Monday, September 10, 2018

SINGAPORE- SRI LANKA FREE TRADE AGREEMENT-DEVIL IS IN THE SRI LANKA IMPORT-EXPORT LIST

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CENTRE FOR ENVIRONMENTAL JUSTICE/FRIENDS OF THE EARTH SRI LANKA
SINGAPORE- SRI LANKA FREE TRADE AGREEMENT
DEVIL IS IN THE SRI LANKA IMPORT-EXPORT LIST
Hemantha Withanage
Executive Director, Centre for Environmental Justice

Sri Lanka is one of the highly indebted country due to its mismanagement in the economy and the governance in the recent years. The issues are interconnected to the 30 year civil war, lack of a national development vision, excessive borrowings, overdevelopment of infrastructure with no feasibilities, high dependence of China and corrupt governance system. Sri Lanka being a strategic location of the China Belt Road Initiative and recent crisis in the global waste management including China’s restriction to import waste for recycling industry, Ministry of Megapolis plan to establish three waste to energy plants in Sri Lanka, Chinese contract for the Arruwakkaru waste landfill and Chinese plan for Hambanthota, lack of proper enforcement of the National Environmental (Protection and Quality) Regulations, No. 1 of 2008 enacted under the National Environmental act No 47of 1980 are few factors to consider when analyzing the recently signed Singapore- Sri Lanka Free Trade Agreement.


This appears to be a pretty standard free trade agreement entered into bi-laterally by two countries similar to other Free trade agreements under Article XXIV of GATT 1994 and Article V of GATS. GATT 1994 means the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement. It covers, Elimination of Custom duties, intellectual property rights, telecommunications, Health, environment and several other areas. However, in my opinion devil is in the Sri Lanka export and import list in the Appendix 2-A-1 Tariff  Schedule Sri Lanka which has made free importation of the goods and material which are even banned in Sri Lanka for many years ago. The issue seems that when we enter into global agreements, we have not made our policies and regulations corrected and updated adequately and timely manner.

According to the Department of Import and Export control website “Necessary steps have been taken to control or ban critical items that has harmful effect to the environment and public security according to the International Conventions such as Basel, Rotterdam and Stockholm’s. Eg. Banning of Glyphosate. Further, two third of the shelf life is an essential requirement for importation of pharmaceuticals and it is a critical step that has been taken to avoid expired drugs”. It further state that Since, Sri Lanka situated in a prime location in the Indian Ocean and mid of the Silk Road, world has identified Sri Lanka is a good trans-shipment point for international trade. Apart from that Chinese and Indian trade expansion policies give us a sign to develop a sound policy framework in the border protection and international trade relations.

This proves that the FTA signed between Sri Lanka and Singapore has something to do with the transshipment. However, there is high probability of dumping such material in Sri Lankan soil and also using them as raw material in some dirty industries which might come in the proposed industrial zones including one proposed by China in Hambanthota. Perhaps this is the business that China is looking for using Hambanthota harbor. Therefore, having strong customs regulation and cleaning import export list is crucial.

Banned Waste categories are free to import- Some of the items in the Export-Import list are prohibited products. For Eg. Sri Lanka has banned importation of Polychlorinated Biphenyls (PCB) in 1979. PCB was officially banned worldwide under the Stockholm Convention in 2001. But our Export-Import list still allows them. This FTA allows importation of PCB, PCB contaminated or containing items free under different HS codes including 29039913. Although the Gazette Extraordinary 2044/40  of 9th November /2017 published under the Import and Export Control Act No 1 or 1969 has banned some of these items, it does not reflect in the FTA annex referring to the Tariff Schedule in Sri Lanka.
Similarly, DDT is one of the banned items in Sri Lanka since 1976. But the FTA allows importing DDT under HS code 29039220 free to Sri Lanka. Endrin, Dieldrin and many other such banned pesticides and weedicides are included in the list of items to import free.
There are various types of wastes in both Sri Lanka Singapore lists. For eg: HS codes 12130010- Waste straw, 26211000-Ash and residues from the incineration of municipal waste, 28053010-Waste and scrap of rare-earth metals, 30069200-Waste pharmaceuticals, 38251000 - Municipal waste, 38252000-Sewage sludge, 38253000 - Clinical waste, 40040020-Waste, - Scrap and waste of Micro cellular, 47079000- Other paper/paper board, including unsorted waste and scrap, 68101110-Building blocks & bricks-concrete cement blocks encasing industrial waste sludge, 68109910-Other - Concrete cement blocks encasing industrial waste sludge, 70010010-Waste and scrap containing lithium-tantalum and lithium niobium, 75030000-Nickel waste and scrap 78020000-Lead waste and scrap, 81019700 Waste and scrap, 81053000-Waste and scrap of cobalt etc. There are many other type of waste included in Sri Lanka list with free of custom duties. Some are harmful to the environment and some are not. Meanwhile some  waste can be used as raw material and some are just waste.  
Environmental regulations in Sri Lanka- The government of Sri Lanka trying to bring market solutions to heals in debt. Yet the proposed solutions may be more damaging to the country’s environment and health of people. This is an issue that needs to be addressed politically as well as legally and economically.
The issues related to the waste dumping and Sri Lanka becoming a dumping yard of Asia is very possible under this highly indebted situation. Lack of waste law enforcement in Sri Lanka is an added factor. Strengthening and enforcing our waste importation and handling hazardous waste regulation is not satisfactory.
In comparison, Singapore has a better regulation and a proper law enforcement. Most items in the Singapore Customs list do not generate within its territories. In fact, Singapore is a transit point being a service provider to shipping lines. Singapore also produce about 60,000 Metric tonnes (MT) electronic waste annually as reported in 2018. The total generation is about 7.5million MT a year which only 4.5 million MT goes for recycling.
Basel convention- It appears that Basel regulations could be the only hope if there is scheduled waste import under this FTA. However, in general there are major gaps in implementing the environmental laws in Sri Lanka due to the unnecessary political interventions. Sri Lanka ratified the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and their Disposal in 1992 and had taken some steps to ensure implementation of its provisions.  Implementation of the National obligations on Import, Export and Transit of waste listed in the Basel Convention is carried out by the CEA as the National Competent Authority for the Basel convention.  Singapore has a good set of regulations to control transboundary movement of hazardous waste.
As Sri Lanka does not have disposal facilities the importation of List A waste of the Basel convention is not allowed. For the importation of List B waste of the Basel convention a proposal should be submitted by the Importer/ Industrialist to the CEA/BOI. Then the proposal is been circulated among the members of the Technical Committee for the implementation of the Basel Convention for comments. Based upon TEC recommendations Importation is approved under conditions/not approved with reasons. The ports Authority & the Sri Lanka Customs are also informed of the decision taken. But this process is not necessarily follow all the time.
Intellectual property- According to the critiques, most developing countries don't have adequate laws to protect patents, inventions, and new processes. The laws they do have aren't always strictly enforced. As a result, corporations often have their ideas stolen. The FTA between Sri Lanka and Singapore says that “The Parties shall explore cooperation in the granting of patents on the basis of applications filed by applicants of a Party in the other Party, and patent examination and work sharing”. This is an area that Sri Lanka need to be worried as our Intellectual properties are very much vulnerable due to the lack of strong regulations. Sri Lanka being a place with long history, it has many traditional knowledge which can be threatened due to this FTA.

Environment and health- The FTA somehow has a provision to suspend its operation in related to safety. The article 5.14 sectoral annexes state “Where urgent problems of safety, health, consumer or environment protection or national security arise or threaten to arise for a Party, that Party may suspend the operation of any Sectoral Annex, in whole or in part, immediately. In such a case, the Party shall immediately advise the other Party of the nature of the urgent problem, the products covered and the objective and rationale of the suspension”.

The FTA between Singapore and Sri Lanka need to look at as an agreement between a weak and a strong regulator in related to trade, investment and environment. Singapore has no natural environment to save in comparison to Sri Lanka. In my opinion Sri Lanka is more vulnerable to environmental pollution, losing intellectual property rights unless we pay more attention. It’s the time to look at these aspects and adequacy of our laws, regulations and enforcement before moving further. (END)

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