Jamaican soap manufacturer Blue Power is questioning the rationale for being dragged to court by its Dominican competitor DCP Successors Limited.
Blue Power and DCP Successors are at the centre of a dispute between Jamaica and Dominica regarding the tariff treatment of soap manufactured in Jamaica and exported to the Caribbean market. The trade dispute intensified last month with the Dominican company filing a law suit against Blue Power; two agencies of the Jamaican Government: the Trade Board and the Jamaica Customs Agency; and their bosses the Trade Administrator and the Commissioner of Customs and Excise.
Speaking with the Jamaica Observer, Blue Power Chairman Dr Dhiru Tanna was at a loss about why his company had been dragged to court by DCP Successors, declaring that, “Blue Power has done nothing wrong but has followed the rules.” He advised that Blue Power will be putting up a strong defence and sought to explain why the company ought not to have been named in DCP Successors’ lawsuit, which was filed in the Jamaican Supreme Court on June 8, 2021.
The lawsuit seeks “an order to restrain Jamaica’s Trade Administrator and Trade Board from issuing certificates of origin to local soap manufacturers in respect of soap produced from soap pellets imported from outside of Caricom”, as well as an order directing “the Jamaican Commissioner of Customs and Excise and the Jamaican Customs Agency to apply a Common External Tariff of 40 per cent on all bulk soap pellets (from outside of Caricom) imported by Blue Power and other Jamaican soap manufacturers”.
Soap pellets are a key bulk ingredient used in the production of bath and laundry soaps. In addition to these orders, DCP Successors is also seeking to “obtain from the Caribbean Court of Justice an advisory opinion on (a) the applicability of a Common External Tariff of 40 per cent to be imposed on imports from outside of Caricom of noodles/pellets used in the production of soap in Jamaica and (b) the validity of certificates of origin issued by the Jamaican Government in connection with bath and laundry soap produced in Jamaica with imported noodles/pellets.”
However, Dr Tanna explained that, as required by law, Blue Power has applied for and received a certificate of origin whenever exporting its soaps to the Caribbean market. He acknowledged that the company does import noodles/pellets, which are used in the manufacturing process.
Dr Tanna was adamant that Blue Power has done nothing wrong, indicating that the issue DCP Successors has is one of policy, which is to be addressed by the Government of Jamaica and not Blue Power, which he emphasised has followed the rules laid down by Jamaica’s customs authorities.
The Blue Power chairman has disclosed that since the stalemate between Jamaica and Dominica last year, the company has not received a certificate of origin for soap exports to the Caribbean market. Lack of a certificate of origin from Jamaica may require an importer in a Caricom country to pay a tariffs on imported Jamaican soap.
Arising from the trade dispute, Blue Power is looking outside of Caricom for new markets with the company focusing on America and the UK. It is also looking to supply the Central American and Latin markets with laundry and handwashing soaps. Exports to Caricom represent 20 per cent of Blue Power’s total revenue with another 10 per cent coming from extra-regional markets. Inside Caricom, the largest market for laundry soap is Jamaica followed by Guyana.
The lawsuit is the latest in a series of manoeuvrings by DCP Successors, which is seeking to get a level playing field regarding competition in the soap market in Caricom, accusing Jamaica and Blue Power of uncompetitive practices. DCP Successors manufactures soap which it exports across the region, and is regarded as the pre-eminent manufacturer of soaps in Dominica, providing its produce to cruise lines and leading hotel chains.