Legislators of all parties, amid a great deal of hubbub, were determined to get the recent round of amendments to the Act Governing Food Safety and Sanitation (食品安全衛生管理法) through a third reading and passed into law in time for the elections on Saturday last week, seeking to give the impression that lawmakers have the public interest as their top priority. However, the amended law still contains three hidden doors — two safety hatches, an escape hatch and a closed door.
The first thing to realize is that business and commercial activities are governed by rational economic motives. People might risk their necks to make a profit, but no one is interested in loss-making deals.
Laws governing business can only be effective if the penalties they impose for shady deals cause manufacturers to lose money or go bankrupt. That is why the Cabinet keeps stressing that penalties have to be heavy, on-target and speedy.
While the recently approved amendments might seem to achieve these aims, in fact there are three clever tricks hidden among them.
The first safety hatch has to do with the upper limit for fines that can be imposed. If food products lead to people dying, an individual can be fined NT$200 million (US$6.47 million) and a company NT$2 billion. These are the maximum fines, not the minimum. A fine of NT$2 billion will not cause a company as big as Ting Hsin International Group (頂新國際集團) to go bankrupt, and besides, while Ting Hsin’s products could cause cancer or other illnesses, it would be too difficult to prove that they caused any deaths.
The second safety hatch is the criminal or administrative penalties that prosecutors and administrative departments respectively can impose in pursuit of ill-gotten profits.
This is a key point, because such penalties are supposed to get delinquent manufacturers to disgorge all their ill-gotten profits. Only if they are made to suffer a loss will they be restrained from engaging in shady practices.
However, the newly amended law authorizes the Cabinet to draw up a way of estimating and valuating unlawful assets, and this is a complete blank check.
Leaving aside the issue of whether the Cabinet will once again let offenders off the hook, it has built in a “hidden room” by setting an upper limit for pursuing payment that is binding upon administrative departments.
Pursuing payment of fines is clearly the prerogative of prosecutors, and should be judged according to the particular features of individual cases.
That being so, what grounds does the Cabinet have for limiting prosecutors’ options in advance?
There is also an escape hatch. The government might want to pursue ill-gotten gains, but businesspeople are not idiots. They are sure to think of ways to conceal their capital, launder money and strip assets.
The Chinese Nationalist Party (KMT) caucus insisted on adding a clause to article 49-1 of the act saying that its limits do not apply to well-meaning third parties who obtain goods with equivalent consideration. This is plainly an escape clause.
To prevent lawbreakers from profiting from their crimes, countries all over the world will do everything in their power to pursue every cent of unlawful gains. However, the added clause once again gives “well-meaning third parties” space to do what they want, although they might just be a manufacturer’s left and right hands.
Consider how Ting Hsin took the money it made from selling adulterated oil and reinvested it in Taiwan Star Telecom Corp, and how Taiwan Star then used it to buy cellphones with which to promote their services. This kind of trick is not terribly difficult to perform.
There is a further abstract concept that has had the Ministry of Justice and the Judicial Yuan arguing for ages, namely whether the actors in such crimes are individuals or legal entities. Judges can exercise discretion in this regard, and this has a direct influence on the size of fines imposed.
Furthermore, administrative departments can also get embroiled with judicial ones, with both of them imposing fines to pursue ill-gotten gains — administrative fines in the case of administrative departments and criminal fines in the case of judicial ones.
Priority is given to compensating consumers who have been affected by food safety incidents. The simplest and most convenient way to achieve this would be to apply directly to the food safety fund for compensation. That would save consumers from having to go through the pain of lengthy litigation.
However, this legal amendment clearly still requires members of the public to take the long way around by going to the courts to sue the manufacturers. Even if the burden of proof is reversed, this kind of arrangement a closed door to the public’s rights and convenience.
These three hidden doors give the public no cause to be optimistic about the effectiveness of the changes to the act.
Kao Jung-chih is a lawyer and chief executive of the Judicial Reform Foundation.
Translated by Julian Clegg
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