Haycarb succeeds in Supreme Court

After a local activated carbon manufacturer's unsuccessful challenge in Sri Lanka's Supreme Court to restrict a foreign company, Jacobi Carbons, from purchasing raw materials locally last week, Haycarb Ltd succeeded this week on a fundamental rights case they filed on November 8.

Haycarb, a subsidiary of Hayleys Limited, is the world's leading activated carbon manufacturer and like other local companies in the industry, has been struggling with the scarcity of local raw materials.

When Jacobi Carbons, a foreign company secured Board of Investment (BOI) status, their application stated they would only install 2 Rotary Kilns and 2 Boilers which would require the consumption of 450 tons of charcoal each month. However, a subsequent inspection by the Coconut Development Authority (CDA) uncovered that Jacobi Carbons had actually installed 5 Rotary Kilns and 5 Boilers on their facilities, requiring an additional 250% increase in the amount of charcoal needed per month for the company to carry out its operations. On this basis, a petition was filed by Sudath Perera Associates on behalf of Haycarb under Articles 17 and 126 of the Constitution against the BOI, Deputy Director-General of the BOI AMC Kulasekera, Jacobi Carbons, the CDA, the four remaining local activated carbon manufacturers and the Attorney-General.

According to court documents of this Monday's proceedings, the Supreme Court issued an interim order restraining Jacobi Carbons from sourcing raw material locally, in the form of coconut shells, coconut shell activated carbon and activated carbon for the manufacture of activated carbon products or value added products in Sri Lanka. Furthermore, the Court restrained local sourcing of raw material in excess of 450 metric tons of coconut charcoal per month and 310 metric tons of activated carbon per month. Objections from the respondents should be submitted by January 31, 2007, the court said.
(NG)