Mauritius Sugar Producers’ Association

Annual Report 2001

Contents Page

MEMBERSHIP AND REPRESENTATIVES AT EXECUTIVE LEVEL i

LIST OF CHAIRMEN ii

EXECUTIVE COMMITTEES iii-iv

REPRESENTATIONS ON VARIOUS COMMITTEES v

STAFF vi

CHAIRMAN’S REPORTOverview vii

1. Technical IssuesClosures of Highlands and Rose Belle Sugar Factories 1Review of the 2001 Crop and Crushing Season 2-3Environmental Issues 4-5Energy Production 6

2. Strategic & Financial IssuesSugar Sector Strategic Plan 2001-2005 7The Sugar Industry Efficiency Act 2001 8The Voluntary Retirement Scheme 9The National Budget 2001/2002 10Tripartite Negotiations for Wage and Salary Compensation 11

3. Human Resource Management IssuesJudicial Review of the Permanent Arbitration Tribunal Part-Award 12-13Judicial Review of the 5-Day 40-Hour Week during the Intercrop Season 14Occupational Health & Safety 15-16Manpower Training and Development 17-18

4. General IssuesCommunication Strategy and Public Relations 19Staff Matters 19Obituary 20

Acknowledgements 21

ESTIMATED REVENUE & EXPENDITURE ACCOUNT OF SUGAR ESTATESWITH FACTORIES 22

i

REPRESENTATIVES

MEMBERS SUGARFACTORIES

REPRESENTATIVES EXECUTIVECOMMITTEE

1. Cie. Agricole de Belle Vue Ltée2. Belle Vue Milling Co. Ltd.

Belle VueMauricia

Cyril MayerJean-Raymond Harel

Cyril MayerJean-Raymond HarelDenis Pilot

3. Harel Frères Limited - Philippe deChasteauneuf

Philippe de Chasteauneuf

4. The Beau Plan S.E. Co. Ltd - Jean-Pierre Hardy Jean-Pierre Hardy5. Cie. Sucrière de St Antoine Ltée. - Roger de Chazal

(alternate BernardMayer)

Roger de Chazal(alternate Bernard Mayer)

6. Cie. Usinière de Mon Loisir Ltée7. Sté de Gérance de Mon Loisir

Mon Loisir Cyril LagesseArnaud Lagesse

Cyril LagesseArnaud Lagesse Jean Raymond Hardy

8. Cie. Agricole du Mount Ltée. - J M Antoine Harel J M Antoine HarelJacques Pilot

9. Flacq United Estates Limited10. FUEL Sugar Milling Co. Ltd. F.U.E.L.

Joseph VaudinPierre Doger de SpévilleJacques Jullienne

Joseph VaudinPierre Doger de SpévilleJacques Jullienne

11. Deep River-Beau Champ Ltd.12. Deep River Beau Champ MillingCo. Ltd.

Beau Champ Jean-Pierre DalaisArnaud Dalais

Jean-Pierre DalaisArnaud DalaisAlain Noël, CBE, GOSK

13. The Constance & La GaietéS.E.Co. Ltd

- Bertrand D de Grandpré Bertrand D. de Grandpré(alternate Noël AdolpheVallet)

14. Mon Désert Alma Ltd.15. Mon Désert Alma Sugar MillingCo Ltd

Mon DésertAlma

Eric Espitalier NoëlJean-Claude Hoareau,OBE

Eric Espitalier NoëlJean-Claude Hoareau,OBE

16. The Médine S.E. Co. Ltd17. The Médine Sugar Milling Co.Ltd.

MédineMaxime LeclézioJacques Forget

Maxime LeclézioJacques Forget

18. Britannia-Highlands Milling CoLtd19. Britannia Growing20. Highlands Growing

BritanniaHighlands

Georges Leung ShingJack Kong Wing Chang

Jack Kong Wing Chang

21. Mon Trésor & Mon Désert Ltd.22. Mon Trésor Milling Co. Ltd

Mon Trésor Georges Leung Shing Georges Leung Shing

23. Cie de Beau Vallon Ltée24. Cie. Sucrière de Riche en Eau Ltée

Riche-en-Eau Paul Lavoipierre Paul LavoipierreLuc Pilot

25. The Savannah S.E. Co. Ltd.26. Savannah Sugar Milling Co. Ltd.

Savannah Hector Espitalier Noël Hector Espitalier NoëlFrançois Chasteau de Balyon

27. Union St. Aubin Milling Co. Ltd. Union St.Aubin

Raymond Rivalland Raymond Rivalland

28. The St Félix S.E. Co. Ltd29. Cie. Usinière de St Félix

St Félix J Frédéric Robert J Frédéric RobertFrédéric Léon Robert

30. Cie. Sucrière de Bel Ombre Ltée. - Hector Espitalier Noël Hector Espitalier NoëlBernard Toulet

31. Bel Air Sugar Estate Limited - Patrick Wilson Rountree Patrick Wilson Rountree(Alternate Gervais Fayolle)

32. The Union S.E. Co. Ltd - Patrick Giblot Ducray Patrick Giblot Ducray33. Sté des Investissements de StAubin

- J M Patrick Guimbeau J M Patrick Guimbeau

ii

LIST OF CHAIRMEN

P.N. Antoine Harel 1947

P.G.A. Anthony 1948

P.N. Antoine Harel 1949

Philippe Espitalier-Noël 1950-1952

Paul Hein 1953-1954

P.G.A. Anthony 1955

Philippe Espitalier-Noël 1956

G. Léon de Froberville 1957

Philippe Espitalier Noël 1958

André Raffray 1959-1960

Maxime de Spéville 1961-1962

André Raffray 1963

Maxime de Spéville 1964-1965

M. J. Philippe Ducler des Rauches 1966-1973

E. Peter G. White 1974

Philippe de Labauve d'Arifat 1975-1976

J.M. Antoine Harel 1977-1978

Hervé Koenig 1979

Philippe de Labauve d'Arifat, CBE 1980

Roger de Chazal 1981

Hervé Koenig 1982-March 1990

J.M. Antoine Harel April-December 1990

E. Peter G. White 1991

Hector Espitalier Noël 1992

Arnaud Dalais 1993

Cyril Mayer 1994 - 1995

Arnaud Dalais January - July 1996

Hector Espitalier Noël August 1996- June 1997

Joseph Vaudin July 1997-December 1998

Patrick Giblot Ducray 1999

Cyril Mayer 2000

Georges Leung Shing 2001

iii

BUREAU AND CENTRAL COMMITTEE OF MANAGERS

Bureau Central Committee of Managers

Georges Leung Shing Chairman Alain Noël, CBE,GOSK,Chairman

Joseph Vaudin 1st Vice-Chairman Christian Foo Kune,Vice-Chairman

Alain Noël,CBE,GOSK 2nd Vice-Chairman François Chasteau de Balyon

Arnaud Lagesse François Motet

Jacques Frédéric Robert Alain Dupont

Jean-Pierre Dalais Gérard Maurel

Hector Espitalier Noël Jacques Jullienne

Cyril Mayer Jean-Claude Hoareau, OBE

Jacques Forget Pierre de C du Mée

Jean-Claude Hoareau, OBE Jacques Forget

Christian Foo Kune Jacques Pilot

Luc Pilot Luc Pilot

Denis Pilot Roland Rambert

Jean-Raymond Hardy – up to July 01 Raymond Rivalland

Jacques Pilot – as from August 01 Denis Pilot

Bernard Toulet

Jacques Kong Wing Chang

Jean-Raymond Hardy – up to July 01

iv

Regional Committees of Managers MSPA/SISEA CommitteeNorthDenis PilotJean-Raymond HardyRoland RambertJacques Pilot

SouthChristian Foo KuneLuc PilotFrançois Chasteau de BalyonGérard MaurelFrançois MotetRaymond RivallandAlain DupontBernard TouletJacques Kong Wing Chang

ChairmanVice-Chairman

ChairmanVice-Chairman

Alain Noël, CBE, GOSKDenis PilotJacques JullienneRaymond RivallandPierre de C du MéePatrick de L. d’ArifatPatrice Legris

Tristan BelleroseGérard Chung Kwan FangChristian FrojetChristian BellouardCyril KalleePatrice Duval

Chairman

representingthe MSPA

Centre-East-WestJacques ForgetJean-Claude Hoareau, OBEAlain Noël, CBE, GOSKJacques JullienneJacques Kong Wing ChangChristian Foo KunePierre de C du Mée

Aerial Spraying CommitteeLuc PilotAlain BaxDidier MartinBruno PiatStellio PrefumoJocelyn DevilleRazack NayamuthDominique RoussetRémi Desvaux

ChairmanVice-Chairman

Chairman

Pierre YthierJean-Claude de Fontenay

Personnel & IndustrialRelations Officers'CommitteeGilbert BouicMrs. Michèle RaultGérard GougesPhilippe Chan TinJay HurryJodhun PoonithJean-Claude DercyMoonsamy VeerapenKrishna VeerapenBertrand AbrahamRajkishore NemchandVishnu LuximanMario Radegonde

representingthe SISEA

Chairman

Pierre d'EspagnacMarc LincolnJean-Arthur LagessePatrice Legris

Scholarships CommitteeAlain Noël, CBE, GOSKDenis PilotJacques JullienneJacques ForgetRaymond RivallandPatrick de L. d'ArifatPierre Rivet

Secretary

Chairman

Secretary

Richard de St PernJean BayaFeroz PeerbaccusEddy AppasamyAnil DwarkaDaniel ThomasElsmi AglarBen FélixHamid SeelarbokusMrs Alix North-CoombesPatrice LegrisPierre Rivet

MSPA,SecretaryMSPAMSPA

v

REPRESENTATION ON VARIOUS COMMITTEES

Sugar Insurance Fund Board Joint Economic CommitteeJean-Pierre Dalais Georges Leung Shing

Patrick de L. d’Arifat up to 30/06/01Patrice Legris as from 01/07/01

Mauritius Employers' FederationGeorges Leung ShingPatrick de L d’Arifat up to 30/06/01Patrice Legris as from 01/07/01

National Pensions Board Mauritius Sugar Industry Research InstituteJérôme de Chasteauneuf Jean-Claude Hoareau, OBE

Joseph Vaudin

Cane Planters & Millers Personnel and Industrial RelationsArbitration & Control Board Officers' Committee MEFPatrick de L. d'Arifat up to 30/06/01 Patrice LegrisPatrice Legris as from 01/07/01 Pierre RivetJean-Claude Hoareau, OBE

Labour Advisory Board Mauritius Sugar SyndicatePatrice Legris up to 30/06/01 Arnaud LagessePierre Rivet as from 01/07/01 Arnaud Dalais

Patrick Giblot DucraySugar Industry Pension Fund J M Patrick GuimbeauJean-Pierre Dalais Cyril MayerEric Espitalier Noël Georges Leung ShingPatrick de L d’Arifat Hector Espitalier NoëlArnaud Lagesse Adolphe ValletMaxime Leclézio Joseph VaudinCyril Mayer Patrick de L. d'Arifat

Paul LavoipierreMauritius Sugar Terminal Corporation Jacques ForgetPatrick de L d’Arifat up to 30/06/01 Patrice LegrisPatrice Legris as from 01/07/01

Farmers' Service Corporation Mauritius Sugar Authority Advisory CouncilChristian Foo Kune Patrice Legris up to 30/06/01

Pierre Rivet as from 01/07/01

National Savings Fund Public Relations Office of the Sugar IndustryPierre de C. du Mée Georges Leung Shing

vi

STAFF

Director Patrick de L. d'Arifat up to June 2001

Patrice Legris as from July 2001

Secretary Patrice Legris up to June 2001

Pierre Rivet as from July 2001

Senior Asst. Secretary & Treasurer Pierre Rivet up to June 2001

Administrative Assistant Mrs. Alix North Coombes

Confidential Secretary Mrs. Mireille Leung

Receptionist Mrs. Gyliane Danjoux

vii

CHAIRMAN’S REPORT

Overview

The year 2001 for the sugar sector was marked by major events. The crop was good with sugar

production amounting to 645 598 tonnes and represented the best performance of the last decade.

The ex-Syndicate sugar price per tonne was Rs. 12 834.68, which was higher than in 1999 and

2000, but was, however, lower than 1998.

Energy production from coal and bagasse was 943 GWh and represented an all time high share of

nearly 50% of total island energy production, with bagasse being accountable for a 25% share.

On the strategic and socio-economic fields, the Ministry of Agriculture, Food Technology and

Natural Resources published in June the Sugar Sector Strategic Plan (SSSP) for the period 2001-

2005 which boldly addressed the major reform that had become imperative for the sugar sector.

The main objective of the SSSP was to create the proper environment to enable the industry to

rethink its operations thoroughly, ensure its efficiency and viability and win the competitiveness

battle. The existing Sugar Industry Efficiency Act was completely overhauled and a new revised

piece of legislation was enacted in July mostly to enable a rapid and comprehensive

implementation of the new measures recommended in the SSSP.

The Voluntary Retirement Scheme (VRS) represented the most important component of the SSSP

and three growing companies undertook a VRS by end of December. Most of the remaining ones

were already engaged in the implementation of their VRS in 2002.

The Judicial Review of the Part Award of the Permanent Arbitration Tribunal (PAT) was

determined later during the year. The Supreme Court delivered its judgment in June 2001 and

found that only after the PAT would have completed its exercise on the many outstanding issues

that it would be in a position to pronounce itself on the reasonableness of the Part-Award. The

sessions thus resumed at the PAT and were still ongoing at year end.

The year 2001 also saw the resignation of Mr Patrick de Labauve d’Arifat as Director of the

Association and the appointment of Mr Patrice Legris, formerly the Secretary, in that capacity.

1

1. TECHNICAL ISSUES

CLOSURES OF HIGHLANDS AND ROSE BELLE SUGAR FACTORIES

Highlands Sugar Factory

Britannia-Highlands Milling Co. Ltd. submitted on 15 October 2001 to the Minister of

Agriculture a request of closure of Highlands sugar factory effective as from Crop 2002.

Various consultations and meetings were held with the various stakeholders, planters and

employees during which the terms and conditions applicable to them were fully explained

and elaborated upon.

The Minister of Agriculture’s approval letter was received on 16 April 2002 and allocated

all the the 250 000 tonnes of canes of Highlands factory area to the neighbouring Mon

Désert Alma sugar factory for processing; subject to the factory closure costs being borne in

toto by Mon Désert Alma Milling Company Ltd

Rose Belle Sugar Factory

The Minister of Agriculture approved the closure of Rose Belle sugar factory on 31

December 2001. Under the terms of the agreement, the canes from Rose Belle factory area

were allocated as follows:

45% to Mon Trésor and Britannia sugar factories;

27,5% to Riche en Eau sugar factory, and

27,5% to Savannah sugar factory.

The closure costs and various undertakings provided in the Blue Print would be borne by

the sugar milling companies in the same percentage.

2

REVIEW OF THE 2001 CROP AND CRUSHING SEASON

General

The cane and sugar production in 2001 were recorded as the best results for the past decade.

The area harvested was 73 302 hectares, i.e. some 250 ha more than in 2000. Sugar

production totalled 645 598 tonnes from an outturn of 5 788 158 tonnes of canes crushed.

The average extraction rate reached 11,15% which was similar to 2000. The average yield of

sugar per hectare, at 8,8, was however higher than the 7,8 recorded in 2000.

The crop started on 13 June and the last factory finished crushing on 7 December. The

overall length of the season was slightly shorter than in 2000, 178 days including the 28

scheduled stoppages for Sundays and public holidays. The number of crushing days for each

factory was, however, longer and averaged 127 days, ranging from a maximum of 146 days

to a minimum of 99 days.

Cane Crop

5 788 158 tonnes of cane were processed by the 14 sugar factories which were in operation in

2001. The tonnage of cane was higher by around 14% than that crushed in 2000 (5 105 700

tonnes).

Measures taken to improve the cleanliness of cane in 1999 and 2000 were also applied during

the 2001 crop season. They resulted in a noticeable improvement in cane quality. Sucrose %

cane (12,56) was higher and fibre % cane (14,57) was lower than for the previous season.

Sugar and Molasses Productions

The total production of 645 598 tonnes of sugar (2000: 569 129 tonnes) included 623 073

tonnes of raw sugar and a total of 22 525 of special sugars and refined sugar which satisfied

the stringent overseas buyers’ specifications.

The molasses production was 175 603 tonnes at 87,2o Brix.

Factory Performance

The number of crushing hours per day ranged from 22,4 to 19,3 and averaged 21,2 compared

to 20,9 in 2000. The average mechanical time efficiency was higher at 93,5%. The actual

crushing rate was 155,0 tonnes cane per hour or 3 281 tonnes cane per day.

3

Milling performance proved excellent this year again. Average mill extraction of 97,2 was

similar to 2000, despite the relatively low imbibition rate of 213% fibre. The sucrose %

bagasse was 1,22 and the moisture % bagasse 47,9.

Boiling House Recovery and Overall Recovery were 90,3% and 87,8% respectively. Total

sugar recovered % cane (extraction) was 11,16% at an average polarisation of 98,81. The

tonnes cane per tonne sugar made were 8,96 as is (tel quel)or 8,71 when converted to 96o pol

sugar.

4

ENVIRONMENTAL ISSUES

Environment Protection (Standards for Hazardous Wastes) Regulations 2001

The Department of Environment issued in February 2001 a press communiqué on proposed

environmental standards for hazardous wastes. Comments and suggestions were invited

from interested bodies and the public in general and the Mauritius Chamber of Agriculture

(MCA), in consultation with MSPA, forwarded its comments on the proposed standards.

The Regulations were finalised and published in October 2001 (Government Notice No.

157 of 2001) to come into force on 01 April 2002. Such regulations concern the transport,

import, export and disposal of hazardous wastes. The procedures to be followed for

delivery of waste by a consignor or to a carrier for the purpose of its treatment or disposal

are also clearly laid down.

Draft Environment Protection Bill 2001

The Ministry of Environment proposed to amend and consolidate the existing

Environmental Protection Act (EPA) of 1991 to ensure a better and more effective

coordination and enforcement of the legislation. A draft bill was circulated in the course of

the year to all parties concerned.

The Ministry invited all interested parties and the public in general for their views,

comments and suggestions on the draft bill. The MCA, in consultation with the MSPA,

submitted a memorandum on this major item stating, inter alia, that the coherence and

clarification of the document on a number of issues was welcome. The objective of

Government is to come up with a major and new piece of legislation on the whole

environment issue which would replace the existing EPA of 1991.

Effluent Survey

The MSIRI, following its survey carried out in 2000, published in February 2001 a

technical report entitled “Survey of Effluent Situation in Sugar Factories”. The technical

data specific to each sugar factory was submitted on an individual basis to the sugar Factory

Managers. The overall conclusions indicated that, in general, there is compliance to the

various factors of effluent and that the oil and grease level does not constitute any problem.

Some factories experienced certain difficulties with total suspended solid and chemical

oxygen demand and suggestions were made by the MSIRI for improvement on those

specific issues.

5

Air Monitoring

The Air Monitoring Programme undertaken by the University of Mauritius, under the aegis

of the Mauritius Sugar Authority, was completed in June 2001. It is to be recalled that the

analysis and measurements were in respect of solid particles nitrogen oxides, sulphur

dioxide, carbon monoxide and ozone and were carried during the 1999 and 2000 crop

seasons. The results were communicated to each sugar factory.

6

ENERGY PRODUCTION

Firm Power

Since Centrale Thermique de Belle Vue (CTBV) started commercial operations in late 1999,

three firm power producers exist in Mauritius.

Continuous Power

Seven (7) sugar factories produced electricity on a continuous basis, i.e. during the crop

season using bagasse only.

Total production from coal and bagasse

The total electricity production from coal and bagasse, of sugar factories are shown below

and compared to other sources of energy for the years 2000 and 2001:

Sources of Energy 2000 2001

GWh % GWh %

Coal 363 20,4 465 24,4

Bagasse 430 24,2 478 25,0

Coal & Bagasse 793 44,6 943 49,4

Others 984 55,4 967 50,6

Total 1 777 100 1 910 100

The share of electricity production coal and bagasse in the island’s energy by sugar

factories from production has thus increased from 44,6% in 2000 to 49,4% in 2001. The

increase in the island’s energy production in 2001 was 4,9% higher than in 2000. The

increase in electricity consumption nationwide over the next 10 years is expected to be

around 5% per year.

7

2. STRATEGIC & FINANCIAL ISSUES

SUGAR SECTOR STRATEGIC PLAN 2001-2005

It is to be recalled that full and exhaustive consultations had been held in November and

December 2000 between the Mauritius Sugar Authority and the various sugar institutions in

relation with the preparation of a new Sugar Sector Strategic Plan. The MSPA submitted

four position papers on the issues of Employment, Factory Centralisation, Energy

Production and Land Conversion.

The Minister of Agriculture, Food Technology and Natural Resources released on June 28

2001 the Sugar Sector Strategic Plan (SSSP) for the period 2001-2005.

The SSSP underlined the imperative reform necessary in the coming threats and challenges

facing the sugar industry. It aimed at a comprehensive package reconciling the conflicting

requirements and views of the stakeholders and set a number of targets to be attained in the

5-year period.

The major aspects covered in the SSSP were as follows:

v Factory Issues

v Field Issues

v Employment, and

v Land Conversion

Other issues raised were concerned with Biotechnology and Strategic Alliances, Financial

and Taxation and Democratisation of ownership.

A mid-term review of the SSSP is scheduled for the end of 2003 to take stock of progress

and recommend consecutive or new measures for the remaining period until 2005.

The SSSP concluded that the mission of Government was to ensure a viable sugar industry

for future generations. Most of the measures contained in the Plan were embodied in a new

Sugar Industry Efficiency Act. Other measures of a more administrative nature would be

dealt with by the various Task Forces appointed on an ad-hoc basis.

8

THE SUGAR INDUSTRY EFFICIENCY ACT 2001

Government enacted a new and completely revised version of the Sugar Industry Efficiency

Act which was passed by the National Assembly on 26 July 2001.

Such a major piece of legislation was, on the one hand, to consolidate, amend and

streamline the laws relating to the package of incentives applicable to the sugar industry,

and on the other, to ease the implementation of the new measures recommended in the

SSSP. They were enforced with a view to further facilitating the democratisation of

ownership in the sugar industry, restoring and maintaining its efficiency and viability and

supporting the socio-economic development of Mauritius.

The new provisions governing the parameters and modalities of the Voluntary Retirement

Scheme were introduced together with new entitlement provisions for contributory

retirement pension and payment of gratuity.

The conditions pertaining to land conversion were also reviewed to cater for new instances

where Land Conversion Tax would not be payable.

Major provisions were also made in respect of continued employment of existing workers

in the sugar industry, seasonal employment and contractual services by job contractors

through amendments to the Labour Act.

This new legislation provided that different parts would come into operation on dates to be

fixed by proclamation. Most of the provisions were subsequently proclaimed while those

amending the Labour Act still remained to be officially gazetted at year end.

9

VOLUNTARY RETIREMENT SCHEME

The Voluntary Retirement Scheme (VRS) represented, by far, the most important

component of the SSSP. The MSPA studied in detail the proposed terms and conditions

and found them to be financially very heavy for sugar companies. It further remarked that

the cost involved in the compensation payment to workers was estimated at Rs. 2 billion

which, added to Rs. 1 billion to be incurred towards land infrastructure costs, would worsen

the already very high indebtedness of sugar companies.

The MSPA made to that effect some practical suggestions in view of trying to alleviate the

financial constraints found in the VRS. The practical modalities and parameters were fully

discussed and finalised with the Mauritius Sugar Authority which acted as the supervising

body in the whole process.

A bridging loan from the Bank of Mauritius for financing the VRS was also discussed with

Government. A total amount of Rs. 2 billion as provided which would cover the amount of

compensation to the workers.

The MSPA expressed the commitment of all its members to attain the objectives set and

declared that it relied upon the firm and sustained backing of Government in the pursuance

of a policy of such national importance.

The first three sugar growing companies which undertook a VRS by end of December 2001

were St. Antoine, Bel Air and Union, whereby 226, 90 and 272 field and garage workers

respectively voluntarily opted for early retirement. The total compensation paid to those

588 workers amounted to Rs. 143,8 M.

Most other growing companies expressed their intention to propose a VRS to their field and

garage workers in the course of next year.

10

THE NATIONAL BUDGET 2001/2002

The Mauritius Chamber of Agriculture, the Mauritius Sugar Syndicate and the MSPA

presented on 23 May 2001 to the Minister of Finance their joint memorandum in the

context of the national budget.

The memorandum underlined the urgent need for an in-depth reform of the sugar sector and

recalled the industry’s expectations in the light of the then forthcoming SSSP. Concrete

proposals were made to Government regarding, inter-alia, land conversion, global cess and

institutional reforms and foreign currency earnings management (FOREX).

The memorandum strongly expressed the need to review the parameters under which the

industry had so far been operating. The current policies and practices needed to be

reassessed and reviewed and new and bold measures introduced to create a business

environment more conducive to productivity enhancement and competitiveness. The

memorandum concluded that those specific proposals would need to be viewed as positive

steps taken in the spirit of the major reform process under way in the sugar industry.

The Budget Speech was delivered by the Minister of Finance on Friday 14 June 2001. The

Minister made an in-depth analysis of the very difficult times through which the sugar

sector was going and declared that piecemeal and ad-hoc measures would not be sufficient.

He stated that, after a series of consultations with all stakeholders, Government would come

up soon after the budget with a SSSP for the period 2001-2005. He added that such plan

would take into account the interests of employees and that the implementation of a VRS

would be proposed.

The single most salient measure contained in the Budget Speech was the increase in the rate

of Value Added Tax (VAT) from 10% to 12% with effect from 1 July 2001, accompanied

with a certain degree of rationalisation in the rates of Customs Duty.

The concrete measures in respect of the Sugar Sector were in fact embodied in the SSSP

released on 28 June 2002 and enforced through the passing of the Sugar Industry Efficiency

Act 2002.

11

TRIPARTITE NEGOTIATIONS FOR WAGE AND SALARY COMPENSATION

In view of the annual round of negotiations of wage and salary compensation, the MSPA

prepared and submitted in May 2001 a memorandum to the MEF. In that document, the

local and international scenes were reviewed and assessed in the light of the numerous

challenges facing the sugar industry. The regular and persisting increase in the cost of

production during the period 1990-2000 was highlighted as well as the evolution of wages

compared to inflation and the price of sugar for the same period. The MSPA called for bold

and strong actions to address those challenges and recommended that resolute and urgent

action be taken in two main areas, viz:

• measures to reduce and control the cost of production;

• review of the rigid legal framework to promote labour flexibility and

productivity.

Two sessions of the Tripartite Negotiations were held on 9 May and 23 May 2001

respectively. The inflation rate for the year under review was officially established at 4,4%.

The outcome of such negotiations was a final proposal of wage and salary compensation

made by the Minister of Finance. Such proposal ranged from 5% in respect of employees

earning up to Rs. 3 200 per month or Rs. 100 whichever is the higher, up to a maximum of

Rs. 210 for an employee earning more than Rs. 8 000 per month. This proposal was

subsequently enacted in the Additional Remuneration Act No. 12 of 2001.

Such a rate of compensation represented for the sugar employees of MSPA members a

weighted average increase of 3,4%, requiring. an estimated additional outlay of Rs. 95,2 M.

for a whole year.

12

3. HUMAN RESOURCE MANAGEMENT ISSUES

JUDICIAL REVIEW OF THE PART-AWARD OF THE PERMANENT

ARBITRATION TRIBUNAL

Further to the action of Judicial Review lodged by the MSPA and the Trade-Unions in 2000

in respect of the Part Award of the Permanent Arbitration Tribunal (PAT), the Supreme

Court delivered its judgment on 28 June 2001. Their Lordships found in respect of the first

application made by the MSPA, for various stated reasons, that “this application is

premature and should be set aside”. In effect, they held that it was not possible for the

Court to pronounce itself on the reasonableness or otherwise of the partial award of the

PAT on two issues only, the more so, as it admitted, that there were still many outstanding

issues which had not yet been adjudicated by the PAT.

As regards the second application lodged by the Unions, their Lordships found that it was

not for the Court to substitute itself for the decision making body and declared that “we

cannot say that its failure to do is Wednesbury unreasonable”. That application was thus

also set aside.

The PAT subsequently called back all the cases and convened the parties to several

sessions/hearings which were held as from July 2001.

The PAT, at its sitting held on 11 July 2001, declared that it was left with the modalities for

the implementation of the 40-hour week and the other issues outstanding to be determined.

The President suggested that negotiations be held between the parties on that particular

issue of the 40-hour week, failing which the Tribunal would have to determine it together

with the other outstanding issues. The Tribunal also invited each party to submit an

updated statement of case accordingly.

The MSPA wrote to the Unions on 23 July 2001 to inform them that it did not propose to

discuss the modalities for the 40-hour week and that it intended to canvass that particular

issue together with the updating exercise to be submitted to the PAT. The MSPA, however,

wished to explain its reasoning behind its stand and convened a meeting with the Unions to

that effect on 26 July 2001.

At that meeting attended by all parties to the disputes, MSPA reiterated its stand on being

totally against the introduction of the 40-hour week during the crop season. MSPA

13

confirmed that it would substantiate its stand with facts and figures to be contained in its

updated Statement of Case.

The MSPA subsequently submitted to the PAT on 12 September 2001 its updated

Statement of Case which comprised also two Annexes, viz, Updated Financial Situation of

the Corporate Sector of the Sugar Industry from DCDM, dated September 2001, and a copy

of the SSSP.

The salient facts and new elements underlined in such updated Statement of Case were as

follows:

(a) The major changes intervening at international level with the adoption of the

Everything But Arms (EBA) initiative.

(b) The serious threat to the EU sugar regime in the context of the World Trade

Organisation (WTO) Negotiations on Agriculture.

(c) The review of the EU Sugar Regime, which is due to take place as from early

2003.

(d) The unequivocal evidence today that the Mauritian sugar industry is already

unprofitable due to its high cost of production.

All the other parties subsequently submitted their respective updated Statement of Case in

the course of various other sittings held by the PAT.

In October 2001, the Tribunal decided to write to the MSA to make known its views, if

necessary, regarding the introduction of the 40-hour week during the crop season.

This document from the MSA was still being awaited at year end and the next session was

fixed for 25 January 2002.

14

JUDICIAL REVIEW IN THE MATTER OF THE IMPLEMENTATION OF THE 5-

DAY 40-HOUR WEEK DURING THE INTERCROP SEASON.

It is to be recalled that this matter was taken on merit by the Supreme Court and that a

judgment was delivered in October 2000, dismissing the application of MSPA.

The matter was further discussed early in 2001 and further to legal advice sought on this

issue, MSPA decided not to pursue the matter any further.

15

OCCUPATIONAL HEALTH AND SAFETY

The detailed analysis of the Statistics pertaining to Health and Safety at work confirmed the

downward trend in the overall number of industrial accidents as follows:

Year No of Accidents Index Rate

Accident/Employer

1994 8 655 100 0,29

1996 4 962 54 0,17

1998 3 860 45 0,15

2001 2 866 33 0,13

The analysis of industrial accidents by sectors of activity indicate that nearly 80% of

accidents occur in the field activities and only 12% and 5% at factory and garage levels

respectively.

The annual Training and Awareness campaign carried out during the year at estate, regional

and national levels totalled 94 sessions and reached some 1 900 employees of all categories.

More detailed data is to be found in the Statistics Section of this Report.

Many members participated in the 3-day Annual Conference of the Institution of

Occupational Safety and Health Management (IOSHM) organised in joint collaboration

with the National Productivity and Competitiveness Council and the National Safety

Council of USA which was held in May 2002. The various topics raised and discussed

were Ergonomics at Work, Work improvement in Small and Medium Enterprises (WISE)

Program and the Health Education and Chemical Control with the help of international

consultants attending the conference.

The MSPA also contributed to the workings held by the Ministry of Agriculture pertaining

to the submission of International Labour Instruments, in respect of ILO’s proposed

Convention concerning Safety and Health in Agriculture. MSPA prepared a document,

reflecting the views and comments of its members, which was submitted to the Ministry in

August.

A 3-day national Tripartite Conference on Occupational Safety and Health was organised

by the Ministry of Labour and Industrial Relations in October. Messrs. J Hurry and E Ah-

16

Choon, Health and Safety Officer at Constance La Gaieté S E and Deep River-Beau

Champ, respectively were nominated as representatives of the MSPA. The debates proved

to be very interactive and enriching and a National Occupational Safety and Health Policy

for Mauritius was formulated and adopted at the Conference.

Further to a recommendation from the MSPA, Mr. Jay Hurry was nominated by the MEF to

become a member of the Advisory Council for Occupational Safety, Health and Welfare in

replacement of Mr. Philippe Chan Tin who resigned therefrom in September 2001.

17

MANPOWER AND TRAINING DEVELOPMENT

Robert Antoine Sugar Industry Training Centre (RASITC)

In the light of the challenges facing the industry and the changes set out in the SSSP (2001-

2005), a RASITC Strategic Committee was set up to guide the orientations of the centre.

Following its recommendations, RASITC decided that all training initiatives should be

focussed on:

• reducing costs through better management tools and techniques;

• increasing productivity through empowerment and increased efficiencies; and

• consolidating technical know-how for the new operating environment.

RASITC also decided to:

• increase its commitment to act as an international centre of excellence; andimprove

the quality of its courses and services.

Local Training Programme

A total of 34 courses was held during the year representing 17 129 man-hours of training

for 936 participants from the local industry. All the courses were related to the goals

identified above.

Training activities for Agricultural and Non-Agricultural Workers

Emphasis was placed on training activities for field overseers and garage and factory non-

agricultural workers. Supervisory skills courses were run for field and garage supervisors

and attracted 55 participants. After a long gestation, the Know Your Industry (KYI) project

was launched at FUEL S.E. in April and during the year, a total of 192 employees followed

this programme. It was planned to present this information package on an in-house basis to

other sugar companies. The 6 M Business Awareness course, which is also run on an in-

house basis, attracted 188 participants from Deep River Beau Champ, Savannah, and Riche

en Eau.

Several courses in agronomy were held for field overseers, including Botany and Cane

Varieties, Planting Techniques, Diseases and Pests, Soils and Fertilisation, Irrigation and

Water Management, Weed Control and Harvesting Techniques. Several courses, including

Practical Sugar Technology, Elementary Sugar Technology and Pan Boiling, run by Mr

Sydney North-Coombes for factory shift supervisors and other workers, were once again

18

well attended. The course on Sugar Laboratory Principles and Practices was again run this

year with 15 participants.

Training activities for Staff Employees

During the implementation of the VRS, training was provided for those who were

responsible for the Cellules d'Ecoute. Courses were also run on Time Management and

Productivity Understanding.

A new course on agricultural mechanization designed by Mr E. Jacquin , Head of

Mechanisation Department at the MSIRI, was run for 41 field staff. A workshop on the

management of sugar losses to improve the financial viability of sugar factories was held on

20 November by Dr R. Lionnet, Assistant Director, Sugar Milling Research Institute of

South Africa and was attended by 37 participants. Several courses were run in collaboration

with equipment suppliers, for example Bearing Technology with SKF of South Africa and

Turbine Fundamentals with ROTEK of South Africa.

International Courses

An international course on Co-generation in sugar factories was held in April-May and

covered technical and practical aspects of co-generation, together with policies and socio-

economic aspects of energy production from bagasse or from coal and bagasse. 14

participants attended from Fiji, India, Uganda and Mauritius.

23 international and 13 Mauritian participants attended the International Certificate courses

held between September and November in Sugar Cane Agronomy, Cane Sugar

Manufacture and Chemical Control of Sugar Factories, as follows:

Courses Nationalities

Sugar Cane Agronomy (22) Kenya (5), Sudan (5), Ethiopia (3), Mauritius (9)

Cane Sugar Manufacture (10) Kenya (3), Ethiopia (3), Pakistan (1), Mauritius (3)

Chemical Control of Sugar Factories (4) Kenya (2), Nigeria (1),Mauritius (1)

A training attachment on practical raw sugar manufacturing was arranged for 14 factory

staff and workers from Wonji-Shoa Sugar Factory of Ethiopia between 1 October and 2

November.

19

4. GENERAL ISSUES

Communication strategy and public relations

Major changes occurred during the year in the field of public relations within the corporate

sector of the sugar industry. Messrs. J Dinan and H Audibert, respectively Director and

Assistant Director of the Public Relations Office of the Sugar Industry (PROSI) retired in

July and August having reached retirement age.

Following discussions within the main stakeholders of the sugar industry, it was decided to

entrust to a local consultancy firm an in-depth survey and analysis on the state of

communication and public relations in the sugar industry. Such report was received in

September and one of its major findings was that, inter-alia, communication and public

relations practices should more and more be entrusted to each sugar estate; the structure of

PROSI, which had been set up back in 1968, was no more adequate for such a revised

strategy and a new framework should be set within the MSPA itself.

The parameters and modalities of such a new strategy were fully discussed and a Cellule de

Communication was set up at year end to advise MSPA members on the matter. Such

Cellule was composed of representations of Chief Executives Officers, Estate Managers,

Public Relation Officers and the Management team of the MSPA and would start to operate

early in 2002.

Staff matters

Major changes occurred during the year at the top executive level of the MSPA. Mr.

Patrick de L. d’Arifat who joined the Association in April 1990, resigned as Director in

July 2001.

Mr. Patrice Legris who held the post of Secretary was appointed Director and Mr J F Pierre

Rivet, previously Senior Assistant Secretary and Treasurer, was appointed Secretary while

retaining his responsibilities as Treasurer of the Association. Both appointments took effect

as from 1 July 2001.

The contribution of Mr. d’Arifat, during his tenure of ten years in office, to the promotion

and representation of the general interests of the MSPA, was indeed significant. He dealt

with great competence and resilience with all the major issues and new challenges facing

20

the corporate sugar sector. We wish him all the success he rightly deserves in his new

position in the sugar industry.

We also wish Messrs. Legris and Rivet a fruitful pursuance of their career at the MSPA.

Obituary

Mr. Freddy Appassamy who held the post of Director of PROSI from October 1970 to 1987

died on 26 July 2001. It is to be recalled that his contribution in the field of Public

Relations for the Sugar Industry has indeed been very innovative and bold on many counts

and long lasting. He took an active part in the current affairs of our Association and proved

always to be of most valuable advice when consulted on matters encompassing many fields,

even beyond public relations as such.

The MSPA reiterates its deepest sympathy to the members of the bereaved family.

21

ACKNOWLEDGEMENTS

I wish to express my deep appreciation of the work performed by the Director, Secretary

and staff of the MSPA throughout this eventful year. I extend my heartfelt thanks to the

Vice-President, the members of the Bureau and also to all the members of the Association

and to Estate Managers for their valuable help and cooperation.

Georges Leung Shing

Chairman

22

ESTIMATED REVENUE & EXPENDITURE ACCOUNT FOR YEAR 2001

SUGAR ESTATES WITH FACTORIES*

(Prepared in consultation with the Mauritius Chamber of Agriculture)

Production

Sugar (Tonnes)

Sugar Estates with Factories’ Share (Tonnes)

Price of Sugar (Rs./Monne)

Molasses (Tonnes)

Sugar Estates with Factories’ Share (Tonnes)

Price of Molasses (MUR./Tonne)

645 598

429,754

12,835

175,603

122,920

902

Revenue

Sugar

Molasses

Sale of Electricity, By-Products and Manufacturing Premiums for Special Sugars

Compensation from Sugar Insurance Fund Board **

Total

MUR (M)

5,016

15

847

35

5,913

Expenditure

Wages and Salaries

Supplies and Other Charges

Sugar Insurance Fund Board Premium

Interest Charges

Depreciation **

3,095

2,011

444

278

491

Total 6,319

Profit/(Loss) on sugar activities (405)

* excluding Rose Belle S.E.

** Depreciation is calculated on Mauritius Sugar Authority basis