Cut Flower Importers Association (the building's user), the Narita Airport Authority, International Airport Warehouse Co. Ltd. (the warehouse company), and Japan Airlines, in order to hear users' opinions and urge the improvements if possible to implement. The Airport Authority subsequently completed Cargo Building No. 4 in December 1995, which provides an additional 22,000 square meters of space for import cargo. Consequently, as for refrigeration warehouse and sorting areas, when users provide specific requests, adequate measures will be taken after coordinating among the parties concerned. Additional hearing for users will be taken if necessary.
2) Covered areas have been added at the time of construction of Cargo Building No. 4.
3) The corridors of the inspection site where cut flowers are left to await inspection will be covered in FY1996.

(6)
1) In August 1995, the fumigation companies, fumigation facility officials, and cut flower importers had meeting to exchange views. Based on the opinions of the parties regarding fumigation fees, it was agreed that the two sides should consult to make changes where possible.
2) The ministry concerned has had explanation of the Airport Authority, at a meeting of the concerned parties in July 1995, that additional space has been secured in existing fumigation warehouses.

[Note 1]
The FAO's PRA consists of the following three stages, to determine insect pests warranting quarantine and quarantine measures.

Stage 1: Does the insect pest require PRA?
Stage 2: Is the insect pest subject to quarantine?
Stage 3: What quarantine measures should be taken against the insect pest in question?

[Note 2]
Outline of the amendment to the Plant Quarantine Law

In order to carry out international plant quarantine in an appropriate manner, the types of insect and plant pests subject to international plant quarantine will be specified, and additional measures will be taken, by requiring exporting countries to inspect in cultivation areas, etc.

Bill tabled to partially revise the Plant Quarantine Law (extract)

Article 5, Clause 2 (Insect and plant pests subject to quarantine)

In this section, "insect and plant pests subject to quarantine" refers to harmful plants or insects which, if they spread, could damage useful plants, and they are so defined if they fit the definitions below:

1) plant or insect pests which exist in Japan but have not been detected
2) plant or insect pests which already exist in some parts of Japan, and which are subject to monitoring, prevention or eradication, depending on the country.

2 When stipulating the ordinance in accordance with the above, the minister of Agriculture, Forestry and Fisheries shall hold public hearings to hear from persons who may be affected by the decision and from academic experts.

Further Follow-up (May 12, 1997)

1-(1) Improvement of the plant quarantine system and others relating to the import cut flowers

(1)
1) In order to introduce quarantine measures consistent with international guidelines on Pest Risk Analysis (PRA) adopted by the FAO, partial amendments were made to the Plant Protection Law (June 1996). The revised law and related statutes were into force in April 1997. PRA has being done in accordance with international guidelines and pests which are not subject to quarantine were clearly indicate.
2) Bilateral consultations are being held with the concerned countries appropriate PRA methods to prove that pests are of the same biotype as those distributed in Japan or not.
All plants shall be subject to import inspection. Non quarantine pests which are exempted from quarantine measures shall be designated for those of biotype unknown abroad, even though they may be widespread in Japan. Information is currently being exchanged with the United States, Australia, the Netherlands and New Zealand.
3) As a result of studies on sampling methods, conclusion was reached that it would be worth introducing two-stage inspections for shipments with few pests, as a way of avoiding quarantine measures. This decision was approved by experts, under certain conditions. However, in view of viability such as the volume of imports to be processed and the needs of speedy inspection, further studies concluded that introduction of two-stage inspections on site would cause consuming more time for re-inspection and negative effects for re-sampling on the freshness of the cut flowers. It was also pointed out that loss of freshness due to re-inspection would be a burden on cut flower importers, and accordingly, introduction of two-stage inspection was deemed to be difficult.

(4) Through the discussions with experts from the Netherlands at the Japan-Netherlands Plant Quarantine Meeting in March 1996, the Netherlands expressed their understanding that it is impossible to introduce random testing, as infractions are continuing.

(5)
3) Roof installation to cover the passageway in front of the cargo inspection site where cut flowers during preparations for inspection are left is scheduled to be completed in May 1997.