Sri Lanka seeks compensation, wants Chinese fertiliser firm blacklisted

An audit report by the National Audit Office of the Sri Lankan government has recommended that the Chinese fertiliser company Qingdao Seawin Biotech Company (QSBC) should be blacklisted for trying to force Sri Lanka to accept contaminated fertiliser in 2021.

The audit report also says that the government should take compensation of $6.9 million from the Chinese company for trying to force the country to take fertiliser that had been rejected by Sri Lankan scientists for containing harmful bacteria.

The audit report also calls for prosecuting officials who were responsible for signing the transaction for fertiliser that eventually remained unsupplied but not before putting the government under undue pressure from China, says a report in The Sunday Times.

India Narrative had widely reported on the spat between strategic allies Sri Lanka and China over the non-acceptance of contaminated fertiliser sent by Qingdao to Sri Lanka. Upon inspection of the fertiliser, Sri Lankan scientists found harmful pathogens in the fertiliser, which was being transported by the ship Hippo Spirit.

The Chinese embassy in Colombo jumped into the argument and to put pressure on Colombo, blacklisted the People’s Bank of Sri Lanka for not releasing money to Qingdao.

Amidst a raging quarrel between the two countries, the ship generated more controversy. After the rejection of the fertiliser, the ship ostensibly returned back to bring a fresh consignment of fertiliser. However, it cast anchor at Malacca Strait, near Singapore and switched off its automatic identification system. It did not go back to China with the contaminated fertiliser and instead came back to Sri Lanka under a new name Seiyo Explorer.

The dispute lingered on for months as China kept piling up pressure on Colombo to accept the rejected fertiliser. Eventually, the Chinese company came up with a two-fold solution to supply Sri Lanka with fresh fertiliser—that it will pursue international arbitration against Sri Lanka for sullying its reputation, and that the island nation will have to pay double the cost of the new fertiliser.

By this time the island nation had turned to India for its organic fertiliser needs.

The fertiliser pow-vow that continued from around August 2021 lasted till February 2022 causing much diplomatic damage between Beijing and Colombo. All through this period, the Indian Ocean island was facing an acute foreign exchange crisis and its fast friend Beijing forced it to pay for fertiliser it did not supply.

Now Sri Lanka has hit back through its audit report and seeks to claim approximately $6.9 million from Qingdao which it had paid under duress for fertiliser that never came.

(This article was first published on India Narrative)