Plant Health Exports Audited Trader Scheme - Scottish membership: BRIA - partial

Consultation

Within Government

We have consulted internally with colleagues in Policy, Legal Services, and SASA to establish the processes, procedures and costs to provide the export certification services, and to seek their advice and comments on our proposals as they have developed.

Public Consultation

A public consultation took place from 23 October 2023 and closed on 15 December 2023. Relevant businesses were contacted via email to make them aware of the public consultation and they were provided with a link. It was mentioned on the Twitter account of the Chief Plant Health Officer for Scotland. The consultation was also placed on Citizen Space and the SG website for wider awareness.

Business

The consultation was specific to specialised businesses of the agricultural sector, specifically consisting of exporters of low-risk fruit, vegetables and cut flowers.

Ten businesses were contacted via email and provided with a copy of the consultation paper and this partial 'Business and Regulatory Impact Assessment' (BRIA) for comment.

One response was received during the consultation. The business saw merit in the scheme, but they were unprepared to commit outright because the scheme was not a best fit for their business model at this time. A second response was received after the consultation was closed from a major Scottish low-risk fruit and vegetable producer, indicating that they would be interested in using PHEATS. This suggests that if PHEATS was operational in Scotland, further consideration would be given to join, and take full advantage of PHEATS' benefits.

Despite the low response rate to the consultation, SG believe the best approach is to proceed with implementation of PHEATS, and that other businesses will look to join the scheme once it is operational. Once PHEATS is available in Scotland, we can then consider if there is interest from other sectors, such as ware potato and possibly used machinery exporters in using PHEATS. This can only be done if PHEATS is rolled out in Scotland.

The SSI will allow SG to charge the appropriate fees for PHEATS services, which would equally apply to any extension in scope to other sectors.

Policy Options

To introduce PHEATS in Scotland:

Option 1. Introduction of PHEATS in Scotland

Introduce PHEATS in Scotland on the same terms and conditions as England and Wales. PHEATS is a voluntary trade facilitation scheme developed by DEFRA for exports of low-risk fruit, vegetables and cut flowers to the EU and NI that complies with internationally recognised rules. This scheme is a process which gives devolved authority to an AP(s) within an AB to conduct phytosanitary inspection(s). The actual issue of a PC remains with the SG plant health inspector. The business would be subject to audits to ensure they are complying with the phytosanitary requirements for inspections.

The likely costs associated with this scheme are as follows:

Fees outline

1. Initial authorisation and site visit

This fee covers the cost of the inspectors first visit, their full assessment of the inspection site and an audit of the PR and the AP(s) competency to inspect. The inspector would check that the inspection site is correctly set up by checking aspects like: the physical layout of the inspection point; ensuring the correct equipment is used; and an assessment of the holding area (amongst others).

PHEATS training is audited by an SG inspector shadowing a PR and AP(s). They must conduct an export inspection and do a short assessment.

2. Compliance audit

The fee covers the cost of the inspector auditing and checking the inspection site and reviewing the inspection abilities of the AP(s). All audits and checks would be checked against the criteria set out in the BCMP.

The PC fee below is for the time taken to complete and issue the PC by an SG inspector:

Businesses accepted onto PHEATS will receive regular audits of the inspection site by SG inspectors, to monitor conformity with the scheme and their BCMP.

Every audit includes a requirement for one AP or the PR to demonstrate export, scheme and inspection knowledge at each audit. After acceptance on to the scheme, all AP(s) and the PR must be available for, and pass an audit assessment at least annually.

Refresher training will be provided by the SG every five years which must be completed by all AP(s) and the PR. It is a requirement of the BCMP that AP(s) and the PR maintain their knowledge of relevant pests and diseases and the countries' import requirements.

Sites will be audited weekly for the first month, fortnightly the following month and monthly thereafter. If non-conformities are identified, additional audits within this frequency will be undertaken. Unannounced audits, or audits within the above frequency may also be undertaken by the SG. The table below details all the costs of the audits combined for year one:

The table below details all the costs of the audits combined for any subsequent year at current fee rates:

Please note that an unannounced audit can take place at any time, and the cost of an unannounced audit is still £191.00.

If moving goods solely to NI, no fees will apply for any audits, or for the issue of a PC. Currently, no charges for PCs are issued for goods sent to NI under the Movement Assistance Scheme (MAS).

You may also want to consider if the goods your business sends to NI are within scope of the NI Retail Movement Scheme (NIRMS). Further guidance is available at GOV.UK.

Goods sent to the Republic of Ireland (RoI) through PHEATS will require a PC charged as normal because the RoI is in the EU.

Option 2: Maintain the current exporting arrangements with the EU and NI

This option would allow businesses to continue with current arrangements, by applying official inspections and the issue of PCs to allow movement of all low-risk fruit, vegetables and cut flowers to be moved to the EU and NI.

You may also want to consider if the goods your business sends to NI are within scope of NIRMS. Further guidance is available at GOV.UK.

Preferred Option

If Scottish businesses wish to use PHEATS, then Option 1 is preferred by the SG. This is because having all PHEATS members working from the same terms and conditions allows for the seamless operation of the scheme through shared inspection practices and standard operating procedures, and does not compromise our international obligations. Also, the costs being introduced are expected to recover the full cost of this service, with no additional cost burdens being placed on businesses who do not use this service.

Sectors and groups affected

The only sector this partial BRIA concerns is the Scottish exporters of fruit, veg and cut flowers. No other sectors are involved or affected. However, as DEFRA has had the scheme operational in England and Wales since 2021, and are aware of the benefits it brings to the fruit and veg sector, they are looking to extend PHEATS into other sectors. Likewise, the SG can only extend PHEATS if it is operational in Scotland.

The following groups are not affected because:

• Local Authorities have no role in the administration of PHEATS or inspection of the exported goods.
• UK consumers are not affected because PHEATS is a voluntary exports scheme.
• The regulator and administrator of PHEATS would be the SG's 'Horticulture and Marketing Unit' (HMU), and because PHEATS devolves phytosanitary inspection responsibility to PHEATS' members, this enables them to move goods on their timetable.
• It is for eligible businesses who export PHEATS' goods, to choose to join providing they undertake the appropriate training and audits.
• The SG is ensuring the scheme is available to such businesses.
• Third sector organisations will not be affected by PHEATS because it has nothing to do with this sector.

Costs and Benefits

Being a PHEATS member brings the benefits of:

• Choosing when you are able to undertake your own inspections.
• Choosing when you can move the consignment(s) after the PC has been issued helping with just-in-time logistics.
• Faster inspection times are possible when more than one AP inspects consignments which saves money and time.
• Removal of unnecessary paperwork for applying for PCs and inspections.
• Exporting under PHEATS is a chargeable service, and as such, is subject to full cost recovery. However, these costs are kept to a minimum. The fees cover training, assessment, authorisation, auditing, on-going auditing and the issuance of a PC.

Indicative fees for joining the scheme are outlined in the 'Policy Options' section.

Scottish Firms Impact Test

Ten businesses who are exporters of low-risk fruit, vegetables and cut flowers were contacted to take part in the BRIA interviews, however, they were reluctant to take part despite being contacted twice via email. This means we were unfortunately unable to get in-depth views of eligible businesses about joining PHEATS in Scotland.

The SG ran a consultation on PHEATS from 23 October 2023 to 15 December 2023, and one business responded. Their response was non-committal about joining at this time, but they were supportive of it.

Competition Assessment

There is not expected to be an overall negative impact on competition arising from joining PHEATS. This scheme has been in operational in England and Wales since 2021, by extending this membership to Scottish businesses, it provides more options for their business model.

UK Internal Market Act (2020) and Common Frameworks Impact Test

PHEATS has no impact on the UK Internal Market Act (2020), and its operation in Scotland has no impact on the Plant Health Common Framework.

EU Alignment Impact Test

No impact on alignment with EU law is expected because PHEATS complies with EU Member States' importing requirements. PHEATS members in England and Wales have been successfully exporting to EU countries since 2021. The SG's EU Alignment Team have no concerns with Scottish PHEATS' membership, re- accession or EU law alignment.

Fairer Scotland Duty

PHEATS does not interact with reducing socio-economic inequalities. Its focus is on moving low-risk goods more quickly, and has been implemented to address the increase in export demand. PHEATS is a trade facilitation policy, as opposed to one focussed on people, a group or a service. A Fairer Duty Scotland is not applicable to PHEATS because it is goods focussed, and it does not attempt to tackle socio-economic inequalities.

PHEATS does not fall under any public sector reform objective. The SG's decision to facilitate PHEATS and make it available to Scottish businesses has been taken as a result of Brexit, the impact on our inspection resources and on exporters of low-risk plant products. Overall, the SG's decision to join PHEATS is a standalone decision taken to offset the negative consequences of EU exit, as opposed to being part of a broader strategic decision.

Test run of business forms

There is a Part 4 Agreement and an Impartiality Agreement that have been added to the application form for Scottish PHEATS' members to sign. Both of these items contain mandatory requirements that PHEATS' members must conform to if they want to join the scheme. The application form has not been amended in any significant way except for the above additions, and so it was deemed unnecessary to conduct a trial run.

International Trade and International Standards

The SG's 'World Trade Organisation' (WTO) Team were consulted and they have confirmed that Scottish membership of PHEATS does not require WTO notification, and it will have no impact or negative effect on international standards.

Legal Aid Impact Test

Having consulted with the Legal Aid Team, we do not anticipate that the contents of this Final Partial BRIA will impact the Legal Aid Fund.

Equality Impact Assessment (EQIA)

PHEATS is a voluntary exports scheme, and its focus is on plants and plant products. It aims to protect the importing countries from pests and diseases by ensuring plants and plant products are free from them. It has been designed to align strictly with, and not go beyond the requirements of ISPM 45.

Because PHEATS' focus is on exporting plant goods, no EQIA is required for PHEATS. This is because no marginalised individuals or excluded groups with protected characteristics, and by extension their opportunities, will not be affected by PHEATS. Also, because PHEATS is a voluntary exports scheme, it does not seek to redress any social, political or economic outcomes.

Enforcement, sanctions and monitoring

PHEATS enforcement will be undertaken by the SG's HMU; including the collection of statutory fees. HMU will monitor and audit PHEATS' PR and AB training and testing. They will also conduct audits of AB inspection sites and inspection practices over a set period.

If there is sufficient interest from Scottish businesses to introduce PHEATS in Scotland, a process for dealing with critical and non-critical conformities (violations of PHEATS' requirements) will be developed and guidance will be provided to PHEATS' members.

Implementation and delivery plan

The Plant Health (Export Certification) (Scotland) Order 2018 will be altered using the powers derived from the Plant Health Act 1967 - sections 3(1) and 4A, to include fees for the initial site visit (training, assessment and authorisation), auditing and issue of an export PC.

An exception clause has also been inserted so there is no charge for auditing or PC fees where all goods transported in accordance PHEATS are moved exclusively to NI. These will be covered under MAS which is due to run until 2025.

Summary and recommendation

If Scottish businesses wish to use PHEATS, then the SG's intention is to introduce PHEATS in Scotland using the same terms and conditions as England and Wales.

Summary costs and benefits table

PHEATS is a chargeable service, which is set up to facilitate trade for low-risk plant products, and subject to certain criteria that will involve SG inspectors. By charging for these costs, the objective of this policy is to contribute to a full cost recovery regime for plant health inspection services. The intended aim is to make more efficient use of public resources by transferring the cost of the service from the taxpayer to those who benefit directly from the service (i.e. exporters of PHEATS' goods).

Declaration and publication

I have read the Final Partial Business and Regulatory Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

Signed: Lorna Slater Date: 19th March 2024

Ms Slater,

Minister for Green Skills, Circular Economy and Biodiversity

Scottish Government contact point:

Steven Deans

SASA Policy, Pesticide Survey Unit Scottish Government

Saughton House SPUR D

Broomhouse Drive EDINBURGH EH11 3XD

Email: php@gov.scot