March 2014 INVESTMENT CLIMATE Food Safety Toolkit Introduction and Quick Start Guide Investment Climate l World Bank Group ©2014 The World Bank Group 1818 H Street N.W., Washington D.C., 20433 All rights reserved. March 2014 Available online at www.wbginvestmentclimate.org This work is a product of the staff of the World Bank Group with external contributions. The information included in this work, while Table of Contents based on sources that the World Bank Group considers to be reliable, is not guaranteed as to accuracy and does not purport to be complete. The World Bank Group accepts no responsibility for any consequences of the use of such data. The information in this work is not intended to serve as legal advice. The findings and views published are those of the authors and should not be attributed to IFC, the World Bank, the Multilateral Investment Guarantee Agency (MIGA), or any other affiliated organizations. Nor do any of the conclusions represent official policy of Foreword 5 the World Bank or of its Executive Directors or the countries they represent. Acknowledgements 9 The denominations and geographic names in this publication are used solely for the convenience of the reader and do not imply the expression of any opinion whatsoever on the part of IFC, the World Bank, MIGA or other affiliates concerning the legal status of any Acronyms 11 country, territory, city, area, or its authorities, or concerning the delimitation of its boundaries or national affiliation. Quick start guide 13 Rights and Permissions The material in this work is subject to copyright. Because the World Bank Group encourages dissemination of its knowledge, this work Importance of food safety regulation to private business development 21 may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution of this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, the Internal market development and growth 23 World Bank, 1818 H Street NW, Washington, DC 20433, USA; telephone: 202-522-2422; email: pubrights@worldbank.org. Purpose of the Toolkit 25 About the Investment Climate Department of the World Bank Group The Investment Climate Department of the World Bank Group helps governments implement reforms to improve their business environments and encourage and retain investment, thus fostering competitive markets, growth, and job creation. Funding is provided by the World Bank Group (IFC, the World Bank, and MIGA) and over 15 donor partners working through the multidonor FIAS platform. Foreword Demand for food safety regulatory reform can come from many quarters: domestic businesses, exporters, traders, retailers, foreign investors, and most importantly, consumers. Well-crafted regulations can guide and assist domestic farmers and firms to effectively compete with imports or allow them to access new export markets. As the agricultural sector in a developing country evolves and the quality and breadth of food processing increases, establishing a viable food safety system is a key element of success. This Toolkit aims to empower reformers with a suite of tools to assess market potential, build capacity, and assist in mitigating barriers to development in the area of food safety. The Toolkit tackles each step in the reform process. It examines the related system development in a strate- gic way supported by best practice examples and sound principles of institutional structure and legislative reform. Risk-based approaches to regulation and regulatory delivery are considered alongside the need for flexible and proportionate responses to both. continued on next page Module 1: Introduction and Quick Start Guide 5 Foreword Design of the Investment Climate Food Safety Toolkit builds on the IFC’s Sustainable Business Advisory Food Safety Toolkit which sets out practical tools and techniques for verification of effective food safety systems at the firm level. These two complementary tools, addressing both public and private sector dimensions to the development and implementation of effective food safety systems, can form the basis of a public private partnership that fosters reform and growth. Products, sectors and entry points may vary but the need for confidence in the safety and quality of the products produced for the benefit of both markets and citizens remains constant. Pierre Guislain Director Investment Climate Department World Bank Group Module 1: Introduction and Quick Start Guide 7 Acknowledgements The Investment Climate Department wishes to thank the Swiss Development Agency (SECO) and the United States Agency for International Development (USAID) for their generous support in funding the Investment Climate Food Safety Toolkit. The preparation and publication of this toolkit has involved the participation and efforts of a significant number of dedicated people. The overall project was managed by Selma Rasavac-Avdagic, Senior Operations Officer, Investment Climate for Industry, with the support of a consulting team comprised by Delpas Consulting Group from Serbia, in consortium with Better Regulation Delivery Office from United Kingdom, and by Florentin Blanc, Regulatory Reform Specialist. Many thanks and acknowledgment goes to the following people who were intensively working with the consultant on developing the Toolkit: Damien Shiels Global Product Specialist, Investment Climate for Industry Alberto Criscuolo Senior Private Sector Development Specialist, Investment Climate for Industry Loraine Ronchi Senior Economist, Investment Climate for Industry Heinz Strubenhoff Agribusiness Program Manager, ECA Investment Climate Brian Bedard Senior Livestock Specialist, World Bank Ivan Ivanov Senior Operations Officer, Sustainable Business Advisory Sarah Ockman Program Manager, Sustainable Business Advisory Kateryna Onul Policy Coordinator, Sustainable Business Advisory English editing was completed by Vandana Mathur. Graphic design and branding was completed by Aleksandra Milakovic Radinovic with valuable support of Shaela Rahman. Special acknowledgment goes to Cecilia Sager (Manager, Investment Climate for Industry) for her overall support for this initiative. Module 1: Introduction and Quick Start Guide 9 Acronyms APLAC Asia Pacific Accreditation cooperation SPS Sanitary and Phytosanitary BAP Best Aquaculture Practice SQF Safe Quality Food BRC British Retail Consortium USAID U.S. Agency for International Development CAC Codex Alimentarius Commission USDA U.S. Department of Agriculture CAS Country Assistance Strategy WHO World Health Organization CFIA Canadian Food Inspection Agency WTO World Trade Organization CPS Country Partnership Strategy EAL European Cooperation for Accreditation of Laboratories EC European Commission EAC East African Community EFSA European Food Safety Authority EU European Union FAO Food and Agricultural Organization FBO Food business operators GDP Goss Domestic Product GAP Good agricultural practices GFSI Global Food Safety Initiative GHP Good hygiene practices GMO Genetically modified organisms GMP Good management practices GRMS Global Red Meat Standard HACCP Hazard Analysis Critical Control Point System ILAC International Laboratory Accreditation Cooperation KDB Kenya Dairy Board KEBS Kenya Bureau of Standards LIMS Laboratory Integrated Management System NGOs Nongovernmental organizations ILAC International Laboratory Accreditation Cooperation IPPC International Plant Protection Convention OECD Organisation for Economic Co-operation and Development OIE World Organization for Animal Health PCB Pest Control Products Board PRPs Prerequisite Programs RFID Radio frequency identifier SBA Sustainable Business Advisory Module 1: Introduction and Quick Start Guide 11 Introduction and Quick Start Guide Module 1 Introduction and Quick Start Guide Module 2 Guiding principles of food safety reform For all projects related to food safety reform, the following guiding principles should be kept in mind: • Regulation and official controls by themselves cannot ensure food safety. • Primary responsibility (and liability) for the safety of food rests on food business operators. • Food safety should be secured across the entire food chain. • A preventative and risk-based approach should be the basis for regulatory reform, decision making, and control and self-control of food safety. • International standards and scientific justification should form the basis of all regulatory measures. • The impact of food safety reform on trade, consumer prices, economic output, and jobs should be carefully considered – costs and negative impacts can be significant from an economic perspective. • The food safety system will always involve multiple players; coordination and collaboration are vital. Note: Not all projects will go through all the following steps – selecting what will be covered will be based on the project scope and design as defined above, depending on country needs, capacity, resources, and the specific role of the Investment Climate Department of the World Bank Group. Module 3 Legislative reform For a food safety reform project to be successful, it is not enough to alter only texts in legisla- tion, or structures in the government or processes in inspectorates. It involves a different way of thinking by many people and a change in attitudes and behaviors. This can be the most difficult part of the project and easily underestimated or even overlooked. Applying food safety reform can in many countries be an extremely radical change in fundamental assumptions about safety and about the role of the state. It is important to be clear about the starting point and destination. For countries that are realistic candidates for European Union accession, the destination is a pre-existing package of legislation within the EU system and this path has been followed by a number of other ac- cession countries previously. For countries not in line for EU accession the destination may be joining other trade agreements and there may be in some cases similarly clear packages of food safety regulations to adopt. For other countries, getting a clear vision of the destination can be difficult and the timescale for that journey can be challenging and often insufficiently thought through. The World Trade Organization Sanitary and Phytosanitary (WTO SPS) agreement pro- vides a general framework, but many details have to be fleshed out in each specific case. Module 1: Introduction and Quick Start Guide 13 Introduction and Quick Start Guide Introduction and Quick Start Guide To assess the starting point for any legislative reforms, you have to have a good grasp of how Module 4 Institutional structure the current system operates and how embedded it is in institutions, practices, and the culture of practitioners as well as of businesses and consumers. It is also essential to think about capac- Start from a map of the current distribution of responsibilities and roles, which are likely to be ity of economic operators and regulators and about consumer incomes and education. It is not spread across a range of ministries, agencies, and inspectorates. The field of food safety im- simply a matter of aligning legislative texts or of aligning systems and thinking. Depending on pinges on many other policy areas, and the particular distribution of roles in a country is likely the conditions and objectives, the legislation may be: to be unique in its detail but common in its complexity. Many agencies are typically in charge of various aspects of the food safety issue – from animal breeding through plant protection • close to EU legislation; chemicals, processing, transport, catering, up to human health at the end of the chain. • similar to international best practices; or • not closely based on a foreign model. It is generally easier to try to unify the implementation part of the food safety system (control, inspections, supervision, testing, enforcement) than the policy inputs (that is, setting rules These are some key questions to ask: and requirements on all aspects (production, animal health, chemicals, water, residue levels in food). Therefore, much can be done with a single inspectorate, even if regulations are issued • Is the pre-existing system based on standards, on testing, and on blanket inspections (trying by more than one ministry or agency. to inspect each and every business, process and product)? • Have any of the norms and standards been aligned with international standards? There may be a strong desire to try and set up a single food safety agency that covers policy • Can the legislation be identified clearly as being about food safety or is it mixed with issues and implementation, but such institutions are quite rare. It may not be appropriate or feasible of food supply and food quality? for a particular country, or the political opposition may be too great. • What is the implementation capacity, existing problems in enforcing applicable legislation, and what challenges are to be expected in bringing reformed legislation to life? Although there is probably a preference internationally for a single agency, at least in terms of inspections, it does not have the status of international best practice, precisely because of the complexity and peculiarities of other government structures. It is very rare in practice to have an agency that covers the entire food chain from primary production (veterinary, phytosanitary) to retail and catering. Most “single” agencies cover only a part of the chain (even though a major one). It is essential to aim at consolidation as much and as effectively as possible in the context, and in the perspective of what the Food and Agricultural Organization (FAO) defines as the “integrated model.” Under such a model, all institutions involved in food safety regulation have clearly defined and articulated roles, and are fully interconnected so that regulation and supervision are not overlapping or duplicated, and are coherent and consistent throughout the food chain. Ensuring that there is no duplication or overlap in control and supervision should be a priority – and, where possible, consolidation of as many of the control and supervision functions in a single food safety inspectorate as well. If further consolidation can be achieved, it will be a positive step. But if consolidation is politically difficult or impossible, many other aspects are important and the reform team should not expend all energies on this goal to the detriment of others. 14 Investment Climate Food Safety Toolkit Module 1: Introduction and Quick Start Guide 15 Introduction and Quick Start Guide Introduction and Quick Start Guide Module 5 Risk assessment, enforcement, and inspections Module 6 Principles of food safety management Institutional change alone will not bring success without also reforming the approach taken to A food safety system is based on the concept of the “food chain,” from start to finish, from inspections, both by the inspectorate in terms of process and the inspector in terms of attitude. the plant or livestock to the meal on the family table. That can involve the grower / farmer, the Institutional change may help in tackling these other issues, but it should not be expected to slaughterhouse, the transporter, the food production factory, again the transporter, the ware- transform them by itself. In fact, excessive attention given only to the institutional framework house, the retailer, and then the customer. can distract from looking at real inspection practices, which is a real risk for project success. In most countries, there is a scientific infrastructure already in place to some extent but its role The person who is asked to change the most is the inspector. Again, it can be presented as and function may be radically different to what is needed in a modern approach (and in some leading to greater job satisfaction and increased respect and status but that may seem unrealis- countries it may be entirely or mostly missing). In most unreformed systems, science is used tic to them, whereas the likelihood of losing the opportunity to supplement an often extremely after the event, testing the end product but doing little to increase the chances that such a low salary is a much more immediate and real prospect. Additional difficulty comes from the product will in fact be safe. fact that achieving broader reforms that would improve the status and compensation package of inspectors is often very difficult for political, financial, and other reasons. It is important that Production of food is not as uniform as production of goods, and scientific testing needs to be the project provides good quality training to equip inspectors for a more challenging role and, of the whole process, not just a few final products. The scientific basis of the reformed systems ideally, entitle him to an increased salary, if the context allows. Developing the competence of of food safety relies on gathering good evidence (on the whole food chain) and building on individual inspectors can be one of the fundamental aims of the project. In many countries, that through a process of risk analysis to devise the optimum system. The emphasis is on better the inspection system is geared more towards opportunities for rent-seeking then a serious systems leading to safer products, and this is enshrined in the Hazard Analysis Critical Control attempt to tackle the risks arising from unsafe food. The more often an inspector has some Point System (HACCP), which checks where the likely dangers will be in the process and takes justification to go into a business, the greater the opportunity for collecting rents. steps to manage the risks at these points in a highly disciplined and regular system. In most unreformed systems, it is assumed that blanket inspection is the best way of providing The HACCP system relies on the existence and implementation of functional “prerequisite protection but modern thinking and experience has invalidated that model. Comprehensive programs” in place securing a basic level of hygiene and safety. HACCP is a relatively recent inspection of each and every product and establishment is impossible in practice because it introduction in most countries where it is in force, and what are now referred to as “prereq- requires resources to be spread too thinly. Trying to control all products and premises through uisite programs,” fundamental hygiene and safety requirements have long been enough to inspection will usually mean that the highest risk areas are not being tackled, can lead to badly ensure an adequate level of food safety in most contexts. For many small businesses, applying implemented checks (including rent-seeking behaviour of inspectors) and also leads to unnec- these is enough to secure safety of products since their operations are simple and number of essary administrative burdens. inputs limited. Targeting inspection resources on the highest risks where they are likely to have the great- Laboratories are an opportunity and a challenge to the project because they are both important est effect is a major change that will often be difficult to achieve. The basis for food safety and expensive. It is impractical to use them for blanket testing of products and, again, scarce reform of inspections is the application of risk in identifying which establishments and prod- resources need to be targeted where they will be most effective. Depending on distances to ucts are most likely to present the greatest danger. Applying this approach requires designing be covered, it is preferable to have a network of laboratories where some will specialize in par- risk criteria suited to the dangers being tackled; information about the compliance record of ticular tests or products (“reference laboratories”). This is a more effective way of organising businesses; and the likelihood of their continuing compliance. This practice will lead to a risk scientific infrastructure but does not work if it takes three days for the sample to reach it. matrix and data that will allow establishments to be categorized as high, medium, or low risk. The categorization then allows for a plan of inspections that starts to make the process more Laboratories carry out testing to: transparent and targeted. • confirm whether a suspected product is in fact dangerous; and • provide certification of food in a way that will ease external trade and avoid further re- certification procedures in the importing country Unfortunately, the latter is possible only if the domestic laboratory has international accredita- tion and this is usually beyond the resources of developing countries. 16 Investment Climate Food Safety Toolkit Module 1: Introduction and Quick Start Guide 17 Introduction and Quick Start Guide Introduction and Quick Start Guide The question of scientific underpinning and infrastructure is difficult because it relates so a factory where raw materials are transformed into new products) – but it will be difficult to strongly to the country’s capacity at the government and business levels, and also because it bring about in least developed markets with low-capacity operators. may involve very significant involvements. For that reason, reform efforts need to have a clear view of the issues and needs, but be realistic about what can be tackled. In this situation, co- In most developing countries where food safety reform is a relatively new or large undertak- ordination with other donors is essential. ing, traceability requirements should be phased in – focusing first on some priority sectors and commodities, in particular those destined for export. This means that operators’ and regula- The cornerstone in making the food chain work is that of “producer responsibility.” Individuals tors’ capacity can be gradually built, needed investments done, and success in these “flagship” at each stage of the chain are responsible for the safety of the food under their control. Each sectors can later be replicated for other productions. person is accountable to the next party in the chain, who in turn is responsible to the next. If there is choice, there is competition to both buy the best and sell the best and, in this way, the Following the principle of traceability is the ability to recall products when a problem is found. chain reinforces safety. If there is no choice or if there is a very short supply chain, the system This may be a voluntary withdrawal or recall by the producer or it may be mandated by the is less effective, although the principles still apply. control body. Effective traceability records allow the possibility of quickly tracking back from an unsafe product to its source and then tracking forward to see where else that product has been “Producer responsibility” is a major change for many countries, where the existing model is distributed and may pose a danger. Because problems are bound to happen, however robust the outdated “regulator responsibility” model where safety is expected to result from a high the rest of the food safety system, the ability to identify the source of outbreaks (traceability) level of state controls by regulators. This shift toward producer responsibility is both essential and react effectively to them (withdrawals and recalls) is vital. and very difficult to achieve. The businesses themselves also need to understand their new responsibilities and the new dynamics in the market. It is fortunate that these reforms are generally in the commercial Module 7 Implementation, monitoring and evaluation interests of business development, at least in the long run. But in the short term, or for many existing businesses, the costs may outweigh the benefits, if things are not properly designed Although the reformed system is actually putting in place a far stricter and far greater number and planned. The businesses also need to understand their new responsibilities and the new of tests because it works through the internal systems of the producer, what may be visible to dynamics in the market and that at the end of the day, businesses that implemented food the public is an apparent reduction in official testing and inspections. Given that the previous safety principles will be better able to compete in the market race. Applying internal control system was based fundamentally on extensive testing and inspection, this may understandably systems may seem to be an unwelcome overhead but they tend to be excellent business invest- give the impression that the state is abdicating responsibility and that it is a free-for-all for ments. There is a selling job to do with businesses but the emphasis is strong on evidence. It is unscrupulous businesses. It is therefore very important for the project to support public discus- in your interest when managing an project, to encourage more businesses to enter the market sion and communication prior to reform to demonstrate the ways in which the “pre-reform” as food business operators (FBOs). One of the first reforms is to reduce the common barriers to system is not really effective in securing consumer safety (even though data may be sometimes entry that new businesses usually face, in terms of approvals (such as permits and licenses) and difficult to find come by, this is usually possible). examinations before starting up. Experience and research have shown that, in most cases, such entry barriers bear high economic costs in terms of reducing competition and growth, while Practitioners also need to build in the capacity for monitoring and evaluation (M&E) as they delivering only limited benefits in terms of safety. Indeed, checking before start of operation is design and develop the project, rather than M&E being an add-on. Module 7 makes the vital highly deterrent and costly – but says little about how operations will really run. distinction between outputs and outcomes and suggests various outcome measures. Some FBOs dealing with particularly high risk processes or products do still require approval to enter the market (for example, slaughterhouses, meat and dairy processing factories) but, for non high risk FBOs, registration should simply be a matter of informing the authorities that it Module 8 Case studies is about to start a business of a particular kind. That brings the FBO within the system. Checks on its suitability and compliance can be performed later, rather than before business startup, Module 8 has various case studies to inspire and guide. They were selected to reflect experi- which poses a barrier to entry. ences in various regions and give examples of different approaches, models, issues, and chal- lenges covered in this toolkit. The principle of traceability is also needed to make a food chain work. At each link in the chain, the FBO needs to know who supplied specific products and needs to record the next recipient of these products. This “one step down – one step up” approach should not be a particularly burdensome overhead in a well-run business (although it can start to become complicated in 18 Investment Climate Food Safety Toolkit Module 1: Introduction and Quick Start Guide 19 Importance Results and of food Ensuring that the food safety regulatory system works effectively, efficiently, and with the least possible bur- Learning safety from the regulation den is in fact key to private sector development in more ways than one. First, an effective food safety system is FY08–11 to business private Strategy key for access to external markets. Second, a robust and trusted food safety system is key to growing the development Cycle country’s own internal market, and the ability of local firms to position themselves on higher value-added market segments. Even though there are other impor- tant aspects in which food safety impacts private sec- tor growth, these are the most essential in terms of involvement by the Investment Climate Department of Legislation Food safety should is primarily, be basedby on its the nature, relevant a public health existing the World Bank Group. food safety issue, means whichpolicy ofthat the country. the involvement of the Food safety Invest- policy is often ment found Department Climate as a part of an of agricultural the World Bank Group policy, or in this sometimes sphere as may“food seem qufar from obvious. To most, food Access to international markets and safety does not readily appear to be a private sector competitivenesss development or an investment climate issue. In fact, the ability to produce safe food and to be trusted by The existence in a given country of a robust, reliable potential customers is crucial to integration in interna- and effective food safety system, and one that is (a key tional trade for food producers – meaning that food point) recognized as such by foreign countries, is cru- safety systems are a key issue for the private sector. At cial to the realization of this country’s export potential. the same time, food safety regulations can also impose For certain types of food products, having such a sys- a heavy administrative burden on businesses. There are tem is a requirement for access to certain markets (for thus several perspectives from which food safety is a example, the EU). In all cases, whichever the product, highly relevant issue to the Investment Climate Depart- not having such a system means a serious competitive ment of the World Bank Group. disadvantage for a country’s producers, who will gener- Annexes 1: Justification and Scope of World Bank Group Involvement 21 ally be confined to the lowest-profit markets, lowest-margin types of products, and mostly excluded from international The priority level of food safety regulation improvements for the private sector thus to some extent depend on the Results Internaland market Creating trust enables local growers, herders, proces- sors, and distributors to reap the benefits of invest- supply chains. type of products to be exported (animal or plant) and the target markets. But increasingly, even for lower-risk products, Learning from development and the ments in safety and quality. In this way, they not only generate growth and create better jobs, but they also This is an essential development issue because many devel- oping countries and emerging markets have considerable, not having appropriately trusted food safety systems in the country means that exporters are shut out of the main supply FY08–11 Strategy growth prepare themselves better to participate in internation- al markets. Cycle but incompletely realized, potential for agricultural or animal chains that lead to the major wholesalers and retailers, and production and transformation thereof into processed food confined to regional markets, with lower prices. Weak food Well-designed food safety regulatory systems, if control products. In many of these countries, however, the food safe- safety systems also mean that processing of any kind will not and implementation are adapted to the development ty system suffers from one or several weaknesses: take place in the country. Instead, only raw foodstuffs will be level and properly risk-based, can deliver improved exported to be processed and conditioned elsewhere, thus An unreliable food safety system is not only harmful to safety and increased trust while generally decreasing • Requirements and norms are not in line with taking a large portion of the potential value-added out of a country’s ability to access and compete on world mar- administrative burden. In most cases, such systems can internationally accepted practices. the country. kets, it canshould Legislation also seriously be basedburden on the firms in country, relevant existingand facilitate innovation and technology adoption in terms foodharm also safetythe development policy of the of the country. internal Food market. safety policy of products and processes. This is because effective sys- • Laboratory testing and monitoring of animals and is often found as a part of an agricultural policy, or tems rely only to a small extent on permits and licenses foodstuffs is unreliable. sometimes food Ineffective as “food quregulations can also prove to be safety or mandatory certification, and because inspections burdensome to business. For example, in many coun- and controls are made proportional to risk. Thus, im- • Inspections and controls are poorly planned, tries there are frequent checks and inspections without proving food safety can also lead to an actual decrease implemented, and coordinated. relation to the risk level of the business operation and/ in the overall regulatory burden for many businesses. or numerous permits and licensing requirements. Inef- As a result, these countries’ food safety regulatory systems fective food safety regulations can often discourage In addition to the main economic benefits provided by are seen by potential customers as not offering acceptable the introduction of new products and technologies be- improved access to international markets, increased guarantees. For more hazardous types of goods (for example, cause of outdated and highly prescriptive requirements. differentiation on the internal market and, in many foods of animal origin) and the most demanding markets (for All this means that, even without taking into account cases, decreased administrative barriers to innovation example, the EU) it means exporters from these countries the impact on exports (or potential exports) these regu- and growth, improved food safety regulations can de- may be entirely barred from access, or be allowed access to a latory systems can create real barriers to growth. liver some additional positive outcomes. For instance, narrow range of goods. even though the link is not always direct, improved In addition, ineffective food safety regulations can slow food safety in a country can bring a positive contribu- For less hazardous goods such as rice, weak food safety sys- down or hamper the development of internal markets in tion to the tourism industry by improving this country’s tems may not mean access to the richest markets is entirely ways that harm countries’ long-term competitiveness. image, and making it more attractive for “mainstream” impossible, but it is made more difficult, and with a worsened Indeed, if food safety regulation is not seen by domes- and higher-income tourists. Also, improved food safety competitive position. Producers from these “low food safe- tic consumers as reliable, they will be reluctant to spend means a significant (and in some case major) reduction ty” countries will usually only be able to sell their products more for safer, higher value-added foods – and/or they in foodborne diseases, reducing health costs, loss of through middlemen that blend them with other products will only be happy to spend more on imported foods or lives, and disabilities. This takes away a major source (and do so in establishments located in more reliable coun- foreign brands, which they see as more reliable than lo- of insecurity for the more vulnerable households and tries in terms of food safety), or as lowest grade, lowest price cal ones. Alternatively, consumers may have more trust improves overall productivity. These health benefits are goods. In fisheries, the lack of a reliable food safety system in local producers because of “traditions.” In all cases, also a major contributor to economic growth. often means that natural resources are harvested by others’ this means there is no incentive for domestic producers fleets, with only minimal income left in the country, if any (for to invest in improving the safety level of their foods, as example, the current situation in Guinea). they will neither gain market share nor be able to de- mand higher prices, given that consumers will not trust Even major markets, to which exporters from “low food safe- that such foods are indeed safer. As a result, domestic ty” countries have traditionally had access, such as the Rus- firms will be less likely to invest in food safety improve- sian Federation, are now gradually tightening their require- ments, which will in turn make their international com- ments. This means the position of exporters from countries petitiveness worse in the long run. in Central Asia, for example, becomes even more critically dependent on improvements in these countries’ food safety systems. 22 Investment Climate Food Safety Toolkit Annexes 1: Justification and Scope of World Bank Group Involvement 23 Purpose of the Toolkit The purpose of this Investment Climate Food Safety Toolkit is to provide reformers, project teams supporting reforms, and policymakers with an overview of the principles of food safety reform, the primary objectives, key instruments and critical success factors, as well as provide a number of specific examples and case studies. The Toolkit is aimed at supporting work on food safety and inspections reform to support development of the agribusiness sector. This toolkit may also be used as a guidance document for external audiences, such as partners and stakeholders in reform programs, so that they can understand the scope of food safety reform, the importance of collaboration of public and private sectors, the value of education of all involved parties, the importance of transparency, and the strength of the market-driven approach. This toolkit focuses on the overall architecture of food safety regulation and answers the fol- lowing questions: • What does it entail? • What other components form the “food safety system” and are essential for it to work ef- fectively? • What are the key elements of best practice (and what elements are disputed)? • What can interventions by the Investment Climate Department of the World Bank Group focus on (and achieve)? This toolkit emphasizes the roles of all players in the food chain, including food business opera- tors and states providing the regulatory and control environment. The Toolkit emphasizes solutions and approaches that are realistic, and conducive to private sector development and broad-based, inclusive growth. At the same time it warns against potential pitfalls, including the danger of “gold plating” and the introduction of regulatory requirements that are not commensurate to the level of development of the country or of its businesses. Finally, it should be noted that the Toolkit does not attempt to provide full, in-depth prescrip- tions on all aspects of food safety regulations, as this would both make the Toolkit unwieldy and duplicate information readily available in public documents. Module 1: Introduction and Quick Start Guide 25 Credits Photography: BigStockPhoto (cover page), Arindam Banerjee (page 5), YongXin Zhang (page 21), Kaulin Boris Georgievich (page 22) in partnership with: