RESTRICTED
WORLD TRADE G/STR/N/1/JAM
5July1996
ORGANIZATION(96-2619)
Original: English Working Party onState Trading Enterprises
STATE TRADING
Notification Pursuant toArticle XVII:4(a) oftheGATT andParagraph 1
oftheUnderstanding ontheInterpretation ofArticle XVII
JAMAICA
Thefollowing communication, dated 25June1996, hasbeenreceived from thePermanent
Mission ofJamaica.
_______________
1. Enumeration ofState Trading Enterprises
2. Reason andpurpose ofintroducing andmaintaining State Trading Enterprises
3. Description ofthefunctions ofthese Enterprises
4. Statistical information
Enumeration ofState Trading Enterprises
1. Jamaica maintains anumber ofenterprises covered bytheprovisions ofArticle XVII. These
enterprises andtheproduct(s) aredetailed below:
(1) Jamaica Commodity Trading Company Limited
(2) Commodity Boards: Authority
(i) TheCocoa Industry Board
(ii) TheCoconut Industry Board
(iii) TheCoffee Industry Board
(iv) TheBanana Board
(v) TheSugar Industry Authority
(3) ThePetroleum Corporation ofJamaicaG/STR/N/1/JAM
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Jamaica Commodity Trading Company Limited (JCTC)
Reason andpurpose forintroducing andmaintaining aspects ofState Trading Enterprises
TheJamaica Commodity Trading Company Limited haditsorigins in1974 under thename
ofJamaica Nutrition Holdings Limited. TheJCTC anditspredecessor JNHwere incorporated by
theGovernment primarily forthepurpose ofimporting certain basic fooditems intothecountry as
itwasdecided thatacentralized State-owned procurement agency would bethemost efficient way
ofutilizing andmanaging thethenlimited foreign exchange available.
History
JNHwastherefore mandated toprocure allthebasic fooditems forthecountry 'sneeds.
Within ashorttimetwoother similar agencies wereestablished topurchase abroad andimport
inbulkpharmaceuticals andbuilding materials.
In1981thethreecompanies weremerged tobecome theJamaica Commodity Trading Company
Limited.
Thefunction ofthecompany wasmaintained. However, asearlyasthe1980'stheprocurement
ofsome fooditems wentbacktothedistributive trade. By1991, lumber amajor commodity inthe
company 'sportfolio wasreturned totheprivate sector.
TheGovernment 'sembarkation onthepolicy ofliberalization andderegulation resulted inthe
return oftheprocurement ofallfoodstuffs totheprivate sector by1993.
Atthesame time, theCabinet tookthedecision thatthecompany would cease allcommercial
trading activity andwould onlyhandle thegovernment togovernment concessional programme the
PL480andCIDA.
Between 1993 andthecurrent period there hasbeenaconstant retrenchment ofstaffasthe
company continues itsdown sizing. Thisisexpected tobereduced evenfurther asthecompany now
handles onlyonecommodity under thePL480programme, namely brown rice.
Commodity Boards
Reason andpurpose forintroducing andmaintaining State Trading Enterprises
Commodity Boards wereintroduced toorganize, monitor andensure thatthequality offruit
being exported metinternational quality standards.
TheCocoa Industry Board
TheCoco Industry Board wasestablished bytheCocoa Industry Board Actof1957.
TheBoard consists ofseven (7)members, four(4)appointed bytheMinister responsible for
theBoard including theChairman andthree (3)bytheMinister from apanel offive(5)persons
nominated bythebody which theMinister recognized asrepresentative ofthegrowers ofcocoa.G/STR/N/1/JAM
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Functions
Thefunctions oftheBoard areasfollows:
- Tomaximize theefficiency oftheCocoa Industry;
- Toassist initsdevelopment andtopromote thewelfare ofpersons engaged inthat
industry;
- Tosecure themostfavourable arrangements forthepurchase handling, marketing sale,
importation andexportation ofcocoa. TheBoard alsohasthepower to:
- establish, maintain andoperate nurseries;
- import, cultivate, sell,giveaway, distribute, export orotherwise dispose of
anycocoa seedlings orcocoa plants;
- cultivate, drycure, clean orprocess cocoa;
- establish, maintain oroperate research stations.
Deregulation
TheCocoa Industry wasderegulated andtheCocoa Industry Board Actamended in1991.
TheBoard remains theregulatory body forcocoa being exported from Jamaica. Itactsasaquality
control unitforexportable cocoa.
TheCoconut Industry Board
TheCoconut Industry Board wasestablished under theCoconut Industry Control Actenacted
in1945 andconsists ofnine(9)members, four(4)ofwhom including theChairman areappointed
bytheMinister. Theremaining five(5)areelected byregistered coconut growers andmustthemselves
beregistered coconut growers ortheattorneys forsuchregistered coconut growers orthemanaging
directors ormanagers ofcompanies which areregistered coconut growers.
Functions
TheBoardpromotestheinterestandefficiencyofthecoconutindustry,encouragestheproduction
ofcoconuts andregulates thepurchase, saleandexportation ofcoconuts aswellasimportation ofedible
oils.
Allied functions are:
(a) Keeping theGovernment informed onthestate oftheindustry andadvising the
Government when anyaction isnecessary.
(b) Arranging fortheestablishment ofcorpa factories toprovide growers withoutlets for
theircoconut production.
(c) Arranging fortheissuing oflicences formanufacturers inwhich thecoconut isused.G/STR/N/1/JAM
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(d) Arranging insurance ofcoconut treesdamaged bywindstorm, lethal yellowing disease
andother disasters.
(e) Marketing thecoconut crop.
(f) Carrying outresearch ontheagricultural problems oftheindustry andadvising growers
ontheiragricultural problems.
TheCoffee Industry Board
TheCoffee Industry Board wasestablished under theCoffee Industry Regulation Actof1948.
TheBoard consists ofseven (7)members appointed bytheMinister responsible andthe
membership ofwhich shallbenolessthanseven (7)members appointed bytheMinister, three (3)
ofwhom shallbenominated bytheapproved association. TheMinister shallappoint aChairman from
amongst themembers oftheBoard.
Thegrowers shallberepresented andtheCoffee Council which comprises ofrepresentatives
ofallsegments oftheindustry including growers andprocessors isalsorepresented.
Functions
(a) Toestablish, maintain andoperate anynurseries.
(b) Import, cultivate, sell,giveaway, distribute, export orotherwise dispose ofanycoffee
seedlings orcoffee plants.
(c) Establish, maintain andoperate anycoffee plantations orcoffee plants.
(d) Cultivate, drycure,pulp, clean, washorprocess inanyothermanner anycoffee berries
andmanufacture anycoffee product andpurchase, prepare formarket, store, transport,
distribute, sellorexport anycoffee berries oranycoffee products.
(e) Establish, maintain oroperate research stations for:
(i) investigating thecause, incidence, prevention, control oreradication ofany
disease likely tobeprejudicial totheinterest ofthecoffee industry;
(ii) investigating thetypes ofcoffee which, andtheconditions under which and
themanner inwhich coffee maybemostadvantageously cultivated inJamaica
orinanyareainJamaica;
(iii) investigating theconditions under which andthemanner inwhich coffee may
most advantageously becured, dried, pulped, washed, cleansed, processed,
stored, prepared formarket, transported from Jamaica;
(iv) improving theyieldorother economic value ofcoffee orofanytypeofcoffee;
(v) investigating thetypes ofcoffee products most suitable formanufacture in
Jamaica andtheconditions under which andthemanner inwhich anysuch
productsmaybemostadvantageouslymanufactured,stored,processed,prepared
formarket, transported orexported;G/STR/N/1/JAM
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(vi) investigating anyother matter theinvestigation ofwhich mayintheopinion
oftheBoard benecessary orexpedient intheinterest ofthecoffee industry.
TheBanana Board
TheBanana Industry Board wasestablished in1953.
TheBoard shallconsist ofnotlessthanfive(5)ormore thaneight(8)members ofwhom one
shallbeaperson selected fromapanel ofthree (3)persons nominated bythebodywhich theMinister
recognizes asbeing representative ofbanana growers intheisland.
Description ofthefunctions ofthisBody
(a) Topromote theinterest andefficiency oftheBanana Industry andtoassist inits
development;
(b) Tosecure themostfavourable arrangements forthepurchase, handling, transportation,
exportation, shipping, marketing andsaleofbananas andtosellandexport same.
(c) Toinstitute, conduct, finance, assist andsuperintend research activities, experiments
andoperate;
(i) fortheimprovement inmethods ofplanting andcultivation ofbananas;
(ii) forthecontrol andelimination ofanydisease affecting bananas;
(iii) forthedevelopment ofbananas wholly orpartially immune todiseases.
Sugar Industry Authority: Vol.17
TheSugar Industry Control Actwasestablished in1937. Section 3ofthisActspeaks tothe
establishment oftheSugar Industry Authority.
TheMinister appoints persons whobytraining orexperience appear tohimtobesuitable
including persons appearing tohimtohaveability intheareasoffinance, law,economics andinmatters
related totheSugar Industry.
TheBoard consists ofseven (7)members appointed bythatgroup.
Functions oftheSugar Industry Authority
1. TheSugar Industry Authority advises theMinister:
(a) Onallmatters ofgeneral policy withrespect totheoperations anddevelopment ofthe
industry.
(b) With respect totheuseofaneconomic andefficient basis, ofports inrelation tothe
exportation ofsugar among other things.
2. Theauthorityfostersandcoordinatesscientificresearchinrelationtotheindustryandencourages
theapplication oftheresults tothedevelopment oftheindustry.G/STR/N/1/JAM
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3. TheAuthoritymakesarrangementsforthemarketingofsugarandmolassesforlocalconsumption
andforexport.
4. TheAuthority issues licences inrespect ofquotas, exportation ofsugar andtocanefarmers.
5. TheAuthority shallguarantee thequality ofsugar bothintheexport andlocalmarkets.
ThePetroleum Corporation ofJamaica (PCJ)
ThePetroleum Corporation ofJamaica isawholly-owned StateCorporation established under
thePetroleum Actof1979. Itsmost important subsidiaries arePetrojam andPetcom.
Reason andpurpose formaintaining State Trading
ThePetroleum Corporation ofJamaica hasasitsmajor mandate:
Tosearch foroilandgasandtobetheleastcostsupplier ofthese products toJamaica.
Description ofthefunctions ofthese State Trading Organizations
Thecorefunctions ofthese Organizations are:
(i) Toexplore, develop andmanage petroleum resources.
(ii) Toimport, export, refine anddistribute petroleum andpetroleum products.
Asfarasimport, export andrefining ofoilareconcerned these arecurrently being handled
byPetrojam. Their customers include themultinational marketing companies, ESSO, Shell, Texaco
aswellaslocalcompanies Petcom andother Jamaican private petroleum marketing companies e.g.
Nipet National Epping andCross Island. Clientele alsoinclude Jamaica Public Service andoneof
theBauxite Companies.
Petrojam alsomanufactures ethanol forexport totheUnited States under theCaribbean Basin
Initiative (CBI).
Privatization
Within thecontext oftheliberalization andprivatization policy oftheGovernment thefunctions
ofPCJareexpected tobedivested totheprivate sector. Itisenvisaged thatallthesubsidiaries under
PCJwould bedealtwithasfollows:
(a) Entry intojointventure partnerships withtheprivate sector withregard tothose entities
which arecommercial andcanbeprivatized.
(b) Terminate theoperations ofthose which arenotcommercial, cannot beprivatized and
arenotexpected tobecome financially viable.
(c) Transfer those functions from PCJwhich willthenbecome apartofthepolicy role
andfunction oftheGovernment, Ministry oradepartment ofportfolio responsibility.G/STR/N/1/JAM
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PCJisinaprocess ofconstant restructuring aspartoftheongoing privatization ofenergy sector
entities. Based ontherecommendations ofareview, atimetable andtargets fortherestructuring of
PCJhasbeenestablished.