Justice Douglas Singiza, in his ruling, declared that the ministry’s failure to operationalise the USB is illegal under Section 4 of the Act.
The High Court’s Civil Division in Kampala has directed the Ministry of Trade, Industry, and Cooperatives to establish the Uganda Sugar Board (USB) within three months, citing the ministry’s failure to do so as a violation of the Sugar Act.
Justice Douglas Singiza, in his ruling, declared that the ministry’s failure to operationalise the USB is illegal under Section 4 of the Act.
The order followed a petition by the Uganda Sugar Manufacturers Association Ltd, which sought court intervention over the ministry’s decisions permitting CN Sugar Ltd and Shakti Sugar to establish sugar and jaggery mills without proper licensing.
The court emphasised that the USB is mandated to regulate the sugar industry, including licensing sugar and jaggery mills and overseeing the processing of sugarcane by-products.
Despite these provisions, the ministry has been issuing “letters of no objection” to new sugar companies, bypassing the legal licensing framework.
Judge Singiza described this practice as a breach of the law and government policy.
He noted that allowing CN Sugar Ltd and Shakti Sugar to establish mills without licenses violated the legal framework and contravened the government’s zoning policy.
This policy aims to regulate the distance between sugar mills to avoid over-saturation and unfair competition.
The court further declared the licensing of CN Sugar Ltd and Shakti Sugar unlawful, particularly as their mills are located within a 25-kilometre radius of other existing sugar and jaggery mills.
This breaches both government policy and presidential guidelines on sugar enterprise zoning.
An immediate order was issued to halt operations at CN Sugar Ltd and Shakti Sugar until they acquire proper licenses from an authorised regulatory body.
“An order is hereby granted restraining CN and Shakti and any other sugar and jaggery mill enterprises from illegally constructing mills in contravention of the law,” the ruling stated.
The Sugar Act serves as the legal framework governing Uganda’s sugar industry. Section 3 establishes the USB as a legal entity, while Section 4 outlines its composition.
The board includes key accounting officers from the Ministries of Trade, Agriculture, and Finance, alongside representatives of sugar millers and outgrowers.
The USB’s operationalisation is crucial to addressing challenges in the sector, including over-saturation of mills, sugarcane poaching, and anti-competitive practices.
The ruling underscores the importance of adhering to legal frameworks in regulating Uganda’s sugar industry, ensuring fair competition and sustainable practices.
