Court continues stay order against Surya Nepal strike

The Appellate Court, Hetauda on Thursday continued the stay order it had issued a week ago against labor strike at Surya Nepal, after hearing demands of laborers of the country´s largest multinational tobacco company.

The court decision to continue the stay order has prevented the company´s closure for indefinite period.

“The court has ordered us to resolve the problems through dialogue,” Rabi KC, corporate vice-president of Surya Nepal informed Republica Thursday evening.

The Maoist-affiliated Nepal Multinational Companies´ Workers Union (NMCWC) had threatened to close down the company from last Monday if its 11-point demand was not fulfilled. Surya Nepal had challenged the union´s move at court and the court had issued the stay order on March 29.

According to KC, the court´s decision to continue the stay order and recommend dialogue for resolving the dispute has paved the way for resumption of talks between management and the trade union.

Trade union officials however termed Thursday´s court order as unfair. “We are not happy with the court decision,” Beni Prasad Timilsina, president of NMCWC said. “We will meet Friday to decide our future strategy.”

According to Timilsina, the court has again summoned both management and trade union officials on May 2 for another hearing.

After the court´s March 29 stay order, the management, which had raised the basic salary of workers a few months ago by Rs 1,165, has agreed to further increase it by another Rs 400 and allowance by Rs 500.

It has also proposed raising gratuity amount by Rs 20,000 for those who serve the company for 20 years and by Rs 120,000 for those serving for 25 years, from existing Rs 180,000. It has also expressed readiness to increase medical expenses from Rs 300,000 to Rs 400,000 for those workers who suffer from cancer.

The trade union also maintained flexibility and has reduced the number of demands to 7 from 11. “But we are firm on other demands like raising basic salary by Rs 2,000, allowance by Rs 1,000 and increasing gratuity paid at the time of retirement to Rs 500,000,” said Timilsina.

The union has also refused to relinquish its demand for job guarantee for offsprings of staffers in case they die while working, while dropping demands like raise in medical insurance and residential quarters for workers.

International Trade Fair to kick off Thursday

Exhibitors from different countries including China, India, Bangladesh, Bhutan and Pakistan have booked more than 350 stalls for Nepal International Trade Fair 2012, which is set to kick off from Thursday in Kathmandu.

Bhaskar Raj Rajkarnikar, vice president of the Federation of Nepalese Chamber of Commerce and Industries (FNCCI) -- the lead organizer of the fair -- said around 200,000 people were expected to visit the five-day event which will be inaugurated by President Ram Baran Yadav.

“We are trying to transform this fair into a forum for those who want to invest in sectors ranging from agriculture to hydroelectricity in the country,” Rajkarnikar said.

Moreover, the government of Nepal has also supported this fair in order to promote domestic products with comparative advantage, which include 19 products listed in Nepal Trade Integration Strategy.

According to Rajkarnikar, six stalls have been booked by Indians, 30 by Chinese, seven by Bangladesh and two by Bhutan so far.

However, some of the exhibitors, like China Sichuan Pavilion, will start showcasing their products only from Friday.

“This trade fair will push itself a bit far from just a fair of goods to a showcase forum of whole nation, products and features,” Rajkarnikar said, “We have planned to arrange one-to-one meeting for domestic and foreign investors in order to lure foreign investment.” He claimed that the fair will be helpful in promoting features of Nepal´s different sectors in order to attract investment during the Investment Year 2012/13.

The Federation of Nepal Cottage and Small Industries (FNCSI), Federation of Nepal Handicrafts Associtaions´ (FNHA) and Nepal China Executive Council (NCEC) are among other organizers of the fair. “The fair will showcase products from east to west Nepal such as tea, coffee, herbs, honey and handmade carpet,” Rajkarnikar informed on the eve of the trade fair.

Moreover, the fair will also showcase readymade garment, electrical equipment, organic and leather products, among others. “We will also award best buyers during the fair,” Rajkarnikar said. He further added that there would be interactions and meetings between national and international investors and businessmen.

According to Rajkarnikar, Nepal Telecom is chief organizer whereas Surya Nepal is orgnizer and Shikhar Shoes is co-organizer.

Govt prepares guidelines for betel nut export

Ministry of Commerce and Supply has prepared a new guideline on export of betel nut to check illegal re-export of nuts imported from third countries to India.

"Its draft has already been prepared and has been circulated among a close group of private sector and Ministry of Agriculture and Cooperatives (MoAC) for finalizing it," said a source at the Ministry. He told Republica that Commerce Minister Lekh Raj Bhatta is holding up the final decision.

The guideline was drafted as per the ministerial decision of January 1, and sources disclosed that traders who were reaping handsome returns through its illicit trade are now trying to influence the guideline.

Though officials refused to disclose the contents of the guideline, sources said it would allow local chambers to issue certificate of origin (CoO) only after the recommendation of Betel Nut Producers´ Association (BNPA) and MoAC. MoAC, in turn, would issue such recommendation based on its data of dometic production.

“Verification from MoAC is being provisioned mainly to ensure that volume of exports do not exceed the domestic production," said the source, adding that enforcement of guidelines would control the illicit export of betel nut to India.

The Ministry took the decision to enforce the guidelines after traders influenced local officials to issue CoO even when source of betel nut were unknown.

According to statistics, Nepal produced around 7,500 tons of betel nut mainly in Jhapa, Sunsari, Ilam and Morang in 2010/11. But in the same year, Nepal imported more than 108,000 tons of beetle nuts.

Though MoAC has no specific data on actual demand of betel nut in the country, officials ruled out demand was so high as import suggested. "Imports remained huge mainly because large portions were easily finding its way into the Indian market," said the source.

India, has constantly raised the issue of illicit export of beetle nut, and urged Nepal to take concrete steps to check it.

Govt forms committee to prepare guidelines for select investors

The Cabinet has approved formation of a high-level committee, as recommended by Ministry of Physical Planning and Works (MoPPW), to prepare guidelines for selecting investors for Kathmandu-Tarai Fast Track, a national priority project.

Ministry, which was entrusted to open the six-lane 76 km road linking Kathmandu and Nijghad, had recommended the cabinet to form a six-member high level committee to prepare basic documents needed for inviting bids and selecting investors few weeks back.

"The Cabinet endorsed our proposal last week. The committee will start its function immediately," Hariom Srivastav, joint secretary at MoPPW told Republica. The government´s plan is to build the fast track under build-own-operate-and-transfer (BOOT) mechanism.

The high-level committee, which is assigned to prepare the guidelines for selection of investors, is led by by Birendra Bahadur Deuja, former director general of the Department of Road (DoR).

"Ram Ayodhya and Hari Prasad Dhakal, both are former division engineers of DoR, Dinkar Shamara, director general of the DoR and representatives from MoPPW and Ministry of Finance (MoF) are other members of the committee," said Srivastav.

According to Srivastav, the ministry has provided three months to prepare the guideline“. "Ministry will proceed to get expression of interests from different investors after the committee finalizes the guidelines," he said. However, the committee won´t have any authority to screen the final investors.

Ministry has allocated Rs 1.9 million for the committe. "The money will be used as remuneration for members of the committee," Srivastav shared. According to Asian Development Bank´s 2008 estimate, the project will cost Rs 67 billion.

Kathmandu-Tarai Fast Track is one of the prioritized projects of the government. Track opening works on 51 km of the 76-km expressway has already been completed.

Nepal-Bangladesh trade talks in May

Nepal and Bangladesh are aiming to ink an agreement in May, which would pave way for commencing the operation of transit route between the two countries. The draft of the agreement was finalized more than a year ago.

Ministry of Commerce and Supplies (MoCS) has started preparations for the secretary-level talks scheduled to be held in Katmandu in May during which an agreement on transit route will be signed, an official of the ministry said on condition of anonymity. However, the two sides are yet to finalize the exact date of the meeting.

The draft was finalized during a commerce secretary-level talk held in Dhaka in 2010. The meeting had also decided to hold next bilateral meeting in Kathmandu between February and March this year.

According to Naindra Prasad Upadhya, joint secretary at the MoCS, though agendas of the meeting are yet to be finalized, Nepal is seeking for a zero tariff facility from Bangladesh.

However, Nepal does not intend to provide similar facility to Bangladesh. Nepal cannot provide equal and less than equal tariff treatment to any third country as per the revised Trade Agreement 2009 between Nepal and India.

"This is the reason why we are not preparing agenda on tariff," the official said. "We are only looking forward to establishing connectivity with Bangladesh."

The draft of the agreement on bilateral transit includes provisions that allow Nepal to use Mongla and Chittagong ports for international trade. Nepali traders are currently facing problems in transit of goods through Fulbari-Banglabanda route due to complicated transit process.

Nepali exporters also have to bear up with poor road infrastructure along the Kakarvitta-Fulbari-Banglabanada route and hassles caused by Indian security personnel.  

The proposed pact is crucial to boost Nepal´s exports to Bangladesh. According to statistics compiled by Central Bank of Bangladesh, Nepal exported goods worth $7.5 million during the three months between July and September last year, compared with imports of $3.6 million from the country in the same period.

Statistics shows lentils contribute to 75 percent of Nepal´s export to Bangladesh. The agreement, which is expected to improve connectivity between the two countries, is expected to further boost Nepal´s trade with Bangladesh.

Secretary Purshottam Ojha, who was recently transferred to the Prime Minister´s Office from the MoCS, however, said Nepal´s progress in signing a deal with Bangladesh has been very slow.

"Though Bangladesh is ready to ink the pact any time, the progress on our side has been slow," he said.

Court stays strike at Surya Nepal

Surya Nepal, the largest tobacco manufacturing factory of the country has escaped the risk of immediate industrial shut down after Hetauda Appellate Court on Thursday issued a stay order against workers´ strike.

The Appellate Court has also summoned the trade union officials for hearing on April 5 to ascertain the rationale behind their demands.

The Maoist-affiliated Nepal Multinational Companies´ Workers Union (NMCWC), which has been pushing the management to raise perks and benefits, had on Wednesday threatened to shut down the industry from Monday if the company did not fulfill its 11-point demands.

Following the union decision, the management moved the court seeking legal remedy, citing the demands placed by the union were not rationale.

"We have deferred our strike for now,” said Beni Prasad Timilsina, president of NMCWC. Talking to Republica on Saturday over phone, Timilsina said the trade union officials will appear before the court as per its order. “We will take decision on our future course of action depending on what the Court says on the issue,” he stated.

Senior officials of Surya Nepal said they had knocked the court´s door because they believed there were ample rooms to resolve the tension through talks.

“We always wanted to settle the problem within the company,” Rabi KC, corporate vice-president of the Surya Nepal said, adding that the management still feels there is scope of reaching an understanding.

Though trade union officials said they are firm on their stance, they admitted the court´s decision will be crucial.

Meanwhile, both the sides have shown flexibility on the demands after the court´s order.

For instance, the management which increased basic salary of its workers few months back by Rs 1,165 has shown flexibility to increase it by further Rs 400 and allowance by Rs 500.

It has also floated that it will increase gratuity by Rs 20,000 for those who serve the company for 20 years and by Rs 120,000 for those serving for 25 years at the time of retirement from existing Rs 180,000. It has also expressed readiness to increase medical expenses from Rs 300,000 to Rs 400,000 for those workers who become the victim of cancer.

“We have exercised maximum flexibility. This is all we can do at this moment,” said KC.

Trade union, for its part, too has reduced the number of its demand to 7 from 11 points. “But we are firm on other demands like raising basic salary by Rs 2,000, allowance by Rs 1,000 and increasing gratuity paid at the time of retirement to Rs 500,000,” said Timilsina.

The union has also refused to let go its demand that seek job guarantee to off springs of staff in case they die while working. “These are our bottom line,” he stated, adding that the union has dropped its demands like raise in medical insurance and compulsory residential quarters for workers.

Settle labor row, FNCCI tells PM

Federation of Nepalese Chambers of Commerce and Industry, which received a request from Surya Nepal to settle the labor row, has raised the problem faced by the industry with Prime Minister Baburam Bhattarai.

“We informed the PM what actually is the problem in the industry and have requested him to take prompt steps to address the labor tension in one of the largest multinational companies of the country,” said Vaidya.

Referring that Surya Nepal, a subsidiary of ITC Ltd of India, had faced ill-fated closure of its garment unit in 2011 due to labor stir, Vaidya said the government must intervene into its case immediately, particularly as situation in the industry remains volatile.

“It is unfortunate that our industrial sector continues to face grave problems due to rigid labor law and irrational demands coming from the workers,” he stated.

FNCCI has urged the government to take concrete steps to reform labor law if it wants to convince investors that the country has more favorable environment when it celebrate Investment Year in fiscal year 2012/13.

According to Vaidya, PM assured him of taking sincere steps to address Surya Nepal´s problem.