June 4, 2007
In what would be considered a serious ultra vires action under administrative law in the
United States, the Chinese government sentenced the former head of its food and drug
safety agency to death. Zheng Xiaoyu served as commissioner of the Food and Drug
Administration from its creation in 1998 until the middle of 2005, when he was removed
from his position.
Mr. Zheng was arrested in February 2007 following a government investigation of the
Chinese FDA. The investigation accused Mr. Zheng of accepting $850,000 in bribes in
exchange for approval of licenses for the production of drugs. Mr. Zheng entered guilty
pleas to corruption and accepting bribes. The Chinese government was quick to note,
however, that death sentences for corruption are quite common in their country.
The government continues its work on the agency because it fears that the licenses may
have been granted to companies that are producing substandard drugs. The
investigation will look at 170,000 licenses granted.
The sentence follows nearly two months of investigations and issues surrounding
China’s exported food industry. Two Chinese companies have been accused of
shipping contaminated pet food ingredients to U.S. companies. The U.S. pet food
companies had to issue massive recalls of their products after the deaths of about 60
dogs.
Over the past year, Chinese products have caused death and illnesses around the
world:
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Diethylene glycol, a chemical found in some antifreezes, was discovered in
toothpaste and cough syrup from China that had been shipped to Central and
South America.
Six died and 80 became ill in China after taking an antibiotic produced in their
country that contained a “substandard disinfectant.”
There is a large counterfeit drug underworld in China that makes substantial
sales internally and around the world and the counterfeit drugs are more
dangerous because of substandard production.
Mass poisonings from tainted food products are quite common and regular in
China.
As a result of this recent activity, China has started its first recall program. The recall
program will apply only to food production, not to restaurants and food stall sales, an
area of commerce regulated by different agencies. The Chinese Premier has said, “The
pharmaceutical market is in disorder.”1
On the pet food issue, U.S. pet food brands and the higher quality Chinese suppliers
they rely on are demanding that branding be protected in China as a means of curbing
the scandals. Pet food companies in the U.S. have been working with Chinese suppliers
to ensure standards complain that bad actors are killing the market for companies with
Nicholas Zamiska, Jason Leow, and Shai Oster, “China Confronts Crisis Over Food Safety,” Wall Street
Journal, May 30, 2007, p. A3.
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standards. Some point to China’s unwillingness to embrace intellectual property rights
as a barrier to branding and the power of brand equity.
How could brands be protected in China? What components of U.S. administrative law
might help China in its present crisis?
FOR MORE INFORMATION
Holman W. Jenkins, Jr., “Yes Logo,” Wall Street Journal, May 30, 2007, p. A18.
David Barboza, “Ex-Chief of China Food and Drug Unit Sentenced to Death for Graft,”
New York Times, May 30, 2007, p. A7.