Business Bhutan reporter Phub Dem talks with the new Secretary General of Bhutan Chamber of Commerce and Industry (BCCI), Sangay Dorji, on the damning report by Royal Audit Authority on BCCI’s performance and BCCI’s stands
Secretary General of Bhutan Chamber of Commerce and Industry, Sangay Dorji
1. The Royal Audit Authority’s (RAA) performance audit on projects implemented by the BCCI states that there is no clear linkage with its primary objectives, failing to benefit its members. What is BCCI’s stand on this?
Ans: As far as BCCI is concerned, the projects implemented by the BCCI have clear linkages with its primary objectives. The projects implemented by the BCCI in the past years have clear linkages with the following objectives spelt out in the Royal Charter 1996:
Article 2.2: To supplement and augment the Royal Government of Bhutan’s effort in developing private sector.
Article 2.3: To promote private sector development through collective self-reliance base by harnessing complimentaries, processing economic policy mutually advantageous for socio-economic development.
Article 2.5: To collate, collect and disseminate business opportunities and policy directives.
Article 2.8: To promote the exchange of commercial, technical, industrial, management and scientific education and know-how information amongst its members.
The BCCI believes in evolving itself to be relevant in the changing context. But it is mindful of the guiding document, the Royal Charter 1996. As evident, the BCCI have evolved over the years within the broad provisions of the Royal Charter 1996. Most importantly, it has strived towards aligning its focus with the national focus considering the growing expectations of the stakeholders.
Further, the growing diversity in terms of members’ need and increasing demand for services by the general public (beyond licensed business entities) has mandated the Chamber to evolve in order to position itself relevant in the changing environment, national priorities and be responsive to the expectations of the stakeholders. As an economic development partner of the country, some change, alignment and adjustment is inevitable to remain up to the expectations of stakeholders. Therefore, the external agencies assessing the performances of the Chamber without considering the changes in the overall environment, national priorities and expectations in the present context may deter recognizing the additional efforts put by the institution.
2. According to RAA, the sustainable entrepreneurship and food security facility primarily focused on milk supply chain development for Zimdra Foods Private Limited. The project is envisaged to benefit milk-supplying farmers of Samtse and Chukha. However, the RAA found otherwise. Your comments.
Ans: Firstly, it should be understood that FDOV project is a pilot PPP project for dairy sector, wherein the private party has to inject money for the project activities. As per the Cooperation Agreement, Zimdra Foods Private Limited has committed for 49.8% of the total project budget of Euro 2.8 Million that translates to Euro 1,398,304/- (Euro 464,576/- for soft component and Euro 933,728 for hardware). Through project like this, the BCCI is trying to link small players to the mainstream value-chain. The Zimdra Foods Private Limited benefiting from the project is nothing wrong, as the company has to put money in the project to enhance its milk supply chain. However, as per the projection, the benefit, if any, may start accruing to the industry only after the fifth year of the operation of supply chain.
Who is going to invest money if one is not getting a fair return? There is no question of BCCI being biased in supporting big private sector members. In this case, private sector capacity to participate in the project was a concern vis-à-vis the financial requirement within the project framework.
Most of the people think that only licensed business entities are the members of the private sector. However, the private sector base is really diverse, comprising of individuals from both formal and informal settings, legal entities, etc. In fact, everything outside government system falls within the purview of private sector. The BCCI as the apex body for the private sector do not restrict its working only with the formal sector. It considers members of the non-formal sector as potential members who at some point of time would graduate to formal sector and become active members of the Chamber.
3. Green Public Procurement (GPP) is a project to encourage green features of consumption and procurement. The RAA stated that there are other agencies like finance ministry, government procurement and property management division looking at Green Public Procurement. What happened? Was there duplication?
Ans: The GPP as a project is not a duplication of what Ministry of Finance is looking after. The BCCI is fully aware of government’s policy initiatives to promote green and sustainable consumption and procurement of goods and services. But the government policy alone is not going to take us to the desired state. Therefore, certain responsibility on promoting such policy goals falls on the private sector, which is the main stakeholder for government procurement. One of the main functions of the Chamber is lobbying and advocacy.
The BCCI through this project was only supplementing the government to push green procurement system forward. This was done mainly through lobbying with the government for creating enabling policy environment and advocating with the members of the private sector on the importance of adopting green supply chain and reaping the benefits thereof. So, there is no question of duplication.
4. It was revealed that the One Dzongkhag Three Products (ODTP) program was undertaken based on desk research and failures were attributed to lack of prefeasibility studies and timely monitoring. What is BCCI’s say on this?
Ans: One District Three Products (ODTP) – Firstly, ODTP is not a project but along term initiative of the Chamber. This initiative was supported by the Bhutanese companies who came forward for voluntary contribution as part of their Corporate Social Responsibility (CSR) activity. ODTP as an initiative is guided by the Economic Resource Mapping and a broad implementation framework. The BCCI did not roll out the program fully; rather, it piloted some projects to get insights on how to take such initiatives forward. Yes, the ODTP as a program is an output of a desk research. But the pilot projects implemented by the BCCI under the ODTP initiative are backed by feasibility studies. All the pilot projects implemented by the BCCI has technical agency on board, which is more than feasibility studies. Furthermore, not all the pilot projects were failed.
05. On SME loan project – limited initiatives were taken by the BCCI to track migrant beneficiaries and report to BDBL. Audit findings said BCCI have not been successful in delivering the results and creating impact towards private sector development.
Ans: MSE Loan – The MSE loan scheme was introduced by BCCI with the support of BDBL to address the financial needs of the small businesses. The scheme which started in 2010 has benefited over 4000 micro and small enterprises across the country. This loan scheme is highly sought after mainly by the women entrepreneurs. For this scheme, the BCCI mainly facilitates BDBL in identifying potential clients and conducting sensitization meeting with the clients. Once the loan is disbursed, the BDBL deals directly with the clients. Therefore, BDBL is placed in a better reach to monitor the clients and portfolio performance, as the office deals with the clients on a regular basis. However, BCCI also helps BDBL in tracing defaulting clients.
06. RAA also said BCCI did not undertake any studies to assess the needs of the members in private sector. Without such studies, the RAA is of the view that any training conducted may not address the gaps.
Ans: Training Needs Assessment: The BCCI do conduct training needs assessment for the private sector. The training needs assessment for private and corporate is led by Ministry of Labour and Human Resources and it is the custodian of the HRD Master Plan for Private and Corporate sectors. The BCCI takes necessary feedback from the private sector on their training needs and ensures that it is incorporated in the HRD Master of the MoLHR. As BCCI mainly collaborates with MoLHR in conducting training programs from the HRD Master Plan, there is no question of BCCI organizing training programs without any prior needs assessment. The training programs delivered for the private sector by the BCCI are mostly funded externally routed through MoLHR and its all in line with the training needs assessment and the HRD Master Plan.
Phub Dem from Thimphu