The Trade Organisations Ordinance (TOO) 2007, promulgated on June 5, has left the 'Sword of Damocles' hanging on the trade bodies. The Trade Organisations Ordinance 2006 promulgated in December last year had replaced Trade Organisations Ordinance of 1961 to cleanse the trade bodies of the ills these bodies had been suffering from.
But some of the provisions in the Ordinance and Rules had caused concern among trade leaders, particularly the apex trade body, ie Federation of Pakistan Chambers of Commerce and Industry (FPCCI) functionaries. Following intense lobbying by key trade leaders, the TOO-2007 has been promulgated on June 5, incorporating several amendments suggested by the FPCCI.
However, one of the main irritants relating to the powers and functions of Director General of trade organisations, which had come under heavy criticism, has not been removed. The main disturbing factor for the agitators, which has stayed in TOO-2007, is that the Director General has the same powers as are vested in a civil court under the Code of Civil Procedures 1908 in respect of the following matters:
-- Summoning and enforcing the attendance of any person and examining him on oath;
-- Compelling the production of documents;
-- Receiving evidence on affidavit; and
-- Issuing commission for the examination of witnesses.
He also enjoys the powers to conduct enquiries into the affairs of a trade organisation and inspect, with or without prior notice, any office of such trade organisation, including any of its branch or regional, circle, zonal or liaison office, or any record or document.
He can also attend any meeting of the general body or the executive committee of such trade organisation or of any committee or other body set up or appointed to transact any business, or to conduct any affair, of such trade organisation. He can further enter and search the premises.
Changes made in TOO-2006 through TOO-2007 relate to the following: One or more districts where there is no chamber may be combined to form a town association. A clause has been provided for the establishment of a chamber of small traders organised to represent small businesses and cottage industry provided that the size, nature and extent of small businesses and cottage industry and the organisational structure and territorial jurisdiction of such a chamber shall be prescribed by the federal government.
The tenure of the office-bearers and executive committee of the Federation shall remain two years till December 31, 2010. TOO-2006 and TOR-2007 had fixed the tenure for one year. Penalty for contravention of any provision of the ordinance or rule made under it has been reduced to Rs 100,000 from Rs 500,000.
The trade organisations shall amend their Memorandums and Articles of Association before submitting applications for grant of licence. Similarly, following changes have been made in TOR-2007 issued on March 15 through TOR-2007 issued on June 7. The minimum number of membership of a trade body, to be eligible for applying for renewal of licence, has been reduced from 300 to 150 for chambers, from 150 to 100 for associations and from 200 to 100 for women chamber.
The renewal fee of the chambers, associations, women chamber and town association has been reduced from Rs 300,000 to Rs 30,000 for chambers, from Rs 150,000 to Rs 30,000 for associations, from Rs 200,000 to Rs 20,000 for women chambers and from Rs 100,000 to Rs 15,000 for town associations. The renewal fee for chamber of small traders will be Rs 30,000. However, within three years from the grant of licence the trade organisations shall raise and subsequently maintain the minimum threshold prescribed earlier.
The FPCCI will have nine vice-presidents, instead of eight. The general body members, nominated by the associations, will elect four vice-presidents, while the general body members, nominated by the chambers and women chambers from the provinces of Punjab (including Islamabad), Sindh, NWFP and Balochistan will elect one vice-president while one vice-president will be elected by general body members representing the chambers of small traders.
Each chamber, women chamber, association and chamber of small traders will nominate two members on the general body of FPCCI, out of whom one will be nominated on the executive committee of FPCCI.
The tenure of all office-bearers and members of the executive committee will be two years, till December 31, 2010, and thereafter it will be one year. The office-bearers of a chamber, women chamber, association and town association will be elected by the executive committee for a one-year term while the executive committee itself will be elected for a two year term, with the proviso that 50 percent of the executive committee members will retire every year.
Further, after the first election of the executive committee under the new Ordinance a draw shall be made to determine the 50 percent members who shall retire after expiry of first year.
The definition of corporate member of a trade organisation has been revised to mean either a body corporate or a multi-national corporation with its head office or branch office in Pakistan or a sales tax registered manufacturing or business concern, having annual turnover of Rs 50 million or more.
The qualification required for the full time Secretary General of a trade organisation has been changed from 'qualification of a company secretary prescribed in the Companies Ordinance of 1984' to 'appropriate qualifications'. Instead of requiring that the office of the trade organisation shall not be "housed in a premises not belonging to any of its members," it shall not be housed in premises "being used as residence or office of any of its members."