Court battle lingers for Govt over chicken imports

June 1, 2015, 8:17am

Court battle lingers for Govt over chicken imports

Government still has to go to court to defend its decision to cut down on chicken imports from South Africa after the South African poultry industry challenged them late last year, the Minister of Industrialisation, Trade and Small to Medium Enterprise Development, Immanuel Ngatjizeko has confirmed.
Initially, the case was heard in the High Court in November 2014 through an interlocutory appeal (an appeal of a ruling by a trial court which is made before all claims are resolved as to all parties).
“I am not sure exactly how far the proceedings have gone and when the court hearings are, but what I know is that the process is ongoing, it has not been finalised yet. We are still busy with the proceedings,” Ngatjizeko said.
In the middle of last year, the South African Poultry Association (SAPA) and five other companies lodged a review application against the Ministry of Trade and Industry (MTI) when then-minister Calle Schlettwein announced the quantitative restrictions on poultry imports in April 2013.
Schlettwein at the time announced the import restrictions at 600 tonnes monthly, to which the South African importers felt the legislation used to set these restrictions was not in line with international law standards.
It was also believed that the 600 tonnes was not even equal to the monthly order of one company.
However, as local producer Namib Poultry was unable to meet the country’s full demands, government increased the monthly imports to 900 tonnes monthly last year.
The South African importers who sued government fall under SAPA.
They included Crown Chickens, Supreme Poultry, Rainbow Farms, Astral Foods and Agri-Poultry.
They asked the High Court to review and set aside those import restrictions.
Meanwhile, Finance Minister Schlettwein said the full details of the court case could be narrated by the MTI Permanent Secretary, noting that the South African poultry importers are not suing the government, but are rather challenging the government on the import restrictions.
When Schlettwein announced the import restrictions, he said they were in terms of the Import and Export Control Act.
“The South African poultry importers are not suing us, but they are just challenging us on the import restrictions. However, I am unable to comment further on the issue, but you can contact the Permanent Secretary (PS) of Trade, and he can give you the complete details on the issue at hand,” he stated.

Meanwhile, the PS of Industrialisation, Deputy PS of Industrialisation and the Deputy PS of Trade and Commerce were out of office all week for an annual planning meeting, and could not be reached for comment as their mobile phones were off.
One of the reasons cited by the South African poultry exporters is that in order for them to import poultry products into Namibia, they need to apply for import permits, which are issued by the MTI.
The restrictions were meant to provide protection to the Namibian poultry industry which complained that it was battling to compete with the more established producers of poultry products who have been able to market their products here at lower prices than Namibian producers have.
When the restrictions were put in place, Small and Medium Enterprises locally also schemed to demonstrate against the MTI for the restrictions to be lifted as the Namib Poultry farm could not meet the demand.
Government recently gazetted another increase in the import of poultry products into the country, allowing an increase of 1500 tonnes monthly.
Meanwhile, SAPA’s Chief Executive Officer Kevin Lovell told The Villager that a judgement has not been reached yet, citing that the first process was just an interlocutory appeal.
"The matter has not even been heard in court yet. The Namibian court system is very different, and we need to have it heard in court first before judgement is passed," he noted.
Lovell added that the matter is ongoing, and he is unable to provide any comments.
"I confirm, however, that the merits of SAPA’s review challenge have not yet been determined by the Namibian High Court," he said.
The court case was heard in the High Court by Judge-President Petrus Damaseb under Case number A 94/2014.
The case was filed by SAPA, which was the first applicant, Astral Foods Limited, Supreme Poultry (Pty) Ltd, Crown Chickens (Pty) Ltd T/A Sovereign Foods, Afgri Poultry (Pty) Ltd and Rainbow Farms (Pty) Ltd against the Ministry of Trade as the first respondent, followed by the Government of Namibia, Namibia Poultry Industries (Pty) Ltd and Meat Board as the other respondents.         
Schlettwein set the restrictions on the importation of poultry products into Namibia under the Import and Export Control Act, 1994 and was published in Government Gazette No.5167.
 Government made this decision as far back as 2001 when, for the first time, the Minister of Agriculture, Water and Forestry publicized the accessibility of Infant Industry Protection (IIP) for the poultry industry, and stated that such a measure was sanctioned by the Southern African Customs Union (SACU).
“The core message conveyed in the public notice of 2001 was that the Namibian government could “levy import duties on broiler products from outside Namibia, including SACU members, for an eight-year period in order to give Namibian companies protection and the opportunity to establish industries in the broiler industry,” the court document noted in part.
Meanwhile, SAPA maintains that the Namibian Government’s pursuit of ‘infant industry status for the poultry (broiler) industry at that time was not authorised in terms of the SACU Agreement of 1969’, and that in any event, there is no IIP status lawfully in force in Namibia which could lawfully justify the Minister’s determination.
According to the court documents, the neutral citation was South African Poultry Association versus the Ministry of Trade and Industry (A 94/2014) [2014] NAHCMD 331 (07 November 2014).
The case was heard on September 29, 2014 and judgement was delivered on 7 November 2014.
The case was an interlocutory application for discovery arising from a review application launched on April 17, 2014 by a voluntary association of South African poultry producers and some of its members.
“The applicants will, individually and collectively, be referred to as ‘SAPA’. The review application principally seeks to review and set aside a determination by the Namibian Minister of Trade and Industry restricting the importation into Namibia of certain chicken products”, cited the document in part.
According to the document, SAPA alleged that the Minister’s determination caused them ‘direct, persistent and ongoing harm’, saying it is common cause that SAPA members produce their chicken products outside Namibia, and only import them into Namibia.
“Whereas the third respondent in the review application, Namibia Poultry Industries (Pty) Ltd) (NPI), is Namibia’s largest producer of poultry products and stands to benefit from the import quota restrictions imposed by the Minister. The NPI has invested huge amounts of money in setting up a local poultry industry in Namibia which produces chicken products locally,” the document said in part.
Citing documents referred to in SAPA’s founding affidavit in the review application, the NPI’s investment is characterized as ‘A Project of National Interest’.
SAPA argued  that the Minister’s determination was ultra vires the provisions of the Import and Export Control Act, 1994 (Act 30 of 1994),  and that the purported Infant Industry Protection (IIP) embodied in the impugned notice runs fowl of the Namibian government’s Treaty obligations under the World Trade Organisation (WTO) agreement,  the Southern African Development Community (SADC Treaty) together with the SADC Protocol on Trade of 1996 , the General Agreement on Tariffs and Trade (GATT)  and the Southern African Customs Union (SACU) agreement.
“Additionally, SAPA alleges procedural unfairness inconsistent with Article 18 of the constitution in that SAPA, as interested parties, were not afforded a fair and reasonable opportunity to be heard before the Minister imposed the quantitative quota restriction,” said the document in part.
Part of the SAPA allegations were that the Minister’s determination was also disputed on the grounds that it is an “unconstitutional infringement of their right to carry on a trade or business entrenched in Art 21(1)(j) of the Namibian Constitution, claiming that the Minister’s determination was ‘irrational’ and ‘contrary to the rule of law”.
“SAPA asserts further that the impugned notice is tainted by the improper influence exerted on the Namibian Government by NPI in both the bringing into effect of the determination and its enforcement. SAPA attacks the authorisation given by the Minister to the Meat Board of Namibia (fourth respondent in the main application) to administer the permit system created by the Minister’s determination on the ground that it falls outside the purview of Meatco’s competence under its creative deed.  The applicants also seek declaratory and interdictory relief”, the document continued.
Unless both import quotas are reviewed and set aside, SAPA was not willing to set aside the court case as they felt they were affected.

by Charmaine Ngatjiheue