Pesticide Laws & Regulations : Contest between Science and Politics hurting Progress

 Pesticide Laws & Regulations in India

Need to address the conflict between Science & Politics in the law-making process in the national interest

By:

Vijay SARDANA FICA, MIMA

PGDM (IIM-A), LLB, M.Sc. (Food Tech) (CFTRI), B.Sc. (Dairy Tech)

PG in Intl. Trade Laws & Alt. Dispute Resolution. IPR, PhD (in Progress)

Advocate, Delhi High Court

Techno-legal Expert on Agribusinesses & Agri-inputs, IPR Issues,

Commodities Trade & Consumer Products Industries

&

Founder & Convenor

Food Security & Sustainable Agriculture Foundation, New Delhi

India and growing food security challenges

The worldwide population is projected to increase to 9 billion by 2050 (United Nations). To accommodate this increase, food production will necessarily need to increase as well. However, new agricultural land is limited, so sustainable production and increasing productivity of existing agricultural land is an important aspect of addressing global food security.

India will be the country with the largest human as well as livestock population, shrinking land and water and a dream to become a USD five trillion economy in the next 5 years.

Food security has been described as a condition of humanity “…when all people, at all times, have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life.” (Food and Agriculture Organization). Increases in the terrestrial agricultural production of food and fish farming will be necessary to ensure adequate food availability, but this is only part of the larger concept of food security that also comprises food access, utilization, and stability (Food and Agriculture Organization). Given that there is limited additional land available for agriculture and sites for fish farming coupled with increasing economic pressures to produce agricultural commodities for industrial purposes, including fibre and biofuels, strategies to increase agricultural yield will need to be used to meet the increase in food demand for the immediate future.

Role of pesticides in food security

Pesticides are substances used to prevent, destroy, repel or mitigate any pest ranging from insects, animals and weeds to microorganisms, but inadvertent exposure to pesticides may adversely affect human health. For the near and foreseeable future, pesticides may be an important component of a comprehensive strategy to increase crop yield by preventing both pre and post-harvest loss to pests.

WTO, Pesticide Regulation and India

India is a signatory to WTO Agreements. The pesticide regulations are part of Sanitary or phytosanitary (SPS) measures which conform to the relevant provisions of this Agreement shall be presumed to be in accordance with the obligations of the Members under the provisions of GATT 1994.

Article 3.1 of SPS agreement clearly says that to harmonize sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their sanitary or phytosanitary measures on international standards, guidelines or recommendations, where they exist, except as otherwise provided for in this Agreement.

Article 3.2 of SPS agreement clearly Sanitary or phytosanitary measures which conform to international standards, guidelines or recommendations shall be deemed to be necessary to protect human, animal or plant life or health, and presumed to be consistent with the relevant provisions of this Agreement and of GATT 1994.

Article 3.3 of SPS agreement reminds that all measures which result in a level of sanitary or phytosanitary protection different from that which would be achieved by measures based on international standards, guidelines or recommendations shall not be inconsistent with any other provision of this Agreement.

New Indian Pesticide Laws will be under global scrutiny at WTO

According to Article 3.5, India is bound by the global obligation and all regulations will be evaluated and analysed by the Committee on Sanitary and Phytosanitary Measures provided for in paragraphs 1 and 4 of Article 12 (referred to in this Agreement as the “Committee”) shall develop a procedure to monitor the process of international harmonization and coordinate efforts in this regard with the relevant international organizations.

What are the obligations of India under WTO?

The world community is fully aware that countries may distort the facts and may do politics while formulating their internal regulations, which may impact the whole world, there are many International Conventions on Pesticides.

To address global concerns, several international instruments dealing directly or indirectly with pesticides or pesticide management have come into force. India is a party to WTO Agreements and various international treaties. The most important of these are:

• 👉The Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals & Pesticides in Int'l Trade. (Rotterdam Convention),  
• 👉The Stockholm Convention on Persistent Organic Pollutants (Stockholm Convention),
• 👉The Basel Convention on the Transboundary Movement of Hazardous Wastes and their Disposal (Basel Convention),
• 👉The Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol)
• 👉The International Labour Organisation Convention No. 184 on Safety and Health in Agriculture (ILO Convention 184).
• 👉Strategic Approach to International Chemicals Management (SAICM)
• 👉Globally Harmonized System of Classification and Labelling of Chemicals (GHS), which is intended to standardize and harmonize the classification and labelling of chemicals.

Important: It will be useful for the growing economy like India to respect these international treaties and adopt these norms without favour or fear of vested interests and short-sighted political pressures. The global community will evaluate all the decisions taken by the Ministry of Agriculture and other related departments on the crucial issues related to pesticides.

Major Concerns concerning pesticide regulations in India

Policymakers must address them to make a credible governance system.

Issue 1. Wrong units are getting Manufacturing Registration of units under the Pesticide Act: There are concerns that wrong units and units without proper infrastructure and facilities are given licences. Inspection reports by field officers are not reliable.

Suggestion: In the new Pesticide Management Bill as part of Digital India Mission, all factory inspections must be video recorded and uploaded with GPS coordinates to a centralised portal from the site itself to ensure inspectors do not get chance to manipulate the facts so that this can act as evidence in case of any litigation and other safety concerns. Video of the manufacturing facilities must be a mandatory part of the submission for granting manufacturing licence. This transparency will also minimize the chances of human errors and the probability of corruption and wrong manufacturing certificates. Overall manufacturing and safety infrastructure in India will improve.

Issue 2. There are allegations of corruption in the application approval process and delay in the approval of filed applications.

Suggestion: Digital & Faceless transaction with the pesticide department will ensure transparency and evidence-based decision making and will address such allegations. Like tax departments and Courts in India, all are working on digital platforms. When a common man can deal on digital platforms all companies can also do the same. 100% digitalization should be adopted in all pesticide-related work and in related departments. This transparency will also minimize the chances of human errors and the probability of corruption.

Issue 3. What should be the priority for India, price or safety, concerning pesticides?

Suggestion: Price is always negotiable but safety cannot be negotiable. India in the globalised economy must focus on the safety of pesticides and their application. Competition is the best way to keep prices low and quality high. Encourage fair competition. Eliminate bad players and products.

Issue 4. China is focusing on quality, research and better technologies to improve exports and global reach. India is still stuck with chemicals which are banned globally and hesitant to change for a better future.

Suggestion: Use of banned and restricted chemicals will only hurt Indian trade and public health interest. Use of banned chemicals in the agriculture production system will hurt the exports of agriculture products from India. Can India export grapes and basmati rice if banned chemicals are used in production? For the growth of Indian agri-exports outdated and banned pesticides are the biggest hurdle. The Pesticide Management Bill must address this issue.

Issue 5. Parliamentary Standing committee has raised concern about the growing cases of adulteration and spurious pesticides. It is not only hurting farmers economically but also their health as well. This is growing evidence of corruption in the governance system. This is discouraging quality manufacturers as well.

Suggestion: All sample collection processes must be digitized and must be traceable as per good laboratory practices. Modern cost-effective technologies like QR Codes and barcodes must be made mandatory. Any opposition to the adoption of traceable technology should not be entertained.

Any laboratory not accredited by NABL, not having digital recording and no traceability system should not be allowed to test the samples for which are used for legal process and litigation. This may lead to injustice due to corrupt practices.

Issue 6. Lack of transparency in decision making creating space for political interference and corruption in decision making. This will compromise the future of India.

Suggestion: Many vested interests people know that decision-making system-related pesticide is not transparent and time-consuming. This is forcing them to spend time and resources to influence the political system in their favour. There is an attempt to use various political forces to influence the decision on scientific matters. Every decision of the ministry related to pesticide is viewed from a political lens. This is not good for the credibility of the decision-making system in India. This is not only hurting investments but also the introduction of new technologies in India. This must change to inspire confidence in all stakeholders.

Issue 7. Proposed Pesticide Management Bill lacks provision to control corruption.

Suggestion: The proposed bill has provisions for the penalty for manufactures and dealers, but silent on time-bound and credible complaint redressal mechanism of corrupt field officials. This is shaking the confidence of honest companies. This is also hurting the investment and development in India. China knows this weakness of Indian governance system. Hence not worried about schemes like Make in India and Production Linked Incentives (PLI) launched by the Government of India.

Issue 8. Many times Imported chemicals may be mislabelled to by-pass the customs duty and registration criteria?

Suggestion: It is common unfair trade practice to change the HS code or names of the product in the invoice to by-pass the custom duties and to by-pass regulatory restrictions. There should be a system to check such trading practices. Many countries have developed proper systems to check such unfair trade practices because this can be dangerous and can be misused by anti-national elements. This also needs urgent attention.

Issue 9. Most companies operate in various parts of the world. They abide by global regulations and norms.

Suggestion: Why do companies seek concessions when they want to operate in India on IPR issues, registration issues and other matters? Policymakers should review the whole process to attract investment and new technologies to India. The governance system should support research in India as well. China has decided to move beyond generics to research-based manufacturing to dominate the world market. Indian policymakers have to factor this while working on policies.

Issue 10. Bad quality and spurious products are flooded in the market, clearly indicating that sampling and testing systems are not effective and credible. Unfortunately, no one in the system is accountable to fix this anti-national activity which is not only cheating farmers but also hurting national food security.

Suggestion: The new Pesticide Management Bill must fix the accountability of the department and people responsible for product integrity.  The functioning of pesticide testing laboratories is always part of debate and discussion among policymakers and stakeholders. When laboratory results are used for litigation, they must be credible and transparent. There must be a  mandatory format for the test reports. All the related documents of laboratory samples used for analysis should be a mandatory part of the report. All test reports must be accompanied by ATR+chromatograms. This is the only way one can understand whether there was much manipulation of the samples or not. This transparency is a must and this is part of natural justice. Departments cannot and should not deny this right to the person; the whole sample is under scrutiny. Demand for a transparent system is a fundamental right.

Issue 11. Historically, before British rule, India was always known for innovations and intellectual property. The reason was very simple because there was an investment in intellectual property and there was respect for intellectual property in the country. In the 21st century, we all talk about knowledge as power but when it comes to the legal system, there is no provision to respect the same. Why? The Government of India is very much worried about data protection when it comes to e-commerce and IT services, traditional knowledge of India is herbal and ayurvedic systems in products like turmeric but not keen to protect the same data when it comes to agro-chemicals? Why?

Suggestion: R&D investment in India is less than 1% of GDP in India. We all want to stand against the Chinese products but we do not have the desire to spend on R&D, China is spending 3-4 % in China for a 10 trillion economy. This is a serious gap. India should invest a minimum of 2.5% of GDP on R&D. Otherwise, India will remain a country of traders. People will import and do blending and mixing and sell the product to farmers and make some profit. This is not good for the future of India. Unless we follow and develop good practices to encourage research in India and create an environment to protect and respect intellectual properties, why should anyone invest in research in India. Companies without visionary leadership will continue to operate like traders. The government must look into this seriously on an urgent basis.  

Issue 12. The fragmented and outdated approach is hurting India at all levels. Why there cannot be complete integration in digital Indian and why time-bound approvals are not possible. It takes over two years for a Good Laboratory Practices (GLP) approval of a laboratory by the Department of Science and Technology. There are no training programs for the officers working in agriculture inputs divisions about new and emerging technologies.

Suggestion: Excessive time required for approval can happen only under two situations, either there is a lack of competency in the departments or lack of desire or some ulterior motives of the people involved. There is no other reason for the delay. In these situations. Action must be there against people responsible for hurting national interest and accountability must be fixed. When the taxation department timeline can be fixed, why the same cannot be fixed in departments related to the agriculture sector.

If there are activities which are under other ministries and their inefficiencies are hurting the growth of the agriculture sector, it is high time the government just look at merging all related departments under one roof and till then create a coordination committee which must review the progress every week. Now, with video conferencing facilities with all officers, this can be done without any delay on a real-time basis from anywhere and at any time.  

Pesticide Management Bill 2020 and the way forward

Before revising or drafting pesticide legislation, due consideration should be given to the points raised above.

The following points will also help in revising and drafting the new Pesticide management bill for the progressive Indian in the 21st century.

1) Analysis of the national legal and institutional frameworks directly or indirectly relevant for pesticide management;

2) Identification of technical needs and regulatory failures, based on

1. 👉Field realities and experiences,
2. 👉New pesticide policy objectives should be clearly defined;
3. 👉Existing legislation; and
4. 👉The International recommendations will help in improving the global standing of India
5. 👉How to encourage, promote and respect new research in India
6. 👉How to promote investment in India for manufacturing

3) Drafting, which usually involves a team composed of legal and technical experts;

4) Review of drafts with the involvement of key stakeholders to avoid any politics and unscientific justifications.

Important: All stakeholders should evaluate all the decisions taken by the policymakers on the above-mentioned parameters to ensure logical and transparent policy-making without pulls and pressures. The decision of the above-mentioned criteria should also be tested on technical and legal justification if required.

The Prime Minister has decided to improve the governance system and to make India USD Five Trillion economy to attract global investments. Five trillion dollar economy in a highly competitive globalised economy can only be built on trust and credible governance system. The only expectation from the decision-makers and Parliament of India is to make a credible, transparent system which cannot be influenced by vested interest and where honest and credible investors and products survive.

A testing time for the Policy Makers in the 21st Century

Can India ever become a world leader in agrochemicals by following an outdated mindset and preferring politics over science in the 21st century?

With the prevailing situations and mindset, a few companies and their well-wishers may gain, but the country will suffer. This is the testing time for the policymakers.

All eyes are on them. Every decision will be scrutinized by stakeholders in India and also by the international community.

Many suggestions given above can be done with immediate effect just by passing a proper office order or by issuing a Gazette notification.

Actions will speak louder than the words expressed in conferences and public forums. Vested commercial and political interests cannot be and should not be bigger than national interest.

If any discussion is required on how to implement the given suggestions, the author is keen to extend his experience and expertise.

Let us all work hard to make India a great economy once again.

@ @ @

[1] Presented at 9th Agrochemicals Conference. Theme: Role of Agrochemicals: Achieving the vision of $5 Trillion economy by 2025, organised by FICCI, New Delhi

FSSAI Regulations: Latest FSSAI Order on GM-Free Certificate for Imported Foods / Crops is Confusing & Vague

FSSAI Regulations: 
FSSAI Order on GM Free Certificate on imported Crops / Foods is Confusing & Vague

Techno-legal Analysis by:

Vijay SARDANA
Advocate, Delhi High Court

Techno-Legal Expert for Bio-economy

FSSAI issued an order (given below) on the need for GM-free certificate on imported products.

The language of the order has created serious confusion and may lead to litigations as well. Let us analyse the order.

• In the title of the order, it says, it is for "imported food consignments. In the copy, it says only non-GM crops are imported, in the annexure it mentioned the term "Crops" Should we conclude that FSSAI is using these terms interchangeably? (Legally  all these terms have different meanings, I am not sure what is the intention and message from FSSAI)
• If these terms are used as interchangeable terms, then the use of terms like "date of manufacturing or production" in certificate this clearly indicates that there is a lack of understanding within FSSAI about these terms or about the business practices around the world and within India.
• Why FSSAI does not demand the date of production from farmers, FCI and companies selling wheat, rice, pulses, etc and all the products mentioned in Annexure -1. 
• If there are not used interchangeably, then there is a serious legal implication and confusion because then every person is free to make his or her own interpretation and this will open a Pandora’s box for litigations and disputes including corruption.
• The information expected by the FSSAI in the form of a certificate needs a serious relook. If the notification is for the crops only, in that case why term manufacturing is used.
• Large consignments are from many fields or factories and consolidated. Can anyone provide the production with the date of production when there is a shipload of the consignment? What should be the entry by the government of India, the same certificate for basmati rice is to be issued by the Government of India?
• In bulk loading shipments of soybean oil, what should be the date of manufacturing/production/packing? Which date is prefered or expected by FSSAI? Can FSSAI issue a sample document and guidelines for the countries supplying soybean oil to India?
• Annexure 1: The annexure includes only crops or the products from these crops as well, this should be clarified by FSSAI. 
• Annexure 2: Let FSSAI come out with proper implementation guidelines for exporters, importers and port officials to avoid unnecessary litigations and disputes.
• Dispute resolution is missing: Why FSSAI is not providing any contact number and email of FSSAI officials in case there is a problem at Indian ports who should be contacts and approached under this order. This is important to make system accountable, transparent, to minimize chances of corruption and delays. 

Please note such vague orders also spoil diplomatic relations. 

Please see the order below:

FSSAI Order

Annexure -1 

Annexure -2

Hope FSSAI will issue clarifications and guidelines regarding this order.

Please do share your views and write in the comments below. Pl. feel free to share. 

Why Expert Committees' Recommendations should be logical?

 Why Expert Committees' Recommendations should be logical?

In today's hyper-connected world, every documented is floating in every part of the world. It is the duty of the author, members of the committee and the head of the institutions under which the work was carried out to ensure that every document is not properly drafted and presented to the readers but also provide logical reasoning behind their recommendations.

These expert committee documents are also used as evidence in the courts. Unfortunately, courts take these expert committees on face value. If these committees have concluded the recommendations without proper assessment, the court's judgements can do more harm to society.

While doing some legal and policy work, I was referring to the documents published by expert committees constituted by the Government of India to study the pesticides and their relevance. This is a very important agenda because the periodic evaluation of all chemicals, systems and products to ensure bad products are phased out and new and safer options are included. There can be various criteria to understand what is useful and what is not useful for society.

As a techno-legal & techno-commercial expert, I have a tendency to read the documents from various angles to understand the perspective of various stakeholders. This helps in coming to a logical conclusion.

While evaluating the recommendations of various expert committees on the pesticides, I came across the following observations:

1. Lack of clearly laid-out procedure and criteria: The committees have randomly picked up a few documents without any justification and then unable to come to any meaningful conclusion. This has created more 

2. Conflict of Interests: The committee is seeking the evidence to come to the conclusion from the stakeholders which has a conflict of interest with the scope of the agenda itself. 

3. 

3. 

Stop Toxic Adulteration : Open letter to FSSAI and AGMARK

Stop Toxic Adulteration in Food

Open Letter to Food Safety and Standards Authority of India (FSSAI) & AGMARK

To,

The Chairperson / CEO
Food Safety & Standards Authority of India
Ministry of Health
Govt. of India
New Delhi

&

The 

The Joint Secretary / Director, 

Incharge for AGMARK

Ministry fo Agriculture

Government of India

Dear Chairperson / CEO / JS/ Director,

Subject: Letter of 19^th Aug 2020 (attached) is legally ineffective and will have no impact on adulterated oil suppliers. : This appears to be an eyewash

Eat Right (adulterated food) is the joke of FSSAI,

if food adulteration is not controlled.

The mentioned letter on the subject is a baby step but this is a half-hearted incomplete attempt to address the serious concerned with public health.

FSSAI has issued the advisory in the form of a letter and it has no legislation under the court of law. In past, such advisories were questions in the court and courts refused to accept such directions unless issues as proper notification.

Unfortunately, the letter reminds the department about the power of food safety officers. The record of the department and the market flooded with adulterated and substandard products clearly indicates that this advisory will have no effect on the ground.

If they had any concern, commitment, and understanding of their moral and legal duty, citizens’ health can be saved from adulterated products. Unfortunately, as a citizen, with the experience I can say, this will have no positive impact on the ground. Corruption is due to these powers under the act. Your letter will only create more corruption opportunities. I will be happy to see the change on the ground this time under your leadership.

1.   As citizen, I also expect transparency in the function of FSSAI. FSSAI must honestly disclose how may oil samples were tested every week, how many were found adulterated, and how many suppliers were booked and factories sealed. Unless there is an action on the ground, do not expect this letter of FSSAI has any impact on the ground.

2.   It is sad to see that citizens of India are suffering due to adulteration and FSSAI is taking too long a time to issue a proper logical notification to protect public health. This letter also ignored many vital parameters which were suggested for controlling adulteration.

As a citizen of India, let me help FSSAI in formulating the proper standard and rules. If the technical advisory committee has any issue with any of the following suggestions, the same should be discussed in an open forum. The industry should know the reason for rejecting the following suggestions.

My humble request is the following points should be considered and included in the regulations to control the adulteration in India edible soil in India.

1)  Raw oils should NOT be allowed for blending under any pretext.

2)  Only refined oils meeting FSSAI standards are allowed for blending.

3) Colour of the edible oils, other than raw oils, must be mandatory parameters under FSSAI and Agmark in line with BIS.

4)  All blended edible oils must mention Fatty acid profiles on the product label to know the truthfulness of the blended oil and claims made on the label.

5) All oils, not added with rice bran oil must mention, must mention “Free from Oryzanol” on the label.

6)   All oil samples must be tested for Oryzanol content

7)  All raw oils and refined edible oil standards must specify mono-glycerides and di-glycerides parameters in FSSAI and AGMARK.

8) Mono-glycerides and di-glycerides parameters oils must be tested for these items in every sample.

9)  Raw Mustard oils (Kacchi Ghani) must have a minimum 35% erucic acid and diglyceride content is not more than 2%.

10)All Invoices must mention the license and registration number of the purchasing dealer to minimize mixing in tankers and in godowns: Modify Point no. “14 in FSSAI licensing condition - The Manufacturer/ Importer/ Distributor shall buy and sell food products only from, or to, licensed /registered vendors and maintain record thereof. The invoice/delivery challan in respect of the sale/movement of vegetable oils must mention the license/registration number of the purchasing dealer. " 

11) Modify Point no. “5 in FSSAI licensing condition. Every sale and movement of stocks of solvents-extracted oil,'semi-refined' or 'raw grade I’, 'fatty acids / acid oils produced during the refining of vegetable oils', edible groundnut flour or edible coconut flour, or both by the producer shall be a sale or movement of stocks directly to a registered user and not to any other person, and no such sale or movement shall be effected through any third party."

12) Ministry of Finance and Corporate Affairs, FSSAI and Agriculture Ministry must enforce Section-148 under Companies Act 2013 on all food companies.  This will ensure only good material and purchased by the company. This will be verified by the statutory auditors and should be made part of the annual report to shareholders and to ROC. This will ensure not only safe products but also proper GST collection for the government.

If any help is required in explaining these self-explanatory points, undersigned will be happy to explain all the technical and legal justifications in from of any expert in the country or outside India. Please provide the opportunity for the same before rejecting the above points in the public interest.

Appeal: My requests to all FSSAI leadership and officials, you all are paid salaries to sustain your decent lifestyles and families by taxpayers and your inaction is making the same taxpayers and their families sick due to adulterated foods. Is this morally and ethically right?

Your actions will speak louder than your words. Citizens are watching carefully are you ensuring that foods are delivered as per the laws or not.

I wish you all the best so that you have the courage to take a right stand against the wrong door and make the system FSSAI transparent before more citizens of India become victims of adulterated foods. FSSAI actions must be visible and should inspire confidence among citizens. Are we expecting more than the minimum required?

Waiting for proper elaborate notification on this vital concern of the citizens.

With best regards,

 

Vijay Sardana

 

CC:

1.    PM Office

2.    All Concerned Ministers

3.    All Concerned Secretaries

4.    All Concerned Departments

Copy of the letter issues: This letter has no legal standing. This is not a law. Please issue the proper notification.

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Can China drag India to WTO for banning Apps and Cancelling existing Orders?

A Techno-Legal Analysis

Can China drag India to WTO for banning Apps and Cancelling existing Orders?

By:

Vijay SARDANA

Advocate, Delhi High Court

Techno-legal Expert on Agribusiness 

& Consumer Products Industries

& 

Priyanka Sardana, Advocate, Supreme Court of India

& 

Aastha Sardana, Researcher on Legal Matters

After the border conflict with China, India took various decisions to block the trading interests of China in India. Let us keep the following facts in mind:

• China encroached about 400-meters of the territory which is on the disputed border.
• In conflict, India lost 20 soldiers and there are reports that China lost around 40 soldiers.
• China refused to accept the previous agreements on border disputes and delaying in maintaining status-quo. 
• India took various retaliatory actions and blocked various commercial interests of the aggressor in the interest of national security.
• Now, China is treating to take India to WTO for dispute resolution mechanism under the pretext of MFN status is violated.

What is the WTO position on such matters? 
The World Trade Organization (WTO) regime is rules-based. Member States can only invoke exceptions that are expressly provided for. National measures based on these exceptions must comply with the stated conditions and such measures are justiciable. 

However, one of the GATT exceptions, the national security clause in Article XXI GATT, has always been in a category of its own, an exception among the exceptions.

What is Article XXI: on Security Exceptions?

Nothing in this Agreement shall be construed

(a)  to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests, or

(b)  to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests

i. relating to fissionable materials or the materials from which they are derived;

ii. relating to the traffic in arms, ammunition and implements of war and to such traffic, in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; 

iii. taken in time of war or other emergency in international relations, or

(c)  to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

Now let us see what is the past experience at WTO on such matters.

Please note, the Dispute Settlement Body of the World Trade Organization (WTO) has never passed judgment on the validity of measures taken under this Article. It means there is no precedence before us.

What will happen if China approaches WTO on the trade restrictions in India on Chinese Products?

According to our assessment. the WTO regime is operating in a normal business environment with disputes related to trade. The Article XXI clearly makes Security Exceptions and no one can interfere in that. 

The UN Charter clearly says that Article 51 provides for the right of countries to engage in self-defence, including collective self-defence, against an armed attack (including cyber-attacks). 

This Article 51 of the UN Charter is particularly vague: it does not define what constitutes an attack. Is the seizure of ships or aircraft an attack? Is the accidental or intentional violation of another country’s airspace an attack? Is industrial espionage an attack? Is a spy satellite taking photographs of military installations an attack? It does not define what constitutes an armed attack. For example, is a cyber-attack an armed attack?

India China Border Conflict: 

The fact is War or other emergencies in international relations, like Indian-China border conflict leading to the death of security persons, “involves a fundamental change of circumstances which radically alters the factual matrix in which the WTO-consistency of the measures at issue is to be evaluated.”

Unlike the evaluation of measures are covered by the exceptions in Article XX, evaluation of measures under Article XXI(b)(iii) does not necessitate a prior determination that the measures would be WTO-inconsistent had they been taken in “normal times”. Therefor in the issues of national security, WTO cannot intervene.

Let us understand the disputes in the past and their outcomes at WTO:

In the GATT Analytical Index, the original thinking behind Article XXI has been explained as taking care “of real security interests and, at the same time, so far as we could, to limit the exception to prevent the adoption of protection for maintaining industries under every conceivable circumstance.”

Let us understand the intention behind the wording of Article XXI:

Paragraphs (a) and (b) of Article XXI, as mentioned above says, “it considers … essential security interests”

During discussions in the Geneva session of the Preparatory Committee, in response to an inquiry as to the meaning of “essential security interests”, it was stated by one of the drafters of the original Draft Charter that “We gave a good deal of thought to the question of the security exception which we thought should be included in the Charter. We recognized that there was a great danger of having too wide an exception and we could not put it into the Charter, simply by saying: ‘by any Member of measures relating to a Member's security interests,’ because that would permit anything under the sun. Therefore we thought it well to draft provisions which would take care of real security interests and, at the same time, so far as we could, to limit the exception to prevent the adoption of protection for maintaining industries under every conceivable circumstance.… there must be some latitude here for security measures. It is really a question of balance. 

We have got to have some exceptions. We cannot make it too tight, because we cannot prohibit measures, which are needed purely for security reasons. On the other hand, we cannot make it so broad that, under the guise of security, countries will put on measures which really have a commercial purpose”. The Chairman of Commission suggested in response that the spirit in which Members of the Organization would interpret these provisions was the only guarantee against abuses of this kind. 

It means every situation will be evaluated on its merit. India-China disputes if we go by the evidence and the merit of the case, it will be difficult for Chai to defend its position at international forums. In our view, China will not take the matter to WTO. 

Let us also evaluate past cases:

Portugal – Ghana Dispute

In 1961, on the occasion of the accession of Portugal, Ghana stated that its boycott of Portuguese goods was justified under the provisions of Article XXI:(b)(iii), noting that “… under this Article each contracting party was the sole judge of what was necessary for its essential security interest. There could, therefore, be no objection to Ghana regarding the boycott of goods is justified by security interests. At that time it was debated that it might be observed that a country’s security interests might be threatened by potential as well as an actual danger.

EU-Argentine Dispute:

During the Council discussion in 1982 of trade restrictions applied for non-economic reasons by the EEC, its member States, Canada and Australia against imports from Argentina, the representative of the EEC stated that “the EEC and its member States had taken certain measures on the basis of their inherent rights, of which Article XXI of the General Agreement was a reflection. The exercise of these rights constituted a general exception and required neither notification, justification nor approval. This procedure showed that every contracting party was - in the last resort - the judge of its exercise of these rights”.

The representative of Australia “stated that the Australian measures were in conformity with the provisions of Article XXI:(c), which did not require notification or justification”. 

The representative of the United States stated, “The General Agreement left to each contracting party the judgment as to what is considered to be necessary to protect its security interests. The CONTRACTING PARTIES had no power to question that judgement”.

Ministerial Declaration adopted 29 November 1982 at the Thirty-eighth Session of the CONTRACTING PARTIES provides that".. the contracting parties undertake, individually and jointly: ...to abstain from taking restrictive trade measures, for reasons of a non-economic character, not consistent with the General Agreement”.

The question of whether and to what extent the CONTRACTING PARTIES can review the national security reasons for measures taken under Article XXI were discussed again in the GATT Council in May and July 1985. 

It was concluded that this provision should be interpreted in the light of the basic principles of international law and in harmony with the decisions of the United Nations and of the International Court of Justice and should, therefore, be regarded as merely providing contracting parties subjected to aggression with the right of self-defence.

The action was taken by Arab League:

Article XXI(b)(iii) says…“taken in time of war or other emergencies in international relations” The 1970 Working Party Report on “Accession of the United Arab Republic” notes that in response to concerns raised regarding the Arab League boycott against Israel and the secondary boycott against firms having relations with Israel, the representative of the UAR stated that “the history of the Arab boycott was beyond doubt related to the extraordinary circumstances to which the Middle East area had been exposed. The state of war which had long prevailed in that area necessitated the resorting to this system. … Because of the political character of this issue, the United Arab Republic did not wish to discuss it within GATT.

It would not be reasonable to ask that the United Arab Republic should do business with a firm that transferred all or part of its profits from sales to the United Arab Republic to an enemy country”.

The Way Forward:

After careful assessment of the Article XXI and based on the previous disputes and issues raised by many countries at GATT meeting, we can conclude the following: 

1. India has not violated any commitment under GATT/WTO agreement.
2. UN Charter allows India to take necessary action in the interest of National security of India.
3. All evidences are against China and therefore China will not be able to defend its position in any forum.
4. India is free to take all possible action, which India feels in the national interest and no international law cannot force India to deal with the enemy state.

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