Sunday, 24 September 2023 05:25 GMT

Chinese Organic Fertiliser That Put Sri Lanka In A Quandary

(MENAFN- Colombo Gazette)

The Chinese toxic fertiliser ship that caused a diplomatic controversy between Sri Lanka and China came to a close after the Sri Lanka authorities agreed to pay the Chinese company its dues. Sri Lanka had to pay this money under compulsion and enormous pressure exerted by the Chinese supplier.

In the first instance, Sri Lanka did not want to create a diplomatic spat over the matter and feared that China would backtrack on issues about Sri Lanka's debt restructuring, which is essential for the IMF's involvement in Sri Lanka.

Given the clout they wield with the IMF, China could very well scuttle efforts or make things difficult for Sri Lanka.

Despite various complexities, India played a significant role in helping Sri Lanka. Indian Finance Minister Srimathie Nirmala Sitharaman was in Washington and met with the International Monetary Fund chief, Kristalina Georgieva, to present the Sri Lankan case.

Sri Lanka was well aware of the Chinese influence on the IMF and was cautious in handling China.

The Chinese foreign minister emphatically told President Gotabaya Rajapaksa during his visit to Sri Lanka in January that there were no provisions in the Chinese system for a debt moratorium.

Be that as it may, when the matter relating to the shipload of toxic fertiliser surfaced in the public domain, whatever the stance taken by the government had hardly any influence on the steps taken by the Auditor General.

In other words, the Auditor General has taken exception to what was going on in the political theatre and launched an investigation into the alleged payment for which the ultimate responsibility fell on the Sri Lankan public.

In the meantime, the National Audit Office has also cracked open the lid of yet another massive fraud that has taken place when the authorities were planning the importation of organic fertiliser containing toxic pathogens. The consignment in question was to be brought to Sri Lanka from China, which led to an unprecedented controversy throughout the country.

It has now come to light that the tender for the purchase of organic fertiliser from China, which was rejected due to the presence of harmful pathogens, was not evaluated appropriately by the technical evaluation committee. The reasons for this are not known to date.

The relevant transaction has been approved only by the Chairman of the Technical Evaluation Committee (TEC), raising eyebrows. The sole signatory for the transaction was the Chairman of the TEC.

Hence, the Audit Office detected flaws in the evaluation process and has recommended legal action against all the officials who were part and parcel of the decision to purchase this consignment of fertiliser from the Chinese supplier.

The people in this country have already taken it upon themselves to bear the costs incurred for the shipload of contaminated organic fertiliser from China. Agriculture Minister Mahinda Amaraweera said.

The amount of US$6.9 paid for the Chinese toxic fertiliser ship has already been recovered from the people of Sri Lanka. Amaraweera said recently.

He said that his ministry explored the possibility of recovering at least a sum of US$6.5 million from the Chinese supplier, but that too ended up without success.

The minister further explained that the position taken by the government is to deal with the issue of the controversial Chinese fertiliser ship in a manner that does not harm relations between the two countries.

It implies that Sri Lanka was under tremendous pressure from China to honour the deal. This is despite the fact that the consignment of fertiliser did not meet the stipulated specifications set by the authorities.

Presently, the Ministry of Agriculture is trying to recover the money from the supplier by employing other ways and means. As a result, we have decided to delegate the matter to the Ministry of Foreign Affairs to devise a suitable procedure. Agriculture minister Mahinda Amaraweera said.

Minister Amaraweera made these remarks after the Auditor General issued a special report requiring the government to sue the company involved in the toxic manure deal with Qingdao Seawin Biotech.

Amaraweera said that since he took over the Ministry of Agriculture, he had discussed the issue relating to the controversial toxic manure ship on several occasions, putting strains on the goodwill between the two countries. He said it had dropped to a very low ebb owing to this.

He said he tried his best to get chemical fertiliser instead of organic but that the company concerned had informed him that they do not produce any other type of manure other than organic.

The minister says that under these circumstances, the government wouldn't be able to retrieve the money paid for the shipload of organic fertiliser. During Parliament debates, the question of who takes responsibility for the toxic manure ship cropped up on several occasions.

The name of Sashindra Rajapaksa surfaced, necessitating an investigation, but no advances were made, and all indications were that it was swept under the carpet.

The import of organic fertiliser was a direct result of President Gotabaya Rajapaksa's government switching to organic produce overnight by prohibiting the use of chemical fertiliser.

The scientists and agricultural analysts were up in arms when they received samples of the organic manure from Qingdao Seawin Biotech Group Co. Ltd. Initial scientific tests on samples proved that Qingdao's manure contained a microorganism known as“Erwinia” that could result in crop failure.

Notwithstanding all the controversies, a shipload of 20 000 MT of organic fertiliser from China was heading towards Sri Lanka soon despite two of its samples having failed quality testing following the detection of harmful bacteria, Erwinia.

Soon afterwards, the Chinese supplier, Qingdao Seawin Biotech Group Co., Ltd., pressured the Director General of the Agriculture Department to get another sample test done by a third party.

The National Plant Quarantine Service, the Sri Lanka Standards Institute, and the Sri Lanka Atomic Energy Board carried out the earlier testing.

Their request and assessment of the consignment were included in the letter dated October 22, 2021, nearly one month after the ship had left China. It was also copied to other senior Sri Lankan officials, including the secretary to President P.B. Jayasundara, the secretary to the Prime Minister, Gamini Senarath, the secretary of the agriculture ministry, and the Chinese ambassador in Sri Lanka.

The Director General of Agriculture has directed the Ports Authority's harbour master not to allow the ship to enter Sri Lankan waters.

In a subsequent development, the Colombo Commercial High Court issued an order against the Chinese supplier and its local agent, preventing the Central Bank from making any payments using the Letter of Credit.

The Letter of Credit was in favour of Qingdao Seawin Biotech. The Ceylon Fertiliser Company obtained the court order through their application to the Colombo Commercial High Court.

Soon after, the Ceylon Fertilizer Company suspended payments to Qingdao Seawin Biotech for the consignment of organic fertiliser.

The Colombo High Court also ordered Sri Lanka's People's Bank to freeze the disbursement. The Sri Lankan ports denied entry to the ship carrying the cargo of Chinese fertiliser, Hippo Spirit.

Qingdao Seawin Biotech responded by demanding US$8 million in compensation from Sri Lanka's National Plant Quarantine Services, asserting that failure to pay the sum in three days would result in legal action.

The Chinese Embassy in Colombo tweeted that the People's Bank, one of the premier banks in Sri Lanka, would be included in the list of embargoed entities for freezing payments. The bank implemented only the ruling given by the Colombo High Court.

Some questioned whether China was arrogant and showing disregard for the Sri Lankan legal procedures, despite their claim the world over that China respects each country's local processes, independence, and sovereignty.

They also pointed out that the threat to slap a legal suit against the plant quarantine unit was something akin to rubbing salt on a wound after the country was reeling under severe economic pressure.


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