New guidelines for betel nut export okayed

Ministry of Commerce and Supply (MoCS) has endorsed new guidelines on export of betel nut, aiming to control illegal re-export of nuts imported from third countries to India.
The guidelines, which the Ministry enforced last week through a minister-level decision, outlines a new process of issuing certificate of origin (CoO) to check its possible smuggling to India.
Under the new arrangement, MoCS now holds the right of making recommendation for issuing CoO to the traders, Lal Mani Joshi, secretary of the ministry told Republica.
"Federation of Nepalese Chamber of Commerce and Industries (FNCCI) and local chambers will also need to receive recommendation from farmers´ associations and cross-check local production and export data from Ministry of Agriculture and Cooperatives (MoAC), apart from MoCS´ recommendation for issuing the CoO," Joshi said.
So far, FNCCI and local chambers were issuing CoO based on recommendation of the MoAC.
The ministry took over the recommendation authority from MoAC after multiple cases disclosed MoAC of issuing recommendation letter under the influence of traders, thereby facilitating unauthorized trade. "We believe the new guidelines will help control illegal re-export of imported nuts imported to India," said Joshi.
However, sources said that the new guidelines too is not free from loopholes, something which leaves scope of possible manupulation and misuse of authroity by MoCS itself.
"For instance, the guideline has reserved the sole right of issuing recommendation for CoO at the MoCS. But does this provision mean MoCS officials will act fairly or will not fall under the influence of illicit traders?" questioned a source.
His opinion was that the guidelines should have incorporated check and balance mechanism to ensure control over possible abuse of authority. "But that is completely lacking," he stated.
The MoCS had drafted the guidelines as per the ministerial decision of January 1, 2012, in which it had decided to form a new mechanism to control growing unauthorized export of betel nut. The decision aimed at addressing Indian concerns, which for last few years had been constantly complaining of the rise in illegal re-export of betel nut by Nepali traders to India.
Apart from formulation of new guidelines on issue of CoO, MoCS have also requested Ministry of Finance (MoF) to hike the import tariff of betel nut from third countries. However, MoF has not paid heed to this call.
According to MoAC 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 had imported more than 108,000 tons of beetle nuts from East Asian countries.
Though MoAC has no specific data on actual demand of betel nut in the country, officials ruled out demand being that high. "Imports remained huge mainly because large portions were easily finding their way into the Indian market," said the source.

MoI for implementing sick industries revival measures

Ministry of Industry (MoI), which was instructed two months ago to implement recommendations of a high-level taskforce to revive sick industries, is soon forwarding the stimulation package that the taskforce proposed to the cabinet to get formal authority from the government to implement it.
The ministry is seeking a formal nod from the cabinet to implement the taskforce´s suggestions as it has recommended the government to provide facilities like soft loans, waiver of tax and outstanding loans, something which the ministry has no authority to execute.
And as the Prime Minister´s Office (PMO) instruction to implement the report´s suggestions had come through verbal order, it had lacked legal status and thus, prevented the ministry from taking concrete steps to implement them.
“We are soon forwarding the report, including its suggestions, to the cabinet to get it owned by the government and secure legality to implement it,” Uma Kant Jha, secretary of the MoI told Republica.
The high-level task force on rehabilitation of sick industries, comprising eight members from different stakeholder institutions like National Planning Commission (NPC), Ministry of Finance (MoF) and Nepal Rastra Bank (NRB) had handed over its suggestions to the PMO in September, 2011.
The PMO had instantly endorsed the report and later forwarded it to MoI for implementation.
“We have the verbal instruction to implement it from PMO. But still we will need formal approval from the Cabinet to implement its recommendations,” Jha said.
He disclosed that the ministry has already formed a committee and is working out modalities to implement the report. “We are forwarding the modalities of report implementation to the cabinet as well so that we could get government´s consent on it,” Jha stated.
The ministry feels such a consent is very necessary as the implementation of the report requires better coordination between numerous stakeholders, including banks and other institutions and also various ministries.
Clearly, without the cabinet´s nod, the ministry cannot approach MoF to waive off taxes or request NRB to facilitate loans restructuring or arrange other facilities for the sick industries, as suggested by the taskforce.
“The approval of the cabinet, hence, is crucial for us to communicate with other stakeholders to get the sick industry revival measures implemented,” said Jha. Once the cabinet´s nod comes, he said the ministry would instantly start functioning as coordinating agency on behalf of the sick industries for the execution of revival packages.
However, knowledgeable officials said that implementation of sick industry revival measures will not be as easy because the report that pushed numerous recommendations has not categorically defined or categorized the sick industries.
“What this means is; we still have no criteria to genuinely identify which industry is sick, and what sort of facilities it is entitled to. Without it, the ministry simply cannot make its offer,” said a source.
The high-level taskforce during its study received applications from 26 firms claiming that they are sick industries. “However, we have not taken any decision on whether they are really sick industries,” Jha said.