Soap War

A long-running row between Dominica Coconut Products Successors Limited, DCPS, and some Jamaican state agencies and Jamaican soap manufacturers and exporters, is headed for the courts in Kingston, and could end up before the Caribbean Court of Justice, CCJ.

DCPS, through its attorneys, Hylton Powell, has filed a lawsuit in the Jamaican supreme court naming the island's trade administrator, the trade board, the commissioner of customs, Jamaica Customs Agency, and Blue Power Group Limited, the manufacturer of laundry, beauty and personal care soaps, as respondents in a matter involving the importation of raw materials for soap-making and the export of soaps made in Jamaica to Caribbean Community, CARICOM, countries.

The Dominican company, the only producer in CARICOM of animal fat and palm oil-based noodles needed to produce soap bars, has accused Jamaican soap manufacturers of cheating the system, with the blessing of the authorities in Kingston, by skipping the soap-making process, and buying near ready-made soap from Indonesia and selling the finished products as if they are of CARICOM origin, thus avoiding the 40 per cent common external tariff, CET, imposed on goods from non-community countries.

At the heart of the dispute is the importation of the Indonesian soap pellets raw material by the Jamaican producers and the issuance of certificates of origin by trade officials in Kingston, certifying that the soaps produced from these raw materials meet the criteria to be considered as originating in CARICOM.

DCPS and its principal, Yvor Nassief, claim in the court papers that the Jamaican trade board and Blue Power, the producers of the well-known Blue Soap, contravened a decision by the CARICOM Council for Trade and Economic Development (COTED) last November, that Jamaican should stop issuing the certificates for these soaps.

Dominican representatives at that meeting had argued the DCPS position that the soap pellets raw material imported from Indonesia was simply reshaped as soap without going through a process of manufacturing necessary for the finished product to be classified as being of CARICOM origin.

However, the Jamaican soap producers have held that the raw material from DCPS is of poor quality, and the Dominican company was trying to force them to purchase material that simply did not make the grade, according to the Jamaica Gleaner.

The publication also states that the country's industry and commerce minister, Audley Shaw, is squarely behind the Jamaican soap producers, and has amplified their assertions about the quality of the DCPS raw material.

"The Dominican company has not been making noodles of the quality that our manufacturers want, and they are seeking to get COTED protection for it; and they are trying to force our manufacturers to use their raw materials. They have tested it. It doesn't even smell good," The Gleaner quoted Shaw as saying.

Blue Power has said that the COTED decision – which did not receive unanimous support - would effectively close the CARICOM market to it and other Jamaican soap exporters.

Despite the COTED decision, which is being appealed, Jamaica continued to issue the certificates of origin, and Blue Power has confirmed that since December, it has made six shipments of soap to CARICOM countries after receiving certificates from the trade board.

This has further angered Nassief and the DCPS, which filed a motion of non-compliance against Jamaica at the 52nd COTED meeting held virtually on 1-2 June, and chaired by the Jamaican foreign affairs and foreign trade minister, Kamina Johnson Smith.

Since the lawsuit was filed last week, the Jamaican authorities have stopped issuing the certificates of origin while the matter goes through the legal process.

"Now that this matter has been taken before the court, what the manufacturers will simply do, for now, is to cut down on exports to other CARICOM countries or they might have to pay the duty. Otherwise, we will continue to support our manufacturers to produce materials of high quality, and if they can't get the raw materials in the region, and they have to import it from third countries, then they go right ahead and do it. We won't issue the certificates as long as the matter is in court," The Gleaner quoted Shaw as saying.

DCPS wants the Jamaica court to force the trade administrator and the trade board to provide certain information that it requested from as far back as 2 March this year. It was not immediately clear what information DCPS is seeking.

The Dominican manufacturer, which itself buys animal fat and palm oil in its raw form from Indonesia and processes it here into soap noodles, also wants the court to declare that the Jamaican trade authority unlawfully issued certificates of origin to Blue Power Group, contrary to the Revised Treaty of Chaguaramas, or for the issue to be referred to the Caribbean Court of Justice.

DCPS has also asked the supreme court to prevent the trade board from issuing certificates of origin to Blue Power or any other Jamaican soap producer "in respect of soap produced with soap noodles/soap pellets imported from countries outside the region" pending a CCJ decision on the matter.

It has applied for "consequential damages" against the Jamaican trade administrator, trade board, commissioner of customs, and Jamaica customs for "breaches of statutory duty" related to their alleged failure to comply with their obligations and duties under the revised treaty, the customs act and the revenue administration act, and wants the court to declare that the commissioner of customs and Jamaica customs wrongfully exempted Blue Power from paying the CET, or to refer this matter to the CCJ.