Govt will answer cement company at CCJ - Jagdeo

Govt will answer cement company at CCJ - Jagdeo
Stabroek Business, April 18, 2008
http://www.stabroeknews.com/?p=1638

The government will answer the Trinidad Cement Limited (TCL) at the Caribbean Court of Justice (CCJ), President Bharrat Jagdeo said on Tuesday, describing the company’s track record as one of profiteering.

TCL Silos
In a historic case – the first time that the regional court has been approached in its original jurisdiction - TCL and TCL Guyana Inc (TGI) have applied to the court pursuant to Article 222 of the Revised Treaty of Chaguaramas and Part 10 of the Caribbean Court of Justice (Original Jurisdiction) Rules of 2006 for special leave to commence proceedings against the Guyana Government over its failure to apply the Common External Tariff on cement in accordance with the revised treaty.
In their application TCL and TGI said that under Article 82 of the Revised Treaty they are entitled to protection under the Common External Tariff (CET) and that they “have been prejudiced in the enjoyment” of their rights by the government. The applicants also said that Trinidad as the contracting part entitled to espouse TCL’s claim had not done so and the same was the case in relation to Guyana and TGI.
Appended to the application was a letter by TCL to the Trinidad Attorney General Bridgid Anissette-George dated February 20, 2008 asking for permission for TCL to pursue the claim on its own behalf or for Port-of-Spain to forward the claim on its behalf.
Anissette-George replied on March 4, 2008 with a three-line letter that said that the matter had been duly noted.
The applicants also attached to their application a letter dated December 27, 2007 to Guyana’s Attorney General Doodnauth Singh arguing for the implementation of the CET on cement imports from outside of the region.
The application for special leave is expected to be heard shortly.
In its proposed originating application, TGI has computed its loss at US$2 million for the period January 2007 to December 2007 because of the non-implementation of the CET.
Asked for government’s response to the action at a press conference at the Office of the President, Jagdeo said TCL’s track record in Guyana was one of profiteering.
“You know the track record of TCL in Guyana. When we had shortages of cement here and the prices kept skyrocketing… and profiteering on Guyanese. So we will answer that in court,” he said.
The action was filed on April 3, under Article 211 (d) and 222 of the Revised Treaty of Chaguaramas, which established the Caribbean Community including the Caricom Single Market and Economy and Articles XII (d) and XXIV of the agreement establishing the CCJ.
According to the Offices of Senior Counsel Dr Claude Denbow and Associates, TCL’s counsel, the case is the first that would be giving an interpretation of the Revised Treaty of Chaguaramas.
In the proposed originating application, TCL (the parent company) and TGI are “claiming compensation from and/or injunctive relief against the government of Guyana in respect of breach of provisions of the Revised Treaty under which Guyana is obligated to impose and maintain a Common External Tariff on cement imported into Guyana from countries outside the Caribbean Community.”
TCL and TGI are asking the CCJ to declare that the Republic of Guyana, a party to the revised treaty, violated the provisions of Article 82 by failing to implement and maintain the CET of 15% in respect of imports of building cement. They also seek a declaration that as a party to the revised treaty and member state of Caricom, Guyana failed to maintain the CET, violating the right and entitlement of the claimants to the protection of the provisions of the revised treaty. As a consequence, the claimants feel, Guyana is liable to pay compensation to them for any loss suffered by reason of its conduct.
It is also asking the CCJ for an order to direct the government to bring its regime of imports of building cement in conformity with Article 82 of the revised treaty by implementing the CET; and for damages for loss of profits as a direct result of the government’s failure to implement the CET for the period January 2007 to December 2007 and continuing; exemplary damages; an order that the costs of the proceedings be borne by the government of Guyana; as well as such other orders that the CCJ deems fit.
According to the full statement of facts, the first claimant TCL is a limited liability company incorporated under the Companies Ordinance Chapter 31:01 of the laws of Trinidad and Tobago but it is also registered “as an external company under the Companies Act No 29 of 1991 of the Laws of Guyana with its registered office at 2-9 Lombard Street, GNIC Compound, Georgetown, Guyana.
The second claimant, TGI, is a limited liability company, which was incorporated on March 17, 2004 under the Companies Act No 29, with registered office at Lombard Street as well. TCL holds 80% of the issued capital of TGI and the other 20% is held equally by Toolsie Persaud Ltd and Anral Shipping Ltd.
The facts also said that TCL established a physical presence in Guyana to eliminate complaints about shortages of cement in the construction industry. The sum of US$10 million was invested in a state-of-the-art cement terminal, which was part of an overall loan package of US$105 million obtained from the International Finance Corporation in Washington DC to expand and modernize TCL plants in Jamaica, Trinidad and Tobago and Guyana.
The funds were borrowed on the assumption and expectation that the TCL group would enjoy the protection afforded by the implementation and maintenance of the CET on imports of non-Caricom cement products. This legitimate expectation has not been fulfilled. And according to TCL and TGI, “not only have a number of member states of [Caricom] sought and obtained suspensions of the CET but also because the [GOG] has gone one step further and
unilaterally (without an application to the Council for Trade and Economic Development [COTED] of Caricom) effected a suspension on its own.”
Imports of cement into Guyana from Venezuela, Colombia and the Dominican Republic do not qualify for community treatment under the revised treaty but have not had the CET applied to them..
The Guyana Minister of Finance, by letter dated September 22, 2006 to the Commissioner General, Guyana Revenue Authority purportedly suspended the application of the CET on cement for one year by relying on Section 6(1D) of the Financial and Audit Act Chapter 73:01 of the Laws of Guyana. However, the claimants contend that this action was taken without lawful authority either under the laws of Guyana or under the provisions of the treaty since, as far as they are aware, no resolution was obtained from the National Assembly of Guyana prior to the suspension of the CET. COTED grants permission for the suspension of the CET in accordance with Article 83 of the revised treaty.
Guyana has neither sought nor been granted permission to suspend the CET. TCL and TGI wrote several letters to Minister of Foreign Trade and International Cooperation, Dr Henry Jeffrey and Minister of Tourism, Industry and Commerce Manniram Prashad, but received no response.
They learnt of the continued suspension of the CET through the Stabroek News of December 17, 2007 which quoted Head of the Presidential Secretariat, Dr Roger Luncheon, as saying that the government was aware of the recommendations of COTED but was continuing with the suspension of the CET.
TGI said that because of the government waiver of the CET, it has suffered loss of its market and TCL said it has not realized a return on its investment in Guyana.