US embassy cable - 03ZAGREB1451

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, Trade 
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