6th Report of Market Access Ombudsman Council (March 16, 2000)

1-(1) Allowing food testing to be conducted by private sector organizations

1. Complainant: Nagoya Chamber of Commerce and Industry

2. Ministry concerned: Ministry of Health and Welfare

3. Background:

According to Article 15, Paragraph 3 of the Food Sanitation Law, the minister for health and welfare may order foods for which an import declaration has been made to undergo testing at a test laboratory designated by the minister of Health and Welfare, when local conditions in the product country indicate a risk that the food in question may be in violation of the Food Sanitation Law.
When testing is ordered, expenses for test laboratories designated by the minister must be borne by the importer. The importer is notified of test results via the minister for health and welfare, after which the importer is allowed to import the said food.
In accordance with Article 15, Paragraph 6 of the Food Sanitation Law, the testing fee is not to exceed the amount stipulated by government ordinance (\139,400 per test category), based upon which the testing facility has received permission from the minister for health and welfare. In accordance with Article 19-4 of the Food Sanitation Law, only corporations (public incorporated bodies or foundations) established under Article 34 of the Civil Code may be designated testing facilities.

4. Complaint:

When the quarantine station requests that imported foods be tested, testing must be done at a test laboratory designated by the Ministry of Health and Welfare, and only facilities which are public incorporated bodies or foundations may be used.
Since private sector companies cannot be designated testing facilities, no competition exists, and users must put up with a low standard of service, for example not being informed beforehand of how much time and money testing will require. Testing fees are also expensive.
Accordingly, testing facilities other than public incorporated bodies or foundations, and including private sector companies, should be eligible to be designated testing facilities.

5. Results of deliberation:

According to the ministry concerned, public corporations (public incorporated bodies or foundations) established in accordance with Article 34 of the Civil Code are as fair as the government, but for-profit, private sector testing facilities are likely to be less fair and to make errors more often compared to public service corporations, and they are thus not allowed as designated testing facilities. However, this is a outdated perception on the part of the ministry concerned and is not a convincing reason.
Private sector companies endeavor to continually adopt the newest technology and to carry out testing accurately and efficiently, in order to provide inexpensive service satisfactory to customers. Assuming that testing is accurate, importers are not likely to use testing facilities that are expensive and take time, and under market principles, such organizations will be weeded out naturally.
Many private sector testing facilities are capable and fair, and designation of testing facilities should be made based on technological standards for carrying out testing rather than because they are either public service corporations or private sector companies.

Based on the above, the following measures should be taken by the ministry:

(1) The ministry should study testing facilities, with a view to also designating private sector testing facilities as designated facilities under the Food Sanitation Law, and reach a conclusion on this matter during 2000.

(2) Regarding designation of testing facilities, the ministry should study and reach a conclusion during 2000 concerning the taking of measures to draw up standards on operation and supervision, and of technical standards, and to revoke designation when testing facilities are found to be inadequate, in order to ensure that the said facilities meet standards for reliability, fairness and impartiality.

Government decision (March 21, 2000)

1-(1) Allowing food testing to be conducted by private sector organizations

The following measures will be taken regarding designating testing organizations under the Food Sanitation Law.

(1) The ministry will study testing facilities, with a view to also designating private sector testing facilities as designated facilities under the Food Sanitation Law, and will reach a conclusion on this matter during 2000.

(2) Regarding designation of testing facilities, the ministry will draw up standards regarding operation and supervision, and technical standards, where designation of testing facilities is concerned, and standards for revoking designation when testing facilities are found not to meet standards, in order to ensure that facilities meet standards for reliability, fairness and impartiality.