Vasu goes to court over shipping industry monopolization
„Files legal action against Ports and Shipping Ministry for failure to stop monopolization „Says high shipping charges reduce export potential and increase import prices and cost of living „Predatory monopolistic practices will affect SMES
Member of Parliament Vasudeva Nanayakkara fired broadsides at the Ports and Shipping Ministry, bringing legal action against key state officials and policy makers in the ministry for failing to prevent the monopolization of the shipping industry.
Filing a case at the Court of Appeal, Nanayakkara petitioned that Ports and Shipping Minister Mahinda Samarasinghe has not discharged his duties to stop the concentration of the means of production and exchange and wealth at the hands of the few under the country’s constitution, and more specifically, to stop monopolization of shipping under the Shipping Act No. 52 of 1971.
The court was informed that the industry is being openly monopolized, with 70 percent of the market now being controlled by two companies, which are intent on further increasing their control of the market, as evidenced from recent acquisitions.
The Ports and Shipping Minister has widespread powers under the Merchant Shipping Act to stop such mergers, acquisitions and contracts and to formulate further regulations to deter monopolization. In addition to the Minister, Merchant Shipping Director General Ajith Wickrama Seneviratne, Sri Lanka Ports Authority Chairman Dr. Parakrama Dissanayake and Ports and Shipping Ministry Secretary L. P. Jayampathy have been listed as respondents in the Writ of Mandamus application made by Nanayakkara.
However, relief is sought only from Samarasinghe and Seneviratne as they are responsible under the Merchant Shipping law. The respondents were served notices through registered post.
Mirror Business attempted to contact two of the respondents multiple times, but the attempts were unsuccessful.
Nanayakkara’s legal team consists of his counsel President’s Counsel Faisz Mustapha, instructing attorney Sarath Upula Fernando and the supporting attorneys Faisza Mustapha Markar, Akiel Dean and Rajika Aluwihare.
Fernando has been appointed as Nanayakkara’s proxy. Nanayakkara outlined concerns that the industry is not capable of offering competitive rates under monopolies, which would make Sri Lankan exports more expensive and uncompetitive in the world market, which goes against the government target of doubling export revenue by 2020,while raising the prices of imports consumed by the end consumers in Sri Lanka. The predatory business practices of monopolies which drive small and medium scale enterprises out of business was also highlighted.
This lawsuit comes amidst a heated battle taking place between the Finance Ministry and the Ports and Shipping Ministry to liberalize the shipping industry to allow foreign parties to own majority stakes in shipping companies.
After the liberalization proposals were outlined in the budget, Samarasinghe said that he will not allow it since local companies have to be protected and because he was not consulted by the Finance Ministry when formulating the budget proposal.
Samarasinghe said that even President Maithripala Sirisena was against the liberalization.
While the shipping industry has rallied behind Samarasinghe to call for continued protection, economists and top export industries have hailed the move to liberalize the industry.