Time to enforce cement regulation

The recent directive by the Minister of Trade and Industry, K.T. Hammond, ordering cement manufacturers to secure a licence or halt production immediately, is a welcome move. For far too long, the industry has operated without effective regulation, compromising quality and safety standards.

The Ghana Standards Authority's (GSA’s) Manufacture of Cement Regulation, 2023 (L.I. 2480) provides a robust framework for ensuring compliance. It is a concern that none of the existing manufacturers have applied for a licence, thus rendering their operations illegal.

This blatant disregard for the law undermines consumer trust and puts the environment at risk.

Under the legal framework, the regulations are clear: no cement manufacturing without a licence. Section 17 of L.I. 2480 stipulates that non-compliance is punishable by imprisonment and fines.

“(1)A person shall not manufacture cement in the country unless the person has obtained a licence in accordance with these Regulations.

“(2)A person who contravenes subregulation (1) commits an offence and is liable on summary conviction to a term of imprisonment of not less than 12 months and not more than two years.”

The Daily Graphic firmly believes that the time has come for the cement industry to embrace regulations and prioritise quality and compliance. The lack of effective regulation has led to compromised standards by some few manufacturers, putting the industry at risk.

Thankfully, since 2022, the GSA, under the auspices of the Ministry of Trade and Industry and in partnership with law enforcement agencies, has intensified efforts to combat the production of substandard cement by unscrupulous firms operating in the country.

This crackdown has revealed alarming practices, including the unauthorised use of the GSA certification logo and the operation of cement factories without proper permits.

Three companies found to be using substandard raw materials in their cement production in the Ashanti Region were closed down in the last quarter of last year.

The Ministry of Trade and Industry also issued a directive to producers to halt the setting up of new cement factories in the country until the regulation came into force.

The situation underscored the absence of robust regulations governing the issuance of permits for establishing cement factories, leaving room for exploitation by individuals seeking to cut corners and compromise quality standards.

It is unacceptable that these manufacturers have been producing substandard cement, jeopardising the structural integrity of buildings and infrastructure. The consequences of such negligence can be catastrophic, resulting in loss of life, property damage and economic hardship.

The benefits of compliance are manifold. Quality assurance will protect consumers from substandard products, while environmental protection will ensure cement production occurs only at approved sites.

Consumers deserve better. They deserve an assurance that the products they purchase meet rigorous quality standards to ensure their safety and well-being.

Strict enforcement of regulation will also address concerns over rising cement prices, which is currently around GH¢105 per bag. In the UK, Spain, Germany and France, cement producers are required to disclose pricing information and cost structures periodically.

This includes detailed breakdowns of raw material costs, production costs, transportation costs and pricing structures. The trust, fairness and innovation such transparency builds reduces unjustified price volatility.

Examples of collusion and price manipulation in the global cement industry are worrying. In India, the Competition Commission of India imposed fines on several major cement companies for price fixing. In the US, the Federal Trade Commission has intervened in cases of suspected collusion to keep prices artificially high.

In Canada, the Competition Bureau has investigated and prosecuted cement companies found guilty of collusion. The Nigerian Competition Authority has also imposed penalties on companies manipulating prices.

These instances highlight the need for regulatory bodies to ensure transparency and fairness in the country’s  industry. The industry must adopt codes of conduct for clear pricing disclosures and fair marketing practices.

We commend the minister's directive and urge the GSA to enforce these regulations rigorously. The authority must provide oversight and ensure transparency and accountability throughout the licensing process.

To cement manufacturers, we say comply now or face the consequences. The nation demands quality and safety. To the GSA, we charge you to enforce these regulations with utmost diligence.

Ghana deserves better. Let us build a stronger, safer and more prosperous nation, founded on adherence to the law and respect for quality standards.