Taishan Enterprise lawyer Chen Zhengxi, left, and marketing deputy general manager Anze Niu held signs outside the Taipei District Court yesterday. Photos provided by Taishan Enterprises
BAP argument: Lawyers say liability will be determined by when information about abnormal benzo[a]pyrene (BaP) levels surfaced and whether it was communicated in a timely manner.
By Wenchuan Zhang and Sam Garcia/Staff reporters and staff writing
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Taishan Enterprises (Taishan Enterprises) filed a lawsuit yesterday against Zoomlion Oils and Fats (Zhonglian Oils) and three other companies, demanding joint compensation of NT$1 billion (approximately US$31.71 million) because the edible oil produced by China United Oils and Fats contained excessive amounts of the carcinogen benzo[a]pyrene (BaP), triggering a food safety controversy.
On August 18, the Taichung District Prosecutor's Office indicted Chung Lian Oil, Taishan, Fu Shou Industrial (Fu Shou Industrial), and Fuma Oil (Fu Mao Oil), as well as related individuals, on charges ranging from violation of the Food Safety and Hygiene Management Act to forgery and fraud, for allegedly circulating contaminated cooking oil.
The key to determining liability lies in when the information about abnormal BaP levels was learned and whether it was delivered in a timely manner, said Chen Zhengxi, a lawyer at Taishan Enterprises.
Nam Chiau Oils and Fats Industry Co., Ltd. (Nang Chiu Oils and Fats Industry Co., Ltd.) received three test reports showing that BaP exceeded the standard on May 13, May 22 and June 4, but only privately notified Fu Thou Industrial, Chen Zhengxi explained, noting that neither company fulfilled its obligation to promptly report the findings to the competent authorities.
After Fushou Industrial learned of the abnormal test results on May 18, it failed to notify the competent authorities in a timely manner, he added.
Comparing the information in the indictment with public statements by Nan Chiau Oil and Fat showed significant differences in when the companies obtained the information, how aware they were and how they responded, he said.
The companies' failure to promptly report the problem resulted in the contaminated cooking oil not being discovered and removed from shelves, a delay of two months, the lawyer said.
Companies including Taishan continued to use the batch of cooking oil without knowing it and subsequently suffered significant losses due to product recalls, inventory disposals, consumer compensation, reduced profits and brand damage, he explained, adding that Taishan's losses were approximately NT$1 billion.
Taishan initially believed that it would be responsible to consumers as long as its branded products were still on the market, said Niu Anze, Taishan's deputy general manager of marketing.
However, while it handles consumer complaints and conducts confidential investigations, the company does not know when other companies discovered problems in the supply chain, New Zealand said.
After the indictment was released, Taishan compared its contents with statements and news reports from Fushou Industrial and other companies, as well as its own test results in April and May, and then filed a lawsuit to clarify liability, she said.
Taishan received the same batch of soybean oil from Zoomlion Oils and Fats on April 8 and 9, and sent it to Swiss SGS for testing on April 10. On April 21, it received a qualified result. Therefore, there is no reason to believe that its products have safety issues, the company stated.
If Nan Chiu Oils and Fats had disclosed the abnormal test results when it first discovered them in mid-May, Zoomlion Oils and other companies in the supply chain could have started tracing the source, conducting additional testing and managing risks, Taishan said.
The period from mid-May to mid-June is a critical period for controlling issues, but delays in information sharing have led to delays in supply chain tracking and risk control, thereby increasing the company's losses, Taishan added.
The court should determine liability based on the time when Zoomlion Oil, Fu Shou Industrial, Nan Chiu Oil and Fu Mao Oil learned of the problem and the timeliness of their notification, Taishan stressed.
Additional reporting provided by China Central News Agency
News source: Taipei Times
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