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### Viewing cable 03ZAGREB1451, BIOTECH LEGISLATION ON THE MOVE IN CROATIA

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
03ZAGREB1451 | 2003-06-24 12:44 | 2011-08-25 00:00 | UNCLASSIFIED | Embassy Zagreb

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS  ZAGREB 001451

    SIPDIS

    SENSITIVE BUT UNCLASSIFIED
    STATE PASS USTR

    STATE FOR EB/MTA/ATP

    USDA FOR FAS/ITP/SHEIKH, FAS/ITP/EAMED, FAS/ITP/OFSTS

    USEU BRUSSELS FOR AGRICULTURE

    VIENNA FOR FAS PSPENCER

    BUDAPEST FOR ENVIRO HUB

    E.O. 12958: N/A
    TAGS: ETRD EAGR TBIO HR
    SUBJECT: BIOTECH LEGISLATION ON THE MOVE IN CROATIA

    REF:A) 02 ZAGREB 2102
    B) 02 ZAGREB 2253
    C) 02 ZAGREB 2576
    D) 02 ZAGREB 2977
    E) ZAGREB 1061

    Summary
    -------

    ¶1.  (SBU) Over the last several months in Croatia,
    several pieces of legislation have been introduced which
    seek to regulate the import and cultivation of biotech
    crops and foods.  The embassy and FAS Vienna have
    engaged the government on a number of fronts to stop
     to stop
    legislation that, in the case of one parliamentary
    proposal, would temporarily ban GM products.  We are
    also trying to soften restrictive measures that are
    contained in two pieces of proposed legislation (the
    Food Law and Law on Protection of Nature).  While the
    government has discarded its earlier intention to ban
    the import and sale of biotech products, it feels,
    probably correctly, that for any law to have chance of
    passing it must follow EU's outline for traceability and
    labeling.  In the meantime, the government and importers
    appear to be maintaining an "informal" ban on GMOs,
    which is costing U.S. exporters $12-$15 million a year
    in lost soybean sales.  End Summary.

    Temporary Ban Revisited
    -----------------------

    ¶2.  (SBU) In early May, we learned that two draft bans
    on GMOs had appeared on the parliamentary agenda.  Both
    drafts were submitted by political parties, not the
    government.  One, a total, indefinite ban on GMOs, was
    proposed by the HSP -- Croatian Party of Rights, a tiny
    far-right party.  Conventional wisdom was that party's
    marginal status would preclude the bill from getting
    serious consideration.  The second bill, which called
    for a total ban on the import and sale of GMOs until
    legislation regulating its planting, distribution and
    sale were in place, was introduced by the HSS - the
    Croatian Peasants Party -- the second largest party in
    the ruling coalition.

    ¶3.  (SBU) Drawing heavily upon the points used by the
    embassy the first time a ban on GMOs was proposed in
    Fall 2001, we urgently demarched Marijana Petir,
    Spokesperson of the HSS and prominent environmental
    activist (points emailed to EUR/SCE).  The HSP bill was
    voted down.  The HSS bill was voted on and passed its
    first reading, but was taken off of "urgent procedure" -
    - which would have meant that it would have become law
    immediately -- and put on the shelf awaiting a second
    reading.  While this allows the HSS to have a campaign
    issue, in reality the bill is unlikely to come up for a
    second reading before parliamentary elections, expected
    in the fall.

    We'll Protect You!
    ------------------

    ¶4.  (SBU) Last year the government told the public that
    it would, before the end of the year, pass legislation
    to regulate the import and sale of GMOs.  The government
    told us that it felt the need to address the concerns of
    consumers, meet its obligations to bring its laws into
    line with EU directives, and divert calls for an
    outright ban.  A number of legislative initiatives

    dealing with consumer protection, food, and
    environmental issues are under consideration and they
    all touch upon GMOs in some way.  While the government
    did not make its 2002 deadline for biotech legislation,
    it is intent on getting these laws passed by the end of
    the current legislative year, partly to make progress
    with EU accession and partly to have something to show
    the electorate in the Fall (the most likely time for
    parliamentary elections).

    Consumer Protection Law
    -----------------------

    ¶5.  (SBU) Last fall, we commented on GM-labeling
    requirements in the draft consumer protection law (ref
    A).  Assistant Minister Spevec assured the Ambassador,
    during a meeting with Minister of Economy Jurcic, that
    she had reviewed the law, agreed with our assessment
    that the labeling requirements went beyond even what the
    EU required, and she had ordered the language be deleted
    (ref B).

    ¶6.  (SBU) The legislation finally passed parliament on
    June 4th.  Our preliminary review of the law indicates
    that the Ministry of Economy hedged its position by
    deleting all mention of "genetically modified" products.
    Instead, the legislation requires manufacturers to
    provide consumers with information about the existence
    of "transformed" products, including transformed
    ingredients and supplements, as well as the type of
    transformation, in accordance with "subsequent
    regulation."  It is unclear whether this is a reference
    to the food law (which is generally considered to be the
    main legislation on labeling), or subsequent
    implementing regulations for the consumer protection
    law.

    Law on Protection of Nature
    ---------------------------

    ¶7.  (U) This law has passed its first reading and is
    undergoing changes in committee before getting a second
    reading, probably late in June.  We are in the process
    of preparing comments for the Ministry of Environment,
    which is in charge of drafting the law (we have sought
    input from USEU and USDA/W).  We had discussed the law
    in general last fall during the visit of biotech speaker
    Lisa Katic (ref c).  The draft legislation would require
    licenses for the import, transport and introduction into
    the environment, and placing into the market of GMO
    products, principally seed.  Regulation of food and feed
    is specifically deferred to the food law, and GM drugs
    to a future law.

    ¶8.  (SBU) Labeling of GM seeds would be required, which
    may not be an issue for the seed companies, since GM
    seed usually attracts a higher price, and is a selling
    point for those that wish to purchase it.

    ¶9.  (SBU) Encouragingly, GM seed imports could be
    approved by a shortened procedure if there is enough
    data and experience with release of the product into the
    environment.  Hopefully, this would mean that products
    already approved in the EU (and we would argue, in the
    U.S.) would be quickly approved in Croatia as well.

    Food Law
    --------

    ¶10.  (SBU) We regularly raise the issue of biotechnology
    in our discussions with the Ministry of Agriculture,

    including in a discussion between the Ambassador and the
    Minister ref D).  When we learned that the draft law was
    soon to be introduced into Parliament, we sent
    preliminary comments on June 4 to the Ministries of
    Agriculture (principal sponsor of the bill), Economy,
    Foreign Affairs, Environment and the advisor to the
    Deputy Prime Minister, and expanded comments June 16th.
    The provisions of the law concerning GMO (covered as a
    "novel food" in the draft) and our comments were:

    -- Special permits, issued by Ministry of Agriculture,
    will be required to put GM food and feed products on
    market.  The permit should be issued based on a
    scientific opinion of a biotech committee in the new
    food agency (the details of this committee will be
    spelled out by the Minister of Health with consent of
    the Minister of Agriculture in future regulations).

    US Embassy Comment: Any "committee" system should be
    transparent.  It is important that non-scientific
    prejudices not be allowed to block applications.  We
    encourage the inclusion of industry representative on
    this committee.

    -- Novel food can be banned from market entry if it is
    scientifically determined to harm human health.  Novel
    foods may also be temporarily banned if there is
    scientific uncertainty (decision by the Ministry of
    Health with consent the Ministry of Agriculture).

    U.S. Embassy Comment: We are concerned that this could
    lead to the non-scientific application of the so-called
    "precautionary principle" for novel foods.  There is
    "scientific uncertainty" in even the most respected and
    widely applied food safety rules.  The degree of risk is
    what matters, not the fact that risk is present.  All
    foods, additives, processes, etc., contain an element of
    risk.  Why are novel foods being treated under a
    separate regulatory framework?  (Please also see the WTO
    SPS Agreement, Article 5, Paragraphs 1 and 2, to
    determine Croatia's international obligations on this
    point.)

    -- Novel foods will have to have a label that states
    specific information that informs the consumer about
    differences of novel foods comparing to standard food,
    and about the process of change.  Food containing GMOs
    must be labeled with "this product contains GMO."  Foods
    that derive from GMOs but that do not contain GMOs must
    be labeled as "this product derives from GMOs."

    U.S. Embassy Comment: We note that the proposed labeling
    does not convey any health related information.  The
    label will essentially be ideologically-based and will
    not provide consumers with any science-based conclusions
    about the product.
    The labeling provisions will also be technically
    impossible to enforce and will be open to fraud.  For
    example, how will Croatian authorities know if soybean
    oil from Brazil was made from GM soya?  There is no
    reliable scientific method to test soybean oil to
    determine if it has been made from GM plants.  Also, it
    is unclear what the threshold level will be for
    labeling.

    Labeling of all foods that are made with GM-derived
    vitamin supplements, GM-derived enzymes (cheese), GM-
    yeasts (beer), etc., is also not feasible and will and
    result in many unintentional violations.  In many
    instances, there is no scientific way of proving whether

    foods are derived from GM-plants or bacteria.
    Enforcement of the law will necessarily be very
    selective and aimed at imported products.

    However, we note that exempting domestic manufacturers
    from labeling because they are currently widely used or
    because non-GM varieties are not available (as has been
    proposed recently in Parliament) could be a violation of
    the WTO's principle of national treatment.

    The U.S. Government believes that labeling should convey
    material facts.  We are concerned that requiring
    labeling when there is no material difference in the
    product will lead to discrimination.  We support
    voluntary labeling (such as the "organic" label used in
    the United States, or "GMO-free") when the manufacturer
    believes that the customer puts a premium on that
    characteristic.

    -- Feed containing GMO would have to be labeled
    accordingly, but details will be prescribed by the
    Ministry of Agriculture.

    Embassy comment: similar to comment for food.

    -- Penalties for the violation of the law are from
    100,000 to 500,000 Kn for a company and 5,000 to 10,000
    Kn for any responsible individual or employee.  (Note:
    currently the exchange rate is approximately 6.5 kunas
    to the dollar.)

    U.S. Embassy Comment: These are the highest penalties
    contained in the draft law.  Given the fact that other
    food safety issues are actually harming consumer health
    in Croatia (e.g., trichinosis, lysteria, etc.) it is
    interesting that other violations of the law do not
    result in such strong sanctions.

    ¶11.  (SBU) We spoke to Assistant Minister Miroslav Bozic
    shortly after we sent the Ministry preliminary comments.
    He said he generally agreed with our comments, except in
    the areas of labeling and testing.  He believed that
    consumers demand labeling, and fraud in declaration can
    be prohibited.  Bozic appealed for understanding.  He
    noted that Minister Pankretic (who is a member of the
    HSS -- the same party that proposed a ban) has withstood
    considerable pressure from his party in allowing the
    food law to be drafted in a way that "opens the doors to
    GMOs."  Bozic reported that he had appeared on
    television the night before to defend the food law, and
    had to rebut ridiculous arguments such as "why do we
    need GMOs?"

    ¶12.  (SBU) In this conversation with A/M Bozic, we noted
    that while labeling sounded reasonable in theory, in
    practice, in other European countries, labeling had led
    to a lessening of consumer choice, since "environmental"
    NGOs had frightened grocers out of carrying GM products.
    In Croatia, importers of soy products had told us that
    they were not buying US soy beans, because of the fear
    of being stigmatized, yet were buying Argentinean and
    Brazilian soy, much of which was probably GM, despite
    certificates to the contrary (see para 15).

    Media Announces Victory for GMOs
    ----------------------------------

    ¶13.  (SBU) While the Embassy has a number of concerns
    with the proposed Food Law, the press has proclaimed
    that the legislation will "open the doors to GMOS."
    This has caused a gnashing of teeth from the more

    strident NGOs.  A producers' NGO, the Community of
    Farmers Assembly from Slavonia and Baranja (ZUSSB), held
    a press conference last week to express their shock at
    Government decision to allow import of GM food.  They
    invited consumers not to buy such products and even to
    go a step further by "throwing" such products off the
    shelves.

    But Victory not in Sight
    ------------------------

    ¶14.  (U) Prominent environmental NGO, Zelena Acija
    (a.k.a. Green Action, which is associated with the U.S.
    NGO Earth First), also published a "black list," "white
    list" and "green list" for foods.  The "black" list is
    for companies that could not or would not certify that
    they did not use or import GMOs; the "white" list is of
    companies that expressed a desire to be GM-free but
    could not certify all their sources; and, on the "green"
    list are companies that feel they could certify their
    GM-free status.  This is the second such attempt by
    Zelena Acija to create such a list.  In a visit last
    year to the food industry committee of the Croatian
    Chamber of Economy, Zelena Akcija's activities were
    cited as a factor in the Croatian industry's fear and
    distrust of biotech.

    ¶15.  (SBU)_ As mentioned above, a major food and feed
    importer told us that it had stopped importing US soy
    products as part of an "informal ban" on U.S. products
    which could contain GMOs.  This "informal ban" was also
    acknowledged by a Croatian public health official.
    While the Croatian official maintained that soy imports
    from Brazil (the leading source country for soya for
    Croatia) were tested for GMOs in Slovenia, the Croatia
    importer told us that there was no testing being done;
    he and his counterparts simply requested and got "GM-
    free" certificates from their suppliers. U.S. soybean
    and soy meal exports to Croatia went from $12-$15
    million annually to zero today.  The decline mirrors the
    adoption of GM-soybeans in the United States.

    ¶16.  (U) Prominent weekly magazine Globus conducted a
    poll of 600 respondents to determine the attitudes of
    Croatians towards GMOs.  66 percent said they would not
    accept GMOs in Croatia, and 16 percent said they would
    not mind.  60 percent feared that such food would not be
    properly labeled and only 15 percent said they would buy
    it.

    Mission Outreach
    ----------------

    ¶17.  (SBU) The Embassy and USDA/Vienna are working
    together to change those numbers, by countering the
    grotesque misinformation campaign against biotech.  As
    mentioned earlier, the Embassy hosted a roundtable with
    a biotech speaker from the grocery industry last fall.
    The speaker also visited associations and government
    officials to answer often-hostile questions.  We sent a
    group of four parliamentarians (two of them from the
    HSS) on a biotech study tour of the U.S. in March (ref
    E).  These parliamentarians, all from farm areas, came
    back more inclined to believe our assurances that the
    environmental and health risks of biotech are minimal.
    We plan a repeat for next year, focusing on some of the
    people most opposed to biotech, including the president
    of Zelena Akcija.

    ¶18.  (SBU) In February, USDA/Vienna brought in one of
    the FDA's chief regulators, Dr. Jim Maryanski, to give a

    lecture at a biotech conference and participate in a
    lunch for regulators and trade groups.  This month,
    USDA/Vienna sponsored Richard Sellers from the American
    Feed Industry to speak at the annual Krmiva feed show --
    the largest event of this type in the region.  Mr.
    Sellers met with a number of industry representatives
    and described how the U.S. feed industry has taken
    advantage of the current generation of GMO crops.  The
    Embassy currently seeks funding to help a local biotech
    ally (the head of the Croatian Association of Bio-
    geneticists and a passionate critic of "junk science")
    produce a home-grown pro-biotech public information
    pamphlet.

    Comment
    -------

    ¶19.  (SBU) It is tempting to look at the headlines
    decrying the "opening of Croatia to GMOs" and declare
    victory.  Unfortunately, it would be illusory.  It is
    difficult to see a breakthrough soon.  The chances of
    Croatia passing laws that depart from EU norms on GM
    labeling and licensing are negligible.  If the current
    proposed laws pass, most if not all grocers and food
    producers may well be afraid to source and sell biotech
    products because of public perceptions and threats of
    NGO protests in their stores.  And the status quo -- no
    restrictions on paper yet an informal but effective
    shunning of U.S. products  is hurting U.S. farm
    exports.

    Rossin
    NNNN

`