FOR: Prof.

Ian dela Cruz Encarnacion

FROM: NAME OF STUDENT
Re: Necessity of/Beneficiality of/Practicability of ______________________
Date: January 13, 2014

Mr. Raymond Neil Franco seeks our opinion on concerns regarding retail establishment
“Healthy Options” and the arsenic content of a product it sells which is (or was) marketed as
“Earth's Best Organic Whole Grain Rice Cereal”.

There are no standards covering allowable levels of arsenic in the Philippines for food.
Since 2010, the maximum limit for arsenic is for drinking waters, 0.01 mg/L. 1 But for the said
Rice Cereal, the inorganic arsenic levels are 0.0017 to 0.0027 mg per 15 gram serving. 2 While at
first glance one would state that the product is below the maximum limit set by the Department
of Health (DOH), it should be noted that the product is an infant rice cereal. The tolerance level
of the infants and toddlers are below that of the adults and the level may be prejudicial to their
health and safety. This view may however need further scientific verification.

Through the years, several class action lawsuits have been instituted in the USA. In
Arkansas, farmers sued Pfizer and Tyson Foods over high levels of arsenic in rice.3 The US Food
and Drugs Administration (FDA) was sued in a California federal court over its failure to
respond to a 2009 petition to ban arsenic-based animal feeds.4 In 2011, Kashi Company and its
mother corporation Kellogg Company were sued because the company was claiming that its
products were “all-natural” when, in fact, they contained genetically-modified ingredients,
including arsenic, which are not “all-natural”.5 And as early as 2009, the European Food
Standards Agency warned parents not to give rice milk to infants and toddlers because it tested
positive for traces of arsenic.6

Our review of Mr. Franco’s concerns show that “Healthy Options” may be held
administratively, civilly, and criminally liable for the introduction into the Philippines of the
product “Earth's Best Organic Whole Grain Rice Cereal”. They could likewise be held liable for
product misrepresentation if the said product is unregistered with the FDA as required under the
Consumer Act of the Philippines and the Food and Drugs Act of 2009.

1
Administrative Order No. 2007-0012 dated 9 March 2007
2
http://consumerreports.org/cro/arsenicinfood.htm#chart
3
1http://www.arkansasbusiness.com/article/87766/arkansas-farmers-sue-pfizer-tyson-foods-over-arsenic-in-

rice?page=all
4
http://www.law360.com/articles/437702/fda-ignores-toxic-arsenic-in-animal-feed-suit-says
5
http://www.courthousenews.com/2011/08/30/Kashi.pdf
6
1http://www.dailymail.co.uk/news/article-1186722/Rice-milk-arsenic-contamination-prompts-food-watchdog-
warning-children-stop-drinking-it.html

1
 As provided by Article 18 (a) of the Consumer Act of the Philippines, it states:

ARTICLE 18. Prohibited Acts - It shall be unlawful for any person to:

a) manufacture for sale, offer for sale, distribute in commerce, or

import into the Philippines any consumer product which is not in
conformity with an applicable consumer product quality or safety
standard promulgated in this Act;

******

d) fail to comply with an order issued under Article 11 relating to

notifications of substantial product hazards and to recall, repair,
replacement or refund of unsafe products;

e) fail to comply with the rule prohibiting stockpiling.

ARTICLE 19. Penalties -

a) Any person who shall violate any provision of Article 18 shall, upon
conviction, be subject to a fine of not less than One thousand pesos
(P1,000.00) but not more than Ten thousand pesos (P10,000.00) or
imprisonment of not less than two (2) months but not more than one
(1) year, or both upon the discretion of the court.

The Civil Code provisions on tort also shows the applicable liability of the producer,
manufacturer or retailer of any product found to be the cause of any death or injury to another
because of any noxious or harmful substances.7

Art. 2176. Whoever by act or omission causes damage to another, there

being fault or negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of
this Chapter. (1902a)

7
Art. 2187. Manufacturers and processors of foodstuffs, drinks, toilet articles and similar goods shall be
liable for death or injuries caused by any noxious or harmful substances used, although no contractual
relation exists between them and the consumers. (n)

2
 In light of the findings from suits and case decided overseas, there are possible legal
liabilities that “Healthy Options” might incur under our own laws.

Remedies available

There are three possible remedies available to Mr. Franco: (a) an administrative case
against the retailer/distributor filed with the Food and Drugs Administration8, (b) a civil case for
damages (either individually or a class suit), and (c) a criminal case for violation of the
Consumer Act of the Philippines and the Food and Drugs Act of 2009 for peddling an unlicensed
product.9

8
Section 13. Section 29-A of Republic Act No. 3720, as amended, is hereby further amended, and new subsections
are added to read as follows:

"SEC. 29-A. Administrative Sanctions. - Where there is finding of prohibited actions and determination of
the persons liable thereto, after notice and hearing, the director-general is empowered to impose one or
more of the following administrative penalties:

"(1) Cancellation of any authorization which may have been granted by the FDA, or suspension of the
validity thereof for such period of time as the director-general may deem reasonable which shall not exceed
one (1) year:

"(2) A fine of not less than Fifty thousand pesos (P50,000.00) but not more than Five hundred thousand
pesos (P500,000.00). An additional fine of not more than One thousand pesos (P1,000.00) shall be imposed
for each day of continuing violation; and

"(3) Destruction and/or appropriate disposition of the subject health product, and/or closure of the
establishment for any violation of this Act, as determined by the director-general."

9
Section 10. Section 11, subsections (a), (b), (d), (g), (j),(k) and (l) of Republic Act No. 3720, as amended, are
hereby further amended to read as follows:

"SEC. 11. The following acts and the causing thereof are hereby prohibited:

"(a) The manufacture, importation, exportation, sale, offering for sale, distribution, transfer, non-consumer
use, promotion, advertising, or sponsorship of any health product that is adulterated, unregistered or
misbranded.

Section 11. Section 12, subsection (a) of Republic Act No, 3720, as amended, is hereby further amended to read as
follows:

3
 Section 5 of the Food and Drugs Act also empowers the FDA Director to impose
provisional sanctions for violators of said law:

"(j) To issue cease and desist orders motu propio or upon verified
complaint for health products, whether or not registered with the
FDA Provided, That for registered health products, the cease and desist
order is valid for thirty (30) days and may be extended for sixty (60) days
only after due process has been observed;

"(k) After due process, to order the ban, recall, and/or withdrawal of any
health product found to have caused the death, serious illness or serious
injury to a consumer or patient, or is found to be imminently injurious,
unsafe, dangerous, or grossly deceptive, and to require all concerned to
implement the risk management plan which is a requirement for the
issuance of the appropriate authorization;

If “Healthy Options” is still selling the product, this may subject to a wide array of
product liability cases. A class action, coupled with an administrative case, can be started by Mr.
Franco and other persons who bought the product in the past to compel “Healthy Options” to
settle with them through some form of compensation.

"SEC. 12. (a) Any person who violates any of the provisions of Section eleven hereof shall, upon
conviction, suffer the penalty of imprisonment ranging from one (1) year but not more than ten (10) years
or a fine of not less than Fifty thousand pesos (P50,000.00) but not more than Five hundred thousand pesos
(P500,000.00), or both, at the discretion of the court: Provided, That if the offender is a manufacturer,
importer or distributor of any health product, the penalty of at least five (5) years imprisonment but not
more than ten (10) years and a fine of at least Five hundred thousand pesos (P500,000.00) but not more
than Five million pesos (P5,000,000.00) shall be imposed Provided, further, That an additional fine of one
percent (1%) of the economic value/cost of the violative product or violation, or One thousand pesos
(P1,000.00), whichever is higher, shall be imposed for each day of continuing violation: Provided, finally,
That health products found in violation of the provisions of this Act and other relevant laws, rules and
regulations may be seized and held in custody pending proceedings, without hearing or court order, when
the director-general has reasonable cause to believe from facts found by him/her or an authorized officer or
employee of the FDA that such health products may cause injury or prejudice to the consuming public.