Public interest
Reasons for increased analysis
Comment
Public interest, being the interest and wellbeing of the economy as a whole, is a reminder to interested parties in any decision that there are considerations beyond their own individual objectives and goals.
With regard to anti-dumping investigations, public interest is the study of the impact on the different sets of parties that may be affected by the outcome of an investigation – namely:
- the domestic industry;
- the domestic consumer;
- upstream or downstream industries;
- any association; and
- the general public as a whole.
The investigating authorities in countries such as New Zealand, Canada and Brazil conduct a detailed public interest analysis in their anti-dumping and anti-subsidy investigations. In India, although public interest is not a new concept and the Directorate General of Trade Remedies (DGTR) has examined its relevance in the past, public interest became a key issue of examination in anti-dumping and anti-subsidy investigations only recently.
Reasons for increased analysis
Public interest started gaining attention in India in 2020, only after the Ministry of Finance (MOF) rejected a significant number of positive DGTR recommendations. The MOF did not indicate any reason why it was not accepting the recommendations of the DGTR. However, in the budget speech of 2020-2021, while withdrawing anti-dumping duty on imports of purified terephthalic acid, the Finance Minister, Ms Nirmala Sitharaman, stated that:
Chemicals are crucial feed stocks for downstream users. PTA, for example, is a critical input for textile fibres and yarns. Its easy availability at competitive prices is desirable to unlock immense potential in textile sector which is a significant employment generator. Therefore, in the larger public interest, anti-dumping duty on PTA is being abolished.(Paragraph 143.)
Therefore, there was an understanding that in rejecting the recommendations of the DGTR, one of the factors the MOF considered was public interest. The DGTR subsequently started conducting a detailed analysis of the public interest aspect in its final findings. In 2021 and 2022, the DGTR examined and conducted a public interest analysis in almost all cases in order to determine the overall impact of duties – for example, in cases involving:
- décor paper;
- rubber chemicals;
- low-density polyethylene;
- hydrogen peroxide;
- vitrified tiles;
- hydrofluorocarbon blends;
- opal glassware and
- aluminium foil.
The DGTR has analysed the likely quantitative impact of the duties on the users and the downstream industry along with a number of key aspects and consequences of the duty proposed, such as:
- the demand-supply gap in the country;
- the investment and employment in the domestic industry;
- the environmental impact of the duties;
- the performance of the user industry over the years in case of sunset investigations;
- the possibility of a creation of a monopoly situation in the country;
- the interest of the micro, small and medium enterprises sector in the investigation;
- the impact of covid-19 on domestic producers and users; and
- the availability of substitutes.
Interestingly, a number of appeals were filed before the Customs Excise and Service Tax Appellate Tribunal (CESTAT) against the central government's decision and the lack of reasoning provided for non-imposition of duties. Finally, on 27 October 2021, after the landmark judgement of Jubilant Ingrevia Limited v Union of India and Others (for further information please see "Tribunal ruling under anti-dumping law gives respite to domestic industry in India"), the CESTAT held that the MOF was required to record reasons for their decisions, especially in the case where they decided not to impose the duties. Consequently, when the DGTR recommended anti-dumping duties regarding the dumping of caprolactam from China, the MOF issued an office memorandum, stating the reasons for its decision not to impose anti-dumping duty in light of the "overall public interest".
The Supreme Court has repeatedly held that when a decision effects the right of a person, it is imperative that the principles of natural justice or fair play be considered. In the case of anti-dumping, this means that, while the decision to impose the duty lies with government, it is imperative that the government supports its decisions with evidence, relies on relevant reasoning and provides the interested parties with an opportunity to present their case. However, only the DGTR is currently providing the relevant parties a chance to explain their stance and record a reason for its decisions.
Recently, the DGTR also held a stakeholder consultation, proposing a public interest questionnaire with the intent of giving all the interested parties a chance to submit their views. The questionnaire aims to cover all the aspects of public interest and will provide a more holistic view of the investigation, while covering the interest of all parties. While the questionnaire has not been finalised and may take some time to be implemented, it will certainly be a huge step towards a more transparent investigation, and conclusions on public interest will be duly supported by facts and evidence.
For further information on this topic please contact Nishtha Gupta or Aastha Gupta at TPM Solicitors & Consultants by telephone (+91 11 4989 2200) or email ([email protected] or [email protected]). The TPM Solicitors & Consultants' website can be accessed at www.tpm.in.