Trade associations needs more freedom of action
Tuesday, 23 November 2010
M S Sidduqui
THE laws of Bangladesh have empowered the regulatory wings with enormous authority unlike any other country of the world. In granting a license the government can impose conditions and prescribe regulations as it may think fit and such conditions and regulations shall be binding on a trade organization and if the government directs these will also have to be incorporated in the memorandum and articles of associations of a trade organization or in one of those documents (Sec. 3-3 of Trade Organization Ordinance). The regulators can interfere in TA so extensively that under Section 8(1), all acts and proceedings of a registered trade organization shall be subject to the control of the Director and the affairs of such trade organization shall be managed and conducted in such a manner as the Director may direct from time to time [Sec. 9(1)].
The Director of Trade Organization (DTO), who is an officer with the rank of Deputy Secretary, enjoys wide powers such as: he can attend any meeting of the general body or the executive committee of a trade organization or of any committee or body appointed to transact any business of the organization; he can watch and supervise or cause to be watched and supervised any election held by the executive committee or other body; he can with the approval of the government annul the results of any election held by the executive committee or any other body if he is satisfied that unfairness in the conduct of such election justifies such annulment; he can cancel, suspend or modify any resolution adopted or any decision taken by the general body or the executive committee; he can remove or cause to be removed any member of the executive committee and can fill up or cause to be filled up the resultant vacancy for the un-expired period, provided the number of members so removed shall not be more than five in any calendar year; he can suspend or cause to be suspended up to total fifteen members in one calendar year, he can remove or cause to be removed from the membership registrar of a trade organization the names of up to fifteen members in one calendar year (however, the power of removal or suspension shall not be exercised without the approval of the government).
The government can supersede the executive committee of a trade organization for such period not exceeding one year if it is of the opinion that the affairs of the organization are not being properly managed and the interest of the trade organization requires such supervision (Sec. 10).
The government may, when the executive committee has been superseded, appoint an administrator for such period not being more than one year, to take over the functions of such a committee and to manage and conduct the affairs of the trade organization. Upon the appointment of an administrator, the members of the committee shall be deemed to have vacated their respective offices. The administrator shall manage and conduct the affairs of the registered trade organization under the supervision and control of the director. Expenses incurred in connection with the management of a trade organization by an administrator, including pay, allowances and remuneration of the administrator) shall be borne by the trade organization concerned (Sec 10 & 11). Moreover, under Section 22, an order made under the ordinance (by DTO) shall not be questioned in any court.
It is known that most of the association leaders are either retired or partly retired from profession and involved full-time in activities of trade associations (TAs), which are mostly meetings and sittings among themselves and with the government. They invest unbelievable amount of money to become a voluntary leader of professional associations. They don't feel odd with the abnormal authority of the government as an obstacle to perform their duties under trade body act. They are interested in social status for position in some government advisory committees. They hardly have courage and ability to fight for right and privileges of the business community.
This unlimited authority of the regulators has no reference to competition or other obligation or enforcement. There are some other laws, which authorize other regulators like local government, ministry of commerce, home, health etc as well as law-enforcement agencies to intervene and enforce such laws. Above all, there is the much-publicized action by magistrates of mobile courts. Unfortunately, there is in practice no visible control of anti-trust activities like so-called 'syndication' as widely publicized by the government. There are too many regulators and too many laws and rules but there is no action to implement the anti-trust or competition act.
Bangladesh is awaiting enactment of a competition act while in many countries, the existence and activities of trade associations are protected by fundamental rights of freedom of association and expression and the right to freely petition the government. In order to prevent conflicts between these fundamental rights and competition policy objectives, many jurists exempt a number of trade association activities from the application of competition rules. However, these exemptions are generally interpreted narrowly, because accommodating these values may sometimes also impose costs on consumers.
Finally, it must be remembered that the constitution of the country guarantees freedom of association. Freedom should not be conceived only in terms of freedom to associate or form an association but also in terms of freedom to act, to voice opinion, to demand relief or remedy. But the type of trade organizations as envisioned in the Trade Organization Ordinance, 1961 cannot be accepted as an association that is free and capable of serving the interest of trade, business, commerce and industry, which is its primary duty.
The DTO can dictate every action and function of a trade organization. The DTO is so much empowered by the Ordinance that he can reduce a trade organization to such a subservient position that it will have no alternative but to act on his directions. The DTO can remove any member of the executive committee of a trade organization any time, he may suspend or remove members from their membership. Even the activities and proceedings of a registered trade organization are subject to the control of the DTO. The affairs of such trade organizations are managed and conducted in such a manner as the DTO may, from time to time, direct. The DTO controls and decides the fate of TAs and there is no scope to challenge his decisions and orders in any court of Bangladesh.
The constitution of Bangladesh guarantees freedom of association and the Trade Organization Ordinance 1961 is conflicting with the constitution. Besides, there are many other professional associations in the country but the government has no such authority or control over those associations. As there is no opportunity for TAs to think freely and work independently, the nation cannot expect creative work from TAs.
TAs should be allowed to work freely to organize entrepreneurs, who have already demonstrated their ability in contributing in GDP and creating employment opportunities despite hurdles of poor infrastructure, inadequate policy support and bureaucratic obstacles. These business persons are in global market, competing with business persons of many countries. They are competing with their manufactured goods and services. TAs should therefore be consulted effectively in the formulation of economic policies and development strategies.
Bangladesh should have an appropriate trade body act in line with the country's constitution and acts of other countries. A competition act, which is pending for final decision of the government, must be passed immediately. The proposed competition law also has many drawbacks and it should be more pragmatic. The proposed regulating authority should also be free from bureaucratic control.
The writer, a Part-time Teacher at Leading University, can be reached at e-mail: shah@banglachemcial.com
THE laws of Bangladesh have empowered the regulatory wings with enormous authority unlike any other country of the world. In granting a license the government can impose conditions and prescribe regulations as it may think fit and such conditions and regulations shall be binding on a trade organization and if the government directs these will also have to be incorporated in the memorandum and articles of associations of a trade organization or in one of those documents (Sec. 3-3 of Trade Organization Ordinance). The regulators can interfere in TA so extensively that under Section 8(1), all acts and proceedings of a registered trade organization shall be subject to the control of the Director and the affairs of such trade organization shall be managed and conducted in such a manner as the Director may direct from time to time [Sec. 9(1)].
The Director of Trade Organization (DTO), who is an officer with the rank of Deputy Secretary, enjoys wide powers such as: he can attend any meeting of the general body or the executive committee of a trade organization or of any committee or body appointed to transact any business of the organization; he can watch and supervise or cause to be watched and supervised any election held by the executive committee or other body; he can with the approval of the government annul the results of any election held by the executive committee or any other body if he is satisfied that unfairness in the conduct of such election justifies such annulment; he can cancel, suspend or modify any resolution adopted or any decision taken by the general body or the executive committee; he can remove or cause to be removed any member of the executive committee and can fill up or cause to be filled up the resultant vacancy for the un-expired period, provided the number of members so removed shall not be more than five in any calendar year; he can suspend or cause to be suspended up to total fifteen members in one calendar year, he can remove or cause to be removed from the membership registrar of a trade organization the names of up to fifteen members in one calendar year (however, the power of removal or suspension shall not be exercised without the approval of the government).
The government can supersede the executive committee of a trade organization for such period not exceeding one year if it is of the opinion that the affairs of the organization are not being properly managed and the interest of the trade organization requires such supervision (Sec. 10).
The government may, when the executive committee has been superseded, appoint an administrator for such period not being more than one year, to take over the functions of such a committee and to manage and conduct the affairs of the trade organization. Upon the appointment of an administrator, the members of the committee shall be deemed to have vacated their respective offices. The administrator shall manage and conduct the affairs of the registered trade organization under the supervision and control of the director. Expenses incurred in connection with the management of a trade organization by an administrator, including pay, allowances and remuneration of the administrator) shall be borne by the trade organization concerned (Sec 10 & 11). Moreover, under Section 22, an order made under the ordinance (by DTO) shall not be questioned in any court.
It is known that most of the association leaders are either retired or partly retired from profession and involved full-time in activities of trade associations (TAs), which are mostly meetings and sittings among themselves and with the government. They invest unbelievable amount of money to become a voluntary leader of professional associations. They don't feel odd with the abnormal authority of the government as an obstacle to perform their duties under trade body act. They are interested in social status for position in some government advisory committees. They hardly have courage and ability to fight for right and privileges of the business community.
This unlimited authority of the regulators has no reference to competition or other obligation or enforcement. There are some other laws, which authorize other regulators like local government, ministry of commerce, home, health etc as well as law-enforcement agencies to intervene and enforce such laws. Above all, there is the much-publicized action by magistrates of mobile courts. Unfortunately, there is in practice no visible control of anti-trust activities like so-called 'syndication' as widely publicized by the government. There are too many regulators and too many laws and rules but there is no action to implement the anti-trust or competition act.
Bangladesh is awaiting enactment of a competition act while in many countries, the existence and activities of trade associations are protected by fundamental rights of freedom of association and expression and the right to freely petition the government. In order to prevent conflicts between these fundamental rights and competition policy objectives, many jurists exempt a number of trade association activities from the application of competition rules. However, these exemptions are generally interpreted narrowly, because accommodating these values may sometimes also impose costs on consumers.
Finally, it must be remembered that the constitution of the country guarantees freedom of association. Freedom should not be conceived only in terms of freedom to associate or form an association but also in terms of freedom to act, to voice opinion, to demand relief or remedy. But the type of trade organizations as envisioned in the Trade Organization Ordinance, 1961 cannot be accepted as an association that is free and capable of serving the interest of trade, business, commerce and industry, which is its primary duty.
The DTO can dictate every action and function of a trade organization. The DTO is so much empowered by the Ordinance that he can reduce a trade organization to such a subservient position that it will have no alternative but to act on his directions. The DTO can remove any member of the executive committee of a trade organization any time, he may suspend or remove members from their membership. Even the activities and proceedings of a registered trade organization are subject to the control of the DTO. The affairs of such trade organizations are managed and conducted in such a manner as the DTO may, from time to time, direct. The DTO controls and decides the fate of TAs and there is no scope to challenge his decisions and orders in any court of Bangladesh.
The constitution of Bangladesh guarantees freedom of association and the Trade Organization Ordinance 1961 is conflicting with the constitution. Besides, there are many other professional associations in the country but the government has no such authority or control over those associations. As there is no opportunity for TAs to think freely and work independently, the nation cannot expect creative work from TAs.
TAs should be allowed to work freely to organize entrepreneurs, who have already demonstrated their ability in contributing in GDP and creating employment opportunities despite hurdles of poor infrastructure, inadequate policy support and bureaucratic obstacles. These business persons are in global market, competing with business persons of many countries. They are competing with their manufactured goods and services. TAs should therefore be consulted effectively in the formulation of economic policies and development strategies.
Bangladesh should have an appropriate trade body act in line with the country's constitution and acts of other countries. A competition act, which is pending for final decision of the government, must be passed immediately. The proposed competition law also has many drawbacks and it should be more pragmatic. The proposed regulating authority should also be free from bureaucratic control.
The writer, a Part-time Teacher at Leading University, can be reached at e-mail: shah@banglachemcial.com