| TOP |
| 6th Report of Market Access Ombudsman Council (March 16, 2000) |
1. Complainant: Keidanren
2. Ministry concerned: Ministry of Health and Welfare
3. Complaint:
(1) Changing labeling methods for cosmetics
The complainant states that the labeling requirements for cosmetics under the Pharmaceutical Affairs Law should be changed to allow products to be sold with labels bearing the name of the seller only, in the case of manufacturers or importers who already have licenses, when products are manufactured or imported for sellers wishing to sell the products under their own name only, as follows: 1] that, upon prior notification of the ministry by both the business with a permit and the seller, labeling show the name of the seller followed by the code used in the notification, or 2] that the label show the seller's name and the license number of the business with a license, in order to clearly identify manufacturer liability.
The ministry's policy mentions that it "requires that the name of the manufacturer (importer) be shown," in order to carry out centralized supervision of all safety-related information, but in fact, in many cases product labels show both the seller and the manufacturer (importer)'s name, and if problems with the safety or quality of the product arise, consumers usually contact the seller. This is because the name of the seller, who is responsible for business operations regarding the product, is shown in larger type on the label than the manufacturer (importer)'s name, and the telephone number shown is that of the seller. In other words, even under the current system, this only means that the seller communicates safety information received from consumers to the manufacturer (importer) on a de facto basis and that this is not mandated by law.
Accordingly, if it were legally required that sellers communicate safety information about side-effects after the product is marketed to the manufacturer (importer), even if the label carries only the seller's name, it would be possible for manufacturers (importers) to oversee relevant information. Where consumers are concerned, in many cases, it is often the seller who assumes the primary responsibility for product liability, and thus there should be no problems if a system is established that allows consumers to contact sellers directly.
Further, if methods 1] or 2] above were adopted, the administrative authorities would also know who assumes product liability.
In the case of foods, the Food Sanitation Law already allows labels to carry only the name of the seller, and there have been no cases where liability for the product has been an issue, from the viewpoint of either the administrative authorities or consumers.
(2) Clarifying the implementation schedule for changing the regulation system for cosmetics
The ministry is currently working on changing the regulation system for cosmetics, but has not disclosed any information concerning a specific implementation schedule or procedures. Based on the decision of the Office of Market Access in December 1998, the ministry should carry out this work "after clarifying the implementation schedule and procedures."
4. Corresponding Policy of the Ministries concerned:
(1) Changing labeling methods for cosmetics
Since cosmetics are intended to be used by applying or spraying onto the human body, under the Pharmaceutical Affairs Law, businesses engaged in manufacturing or importing cosmetics are required to have a license when manufacturing or importing cosmetics, from the viewpoint of health and sanitation.
Under the such Law, if some problem with cosmetics should arise, it is mandatory for manufacturers (importers), as part of their responsibility in manufacturing (importing) the product, to report side effects and to report on product recalls, in order to prevent further damage to health and to take the necessary safety measures, such as product recall.
This responsibility is placed on manufacturers (importers), who are very familiar with the contents and characteristics of the products, so that they may carry out centralized supervision of safety information on side effects of products after marketing.
Safety or quality problems with products are often discovered by consumers when they actually use the products, and if there is a problem, quick response is possible because of the system in use where consumers can contact the responsible party directly. To make this possible, it is necessary not only for the administrative authorities, but also for consumers, to know about the party with manufacturing liability, and accordingly, labeling must carry the name of the manufacturer (importer).
Therefore, it is not possible for products to be sold without showing the name of the manufactures (importers) with a license directly on the product container, from the viewpoint of health and sanitation.
In cases where only the seller's name is shown directly on the product container, information is known only to the seller, but since there is no legal obligation for the seller and the manufacturer (importer) to transmit information to each other, information the seller has obtained may not always be reliably transmitted to the manufacturer (importer).
However, taking into consideration the requests of the American Chamber of Commerce in Japan (ACCJ), the European Business Council (EBC) and representatives of domestic companies, the ministry is studying a review of the provisions for implementation under the Pharmaceuticals Affairs Law, concerning facilities and equipment required when obtaining a license, the requirement for manufacturing (importing) control manager, and the extent to which businesses with licenses may contract out or undertake manufacture of products on each other's behalf, so that manufacturers (importers) may obtain licenses with less bother and expense. This review is being carried out at the same time as the comprehensive review of cosmetics regulations which is scheduled to be implemented by the end of FY2000.
(2) Clarifying the implementation schedule for changing the regulation system applied to cosmetics
In accordance with the government's Action Plan for Promoting Deregulation in operation since 1998, the regulation system for cosmetics is scheduled to be changed by the end of FY2000. Specifically, a proposal for a new system will be announced at the end of this fiscal year (FY1999), and after notifying the WTO and taking the procedure of public comments, the relevant requirements will be amended and the new system will be implemented by the end of FY2000, after a certain preparatory period has elapsed.
5. Remarks
The complainant is currently studying this reply.
6. Council member's comments
Regarding this case, the Council member commented that "the ministry stresses the need for centralized supervision of safety information, but the fact that the ministry accepts only information collected and collated by manufacturers under its control is administrative negligence. Although it is certainly necessary to prevent damage caused by cosmetics, since it is often the case that consumers discover this when they actually use the products, it is more useful if the ministry supports lawsuits under the Product Liability (PL) Law and takes measures based on those actual circumstances." To this the ministry replied that "the Pharmaceuticals Affairs Law requires manufactures (importers) to report to the authorities the information that they have collected centrally, in order to clarify responsibility for manufactured products. On the other hand, if consumers or medical authorities report information on the safety of cosmetics directly to the ministry, the ministry will take appropriate action. Cosmetics may have unknown and unforeseeable side effects, and while the PL Law basically does not hold manufacturers responsible in the case of such side effects, the Pharmaceutical Affairs Law makes it mandatory to report side effects, in other words, the purposes of the two laws are different." In response, the Council member said "while deregulation is being actively promoted, consumers will be protected not by the authorities clinging to existing laws, but by the vigorous application of the Anti-monopoly Law and the PL Law and the penetration of these laws into society."