Rudisa and the governance of Guyana

The case of Rudisa Beverages and Juices (Rudisa) v The State of Guyana, decided by the Caribbean Court of Justice (“CCJ”) on May 8, 2014, exposes not only the state of governance in Guyana over the past two decades but also symbolizes the complete loss of Guyana’s ability to achieve political agreement on any matter of consequence.

Rudisa, a Suriname company, produces and sells beverages in non-returnable containers. Caribbean International Distributors Inc. (“CIDI”), a locally owned subsidiary of Rudisa, imports and sells them in Guyana. They alleged that the imposition by Guyana in 1995, by section 7A of the Customs Act, of an environmental levy or tax of $10 on all imported non-returnable beverage containers imported into Guyana, was discriminatory and amounted to a violation of the Revised Treaty of Chaguaramas (“RTC”) passed into Guyana law in 2006.

The CCJ ruled in favour of Rudisa and rejected the argument of the Attorney General that Guyana’s violations were excusable because the Government had made ‘a good faith effort to comply with its treaty obligations’ but that the National Assembly in 2013 refused to pass the necessary amendments to address the breach of the RTC. The CCJ found Guyana liable for the violations and awarded to Rudisa the sum of US$6,047,244. It also ordered the Government of Guyana to cease collecting the tax.

so140112ralphThe Opposition had declined to support an amendment in the National Assembly to section 7A, which would have reduced the tax to $5 and removed the discriminatory aspect by imposing it on Guyana’s containers as well.

The Opposition claimed that it wanted time to study the implications of the measure and to consult with the business community.

News reports have suggested that the Government’s position is that Rudisa had agreed that if the law imposing the tax were amended, it would not pursue its case. It is not clear whether Rudisa meant an amendment abolishing the tax or an amendment removing its discriminatory application to only overseas containers and not Guyana’s.

But it is not understood how, if not this Government, then at least the past Government could be blameless. The issue engaged the attention of COTED (the Council for Trade and Economic Development) of Caricom on twelve occasions between 2001 and 2012 and on seven occasions since 2006 when the RTC was enshrined in Guyana’s laws.

The tax or levy was blatantly discriminatory and ought to have been withdrawn or modified to remove its discriminatory aspect long ago. Like the AML/CFT Bill, the past Government had years to pass amendments but did nothing.

A similar situation arose in the Trinidad Cement Limited (“TCL”) case. The complaint to the CCJ was that the Government suspended the Common External Tariff several years before without COTED’s approval, as was required and then, to compound the violation, continued it long after TCL claimed to be in a position to supply all of Guyana’s needs.

The CCJ ruled in favour of TCL and the only thing that spared Guyana was that TCL could not prove the loss of profits of the US$250,000,000 claimed or any part thereof. Criticisms of the Opposition, therefore, ought to be tempered by the acknowledgement of the omissions of the last Government which have resulted in legal liability and cost to the taxpayer.

While Dr. Luncheon was voicing these criticisms against the Opposition, he might have added some credibility thereto by advising whether the Rudisa tax, the AML/CFT amendment and, for the sake of history, the TCL issue, came up for discussion in the last Cabinet and what was Cabinet’s position on these matters. He was Cabinet Secretary at all material times.

At the same time the Opposition cannot hold itself blameless. It is not known if the Government took the Opposition into its confidence in relation to the amendment.

But the Opposition has a responsibility to protect the citizens of Guyana and in so far as they did not do so by supporting the legislation, or by being dilatory in making up their minds, they have failed the taxpayer who will have to bear the burden of paying the damages awarded.

The optimism of the Guyanese people in the good sense of our politicians and in the expectation that the electoral outcome in 2011 would have forced them to cooperate for the benefit of Guyana, has now been shattered. Major projects -Amaila, the Airport, the Specialty Hospital – have been stalled. Significant increase in production is taking place in only rice and gold. The AML/CFT Bill, soon to be voted on in the National Assembly, is unlikely to pass even though the differences among the parties are eminently capable of being resolved with modest compromises from both sides. But compromise is now so bad a word that it has disappeared from our political lexicon.

Guyana has lost fifty years to political divisiveness while countries with our level of development fifty years ago have grown by leaps and bounds. The people are now frustrated. While core support for political parties remains strong, an increasing minority, large enough to have a political impact, is becoming disaffected. They see no possibility of progress and daily grow more disenchanted with politicians. They are rapidly disengaging and will continue to do so unless a way can be found within the next month or two whereby the Government and Opposition can develop a modus operandi for cooperation. If not general elections is the only course open to the Government and Opposition alike.

 

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