Financial Times

WTO recognition for Ceylon tea
Sri Lanka is to make a strong push for special recognition of Ceylon tea under international agreements on intellectual property rights at a forthcoming meeting of the World Trade Organisation, in order to protect the island's best-known brand name.

The government is seeking to extend to Ceylon tea recognition granted to products such as champagne and Scotch whisky under "Geographical Indications" (GI) provisions of the Trade Related Intellectual Property Rights (TRIPS) system of the WTO.

This will be done at a key WTO meeting scheduled to be held in Cancun, Mexico in September, which is considered an important forum for producers who want to obtain appropriate protection under GI.

Geographical Indications allow the protection of product names that are unique because of their origin and distinct characteristics. They are based in particular territories and allow producers to make use of consumer demand for origin and quality in marketing the products.

A GI producers lobby group was formed at a meeting held in Geneva, Switzerland, last month and attended by 17 countries with the aim of making "collective representations" at international negotiations and conveying "a common position" at such talks.

The International Geographical Indications Network, called ORIGIN, is designed to deliver a strong message to WTO negotiators, calling for improved international protection of GIs, said Hasitha de Alwis, Acting Director General, Sri Lanka Tea Board.

The meeting was also attended by Niranjan de Mel, CEO, of the Tea Association of Sri Lanka, the apex body representing the Ceylon tea industry, and other officials.
"Substantial progress can be expected at the forthcoming WTO negotiations regarding protection of GIs, where members are seeking extension of a higher level of protection to all products, which is currently granted only for wines and spirits under the TRIPS Agreement," de Alwis said.

"The registration of GIs is very useful for the industry to protect the image of Ceylon Tea and prevent infringements," he added.
The Tea Board is formulating regulations to register the "Ceylon Tea" name and the agro-climatic zones of Uva, Dimbulla, Nuwara Eliya, Udapussellawa, Kandy and Ruhuna under Geographical Indications of the Intellectual Property Bill, de Alwis said.
These regions produce teas with distinct characteristics that are sought after by foreign buyers. The tea industry is concerned that foreign firms and other producers might try to pass off teas from other origins as Ceylon tea to exploit the reputation it has established.

The normal level of GI protection has been provided under Article 22 of the "TRIPS" Agreement, where GIs have been defined as indications of products, which are identified as originating in the territory of a WTO member or of a region or locality in that territory, where a given quality, reputation or other characteristics of the goods are essentially attributed to its geographical origin.

The TRIPS agreement provides protection for GIs at two levels - a normal or standard protection for all products based on unfair competition or an attempt to mislead the public and extra protection currently given only for wines and spirits which prevents the incorrect use of GIs on these types of products.

Producers are worried that there is not enough legal protection at an international level for GIs, which are considered important, and that the misuse of GIs could hurt their economies.

Touchwood profits up 151%, to expand overseas
Touchwood Investments Ltd (TIL) recorded a 151 percent increase in net profits after tax to Rs. 6.4 million for the financial year 2002/03. Turnover rose by 59 percent.
Profits and turnover are expected to increase by 25 percent during the coming year, the company said in a statement.

TIL plans to expand its operation overseas and add new timber species to its product profile. TIL is the first public quoted company on the Colombo Stock Exchange marketing private forestry investments.

The project, which is approved by the Board of Investment, has over 60,000 trees planted in over 350 acres at Ayagama, Eheliyagoda, Mathugama and Ingiriya. The number of its clients now exceed 2,000, said Roscoa Maloney, chairman and managing director of TIL.

Electricity galore, but cost to remain high
By Suren Gnanaraj
Expensive contracts for short-term emergency power given by the Ceylon Electricity Board (CEB) to private firms have ended with no extensions being granted, but there is no immediate prospect of a reduction in electricity charges.

CEB General Manager D. Wijeratne said that the additional 240MW that was purchased from the private sector at high cost was no longer necessary since the energy situation had improved tremendously.

He said that with the advent of the two Kelanitissa combined cycle power plants, and the introduction of the Kukule Ganga hydropower plant at the end of the year, the rising energy demand would be easily met.

Dr. Mohan Munasinghe, Chairman of the National Energy Council and chief advisor to the Minister of Power and Energy, said that electricity prices were unlikely to be reduced in the short term.

He said that when the present government came in to office, the CEB had a staggering debt burden of Rs. 16 billion, which had been eased to a large extent.
"Added to that, we were compelled to purchase electricity from the private sector at a huge cost, which has been cushioned by increasing the tariff rates," he said.
The emergency contracts, signed in May 2002 to relieve the nation of power cuts, ended last month.

Dr. Munasinghe said that the government had approved the decision to set up two diesel power plants next year to generate a total of 200 MW, and a 300 MW combined cycle power plant in Kerawalapitiya.

He stressed the need for a coal power plant, which would help drastically reduce the country's cost of electricity, which is deemed to be one of the highest in the world.
He said that tenders had been called for the coal-power project which is to be completed by 2010, with Hambantota and Puttalam earmarked as possible sites.

The Central Bank has said that while existing power projects might be enough to meet current demand more plants might be needed if economic growth was to pick as has been forecast.

It is necessary to increase installed capacity by at least 100MW each year to meet the 8-10 increase in annual demand.

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