Willemien Viljoen, tralac Researcher, discusses two recent SPS disputes involving South Africa

Since 2010 there has been an ongoing dispute between South Africa and the European Union (EU) regarding citrus fruit exports from the former to the latter. At the centre of the matter is the lack of scientific consensus and definitive scientific evidence that Citrus Black Spot (CBS) on the peel of South African citrus fruit exports poses a risk to the orchards of the citrus producing regions of the EU. At the same time South Africa is also involved in a dispute with Zambia involving similar sanitary and phytosanitary-related (SPS) matters. This dispute concerns organic honey exports from Zambia to South Africa which are currently being denied market access due to the fact that the honey is not irradiated as required in terms of the South African honey regulations (Regulation Number 835). This dispute is based on the refusal of market access of non-irradiated honey from Zambia based on historical evidence of American Foulbrood Disease (AFB). Although these cases are based on similar allegations, divergent approaches are currently being utilized to resolve the disputes. Also, the basis of South Africa’s case against the EU is the exact same argument Zambia is making against the current actions of South Africa.

a)  South Africa and the EU in the case of CBS

CBS is a fungal disease that causes black spots to be present on the leaves of trees and causes blemishes on the peel of fruit. Although this can result in a decrease in the value of the fruit, it has been found that CBS does not pose a risk to human or animal health when consumed. The jury is still out on whether CBS can be transmitted from exported fruit to fruit producing orchards in the EU. CBS is, however, of quarantine importance to some of its trading partners. Until recently the United States (US) only permitted imports of fresh citrus fruit from areas classified as CBS-free, while Japan only allows imports that are free from visible symptoms of CBS. In February 2013 the International Plant Protection Convention (IPPC) Secretariat hosted formal consultations between South African and the EU under the IPPC Dispute Settlement system in an attempt to resolve the ongoing battle between the two countries on the CBS issue. However, the proceedings were suspended after the parties agreed to negotiate on further steps to be taken after results of ongoing scientific analysis are known. Until the end of 2013, when CBS was found in certain consignments of exports, the EU allowed the import of citrus fruits produced in areas categorized as CBS free or from production sites where no CBS infected fruit were detected in official inspections. The detection of CBS; however, led to a temporary ban which was lifted in May 2014 under the conditions that citrus fruits could only be exporter to the EU market if stricter plant safety rules were adhered to. These rules were notified to the WTO Committee on SPS Measures in July 2014 as emergency measures to be taken against imports from areas not recognized as CBS-free in South Africa and include records of chemical treatments to be kept, registering packing houses, inspections of orchards and extensive sampling. South Africa states that these regulations are purely protectionist measures aimed at restricting competitive imports into the EU to protect domestic citrus producers and have considerable implications for employment in South Africa and the loss of export earnings. On the other hand the EU is of the opinion that CBS carrying fruit can in fact infect EU orchards and pose a risk of infection to the citrus producing areas in Europe necessitating the current strict import regulations and the threat of future bans.

b)  South Africa and Zambia in the case of AFB

AFB is a very destructive bacterial infection of the developing brood and is the most widespread and destructive of all the bee brood diseases. The bacterial infection causes the putrefaction of the hive and the only method to eradicate the disease is to destroy the hives showing signs of AFB.

In terms of the non-tariff barrier (NTB) registered on the tripartite online NTB mechanism South Africa only allows imports of honey from Zambia that has been irradiated due to historical evidence of AFB. However, the Zambian industry has repeatedly asked for an exception to the irradiation rule due to an analysis undertaken by the South African National Department of Agriculture (NDA) on honey samples from across Zambia revealing that no AFB is currently in Zambia. The problem with irradiating the honey is that it loses its status as organic honey once it has been irradiated and no Zambian non-irradiated honey is currently allowed to enter South Africa’s borders. Zambia is well-known for its honey production of which the bulk is certified organic due to the climatic conditions and the traditional processing and harvesting techniques employed by the beekeepers. This has resulted in Zambia receiving a price premium for their exports of honey, especially to the EU which is their most important destination for conventional and organic honey. It is interesting to note that Zambia is one of the countries registered and certified to export organic honey to the EU, meeting their strict import regulations, but is not allowed to export the same product to South Africa due to historical evidence of AFB.

In order to allow organic imports into South Africa it was indicated that draft requirements for imports of non-irradiated honey have been internally consulted with the relevant role players. These requirements have been drafted by the National Plant Protection Organisation of South Africa, which has the responsibility for setting import measures for honey even though honey falls within the ambit of the World Organisation for Animal Health (OIE) rather than the IPPC and a final draft was expected by the end of November 2013. However, these regulations are currently still in draft form and Zambian organic honey is still being denied access. This has led Zambian companies to conclude that the import ban is not based on scientific evidence of risk, but rather as a purely protectionist measure to protect the domestic honey producers in the South African market.

c)  The implications

South Africa, the EU and Zambia are signatories to the World Trade Organization (WTO) Agreement on Sanitary and Phytosanitary Measures (SPS Agreement), the IPPC and the OIE. In accordance with these instruments phytosanitary measures implemented to protect domestic animal or plant life must be based on scientific data and international standards, and reliable information must be provided to trading partners about the presence and distribution of plant or animal pests within a country.

Due to the inability of bilateral talks between South Africa and the EU to resolve the matter, South Africa has now opted to follow the multilateral route to attain a resolution of the dispute. Recently South Africa raised their concerns at the SPS Committee of the WTO and requested the IPPC to establish an expert committee to resolve the two opposing views on the matter. According to South Africa the stringent import conditions and the threat of re-imposing the previous ban are unnecessary and without technical justification and scientific merit. South Africa has also posed an alternative solution to the EU in the form of market division. In terms of its request the EU can be divided with only the southern citrus producing region imposing stricter import regulations. This should eliminate any concerns regarding the imported fruit contaminating the orchards in the citrus producing region of the EU. However, the EU has yet to respond to this request and the matter is now in the hands of the WTO and IPPC to find an amicable solution.

In terms of the honey case, Zambia has opted to follow the route of continued bilateral consultations through the tripartite and SADC NTB resolution mechanisms to resolve the dispute with South Africa. However, it is unclear whether these political consultations will actually result in an amicable resolution in the near future. The legal basis for the tripartite NTB mechanism is yet to be adopted and implemented, leaving the resolution of NTBs in the hands of informal discussions at the Ministerial level. In terms of the NTB resolution mechanism in SADC an NTB can be referred to the Sub-Committee on Trade Facilitation to resolve the matter through bilateral consultations. Then the case can be referred to the NTB Task Team for further consultations, followed by arbitration and then finally the SADC Tribunal can be utilized. This is also a very long and time-consuming process of diplomatic discussions between the disputing parties. The honey issue has been referred to the Sub-Committee where it has been stalled for the last year. If Zambia continues to choose this route it seems that a resolution is still a long way off, and with the current suspension of the SADC Tribunal finality in the matter is unclear. Although the SADC Tribunal might be re-instated in future as a new Protocol on the Tribunal was signed in August this year, its mandate and authority in disputes like the honey case is unclear seeing that its jurisdiction has now been limited to inter-state disputes.

However, Zambia is not limited to taking the route of bilateral consultations and can still decide to follow the same multilateral route as South Africa has in the case of CBS. Seeing that both cases are based on a similar alleged violation of the provisions of the WTO Agreement on SPS Measures, Zambia can follow suit in an attempt to pressure South Africa in finding a timeous solution in the matter. However, the lack of financial, organisational and human capacity, the time consuming process of the WTO dispute settlement mechanisms and the complexity of the WTO rules are often cited as the main reasons why developing and least developed countries do not utilize the multilateral dispute settlement mechanisms put in place. Irrespective of the reasons, it seems that Zambia remains unwilling to use multilateral measures to address South Africa’s use of SPS measures as a barrier to trade and an instrument to protect domestic industry. This can turn out to be a costly decision with the loss of export earnings and price premiums for one of Zambia’s oldest industries on which many households depend.

Tell us what you think.

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Sources:

Tripartite NTB online mechanism (www.tradebarriers.org);

WTO Committee on Sanitary and Phytosanitary Measures (notices G/SPS/N/EU/89 and G/SPS/N/ZAF/32 available on www.wto.org);

World Organisation for Animal Health (www.oie.int);

International Plant Protection Convention (www.ippc.int);

South African Department of Agriculture (Regulations Relating to the Grading, Packing and Marking of Honey and Mixtures of Bee Products Intended for Sale in the Republic of South Africa, Regulation 835 of August 2000 available on www.daff.gov.za)