Export sector awaiting urgent relief over sudden and unprecedented policy reversal

Monday, 27 March 2023 03:27 -     - {{hitsCtrl.values.hits}}

  • Outcry grows as rescinding of Gazette 2041/10 of 2017 (original 2013) that helped export competition and consumer protection
  • Exporters say original Gazette brought transparency in freight and helped consumers and exporters against artificial cost increases by service providers
  • It adapted best practices recommended by the EU based international Chamber of Commerce

President Ranil Wickremesinghe
Ports, Shipping and Aviation Minister Nimal Siripala de Silva

The all-important export sector is awaiting urgent relief from higher authorities following the Shipping Minister arbitrarily revoking a Gazette on 28 February which was introduced after two consecutive Budget proposals in 2012 and 2013 to eliminate anti-competitive practices by service providers by distorting transport costs adding surcharges on exports and imports by unbundling freight to avoid market forces.

The Gazette which was originally issued in 2013 under the instruction of the then President as Finance Minister and Shipping Minister was untouched by President Sirisena, then Prime Minister and now President Rani Wickramasinghe, former President Gotabaya Rajapaksa and by five shipping ministers, two finance ministers and four shipping secretaries earlier in different governments although a lobby was constantly at them by certain service providers to make undue profits by removing the Gazette.

The Gazette was suddenly rescinded by the current Minister Nimal Siripala De Silva and his Secretary Ruwan Chandra without any consultation with the relevant authorities of the Ministry of Policy and Planning or the Cabinet and the Finance Ministry who initiated the laws to make exporters more competitive and to protect the consumers in 2013.

Sources said former Shipping Minister Mahinda Samarasinghe had further strengthened the Gazette in 2017 and former Finance Minister Ravi Karunanayake way back in 2002 mooted the same as Trade Minister and reconfirmed the status in 2016 by supporting the Gazette when lobbied against it by service providers when he was Finance Minister.

The same was the stance by late Mangala Samaraweera who wanted to liberalise shipping with proper anti-competitive regulations.

It is learnt that exporters/importers consisting of all sectors apparel, rubber, tea and the shipper’s council, essential import commodities have sought relief from the higher authorities as the Shipping Ministry has given them a cold shoulder and taken the view to support the middleman who are the service providers who had introduced different surcharges and concepts such as zero freighting for nearly twenty years prior to 2012-13 Gazette.

Opposition MP Dr. Harsha De Silva brought to the attention of Parliament and Minister Nimal Sirpala de Silva the consequences if this law was removed and how exporters and consumers will suffer, during the last budget debate. Minister promised to talk to the exporters and not to revoke the same without studying it at length. However exporters and importers say the reverse has happened suddenly and the competition law was removed silently.

The exporters have sought higher authorities’ intervention to bring the law back as a policy and planning matter in the national interest. They also say that this Gazette as a budget proposal was debated in Parliament and introduced as a bipartisan law and the very same Minister Nimal Siripala de Silva voted in favour of it in Parliament in 2013.

“Therefore it is shocking and it has baffled the trading community to say the least how policies are made and dismantled in the country which also give a complete a wrong signals to traders and international community at this juncture where buyers have accepted the Gazette ten years back as it adopts ICC guidelines of moving away from FOB to FCA in container cargo paid by a contracting party,” industry sources said.

The year 2023 is expected to be very challenging to exporters due to global and local conditions. Cumulative export earnings in the first two months have declined by 10% to $ 1.98 billion. Last year the export sector helped to bring much needed foreign exchange with its best ever performance. Earnings from exports in 2022 surpassed $ 13 billion for the first time, recording an increase of 4.9% from the previous highest recorded in 2021.