sto­ries by Derek Achong

St Lu­cia-based ce­ment im­porter Rock Hard Dis­tri­b­u­tion Lim­it­ed (RHDL) and its lo­cal dis­trib­u­tor have lost their law­suit against the Min­istry of Trade and In­dus­try over the Gov­ern­ment’s move to in­tro­duce a quo­ta and li­cens­ing regime for the im­por­ta­tion of ce­ment.

De­liv­er­ing a draft judg­ment on Mon­day, High Court Judge Jacque­line Wil­son dis­missed the com­pa­nies’ law­suit over the is­sue. 

The com­pa­nies filed the law­suit ear­li­er this year in re­sponse to a de­ci­sion tak­en by the min­istry in No­vem­ber last year, 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 a 50 per cent du­ty.

The quo­ta, a new im­port li­cens­ing reg­is­tra­tion sys­tem and the in­creased tax­es took ef­fect on Jan­u­ary 1.

In the law­suit, the com­pa­nies were claim­ing that the Gov­ern­ment sought to im­ple­ment the mea­sures with­out prop­er con­sul­ta­tion.

At­tached to the law­suit was 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 Lim­it­ed (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.

“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,” Mal­oney said.

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

Short­ly af­ter fil­ing the law­suit against the min­istry, which was dealt with by Jus­tice Wil­son, Rock Hard filed a sep­a­rate law­suit be­fore the Caribbean Court of Jus­tice (CCJ) over the move to in­crease the du­ty on ce­ment. 

The CCJ grant­ed an or­der bar­ring the in­crease pend­ing the de­ter­mi­na­tion of the law­suit be­fore it. The fi­nal de­ci­sion, in that case, is still pend­ing. 

The case is the most re­cent in a se­ries of law­suits that arose since Rock Hard en­tered the re­gion­al ce­ment mar­ket that was pre­vi­ous­ly dom­i­nat­ed by TCL and its sub­sidiaries. 

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 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 2018, the CCJ de­liv­ered judg­ment 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.

Rock Hard was rep­re­sent­ed by Ian Ben­jamin, SC, Jagdeo Singh, and Justin Phelps, while Deb­o­rah Peake, SC, Tama­ra Toolsie, and Brent James rep­re­sent­ed the State.