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Tuesday, September 30, 2008

New product packaging limits proposed in China

The China Daily newspaper recently reported that the government has proposed a new rule to limit the amount of packaging used in goods produced or sold in the country.

The rule would likewise ban goods which occupy less than forty-five percent of the space of a product container. The proposed limit was recently announced jointly by the General Administration of Quality Supervision, Inspection and Quarantine and the National Development and Reform Commission (the “NCRC”). The NCRC is the management agency under the Chinese government's State Council which formulates economic policy through rulemaking proposals. If adopted as passed, the rule would also impose record-keeping requirements on all product packagers. The rule still awaits approval by the State Council.

While the move is consistent with efforts of the central government to promote more environmentally sound policies, it can also been seen as the continuation of a general trend of increased regulation by the central government on manufacturing businesses (with a corresponding rising cost of legal compliance for operations in China). As China Daily also reported, opposition from manufacturers already has surfaced to the “one size fits all” rule. Critics fear the proposal may impact some manufacturers disproportionately, like pharmaceutical producers whose products necessarily require more fill materials relative to total quantity or volume of product packaging. Input on the proposed rule is still possible.

For more information, contact a member of Womble Carlyle’s Supply Chain Management or China practice teams.

-- Randy Hanson

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