Considered in Grand Committee
That the Grand Committee do consider the Organics (Equivalence and Control Bodies Listing) (Amendment) Regulations 2021.
My Lords, for organic products imported from another country to be legally sold as organic in Great Britain they must be certified as organic by a third country or third-country control body that the UK has recognised as having equivalent or compliant standards.
The lists are currently contained within retained EU Commission Regulation EC number 1235/2008. Annexe III of this regulation lists third countries recognised as equivalent and gives the name and website of the competent authority for each country, along with a list of the control bodies operating in that country, their control body codes and websites. Annexe IV of the regulation lists third-country control bodies recognised as equivalent and gives the name, address, website, code numbers, applicable countries and approved product categories for each control body.
This statutory instrument was made to streamline the process of listing and accessing the details of the third countries and third-country control bodies that we recognise as compliant and equivalent for the purposes of UK organic regulations. The amendments made by this instrument do not constitute a policy change.
As the law stands, it would be necessary to pass a new SI to confirm recognition of a new country or control body, or for changes to existing recognition, such as changes to their name, website address or approved goods categories. With hundreds of organisations listed, this information can change frequently. When the UK was an EU member state, these changes were advised on by the European Commission and approved by representatives of the EU member states at the regulatory committee on organic production, not by the European Parliament.
Given the administrative nature of these changes, we believe that making numerous new SIs to reflect them would be disproportionate. The time taken to pass such SIs to update the lists would have a negative impact on trade in organics. Details held on these lists are necessary for port health authorities, local authorities and other relevant parties to ensure that the goods in question have been certified in a recognised third country or by a recognised third-country control body. The delay between the changes taking place and being reflected in legislation would result in discrepancies between the documents and legislation. This can cause disruption to trade, as even minor discrepancies may delay goods being checked at ports.
This SI will not alter the criteria according to which third countries and third-country control bodies are recognised. I would like to reassure the Committee that the process for allowing third-country products to be placed on the GB market as organic remains robust and follows highly technical criteria set out in the retained organics regulations: Council Regulation 834/2007 and Commission Regulations 889/2008 and 1235/2008. This SI simply seeks to move the lists currently referenced in legislation to the GOV.UK website, where they can be updated directly by officials. We will continue to uphold the high standards expected by UK consumers and businesses.
Our approach with this SI follows best practice in other policy areas, where minor amendments are made to lists on various topics without requiring an SI. For example, the register of protected geographical food and drink names, which determines what goods can be sold under particular names in GB, is updated by the Secretary of State on the advice of officials. These decisions are made by evaluating the merits of each case in accordance with criteria outlined in legislation. This change will also improve the accessibility of these lists for stakeholders by providing all the relevant information in a single location, removing the need to consult multiple pieces of legislation, a problem that stakeholders have raised in the past.
These proposed changes have been welcomed by stakeholders including UK port health authorities, UK organic control bodies—through the UK organic certifiers group—and the devolved Administrations at the UK organics four nations working group. International partners such as the United States Department of Agriculture have also welcomed the proposed changes.
The proposed lists on GOV.UK will be updated to reflect the terms of the trade and co-operation agreement, extending EU organic equivalence recognition until 31 December 2023 as agreed, without the need to pass an additional SI. Current UK legislation includes EU recognition only until 31 December 2021, so the lists will need to be amended before that date to be in line with the trade and co-operation agreement. If this SI does not pass, a separate instrument will be required to extend EU recognition to the end of 2023. If a new SI is not passed by the end of the year, that could cause a delay to trade and there would be a risk of political controversy.
A breach of our commitments under the TCA would potentially leave the UK open to retaliatory action from the EU, such as withdrawal of its recognition of UK organics standards, which would prevent GB organic goods from being sold in the EU. Given the importance of the EU market to UK organic producers, this would risk a severe impact on the sector and its contribution to the UK economy. The UK has committed to updating the lists of recognised third countries and third-country control bodies to reflect changes that occurred shortly before the end of the transition period but were not captured in the retained legislation. This includes adding, removing and amending some control bodies in Annexe III and Annexe IV.
Until this SI comes into effect, goods certified by those newly recognised control bodies risk rejection at the border and we also risk that goods certified by control bodies that are no longer recognised may enter the GB market. Delay to these changes would cause disruption to trade and risk a perception that we are in violation of our treaty obligations. Under the current terms of the Northern Ireland protocol, EU organics regulations continue to apply in Northern Ireland as they do in the EU. As such, Northern Ireland continues to use the list of recognised third countries and third-country control bodies in EU law and this SI will have no effect on trade in Northern Ireland. I beg to move.
My Lords, I am most grateful to my noble friend for setting out the remit of the statutory instrument that is before us this afternoon. We have been greatly assisted by the 14th report of the Secondary Legislation Scrutiny Committee, which my noble friend will be aware has a number of outstanding concerns that I will raise.
Paragraph 7.5 of the Explanatory Memorandum says that
“instead of laying new statutory instruments for new recognitions or changes to existing recognitions, the law be amended”
in the way that my noble friend outlined. It concludes:
“This will save a considerable amount of officials’ and Parliamentary time and allow for greater speed in updating information.”
I do not think that Parliament has ever asked for less time to scrutinise legislation. As my noble friend will recall, when much of the legislation went through under the treaties and the Acts taking us out of the European Union, concern was expressed at the amount of parliamentary scrutiny that there would be.
My first question to my noble friend is this. Paragraph 10.1 specifically states:
“The changes to the listing of control bodies and third countries have been discussed with UK control bodies … and with the devolved administrations at the Organics Four Nations Working Group.”
I am interested to know whether that was just one meeting. Was there the opportunity for the devolved Parliaments and Governments to raise any concerns that they must have?
My noble friend will be aware that, in this very Room last week, the Common Frameworks Scrutiny Committee met to raise a number of issues. His department was mentioned, as there are, I think, 14 common frameworks that relate to it. I might be wrong, but I do not think that Parliament has seen a single one of those. Obviously, it is of great interest to us to see what has been agreed. I mention that as background. I would like to think that the Scottish, Welsh and Northern Irish nations have had the opportunity for both their Parliaments and Governments to raise any concerns that they had.
I turn briefly to the issues raised in appendix 3 of the 14th report of the Secondary Legislation Scrutiny Committee—the exchange of letters with our honourable friend Victoria Prentis, in the other place, as Minister for Farming, Fisheries and Food. The Secondary Legislation Scrutiny Committee has done the House a great service in pointing out its concerns. I would like to quote from the report:
“These Regulations replace a legislative process for updating a list of third countries and third country control bodies which are recognised as equivalent in relation to organic standards, with an administrative process.”
It concludes that
“there should be parliamentary oversight of updates to lists.”
Will my noble friend explain to us this afternoon why there is the need for such speed in this regard? Can he convince us that there has been proper parliamentary oversight of what was delegated to the Government to perform this?
The report goes on to cite a letter from the Lord President to the chairman of the committee, our noble friend Lord Hodgson of Astley Abbotts:
“I agree that it is important that Parliament has the opportunity to scrutinise significant changes in addition to streamlining processes to ensure that the regulatory system best serves the needs of British businesses and consumers.”
Obviously there was a long debate about equivalence at the time that the legislation went through. Noble Lords ought to know my admiration for the organic sector and its importance to the rural economy.
I conclude by again raising an issue that was raised by our noble friend Lord Hodgson of Astley Abbotts with our honourable friend Victoria Prentis. On page 30 of the report, the committee sets out again its concern that the decisions before us this afternoon have been removed from the oversight of Parliament by switching from a legislative to a purely administrative process. I am not entirely sure that my noble friend has set out the context for why we will not in future be able to look at these statutory instruments, albeit briefly, or why we are losing the parliamentary oversight, which seems to be the nub of the concern expressed in the 14th report of the Secondary Legislation Scrutiny Committee.
My Lords, I am grateful to the Minister for his introduction to this SI. I thank him and his officials for the useful briefing that they took the time to provide to me and to the noble Baroness, Lady Jones of Whitchurch. As has been said, the SI allows third countries equivalence on organic produce without the need for the time-consuming process of passing secondary legislation on each occasion. The power now rests with the Secretary of State to decide.
Paragraph 2.2 of the Explanatory Memorandum states that changes to the lists of countries and produce
“will be communicated to relevant stakeholders in a timely manner”.
Can the Minister say exactly what “a timely manner” is? Will the list always be updated immediately after equivalence is granted, or will there be occasions when this may take longer?
I note that no impact assessment was prepared for this SI, as the changes are said to be merely administrative. I am sympathetic towards streamlining procedures relating to legislation but do not believe that Parliament should be bypassed in all cases, especially when trade agreements are being considered.
The noble Baroness, Lady McIntosh of Pickering, has already raised my next point. The chair of the Secondary Legislation Scrutiny Committee, of which I am also a member, wrote to Minister Prentis challenging the assumption that the new administration process was merely technical and would have low impact. The committee took the view that making an equivalence decision on a third country would almost certainly be more important than suggested and felt that removing the oversight of Parliament by switching from a legislative to a purely administrative process was a concern. In her response, Minister Prentis indicated that
“when a third country applies for equivalence recognition for the purpose of organics trade, it must provide all necessary information, including details of its control system and production standards, on the basis of which a decision can be made … recognition is limited to … three years. The Secretary of State may recognise a third country as having equivalent organic standards only once they are satisfied that these criteria for recognition have been met … Additionally, a third country recognition is generally part of a wider trade agreement, which would require Parliamentary ratification”.
If Parliament is to be involved in a trade agreement with a third country, why cannot it be involved in that country being added to the list for organic equivalence, especially if that is going to be part of its trade agreement? Can the Minister indicate how many countries are likely to apply for organic equivalence which are not in negotiation for a wider trade agreement? This might help us to see just what the scale of the workload would be if each was to go through the statutory instrument process instead of the informal administrative process proposed today.
As the Minister said, there is a cut-off date for reassessment of 23 December 2023. What will happen after that date? Will this be a cliff edge, or will there be renegotiations prior to that date?
A number of countries are in negotiations for trade agreements with the UK. How can the public be assured that the very high standards that they currently enjoy on organics will not be lowered during negotiations? I remain concerned that this speeding up of the administrative process has no legislative grounding and look forward to the Minister’s response and possible reassurance.
My Lords, I am grateful to the Minister for introducing this SI and for the helpful briefing that he organised beforehand. On the face of it, this seems to be an innocuous change, but, like other noble Lords, I do not feel that it is quite as straightforward as it first appears. I therefore have a number of questions that I want to raise.
First, we have a strong and blossoming organic sector in the UK and it is important that we protect the very high standards that consumers expect of organic products. In particular, it is vital that the UK organics market cannot be undercut by inferior products from third countries claiming to be of the same organic standards. When this was debated in the Commons, the Minister, Victoria Prentis, made it clear that organic trade between the UK and any third country in the future will be the subject of the provision of free trade agreements or treaties.
This immediately rang alarm bells because, as we have seen with other trade deals, most notably the one with Australia, the Government have been prepared to sell out our high food standards when it suits them to have a wider trade deal. Can the Minister clarify the status of our current organic standards? If, as he says, they are set out in retained EU legislation, could they be disregarded in a future trade deal?
Victoria Prentis also said that Parliament would have oversight of those trade deals that might impact organics. Can the Minister clarify whether this is the same oversight that exists for all other trade deals, on which Parliament has in truth had no real say and, as we all know, the views of the Trade and Agriculture Commission, which was set up to act as a mediator, if you like, are widely disregarded? Would organics be caught up in that same process?
Secondly, one of the main arguments put forward in the Explanatory Memorandum for the change is that ports, local authorities and businesses will be able to find an up-to-date list of the organic products that can be imported, as they will be listed on the government website rather than in legislation. I do not find this a compelling argument. I do not really see why this cannot be done in parallel with the original scrutiny process of making changes via SIs. For example, the Minister, Victoria Prentis, said that there were 13 countries, plus the EU, and about 55 control bodies currently listed. Despite what the EM says, I cannot imagine that there will be a swamp of new applications which will become unmanageable. If the concern is that those organisations change their addresses frequently, surely the solution would be to deal with this aspect of approval administratively rather than through the whole recognition of a new country or control body. I would be grateful if the Minister could clarify why it is not possible to have those two systems working in parallel with the original parliamentary scrutiny that we have previously enjoyed.
Thirdly, as noble Lords have said, the Secondary Legislation Scrutiny Committee has drawn these regulations to the special attention of the House on the grounds that they are politically or legally important. We agree with its analysis
“that secondary legislation is indeed an appropriate vehicle for the type of changes that are the subject of this instrument, and that the Secretary of State’s general accountability to Parliament is not a suitable replacement for parliamentary oversight of individual decisions in this area.”
As my colleague Daniel Zeichner said in the Commons in agreeing with the Secondary Legislation Scrutiny Committee,
“We have all heard that argument and we know how well that works in practice. Frankly, we need something better than that.”—[Official Report, Commons, Delegated Legislation Committee, 21/9/21; col. 5.]
To press the Minister on this, if the SI goes through, how would we in practice hold the Secretary of State to account for listing an organic producer that we thought was in danger of undercutting our current organic standards? If a trade deal were signed that opened up the market for a third country for organics with lower standards, which of the many Secretaries of State would we be trying to hold to account anyway? Would it be the Secretary of State from Defra or from the Department for International Trade? Whom will we chase on these issues if such an event occurs?
Finally, I ask the Minister about the devolution implications of this SI. In an exchange in the Commons with David Doogan of the SNP, the Minister revealed that there is a long-standing disagreement about whether this issue is a devolved matter. Rather than getting legislative approval from the devolved Governments, as would be the normal process, the Government on this occasion sought the approval of the organics four nations working group. Does the Minister feel that this is a satisfactory way to proceed? What is being done to get the devolution disagreements back on track so that we can have the proper process of agreement in place?
While I am on that, there is some question over whether the UK organic certifiers have agreed to the proposals, as suggested in the Explanatory Memorandum. As my colleague Daniel Zeichner reported, they reported to him that their preferred form of scrutiny of future applications is an independent expert group, rather than their having to rely purely on the Secretary of State to make those decisions.
We feel that this SI is unsatisfactory in a number of regards and hope that the Minister will be prepared to reflect further, not only on our concerns but on those of the SLSC, which we feel were well made. I look forward to his response.
My Lords, I am grateful for noble Lords’ interest in this issue and for the questions that have been asked. To start with, I say to my noble friend that this is of course a massive increase in scrutiny. When we were a member of the EU, this did not ever come before Parliament; it did not even come before the European Parliament but was dealt with by a committee in the Commission. Everything we are doing is open to all Members of both Houses to scrutinise in the ways in which they ingeniously will, holding Ministers and the Executive to account. There are mechanisms in it, which I will come to in a moment.
I will answer as many of the questions as I can. If I cannot, I will write to noble Lords. My noble friend Lady McIntosh asked about the frequency of meetings of the four nations working group. My understanding is that it meets every month, so this is a very regular affair. I will come on to the points my noble friend made about the slight tension between the devolved Governments.
I think my noble friend Lady McIntosh also asked whether SIs are appropriate, whether they are a frequently used vehicle for minor changes in other policy areas, and why they should not be used here if they are used for many minor matters. The changes to lists that would be covered under this updated process would be administrative changes based on technical evaluations; they do not represent a policy change. These include very minor changes to information required about control bodies, such as their name, legal address and other contact details. Although minor, these details are necessary for port health authorities, local authorities and other relevant parties to ensure that the goods in question have been certified in a recognised third country or by a recognised third-country body.
We are aware of a number of cases in which minor changes to a control body’s information have resulted in goods being delayed at a port due to discrepancies between the details on certification documents and in legislation. As such, delays in updating this information in the list could result in a disruption to trade. Without the move to online lists effected by this statutory instrument, any amendment, however small, would be delayed by the time taken for a further SI to go through the legislative process. The faster mechanism introduced by this SI will enable the UK businesses that depend on this to take advantage of new opportunities to trade more quickly. This may provide a competitive advantage over other nations, such as those in the European Union burdened by cumbersome and lengthy processes.
My noble friend and others mentioned that we have legal agreements with 13 countries and 55 control bodies and asked whether updating their lists would be necessary. Yes, we have equivalence agreements with 13 countries, the EU and the EEA states, and 55 control bodies. However, the situation is much more complex in practice because third-country control bodies can certify businesses operating in a number of different countries, with different rules for their operations in each.
Equally, where a third country is recognised as equivalent, the control bodies in that country must also be listed individually. A full list of recognised countries and third-country control bodies runs to over 100 pages, with each page containing significant detail. As we continue to recognise new third countries and third-country control bodies as an independent trading nation, this is likely to expand over time.
On the questions from the noble Baroness, Lady Bakewell, there is a legitimate query about how quickly Defra will be able to publish updates to the lists after a new decision is made. Once a change has been agreed, the process is fairly swift. It is likely to take approximately two working days, as that is the standard time for updates to GOV.UK to be put into effect, dependent on communication capacity at the time. The time taken for decisions on whether or not to make a change would vary in length based on the complexity of the change in question. For example, if a third-country control body alerts us to a change to its name or website, that can be approved quickly.
The noble Baroness made a point about how Defra would alert stakeholders that changes had been made. Stakeholders will be made aware of the changes in a timely manner by email, and any new third-country recognitions will be consulted on with stakeholders as part of the decision-making process. I add in answer to a number of points that the organic sector desperately needs this—I think noble Lords agree with that and understand it. We are not making this change in the teeth of opposition from the organic sector; it wants a simple, streamlined process.
The noble Baroness, Lady Bakewell, and a number of other noble Lords asked about parliamentary oversight of the approval of third countries and third-country control bodies, and that point was also raised by the SLSC. We believe that, given the administrative and low-impact nature of amendments to the lists of recognised third countries and third-country control bodies and the very detailed technical assessment required by this instrument to add a country or control body to the list, scrutiny at official level is appropriate. The recognition of a third country’s organic standards as equivalent is based on an extensive technical evaluation of the third country’s organic standards to ensure that they are comparable to the UK’s standards, and an evaluation of its enforcement mechanisms to ensure that those standards are being met in practice. The final decision will have Secretary of State oversight, and, if recognition is agreed, the third country must meet continuing obligations, including the provision of annual reports and notification of infringements or changes to standards.
It was asked why reference to EU equivalence is made until 31 December 2023 and what will happen after that date. In the EU-UK Trade and Cooperation agreement we committed to recognising the European Union as equivalent for the purposes of organics until 31 December 2023 and vice versa. This is in line with the convention for EU recognition of third countries for organics, which is limited to three years at a time. We will use the recognition provided by this SI to reflect our recognition of the EU in our official list. This SI will allow us to move our recognition of the EU on to official lists. At the end of the current recognition period, equivalence will need to be renegotiated between the UK and the EU. Our intention is that, when the current mutual recognition ends, we will seek to renew it.
On whether this SI will allow the Secretary of State to lower organic standards, the noble Baroness, Lady Jones, makes an important point. The key point of this is to maintain organic standards; that is what we need for international trade, and that is what the sector wants. The UK standards for organic production, which third countries must equal if their goods are to be recognised as equivalent and imported to the UK, are set out in retained regulations 834/2007 and 889/2008. Amendment to these regulations requires a statutory instrument, so will require parliamentary scrutiny. I think that that point answers a number of the queries made. The Secretary of State cannot simply decide to amend these standards, and it is not in our interests to lower those standards, because it would affect our ability to trade with other countries.
The standards for third-country organics recognition are set out in articles 32 and 33 of retained EU regulation 834/2007 and 1235/2008. There is detailed technical guidance on what will be required to recognise a country as equivalent—for example, carrying out a full standards comparison, reviewing a technical dossier, conducting annual reviews and carrying out audits.
On the point about the Trade and Agriculture Commission, I respectfully take a different view from the noble Baroness. Its views are not ignored; it is a relatively new body, and we want to make sure that it works. It is vital that it works for farmers and the UK economy.
I was asked why Defra cannot publish the lists on GOV.UK without taking them out of legislation. Defra could publish copies of the lists of third countries and control bodies on GOV.UK without removing them from legislation, but that would not solve the main issue, which this SI seeks to resolve. Lists published on GOV.UK would not be legally binding if they were not underpinned by the correct legislation. Port health authorities, for example, would not be able to work on the basis of those lists when checking which organic products may be imported into this country. In such a scenario, any change would still require that a new SI be passed.
I have already touched on the question about ongoing disagreements on aspects of organic regulations and whether they are retained and devolved, but I shall be open with noble Lords. There is an ongoing disagreement between the UK Government and the devolved Administrations about whether certain aspects of implementing trade policy are devolved or reserved. That disagreement is not specific to the organic sector. The source of this dispute is over the question of what is or is not reserved. While it is agreed that trade is in general a reserved matter, there is a dispute over whether domestic enforcement of agreements is reserved. To allow the continued functioning of the organic sector, the four Administrations agreed that Defra should remain the UK competent authority and they should work together through the four nations working group. Although this issue has not been resolved, it is not affecting day-to-day operations—that is absolutely key. The process of seeking a legal resolution would be costly and time-consuming, and therefore the Administrations have not considered it necessary.
I re-emphasise that we are not doing this to the organic producers—we are doing it for them; it is a measure that they want. We are setting up an expert working group that will work with Defra officials to determine whether a third country or third-country control body has an equivalence to GB standards. Consultation will also take place within the sector, and this will be considered before the Secretary of State agrees to any recognition.
With that, I hope that I have answered your Lordships’ questions and that noble Lords share my sense of the need for this instrument to streamline the existing process for amending lists of third countries and third-country control bodies recognised as compliant and equivalent by the UK and to facilitate the trade in organics between the UK and EU. As outlined in my opening remarks, the instrument will allow for the timely extension of EU recognition until the end of 2023, as agreed in the trade and co-operation agreement, as well as avoiding any unnecessary disruptions to trade caused by inaccurate information in legislation.
I believe that I have answered all noble Lords’ questions, but I shall have to check Hansard. I hope noble Lords will forgive me if I have missed any out, and I shall reply in writing.