Staffdel Nelson's Meetings on Melamine in Hong Kong

UNCLAS SECTION 01 OF 02 HONG KONG 002307

TOFAS 15
SIPDIS

STATE FOR EAP/CM, STATE PASS CPSC RICHARD O'BRIEN

E.O. 12958: N/A
TAGS: ECON EFIN EINV ETRD HK
SUBJECT: Staffdel Nelson's Meetings on Melamine in Hong Kong

Ref: Hong Kong 2211


1. Summary: A U.S. House of Representatives staff delegation from
the Energy and Commerce Committee traveled to Hong Kong in early
December to investigate melamine contamination in Chinese food
products. The U.S. Consulate General arranged meetings with Hong
Kong government (HKG) officials, legislative councilors, food
manufacturing and retailing representatives, and with officials from
other consulates general affected by the melamine issue. From
groups and individuals, the Staffdel heard nearly unanimous praise
for the HKG's response to the problem, including its rapid
establishment of a technically justifiable tolerance level of 1
part per million (ppm). Interlocutors agreed that Beijing is
serious about food safety but may lack the institutional capability
to ensure compliance throughout the country. They said the
mainland's practice of maintaining stricter food safety standards
for exported versus domestically consumed foods presents serious
enforcement issues for manufacturers and food inspectors. End
Summary.

HKG's Response to Melamine Contamination
--------------


2. House Energy and Commerce Committee Senior Investigator David
Nelson and Investigative Counsel Krista Rosenthall met with Deputy
Secretary for Food and Health Olivia Nip, Government Chemist Dr. T.

L. Ting, Assistant Director of the Food and Environmental Hygiene
Department Dr. S. Y. Lee, and Assistant Secretary of the Food and
Health Bureau James Chan, to better understand how the HKG handled
the discovery of melamine in Chinese dairy products and animal feed.
The HKG swiftly responded to public health concerns by introducing
a series of measures, including setting a melamine standard for
food, vigorously testing a wide range of food categories, and
proposing legal amendments to allow mandatory food recalls.


3. Nip noted that the HKG referred to tolerable daily intake
standards of selected countries, including the US, in setting Hong
Kong's maximum standard for melamine in food (2.5 ppm) and infant
products (1 ppm). With the establishment of such a standard, the
Center for Food Safety is legally able to prosecute any violations.



4. According to Dr. Ting, there are 10 laboratories in Hong Kong
approved to test for melamine concentration in food. The testing
methods used are based on those adopted by the U.S. Food and Drug
Administration. Dr. Ting indicated that based on extensive testing
since the outbreak, the HKG believes that melamine contamination is
now fully under control.

Legislators Praise HKG Response, This Time
--------------


5. The Staffdel met separately with Legislator Fred Li, Chairman of
the Panel on Food Safety and Environmental Hygiene, and Legislator
Tommy Cheung, a member of the Liberal Party who represents the
catering constituency. Li commented that the HKG has generally
tried to avoid unnecessarily embarrassing Beijing government in its
handling of food incidents, and suggested that the HKG could
generally do a better job as a gatekeeper for food safety in Hong
Kong. Monitoring the food supply from China is a huge challenge for
the HKG, but he praised the HKG's handling of melamine concerns. Li
expected that the proposed mandatory food recall authority for FEHD
will be passed by the Legislative Council with some manageable
amendments.


6. Li indicated that his panel may plan a fact-finding mission to
the U.S. to learn about the U.S. food regulatory system. The
Consulate's ATO Director offered to help arrange meetings and visits
to various food regulatory agencies if such a trip were to take
place.


7. Tommy Cheung of the Liberal (pro-business) Party said that there
was little more the HKG could do to address public concerns about
melamine. He said the new HKG standard will increase the cost
burden on the trade, but may not protect consumers very well. The
problem could be solved effectively only at the source, he said.
Given Hong Kong's immense reliance on food from China, it is
impossible for Hong Kong to send inspectors up to China to fully
monitor the food supply. While he believed Beijing is determined to
solve the melamine issue, Cheung said this may take one year's time
given the large size of the Chinese food industry.


8. Cheung also touched on nutrition labeling. He said Consulate

HONG KONG 00002307 002 OF 002


General representatives should avail themselves of every opportunity
to raise their concern over the impending Hong Kong nutrition
labeling requirements to senior government officials, including the
Chief Executive, Chief Secretary and Financial Secretary.

Industry Reps Worry About the Next Crisis
--------------


9. In an industry round-table discussion, the Staffdel gained
insight into how a variety of importers, manufacturers, and
retailers in Hong Kong are dealing with the threat of melamine
contamination. Milk processors have already set up facilities for
in-house melamine testing, while major retailers are taking
proactive steps to ensure their products comply with Hong Kong's new
melamine standard. Products containing any milk ingredients and/or
milk derivatives sourced from China must provide an independent
laboratory report on melamine concentration for every production
lot. This measure also applies to eggs exported from China and to
any other products that have been confirmed as exceeding the Hong
Kong melamine standard.


10. Industry representatives unanimously agreed that the HKG
reacted swiftly and responsibly to the crisis. They applauded the
HKG's setting a melamine tolerance level slightly above zero, thus
allowing for unavoidable leaching of trace amounts of melamine into
food from approved packaging materials. Industry's biggest concern
is no longer melamine but rather the next food scare resulting from
a Chinese manufacturer's use of a prohibited chemical. They noted
weaknesses in the effectiveness and capacity of mainland regulatory
institutions, especially at the local level, and said commercial and
food safety challenges are exacerbated by the mainland maintaining
different standards for exported versus domestically consumed foods.


Diplomatic Reps Worry about Chinese Capacity
--------------


11. At a breakfast hosted by the ATO, diplomatic representatives
from major food exporting countries agreed that Hong Kong's reaction
and resulting standard was swift and reasonable. They also agreed
that setting a "zero tolerance" for melamine was impractical and
unnecessary given the sensitivity of modern instruments and
available information on the impact of trace amounts of melamine on
human health. They complained that China has yet to demonstrate the
institutional capacity to consistently enforce its food safety laws
at the local level, noting that the mainland's reputation was
damaged by the failure to disclose the melamine problem until after
the Beijing Olympics. They agreed that sound enforcement will
remain a problem as long as China maintains higher safety standards
on food for export than it does for domestically consumed food.


12. Staffdel Nelson did not have an opportunity to clear this
cable.

MARUT