Setback for Govt on cement import tariffs

By: WERNER MENGES

THE infant industry protection import tariffs which were imposed on cement being brought into Namibia near the end of July were declared to be of no force and effect in the High Court in Windhoek on Friday.

The procedure which was followed when the import tariffs were imposed by the Minister of Finance, was not in accordance with the Customs and Excise Act of 1998, it was ruled in a judgement delivered by Judge Dave Smuts.
With no finding made on the principle of the import tariffs, the Finance Minister could conceivably again decide to levy tariffs on cement being imported into Namibia, with the aim of providing infant industry protection to Namibian cement manufacturer Ohorongo Cement.
Judge Smuts’s judgement was given in a case in which a close corporation involved in the importation of cement into Namibia, Jack’s Trading CC, sued the Finance Minister and the Commissioner for Customs and Excise in an attempt to have the import tariffs declared to be of no force and effect.
Finance Minister, Saara Kuugongelwa-Amadhila imposed an import tariff of 60% on cement with effect from July 27. The rate of 60% would have been in force until 2014. In 2015, the tariff would have been lowered to 50% while it would have dropped further to 42% in 2016, 24% in 2017, and 12% in 2018.
The majority member of Jack’s Trading CC, Chinese businessman Yuequan Jack Huang, claimed in an affidavit filed with the court that his close corporation signed a four-year contract with an international cement manufacturer in December last year.
His plan was to import 180 000 tons of cement into Namibia each year.
Huang claimed that the 60% import tariff is “excessive and unreasonable”, and would result in a dramatic increase in the price of cement being imported into Namibia.
The current price for a bag of cement in Namibia is N$60, Huang stated. If the 60% import tariff were to remain in place, Jack’s Trading would have to ask N$96 for a bag of the cement it is importing to cover its costs, which would be a wholly uncompetitive price, Huang said.
Huang further claimed that Jack’s Trading was not given a chance to be heard before the decision to impose the import tariff was taken.
This was denied by the two respondents in the matter, who informed the court that a delegation from Jack’s Trading was in fact received by the Deputy Minister of Finance on July 9 in connection with the import duty which was to be imposed.
The simple point on which the case was decided was the sequence of steps taken by Kuugongelwa-Amadhila when the import tariffs were imposed.
The Finance Minister tabled a proposal on the import tariffs in the National Assembly on April 18 2010. On July 27, a notice about the import tariffs was published in the Government Gazette. The import tariffs were in force from that date.
Judge Smuts agreed with the argument of Jack’s Trading that, in terms of the Customs and Excise Act, the notice in the Government Gazette should have been published first, and that the Finance Minister would then have had to table the notice in the National Assembly within 21 days after that. The notice would have had to remain on the table in the National Assembly for at least 28 days.
The wording of the relevant section of the Act, when construed as a whole, “requires that the promulgation of the notice is to precede the tabling of the proposal,” Judge Smuts said in his judgement.
The procedure is set out in the Act in peremptory terms, and the failure to follow that procedure is fatal to the notice that was published, he said.
South African senior counsel Nazeer Cassim, assisted by Gerson Hinda, represented Jack’s Trading CC. Government lawyer Tinashe Chibwana represented the Finance Minister and Commissioner for Customs and Excise.

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