Food safety, liability, and the right to know in China: Variations on an autocratic theme

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Posted by Linda Stamato January 30, 2009 10:40AM

Next time you read a diatribe against regulation, the U.S. civil courts (and product liability litigation), consider what life is like for those who suffer injuries in China. For that matter, wonder about the progress made in the Peoples' Republic while considering what happens when a product made there causes injury and the manufacturing company and its government conspire, essentially, to deny you, a citizen, access to the courts for redress, not to mention the failure, in the first place, to provide for the safety of your food and to inform the public of potential harm when it becomes known.

In mid November, I wrote a blog, "Toxic milk and poisoned babies: Product liability limits in China," that raised questions about consumer protection laws, regulation, and access to courts in China." This sequel, a policy commentary, is an update as well.

The Chinese courts are still denying access to the would-be litigants, the families of those harmed and killed by melamine-tainted products, but the Sanlu company, one of the largest dairy companies in China, even though it is now in bankruptcy proceedings, has offered to pay the parents of a baby who died last May from drinking tainted milk formula $29,200 to compensate them for the loss of their child. The parents have accepted.

Five other babies have died and, while data is released only by permission of the Chinese Ministry of Health, so some consider the data suspect, some 300,000 children have reportedly been sickened by tainted dairy products and more than 800 remain hospitalized with various kidney and urinary tract problems.

Regulation in China? Not much. Instead, we have government and company complicity: There is no financial penalty for those who produce shoddy goods from the Communist Party's legal system and, to make matters worse, regulators often fail to do their jobs. News regarding problems with products is suppressed and life is supposed to go on. Except, of course, when Chinese officials have to deal with one of the worst food safety scandals in decades, prompting a global recall of Chinese-made dairy products, shaking consumer confidence and devastating the nation's diary industry.

Then the criminal courts become engaged. In 2007, after earlier product-safety scandals, the head of China's State Food and Drug Administration was executed after he was found guilty of corruption and dereliction of duty as a regulator. And, more recently, 21 individuals were tried and, in at least two instances, men have been sentenced to death for endangering public safety, and a woman, the former manager and chairwoman of Sanlu, received a life sentence, according to the state-run news media and published in the New York Times: "China Plans to Execute 2 in Scandal Over Milk." Several others received life sentences, still others five to 15 years in prison.

The Times reported that outside the court (where the executives at Sanlu were sentenced), parents of some victims protested, saying they were dissatisfied with the verdicts. "I feel sorry for them, but they are just scapegoats," said one protestor, "The ones who should take the responsibility are the government."

And, still, no Chinese court will take up a single case from citizens. A few parents are very vocally rejecting the payment offers, the New York Times reports. Among them are a group that gathered 250 signatures from victims' families and is demanding long-term health care for the victims and medical research into their continuing illnesses.

With the government and the companies, together, resisting involvement of the courts, the likelihood of securing these objectives appears remote. Such is the case when courts are extensions of government not independent of them: In China courts are "passive pawns in the party's efforts to handle big disputes behind closed doors." (International Herald Tribune: "Lawsuits unlikely over toxic milk: China discourages action in the courts" October 17, 2008). According to Edward Wong, whose byline appears, officials routinely favor producers over consumers and rarely hold companies or their shareholders accountable even in major cases of malfeasance. Product liability lawsuits remain difficult to file and harder still to win, especially if the company involved has state ownership or close connections to officials who also oversee the courts.

Highly visible lawsuits are seen by the Chinese government as political threats and, as a result, officials go to great lengths to silence the plaintiffs rather than allowing the "wheels of justice to turn." A full airing of the cases in courts would set legal precedents and help deter future misbehavior by big companies or individuals, but "government officials are quietly pressuring everyone involved, from the parents to the lawyers to the judges, to drop the issue," according to reports Wong obtained from legal scholars and lawyers who volunteered to help the parents.

Parents and lawyers in the milk cases have been told by government officials that their complaints can be resolved through out-of-court compensation payments. At least 3,000 families have accepted compensation payments. Some parents, though, have filed lawsuits against the companies even though the courts have refused to accept the cases. One, on behalf of the families of 213 children, is being brought by a group of volunteer lawyers.

The current offer which is to be financed by 22 dairy companies, provides about $29,000 for each family that lost a child and about $4,400 for each child who suffered serious kidney damage. The families of children with relatively minor health problems would receive about $290. That is about three months of the average worker's salary. Among those refusing to accept the compensation offer is Zhao Lianhai, 37, the father of a 4-year-old boy made ill by the milk, who said the $160 million compensation plan announced last month was inadequate and failed to address the medical needs of children whose health had been profoundly damaged.

"Our biggest demand is not the compensation, but medical treatment and academic research on the influence that melamine will have on the health of our children," Mr. Zhao, a former journalist, said in the Times' interview. "We want to know what kinds of lives our children will face." (See more coverage in the chinadigialtimes).

But, consider what has happened to those who have objected to the government's offer. On Jan. 1, five people, including Mr. Zhao, were detained by the authorities shortly before they were anticipating holding a news conference in Beijing. They were held overnight and released. And, Mr. Zhao said that the parents posted a version of their letter online demanding greater compensation, but that it was blocked by government censors.

Meanwhile, here in the United States, a food-related scare is taking shape with respect to a staple in the American diet: peanut butter. Here, though, federal health officials appear on top of the salmonella problem and are involving the Centers for Disease Control and Prevention as well as the Food and Drug Administration's food safety center.

More than 500 people in 43 states have been sickened, with 90 reportedly hospitalized. At least eight deaths have been linked to the outbreak of salmonella.

All suspect products have been recalled. And investigations have revealed a sorry picture of contamination at the primary plant in Georgia and failure on the part of the state's Department of Agriculture regulators to take appropriate action. The nation's Justice Department has already been asked to conduct a criminal investigation and several members of Congress proposed legislation to increase safety requirements for food makers and to give F.D.A. officials greater authority and money to conduct inspections. "Every Peanut Product from Ga. Plant Recalled" in the Washington Post.

Problems can certainly occur in the U.S. food-protection system, and, it is essential to maintain a regulatory network to prevent and, when needed, to take action to remove tainted food products. Regular inspections need to occur; it's clear that food safety must be heavily regulated. As it is now, public information is made available; warnings are issued by federal health officials; citizens are advised to avoid certain products. Companies are told to remove suspect items from store shelves; companies and their distributors comply. The FDA has created a searchable list of recalled products and brands on the agency's website.

And, citizens, harmed by products, have recourse to courts for civil damages and we have criminal courts to prosecute where negligence may have occurred. Citizens have a basis to believe that food is safe in America.

In China? Well, with its compensation plan and the sentences--21 to date--of those held responsible for the melamine scandal, the government is clearly bidding to put an end to the crisis. Without solid regulation and access to courts, though, China is a long way from doing things right--protecting its citizens, regulating its food industries, and providing open access to information and access to courts if products harm people--a fairly good incentive to produce food safely.

Those who would assail the U.S. system ought to consider how well it serves us. We have a reasonably effective regulatory system (despite eight years of efforts to reduce the efficacy of the F.D.A.) but we also have a sound tort system that provides for sanctions, often severe, to be assessed on companies that manufacture or market products that hurt people. Before we seek to change it, consider carefully what it does for us and what can happen instead when politics (and ideology) trump law, policy and consumer protection.



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