October 18, 2013

 

 

By early next year, Namibia's Ministry of Trade and Industry is due to meet a legal challenge in the Windhoek High Court over the imposition of the new import limits for dairy products.

 

A company involved in the import of dairy products into Namibia, Matador Enterprises, has filed a case in which it is asking the court to declare the Government Notice 245 of 2013, in which the import quotas were announced, as unconstitutional and to review and set aside any decision of the trade minister that underpins the notice.

 

The company is also asking the court to declare two sections of the Import and Export Control Act, in terms of which the dairy import quotas were promulgated, unconstitutional and invalid. It was also planning to ask the court to grant an urgent order setting aside Government Notice 245 of 2013.

 

With the trade minister, and also the Dairy Producers Association of Namibia and Namibia Dairies, opposing its legal action, the company did not proceed with its urgent application, which was scheduled to be heard by Judge Dave Smuts.

 

The legal teams representing Matador Enterprises, the minister, and the Dairy Producers Association of Namibia and Namibia Dairies agreed that the company's legal challenge to the notice and the Import and Export Control Act would be argued on February 21, 2014.

 

Matador Enterprises is part of the Bidvest Namibia group of companies. The company's chief executive officer, Jannie Brink, claims in an affidavit filed with the court that Namibia's dairy industry has received protection from the Government since 2000, and that this has unfairly benefitted Namibia Dairies, which is Namibia's only producer of ultra high temperature (UHT) long-life milk.

 

Brink is also claiming that the Namibian dairy industry has received infant industry protection from the Government from the year 2000 to January last year.

 

In the Government Notice being attacked by Matador Enterprises, Minister of Trade and Industry Calle Schlettwein prohibited the importation of dairy products into Namibia, except when an import permit had been issued. He also prescribed a limit of 500,000 litres/month for the importation of milk and cream into Namibia, and a limit of 200,000 litres/month for the importation of cultured milk products.

 

Brink claimed that these quantitative restrictions will strangle Matador Enterprise's trade and business. He is arguing that the Import and Export Control Act has given the trade minister the power to legislate, which is unconstitutional, and that the parts of the Act being attacked infringe on the company's constitutional right to carry on its trade and business.

 

In response to Brink's arguments, the trade permanent secretary, Malan Lindeque, is stating in an affidavit of his own that import restrictions are necessary to build and maintain domestic capacity for the development and production of food products in Namibia. In pursuit of that goal, Government has taken measures to develop Namibia's dairy industry, with those measures including infant industry protection and now also import quotas, Lindeque says. Infant industry protection covered only long-life milk, and not the entire dairy industry, and has in the meantime expired, he says.

 

On average, 650,000 litres of UHT milk are being imported into Namibia each month, Lindeque says. The new import quotas will result in an import reduction of 150,000 litres a month - which he argues is no basis for Matador Enterprises to predict a catastrophe to its business.

 

Lindeque says the Government Notice was issued after wide consultations. It was issued in terms of sections of the Import and Export Control Act that give the minister of trade and industry the power to regulate the import and export of goods, and there is no basis to contend that those parts of the Act are somehow unconstitutional, he added.

 

He is further saying that the import restrictions are based on a legitimate government objective. The interests of Namibia considered by the minister when he decided to impose the import quotas include Namibia's industrial development, job creation, and the benefits that the development of the local dairy industry would have for the country in the long term, Lindeque says.