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Home » Archives » Business

Chambers resist Czech oversight

Draft amendment overstepped its bounds, opponents say

By Paul Voosen
Staff Writer, The Prague Post
February 28th, 2007 issue

KURT VINION/THE PRAGUE POST
The British Chamber's Weaver says media overplayed the problem between the ministry and chambers.
Foreign chambers of commerce have parried off an attempt by the state to place them under increased control, the chambers say. Several weeks ago, the Industry and Trade Ministry (MPO) submitted an amendment to the state’s interdepartmental commentary round that would have granted the Czech Economic Chamber (HK) — the national and partially autonomous chamber created to support Czech entrepreneurs — unprecedented control over the country’s foreign chambers of commerce.
Such chambers have operated since the 1989 revolution as independent organizations dedicated to the promotion of trade between the Czech Republic and their home countries.
The amendment prompted a small tempest of criticism from the chambers, some of which found the draft and the ministry’s initial response misleading and wrongheaded.
The ministry backtracked from the draft Feb. 21, stating in a press release that it would not be nationalizing the chambers and that it had canceled the commentary round for the law. The proposal is going to be refined further, with no new deadline set for revisions, the ministry announced.
“This was an unfortunate situation where one chamber believed more in the forces of state control than in the free market,” said Weston Stacey, executive director of the American Chamber of Commerce. “It speaks very directly to the ambitions of the Economic Chamber, which is not to represent business but to represent itself.”
Jo Weaver, chairwoman of the British Chamber of Commerce, thinks the disagreement between the chambers and ministry was overplayed by the media.
“I can’t say I sat there and immediately jumped in alarm at it,” she said. “The big chambers influence 70 percent of the foreign investment in the country. … If we’re all working together, it would be very dangerous for the government to do anything as radical as was said in the papers.”
Even with the draft indefinitely postponed, questions remain as to who in or outside the government should have oversight of the country’s 39 chambers and why such a law was considered.
The first thing to be clear on is that the MPO was being “disingenuous” when it stated its initiative to transfer authority to the Economic Chamber, Stacey said. “In fact, the Economic Chamber drafted the law,” he said. The draft sat for months on the HK’s home page, attracting little notice.
The principles of the law — a sort of executive summary — did not state that the HK would gain authority to approve, and therefore control, the finances, board of directors and statutes of the foreign chambers. The draft’s body was a different story, said Nils Silfvershiöld, president of the Nordic Chamber of Commerce.
“[It] read that the chambers would be subordinate to the Economic Chamber,” he said.
The MPO has approved foreign chambers since it inherited the authority from the Foreign Affairs Ministry in the 1990s, but its responsibilities have been ill-defined under a communist-era law from 1980 that was drafted to regulate foreign trade associations rather than chambers of commerce.
The ministry released a laundry list of concerns about the current situation, saying that, while its approval is necessary to create a chamber, its control beyond that point is a mere formality.
Despite regulating only in name, the ministry said, it became tied to disreputable chambers founded by small groups of companies — only three companies are required to start a chamber — with the ministry’s approval giving the chambers an imprimatur of authority.
Recently, a foreign government complained to the MPO that it had sincere doubts about the credibility of a Czech-based chamber founded in the country’s name, said Tomáš Bartovský, MPO spokesman, who declined to name the country involved.
“This was a warning sign,” he said, and helped prompt the proposed amendment, with the adoption of the Economic Chamber as a regulatory agency.
The amendment, on its surface, sought to remove government interference from the chambers — many of which are governed by the chambers from their home countries — while adding quality control through the HK. Removing the MPO’s oversight while ensuring some amount of self-regulation between the chambers are still goals, Bartovský said.
“I can see the problem where the ministry comes from, if someone wants to abuse this system,” Silfvershiöld said. “I understand why they don’t want to have supervision.”
Creating a foreign chamber shouldn’t be about the number of members a chamber has, but rather should require the endorsement of the country’s embassy, he said.
“That should be enough for the ministry,” Silfvershiöld added. “They should not try to supervise our statutes or who our members of the board are.”
Stacey saved particular umbrage for the Economic Chamber and its president, Jaromír Drábek, a politician with the Christian Democratic Union.
“This was not about better regulation,” Stacey said. “This was about centralization under a political body. The Economic Chamber is a political body as long as it is under Drábek.”
Viktorie Plívová, spokeswoman for the HK, maintained that the draft would not have interfered with the large, well-run chambers.
“We were just trying to find a way to close the bad chambers,” she said.
Weaver remains perplexed as to how one law could govern all the different chambers, which vary widely in organization — some are strict nonprofits; some are closely associated with embassies.
“Realistically speaking, whatever was in the legislation, how could it ever work?” she said.

Paul Voosen can be reached at pvoosen@praguepost.com


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