Chinese controversial fertiliser shipment : Where is ‘Hippo Spirit’?

‘Hippo Spirit’ previously registered as ‘Seiyo Explorer’

• Interested parties, including environmentalists, speculate whether the Sri Lankan government would be compelled to accept the cargo in order to continue bilateral relations 
• It’s learned that the vessel ‘Hippo Spirit’ was initially registered as ‘Global Explorer’. In 2012 the name was changed to ‘SEIYO EXPLORER’ and thereafter it was called ‘Hippo Spirit’
• Even though the Sri Lankan authorities are hellbent on rejecting the cargo the Chinese authorities haven’t given up on their attempts
• People’s Bank issuing a statement said that the temporary delay in processing the said payment pertaining to the LC is solely due to the bank’s obligation to be bound by the legal directions of the country
• In its petition CEJ claims that organic fertiliser from any country cannot be imported to Sri Lanka, under any circumstance
• CEJ filed an urgent motion on October 25 to call CA WRIT 476/21 to ensure that this stock of fertiliser is prevented from entering the country

Speculation is rife whether the questionable ship ‘Hippo Spirit’, carrying the consignment of Chinese organic fertiliser, has already reached Sri Lankan waters despite repeated rejections by Sri Lankan authorities after the fertiliser tested was infected with harmful bacteria.

 Even after two tests that detected harmful pathogens in its samples, the Chinese authorities weren’t ready to re-accept the cargo, but in turn requested for a third test by an independent analyst. Taking things to a more serious level, the Chinese Government took the initiative to blacklist one of Sri Lanka’s premier state banks - People’s Bank-  for allegedly failing to Make payments. However Sri Lankan courts had ordered the bank not to make any payment to the Chinese fertiliser suplier. In this backdrop interested parties, including environmentalists, speculate whether the Sri Lankan government would be compelled to accept the cargo in order to continue bilateral relations and on the other hand, to direct the Bank to continue its transactions especially with regards to Letter of Credit agreements. 

“We were told that the High Court has also issued a restraining order and that there’s no need for a second one. However the case could be called by an urgent motion depending on the situation”
- Hemantha Withanage 
Executive Director CEJ

Right of Innocent Passage allowed : Colombo Port Harbour Master 

Even though several news reports claimed that the questionable ship has been spotted near the Hambantota Port, Colombo Port Harbour Master Captain Nirmal P. Silva refuted such claims. “The vessel cannot enter the Hambantota Port without my approval. But I cannot say if it is on Sri Lankan waters or not because they have the Right of Innocent Passage as per the United Nations Convention on the Law of the Sea (UNCLOS). However, I can confirm that it is not in any of the gazetted ports in the country. Even if this ship enters our territorial waters it is not illegal. It is only if they come to a port that it is illegal,” explained Captain Silva. 

The term innocent passage is defined under international law referring to a ship or aircraft’s right to enter and pass through another’s territory so long as it is not prejudicial to the peace, good order or security of the other state. 
The Daily Mirror learned that the vessel ‘Hippo Spirit’ was initially registered as ‘Global Explorer’. In 2012 the name was changed to ‘SEIYO EXPLORER’ and thereafter it was called ‘Hippo Spirit’. However, the vessel remains to be anchored along the Indo-Malacca Strait as per its last update on October 14. Even though it is evident that the vessel has stopped its GPS tracking devices, marine experts claim that it is doubtful as to whether its name could be changed when it is already carrying a consignment to another country.

CEJ files lawsuit 

On October 15, Center for Environmental Justice (CEJ) filed a lawsuit seeking an injunction restraining the importation of polluted organic fertiliser. 

In its petition CEJ claims that organic fertiliser from any country cannot be imported to Sri Lanka, under any circumstance, according to the regulations of the Plant Protection Ordinance imposed in 1981 and Plant Protection Act No. 35 of 1999 as it prohibits the import of soil particles, living organisms, any virus, bacteria or fungus cultures into the country, given that organic manure/compost is made of decomposing animal and plant parts, which could consist of pathogens. 

The samples previously received from this controversial  shipment have been tested and were found to be infected with harmful organisms. As a result, National Plant Quarantine Service did not issue any import permit particularly for this bulk stock of so called ‘Organic Fertiliser’.

Based on these facts Director General of the Department of Agriculture Dr. Ajantha de Silva has issued a letter on October 22 addressing Sri Lanka Ports Authority Chairman with a request to prevent the berth of the vessel that carries this stock of Fertiliser at the Colombo Port. He also requested not to discharge any of its organic fertiliser into the Sri Lankan territory claiming that the stock carries a huge phytosanitary risk to Sri Lanka. 
Ceylon Fertiliser Company also obtained an enjoining order (on October 22) from the Commercial High Court against Qingdao Seawin Biotech Group Co. Ltd; the supplier and the court also prevented People’s Bank, preventing the People’s Bank from making any payment under the Letter of Credit opened in favour of Qingdao Seawin Biotech Group Co. Ltd which has entered into a contract with Ceylon Fertiliser Company.
However in spite of all these Qingdao Seawin Biotech Group Co. Ltd has officially informed the Director General of the Department of Agriculture that its fertiliser consignment, which was shipped from China on September 29, would reach Sri Lanka by October 22. 

Subsequently CEJ filed an urgent motion on October 25 to call case  CA WRIT 476/21 to ensure that this stock of fertiliser is prevented from entering the country in the event there is political or public pressure to do so. 
Taking the facts into account the court resumonned the case on October 29 while directing that it could be called by an urgent motion in the event there’s any unforeseen change in the existing situation, 

“On October 29 we filed a new motion and sought a restraining order against the dumping of these fertilisers,” said CEJ Executive Director Hemantha Withanage. “We were told that the High Court has also issued a restraining order and that there’s no need for a second one. However the case could be called by an urgent motion depending on the situation. The next hearing is on November 11,” said Withanage. 

“The ship cannot be arrested because the court order only relates to the rejection of fertilisers. There’s no reference to blocking the ship from entering SL. Then someone has to obtain a court order to arrest the vessel”
-Dr. Dan Malika Gunasekara Consultant in Ocean and Maritime Law

Mounting pressure 

Even though the Sri Lankan authorities are hellbent on rejecting the cargo the Chinese authorities haven’t given up on their attempts. Earlier last week People’s Bank, involved with issuing payments, was blacklisted for not releasing payments on time. 

In a recent Tweet, the Chinese Embassy of Sri Lanka issued a timeline of events. The Tweet read as follows: “Seawin won open bid, signed contracts, passed tests of China and International Agency designated by Ceylon Fertiliser, shipped before due. NPQ SL (short for National Plant Quarantine Service Sri Lanka) disagreed in halfway, called toxic/harmful. Ship refused. Third party test refused. L/C payment obligation refused. PBSL blacklisted.”

In response to the blacklisting of the bank People’s Bank issued a statement dated October 29 which said that the temporary delay in processing the said payment pertaining to the LC is solely due to the bank’s obligation to be bound by the legal directions of the country as a responsible corporate citizen. “Once the legal barriers in effect are removed, the LC payment will be effected promptly as per the usual trade practices.” the bank said in its response. 

Ship cannot be arrested, it  cannot enter the port : Dr. Gunasekara 

Commenting on the issue Legal expert and Consultant in Ocean and Maritime Law Dr. Dan Malika Gunasekara said that nobody can prevent the ship from entering Sri Lanka since the cargo has been consigned to Sri Lanka. “The ship cannot be arrested because the court order only relates to the rejection of fertilisers. There’s no reference to blocking the ship from entering SL. Then someone has to obtain a court order to arrest the vessel. Therefore the ship can freely navigate on Sri Lankan waters, but it can come to the Port only with the approval from the harbour master.” said Dr. Gunasekara.

Chinese company has to take the shipment back :Minister

A court order was issued to stop the release of payments and the Bank acted upon this order. I don’t know why the Chinese Government blacklisted the bank”
-  Mahindananda Aluthgamage Agriculture Minister

When contacted Agriculture Minister Mahindananda Aluthgamage said that the Chinese Company will have to take the shipment back and bring back proper materials. “Once the relevant tender specifications are met we will accept the cargo,” the minister said. 

Responding to a query regarding the blacklisting of People’s Bank he said that the bank hasn’t done anything wrong. “A court order was issued to stop the release of payments and the Bank acted upon this order. I don’t know why the Chinese Government blacklisted the bank.” said Aluthgamage. 

When asked if these requirements were communicated with the Chinese authorities Aluthgamage said that the State Minister had discussions with the High Commissioner of China for 

Sri Lanka and other parties. “There are several other issues as well. For instance they have sent the shipment without a license from the government. 

So all these issues need to be rectified if we are to accept the shipment.” said the minister.