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Cablegate: Status Update On Brazil's Biotechnology Regulations

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

UNCLAS SECTION 01 OF 03 BRASILIA 000271

SIPDIS

STATE FOR EB/DMALAC, OES/HLEE AND WHA/BSC
STATE PASS EPA FOR JANDERSEN
STATE PASS FOOD AND DRUG ADMINISTRATION FOR RLAKE
STATE PASS USTR FOR SCRONIN
USDA FOR U/S JB PENN
USDA FAS FOR ADMINISTRATOR ETERPSTRA
USDA APHIS FOR ADMINISTRATOR BACORD AND BRS/JTURNER
USDA ARS FOR ACTING ADMINISTRATOR EKNIPLING
USDA FAS FOR OA/BSIMMONS
USDOC FOR 4322/ITA/MAC/WH/OLAC/WBASTIAN/TSHIELDS
USAID FOR J/LEWIS

E.O. 12958: N/A
TAGS: EAGR ECON ETRD TBIO PGOV SENV BR IPR
SUBJECT: STATUS UPDATE ON BRAZIL'S BIOTECHNOLOGY REGULATIONS

Refs: A) STATE 16321, B) 2003 STATE 263456

1. Post provides the following in response to ref B request.

SUMMARY
-------

2. Biotechnology in Brazil is regulated by the 1995 Biosafety
Law 8.974 that established a government commission (CTNBio) to
approve genetically modified organisms (GMOs). While the 1995
GMO Biosafety Law remains on the books, regulation of the
biotechnology sector in Brazil has remained essentially frozen
because of a 1998 court case that is still pending in a federal
court in Brasilia filed by environmental NGOs against the use
of Monsanto's Roundup Ready soybean variety. This complicated
case addresses not only the requirement to conduct
environmental impact studies on GMO products, but also the
constitutional authority of CTNBio to approve biotech products.

3. In the absence of a definitive court ruling in that case or
the passage of the new Biosafety Law, President Lula after
taking office on January 1, 2003 issued two Presidential
Decrees (both later adopted into law by Congress) that
respectively legalized the 2002-03 and 2003-04 biotech soybean
crops. On October 31, 2003, President Lula sent to Congress a
draft of the long-awaited Biosecurity Law that will provide a
long-term regulatory regime for the biotech sector. The text
of the bill from the Presidency envisions a complicated
mechanism for approval of biotech products by a national
biosafety council attached to the Presidency that would
consider political and economic, as well as scientific factors.
On February 5, 2004, the bill was approved with certain
revisions by the Chamber of Deputies and proceeded to the
Senate where it is expected to be debated for several weeks.
Assessments of the bill as passed vary considerably. Post
provides the following information in the interim and will
continue to follow and report on the progress of biotech
legislation in Brazil. End summary.

Relevant Laws and Regulation
--------------------------

4. Law 8.974 of 1995 - GMO Biosafety Law - Determines the
standards for using genetic engineering techniques and the
release of genetically-modified organisms into the
environment;

Provisional Measure 2191-9 of 2001 - Modifies and creates
provisions to Law 8.974/95;

Decree 1.752 of 1995 - Regulates Law 8.974/95;

Law 10.165 of 2000 - Classifies all GMO activities as
potentially harmful to the environment, for taxing purposes;

CONAMA Resolution 305 of 2002 - Provides for Licensing and
Environmental Impact Study and Report (EIA/RIMA) to GMO
enterprises;

Law 7.802 of 1989 - Pesticide Law - Determines registration
of biocide products with federal agencies. Given this
requirement, any biocide GMOs, such as the BT Corn, shall be
registered as pesticides;

Decree 4.680 of 2003 - Regulates Labeling of GMO Food and Food
Ingredients.

Specific Rules for Genetically Modified Soybean
--------------------------------------------- --

5. Law 10.688 of June 13, 2003 (Provisional Measure 113) -
Determines the standards for marketing the soybean produced
in the 2003 harvest and creates labeling requirements;
Law 10.814 of December 15, 2003 (Provisional Measure 131) -
Determines the standards for planting and marketing
genetically modified soybean produced in the 2004 harvest.
Makes GM soybean planting and marketing subject to the
signature, by the producer, of a TCRAC document (statement
of commitment, responsibility and conduct);

Decree 4.846 of September 25, 2003 - Regulates Law 10.814
concerning the TCRAC document;

Law 10.688 (MP 113) of 2003, authorizing the marketing of
soybean produced in the 2003 harvest, clearly containing
transgenic material, and Law 10.814 (MP 131) of 2003,
authorizing producers that had withheld grain from the
previous harvest to grow transgenic soybean in 2004 as long
as a Statement of Commitment is signed, are of exceptional
and non-final character concerning the authorization of GMO
commercial production in the country. According to Law
10.814 of 2003, soybean planting for 2005 shall comply with
the legislation in force at that time. By converting MP 131
into Law 10.814 of 2003, a provision was created authorizing
registration of GM seeds in the National Register of
Cultivars of the Ministry of Agriculture (MAPA). Another
provision gave amnesty to soybean producers that had failed
to comply with the Biosafety Law in the previous harvests.

Bill 2401/2003
--------------
6. Designed to replace Law 8.974 of 1995 and permanently
regulate GMO activity in the country, including the
competency of several government agencies, the President
forwarded bill 2401/2003 to the Congress in October. Under
this bill, CTNBio is preserved as a joint committee to
evaluate GMO-related issues. However, its technical opinion
will be binding only when negative. In case of a positive
opinion, voting is analyzed (or reviewed) by registration
and inspection agencies from MAPA, MS and MMA, within the
scope of their competencies. CTNBio would have 26 members,
of which 10 scientists and 16 Government and civil society
representatives, a restructuring that gives greater weight
to non-scientists.

7. The bill creates the National Biosafety Council (CNBS),
linked to the Presidency of the Republic, with the
responsibility of setting the principles and guidelines for
implementing biotech policies as well as making the final
decision on approvals of authorization requests concerning
GMOs, including marketing and research. This bill already
has 278 proposed amendments and will undergo significant
modifications, especially concerning the competencies and
composition of CTNBio and CNBS. Congress passed the bill
with modifications on February 5, 2004, and the bill
proceeded to the Senate for further debate.

Monitoring and Enforcement under the 1995 BioSafety Law
--------------------------------------------- ----------

8. The regulatory process in place for approving products
of agricultural biotechnology for import or sale is laid out
in the 1995 Biosafety Law (Law 8974 of January 1995) and the
follow-on Presidential Decrees 1752 of 1995 and 2191-9 of
2001. Together, these created a regulatory framework and
established CTNBio ("National Technical Commission for
Biosafety"), granting it wide authority to evaluate,
approve, and regulate GMOs based on scientific criteria for
consumer and environmental safety. CTNBio is attached to
the Ministry of Science and Technology. There is no blanket
legal prohibition on the use, importation or sale of GMOs in
Brazil, but no approvals are currently being issued due to
the pending court case, with the exception of animal feed
products.
9. Under the 1995 law, those wishing to import or sell
biotech products must receive approval from CTNBio and
authorization to market from one of three regulatory
agencies under the Ministry of Health, Agriculture or
Environment depending on the nature of the product.
Monsanto's Roundup Ready Soy was the first biotech product
to receive CTNBio approval in 1998, and the subsequent court
case and injunction effectively halted further biotech
projects in Brazil. Thus, monitoring and enforcement has
never been exercised, as the mandate of the competent
authorities (CTNBio) has not been secured. In the interim,
only a few Embrapa biotech research projects have been
approved through the Ministry of Environment. The Ministry
of Agriculture has granted limited approval for biotech
products for use as animal feed, such as corn from Argentina
for poultry producers in the northeast of Brazil. However,
entry of these products has always been obtained through
court injunction.

10. No testing system for biotech content of shipments of
agricultural products existed under the 1995 law. The GoB
is not seriously contemplating a traceability system at this
time.

Labeling requirements
---------------------

11. Executive Order Number 4,680 applies to all biotech
products to be marketed in Brazil and establishes, as per
article 2, a one-percent limit tolerance level for genetically
modified organisms in bulk products, foods and by-products for
human or animal consumption. It also allows the CTNBio the
prerogative to change the percentage referred in article 2 on a
case-by-case basis. The order states that the lack of
compliance will entail the penalties foreseen in the Code of
Consumer Defense and other applicable rules.

12. For packaged products or those sold in bulk or in natura
(raw), the following wording must appear on the front of the
label in conjunction with the approved GMO logo (a large black
"T" inside of a yellow triangle): "(name of product)
transgenic", containing (name of the ingredient or ingredients
transgenic (s)"or "product produced with (name of product)
transgenic". The order also requires that the consumer be
informed of the specie of the donor gene in the place reserved
for the identification of the ingredients. All of the label
biotech information on the label must also appear on the
invoice so that it can follow the product or ingredient in all
steps of the productive chain.

13. The food and ingredients produced from animals fed with
feed containing transgenic ingredients must have labels printed
on the front panel with the following wording: "(name of
animal") fed with feed containing transgenic ingredients" or
"(name of ingredient) produced from animal fed with feed
containing transgenic ingredient."

14. Food and food ingredients that do not contain or are not
produced from genetically modified organisms will have earned
the right to use the labeling "(name of product or ingredient)
free of transgenic" once there are similar transgenic products
on the Brazilian market.

15. There are special provisions for products produced from
soybeans harvested from the 2003 crop. The labeling
requirements go into effect on February 26, 2004.

HRINAK

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