Funding granted to the proposed Vodka manufacturing project

1240/5(2156)

WRITTEN QUESTION TO THE PRESIDENT OF THE ECONOMIC DEVELOPMENT COMMITTEE BY DEPUTY T.J. LE MAIN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY 28th SEPTEMBER 2004

Question

Would the President inform members –

1. of the totalamountof expenditure that has so farbeen granted to the proposed vodka manufacturing project, both in the form of direct paymentand indirect supportviathe Jersey PotatoExportMarketingBoard?
2. whether the vodkamanufacturing project has received the supportof the potato growing industry, and, if so, whether a contractfor potato supply has been arranged; if not, howfeasible is the project in the absence of such a contractfor the supplyof potatoes?
3. of the totalamountof expenditure so faronthe creation and maintenance of both the Jersey Potato Export Marketing Board and  the  Jersey  Potato Export Marketing Scheme together with  the  cost,  to date, of defending the scheme in Court, if any?
4. of the current status with regardto the JerseyRoyalPotatoExportScheme, and the level of acceptance of it by the industry, andwhat, if any, the effects will be both ontheindustryandthetax-payerin the event that the StateswinstheforthcomingCourtcase,orloses it? and,
5. whether the majorityof potato exports will beclassed illegal in the event that the States winthe Court case, and what the likely legal bill will be in theevent that the State loses it, and whatsteps are beingtakento minimise any further expenditure relating to this matter?

Answer

1. £105,000intotalwas granted totheVodkaproject.The Jersey Potato ExportMarketing Board (JPEMB)has provided administrative support to the project estimatedat £15,000.
2. Individual potatogrowers have not been asked if they support the vodka manufacturing project, but the Jersey PotatoExportMarketing Board isof the opinion that it does have the required support. No contracts for potato supply have been arrangedat this time. The project would not befeasible in the absence of such contracts but the JPEMB will be writing togrowersto establish contracts when the project hasgained planning permission and private-sector fundingarrangements agreed.
3. The Schemewas drafted by a locallegalpractice in 2001at a costof £15,000.TheJPEMB has been awarded a total £337,700inoperatingcosts for the years2002,2003 and 2004.  The costs to date in preparation for, and defending the schemeby a local legal practice on behalf oftheJPEMB, are £105,533. The cost to the States as a result ofanunsuccessful application to the Royal Court in July 2002 to lift the Stay on the Schemewas £50,000.Additionalcostsof £120,957 plus EUR 220 have been incurredby the LawOfficers' Department. It is known that the two marketing groups involved in the case have spent a considerable amountin legal costs.
4. The Scheme remains Stayed at this time. In February 2002, the Jersey Potato Marketing Organisation Limited (JPMO)soughtleave to apply for a judicial review oftheScheme,whichwas granted by the Royal Court. Thecasewas referred to the European Courtof Justice for a preliminary rulingonwhether the

Scheme is contrary to the European Community Law. This case was heard in the European Court on 14th September, but it will be some months before the outcome is known. Subsequent to the application by JPMO,

two further companies, Top Produce Limited and Fairview Farm Limited were granted leave to intervene on

the grounds that the Scheme is contrary to the European Convention on Human Rights. This case will be heard in

the Royal Court in due course. In July 2002, the States and the Board applied to the Royal Court for a lifting of the stay on the Scheme. The application was refused by the Royal Court.

T he current level of acceptance of the Scheme can only be determined by either writing to producers or

taking an official Poll to determine whether it is their wish that the Scheme should continue. However it would be impractical to take a Poll until the outcome of the EU case is known and it is not in the power of the Committee to ask for a Poll to be taken. The effect on the taxpayer of winning the case is that the States should be able to recover much of the costs which they have incurred. The effect on the taxpayer of losing is dealt with in the answer to (e).

5. If the case is won, the Scheme can be introduced at a time when growers have been given sufficient opportunity to register and comply with theScheme.The part ofthequestion relating tothe likely legal bill has been dealt with in the previous question,

I f the court case is lost, it is likely that an order for costs would be made against the States. It is impossible at

this stage to indicate what the likely extent of those costs might be, because the figure would depend on whether the case is lost at the European Court of Justice level, or on the remaining human rights arguments, and if on human rights grounds, whether such loss occurs in the Royal Court. The Committee is of course anxious to ensure that public money is spent wisely, and has been committed to this litigation in support of the States decision to adopt the scheme. However, it is expecting to review the scheme with the relevant interested parties in preparation for the announcement of the ECJ decision.