Article contents
The Right to Food and Buyer Power
Published online by Cambridge University Press: 06 March 2019
Abstract
Modern global food supply chains are characterized by extremely high levels of concentration in the middle of those chains. This paper argues that such concentration leads to excessive buyer power, which harms the consumers and food producers at the ends of the supply chains. It also argues that the harms suffered by farmers are serious enough as to constitute violations of the international human right to food, as expressed in the Universal Declaration of Human Rights and more specifically, in the International Covenant on Economic, Social and Cultural Rights. World competition law regimes cannot ignore these human rights imperatives. To a certain extent, these imperatives can be accommodated under existing consumerist competition law theories by the interpretive mechanism of conform-interpretation. However, when one comprehends the truly global scale of modern food supply chains, it becomes obvious that conform-interpretation alone will not suffice. Instead, the protection of a minimum level of producer welfare congruent to those producers’ right to a minimum adequate level of food must find a place among the aims of any credible theory of competition law. Moreover, the same globalized nature of these food supply chains means that current doctrines of extraterritorial jurisdiction of competition control have also to be revised.
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References
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102 Of the 52 practices investigated by the Commission, 26 were concerned with “practices that have the potential to create uncertainty for suppliers regarding their revenues or costs as a result of the transfer of excessive risks or unexpected costs to suppliers”. See, UK Competition Commission, Groceries Market Investigation (2008), para. 9.52, at 166–67.Google Scholar
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131 Such an “economic approach” to the determination of abuses of dominant positions under Art. 102 TFEU (ex Art. 82 EC) has not filtered through the whole of the EC. The EAGCP Consultation Paper, An Economic Approach to Article 82 (July 2005), questioning the prior practice of holding certain activities as per se abusive and disregarding possible pro-competitive effects, is not a binding legal authority, as is the Commission's discussion paper on the application of Art. 102 TFEU (December 2005). At present, only the Commission adheres to an economic approach to Art. 102 TFEU; the General Court and the ECJ appear to remain wedded to the legalistic approach. See, Case T-340/03, France Télécom SA v. Commission and Case T-201/04, Microsoft Corp v. Commission (General Court), as well as Case C-95/04, British Airways v. Commission (ECJ). It is submitted that the economic approach is preferable from a purely theoretical point of view. However, proving harm to competition may be very difficult, especially if it is as remote and indirect (as may be the case in all-or nothing contracts), meaning that in practice, there is the danger of under-regulation if one takes the economic approach.Google Scholar
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140 See, Cass Sunstein, Irreversible and Catastrophic, 91 Cornell L. Rev. 841 (2006). The precautionary principle, or various expressions thereof, is found in a number of legal and policy instruments and pronouncements, both domestic and international: e.g. Bergen Ministerial Declaration on Sustainable Development in the ECE Region, U.N. Econ. Comm'n for Europe, Bergen, Noway, 8–16 May 1990; UN Conference on Environment and Development, Rio Declaration on Environment and Development, princ. 15, U.N. Doc. A/CONF.151/26/Rev.1 (Vol. I) (1 January 1993); San Francisco, California Environment Code, Chapter 1, section 101, etc. Sunstein posits that there are a number of precautionary principles: namely the Irreversible Harm, Catastrophic Harm and Hazardous Precautions varieties. The argument made by the UK Competition Commission appears to be most akin to the Catastrophic Harm variant, which essentially states that where “risks have extremely bad worst-case scenarios, it makes sense to pay special attention to those risks, even if they are unlikely to come to fruition, and even if existing information does not enable regulators to make a reliable judgment about the probability that they will occur.” At 846.Google Scholar
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142 Application No. 33218/96, (2002).Google Scholar
143 Id. para. 99.Google Scholar
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145 See, Recitals 2 and 3 of the common preamble to the ICESCR and ICESCR; General Comment No. 3, supra, note 47:Google Scholar
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** The adoption of a rigid classification of economic, social and cultural rights which puts them, by definition, beyond the reach of the courts would thus be arbitrary and incompatible with the principle that the two sets of human rights are indivisible and interdependent.Google Scholar
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153 Individual agricultural contracts can indeed be pro-competitive and advance human rights simultaneously if the buyer makes available to smallholders credit facilities to be used for buying equipment, fertiliser, etc; technical advice, and other equitable conditions, such as predetermined prices, minimum income, and penalty clauses for default by buyers: De Schutter, Agribusiness Report, supra, note 24, 17. Essentially, the buyer is paying for his added security of supply. See, also Spencer Henson, Oliver Masakurea and David Boselie, Private food safety and quality standards for fresh produce exporters: the case of Hortico Agrisystems, Zimbabwe, 30(4) Food Policy 371 (August 2005); On the risks inherent in contract farming, see Peter D. Little and Michael J. Watts, Living under Contract: Contract Farming and Agrarian Transformation in Sub-Saharan Africa (1994).Google Scholar
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155 See, X and Y v. The Netherlands, judgment of 25 March 1985, Series A, No. 91 (ECHR): “although the object of Article 8 is essentially that of protecting the individual against arbitrary interference by public authorities, it does not merely compel the State to abstain from such interference: in addition to this primarily negative undertaking, there may be positive obligations inherent in an effective respect for private or family life…. These obligations may involve the adoption of measures designed to secure respect for private life even in the sphere of the relations of individuals between themselves (…) the protection afforded by the civil law in the case of wrongdoing of the kind inflicted on Miss Y is insufficient. This is a case where fundamental values and essential aspects of private life are at stake. Effective deterrence is indispensable in this area and it can be achieved only by criminallaw provisions; indeed, it is by such provisions that the matter is normally regulated.Google Scholar
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158 See, Philip Marsden & Simon Bishop, Editorial: Intellectual Leaders Still Need Ground to Stand On, 3.2 Eur. Competition J. 315, 315 (2007): reporting that the Judge Cooke of the EU General Court (formerly the Court of First Instance) stated that “I tell my clerks that these cases are 20 percent fact, 20 percent law, and 60 percent policy”.Google Scholar
159 Opinion of Advocate General Eleanor Sharpston, Case C-73/08, Nicolas Bressol and Others and Celine Chaverot and Others v. Gouvernement de la Communauté française, para. 136 (25 June 2009).Google Scholar
160 See, e.g. Article 1, German Basic Law: (“Human dignity is inviolable”); Sec. 1, Constitution of the Republic of South Africa 1996: (“The Republic of South Africa is one, sovereign, democratic state founded on the following values: (a) Human dignity, the achievement of equality and the advancement of human rights and freedoms…”); Art. 1, European Charter of Fundamental Freedoms: (“Human dignity is inviolable. It must be respected and protected.”)Google Scholar
161 Case 37971/97, Société Colas Est v France and others (2002) ECHR III-135 (European Court of Human Rights) (Article 8 ECHR infringed by France as a result of inspectors entering applicant's property without a prior judicial warrant); Cases 46/87, Hoechst AG v Commission [1989] ECR 2859, [1991] 4 CMLR 410, (ECJ) para. 19: “… in all the legal systems of the Member States, any intervention by the public authorities in the sphere of private activities of any person, whether natural or legal, must have a legal basis and be justified on the grounds laid down by law, and, consequently, those systems provide, albeit in different forms, protection against arbitrary or disproportionate intervention.”.Google Scholar
162 Woodlands Dairy (Pty) Ltd and Anor v. Competition Commission, (88/CACMar09) [2009] ZACAC 3 (26 September 2009) Competition Appeal Court (South Africa) (unduly vague search warrant); Glaxo Wellcome (Pty) Ltd Others v D. Terblanche Others (03/CAC/Oct00) [2001] ZACAC 2 (5 September 2001) Competition Appeal Court (South Africa) (unduly vague order by lower Competition Tribunal).Google Scholar
163 Section 27(1)(b) of the South African Bill of Rights: “Everyone has the right to have access to … sufficient food and water…”Google Scholar
164 Section 8(1) of the South African Bill of Rights: providing that private persons may be fixed with obligations under the Bill of Rights “if, and to the extent that, it is applicable, taking into account the nature of any duty imposed by the right.”Google Scholar
165 South African Human Rights Commission, Submission to the Competition Commission South Africa in the Matter of the Competition Commission, Tiger Brands Limited and Adcock Ingram Critical Care (Pty) Ltd, Case no. 15/CR/Feb07. The bread manufacturer, Tiger Brands subsequently settled with the Commission, but another member of the cartel, Pioneer Foods, was found liable and fined 195 million rand: Competition Commission v. Pioneer Foods (Pty) Ltd., Case nos. (15/CR/Feb07) (50/CR/May08), reasons issued (3 Feb 2010). I am grateful to Dr. Christine Jesseman for providing me these references.Google Scholar
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167 United States v. Aluminum Co. of America (Alcoa) 148 F 2d 416, (2d Cir.) 444 (1945).Google Scholar
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171 Case 114/85, Ahlström Oy v. Commission [1988] ECR 5193 (Wood Pulp) (ECJ).Google Scholar
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178 General Comment No. 12, supra, note 35, para. 14. The ESCR Committee has used a similar formulation for a number of other rights under the Convention: See, U.N. CESCR, General Comment No, 4: The right to adequate housing, 7th Sess., para. 13, U.N. Doc. E/1992/23 (1992); U.N. CESCR, General Comment 13: The right to education, 21st Sess., paras. 6(a), (b), U.N. Doc. E/C.12/1999/10 (1999); U.N. CESCR, General Comment No, 14: The right to the highest attainable standard of health, 22d Sess., paras. 12(b), 51, U.N. Doc. E/C.12/2000/4 (2000); U.N. CESR, General Comment No. 15, U.N. Doc. E/C.12/2002/11 (2003), paras. 12(c), 31, 44(b), 53; U.N. CESCR, General Comment No. 8: The relationship between economic sanctions and respect for economic, social and cultural rights, 17th Sess., para. 10, U.N. Doc. E/C.12/1997/8 (1997); U.N. CESCR, General Comment No. 9: The domestic application of the Covenant, 19th Sess., para. 9, U.N. Doc. E/C. 12/1998/24 (1998).Google Scholar
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195 See, the Closer Economic Relations Agreement, entered into force between Australia and New Zealand on 1 January 1983.Google Scholar
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203 Allen Buchanan & Robert Keohane, The Legitimacy of Global Governance Institutions, 20(4) Ethics and Int. Affairs 405, 416 (2006).Google Scholar
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206 This is where I part company from Rawls. See, Law of Peoples, 75 – 78, which considers as a minimally “decent” society, one which refrains from persecuting minorities and which observes due process of law.Google Scholar
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208 An interesting exception to this general rule is found in Part 1 of the UK Representation of the People Act 2000 (c.2), which provides that Commonwealth and Irish citizens may vote in Parliamentary elections [section 1(c)], and in elections for local government [section 2(c)]. It appears to be a gesture of contrition for centuries of colonial rule.Google Scholar
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