China’s Qingdao Seawin Biotech Group Co. has its say on organic fertiliser issue

Qingdao Seawin Biotech Group is high-tech enterprise specialising in the R&D, production and sales of new organic fertilisers

China’s Qingdao Seawin Biotech Group Co. has issued a statement on the organic fertiliser issue which has now turned into an apparent diplomatic row, apart from implications to the banking and agriculture sector. Following is the statement issued by Qingdao Seawin Biotech Group Co. Director Song Hai Mei:

Background of the event

In May 2021, the Sri Lankan Government formulated the green agriculture development strategy of replacing chemical fertiliser with organic fertiliser. In June, the Ministry of Agriculture released the global bidding announcement for organic fertiliser procurement on their official website. 

Qingdao Seawin Biotech Group Co., Ltd. participated in the bidding and won the bid successfully. It was officially listed as a qualified supplier for Tender No. IFB No.SMOF/OFPR/2021/1 on 11 August to supply 99,000 tons of organic fertiliser to Sri Lanka. 

Course of this event

After being awarded the tender, Qingdao Seawin Biotech Group signed contracts with buyers through a local biding agent in Sri Lanka and strictly fulfilled the contract. It overcame many difficulties, such as busy international and domestic orders, soaring global raw material prices, tight shipping schedules and berthing space, high sea freight cost and so on, and gave priority to ensure the production and delivery of the tender contract for Sri Lanka. 

After the buyer issued the Letter of Credit (L/C), Qingdao Seawin Biotech Group shipped the organic fertiliser which comply with the quality requirements on 23 September according to the time schedule required by L/C (before 25 September). 

While the goods were on the way by sea, CFC informed that “the import permit has not been obtained” and “the goods will be rejected”. However, according to international trade practices, it is the buyer’s obligation to obtain the import permit. The failure to obtain the import permit is caused by the buyer’s mistakes and negative inaction. 

On 23 September, Sri Lanka NPQ received the seller’s product samples. 

On 27 September, the seller received an oral notice from the buyer and was informed that Sri Lanka Plant Quarantine Centre (NPQ) issued a conclusion of “suspecting that the samples contain Erwinia”, but did not provide the test report, test method and standards. According to ISPM27 rule in IPPC (International Plant Protection Convention), it takes more than six days to identify Erwinia, but NPQ only took three days to draw a “suspicious” conclusion. 

After the supplier raised doubts, NPQ Sri Lanka updated the report on 11 October; seven days were used to test, but it still did not indicate the test standards and methods. Testing temperature of Erwinia shown in the report is 37 degrees Celsius and carrot slices at 37 degrees Celsius are used for pathogenicity test. According to the relevant agreement of IPPC, the testing temperature of Erwinia is 25 degrees Celsius and healthy plants should be used for pathogenicity test. At least 13-14 days should be used to confirm Erwinia through pathogenicity. 

The unscientific detection method and conclusion of NPQ in Sri Lanka obviously do not comply with international animal and plant quarantine conventions. In fact, the supplier’s product samples have passed the test of Schutter Group, a third-party international testing organisation designated by the buyer (SLSI) and passed the export plant quarantine of China Customs before shipment on 23 September. 

On 5 October, according to the requirements of Sri Lanka NPQ, the Testing Centre of China Customs made a supplementary statement on the samples that the products do not contain Erwinia. However, Sri Lanka NPQ and the buyer openly denied the above test results and unilaterally used the test report issued by NPQ laboratory as the basis for judging the product quality, which is inconsistent with the contract agreement, international trade rules and the test result of their own designated third-party. 

After the seller received the buyer’s Letter of Credit, the buyer repeatedly violated the principle of independence of Letter of Credit and obstructed the bank from paying the payment to the seller by arbitrarily changing the negotiation conditions of L/C, changing the settlement method from Letter of Credit to collection, applying to the Court for a stop payment order of Letter of Credit, etc.

In the case of major differences between the two parties on the facts of contract performance and major disputes over the product quality test results, the buyer and NPQ Sri Lanka have irresponsibly conveyed false and even controversial remarks to the media many times. 

The media that do not know the truth have made negative reports on the quality of Chinese enterprise and Chinese products, and even used “toxic, garbage, pollution” and other derogatory words that seriously slander the image of Chinese enterprise and the Chinese Government. Such unilateral, untrue, and irresponsible remarks mislead the public and undermine the credibility of the media. 

The above “deliberately creating difficulties,” “unreasonable” and even “malicious” acts of Sri Lanka NPQ, the buyer and some media give people reason to suspect that the buyer is creating various obstacles to obstruct the performance of the contract, and even has bad commercial intentions. What is the so-called “toxic” fertiliser?

The seller

The seller Qingdao Seawin Biotech Group is a national high-tech enterprise specialising in the R&D, production and sales of new organic fertilisers. Its products have won a number of national, provincial and municipal awards in China, and its product technology, production capacity and sales value are in the forefront of similar products in the world. 

The products have entered the international market for nearly 20 years and have been sold in more than 50 countries and regions around the world. The series of products have passed the EU Ecocert Organic Certification, Reach Certification, American OMRI Certification and China’s COFCC Organic Production Input Certification. 

They have a stable business growth in the international market, have been highly praised by international users for a long time, and have no bad quality record, nor has it been rejected or punished by the customs of any country. 

Fertiliser exported to Sri Lanka

The organic fertiliser exported to Sri Lanka this time is different from the traditional compost. It uses commercial raw materials. The manufacturing process has been sterilised at 600 degrees Celsius, while the resistance temperature of Erwinia is 40-45 degrees Celsius. Under the high temperature of 600 degrees Celsius, all harmful microorganisms have been killed, and Erwinia cannot exist. 

Among them, the surviving bacillus are beneficial microorganisms. Because of their functions of decomposing organic matter, releasing fixed phosphorus and potassium, these strains are vigorously promoted and used in China, Philippines, and many countries in Africa and the European Union. The seller has never used the ‘faeces’ reported by Sri Lankan media in their products or production process for more than 20 years, but uses humic acid, amino acids, natural seaweed and other raw materials, which do not contain Erwinia. 

China’s Plant Inspection and Quarantine Department also conducted a careful investigation into the matter. The investigation confirmed that the seller’s products did not contain Erwinia, and made a formal explanation and reply to the Sri Lankan officials on 21 October. Who is really irresponsible to the planting industry in Sri Lanka? 

As we all know, there is a global shortage of fertiliser, soaring prices and insufficient supply of raw materials now. In this situation, the supplier has delivered high-quality organic fertiliser to Sri Lanka according to the contract agreement, but the buyer and relevant parties have been trying to create obstacles to contract performance in various ways to prevent organic fertiliser from entering Sri Lanka. 

Despite facing various unconfirmed “suspicious” and “single mode” test results, the seller still insists on transporting organic fertiliser to the port of Sri Lanka, which fully shows that the seller has confidence in its products and believes that the quality of products is reliable, trustworthy, and can withstand the inspection of professional institutions with international inspection qualification certification, while the buyer and relevant institutions blindly adhere to unscientific test results, deny the test results made by professional institutions, avoid reselecting a third-party testing institution for testing, and refuse to accept qualified organic fertiliser. 

This is extremely irresponsible of Sri Lanka’s planting industry and is not in line with the President’s strategy for the sustainable development of green agriculture. Sri Lanka is now in the fertilisation season, but the high-quality organic fertiliser in front of us cannot be transported to farmers. By contrast, who is concerned about the planting industry in Sri Lanka? Who cares about Sri Lankan farmers? Who is obstructing the sustainable development of green agriculture?

Therefore,

1. The supplier strongly requests both parties to entrust the world’s most authoritative and top third-party testing organisation (Swiss SGS Group) to re-sampling as soon as possible to test whether the samples are contaminated with Erwinia. Both parties should unconditionally accept the test results of the third party. If Erwinia contamination is confirmed, the supplier shall unconditionally transport the goods back to China. If there is no Erwinia contamination, the buyer shall unconditionally accept the goods and arrange payment.

2. The supplier reserves the right to investigate the legal responsibility of relevant parties for the “untrue” or even “slanderous” reports and comments made by some media.