Exporters already dealing with strained supply lines and the downsides of lockdown face another threat – the suspension of export licences with China if the current Covid-19 outbreak makes its way into their workplace
Kiwi food exporters battling through lockdown have been warned a single positive Covid-19 case within their workforce could lead to Chinese authorities immediately suspending their export rights and forcing a recall of their products.
Sector figures say the advice from government officials has added to the stresses businesses face as they deal with strained supply lines and the public health requirements of operating at Level 4.
In a guidance note to export businesses this week, the Ministry of Primary Industries said it was aware of new import measures being applied by China, covering “all cold chain food products that are normally stored and transported under refrigeration, including vegetables and fruit”.
After staff in cold chain facilities from a number of countries had returned positive Covid-19 tests, China’s custom agency had suspended the businesses’ registrations, preventing them from exporting any more products.
“Cold chain food establishments, packhouses, and cold stores registered with China Customs to produce/store food products for export to China should therefore operate on the assumption that if a staff member returns a positive Covid-19 test result it is possible this will result in China suspending the premises registration.”
Chinese customs officials expected any business with a staff member who returned a positive test to “immediately recall any affected exports to China”, and suspend all further shipments of goods.
“I would say anyone who's in primary industries who isn't worried, and who exports to China, isn't across the details.”
The Asian superpower has been dealing with its worst Covid outbreak since last year, after a number of Delta cases were discovered in the eastern city of Nanjing late last month, and this is not the first time Kiwi businesses have been affected by the country’s import rules.
In November last year, Trade and Export Growth Minister Damien O’Connor was forced to deny claims a shipment of New Zealand tripe had tested positive for the virus, while earlier this year a Sanford mussel processing facility in Havelock and two Sealord facilities in Nelson were barred from exporting a range of products following a Chinese audit.
Sealord chief executive Doug Paulin told Newsroom the suspension had cost the company about $3 million to date, as it had to pay other manufacturers which still held export licences to process its products.
“[China] had some expectations which had never really been communicated, and probably not unfair expectations either, but because that hadn't occurred, it meant that in New Zealand, whoever was going to be the first companies audited were always probably going to strike the issue that Sealord and Sanford did.”
Paulin said both Sealord and MPI were working to get the export suspension lifted, but it had been a slow process as the matter was relatively low on China’s list of priorities.
The company had shared its experiences with the ministry and other primary sector exporters so they could try to avoid a similar fate, but many businesses would still be concerned about how the current outbreak would affect their exports.
“I would say anyone who's in primary industries who isn't worried, and who exports to China, isn't across the details.”
“The problem for New Zealand exporters is that China does not care about the science – it just wants to keep Covid out of China.”
There is limited evidence at present to suggest Covid-19 can be transmitted through cold chain facilities in an international supply chain.
While some Chinese research has suggested the virus may be able to survive on the surfaces of cold and moist objects in the cold chain for more than three weeks, other scientists and the Ministry of Health say it is rare for Covid-19 to be transmitted through surfaces.
A trade source told Newsroom the clampdown was “a clear overreaction from the Chinese” but in line with a number of the actions the country had taken since the pandemic began.
The source said China would be using exception clauses at the World Trade Organisation and through its bilateral and regional trade agreements to justify its move as necessary to protect human health, even though there was little if any scientific evidence to support such a stance.
“The problem for New Zealand exporters is that China does not care about the science – it just wants to keep Covid out of China.”
The country’s approach further highlighted the importance of exporters doing what they could to prevent staff from catching the virus, and encouraging them to get vaccinated.
Export NZ executive director Catherine Beard told Newsroom food manufacturers and exporters already took a cautious public health approach as essential services under Level 4, but the China warning added another degree of difficulty to an already fraught situation.
“It may be one of those things that sounds good in theory at the China end, but if it means they end up with a lack of food crossing the border, then that may be problematic for them, to be honest.”
Beard said food manufacturers worked in highly controlled environments and had worked carefully on Covid safety procedures, and she hoped the close trade ties between New Zealand and China would help ward off any concerns about the current Delta outbreak.
Kimberly Crewther, the executive director of the Dairy Companies Association of New Zealand, told Newsroom the MPI advice confirmed what the sector had known for some time about China's expectations for cold chain exporters.
Crewther said dairy processing sites were highly mechanised, with limited contact between dairy processing operators and cold chain products, and protective clothing and masks already a standard operating procedure where it did happen.
Dairy companies moved quickly to adjust their protocols for the Level 4 lockdown and the Delta variant environment when the first community case was announced last week, she said.
“If a Covid-19 case affecting a staff member on a New Zealand dairy site does arise, we hope that consideration will be given to the factors...which lower the risk of on-site spread between staff and mean that China can continue to have a high degree of confidence in New Zealand dairy products.”
Crewther said the association had asked the Government to include food manufacturing staff among the ‘essential services’ who were given priority access to vaccinations.
“The potential economic implications for New Zealand of Covid entering a cold chain premises are another good reason for everybody to be taking the current lockdown seriously and advancing the vaccine rollout as quickly as possible.”
Meat Industry Association chief executive Sirma Karapeeva said while the measures applied to all countries involved in exporting food to China during the pandemic, the New Zealand red meat processing sector was" committed to protecting our people and doing everything we can to prevent the spread of Covid-19".
“Meat processing companies are now operating under Alert level 4 protocols agreed with the Ministry for Primary Industries (MPI) to ensure our sector’s continuing operations do not compromise people’s safety or contribute to the spread of COVID-19. This includes physical distancing, mandatory masks on site, personal hygiene, transport to and from work, further increased cleaning/disinfection of processing areas, contact tracing and temperature checks.”
MPI market access director Steve Ainsworth told Newsroom there was no indication that New Zealand trade had been affected by the Chinese measures, and the update was “simply a short reminder to cold chain food production businesses, packhouses and cold stores”.
Ministry officials kept in close contact with primary sector exporters to ensure they were aware of the latest developments and provide any necessary support.
