B.S.C.F.A. to A.S.R./B.S.I.: Show Us the Documents! A.S.R./B.S.I.: What Documents?
It’s less than two months to the opening of the next sugar crop and there is still an impasse between the Belize Sugar Cane Farmers Association and American Sugar Refinery/Belize Sugar Industries Ltd. At the heart of the contention is distrust and demands. The B.S.C.F.A. distrusts the figures the company has provided over revenues and costs, and the company has issues with demands that the association has made to provide more documentation. A large part of the country’s sugar industry rests on how the two sides can work out their differences, understanding that under the current system of operation, one cannot do without the other. As a last resort, they have agreed to use a mediation process to look at their issues. News Five’s Marion Ali reports.
Marion Ali, Reporting
It’s the same set of issues between two rivaling partners in business: both sides saying the other is not being fair, whether it’s over their revenue-cost ratio or over demands and expectations of the other. The Belize Sugar Cane Farmers Association insists that American Sugar Refinery/Belize Sugar Industries is not being straight with the figures.
Oscar Alonzo
Oscar Alonzo, C.E.O., B.S.C.F.A.
“We were able to get all their audited accounts, their management reports at the company’s registry for us to have an idea to be able to verify, right, what it is that they are offering in their NSV and other statements but since 2014 to now, those reports and financial audits have not available at the company’s registry for us to review. What they consider as relevant is less than what we require.”
But A.S.R./B.S.I.’s Director of Finance, Shawn Chavarria told News Five that they have provided all that they could to the cane farmers and have offered even more than paper work.
Shawn Chavarria
Shawn Chavarria, Director of Finance, A.S.R./B.S.I.
“Every year we do an independent audit of the Net Strip Value and that audit statement of the Net Strip Value is provided to the associations. In addition to that, they get all the production records for the crops, so every day they get a report of what’s been the production for the day. And at the end of the crop they get to see what is the total production. We also provide them with all the shipments that we’ve made every month and throughout the course of the year. We provide all associations with copies of sales contracts. We offered, as part of the negotiations, an audit right to allow them to appoint their own auditors to review the working papers of our auditors when the audit of the Net Strip Value is done. But they have rejected that.”
Oscar Alonzo explains what the association’s gripe with this offer is.
Oscar Alonzo
“We have no objection to that but in order for that to really have meaning, it means that we would have to first clarify the figures that are being audited by the auditor, such as the manufacturing allowances, local handling. We would have to verify that what is being used is really the true costs and then when the auditors audit, what is actually calculated in each year regarding those rates, then we could audit that figure.”
Chairman of the B.S.C.F.A. Committee of Management, Javier Keme used this graph to explain why there is distrust.
Javier Keme
Javier Keme, Chairman, B.S.C.F.A.
“This model of the Net Strip Value has served the purpose of allowing the mill to accommodate, one, this other cost, which was manufacturing allowance, which was not there before, and accommodation also of the values itself of the local handling. These two costs are the ones that we saw impacted more in the increase of the percentage of the services that the mill provided. So in the analysis we saw they were getting thirty-nine percent of the gross revenues. when you compound the thirty-five percent that they get on the Net Strip Value and these percentages that were on the cost as services that they provide.”
Keme explained why the association has proposed a sixty-forty percent of the total sales.
Javier Keme
“The formula of sixty-forty that we were bringing forward as the gross revenue split was a reasonable one and we expected the counter-proposal on their side to be more on the area of the percentages of sixty-forty being fifty-nine-forty-one or whatever. So that was our expectation. But it didn’t go that way.”
But today B.S.I’s Shawn Chavarria said the company would entertain the sixty-forty proposal, if it is fair to both parties.
Shawn Chavarria
“We’re more than happy to look at sixty-forty gross value structure similar to what the B.S.C.F.A. is proposing but at the end of the day, it can’t disadvantage one side for the other, right. And that’s the key. It has to be a balancing act to make sure that it’s mutually beneficial to both sides.”
After last week’s house meeting, Prime Minister John Briceño alluded to the start of the mediation process after a mediator is named. And by the position that both sides seem to have taken, mediation might be the only solution to the current impasse.
Andrew Westby
Andrew Westby, Chairman, Committee of Management, B.S.C.F.A.
“We will not stand down, and that’s why we were asking for the intervention of the government. The past government messed up. Government needs to regulate it because otherwise the whole north that depends indirectly and directly on this industry will go down.”
Marion Ali for News Five.
