Petition on Legal Notice No. 37 of 2018

LNWMGA Letterhead
11th June 2018

The Lesotho National Wool and Mohair Growers Association (LNWMGA) is humbly requesting all its members, civic society organisations, political organisations, traditional and church leaders, diplomatic organisations, international donor agencies and the public at large to support the association in this difficult times against the newly launched legislation, legal notice no. 37 of 2018.
Following a number of court cases against the association where the association won, the Government of Lesotho imposed new regulations that are now in operation, but makes it very difficult to function. We are currently in the mohair season and find it impossible to operate under the current regulations, hence we have written and presented our stance on legal notice No.37 of 2018 on the 28th of May 2018 to the Portfolio Committee on Economic and Development Cluster as follows:

The legal notice states as follows:
Licensing of wool and mohair business
Schedule 2(1) a person shall not be involved in business of-
wool and mohair shearing shed,
wool and mohair brokering,
wool and mohair testing,
wool and mohair trading and auctioning,
wool and mohair processing and exporting
unless the person has obtained a license to do so from the Minister responsible for Small Business Development Cooperatives and Marketing (in these regulations referred to as “the Minister”) in accordance with these regulations.

Moreover, the regulations stated that the Minister also has power to amend or cancel the license on terms and conditions laid. Additionally, it is stated that a holder of the export licence shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho.

As indicated in the above paragraphs, upon the passing of these regulations, the Lesotho Wool and Mohair Growers Association wrote a letter to the Economic and Development Cluster Committee to reveal its stance on Legal Notice No. 37 of 2018. In the letter the association appealed to the committee that the Legal Notice No. 37 of 2018 be held in abeyance until the following are undertaken:

Government should engage the farmers and farmer organizations for the farmers to input in the said regulations. The Principal Secretary for the Ministry of Small Business Cooperatives and Marketing wrote us a letter of 14 May 2018 proposing the meeting of 30 May 2018 where we anticipated to be availed to engage in discussion in the proposed regulations. To our dismay, on the 18th May 2018 we learned that the regulations had been tabled in Parliament.

Members of Lesotho National Wool and Mohair Growers Association are currently using Lesotho Government owned shearing sheds. Schedule 1 of Legal Notice No.37 of 2018 has reference only to ‘Individual Citizen’ shearing shed, clarity has to be provided as how to use the Wool and Mohair Farmer Associations and Cooperatives shall be accommodated in the licensing.

Auctioning wool and mohair has to be undertaken under well prepared Auction floors and well organised contingent of buyers for effective competition; we are not aware of the presence of this infrastructure to effectively handle Lesotho clip for this important activity.
Lesotho mohair has been shorn, graded and packaged for export to the international markets. While the discussion and other preparatory procedures for local auctioning of Lesotho wool and mohair are under discussion as we propose, we strongly recommend that 2018 Mohair Clip be marketed under The Agricultural Marketing (Trading) Regulations, 1974.

The Portfolio Committee on the Economic and Development Cluster on the same Monday of the presentation made a promise to tabulate the society’s stance in the National Assembly on Wednesday the 30th of May 2018, where the association was invited to witness such, but for the reasons unknown to the association such discussion never happened, a situation that made the regulation be implemented unchallenged.
The Association’s expectation was that Parliament would have discussed our appeal, and held the regulations in abeyance as proper consultations were to then take place without frustrating the flow of mohair clip which auctions are in session as we release this petition.
Background information on what might be the source of the society’s problems

With a very clear vision of walking towards doing some of the wool value chain activities in Lesotho, the association on the 31st of March 2016, legally entered into a Property Development Joint Venture (JV) Agreement with Maseru Dawning (Pty) Ltd to develop what was to be named Thaba-Bosiu Wool Centre.
Section 1.3 of the JV agreement contains an important component of the relationship at its foundation. This is normally referred to as the “object clause”:
1.3 (a) to promote and realize the development of wool and mohair business in Lesotho, including building the Lesotho Wool Centre which include the greasy wool store, wool-baling factory, pre-sale sample store, testing lab, wool classing factory, wool transportation centre, office building etc.

1.3 (b) Maseru Dawning Trading (Pty) Ltd agrees to compile the Business Plan and the design of the Lesotho Wool Centre Scheme, Operating Scheme, Financing and Repayment Scheme and Training Scheme.
1.3 (c) Parties agree to set up a Joint Venture company (hereinafter referred to as the Company), where;
(i) The proportion of shareholding will be: Lesotho National Wool and Mohair Growers Association shall hold 75%, and Maseru Dawning Trading (Pty) Ltd shall hold 25%.

(ii) The form of investment will be: Lesotho National Wool and Mohair Growers Association and Maseru Dawning Trading (Pty) Ltd shall be contributed in cash;
(iii) The scope of the company will be: to build and operate the Lesotho Wool Centre which includes many functions range from wool bailing, transportation, finance, etc. All these things are agreed by both parties and will be detailed in the co-operation agreement.
Going further down the agreement;
(c) Lesotho Wool and Mohair Growers Association agrees to use its resources to help the company legitimately build the Wool Centre, including but not limited to the infrastructure, land, road, electricity, frequencies, etc;

(e) Once the project of Wool Centre is finished, Maseru Dawning Trading (Pty) Ltd (MDT) will take responsibility to operate the Wool Centre and pay annually to the Joint Venture. The details shall be agreed by both parties and will be recorded in the co-operation agreement”.
The association’s vision has been hijacked and this is surely leading us to a big disaster
While everything was going as planned, the association was puzzled by what was named as a launch of Thaba-Bosiu Wool Centre without the association’s knowledge, and therefore shortly after that Maseru Dawning requesting for wool to be sold through Thaba-Bosiu Wool Centre. This request was not honoured as it was clearly in violation with the JV agreement as stated in the above paragraphs.

It honestly came as a shock when the association received a High Court Order dated 14th November 2017 which technically prohibited the association from exporting wool to the international market. A situation that was furthermore worsened by freezing of a paying BKB bank account that frustrated the farmer’s wool sale payments. Both matters were separately challenged by the respondents in the courts of law, and Maseru Dawning lost the case while BKB bank account was unfrozen.

The current situation of this legislation and hostility of the Government of Lesotho is surely going to frustrate the sale of mohair clip and this again is going to affect the cash flows of our members just like it happened at the beginning of the year.

The association is willing to get into meaningful and peaceful talks with the Government of Lesotho, but while such dialogue takes place, we are appealing to all those mentioned in the introductory paragraphs to sign this petition which is going to be submitted to His Majesty’s Government. To show your support kindly sign this document or also write a supporting note to be submitted to the Government and also to be published or broadcasted to the local and international media houses.

Thanking you in advance for your support.
Warm Regards

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