Bhutan Chamber of Commerce and Industry (BCCI)

Established under the Royal Command of His Majesty the King in 1980, the Bhutan Chamber of Commerce & Industry (BCCI) is a non-profit making private sector organization, comprising of business community members from all around the country. While the General Body is the apex forum for the BCCI, the Executive Committee pursues implementation of programs by the BCCI Secretariat, as per the policy directives fo the General Body. The President, Vice Presidents, and the Executive Committee Members of the BCCI are elected by the General Body for a term of three years.

BHUTAN CHAMBER OF COMMERCE AND INDUSTRY

- A BRIEF PROFILE

This brief profile of the Bhutan Chamber of Commerce & Industry (BCC!) intends to present to the readers, the organization’s background history, mission and its agenda, structure & its administrative machinery, internal controls and procedures

1. Birth of the BCCI

The BCCI was established as a non-government and non-profit making service oriented organization in 1980 under the Royal Command with a traditional role of augmenting and supplementing the efforts of the Royal Government towards development of a formal private sector. However, due to a weak private sector base, lack of members’ voluntarism, deplorable resources interms of human skills and budgetary fund coupled with lack of insight on management of such an institution, the Chamber remained dormant from 1985 till mid 1988.

It was again under the Royal Command that the BCCI was reinvigorated in May 1988 as a potential partner for nation building, following a Royal Audience granted to the representatives of the business community by His Majesty the Fourth King. Established on a noble foundation of a broader institutional representation, the BCCl general membership then consisted of representatives all elected through democratic processes from various business sectors & sub-sectors and nationwide district business communities. The Chamber began its operation through voluntary contribution of funds by a handful of prominent enterprises. The organization was managed by a team of honorary members elected for a fixed term and a salaried Secretary General overseeing the day¬ to-day functioning of the organization.

2. BCCI as an IBO

Having taken the form of a national establishment, the BCCI instituted its permanent office with half-a-dozen of largely unprofessional staff in Thimphu in 1990. This was infact the beginning of a reinvigorated intermediary business organization (IBO) in Bhutan, conventionally branded as ‘the bridge between the government and the private sector’. Since then, this IBO, despite wide adversities, has embarked upon achieving its cherished mission of promoting, developing and furthering the economic participation of the Bhutanese private sector in the nation building process, by providing a collective voice in advocacy to represent and protect member’s interests and business facilitation services to help the private sector enhance its competitiveness in their businesses.

3. BCCI and its Office Resources


3.1 Physical Infrastructure: The Secretariat of the BCCI operated in a semi-permanent residential cottage. It lacked proper office space and basic automation system. It was only in 1999 that the institution built a permanent office building through one-time ‘building construction contributions’ of the business community members. Today, the secretariat building, in addition to adequate office space, houses sizable conference hall and a boardroom that has been converted in to IT -based Knowledge Center for sustainable enterprise development.

To move along the decentralization process of the government, the BCCI established five permanent regional offices in five selected regions. The main objective of this endeavor was decentralization of the BCCI’s business development & advocacy services to the MSMEs through improved networking, both for business start-ups and for the ongoing enterprises. The first regional office was set-up at Phuentsholing in 1994 and the rest at Monger, Trongsa, Gelephu and Samdrup ]ongkhar each in early 2007. Required physical infrastructures for these regional offices have been put in place, staff recruited & oriented and offices put into operations from beginning 2007.

3.2 Human Resource: The BCCI today has a total of six professionals and thirteen non-profession, support staff at its secretariat at Thimphu manning three different broad divisions such as Busin Support Division, General Affairs Division and Human Resource Development Division. The f( new regional offices have a couple of staff each, whereas, Phuentsholing, being the nation’s trar as well as commercial hub, has four regular employees with two middle-level professionals.

3.3 Financial Resources: Since the re-establishment of the BCCI in 1988, the bulk of its budget, fund was raised from membership dues contributed by the business units on an annual basis. wh the BCCI has been due diligent towards application of this public money, the fragile resource b, has been a vicious force against institutional sustainability and internal financing of progra and services. In 2006-07, the BCCI, based on the general consensus of the business communi introduced a new membership scheme, in essence, through fresh classification of members.

Imperatively, the BCCI for financing its decentralization move required enhanced resources a the new scheme initially projected sufficient resources even for internally financing of MS~ and other rural enterprise development programs after meeting the administrative overhea( However, due to lack of Chamber’s statutory hold or control mechanism over these members, mobilization of membership dues under the new scheme has not been encouraging. There ha been certain resentments and attrition to Chamber’s goodwill. Never-the-Iess, the new schen has been able to generate resources atleast to meet the additional administrative overheads th mainly escalated as a result of establishment of the regional chapters.

Besides the membership dues, the Chamber today generates its resources trivial though, throu~ other sources such as rental earnings, trade exhibitions and activity-based subsidy from the Roy Government. For services and programs, the BCCI mostly depends on the program supports fro donors, whereas, programs such as the trade fairs and exhibitions are self-sustained

4. BCCI and its Legal Instrument

Prior to the establishment of the Chamber, business veterans narrate that a body called ‘Trade] Association of Bhutan’ existed. Perhaps, the Chamber of 1980 could have been the body intuitional! upgraded from this association. However, the Chamber lacks relevant records to substantiate thi Unlike in other countries, the nation lacked the Chamber of Commerce & Industry Act (cer Ac and it lacks this legal instrument even today. Without an enacted document or an act to govern th activities, the BCCI has functioned under provisions documented and put in place under gener, consensus of its general body members and of course, endorsed or concurred by the relevar agency of the Royal Government. Over a period of past two decades and even today, the BCCI ha functioned and graduated as an institution without enacted act but under interim statutes such a the ‘Memorandum of Association’ and then as the upgraded ‘Bcer Charter’. Realizing the need b have an enacted legislation that would accord a legitimate recognition and govern its operatiom the BCCI, in 2007 drafted at its own, the Bcer Bill and submitted it to the Council of the Cabine Ministers (CCM).

4.1 Memorandum of Association: Prior to 1996, the operations of the Bcer were governed by thl ‘Memorandum of Association’ adopted in the 2nd Annual General Meeting of the BCCI held in 4t May 1988. This document was later upgraded in to a charter.

4.2 BCCI Charter: The Charter of the BCCI was adopted by the 11th Annual General Meeting pf the BCCI in May 09, 1996, which decided to establish the Chamber under its provisions that explicitly outlined the objectives, functions, procedures, etc. Without an enacted CCI A any other relevant legislation, the BCCI, even today exists and operates under this charter.

4.3 BCCI Bill: This document, as an enhanced version of the charter that clearly define! Constitution, goals and objectives was drafted by the BCCI in early 2007 and later in the year, was submitted to the CCM for review and support for possible enactment. The Bill is) be deliberated by the members of the National Assembly of Bhutan. Once enacted as an Act document would provide legitimate standing and provisions for the BCCI to exist and opere a national lBO.

5. BCCI and its Agenda

To achieve its cherished mission, the BCCI has on its agenda, a broad range of function~ services. Some of these services include representation both in the national and international forums, networking & linkages, business information services, training & other skill develop programs, membership development, business referral services and sustainable enter development services. The BCCI provides linkage between the government and the private s and works closely with all the government agencies, autonomous organizations and international organizations and donor agencies towards facilitation and promotion of trade & industrial development in the kingdom.

Performance of sectoral businesses .and their growth, to a large extent, depends on the effective interventions towards creating conducive business environment, addressing sectoral business issues through providing specific membership services by way of advocacy and awareness. In the recent years, facilitating formation of sectoral businesses, based on needs, has added to the roles of chamber
Towards this front, strengthening of the institutional capacity to become a better partner for the royal government for shaping enabling environment for the development of the Bhutanese private sector has been the key approach of the BCCI to respond to the ever-increasing expectations of its members and stakeholders.

6 BCCI and its Participation for the Social Cause

As an apex forum for an integral part of the Bhutanese society - the business society, the BCCI in the past, based on the general consensus of the members though, has participated in supporting promotion of country’s security & sovereignty, has contributed resources towards religious cam and has mobilized relief for people in distress due to natural calamities. This lead role played by the BCCI in marshalling support of the business community for the above causes has indeed been acknowledged by the Royal Government.
In the recent, the BCCI has also accepted the role of the lead agency in promoting the corporate social responsibility (CSR) amongst business entities in Bhutan as one if its agenda.

7 BCCI and its Administrative & Decision-Making Machinery

7.1 General Body: The General Body is regarded as the supreme constitutional organ of the Chamber. It is comprised of the Executive Committee Members and Dzongkhag Thormdey Thuemi who represent different sub-sectors & sector-specific associations of the business community and the district business communities, respectively. The General Body of the BCCI today has 41 members who actually exercise voting rights and are elected through democratic process, both at the sectoral and local levels. The General Body meets once every year at such a place and time s: notified well in advance by the BCCI Secretariat. As a constitutional practice, no proxy is allowed for the Annual General Meeting. Extraordinary general meetings are also organized as called by the Executive Committee, when necessary to discuss urgent matters. The General Body is vested with authority to:

7.1.1 Approve the annual budget, accounts and adopt annual reports;
7.1.2 Approve or delineate the approval of rules and regulations for the Chamber;
7.1.3 Frame out general policy directives and annual work programme for the Chamber;
7.1.4 Elect the President, Vice-President(s) and executive Committee Members as required

Chaired by the President, the Annual General Meeting of the BCCI is attended by the General Body members, District General Members and special invitees such as the past members of the General Body. Open invitations for participation in the Annual General Meeting are also sent to the interested business community members through the National Gazette (Kuensel).

7.2 Executive Committee: The Executive Committee of BCCI today comprises of 16 members including the President, two Vice-Presidents and Secretary General, with 12 representing different sector-associations. As an executive organ of the Chamber, the Executive Committee now consists of chairpersons of the sector-associations who are elected by the members of such associations. The President and Vice-President(s) function as Chairperson and Vice-Chairperson(s) of the Executive Committee, whereas, the Secretary General of the BCCI serves as the member-secretary to the Committee. The meeting of the Executive Committee is held normally on a quarterly basis. This forum provides policy and administrative guidance to the BCCI Secretariat. Extraordinary meetings of the ECM are also held as and when necessary.

The Executive Committee:
7.2.1 Implements the decisions of the General Body and fulfils such other functions as delegated to it by the General Body;
7.2.2 Determines/finalizes place, time, agenda, guest lists etc. for the Annual General Meeting
7.23. Discusses and decides upon points/issues to be submitted to the National Assembly of the Bhutan for deliberation
7.2.4 Recommends the byelaws, rules & regulations and other modifications for the Chamber for endorsement by the General Body
7.2.5 Appointment of the Secretary General and other staff in pursuance to rules an, regulations
7.2.6 Provides guidance and advices to the Secretariat on major administrative and policy issues.

Prior to the establishment of the first few sector-associations in the country, the Executive Committee members were elected directly from different broad sub-sectors. The automat inclusion of the elected chairpersons of the associations in the Executive Committee is a mo\ towards broader representation of different sub-sectors and a democratic system of function in wherein interests of the these sub-sectors are represented at the national forum through the democratically elected chairpersons.

7.3 Secretariat: The Secretariat of the BCCI is headed by the Secretary General who at the moment is supported by division & section heads. The Secretary General discharges his responsibilities per the Article 9 of the Bcer Charter. While the General Body and Executive Committee are organ comprising of honorary elected members, actual implementation of plans and programs of the BCCI are carried out by the Secretariat. The Secretariat provides operational and administrative guidance and support to the regional offices.

7.4 Regional Offices: The regional offices of the BCCI are headed by the regional secretaries. However, the administrative and control of these offices are still centralized for lack of adequate expertise with the newly appointed regional secretaries. Most of the decisions for the regional offices are taken here at the head office based on input and recommendation of the regional offices

7.5 Thormdey Thuemi: The office of the Thormdey Thuemi in each district is a conduit representation of the district business community with the District Development Committee and the BCCI. As a member of the General Body, the Thormdey Thuemi brings issues associated with the private sector development at the district level to the Annual General Meeting for deliberations and adoption of appropriate resolution for implementation by the BCCI Secretariat at the national level. This office assists the BCCI Secretariat and regional offices to implement plans and programs of the Chamber at the district level. Thormdey Thuemi is an elected post.

7.6 Local Committee: The BCCI encourages establishment of local committees at the district level for broader representation of the district business members. Today, each district has a Committee established under the administrative supervision of the Thormdey Thuemi, who also serves committee as its member secretary

7.7 Ad-hoc Committees: The Executive Committee, as the need arises, appoints Ad-hoc Commit to trouble-shoot or deliberate on specific issues requiring technical and professional expertise. Such committees study cases and come out with its recommendations that are eventually submitted to the Executive Committee for appropriate decisions. The ad-hoc committee is automatically dissolved once the assigned responsibility or the business transacted by it.

The BCCI’s decision making process is guided by the principle of consensus amongst members. Implementation of such decisions and recommendations rests with the Secretariat which is also required to report to the Executive Committee on a quarterly basis and to the General Body on an annual basis, for concurrence or endorsement.

8 BCCI and its Election Process

The BCCI is one institution that functioned under a democratic process even before the inst of democracy in Bhutan. The honorary post holders are elected through democratic process down in the BCCI charter from its general membership. The election process is administered the BCCI Secretariat. These elected members include the President, Vice-President(s), Executive Committee Members, local committees and even the Thormdey Thuemis.

8.1 Election of President and Vice-President(s): The President and Vice-President(s) of BCCI are elected from its general membership through secret ballot system. rn the past, the e process, as administered & executed by the BCCI Secretariat and exercised by the general members, involved:
8.1.1 Consultations amongst different local business communities, who were invited to propose names of prospective candidates for these elected honorary posts t the respective Thormdey Thuemis. The office of the Thormdey Thuemi admin such consultations;
8.1.2 Award of sufficient time to the general members of the business community for consultations and proposing of suitable candidates. Certain democratic pare were provided well in advance to guide local consultations.
8.1.3 The proposals received from the general members through their representative were then compiled by the BCCI Secretariat and put up to the Executive Con for administrative guidance prior to setting the venue for election.
8.1.4 The candidates proposed by the general members were then consulted and D invited to the Annual General Meeting where actual elections took place. 8.1.5 The elections were eventually held through secret ballot system on the firs the Annual General Meeting.
8.1.6 Registered members of the BCCU were invited to the Annual General Meeting through open invitation to witness the elections.

8.2 Election of Executive Committee Members: The process of election of members in E) Committee of the Chamber dates back to early 1990. While secret balloting might not ha the system of election then, the incumbents for these honorary posts were recognized on endorsement of their incumbency by the majority of the general members attending the General Meeting.
With the establishment of the sector-specific associations, the approach has totally changed. The automatic inclusion of the elected chairpersons of the associations in the Executive Committee is a move towards broader representation of different sub-sectors sectors and a democratic of functioning, wherein interests of the these sub-sectors are represented at the national forum through their democratically elected chairpersons.

8.3 Election of Thromdey Thuemi:

The Thromdey Thuemi who functions as a conduit and a representative of the district business community is elected for a term of three years as per the DYT Election Chartrim and under the administrative supervision of the concerned Dzongkhag Administration. The Thromdey Thuemi represents the district business community at the DYT and at different forums within the BCCI.

8.4 Election of Local Business Committee Members: The nomination of members in the Business Committee is identified and endorsed by the general members of that community in a meeting particularly called for the said purpose. Such a meeting is organized under administrative supervision of the Thormdey Thuemi, who serves the Committee as its member secretary.
The Chairperson for the Committee is elected from amongst local committee members.

9 BCCI and its Internal Control

The power of managing the affairs and finances of the BCCI remains with Executive Committee by virtue of the Authority granted to it by the BCCI charter and the relevant resolutions adopt the General Body. As the BCCI exists and operates on ‘public money’, appropriate internal control and reporting mechanisms do exist.

9.1 Financial: While the BCCI follows the calendar year for its budget and finances, control and application of funds is based on various provisions in the Financial Manual. The annual budget prepared by the Secretariat is reviewed by the Executive Committee and finally approved by the General Body. Clear-cut delineation of financial authority exists for financial expenditure, commitment, operation of bank accounts, petty cash, advances and reimbursements, quotations and tenders, etc. The affair of the BCCI is audited annually by the Royal Audit Authority.

9.2 Administrative: The BCCI over the years has developed suitable administrative control mechanism that has been put in to practice through executive orders. It is also in the process of developing a control manual which will have rules governing the operation of the institution administratively, control and reporting practices, contacts with media, affiliations with organizations, serving on external boards, membership administration, office procedures, etc.
The BCCI internal control system functions within the purview and overall control administrative and decision making machinery.

10 Institutional Supports to BCCI

The BCCI, as a development facilitator, has always endeavored towards working not in confrontation but in close collaboration with different agencies. With this principal approach, the BCCI has had excellent associations with line agencies in the past. Above all, it was the Ministry of Economic Affairs (Ministry of Trade & Industry, then) in particular that has seen and advocated for the g and sustenance of the Chamber. The achievement made by the BCCI since its re-establishment in mid 1988 holds some kind of testimony to the ministerial support and guidance that it has re from the MoEA.

While the BCCI holds sincere desire to forge cordial and workable partnerships with all stake holders working towards promotion of the Bhutanese private sector and it has been receiving support and cooperation, existence of consistent relationship with the MoEA in particular, is based on the common understanding that in most countries the Ministry of Economic Affairs hold the regulatory charge and control over the general operations of the chambers of commerce. In our situation, the MoEA has not just been a regulator but a guardian ministry in all possible spheres

11 Conclusions:

While much has been gradually achieved by the Bccr in terms of institutional infrastructure autonomy and system, this lBO, is relatively subtle in terms of legal statute, institution sustainability & professionalism, pro-activeness, etc. due to several inherent reasons. Poor financial sustainability has been a deterrent which has virtually restrained the Chamber activities. Production and delivery of programs on a self-sustained basis may not take-off so well immediately particularly when the private sector still receives business support & promotion programs often fully subsidized and delivered by different agencies of the Royal Government and other institutions. It would definitely take some time for the private sector to accept the principle of ‘pay for services’ in Bhutan.

Institutional dependence on mandatory membership fees, in the long run, may not be a sustainable approach, whereas, it is compelled to resort to this financing mechanism one, for lack of government delegated functions that the Chamber could execute within its capacity, two, limited professional competence to produce and sell its services to the members and three, the institution is over-stretched in almost all aspects of representation, professionally not focused and holds very limited scope for prioritizing its promotional services as most of the time, it cannot avoid but engage itself into diverse roles, quite often, passed down to it by the regulating agencies. For the Chamber to be legally recognized, more oriented & focused, clear and of course dynamic, enactment of a suitable CCI Act as its legal statute is equally indispensable.

While the ‘way ahead’ may be difficult and challenging, BCCI has the will to be the apex private sector organization of Bhutan managed by a team of dedicated staff, consistently striving towards creating a conducive environment for the growth and development of the private sector, and playa pro-active and lead role in fostering economic development in Bhutan.

Permanent Address:

Bhutan Chamber of Commerce & Industry, DoybumLam,
Post Box 147,
Thimphu, Bhutan.
Tel: +975-2-322742/324254 Fax: +975-2-323936
E-mail: bsdbcci@druknet.bt/bccihrd@druknet.bt
Website: http://www.bcci.org.bt and http://www.tshongrig.org

The current structure of BCCI is as under: