Pakistani exporters' worth millions of dollar are at stake as knitwear industry is in turmoil because of the inept handling of the quota issued by the Minister of Commerce and Export Promotion Bureau (EPB). Adil Butt, Chairman, Pakistan Hosiery Manufacturers Association (PHMA), North Zone, in a statement here on Sunday said that a meeting of the Association's stakeholders was called by Commerce Minister Humayun Akhtar Khan and vice-chairman EPB on 24th of November 2004.
The meeting was informed by EPB that 1.6 million dozens of Cat 338 quota were on books of exporters against which only 700,000 oz. could be exported as per US customs record.
He said that the discrepancy in the EPB record and that of the US customs was discussed and it was pointed out that 500,000 doz. quota was wrongly auctioned in 2003 by the Ministry of Commerce even though Pakistan had no so much entitlement. It was requested in the meeting that this auction price be reimbursed to the stakeholders.
Adil Butt added that in the larger interest of the country and industry, it was decided not to dwell on this subject at the moment but to concentrate on resolving the immediate crises at hand.
According to him, the commerce minister concluded the meeting with the decision that Cat. 338 in each Category Pass Book exporter will be entitled only 40 percent of that on pro rata basis.
The minister, he maintained, had agreed to consider compensation for the remaining unutilised quota in Category pass books and the consignment of 2004 quota remaining unable for shipment this year, will be assisted financially and otherwise for air lifting in first 20 days of the next year.
But to the utter surprise of associations and stakeholders, the said decision of the minister was totally changed subsequently by EPB on 26th November 2004 outlining assistance and methodology of air shipment in 2005 for consignment, which will not be able to go due to fiasco so created, he alleged.
He further said that on 27th November a circular was issued authorising shipment of Cat 338 against 4 percent security deposit to be shipped within 15 days. The said circular was received by the associations on 29th November (8th November being Sunday) whereas associations were unable to inform their members only by 30th November 2004.
This, however, gave clear three days to some stakeholders to manipulate records, get fresh quotas recorded in their category passbooks and obtain pre-shipment certificates by 30th November 2004.
The PHMA North Zone chief pointed out that this manipulation was well foreseen by stakeholders and it was conveyed to the minister that it will not be transparent and will involve hidden corruption.
Apparently, the minister agreed with this but decision of capping the quota holdings taken in the meeting was subsequently changed by the authorities.
According to him, the decision as per circular of 27th November is unfair and pre-judicial to bona fide exporters as many genuine exporters' shipments are left behind and unable to go because of the malpractice generated by this circular.
Moreover, shipments that have already left Pakistan by sea and by air are likely to be stranded at American ports unless visas are issued for these shipments.
Quoting Shahzad Azam Khan, Circle Chairman of Pakistan Knitwear and Sweaters Exporters Association, who is also member of Quota Supervisory Council (QSC), Adil Butt said the QSC had not been consulted in this entire scenario although it is the supreme advisory body for textile quota management.
"Both the associations of knitwear industry demand that quota affairs be rightly managed as per their discussions with the Minister of Commerce and Industry and EPB authorities, else they will have no option but to sue all those responsible for this fiasco," Adil Butt warned.
He further demanded the shipments that have left Pakistan must be given first priority and visas be issued immediately, pre shipments certificates be honoured, small percentage of quota be kept for samples and the remaining quota in category pass books must be fairly compensated monetarily.
Moreover, the assistance to be provided for 2004 shipments not shipped due to quota restraints as announced by EPB, may be given freight for end destinations in US and restriction of PIA as the only carrier and New York as the only destinations removed from the procedure because the national carrier is not going to have capacity to handle the cargo to be shipped.
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