The aftermath of the Milk Scandal of 2008

267 Pages·2017·1.74 MB·English

AThesisSubmittedfortheDegreeofPhDattheUniversityofWarwick
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The aftermath of the Milk Scandal of 2008 -- The
Challenges of Chinese Systemic Governance and Food
Safety Regulation
By
Yanjie Li
A thesis submitted in partial fulfilment of the
Requirement for Degree of Doctor of Philosophy in Law
University of Warwick, School of Law
May 2015
I
TableofContent
Acknowledgment........................................................................................................................................V
Declaration.................................................................................................................................................VI
Abstract.....................................................................................................................................................VII
Abbreviations.............................................................................................................................................IX
Chapter1Introduction.................................................................................................................................1
I.Background.......................................................................................................................................1
II.TheCurrentLiterature.....................................................................................................................9
III.TheMainResearchQuestion.......................................................................................................15
Chapter2MilkScandalof2008-ACaseStudyoftheWeaknessoftheFoodSafetySysteminChina...18
I.Introduction.....................................................................................................................................18
II.ACaseStudyofthe2008ChineseMilkScandal.........................................................................22
1.MilkScandalof2008.............................................................................................................22
2.TheCausesoftheMilkScandal............................................................................................27
2.1FromtheCompany’sPerspective–TakeSanluCompanyastheCaseStudy...........27
2.2FromtheGovernment’sPerspective-IneffectiveRegulatorySystem........................31
III.Conclusions..................................................................................................................................40
Chapter3FoodSafetyRegulationinChina..............................................................................................43
I.Introduction.....................................................................................................................................43
II.FoodSafetyandSustainableDevelopmentinChina...................................................................44
III.AnOverviewofChineseFoodSafetyLawintheContextoftheGlobalEconomy..................47
1.TheInfluencesofFoodSafetyLawOverseas........................................................................47
2.ABriefOutlineofEarlyDevelopmentsinFoodSafetyLawinChina.................................51
3.ChineseFoodSafetyLegislationafterMilkScandalof2008..............................................55
3.1TheInnovationsintheFoodSafetyLaw2009...........................................................55
3.2RegulatoryEnforcementToolsundertheFoodSafetyLaw2009..............................58
3.3CriminalPenaltiesandFoodSafetyLaw....................................................................61
3.4Theshortcomingofthe2009FoodSafetyLaw..........................................................64
IV.Conclusion....................................................................................................................................66
Chapter4ProblemswithImplementationofFoodSafetyRegulationinChina.......................................70
I.Introduction.....................................................................................................................................70
II.EvaluatingtheMainChallengesofEnsuringFoodSafetyinChina............................................70
2.TheImpactofIndustrialisationandUrbanisationonFoodSafety.......................................72
3.TheImpactofEnvironmentalDegradationonFoodSafety.................................................74
4.TheLocalProtectionismandGDP........................................................................................76
5.TheAbsenceoftheIndependentJudiciarySystem...............................................................81
6.CorruptionProblemsinChina...............................................................................................90
7.TheMulti-LayeredImplementationandtheOverlappingStandards...................................95
III.EnsuringtheFoodSafetyinChina-ALongWaytoGo...........................................................108
II
1. TheReformoftheFoodSafetyLegalSystem................................................................109
2.SwitchingfromTraditionalGDPtoGreenGDP.................................................................112
3.TheEnhancementofPublicParticipation...........................................................................113
4.From‘Inspection-Punishment’modelto‘Multi–Approach’AdministrativeSystem.........115
IV.Conclusions................................................................................................................................117
Chapter5EnvironmentalProtectionasaPossibleModelforReforminChina.....................................119
I.Introduction...................................................................................................................................119
II.TheEnvironmentalProblemandtheFoodSafetyinChina.......................................................121
III.TheGreatChallengetoChina’sEnvironmentandNatureResource:WaterandAirPollution123
1.AirpollutioninChina..........................................................................................................126
2.TheWaterCrisisinChina....................................................................................................130
IVChina’sEnvironmentalTippingPoint........................................................................................133
V.EnvironmentalLegislationinChina...........................................................................................139
1.PriortoEnvironmentalProtectionAct2014.......................................................................139
2.TheObstaclesandChallengestotheEnvironmentalRegulatoryFramework...................141
2.1TheStatutoryDeficiencies........................................................................................141
2.2.WeakImplementationandPoorCompliance..........................................................144
2.3CorruptionProblem...................................................................................................146
2.4TheAbsenceofIndependentEnvironmentalAdministrationandJudicialSystem..148
2.5InsufficientPublicParticipationandTransparency..................................................150
3.The2014EnvironmentProtectionLawandChina’sSustainingEconomicFuture...........152
VI.Conclusion.................................................................................................................................158
Chapter 6 Ethical Practice-Corporate Social Responsibility, Social Harmony and ‘Citizen-driven’
GovernanceinChina................................................................................................................................162
I.Introduction..................................................................................................................................162
II.CompanyLawandCorporateSocialResponsibilityinChina’sEconomicTransition..............164
1.TheDevelopmentofEconomicLawandCompaniesinChina’sEconomicTransition.....164
2.WeakCorporateSocialPerformanceinChina....................................................................166
3.TheChineseSocietyandCorporateSocialResponsibility.................................................169
3.1CSRandChineseTraditionalCulture.......................................................................169
3.2CSRandPoliticalPolicy...........................................................................................170
3.3CSRandChina’sEconomicTransition.....................................................................173
3.4.CSR,MarketShareandConsumers’Choice...........................................................174
5.CorporateSocialResponsibilityinChineseCompanyLegislation....................................178
5.CorporateSocialResponsibilityandNGOs’StandardsandGuidelines.............................184
6.CorporateSocialResponsibilityandtheInformationDisclosure.......................................186
III.CorporateSocialPerformanceandChineseFoodIndustry’sPractice......................................188
1.TheEnforcementofCSRinChina.......................................................................................188
2.CorporateSocialResponsibilityandFoodSafetyIndustryinChina.................................190
IV. The Obstacles and Challenges to the Implementation of Corporate Social Responsible
PerformanceinChina......................................................................................................................192
III
1.TheObstaclesandChallengesfromtheCompany..............................................................192
2.TheObstacleoftheAmbiguousLegislationandPolicy.....................................................195
3.TheWeakAdministrationandPoorCompliance................................................................197
4. The Insufficient Public Participation and the Challenge of Shifting to a Citizen-driven
ApproachtoCSR.....................................................................................................................197
V.Conclusion...................................................................................................................................199
Chapter7Conclusion...............................................................................................................................203
I.Introduction..................................................................................................................................203
II.TheMainObstaclesandChallengesfacingtheChineseFoodSafetySystem..........................204
1.Ambiguous,InconsistentandIncompleteLegislation.........................................................205
2.TheWeakImplementationandIneffectiveAdministration................................................207
3.TheAbsenceoftheIndependentandEffectiveJudiciarySystem......................................210
4.EnvironmentalDegradationandPollutionProblems..........................................................213
5.TheUnethicalandIrresponsibleBusinessPractice............................................................216
6.InadequateCitizenParticipation..........................................................................................217
III. TheWayforwardtoaMoreEffectiveFoodSafetyImplementationSysteminChina.........218
1.LegislationandAdministration...........................................................................................218
2.LocalProtectionism.............................................................................................................220
3.Judiciary...............................................................................................................................221
4.EnvironmentalProtection....................................................................................................222
5.EthicalandResponsibleBusinessOperation.......................................................................224
6.TransparencyandPublicParticipation................................................................................225
BibliographyandReferences...................................................................................................................228
IV
Acknowledgment
For the completion of this thesis, I must thank my supervisor, Prof. John McEldowney, for
his great and firm support during the past three years. Your diligence and academic
creativity has always inspired me to explore new areas and keep making a further progress
with my research. In addition, your generous help, constant care and great encouragement
has supported me to finish this research journey. Thank you for choosing me and never
giving up on me when I was in the most difficult time. I know this thesis would not have
been finished without your massive support. I am grateful for all the generous support you
have given tome.
I also want to take this opportunity to thank my family, especially my parents, for your
unfailing loveand forever support to makemydream come totrue.
Special thanks toLesleyWangfor helping mewith theformat.
V
Declaration
I,YanjieLi, declarethat this thesis ismy own work and has not been submitted fora
degreeat another university.
VI
Abstract
Food safety problems set an enormous challenge to China’s sustainable economic
development. The Milk Scandal of 2008 brought public attention to the poor regulation
and ineffective administration of the food industry. This highlighted the fact that food
safety is relevant to the public health and the brand ‘Made in China’ in the international
trading. It also shows how food safety law and better environmental protection has arisen
out of a crisis. The milk scandal brought an influx of foreign products into China and
opened up the Chinese market to international influence and food standards that would not
have been possible before the crisis began. Sustaining China’s environmental future is a
work-in-progress with uncertain outcomes but there is an admission that without solving
the food safety problem, China cannot achieve its sustainable economic development. This
thesis examines China’s current food safety legislation in the aftermath of the milk scandal
of 2008. The thesis raises the question of how China deals with its food safety crisis and
regulates its food industry to cope with its sustainable economic development. It also
considers how best for the Chinese and the rest of the world may be able to learn from the
Chinese experience. In the aftermath of the Chinese food crisis, China found itself subject
to imports from abroad. This had a two- fold effect. It brought international regulatory
practices into Chinese life; the second effect was to awaken China to the demands of
international trade and the need to conform to best practice. It also showed how China had
to meet expectations that were informed by international experience, which China sadly
lacked. A deeper analysis is that China was exposed to the dilemma of profit driven
organisations failing to appreciate the role of regulation and the safety of ordinary people.
The scandal exposed many institutional and organisational shortcomings while the lessons
were clear for anyone who looked. Placing profits over the preservation of social order and
stabilityresulted inshort-term gains with few long termbenefits.
This research provides a comprehensive analysis and offers a perspective of the Chinese
food safety problem from the legal, social and economic context of the problem. The
causes of the food safety problem in China are complex. The food safety problem is not
only caused by the defect of the food safety legislation itself. Other factors, such as
environmental challenges and the irresponsible business activities, all contribute to the
ineffectiveness of the food safety regulatory system. The thesis starts with the Milk
Scandal of 2008 to examine the current food safety regulatory system in China. It
addresses the main systemic problem, which leads to the weak implementation and
ineffective administrations, and it also finds out that apart from the systemic defects, the
environmental problem and the failure of the private sector all have an impact on the food
safety regulatory system.
Furthermore, the thesis also explores the new innovations in the 2014 Environmental
Protection Law, which may potentially contribute to the food safety law in the future. The
private sector has also been examined. The fact is found that Chinese companies are
operated in an irresponsible way, which causes the consecutive food scandals in China.
The role of corporate social responsibility is also considered to guide the business
activities in practice. The interests of the stakeholders, such as consumers, need to be
VII
addressed in thedecision-making.
The final conclusion is China still has a long way to go to achieve its sustainable economic
development. The legislation system needs to be completed and unified. The effectiveness
of the administration needs to be improved and independent judiciary needs to be built up.
Besides the systemic problem, the improvement of the environment and the responsible
business operation also contribute to re-shaping an effective food safety regulatory system.
The innovation in the Environmental Law of 2014 can also be introduced to the food
safety system. The citizen-driven approach can be used as an important supplement to
China’s traditional state-centred approach, to overcome the systemic weakness in the
implementation of the food safety law. Many disasters in the world are discussed in terms
of the experiences countries may gain from bad events. Bhopal and Chernobyl are two
examples. The Chinese Milk Scandal stands in a line of disasters such as BSE in Britain
that have re-oriented the regulatory map. Stakeholders and citizens have much to gain
from learning thelessons ofthemilk scandal.
VIII
Abbreviations
APEC Asia-Pacific EconomicCooperation
AQSIAQ GeneralAdministrationofQualitySupervision,InspectionandQuarantine
CCP ChineseCommunistParty
CFDA ChinaFoodandDrugAdministration
CMC China'sCentralMilitaryCommission
CSC9000T ChinaSocialCompliance9000forTextileandApparelIndustry
CSR CorporateSocialResponsibility
EIA EnvironmentalImpactAssessment
EPA EnvironmentalProtectionAdministrations
FAO FoodStandardCommission
FDA U.S.FoodandDrugAdministration
FSC FoodSafetyCommission
FSL FoodSafetyLaw
GDP GrossDomesticProduction
GMP GoodManufacturingPractice
HACCP HazardAnalysisandCriticalControlPoints
IRSWR InternalRenewableSurfaceWaterResources
ISO InternationalOrganisationforStandardisation
MIIT TheMinistryofIndustryandInformationofTechnology
MOFCAOM TheMinistryofCommerce
MOH TheMinistryofHealth
IX