TCL Guyana Incorporated has filed an action in the Caribbean Court of Justice (CCJ) against the Guyana government for its failure to apply the common external tariff (CET) on cement sourced extra-regionally. The suit seeks millions of dollars in damages.
The action, filed on April 3, by Trinidad and Tobago-based Senior Counsel Claude Denbow and associates at the CCJ Headquarters in Port-of-Spain, expects that the first response by the government will be made within a matter of 14 days.
TCL has estimated how much it would have earned from its losses on account of the CET waiver, since it commissioned a US$10.5 million bagging facility in January 2006, to supply the Guyana market with cement, and has asked the CCJ to order that damages be paid as it sees fit.
TCL ships bulk cement from its cement plant in Barbados to Guyana where it is bagged at the Guyana facility.
Prior to the establishment of the bagging factory, a TCL spokesman said, TCL Guyana did not legally contest the matter because there was an issue of supply but it was understood that the CET would have been applied once the bagging facility was operational.
Prior to the legal action being filed, TCL wrote several letters to Caricom Secretary-General, Edwin Carrington, complaining about the issue.
The spokesperson, speaking on condition of anonymity, said the locally registered company was also asking the CCJ to direct the Guyana government to apply the 15% CET on cement being imported by entrepreneurs in keeping with the Revised Treaty of Chaguaramas to which Guyana is a signatory as a member of Caricom.
“While the government is not the importer, the government unilaterally granted waivers to the importers without the approval of COTED [the Council for Trade and Economic Development],” the source said.
The spokesman said Guyana’s waiver of the CET was an indirect subsidy of foreign-produced cement and in conflict with the Revised Treaty of Chaguaramas, which calls on Caricom countries to protect member states fledgling industries through the imposition of CET.
The spokesman said TCL Guyana was taking the position adopted by Guyana with Jamaica on rice, where local rice had been pushed out of the Jamaican market with the influx of cheap US rice. Minister of Agriculture Robert Persaud had subsequently visited Jamaica and argued for Guyana’s rice to be allowed equal access to the Jamaican market and this was allowed.
The spokesman said Guyana’s current action on the cement waiver would cause a decline in profits and loss of foreign exchange revenue for Guyana and the TCL subsidiaries in Jamaica, Trinidad and Tobago and Barbados.
In the past, TCL group executives including Guyana Plant Manager, Mark Bender, met Minister of Commerce, Manniram Prashad, to plead their case for the re-implementation of the CET.
Since 2004, government has consistently waived the CET on extra-regional ce-ment imports after a shortage developed in the market that year.
But TCL Guyana has maintained that there is no need for the waiver to be in place now, because it has a capacity of 30,000 tonnes per month when the market demands 12,000 tonnes per month.
One local importer, Jacob Rambarran, had told Stabroek News late last year that TCL Guyana Inc’s claim that it could supply the market was groundless. He said that if the government had not granted the CET waiver, TCL would have a monopoly of the market, he would not be able to buy from them, and Guyanese would not be able to buy the cement. He contended that it was the extra-regional imports that were keeping prices low in Guyana.
Prashad had also told this newspaper that Guyanese must be able to build homes at affordable prices and before taking the decision to extend the waiver, discussions were held with all stakeholders including TCL.
Head of the Presidential Secretariat Dr Roger Luncheon had also said at one of his post-Cabinet briefings around the same time that the government was not certain that the business environment was poised to address Guyana’s needs. He had said that the waiver was extended as importers must be given time to procure the cement.
