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Fresh bid to secure refund for Chinese fertiliser

06 Sep 2022

  • Agri Ministry to request Foreign Ministry to resolve $ 6.9 mn issue
BY Buddhika Samaraweera   The Ministry of Agriculture is preparing to request the Ministry of Foreign Affairs to formulate a programme to resolve the issue over the sum of $ 6.9 million which was paid to Qingdao Seawin Biotech Group Company Ltd. in China for a shipment of organic fertiliser that was rejected by Sri Lanka over reports of contamination. This follows the Auditor General (AG) recommending in a special report that legal action be taken against the said company over the issue. Speaking to the media, Minister of Agriculture Mahinda Amaraweera said that China is a country that has a longstanding friendship with Sri Lanka, and therefore, action should be taken to resolve this issue without damaging this friendship, adding that President Ranil Wickremesinghe is also of this position. “During the discussions held with several parties in this regard, it was decided to set up an appropriate process to resolve this issue so that the friendship between the two countries is protected. Accordingly, I hope to request the Ministry of Foreign Affairs and its Minister M.U.M. Ali Sabry PC to intervene in this matter. I also hope to hold further discussions on this issue with the participation of the relevant officials of the Foreign Ministry and the Chinese Ambassador to Sri Lanka,” he said. Speaking further, Amaraweera said that since he took over the Ministry of Agriculture, he had discussed this issue with the Qingdao Seawin Biotech Group Co. Ltd. on several occasions, and that the purpose of those discussions was to obtain a stock of chemical fertiliser in lieu of the stock of organic fertiliser in question. However, he said that the effort was not successful, as other types of fertiliser are not manufactured by the company. “Given this situation, I studied as to whether we could re-acquire the $ 6.9 million paid to this company. However, the company claims that it is a reputable company in China, and that the accusation from our country has damaged its reputation. Therefore, a situation has arisen where our country has to bear the loss. Regardless of who was involved in this transaction, the burden of the $ 6.9 million paid for the fertiliser ship has ultimately fallen on the people,” said Amaraweera. The Hippo Spirit vessel, which was in Sri Lankan seas for more than three months carrying the controversial fertiliser consignment shipped by Qingdao Seawin Biotech Group Co. Ltd., left Sri Lanka’s maritime space in December 2021. With the said ship leaving Sri Lankan waters, it was reported that the company was to initiate an international arbitration process against Sri Lanka over the issue.  Against this backdrop, the Attorney General had instructed the relevant authorities to resolve the dispute on trade terms that can be agreed upon by both parties. Accordingly, the sum of $ 5 million deposited by the Chinese company for the supply of organic fertiliser as security and another $ 1.9 million was paid by the Lankan authorities to Qingdao Seawin Biotech Group Co. Ltd. Meanwhile, the AG had recommended that legal action be instituted against those responsible for causing a loss to the Government by releasing funds for the Chinese fertiliser shipment in question with zero supervision and to recover the said losses. The recommendations were made in a special audit report prepared by the AG on the procurement process adopted in the purchase of 96,000 metric tonnes of organic fertiliser. The AG had also recommended that a case be filed against the concerned supplier in order to recover compensation.


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