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CCJ upholds COTED decision to increase cement tariff in Barbados

The Caribbean Court of Justice (CCJ) has ruled in favour of the Council for Trade and Economic Development (COTED) decision to raise the tariff on “other hydraulic cement” imported into Barbados.

In passing down the judgement, on Wednesday, in the case of Rock Hard Cement Limited v The State of Barbados and The Caribbean Community
and Arawak Cement Company Limited, Intervening [2020] CCJ 2 (OJ), the CCJ declared that the Caribbean Community (Caricom) and Barbados failed in their respective duties to conduct prior consultation with
the importers, Rock Hard Cement Limited (“Rock Hard”).

(Photo: St Lucia Magazine)

Almost a year ago to the date, COTED — the arm of Caricom responsible for altering or suspending the Common External Tariff (CET) — approved the application of Barbados to suspend the CET of five per cent on other hydraulic cement in order to replace it with a tariff of 35 per cent. The Caricom body, however, authorised the suspension for two years, instead of the five years Barbados requested.

Although aware that the approval to increase the CET would adversely impact Rock Hard’s business activity, neither Barbados nor COTED consulted with or informed the cement-importing company of the application.

Having paid a five per cent CET for the hydraulic cement it imports from Turkey, Rock Hard claimed that the decision to raise the tariff should be annulled because it had a legitimate expectation that Barbados would keep the tariff at the same rate. This claim was dismissed.

CCJ said it is disappointed that Caricom failed to maintain an effective system of consultations at the national and regional level as required by Article 26 of the Revised Treaty of Chaguaramas (RTC).

The CCJ also dismissed Rock Hard’s claims that the COTED decision was arbitrary or irrational. In response, the court stated that the rationale and justification Barbados presented to COTED were supported by the factual circumstances.

Furthermore, the grounds on which COTED approved the request was a category in  which the body had legal right to exercise broad discretion, the appellate court reported.

Notwithstanding, the CCJ reiterated that Barbados and CARICOM had failed to ensure that Rock Hard was consulted before the application for the suspension was approved.

But since the consultation required for the application would only serve the purpose of obtaining information on the impact of the proposed tariff increase, the court decided that neither COTED’s nor Barbados’s failure to consult with Rock Hard would be sufficient reason for the annulment of the decision.

Furthermore, CCJ said it is disappointed that Caricom failed to maintain an effective system of consultations at the national and regional level as required by Article 26 of the Revised Treaty of Chaguaramas (RTC).

The CARICOM Secretariat in Georgetown, Guyana. (File photo)

The court concluded that since the matter is one of Barbadian domestic policy, the State could choose to adopt measures to facilitate the importation of cement produced extra-regionally or encourage locally produced cement manufactured by Arawak Cement Company Limited. However, CCJ emphasised that any such measures and the processes accompanying them must comply with the rule of law.

The judgment was delivered by the full bench of the CCJ: President Adrian Saunders and justices Jacob Wit, Justice Winston Anderson, Justice
Maureen Rajnauth-Lee, Denys Barrow, Andrew Burgess, and Peter Jamadar.