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Chinese fertiliser: No decision on million-dollar payment: Prof. Udith K. Jayasinghe-Mudalige

18 Dec 2021

  • Chinese supplier holds $ 5 m deposit as security
  • Cabinet nod to follow AG’s advice
  • Agri officials ready for arbitration
By Yoshitha Perera Sri Lanka will only accept fertiliser from China’s Qingdao Seawin Biotech Group Co. Ltd. if the company supplies fertiliser in accordance with Sri Lankan recommendations, The Sunday Morning learnt. Speaking to The Sunday Morning, Agriculture Ministry Secretary Prof. Udith K. Jayasinghe-Mudalige said the Government has decided to pay the Chinese fertiliser company $ 6.7 million, which includes a $ 5 million deposit held as security by the Chinese company. “As far as the payment date is concerned, no decision has been made yet,” Prof. Jayasinghe-Mudalige said. “The Sri Lankan Government has asked a Chinese fertiliser manufacturer to re-submit organic fertiliser to the required standard. All imported fertilisers would be submitted to adequate quality checks, and we will pay the amount accordingly,” he said. Attorney General (AG) Sanjay Rajaratnam PC issued a directive last week to resolve a dispute between Qingdao Seawin Biotech Group Co. Ltd of China and two Sri Lankan fertiliser companies, Ceylon Fertiliser Company Ltd. and Colombo Commercial Fertilisers Ltd. Last Monday (13), the Agriculture Ministry and the Justice Ministry presented two Cabinet memorandums in this respect, and the Cabinet authorised the appropriate authorities to act in accordance with the AG’s orders. In September, a tender was given to import 99,000 metric tonnes (MT) of Chinese-made organic fertiliser, a stock that, according to testing agencies, is dangerous to the soil, plants, and humans because the samples failed to pass the obligatory tests conducted by local testing organisations. The necessary tests on the claimed fertiliser sample checks conducted by the Sri Lanka Standards Institute (SLSI), the National Plant Quarantine Service (NPQS), and the Sri Lanka Atomic Energy Board (SLAEB) failed twice, according to reports. The Agriculture Ministry decided on 29 September not to import organic fertiliser from the respective Chinese company after local testing organisations verified the presence of dangerous germs in the second set of samples of organic fertiliser prepared in China. In light of this, the Chinese Embassy indicated in a press release released on 8 October that the authorities’ decision to reject the Chinese business’ organic fertiliser based on the NPQS report is not only doubtful but has also resulted in a significant financial loss to the company. It went on to say that the Embassy hopes that the Sri Lankan side’s related parties and the Chinese company can work together based on the principles of respecting science and facts, as well as the spirit of the contract, to resolve the issue quickly and that the differences should be resolved through good faith dialogue for the mutual benefit of China-Sri Lanka bilateral co-operation. The Chinese firm also sent a Letter of Demand (LoD) to the NPQS, requesting $ 8 million in damages after the NPQS discovered that the fertiliser samples from the company contained hazardous germs after testing was conducted on them on two occasions. Meanwhile, the Hippo Spirit vessel, which had been in Sri Lankan territorial seas transporting the disputed fertiliser consignment sent by Qingdao Seawin Biotech Group Co. Ltd., had left the country's maritime space. After the fertiliser ship left Sri Lankan waters, it was reported that the Chinese company would seek international arbitration against Sri Lanka over the thorny situation surrounding the disputed stock of organic fertiliser. In reaction to such reports, the Agriculture Ministry stated that they were prepared to face any arbitration with the evidence they had. When asked about reports of an arbitration process, Prof. Jayasinghe-Mudalige told The Sunday Morning that the company has the right to do so and that the Agriculture Ministry and other relevant agencies are prepared to deal with it appropriately.

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