Summary Document for Living Modified Organisms
Intended for Direct Use as Food or Feed, or for Processing
Handling, Transport, Packaging and Identification
Background
The Cartagena Protocol on Biosafety (the "Protocol") contains specific procedures for living modified organisms (LMOs) intended for direct use as food, feed, or for processing. Referred to in this paper as "commodities," these LMOs are excluded from the more stringent Advance Informed Agreement procedures of the Protocol because they are not intended for intentional introduction into the environment and, therefore, pose little or no risk to biological diversity. However, two other provisions of the Protocol apply specifically to commodities:
1. Article 11 provides for separate, simplified administrative provisions for decision-making and approvals, utilizing the Biosafety Clearing-House for information-sharing; and
2. Article 18 contains provisions for handling, transport, packaging and identification, including specific documentation requirements for the transport of commodities.
In particular, Article 18.2(a) requires Parties to identify commodity shipments through accompanying documentation indicating its contents “may contain” LMOs not intended for release into the environment and a contact point for further information. Parties to the Protocol are to take a decision within two years after entry into force of the Protocol on detailed requirements for this purpose, including specification of their identity and any unique identification.
The objective of the Protocol, to ensure "the safe transfer, handling and use of LMOs that may have adverse effects on the conservation and sustainable use of biological diversity," must guide decisions on these documentation provisions. Consequently, discussions by the Intergovernmental Committee for the Cartagena Protocol (ICCP) should not focus on cultural preferences or consumer choice but on the most efficient and equitable way to implement the limited requirements of Article 18.2(a). Anything more will not only overstep the boundaries of the Protocol, but could also create artificial barriers to trade and food distribution worldwide.
Throughout Protocol negotiations and subsequent discussions, some parties have attempted to focus attention on the feasibility of segregating and differentiating among bulk commodities. While "segregation" and "traceability" have become topics of discussion in various global fora, the Protocol has no mandate to address these issues. Furthermore, when the ICCP meets in December to consider implementation of Article 18.2(a), the context will remain the treatment of commodities within the existing, bulk delivery system, rather than the more costly specialty markets emerging in some regions for LMO-free grains and oilseeds.
There has been a lack of understanding by parties about the existing commodity system. The Global Industry Coalition (GIC) seeks in this paper to address misperceptions about the fundamentals of bulk commodities and outline the limitations of the existing system. Furthermore, the GIC will attempt to differentiate between bulk commodities and other specialty grains marketed through low-volume, higher cost processes outside the bulk commodity system. These processes, which are covered in greater detail below, include: efforts to segregate LMOs from non-LMOs generally; and efforts to distinguish throughout handling among specific LMO events.
Definitions
What are "commodities?" The term commodities usually refers to "undifferentiated, widely traded raw materials and agricultural products that are traded principally on the basis of price." Agricultural products impacted by the Protocol are grains, such as corn, and oilseeds, such as soybeans, produced in huge volumes around the world, and which are handled and delivered in bulk delivery systems. From the perspective of both producers and consumers of these goods, the strength of the existing high-volume, low-margin commodity system lies precisely in that it does not discriminate between lots of grain based on variety or place of origin. This is what allows exporters to provide a steady supply of low cost grains and oil seeds to countries around the world -- through commerce, international aid and other means.
Grains and oilseeds enhanced through modern biotechnology to exhibit special agronomic traits such as pest resistance or herbicide tolerance are identical to their non-LMO counterparts in all other respects. As a result, they are handled on a commodity scale and are commingled with non-LMO grains. Often, commingling occurs before harvest and accelerates as commodities move from the farm to country elevators to river terminals and on to export or processing facilities. The grain is graded, and therefore priced, at the export elevator and usually loaded onto ships that carry 50,000 tons (2 million bushels) to destinations around the world. Ocean-going vessels tend to load at one port and head straight to the destination.
Aside from the benefits associated with providing low-cost, high volume goods through the existing system, the current mechanisms for commercial transactions on the commodity scale are also well established and understood by all involved. Often, commodity transport involves several parties -- such as shippers, charterers, and vessel owners -- in addition to the buyer and seller, and these parties may have no involvement in the transaction itself. Therefore, established processes throughout transport result in greater efficiency, lower transaction costs and fewer incidents of spoilage due to delay.
What do we mean by "segregation?" When the term "segregation" is used in the context of commodity handling and distribution, it implies that the existing system has the capacity to separate LMOs from non-LMOs. At a commodity scale, this can not be done, as commingling occurs throughout handling -- from the farm to the end user. In this vein, segregation suggests the creation of a completely separate marketing and delivery system to separate out non-LMO grain streams within the traditional bulk delivery system. While not impossible, this requires significant investments in new infrastructure and discourages efficiencies by disrupting the economies-of-scale in the existing system. It should be made clear, however, that specific LMO events within a shipment can not be distinguished and tracked within a segregated system. This could only be achieved through special contracting for identity preservation. Furthermore, the Protocol does not call for or imply the need for such measures.
What do we mean by "identity preservation" and "traceability?" On a much smaller scale, outside the bulk commodity system, more expensive specialty systems have developed which permit distinct handling for grains with special traits -- white corn vs. yellow corn, for example -- to ensure that the special qualities are preserved. Referred to as "identity-preservation," these systems operate on a tightly controlled basis from the farmer to the end user. Volumes in these specialty systems are measured in thousands of bushels rather than millions; the grain moves in bins or bags rather than in bulk; and facilities at each step of the way are cleaned and isolated to minimize commingling with other varieties.
Regardless of the amount of care taken, some amount of commingling inevitably occurs during transport and the parties to the transaction must agree in advance to allowable thresholds, or tolerances, for introduction of other materials. This process of identity preservation, however, allows the sources of grains to be traced with some margin of error from the time the grower purchases seed through the shipping and handling system to the end user, referred to as "traceability." According to most projections, there would be a significant price premium for identity preserved grains, as it would be impossible to accommodate demand at the same high level of efficiency and low-cost as with bulk commodities. However, as the market for such specialty products is too small to accurately quantify, current cost estimates are rough extrapolations at best and may, in fact, be very conservative figures.
Constraints on Specialty Markets
To implement a system of segregation, producers must move outside of the existing commodity system toward specialty markets, as noted above. This would require significant investments by producers and shippers alike, which would result in higher prices for consumers. Identity preservation is far more complex and would involve significantly greater infrastructure and logistical care. As such, attempts to implement identify preservation at an event specific level would have logistical and cost factors of exponential proportions to those facing proponents of segregation.
Conclusion
The provisions of Article 18.2(a) are focused on identifying commodity shipments which may contain LMOs generally, without reference to specific LMO events. However, for importers interested in knowing which events may be included in a shipment, the Biosafety Clearing-House will be the resource for determining those events produced in the country of export. This will allow importers access to all relevant information available within the existing commodity structure without impeding the efficiency of the bulk delivery system. As specialty markets emerge outside of the commodity system, the market remains the most efficient mechanism to dictate appropriate structures for the careful handling, transport and distribution of such products. The preferences of consumers will determine the threshold for LMO content in these specialty shipments based on their willingness to pay the associated premium for such goods.
