Rock Hard quota challenge to be heard on Thursday

THE local and regional importers of the Rock Hard hydraulic cement, manufactured in Turkey, will on Thursday seek to convince a High Court judge to grant an interim order restraining the Ministry of Trade and Industry from imposing a quota and 50 per cent in duties for cement.

Rock Hard Distributors of TT and Rock Hard Distribution of St Lucia are challenging the November 13, 2020 decision of the Ministry of Trade to introduce a quota from January 1 only allowing 75,000 tonnes across the board for all distributors for the year.

The other decision taken by the ministry which is being challenged is the proposal it sent to the Commission for Trade and Economic Development (COTED) for a further suspension of the Common External Tariff (CET) on other hydraulic cements and its intent to apply a 50 per cent rate of duty.

The ministry, in December last year, in Legal Order 415 and 416 of the Customs Act, Chap 78:01, introduced a quota, import licensing regime and registration system for building cement – grey and other hydraulic cement – which went into effect on January 1.

This system, it said, would last for a three-year period and implemented a maximum quota of 75,000 tonnes of cement to be imported. Those who wished to engage in such activity would first have to be registered with the Trade Licensing Unit at the ministry.

The matter will come up for hearing on Thursday before Justice Jacqueline Wilson. Going on affidavit in support of the judicial review claim, which seeks the court’s permission to challenge the ministry, and the interim injunction application, were Ryan Ramhit, a director of Rock Hard Distributors of TT (RHTT) and Barbados-based Mark Maloney, executive chairman of Rock Hard Distribution Ltd (RHDL), registered in St Lucia.

Rock Hard cement is a hydraulic cement manufactured by Sonmez Cimento in Turkey and is consigned to distributors regionally. It began distributing in TT in late 2016.

Maloney said the TT limb of RHDL’s business was of particular importance since almost half of the total amount of cement it purchases, is imported into TT which gives it leverage to negotiate better pricing from its suppliers in Turkey. He admitted that without TT, the brand would not be able to achieve competitive pricing on the supply of cement or shipping and would not be able to operate in the region.

Before Rock Hard cement entered the regional market, there was a monopoly on imported Portland cement. Maloney also alleged that “monopolistic prices,” in excess of world market prices, led to high construction costs and since the entry of Rock Hard, cement prices, and consequentially housing and construction costs, have gone down.

He said for business in TT to remain viable, a minimum of 300,000 tonnes of cement per annum would have to be imported into the region. For TT alone, it distributed some 150,000 tonnes from 2016-2020, and according to the judicial review application filed on December 23, the price of cement on the TT market reduced by approximately 35-40 per cent in six to 12 months.

“RHDL and RHTT are therefore substantial contributors to the economy of Trinidad and Tobago both by way of direct investment, earning foreign exchange, employment, and the development of the cement and construction and related industries,” the application maintains.

It adds that not only would the ceiling quota destroy both businesses, but both decision will cause the price of cement and the cost of construction to rise locally.

The companies say there was no consultation before the imposition of the quota or before COTED was approached for suspension of the CET.

In response to the notice by the ministry in December that the quota system was being introduced to reduce the leakage of foreign exchange, strengthen the local cement manufacturing industry, maintain employment and build on imports, the application maintains that both businesses fulfills all those aims.

It further alleges that the quota and import licence and registration regimes being imposed are in conflict with the Caribbean Community Act and the Revised Treaty of Chaguaramas which prohibits any attempt to frustrate free movement of goods and promotes competition in trade and commerce.

In its application for interim relief, the cement importers are asking that the decisions of the ministry on the quota and the suspension of the CET be stayed until the judicial review claim is heard and determined and as well as an order prohibiting the quota on cement and the 50 per cent rate of duty.

“Should the first and second decisions not be stayed and should this honourable court not grant the injunction sought, the applicants’ businesses will likely be destroyed if not significantly impaired given the immediate and imminent adverse and destructive impact of the impugned decisions upon the applicants’ businesses and that of their employees and contractors and that the damage and harm is not compensatable in damages,” the application says.