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BSI claims conflict-of-interest ; Min. Mai : “ASR/BSI hasto come clean.”

GeneralBSI claims conflict-of-interest ; Min. Mai : “ASR/BSI hasto come clean.”

Photo: Hon. Jose Abelardo Mai, Minister of Agriculture

ORANGE WALK, Thurs. June 1, 2023 

Apart from seeking declarations on the constitutionality of multiple sections of the new sugar regulations, Belize Sugar Industries Ltd. (BSI) is seeking a High Court declaration that Belize’s Agriculture Minister “placed himself in a position in which he has or could have a conflict of interest …” Statutory Instrument (S.I.) No. 62 of 2023 regulating the issuance of import and export licenses for sugar was gazetted on May 16, 2023 after being approved by Hon. Jose Abelardo Mai. The Corozal Sugar Cane Producers Association (CSCPA) joins BSI in its application for judicial review filed on May 29, 2023 by their attorney, Senior Counsel Godfrey Smith of Marine Parade Chambers LLP.

Listed as defendants alongside the Attorney General are Minister Mai (2nd defendant), the Sugar Industry Control Board (SICB) as 3rd defendant, and the Controller of Supplies as 4th defendant who is being authorized in the new regulations to issue shipment permits – required for every sugar export.

The Claimants ask the Court to make 11 declarations and to provide any other relief, orders or directions deemed appropriate. The declarations sought are in relation to the Claimants’ rights to equal protection under the law, to protection from discrimination and rights to privacy and to work.

The first clause the Claimants challenge in S.I. 62 of 2023 is Section 3(4) which states that wherever an offence is committed, the sugar in question is liable to be forfeited and disposed of in such manner as authorities direct. BSI and CSCPA are also challenging the imposition of a fine not exceeding $5,000 and or imprisonment not exceeding six months for anyone found in contravention of the Regulations.

The Regulations are heavily centered around a compulsory sales disclosure requirement and the milling company now being made responsible for the collection and distribution of premiums to certified producers for certified sugar that is sold to buyers. Among the documents the company is to provide to the SICB and the sugarcane producers in order to obtain a license are all copies of its contracts with its third-party buyers and detailed reports of any premiums and benefits due to each certified producer according to the volume of production of sugar cane delivered by each certified producer. BSI says the compulsory disclosure requirement “is a colorable device to gain access to the Claimant’s private commercial affairs with its international third-party customers in breach of the Claimant’s right to privacy …”

Annual export license applications are to be made on or before November 1 each year, and BSI affirms in its grounds for relief that it cannot submit the information being requested for license approval at that time because the sugarcane crop would not have started yet and so the company would “not have sales contracts executed for all the sugar to be produced during the crop” at that stage. Additionally, it notes that it also cannot meet the requirement of disclosing premiums or benefits due to any producer because it is a third-party that is responsible to pay premiums for certified sugar, and, in addition, at that time, the “information is not yet determined because it is dependent on quantity and quality of sugar cane supplied by certified producers as well as quantity of certified sugar third-parties are able to market and sell, which is determined after the sugar cane crop has been concluded.” BSI says that information wouldn’t be known until the months of July or August each year. The company also notes that this information is not contained in the sales contracts between the company and certified producers or between the company and the third-party buyers. Furthermore, says BSI, it cannot compel third-party buyers to pay premiums for certified sugar so BSI can distribute those to the certified producers. According to BSI, the third-party buyer pays the premiums directly to the certified producer.

When it comes to the application for a shipment permit (which can be denied by the Controller of Supplies if disclosures are not made) every time it wishes to export sugar, BSI says this “serves no legitimate legislative purpose, is disproportionate, unduly intrusive and oppressive …”

BSI also objects to the SICB being given the power to revoke a license for any failure to collect and pay premiums. This, says BSI, is against their right to work.

BSI is also requesting a declaration from the Court that the regulations are targeted at them to force them to disclose private and confidential information and to collect and distribute Fairtrade premiums neither of which is within its power to do. They therefore deem the regulations as discriminatory.

BSI is additionally asking for a declaration that the regulations are in violation of Belize’s international obligations as a signatory to the General Agreement on Tariffs and Trade (GATT) because it unreasonably restricts trade. The application states the GATT is an international treaty obligation that requires state parties not to unreasonably restrict trade. It continues, “Because the regulations impose export requirements which unreasonably restrict trade, they fall afoul of and are in breach of the Claimant’s right to protection of law.”

Asked about the conflict of interest declaration sought by BSI on the basis that he is a member of the Belize Sugar Cane Farmers Association (BSCFA) and is “on public record stating that the Regulations are aimed at getting the First Claimant to pay Fairtrade premiums from which he will personally benefit as a cane farmer and therefore in breach of the Claimants’ right to protection of the law,” Minister Mai told Amandala it would not be the first time he is accused of conflict of interest. He affirmed that it holds no water, “the fact is that ASR/BSI has to come clean. They have to be transparent. They have to disclose the prices, the amount that they are being paid for sugar, so this thing about a conflict of interest is a smokescreen.”

The Minister repeated that he is not surprised about the judicial review claim and rejected that BSI is being targeted. He noted, “this regulation is not only for them. This regulation is for all those that import or export sugar, including Santander, and they have no problem complying – disclosing the sugar contracts they have abroad.” According to the Minister, there were consultations with everyone who imports and exports sugar products and the miller regarding the regulations.

Minister Mai also pointed to ASR’s purchase of Tate & Lyle PLC’s European sugar operations in 2010. He stated, “all of us know they are the same entity.” He further explained the only two reasons why a sugarcane association cannot get Fairtrade funds. One is the lack of a commercial agreement with the miller, and the other, that they are decertified. Mai insists that BSCFA has an interim agreement and is certified and should therefore be paid the premiums paid for certified sugar. We checked, and Flocert, the global certifier for Fairtrade, currently lists the BSCFA as certified.

CSCPA, in a release dated May 31st issued jointly with Progressive Sugar Cane Producers Association, revealed that the claimants are also seeking an injunction regarding the new regulations. The release states, “… the sole interest of both Associations is to protect their certification with Fairtrade International and in the Association’s opinion, such review now being made by the Government, would potentially erode the certification status which could culminate with Fairtrade International either reducing its Premium sugar markets that exist, or expose displeasure with the political infiltration which could bring about losing Premium markets and certification for the four cane farmers associations of Belize.”

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