Derek Achong

derek.achong@guardian.co.tt

An ap­pli­ca­tion for an in­junc­tion seek­ing to block Gov­ern­ment’s move to in­tro­duce a quo­ta on im­port­ed ce­ment and a pro­pos­al to in­crease the im­port du­ty to 50 per cent is set to be heard by a High Court judge to­day.

In the ap­pli­ca­tion St Lu­cia-based Rock Hard Dis­tri­b­u­tion Ltd and its lo­cal af­fil­i­ate Rock Hard Dis­trib­u­tors of T&T are chal­leng­ing the moves made by the Min­istry of Trade and In­dus­try, which they claim would crip­ple them.

In No­vem­ber last year, the min­istry took a de­ci­sion to cap the an­nu­al im­por­ta­tion of ce­ment at 75,000 tonnes.

The Gov­ern­ment al­so wrote to Cari­com’s Coun­cil for Trade and Eco­nom­ic De­vel­op­ment (COT­ED) seek­ing the fur­ther sus­pen­sion of the five per cent Com­mon Ex­ter­nal Tar­iff (CET) for hy­draulic ce­ment, and in­di­cat­ed its in­ten­tion to ap­ply 50 per cent du­ty.

The quo­ta and a new im­port li­cens­ing reg­is­tra­tion sys­tem went in­to ef­fect on Jan­u­ary 1.

At­tached to the ap­pli­ca­tion is an af­fi­davit from Rock Hard’s ex­ec­u­tive chair­man Mark Mal­oney, who sought to ex­plain the dire im­pact on the com­pa­ny, which im­ports its hy­draulic ce­ment from Turkey.

Ac­cord­ing to Mal­oney pri­or to Rock Hard’s en­try in­to the re­gion­al ce­ment mar­ket al­most four years ago, Mex­i­can-owned Trinidad Ce­ment Ltd (TCL) had a mo­nop­oly due to the high tar­iffs on Port­land ce­ment.

“With­in the first six to 12 months of the en­try of Rock Hard Ce­ment in­to the mar­ket the price of ce­ment dropped by about 35 to 40 per cent and that drop has been sus­tained over the past four years,” Mal­oney said.

He claimed that for the com­pa­ny to re­main vi­able, it had to im­port ap­prox­i­mate­ly 300,000 tonnes in the re­gion an­nu­al­ly as it start­ed with a ze­ro per cent CET and al­ready ab­sorbed a five per cent in­crease.

He al­so not­ed that be­tween 2016 and last year, 130,000 tonnes were used by its lo­cal af­fil­i­ate in the T&T mar­ket and neigh­bour­ing is­lands, which it ser­vices.

“RDHL and RHTT are there­fore sub­stan­tial con­trib­u­tors to the econ­o­my of T&T both di­rect­ly and in­di­rect­ly, by way of earn­ing for­eign ex­change, the pro­vi­sion of em­ploy­ment and the de­vel­op­ment of the ce­ment and con­struc­tion re­lat­ed in­dus­tries,” Mal­oney said.

“Even a tem­po­rary im­ple­men­ta­tion of the sec­ond de­ci­sion would like­ly de­stroy the busi­ness of both RHDL and RHTT be­cause the ab­sence from the mar­ket of Rock Hard ce­ment even tem­porar­i­ly would ir­rev­o­ca­bly dam­age the good­will, brand recog­ni­tion and as­so­ci­a­tion of the busi­ness,” he added.

He said that the clo­sure of the com­pa­ny would di­rect­ly lead to a sub­stan­tial in­crease in ce­ment prices.

In the sub­stan­tive claim, the com­pa­nies are claim­ing that the Gov­ern­ment sought to im­ple­ment the mea­sures with­out prop­er con­sul­ta­tion.

The com­pa­nies are seek­ing to have the de­ci­sions stayed pend­ing the de­ter­mi­na­tion of the sub­stan­tive case.

The ap­pli­ca­tion is sched­uled to be heard vir­tu­al­ly by Jus­tice Jacque­line Wil­son this morn­ing.

The case is the most re­cent in a se­ries of lit­i­ga­tion which arose since Rock Hard was found­ed.

In 2015, TCL’s Bar­ba­dos sub­sidiary Arawak Ce­ment filed one claim when Bar­ba­dos sought to rein­tro­duce a CET of five per cent on hy­draulic ce­ment.

In 2001, Bar­ba­dos sought an ex­emp­tion on the tar­iff, set by COT­ED, in an ef­fort to give re­gion­al pro­duc­ers an ad­van­tage over for­eign im­ports with a 60 per cent tax.

In 2018, the Caribbean Court of Jus­tice (CCJ) de­liv­ered judge­ment in favour of the Bar­ba­dos Gov­ern­ment and Rock Hard as it ruled that it was per­mit­ted to make the change.

As part of the rul­ing, the CCJ stat­ed that a Mem­ber State must give ad­e­quate no­tice of such a de­ci­sion to en­sure that re­gion­al busi­ness­es “en­joy trans­paren­cy, cer­tain­ty and pre­dictabil­i­ty of tax struc­tures”.

TCL brought a sep­a­rate case call­ing on the CCJ to de­cide if COT­ED had the au­thor­i­ty to clas­si­fy Rock Hard’s prod­uct in T&T.

The CCJ ruled that COT­ED had the com­pe­tence to make the de­ter­mi­na­tion.

TCL and this coun­try’s Gov­ern­ment then brought an­oth­er case chal­leng­ing COT­ED’s de­ci­sion to clas­si­fy Rock Hard’s prod­uct as hy­draulic ce­ment as op­posed to Port­land, which at­tracts a high­er tar­iff.

The CCJ even­tu­al­ly up­held COT­ED’s de­ci­sion.