The Supreme Administrative Court rendered the 108-Pan-530-Zi Decision of November 14, 2019 (hereinafter, the “Decision”), holding that although the data about product problems which are obtained by an agency from its audit are the same as those actively reported by the operator, still the agency’s audit is different from the operator’s reporting, and the operator is not released from its reporting obligation as a result of the competent authority’s audit.
According to the facts underlying this Decision, after the scandal involving Company A’s use of gutter oil to create lard products was reported by the media, the Appellant purchased lard products from Food Store B. However, after learning about the legal violation of the oil products, he returned the remaining oil bottles. The Appellee concluded that the Appellant, who was aware of his use of illegal products, had violated the Article 7, Paragraph 2 Law Governing Food Safety and Sanitation (hereinafter referred to as the “Food Safety Law” effective at the time of the act) (which was moved to Article 2, Paragraph 5 in the December 10, 2014 amendments) on the ground that the Appellant had not recalled the products and refunded the payment until he was audited and interviewed once again by the Appellee. In addition, the Appellee imposed a fine upon the Appellant. Dissatisfied, the Appellant brought an administrative action to reverse both the original disposition and the decision on administrative appeal. The administrative court subsequently set aside the original disposition. After reconsidering this matter, the Appellee still held that the Appellant violated Article 7, Paragraph 2 of the Food Safety Law for his failure to actively report the violation. Therefore, a fine of NT$500,000 was imposed again on the Appellant (hereinafter referred to as the “First Original Disposition,” and there was the “Second Original Disposition in this matter; and the dispositions are collectively referred to as the “Original Disposition.” The author only discussed the First Original Disposition here). Dissatisfied with the Original Disposition, the Appellant appealed. After the matter was remanded, the administrative action was still dismissed. Therefore, this appeal was filed.
According to this Decision, Article 7, Paragraph 2 of the Food Safety Law aims at imposing the responsibility for autonomously managing products and ensuring food safety upon food operators at various stages. The so-called “reporting” in the same paragraph of the same article refers to notification and communication, which means that food operators are required to report product issues to the competent authority. This is different in meaning from the launch of a food safety administrative audit by food safety authorities as a measure of national health administration. The statement of an operator in response to an audit performed by the competent authority is given to accommodate the audit, not to perform the obligation of notifying the competent authority of the potential sanitation and safety violation the operator has identified pursuant to applicable requirements. Even though the data learned by the competent authority about the product issues are the same as those voluntarily reported by the operator, still the audit by the competent authority is not equivalent to reporting by the operator, and the operator is not released from its reporting obligation as a result of an audit launched by the competent authority. In addition, Article 7, Paragraph 2 of the Food Safety Law does not stipulate details such as the procedure and methods for reporting to the competent authority but only indicates that an operator may report in any manner, and it is not true that an operator is released from its reporting obligation.
It was further indicated in this Decision that since the Appellee learned, as a result of its audit, about the Appellant’s use of lard, and the information did not come from the Appellant’s voluntary reporting. Since the operator is not released from its reporting obligation as a result of an audit launched by the competent authority, the Appellant’s accommodation of the audit is not a reporting act. The Original Decision held that the Appellant had failed to perform its voluntary reporting obligation under Article 7, Paragraph 2 of the Food Safety Law and concluded, on such basis, and that the opinions about the defensive and offensive methods and the legal opinions recorded in the decision were not subject to any circumstance of violation of laws and regulations such as insufficiency of grounds and failure to investigate as alleged by the Appellant. However, the Appellee imposed a fine of NT$500,000 upon the Appellant for the violation of Article 7, Paragraph 2 of the Food Safety Law, while a fine of merely NT$30,000 was imposed upon Tai-Jye Foods Co., Ltd., another operator which had violated the same article in the same matter. The difference between the fines is obviously excessive. The original decision did not investigate and mention in the decision reasons why the Appellant and Tai-Jye Foods Co., Ltd., which had both been penalized for violation of Article 7, Paragraph 2 of the Food Safety Law, had been fined differently. In addition, since the court could not determine on its own whether the administrative act meets the principle of fairness and whether the facts of violation in these two cases are the same, the portion of the original decision which rejected the Appellant’s request to set aside the First Original Disposition and such portion in the decision on administrative appeal were reversed and remanded to the original court, which should then render a legally more appropriate adjudication.