Human Rights

Food safety licensing costs will scuttle unorganised food sector

ArujGarg_BhukkadWhen dealing with government authorities, you are often advised to pay a consultant or a tout an amount of money to immediately get your work done without facing any harassment. As the owner of a food business in search of a food safety license, I was also tempted. I made inquiries and the lowest quotation for the food safety license was ten thousand rupees. The statutory cost however, is only one hundred rupees. As I could not afford ten thousand rupees, I had no option but to go through the process myself.

After three weeks of running around six different offices, I finally understood the process. The website of the Food Safety and Standards Authority of India (“FSSAI”) is very comprehensive but it didn’t offer much practical help. The local municipality, which is the implementing agency, has its own norms. Even though I am a trained lawyer, I faced a lot of trouble in just trying to understand how the law worked. It made me wonder how difficult it must be for others, especially the small operators.

LawSchoolInductionMuniyappa sells dosas in a mobile van at a busy crossing in the Banshankari area of Bangalore. On a good day, he makes a profit of approximately eight hundred rupees. He also pays a cop fifty rupees to allow him to use that junction. He told me that while he was aware of the new food safety law that requires him to get a registered license, he simply could not afford a consultant. The proper process of registration would also require him to shut shop for a few days. Apart from losing money, he might even lose his spot if he did not show up for a few days.

Cost of compliance

The costs to be incurred relate to applying for the license and compliance. Let’s analyse these costs with respect to a small or Petty Food Business (“PFB”), who have to undergo a process of registration and medium-sized enterprises, which have to obtain a ‘license’.

For the average PFB in India such as Muniyappa’s, the costs associated with registration are too high. It is much more cost-efficient for him to pay a bribe upon inspection than to undergo the process of registration. The cost of compliance is also too much for him. People like Muniyappa also cannot arrange for the conditions expected from a PFB under Schedule 4 of the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011, such as an effective drainage system and the compulsory use of potable water.

To ensure compliance by a PFB, I suggest that the law should provide for a process of spot registration, and also offer training and aid to adhere to the safety guidelines. An online registration exists but is not yet activated in all the states in the country. Even this will not be a viable option for most PFBs in the country, as the process requires the use of computers and the Internet.

For medium-sized enterprises, the compliance costs are the main cause of concern. Very few enterprises truly understand the complexity of the conditions, and the owners are finding it difficult to renovate their premises just to comply with the new law. Some medium-sized enterprises, like those in the manufacturing sector, are required by the provision in Annexure 3 to the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011to hire experts to oversee the process of production and help them upgrade their facilities and to meet the conditions prescribed under Schedule 4. This is also proving to be difficult, both in terms of talent and in terms of cost.

A sweet shop in Nagarbhavi, near the NLSIU campus at Bangalore, has been in operation for more than eight years now. The owner and the employees have picked up their skills on the job and do not possess any requisite degree to monitor their processes. The requirement of labels under the Food Safety and

Image by Connie Ma, published under a CC BY-SA 2.0 license.
Image by Connie Ma, published under a CC BY-SA 2.0 license.

Standards (Packaging and Labeling) Regulations, 2011 will require considerable time, effort, and investment for the unorganised packaged food industry, including the shops that sell ‘local chips’. They neither have the expertise nor the funds to implement such labeling guidelines.

Unprepared for US standards

These examples clearly demonstrate how difficult it is for the unorganised food industry to work under this new law. It has the potential to scuttle the unorganised sector and will benefit the organised food industry and multinational corporations by reducing local competition. These enterprises have the financial muscle to adhere to the conditions and ensure regular compliance with the Act. As a Food Business Operator (“FBO”) under Section 3(o) of the Food Safety and Standards Act, 2006, responsible for compliance under this law, I understand that the conditions stipulated by law are essential for protecting public health. Some of the conditions are critical to ensure food safety and a phased enforcement of these conditions might be a solution. But, as these conditions have been inspired by the ‘hazard analysis and critical control points’ approach to food safety, adopted by organisations like the United States Food and Drug Administration, it will take more time and training for it to be replicated successfully in India. I shall explore these codes in my next post here.

With the infinite number of food vendors in this country, the current administrative setup is woefully inadequate to implement a law with such an exhaustive list of conditions fairly and effectively. To make the intention of this law a reality, dedicated food zones need to be created, where vendors of all sizes can set up shop without worrying about the physical infrastructure to facilitate their business. Otherwise, the writing is on the wall for most food vendors in this country.

(Aruj is the Chief Bhukkad at Bhukkad, a natural fast food brand. Bhukkad’s second outlet is opening soon at 80 Feet Road in Koramangala, Bangalore.)

Human Rights

The power of licences to censor

AparGupta_freedomofspeechAny study of censorship has to commence with the power of licensing. Shortly after the War for Independence, our colonial masters realised that it was inefficient to enforce criminal sanction for each distinct act of dissent when the mode of expression itself could be prevented by prescribing a set of licensing conditions. Simply, why pulp the paper when you can seize the printing press?

The establishment of a monopoly

The initial prohibition on vernacular publications slowly gained sophistication. The first feature of the licensing system was the express creation of a state monopoly through statute. Private industry had to then operate within a set of requirements prescribed in the statute. Take for instance, the licensing of telegraphs.

Though the physical apparatus of a telegraph has ceased operation, the Telegraph Act, 1885 still holds the field. Under Section 4, the Central Government has the exclusive privilege of establishing, maintaining, and working telegraphs in India. So, even after the process of liberalisation and iterations of the National Telecom Policy, every private telecom operator remains a mere licencee of the Central Government. This licence, which may be a Unified Access Services licence or an Internet Service Provider licence often becomes a unilateral contract prescribed by the Government. All private operators, and by extension their subscribers, have to adhere to the conditions in these contracts.

Licences in India control the medium of dissemination, the substantive content that is disseminated, and some times even the receipt of content. This is all done on the basis of the medium itself, as the law discriminates between newspapers printed on paper, movie exhibitions, television signals, and telephone conversations. Layered and complex, the law consists of law made by Parliament and the State Legislatures. The regulation of newspapers today illustrates this well.

Licensing through registration

Sisir Kumar Ghose (above) was the founder of the Amrita Bazar Patrika, a newspaper that was said to be a principal target of the Vernacular Press Act, 1878, which was passed under the Governor Generalship of Lord Lytton. The law provided for submitting to the police, all the proof sheets of Indian language newspapers before publication.
Sisir Kumar Ghose (above) was the founder of the Amrita Bazar Patrika, a newspaper that was said to be a principal target of the Vernacular Press Act, 1878, which was passed under the Governor Generalship of Lord Lytton. The law provided for submitting to the police, all the proof sheets of Indian language newspapers before publication.

One of the largest mediums in terms of reach, an absolute monopoly has not been expressly prescribed for newspapers. The relevant legal provisions of the system of licensing are contained in the Press and Registration of Books Act, 1867 (“the 1867 law”). Even though the Statement and Objectives state the innocent objective of ensuring that copies of every publication are properly archived by the State, the law goes much beyond ensuring a comprehensive catalogue of the news. The law, which also applies to books and pamphlets, calls for the compulsory declaration of the name of the printer and publisher and the registration of every printing press before the District Magistrate.

A.G. Noorani, in a series of articles published in the Economic and Political Weekly, has documented how this law has been used to enforce (often unlawful) censorship in smaller towns and areas outside metros. The smaller vernacular press also lacked the financial muscle and the professional networks to draw attention, and to resist these attempts. He has highlighted the fact that such declarations are often used by the state administration to harass owners and editors and has also cited one instance where a District Magistrate, relying on a highly technical rule, cancelled the registration of a local newspaper.

Indirect attempts at censorship

This 1867 law pales in comparison to the effort made by the Union Government to neuter the press with the enactment of the Newspaper (Price and Page) Act, 1956, which empowered the Union Government to regulate the prices of newspapers in relation to their pages and sizes and to regulate the allocation of space in newspapers for advertising. In Sakal Papers Ltd. v. Union of India, the Supreme Court determined the constitutionality of this law. The judges stated expressly that the attempt to limit monopolies by fixing prices against the number of pages printed was an attempt to interfere with the freedom of circulation of newspapers and declared parts of the law repugnant to the fundamental right to freedom of speech and expression under Article 19(1)(a) of the Constitution of India, and hence unconstitional.

This decision however, did not impede governments from regulating the content in newspapers through licensing. The Newsprint Policy for 1972-73 made under the Newsprint Control Order, 1962, attempted to ration newsprint. The owners of the Times of India approached the Supreme Court alleging that it violated their fundamental rights, and in Bennett Coleman and Co. and Others v. Union of India, Justice Sikri, speaking for the majority said that the measure was “not newsprint control but newspaper control.” While the Court declared the policy to be contrary to Article 21 for being arbitrary and against Article 19(1)(a), it also emphasised that the power of the government to import and control the distribution of newsprint cannot be denied. The exercise of such power however, has to be within the bounds of the Constitution.

Reframing the law

IPThe Union Government has recently proposed an update to the antiquated 1867 law, increasing its thresholds. Firstly, the Draft Press and Registration of Books Bill, 2013 proposes to extend the coverage of the law to online editions of newspapers. Secondly, it proposes a substantive review of the application for registration itself and prohibits persons convicted of acts of terror and unlawful activity from making such publications. While a convicted terrorist may be guilty of terrorism, such a conviction does not extinguish fundamental rights and it is not understood how such an absolute and complete pre-censorship can be imposed.

A larger concern is the continuity in approach with the 1867 law and the proposals only seek to make the law more onerous. This colonial mistrust of the Press is misplaced with our aspirations of being a mature democracy that trusts its citizens and this amount of regulation is an indicator that rather than tackling such issues with better policing and increased transparency, State entities fear that publications will prompt law and order problems.

This will be a theme in my forthcoming columns as well, specifically focusing on the regulation and censorship of movies and the broadcast of television content. I hope to demonstrate that rather than merely extending the existing regulations, we need a nuanced debate impugning the basis of our colonial laws. With the spread of Internet and mobile communication, we are witnessing a change of season. Laws are becoming redundant, not with the progress of time, but with the progress of technology. Licensing regulations, which sprouted with a sepoy revolt and were then bonded in fabian socialism, need to be shed this autumn.

(Apar Gupta is a partner at Advani & Co., and was recently named by Forbes India in its list of thirty Indians under thirty years of age for his work in media and technology law.)


Are we really “buying” Ebooks?

Being an avid reader, I was excited when Amazon launched the Kindle and the Amazon bookstore in India. I started ‘buying’ a number of books from their bookstore, the most recent being the latest Dan Brown offering. The popularity of the book was obvious from the fact that a number of my friends asked me if they could borrow the book from me­—now that I had a copy.


Image above is from Jorghex’s collection in Wikimedia Commons here and has been published under a Creative Commons Attribution-ShareAlike 3.0 Unreported License.

Then came the conundrum. Could I lend the e-book to my friends? I could lend my Kindle itself, but could my friends download the e-book on their Kindles, as long as I gave permission? I felt I should be allowed to do that as ‘buying’ in the traditional sense would mean that I had the right to lend, and re-sell, to others.

To get an answer to my question, I visited the ‘help’ section on the Amazon website. This is the current policy—only certain books that are bought can be lent. Also, books can be lent only by US customers, and that too only for 14 days. As far as I can tell, Indian customers don’t have the right to lend books currently (or at least all the books I have bought can’t be lent). This means that I do not have the option to sell my e-book to a second hand bookstore or even lend to a friend who wants a copy (well I could, but that could amount to illegal activity).

So, in essence, when we ‘buy’ these e-books, we are not really buying these items, we are just given a license to use the contents in a certain manner. This got me thinking. If we are only being given a license to use this e-book, then why does the website display the message “Buy Now” when advertising and not “License Now”? Or “Buy the License to Read the Contents of this Book Now?” Not as catchy, and perhaps misleading to the consumer.

The Consumer Protection Act, 1986 (“COPRA”) is the main legislation in India that seeks to protect the interests of consumers. Interestingly, under the COPRA it is an offence for any person to use unfair means to entice and dupe customers who are generally not very well informed about both the product that they are buying, as well as the rights they have vis-à-vis that product.

In fact, the COPRA specifically allows consumers to file a complaint against any person who indulges in an ‘Unfair Trade Practice’. The term has a very long definition, but a few things caught my eye. Under the COPRA, the following acts are ‘Unfair Trade Practices’:

the practice of making any statement, whether orally or in writing or by visible representation which,

(i)  falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model; ….. or

(vi)  makes a false or misleading representation concern­ing the need for, or the usefulness of, any goods or services.

Additionally, misleading advertisements have also been interpreted by Indian Courts as an unfair trade practice, for example:

Society of Catalysts v. Star Plus T.V., IV (2008) CPJ 1 (NC): Here, a TV channel and mobile operator conducted a contest in which answers had to be sent by SMS. The advertisements claimed that there was no charge for participating in the contest. However, the SMS rates for sending answers were higher than usual SMS rates. So, the cost of participation was in fact built into the high SMS rates. The TV channel collected a large amount of funds, but distributed prizes for only part of the funds collected. This was held to be an unfair trade practice.

Cox & Kings (I)Pvt. Ltd. v. Joseph A. Fernandes, (2006) CPJ 129 (NC): In this case a cruise was advertised for 2 nights 3 days, however, the consumer effectively got only 1 night and 2 days. The advertisement was clearly deceptive and another example of an unfair trade practice.

Courts have however rarely taken up similar misrepresentations in the digital arena, and there is no case law to suggest how courts would view applications of these provisions in the digital paradigm. When a consumer goes to an online shopping site, they will never see these sites display a message such as ‘license music’ or ‘music license just a click away’. Rather, they always use the term ‘buy’ music or ‘buy’ e-books. In fact, a customer will likely never read the word ‘license’ until they take the time to go through the fine print in a ‘web policy’ or the ‘terms and conditions’ page.

Although not yet tested in the courts, looking at the purpose of the Consumer Protection Act, and the way courts have interpreted and enforced its provisions, there is a possibility that the practice of using the word ‘buy’ in online advertisements for shopping websites could be construed as an unfair trade practice under the COPRA. Especially in newer markets like India, online websites must be careful while selling products to consumers to ensure that there are no deceptive or misleading advertisements that induce a customer to believe that they are actually buying the product in the sense they are used to, as opposed to just a license to view or listen to the material!

(Deepa Mookerjee is a member of the faculty at