KARACHI, Jan 14: The apex trade body of the country — the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) — functions without a well defined mandate and a vision. Its membership rules are open with very limited obligations on members. It has a large number of committees, most of them are inactive and non-performing. The organizational structure needs a major change and so is the recruitment policy of manpower. Besides, the FPCCI should also play the role of an effective regulator.

“It is felt that the corporate image of the FPCCI, both internally and externally, is waning,” is the candid but loud observation of a report on “Organizational Review: Observations and Recommendation”, prepared by a private consultant. Sidat Hyder Morshed Associates was commissioned by the managing committee of the FPCCI early last year to give a hard look at the apex trade body that represents 47 regional chambers and 128 sectoral trade associations.

The report has been finalized and given to the FPCCI managing committee that reviewed it in December and has constituted a 10-member committee headed by FPCCI President Chowdhry Mohammad Saeed. Soon after his election last year, the FPCCI president in a meeting with media persons had announced his intentions of reforming the apex trade body and amendment to the articles of association in a “transparent and democratic manner”.

A major recommendation is to bifurcate the management committee of the FPCCI that now has 102 members and looks after day to day functioning, budget, resource allocation and al other maters. The report suggests formation of an executive board or an executive committee of 10 members. The idea is to separate the policy formulation and implementation.

The report proposes seven members to be drawn from among the members of the FPCCI and there will be three ‘external members’. These three members will be inducted from professional and technical bodies, such as eminent economists, lawyers, chartered accountants, educationists, social workers and bankers. “It is expected that the inclusion of outside representations of professionals into the executive board will add to the value and overall quality of the deliberations and decision-making,” observes the report.

Some members on the FPCCI committee to review the report have, however, suggested that the executive committee should have 15 members on it which should be headed by the FPCCI president. It should have on it at least three to five members drawn from professional bodies like the Bankers Association of Pakistan, chartered accountants, cost accountants, architects, foreign investors, textile business, etc.

The report also wants the office of the secretary general of the FPCCI to be re-designated as chief executive or managing director who will head a team of professionals to run the day to day affairs and also carry out designated functions.

The report counts a total of 338 members of the FPCCI, including 148 life members. It observes that in face of a fairly open membership system, with limited criteria and conversely limited obligations and responsibilities required of the members, the membership within the FPCCI has grown to the point where it actually is counterproductive to its efforts.

There is also a clear criterion for scrutiny of membership applications, across all categories of the membership. In their one-on-one interviews with many business leaders, the authors of the report say that they have expressed the view that many trade associations registered with the FPCCI “exist merely in name and do not function in reality”. It was observed that the number of registration of trade associations increased at the time of elections.

The report has therefore proposed to improve the quality of new and existing members and strengthen members’ service functions.

As a first step in direction of developing clear and firm membership criteria, the report proposes a study of the record of cumulative taxes paid by the members of the association, the record of the employees employed in the association’s office, export value of the sector and requirement of a minimum existence of two years. The report also advocates periodical screening of the members to ensure that only legitimate organizations continue as members.

The report has also taken notice of the proliferation of committees in the FPCCI that are formed to accommodate “supporters and cronies”. It counts 112 such committees and quotes FPCCI’s annual report of 2004 which points out that 106 committees were sanctioned, of which only 25 committees held at least one meeting whereas 82 remained non-functional.

While proposing a thorough review of the existing committees, the report recommends that the power to form committees be given to the proposed executive committee or the management committee and that these two committees should periodically review the operations of the committees formed.

The report wants the FPCCI to develop a strong research section, institute a members’ services wing, carry out events, develop external relations and support services.

First and foremost, the report finds 39 objectives of the FPCCI defined in the memorandum of articles of association as too vague and cumbersome. It wants a precise and clear mandate and vision of the apex trade body which should be constantly communicated to the members and all others.

The consultant studied more than two dozen documents related to the FPCCI and held one-on-one interaction with leaders of all business groups that are active in the politics of chambers and trade associations. The consultant also interviewed selected employees of the FPCCI.