Overview:
Ugandan court cancels licenses of major sugar mills, citing regulatory breaches and sparking uncertainty in the country's sugar industry
The High Court in Kampala has nullified all licenses issued to sugar and jaggery mills by the Ministry of Trade, Industry, and Cooperatives since 2010. The decision, delivered by Civil Division Judge Dr. Douglas Singiza, is a significant blow to the sugar industry in Uganda, particularly CN Sugar Limited and Shakti Sugar Limited.
The court’s ruling follows a successful petition filed by the Uganda Sugar Manufacturers Association (USMA) against the Attorney General, Minister of Trade, Industry, and Cooperatives, CN Sugar Limited, and Shakti Sugar Limited. The USMA argued that the Ministry of Trade’s actions were in contravention of the Sugar Act, which stipulates that licenses for sugar and jaggery mills should be issued by the Uganda Sugar Board (USB).
However, the USB does not exist, creating a legal and policy vacuum. The court found that the Ministry of Trade’s failure to establish the Uganda Sugar Board was a breach of statutory duty, as required by Section 4 of the Sugar Act.
CN Sugar Limited and Shakti Sugar Limited had argued that they had obtained licenses from the Ministry of Trade, Industry, and Cooperatives, but the court rejected this argument, stating that the licenses were issued without following the required procedures. The court noted that the Ministry of Trade had granted licenses to CN Sugar Limited and Shakti Sugar Limited without the required approvals from the Local Councils, and that the Letters of No Objection (LONOs) issued to the two companies were not a substitute for the licenses required by law.
The nullification of the licenses issued to CN Sugar Limited and Shakti Sugar Limited means that the two companies will have to cease their operations immediately. The court has also ordered the Ministry of Trade to constitute the Uganda Sugar Board within three months, which will provide a regulatory framework for the sugar industry.
Furthermore, the Inspector General of Police has been ordered to remove all of CN Sugar Limited’s and Shakti Sugar Limited’s sugar and jaggery mills and related enterprises from prohibited zones within 14 days. The court’s ruling has significant implications for the sugar industry in Uganda, and it remains to be seen how the Ministry of Trade and the affected companies will respond to the decision.