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SEMINAR/BRAINSTORMING SESSION ON
“Revamping the Mechanism of Trade Dispute Resolution In Pakistan” at Karachi
Page 1
Government of Pakistan
Ministry of Commerce
Trade Dispute Resolution Organisation
Islamabad
REPORT
ON
Seminars/Brainstorming Sessions / Meetings on
“Revamping the Mechanism
of Trade Dispute Resolution in Pakistan”
Held In Karachi from 7th to 10th September, 2015
Report of TDRO visit to Karachi from 7th to 10th September 2015
2
Table of Contents
S.N. Contents Page No.
1. Record Notes On Seminar/Brainstorming Session Revamping The Mechanism Of
Trade Disputes Resolution In Pakistan Held At Karachi Chamber Of Commerce
& Industry 07th September, 2015 ………………………………………………………….03
2. Report on Meeting With Federation Of Pakistan Chambers Of Commerce & Industry…….11
(09/09/2015)
3. Report on Meeting With Rice Exporters Association Of Pakistan .................... …. … .. 15
(08/09/2015)
4. Report on Meeting With Pakistan Hosiery Manufacturers Association Of Pakistan……….19
(08/09/2015)
5. Report on Meeting With Pakistan Standards & Quality Control Authority (PSQCA),
Ministry Of Science And Technology (09/09/2015) .................................. ……………… 20
6. Report on Meeting With Pakistan Pharmaceutical Manufacturers Association ............... 21
PPMA (09/09/2015)
7. Report on Meeting With Overseas Investors Chamber Of Commerce And Industry (OICCI)
(10/09/2015) ........................................................................................................................ 23
8. TDRO visits to KPT and NLC container Terminals ..........................................................
ANNEXURES: (i) Schedule of meetings Trade Bodies and Institutions ………. A (ii) Programme………………………………………………………. B (iii) Lists of Participants………………………………………….. C
PRESENTATIONS:
- Presentation By Ms. Roubina Taufiq Shah, Director General, i.
Trade Dispute Resolution Organisation(TDRO)
- Presentation By Barrister Vishal Shamsi, Trainer on Mediation ii.
at National Centre for Dispute Resolution (NCDR)
- Presentation by Mr. Ebrahim Saifuddin Chief Operating Officer, iii.
National Center for Dispute Resolution
- Presentation by Rana Sajjad, President, Centre for International iv.
Investment & Commercial Arbitration (CIICA)
Report of TDRO visit to Karachi from 7th to 10th September 2015
3
MINISTRY OF COMMERCE
(TRADE DISPUTE RESOLUTION ORGANIZATION)
*****
RECORD NOTES OF TDRO VISIT TO KARACHI FROM 7TH
TO 10TH
SEPTEMBER 2015
A three member team, headed by DG TDRO, Ms. Roubina Taufiq Shah accompanied by Director
Mr. Khalid Mahmood, and Deputy Director Mr. Mueed Aman Rana, visited various Trade Bodies and
Pakistan Standards and Quality Control Authority (PSQCA) in Karachi from September 7, 2015 to
September 10, 2015. The visit was part of a series of brainstorming sessions held in various cities with
the stakeholders to obtain their input on the draft law of TDRO.
SEMINAR/BRAINSTORMING SESSION ON
“REVAMPING THE MECHANISM OF TRADE DISPUTES RESOLUTION IN PAKISTAN”
HELD AT KARACHI CHAMBER OF COMMERCE & INDUSTRY
07TH
SEPTEMBER, 2015
2. The Sixth Seminar / brainstorming session with regard to Revamping the Mechanism of Trade
Disputes Resolution in Pakistan was jointly organized by Trade Dispute Resolution Organization
(TDRO) and Karachi Chamber of Commerce & Industry, (KCC&I), Karachi on 07th
September, 2015
at KCCI. The main focus of the seminar was to discuss and seek inputs of stakeholders on the
weaknesses of the current trade dispute mechanism and suggestions for the new law being drafted.
President KCC&I Mr. Iftekhar Vohra chaired the session while Mr. Nusrat I. Jamshed, Sr. Director
General, Trade Development Authority of Pakistan (TDAP), Karachi was the Chief Guest. Director
Generals, Trade Dispute Resolution Organization (TDRO), Karachi Mr. Ather Jamal Abro and Ms
Roubina Taufiq Shah Islamabad, co-chaired the Seminar. Members of KCC&I, Representatives of
TDAP, Director General ANF, Additional Collector Customs (Exports), Karachi, SBP, Banks and
various other Departments/ organizations attended the session. The seminar provided a great
opportunity of understanding on the issues which arise during the trading process. Participants gave
reasonable recommendations for the minimization of the issues and suggested different measures for
the promotion of trade in Pakistan. The Program started with Recitation from Holy Quran.
Report of TDRO visit to Karachi from 7th to 10th September 2015
4
3. Mr. Iftikhar A. Vohra, President, Karachi Chamber of Commerce & Industry (KCC&I)
in his inaugural address welcomed the visit of TDRO Officer to Karachi and the participants of the
seminar for sparing their time to attend the session. He informed that the Karachi Chamber is the
premier Chamber, playing a pivotal role as an economic partner in trading activity & industrial
development of the country. He informed that the Chamber within its limited resources, is providing
all facilities e.g. Business information & advisory services, Import & Export Procedures, Issuance of
Certificate of Origin, visa letters for the foreign visits of businessmen, holding seminars / workshops
and sending bilateral trade delegations. The Chamber acts as a bridge between its members,
Government and semi-Government institutions and most of its members are in the advisory bodies of
the government. Karachi Chamber also gives valuable suggestions for preparation of Import Export
Trade Policy, Economic Policies and Budget during the financial year. KCC&I has been contributing
for economic revolution and enhancement of industrial base.
3. The President KCC&I indicated that the quantum of Trade Disputes in the Karachi region
which is the hub of trade and business, has been increasing day by day. He stressed that it is the time
both the Chamber of Commerce & Industry, Karachi and TDRO hands to make collective efforts and
play an active role to minimize trade disputes, resolving them effectively within the shortest possible
time.
4. The Chief Guest Mr. Nusrat Iqbal Jamshed, Sr. Director General, TDAP, Karachi in his
key note address thanked the President, Vice President, Members of business community of Karachi
and participants of various organizations in the session and expressed his pleasure and a privilege to
attend this important seminar. He commented that Trade Dispute Resolution Organization (TDRO) has
been established by Ministry of Commerce so that business community may get commercial justice.
He informed that from the start of his service he has been made aware of this issue being a hurdle in
promoting export & import, so much so that it has become meaningless now. He was of the view that
Pakistan‟s trade has increased over the years and with the increase of trade, disputes have been
witnessed, therefore a strong mechanism for resolution of trade disputes is the need of the hour. The
rising tendency of disputes between the business communities spoils the image of the country and
destroys its investment climate. Mr. Nusrat Jamshed stated the requirements of the SMEs need to be
understood, as different organizations express them differently, such as SMEDA works to look after
Report of TDRO visit to Karachi from 7th to 10th September 2015
5
98% SME‟s activities, while all business activity is mainly done by the SME‟s sector. He informed
that previously the subject of trade dispute was in TDAP mandate, however in the absence of any
proper law, the organization could not produce effective results. Now the Legal frame work is already
in the making with EU TRTA program providing support to TDRO for an Act / Law which will be
made workable and internationally acceptable. He hoped that the participants of the session would find
the seminar useful and contribute in drafting of law for the enhancement of trade and improving
Pakistan's image in the world.
5. Mr. Athar Jamal Abro, Director General, TDRO, Karachi also informed that TDAP, being
the trade promoting organization, was dealing with the trade dispute cases but as far as he knows,
during his 30 years of service, no trade dispute has been resolved by the department.
6. Barrister Vishal Shamsi, representing NCDR, in her presentation on Mediation in Trade
Disputes stated that NCDR has signed MoUs with TDRO and KCC&I. The evaluation done by NCDR
gives a fact finding report and they charge Rs.7000/- for Mediation. She informed that NCDR was
established in 2007 with IFC funding with an objective to empower people to resolve their disputes. It
is a system parallel to High Court. Justice (Retd) Saeed-uz-Zaman is the Chief Patron of NCDR and
there are 58 Members on the panel with registered Lawyers, Legal Consultants, Chartered Accountants
and Shipping Agents etc. Related field mediators are also available, while there are annual members,
life members like M/s. Gul Ahmed, Angro Foods for whom NCDR resolves disputes. Ms. Shamsi
stated that mediation means to facilitate for negotiations to be done for resolution of a dispute with the
assistance of a third party where both the parties have a win - win situation.
7. Ms. Roubina Taufiq Shah, Director General, TDRO while apologizing for late arrival due
to late departure of PIA‟s flight for Karachi, thanked KCC&I for providing an opportunity to discuss
the most important issue of Revamping the Mechanism of Trade Disputes Resolution in Pakistan at
this forum. In her presentation she introduced TDRO and explained reasons for the establishment of
the Organization and its mandate. DG TDRO informed the audience about the role of TDRO and the
efforts for drafting of trade dispute laws. The DG, TDRO informed that Pakistani businessmen are
facing hurdles in their businesses and one of the major element is the trade disputes arising between
them and their counterparts. She stated that commercial disputes that end in courts of law are always
costly and usually a bitter experience. She informed that Imports and Exports Registration had been
discontinued and trade has been made so easy over the years that all kinds of new exporters and
unscrupulous elements have entered the field. She emphasized the need to provide a strong role of
TDRO so that the interest of genuine businessman can amicably be protected. TDRO has been making
efforts for preparing such rules and laws which may be acceptable locally as well as recognized
internationally. She appealed to the private sector to come forward and give their honest opinion about
the current system, weaknesses and suggestions for improving the same. (She requested all the
participants to fill in the TDRO proforma and return the same for analysis). She added that TDRO is
also providing assistance to Pakistani importers and exporters who are defrauded in international trade
and educating & training exporters and importers to avoid disputes. She urged the KCC&I members to
avail the services of TDRO and requested KCC&I management to coordinate with TDRO on disputes
and assist in locating the companies on whom cases have been filed.
Report of TDRO visit to Karachi from 7th to 10th September 2015
6
8. Brig. Abu Zar, Director General, Antinarcotics Force (ANF), Karachi, who had been
requested by TDRO to make a presentation in the Seminar / Brainstorming session, thanked TDRO for
holding such an important meeting. He further gave an extensive briefing on ANF inspection of goods,
informing the participants that narcotics environment as per global dimension is approximate 2.25%
and with the production of opium in Afghanistan, it has a very high potential for drug trafficking
which takes place through Pakistan‟s borders. He stated that the trend of smuggling of drugs through
containers has increased over the years. He informed that ANF has an outreach with five Regional
Directorates at Sindh Karachi; Sukkhar, Hyderabad, KPK Peshawar and Baluchistan Gawader (not
working). He gave details of containers exported as approximately 51,249 and the checking by ANF as
1116, which according to him was only 2% of the total volume of exports of the previous year.
Checking of Loose Cargo is also done after examination at seaport. He informed that „E‟ Form is
purchased, erasing its number and sent through Weboc.. He gave a comparison of cases checked
during last two years at seaport and drugs found therein as follows:
Year Cases Heroin Caught
2014 8 406.5 KGs
2015 5 166.1 KGs
9. DG ANF stated that the exporters should be asked not sell their Form „E‟ which is used in
smuggling of drugs. While the role of ANF in checking drugs in export cargo is important for the
country & its people, it is also inevitable for the exporters. He believed that Pakistani exporters are
honest and patriotic, however certain people try to smuggle drugs in collaboration with their lower
staff. He elaborated that drug trafficking through container shipment loaded with miscellaneous items
like furniture, bed sheets, crockery fruit/ vegetables etc., is on the rise. He reported that there are
sometimes cavities in the container. ANF faces serious challenges not only in segregation of
consignment but also in detection of concealed drugs. A comprehensive & methodical checking
mechanism is adopted by ANF in the best national interest, whereby only 2.25% export containers are
put on hold for necessary checking/ inspection after profiling through a comprehensive “Risk
Management System”. He indicated that ANF at Karachi sea port checks export shipment as per
procedure in vogue, however re-stuffing/ re- packing is the responsibility of Port Operating
Companies. He suggested that skilled labour may be arranged by the exporter or his clearing agent for
professional repacking of export cargo. ANF had caught 10 cases of smuggling during 2013 and 10
containers in 2014 and there was total 4065 KGs of Heroin and 223,800 KGs of chares and other
drugs. He remarked that the exporters have to remain vigilant and make sure the presence of their
clearing agent during inspection.
10. DG ANF then gave a briefing on the impediments by Port authorities, such as containers not
grounded in time, utilization of International Operators and Cargo Handlers, sub-standard packing by
untrained labour, provision of less time between entering of container in port and loading on ship, non-
availability of machinery for re-loading of bulk / heavy cargo and typing errors while sending
information to ANF. While giving a run-up on the Cargo Examination Process at the seaports, he
informed that all unsealed containers are checked on the same day and facilitation provided to exporter
to avoid shutting out of container. In case the container contains machinery or scrap which cannot be
pulled out, the container is recommended for scanning. All decisions on “hold” and “release after
Report of TDRO visit to Karachi from 7th to 10th September 2015
7
checking” is done centrally at Regional Headquarters level. ANF officials at port cannot “hold”
”release” or “delay” the container at their own.
11. Regarding the impediments by the clearing agents, DG ANF informed their absence in time &
time of repacking, they do not contact ANF immediately in case of mis-declaration, illegal „one
window service‟ is provided by clearing agents to unregistered exporters, misunderstanding created by
clearing agent between exporters & ANF and the fact that they entertain blocked NTN exporters. Most
of the time clearing agent does not present himself for examination instead other person appears. Most
importantly clearing agents charge in the name of ANF, which is very unfortunate.
12. As for the impediments raised by the exporters to ANF, the DG informed that they lack
cooperation by different trade organizations / associations regarding provision of members‟ data. The
forwarders insert their name as shipper in Loading Programme and NTN of exporter, resulting in
wrong entries in export manifest by terminal operators. Selling of E forms to unregistered exporters,
lack of vigilance by export organizations and non-adherence of self-blocking of E form by exporters to
avoid misuse. He added that lack of coordination with banks and Customs authorities, lack of
understanding of ANF procedures & importance of ANF checking and late entries of items on ports
are other issues that can be removed with such seminars. He however informed that ANF facilitates
the exporters by laying down specified location and time for cargo examination, inspection time is
0900 to 1800 hours only, providing namaz break for one hour and provide daily interaction with
exporters and representative of exporters at regional office. ANF has held 30 meetings with different
stakeholders / trade organizations in the last two years and given instructions to Port Terminal
Operators to facilitate exporters. There are arrangements of tarpaulin to ensure safety / cleanliness of
cargo and they allow external labour and packing experts if desired by the shipper.
13. DG ANF also dwelled on the issues with bank authorities where there is an absence of strict
control on E Form issue and its use. He suggested that banks should intimate exporter and customs
once an E-Form is submitted in bank, check ID of the depositor of E Form on the bank counter and be
online with Customs, Port Operators and ANF.
14. Some miscellaneous issues were also highlighted by DG ANF like registration of more than
one company with same name and non-registration of centralized data of all the exporters. If one
container is put on hold by ANF out of a lot, the complete lot is stopped at the port. A Complaint is
filed against ANF without checking the details, facts & duties of other organizations. Freight
forwarders do not communicate with terminal operators and ANF and container. No is issued along
with E- form No. Exporter name & destination. He ended his presentation with the words that there are
Standard Operating Procedure (SOP) on container checking which are forwarded to all concerned. The
provision of ANF facilities free of cost to all organizations and that ANF telephone numbers are open
24/7.
15. The next speaker invited by TDRO was Rana Sajjad Ahmed, President Center for
International Investment and Commercial Arbitration (CIICA) who in his presentation on
“Contracts in International Trade & Commerce” stated that to make an effective contract the terms
of contract should clearly specify and indicate details of goods such as complete and accurate
Report of TDRO visit to Karachi from 7th to 10th September 2015
8
description; price delivery and payment term, risk of loss, transfer of title to the goods and inspection
of goods. He further stated that due diligence is required before negotiating the contract as well as to
obtain information about the other party‟s credit worthiness; size & strength; industry knowledge &
quality of business management as well as business history & reputation etc. With reference to the
terms of contract Rana Sajjad stated that conditions like Warranties and Guarantees; liability,
replacement, repair or reimbursement; force majeure circumstances; amendments / modification,
cancellation / termination of the contract should invariably be placed therein. He further stated that
need of a formal contract is required to eliminate / minimize misinterpretation of contract terms and
clarity in case of enforcement. He added that internationally recognized, pre-defined commercial terms
(INCOTERMS) should be used. He further added that the main thing is which would be the Governing
Law of the contract: one party‟s national law or a neutral third country law. In case governing law is
not specified, UN convention on contracts for the International Sale of Goods (CISG) should be
preferred to be incorporated in the contract. Rana Sajjad concluded with the remarks that important
clauses for Dispute Resolution like negotiation; mediation; arbitration; litigation, exclusive or non-
exclusive jurisdiction; and dispute avoidance and management e.g. early neutral evaluation; and
Dispute Board (mid or long term contracts) should also be specified in the contract agreement.
16. Brainstorming Session / Open House Discussion - Questions & Answers.
After the presentation, a brain storming session ensued. Following are some of the queries and their
responses:
16.1 Mr. Qamar Raza, Management Committee Member, KCC&I & a rice exporter enquired that
if a party does not agree for mediation or any settlement, how it be forcefully done. He also
asked DG, TDRO as to how their complaints from abroad could be resolved. Representative of
NCDR replied that it is done in strict words written to the party that they have to face, asked to
convey their comments for cooperation. Internationally, in Singapore, England and other
countries, 90% of the business entrepreneurs agree. Mediation with Netherlands and companies
based in Dubai and Islamabad, it is also done on line through video conferencing linkage etc.
As for the international dispute resolution, DG TDRO informed him that cases will be pursued
with Pakistan missions abroad and through the trade dispute offices of other countries.
16.2 Mr. Azhar Puri, Management Committee and Customs Committee Member, KCC&I asked if
there is any force to call the parties to come forward. He suggested that there should be time
frame that the dispute could be resolved Barrister Vishal Shamsi, NCDR responded in negative
as it is a voluntary process. Maximum time is four days or one week as per agreement. As for a
query on how many complaints are received in NCDR, Ms Shamsi replied that there is a 73.8%
success while billions of dollars have been got released.
16.3 A participant Mr. Tariq wondered what will happen if any party who commits fraud and is not
traceable. To this KCCI president and TDRO responded that all efforts will made through
organizations such as SECP, TDAP, FIA etc to locate the party and made to comply.
Report of TDRO visit to Karachi from 7th to 10th September 2015
9
16.4 Mr. Mohsin of Cargo Agent / Pakistan Freight & Forwarders Association informed that a
trade dispute committee has been formed by the Association since 1994 wherein Pakistan Ship
Owners Association has also been taken on board. This committee has resolved many trade and
financial disputes. However Pakistan Ship Agents Association takes time and it is not easy to
make them join hands. The Competition Commission (CC) has also given positive input and
CC Law is now effective. He also suggested that the Associations Membership lists may be
obtained. He wondered why carpet exporters are allowed without checking on undertakings
that if any complaint against a carpet exporter, is reported, he should be held responsible. This
facility should be provided to all trade bodies. He suggested that the Furniture examination
should be done without opening the cargo, the terminal is responsible for theft as no proper
space is provided to them and in the absence of skilled labour, there is a lot of mishandling. He
further stated that the system can be improved with provision of funds.
16.5 A Rice Exporter quoted his problem where an agreement was made for export of rice, and
according to invoice, full payment was required to be made but instead short payment was
received. He wondered how such agreements can be enforcement.
16.6 Mr. Khurram Ejaz, D.S.K. Authority stated that in cargo handling other stake holders are
equally responsible for creating hurdles. When disputes arise with Shipping companies, there
is no proper regulation to handle them. Even when Customs agree, demurrages are not waived
off. He opined that a Regulatory Board should be formed to bind them to regulate these issues.
President, KCC&I replied that the Federal Board of Revenue (FBR) does not respond to their
requests and the chamber is firm to get it done even at Prime Minister‟s level.
16.7 Mr. Auqib Nisar, Chairman Ports and Shipping stated that after the last meeting there is
improvement in the system of shipment. Two bills of Ports and Shipping are lying with the
Assembly for which reminders are issued again and again. The port & shipping companies are
over charging the exporters and there should be a law to regulate them.
16.8 President, KCC&I suggested that TDRO should give authority to the Chambers and jointly
resolve the trade dispute.
17. At the end distribution of Shields with photo session was held. The seminar ended with closing
remarks and thanks to the august audience from CC&I, Karachi.
Report of TDRO visit to Karachi from 7th to 10th September 2015
10
Report of TDRO visit to Karachi from 7th to 10th September 2015
11
19. (1). Meeting With Federation Of Chambers Of Commerce &
Industry (09/09/2015)
19.1 A Brainstorming session was also held with FPCCI on 9th
September 2015 at FPCCI
conference Room, was well attended with senior members and office bearers of FPCCI led by
President FPCCI, Mr. Muhammad Idrees. TDRO DGs Ms. Roubina Taufiq Shah and Mr.
Ather Jamal Abro co-chaired the meeting. FPCCI representatives from Islamabad and Lahore
joined the meeting on skype. The seminar was also attended by S.M. Muneer, Chief Guest
while the other prominent members included Muhammad Ikram Rajput, Vice President and
Incharge Sind Region, Shahnawaz Ishtiaq, Vice President FPCCI, Dr. Mirza Ikhtiar Baig and
large number of importers and exporters.
19.2 In his welcome remarks, Mian Muhammad Idrees President FPCCI, appreciated the
creation of TDRO and stated that every business inevitably faces disputes which require
resolution. The establishment of Trade Dispute Resolution Organisation (TDRO) is a good step
Report of TDRO visit to Karachi from 7th to 10th September 2015
12
for resolution of trade disputes under the aegis of Ministry of Commerce and its consultation
with business community for legislation would deliver better results. Mian Adrees further
stated that due to non-existence of such organization the importers and exporters, having minor
trade disputes which would have been easily resolved under arbitration, now become severe
and are stay unresolved.
19.3 In his keynote address, the Chief Guest Mr. S.M. Muneer welcomed the creation of TDRO
as the need of the hour since TDAP was receiving innumerable disputes. The CE TDAP stated
that the powers of TDAP are to file criminal offence suits against the respondent if he fails to
honor his commitment and/or fails to respond to TDAP. However, the CE was of the view that
this was a redundant method thereby rendering TDAP ineffectual. He acknowledged the
necessity of mediation and arbitration as tools for effective dispute resolution. He stressed
upon the fact that the Chambers and the Government should work in tandem with each other to
settle disputes through mediation and arbitration. The establishment of TDRO will facilitate the
business community in case of any dispute arises both in Pakistan and abroad. He further
appreciated that the Director General Ms. Roubina Taufiq herself is eagerly consulting the
trade bodies and other concerned quarters to prepare law covering all aspects to resolve trade
disputes arising day by day for early, expeditious and merit based conclusion. In the end, he
assured full support of TDAP to TDRO in executing its responsibilities.
19.4. Ms. Roubina Taufiq Shah, DG TDRO thanked FPCCI for their assistance in arranging the
session and the participants for their precious time. She introduced TDRO, its creation,
mandate, challenges and gave a brief roundup on the upcoming draft law. She highlighted the
need for having a trade dispute resolution organization in the public sector after constraints of
both TDAP and the chambers which did not have an effective dispute resolution mechanism.
Other contributing factors for the creation of TDRO, were lack-luster performance of
Commercial Courts, backlog in Judiciary, weak contract enforcement mechanism and the
presence of unscrupulous elements in the business community. Her detailed presentation gave
the main reasons for trade disputes and highlighted the fact that many times the Pakistani
businesses suffer when the foreign counterparts files the cases in their own country‟s courts.
The Pakistan missions have no funds to hire lawyers and the exporter cannot afford to contest
the case, resulting in bankruptcy of the exporter many times. For this, she stated that a
revolving fund had been proposed in the Trade policy many times, however, the same has not
been approved. She informed the participants about the extremely low ranking status of
Pakistan in the Ease of Doing Business and Contract Enforcement as per Report of World
Bank 2015. She emphasized that absence of a weak contract enforcement lead to Trade
Disputes. In a State Bank Report, she highlighted that with Pak-India trade expansion,
Pakistan needs to have a proper Dispute Resolution Mechanism in place.
Report of TDRO visit to Karachi from 7th to 10th September 2015
13
19.5 Ms. Roubina apprised the participants of the efforts undertaken by TDRO team in the past few
months for consultations with Pakistan's Trade Missions abroad, Chambers, Associations, legal
community and other relevant departments. The MOUs with two important institutes i.e.
NCDR and PRIME were also signed. She presented an analysis of trade disputes received by
TDRO, based on City, Country, Product and Nature of disputes. In the end, she informed the
participants about the regional challenges such as increased trade with Afghanistan, India,
China and Iran and the need for TDRO‟s presence in cities closer to the borders of these
countries. She informed the meeting that there are many trade disputes for Sialkot region
regarding issues pertaining to quality of goods especially in the engineering and surgical
sectors. She requested CE TDAP that the export development institutes setup under EMDF like
SIMTEL in Sialkot, Cutlery Institute in Gujrat etc., need to be accredited with PNAC so as to
have proper certificates for export which is mandatory under the policy. CE TDAP asked her to
send a letter to him in this context and he will look into it.
19.6 Mr. Ebrahim Saifuddin Chief Operating Officer, National Center for Dispute Resolution
then gave an insight into Mediation and its use in Trade Disputes, the way to a conducive
business environment in Pakistan through a power point presentation. He informed that NCDR
was established in 2007 as Karachi Centre for Dispute Resolution with approval of High Court
of Sindh and financial assistance from International Finance Corporation, a World Bank
Group. It provided mediation services in commercial disputes. Later on it provided mediation
services in all types of disputes. In 2015 it changed its name to National Centre for Dispute
Resolution and is working to expand its reach to all of Pakistan. The Centre is headed by
former Chief Justice of Pakistan, Justice (Retd.) Saiduzzaman Siddiqui. He explained what
mediation is and its benefits, stating that it is inexpensive where disputes can be resolved for as
low as Rs. 7,500, with rapid settlement, privacy, without prejudice, preservation of ongoing
relationship, parties will decide the outcome, higher satisfaction, high rate of compliance and
personal empowerment. NCDR has had a 73% success rate since its inception. He quoted
Justice Khilji Arif Hussain statement that “litigation in Court is not only time consuming but
also has adversary effect on business environment. The use of Alternative Dispute Resolution
has grown up tremendously in the last few years. In many countries of the world it is used as a
Report of TDRO visit to Karachi from 7th to 10th September 2015
14
vital tool to preserve business relationships and to provide a speedy, cost effective alternative
to litigations. Alternate Dispute Resolution has now become an internationally accepted
method of disputes resolution. Government of Pakistan has also introduced Alternate Dispute
Resolution in Customs, Sales Tax, Income Tax Acts. Section 89-A has also been added in the
Code of Civil Procedure, 1908 by Ordinance XXXIV of 2002.It is thus advised that State Bank
of Pakistan to issue instructions to all commercial banks that before approaching the Court, an
attempt for resolving dispute through mediation/reconciliation may be made instead of
adopting malpractice of sending employee or others, extending threats to customers for
recovery of their disputed or undisputed dues.” – [Constitution Petition 931/2008]”.
19.7 Question & Answer / Brainstorming session: After the presentations, the house was opened
for Q/A session. The President FPCCI regretted the fact that anyone can import and export
without the need for formal membership of a Trade Body. He also informed that many Trade
Bodies have mediation committees but since these committees are voluntary, therefore, they
cannot get their awards/decisions enforced. The President stated that Pakistan's judicial system
is not delivering as per the business community‟s expectations and gave a personal example
where he had to file a case against an importer in Dubai. Once he won the case, he was
reimbursed all expenses accrued in pursuing the case along with the disputed amount. Whereas
in Pakistan, aggrieved parties cannot obtain relief in decades after which the cases become
redundant. However, he was of the view that weak judicial system will actually help strengthen
Alternate Dispute Resolution methods and organizations such as TDRO. He also cited the
example of ADR committee of FBR which is proving to be very successful. While concluding
his comments, the President said that FPCCI has been accredited by ISO-9001.
19.8 Mirza Ikhtiar Baig, senior member FPCCI and CEO Denim Jeans, in response to the fact
that a large number of complaints at TDRO are from New Zealand, commented that many
trading houses of Pakistan have home textiles' trade with New Zealand. Commenting on why
trade disputes occur in the first place, he stated that in many countries, e.g. Columbia,
consignments are released without documents, sometimes this happens because of an
understanding between the importer and the exporter. However, this practice is strictly not
allowed by the Pakistani banks which is a heartening fact. He also pointed out that since Pre
and Post Shipment Inspection Reports increase the cost of doing business, therefore, many
traders skip this necessary step.
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19.9 Mian Shaukat, from Islamabad Chapter of FPCCI and former President, stated that Dispute
Resolution Act was first introduced in UK in 1906, which means Pakistan needs to catch-up
with the developed world and creation of TDRO is a step in the right direction. He also
suggested that a panel should be formed which should include members of Trade Bodies to
come up with the law of TDRO. In this law, he also suggested making FPCCI an appellate
body.
19.10 Sheikh Ayub, from Lahore Chapter of FPCCI, informed the audience that with the help of
IFC, LCCI made a mediation cell and is arranging for the training of the business community
on mediation. He stated that the problem in Pakistan is that people do not have awareness of
mediation coupled with the fact that there is no law to strengthen mediation. To this
observation, Mr. Ebrahim Saifuddin replied that TDRO could include a provision in the law by
which mediation be made mandatory in the contracts as an initial step of dispute resolution.
19.11 Mr. Zubair, Vice President FPCCI, welcomed TDRO's creation and stated that majority of
the disputes are settled through negotiations between the parties. He urged Mr. S.M. Muneer to
help TDRO and also pledged to place all possible resources and help of FPCCI.
19.12 In the end, Ms. Roubina Taufiq Shah, suggested to CE TDAP that TDAP and TDRO should
join hands in training exporters/importers on export procedures. The CE TDAP gave his assent
to both the proposals.
19.13 The meeting ended with shield presenting ceremony followed by the lunch by FPCCI.
20. (2) Meeting With Rice Exporters Association Of Pakistan(08/09/2015)
The next brainstorming session was held at the office of REAP on 8th
Sept 2015 at the
Association office. The Chairman REAP, Mr. Suleman Rafique, and other senior members of
the association attended the meeting. In his welcome remarks, the Chairman informed that
Pakistan exported $2bn worth of rice annually despite worsening law & order in Pakistan and
deteriorating energy situation and if the unofficial figure of smuggled rice exports are added
then Pakistan could well be exporting $ 3bn of rice annually. He stated that UAE is the biggest
market of Basmati. Iran will also be open for trade which will enhance Pakistan's exports as
Iran is the world's biggest Basmati buyer. For the non-basmati rice Kenya is the biggest buyer.
Report of TDRO visit to Karachi from 7th to 10th September 2015
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The. Chairman highlighted that REAP members have sophisticated rice plants and Pakistan's
rice is considered among the best in the world. The REAP members often hold Biryani
festivals abroad, latest of which was one in Malaysia where 350 delegates attended the festival.
In many countries Pakistan's Commercial Counselors arrange B2B meetings for rice exporters.
One delegation to a foreign country costs the association around Rs.10 million . Coming to the
point of dispute resolution, the Chairman said if a rice exporter commits a fraud, a furore
erupts, whereas if a Pakistani is defrauded abroad no government authority reaches out to help
him. He stated that REAP's membership is not mandatory for export of rice, therefore dispute
resolution at the platform of REAP cannot be efficacious.
20.1 The Chairman highlighted a case where an agreement was reached and signed with a Chinese
delegation in TDAP for export of 1500 tons of rice. Shortly thereafter, world rice prices fell
and the Chinese back-tracked. This caused a loss of Rs. 4.5 million to one exporter. However,
TDAP could not help the exporters to the desired level, even though the contract was signed in
TDAP. In the end, he stated that the Government should check rapid price fluctuations in the
rice market and should also provide subsidies to rice growers.
20.2 After the welcome remarks of Chairman REAP, DG TDRO Ms. Roubina Taufiq Shah,
introduced TDRO at length to the participants of the session. She informed that one of the
leading product where disputes are occurring is rice which was creating a bad name for the
country. This is also providing advantage to the other competitors like India, Thailand and
Philippines to increase their market share, since buyers prefer to import from reliable suppliers.
20.3 Opening the Q&A Session, Chairman REAP made a few remarks on points arising out of DG
TDRO's presentation. He stated that all REAP members get Pre-shipment Inspection from SGS
which is a world renowned company for PSI. Only two complaints of rice exporters have been
received in the current year which shows the credibility of REAP membership. On the issue of
cyber crime he informed that he himself was about to be defrauded in Kenya but narrowly
escaped due to vigilance on the part of his buyer. On the draft law and the upcoming Android
application, the Chairman appreciated the efforts of TDRO team and suggested to include
REAP members in the Board of TDRO for inputs on a continuous basis.
20.4 Raising the issue of payment default by foreign buyers, REAP Chairman commented that
internationally rice business is conducted on 20% advance basis, this sometimes leads to
foreign buyers defaulting on the remaining amount. He enquired as to how TDRO could be
instrumental if in future such a situation arises. To this DG TDRO responded that after
receiving complete documents of the case, TDRO would pursue the case on all available fora,
such as, Pakistan's Mission in that country, Dispute Resolution Organization of that country
Report of TDRO visit to Karachi from 7th to 10th September 2015
17
and that country's Mission in Pakistan. She also added that TDRO intends to share its law with
other countries' Dispute Resolution Organizations and thus this close liaison would enable
swift resolution of trade disputes.
20.5 Haji Khushi, a senior member of REAP, stated that Government should allow REAP to
blacklist defaulters and circulate their names. This would go a long way in preventing trade
disputes and also enabling their resolution. He added that State Bank should be approached to
offer relaxation to exporters if they are unable to realize their export proceeds within 180 days
in light of their buyers refusing payment. To this DG TDRO responded that in an earlier
session, attended by a representative of SBP, it was clarified that SBP does give relaxation to
exporters in such a scenario once they give credible proof that their foreign buyer has refused
payment.
20.6 Mr. Abdul Aziz, another member of the REAP, suggested that before TDRO forwards
disputes to Trade Bodies for their initial resolution, they should be strengthened under the law.
Once this is achieved, capacity building of exporters and officers in mediation and arbitration
should be carried out for better outputs. Trade Bodies should work under timelines once a case
is forwarded to them.
20.7 Mr. Wajid Piracha commented that the issue of Contract signing is very important and TDRO
should design and sanction contracts and subsequently share it with the Trade Bodies. He also
asked the TDRO team if they can guarantee Pakistan's exporters‟ credibility to foreign buyers.
To this DG TDRO replied that this was the job of the Trade Bodies the exporters are registered
with. She added that the exporters should seek to obtain Invoice Insurance but the members
replied that it was an additional cost.
20.8 Representatives of Baba Rice Mills pointed to the monopoly of Shipping companies and
cited their own experience where Maersk's containers got burnt but the cargo of exporters was
safe. Inspite of this, the shipping line did not allow the exporters to claim their cargo unless
they had paid 52% of CFR value to the shipping line. Thus the Government should introduce
some reforms to do away with the monopoly of the shipping lines.
20.9 The session concluded with exchange of souvenirs and a commitment of close liaison between
the two organizations in the future.
Report of TDRO visit to Karachi from 7th to 10th September 2015
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Report of TDRO visit to Karachi from 7th to 10th September 2015
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21 (3) Meeting With Pakistan Hosiery Manufacturers Association Of
Pakistan( 08/09/2015)
21.1 TDRO team also visited PHMA on 8th
Sept 2015 and met with its Chairman, Mr. Saleem
Parekh and introduced TDRO, its creation and its mandate to the Chairman. A number of
pertinent points were raised by the Chairman, which are summarized below:
Main problem for PHMA exporters is Anti Narcotics Force, which destroys the
consignments once they are inspected. PHMA officials have met ANF and Port
Terminal Operators a number of times and the consensus on ameliorating the situation
has been the installation of sophisticated scanners at the ports. In this context, PHMA
suggested that ANF could charge each exporter marked for inspection so as to cover the
cost of scanners. However, no progress has been made on this account.
On the question of dwindling exports, the Chairman informed that increased cost of
doing business in Pakistan is the reason for the dwindling exports. As far as dispute
resolution is concerned, he stated that TDRO must continue conducting awareness and
brainstorming session which would help introduce the subject of Dispute Resolution to
the business community.
On accreditation, the Chairman commented that the accreditation of local labs might
not help as the international buyer usually wants inspection reports from internationally
recognized agencies.
The Chairman sought attention of the Government to fix the issue of under-invoicing
which is causing harm to the national exchequer.
Appreciating the work of Ministry of Textiles, the Chairman added that there is a
process of registration with the Ministry for the facilitation of manufacturers/exporters
(this includes funds for R&D purposes). In this context, TDRO could devise a
mechanism whereby a defaulter Hosiery and Apparel exporter could be de-registered.
TDRO law could also include making membership of Trade Bodies mandatory for
exports while the Trade Bodies on their part could be requested to regularly submit
their membership to TDRO.
Another important point raised was that the Country of Origin could be made
mandatory in the law of TDRO and the issuing authority could be held responsible for
issuing it to defaulters. Also, the Trade Bodies may be made to accredit themselves so
that their working improves in the face of growing trade complaints.
An important issue highlighted by PHMA was that the Customs officer responsible for
clearing the goods should also be made responsible if wrong consignment is exported.
21.2 In the end, the Chairman was of the view that TDRO could actually be a good marketing tool
(internationally) for the business community of Pakistan as it will give confidence to
international buyers/sellers that Pakistan is a safe trading destination.
21.3 The meeting ended with a hope and a promise to further interact with each other in pursuance
of the goals set by the two organizations.
Report of TDRO visit to Karachi from 7th to 10th September 2015
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22. (4). Meeting With Pakistan Standards & Quality Control Authority
(PSQCA), Ministry Of Science And Technology (09/09/2015)
22.1 On the third day i.e on 9th
Sept 2015, the TDRO team visited PSQCA in Pakistan Secretariat,
Karachi. DG PSQCA, Dr. Barkat Ali, chaired the meeting. Senior officers of PSQCA were also
present.
22.2 Quality issues of Pakistani products is a major reason of trade disputes. To address this
problem was the agenda behind TDRO team‟s visit of the PSQCA and subsequent
brainstorming as to how to plug loop holes in the system whereby the quality of Pakistani
products could be improved. After DG TDRO introduced the organization to the participants a
brainstorming/Q & A session followed. Some important observations/questions were raised by
the team of PSQCA.
22.3 DG PSQCA, Dr. Barkat Ali, opened the session, while appreciating the efforts of TDRO team
in reaching out to the stakeholders, with the observation that working with fewer resources
was not a viable option and TDRO needs to have proper manpower in place to be able to
deliver, as many bottlenecks could be fathomed in the working of TDRO. He informed that
PSQCA has around 400 staff and offices in 12 different areas, yet the department felt restricted
in its working.
22.4 DG PSQCA highlighted the fact that Pakistan has adopted 15,000 international standards while
8,000 indigenous standards have been made. There is a list of 90 mandatory items that are to be
regulated by PSQCA at the manufacturing and import level. PSQCA does not have an
awareness program of its own, however, DG PSQCA informed that the officers of PSQCA
could be brought on board by TDRO in its future awareness programs. Moreover accreditation
is a voluntary process and also very tedious as it involves a lot of money and time, therefore
many organizations and institutions avoid getting themselves accredited. DG PSQCA pledged
to help TDRO in the most possible way.
22.5 Director PSQCA, Engr. Akhtar Bughio, stated that PSQCA complies to standards of importing
country abroad, besides harmonizing international standards for local usage. Conformity
Assessment Department of PSQCA stamps approval only for the 90 products that are in the
mandatory list of PSQCA, both at import or manufacturing stage. These 90 products are tested
in the accredited labs of PSQCA.
22.6 Engr. Ali Buksh, Director WTO PSQCA, informed that PSQCA has formed a National
Enquiry Point (free of cost and available at the website of PSQCA www.psqca.com.pk) to
apprise the exporters/importers about the internationally prevalent standards. This NEP relates
to Technical Barriers to Trade (TBT) only. The Director related an interesting fact that
weekly/monthly emails are sent to over 10,000 manufacturers but most of them show a lack of
interest on issues of Standards and Controls.
22.7 Mr. Nazir Hussain, Director Standardization PSQCA, commented that at the import stage, a
normal consignment takes 7-10 days, whereas urgent consignments take 3-5 days. For
checking, the consignments are released temporarily to avoid demurrage costs. There are over
30 PSQCA labs all over Pakistan. He informed that importers should ask for Inspection
Reports from their exporters abroad so that upon arrival, PSQCA may determine whether the
consignment was shipped in the right state or not through applying the expertise of its officers
in details of packing, weather, time etc. However, the mandate of PSQCA is only TBT and not
SPS. The department of National Food Security looks after SPS.
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22.8 DG TDRO showed her keenness to visit Karachi ports to see the checking procedures and
loading / unloading of goods, for which PSQCA made necessary arrangements.
22.9 The meeting ended on a positive note of future collaboration between the two departments,
especially in awareness raising programs.
23. (5). Meeting With Pakistan Pharmaceutical Manufacturers Association
PPMA ( 09/09/2015)
23.1 The TDRO team next visited the office of PPMA on 9th
Sept 2015. The officials of
PPMA were led by their ex-President, Mr. Haroon Qasim.
23.2 The meeting started with the introduction of PPMA and the Pharmaceutical Industry by
Mr. Haroon Qasim. He stated that PPMA was established in 1961 with more than 265
members. The Pharmaceutical Industry employs skilled labor and is manufacturing
90% of medicines in the market and only 10% of the medicinal volume is being
imported by Pakistan. Thus Pharmaceutical Industry is helping Pakistan save its foreign
exchange reserves. Of the total manufacturers operating in Pakistan with a total
business of $2.2bn, 60% are local and 40% are Multinational companies. Pakistan's
Pharmaceutical exports are about $200mn. Mr. Haroon cited a report by Mckenzie
International which states that Pharmaceutical Industry has the highest potential for
exports in Pakistan. Currently, Pakistan's export market includes Far East, Africa and
Central Asian States.
Report of TDRO visit to Karachi from 7th to 10th September 2015
22
23.3 Mr. Haroon also cited the example of India, whose exports are $20bn with a local
market of $8.8bn. He pointed out that Import substitution can help Pakistan's Pharma Industry
to grow therefore it is imperative that Government should help this industry. He cited various
problems being faced by the manufacturers at the hands of Drug Regulatory Authority of
Pakistan which oversees the working of the Pharmaceutical Industry. Referring to the need of
introducing the policy of Import Substitution, Mr. Haroon stated that in the region, besides
India, Bangladesh also has a very strong Pharmaceutical Industry.
23.4 Adding to the introduction given by Mr. Haroon, Ch. Israr Sharif, member Executive
Committee and CEO Genex, informed that there was not a single FDA approved plant in
Pakistan. He added that the policies of the Government vary frequently leading to difficulties
for the Pharmaceutical Industry.
23.5 The introduction of the Pharmaceutical Industry was followed by the presentation of TDRO by
DG TDRO after which the house was opened for Q & A/inputs/comments. On the importance
of Contracts, the members stated in unison that at the import stage no one signs contracts and
all agreements are executed verbally. However, at export stage, the Pharmaceutical exporters
do sign contracts. To this, DG TDRO pointed out that to avoid frauds, proper Contracts should
be signed at the import stage also. Ch. Israr raised a point that TDRO should share case studies
of frauds with not only PPMA but also with other Trade Bodies for the general awareness of
the trading community.
23.6 Mr. Amin Nota, Executive Member PPMA, raising a pertinent point on Trade Marks, remarked
that Pakistan was not a signatory to Bern Convention which is hurting Pakistani exporters and
manufacturers as by doing so the Registry of Trade Marks in Pakistan would be acknowledged
world-wide.
23.7 Wrapping up the session, Mr. Haroon Qasim commented that Pharmaceutical Industry is the
biggest victim of cyber crime and the government should do something about it. In the end, he
requested DG TDRO to hold training sessions on contract drafting and other issues of trade for
the technical staff of the Pharmaceutical Industry.
Report of TDRO visit to Karachi from 7th to 10th September 2015
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24. (6) Meeting With Overseas Investors Chamber Of Commerce And
Industry (OICCI) (10/09/2015)
24.1 The last meeting of the visit was held with OICCI on 10th
Sept 2015 at the Chamber‟s office.
The meeting was presided over by the Secretary General OICCI, Mr. M. Abdul Aleem. In his
introductory remarks, he stated that the membership of OICCI comprised 195 members and
these contributed roughly 35-40% to the National Exchequer through taxes. The membership
of OICCI is only granted to Multi-National Companies.
24.2 The DG TDRO made a comprehensive presentation about the aim, mandate, functioning and
goals of the TDRO. Pertinent to mention here is the remark of OICCI Secy. Gen. stated that he
had not attended such a well-researched presentation by a government functionary in quite a
long while.
24.3 Ms. Kamila, Company Secretary, ICI, opened the Q&A session with some important
remarks. She stated that arbitration is costly whereas mediation is a better option. As far as
regulators are concerned, she commented that State Bank of Pakistan is doing a wonderful job.
Acknowledging the concept of registering importers/exporters, she was of the view that it is an
uphill task, and TDRO may not be having enough resources to accomplish it. On the issue of
Contracts, she endorsed the idea of standard templates and suggested introducing contracts in
Urdu and regional languages.
24.4 Mr. Jarri Masood, Country General Manager Pakistan for 3M Pakistan (Pvt.) Ltd.
commented that HS Codes need to be harmonized. Country General Manager, Dabur
International, informed the HS Codes were harmonized, however, the business community has
difference on interpretation of a few HS codes with the Customs Authorities. He also stated
that PCT Committee is ineffectual whereas Pre-Shipment Inspection was mandatory till 1997
but now it is no more mandatory.
Report of TDRO visit to Karachi from 7th to 10th September 2015
24
24.5 Mr. Ahmed Waheed, Head Trade & Business Services, made some interesting comments
stating that SBP is about to go online with E form which will greatly help the traders. He
informed that E-form requires the filer of the form to have a contract and also be registered
with a Trade Body, failing which E from will not be issued. Once issued, the importer/exporter
is mandated to submit the documents after 21 days. In Pakistan, Mr. Waheed added that
consignment is not released on copy of documents. In foreign countries, it has been observed
that disputes arise when exporters themselves request their banks to release documents citing
close relations with the foreign importer. This practice should be stopped. Regarding Letter of
Credit, Mr.Waheed stated if a complete set of documents are submitted then bank must release
payment in 5 days which the banks invariably do. If on the contrary, the importer feels that the
payment may be withheld for some time then he should obtain a stay order from the court and
only upon its presentation the bank may stop the payment. He also enquired if the government
intends to give any financial support to small traders? DG TDRO informed him that there is no
such proposal yet.
24.6 Mr. Razi from Honda Atlas commented that TDRO should limit its scope of activities for
now as in the beginning too wide a scope can lead to failure. This point was seconded by the
Secy. Gen. OICCI. Secy. Gen. OICCI also added that lateral issues such as Contract
Enforcement should not be included in the mandate of TDRO at least in the beginning.
Mr. Razi also highlighted the complaints against ANF which needed to be addressed on
priority basis.
24.7 The meeting ended with a note of thanks by Mr. Abdul Aleem, Secretary. General OICCI who
highly appreciated the efforts of the TDRO team.
Report of TDRO visit to Karachi from 7th to 10th September 2015
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25. Visit to Karachi Port Trust and NLC container terminals: The TDRO Team also visited the container
terminals of Karachi and studied the procedures of unloading and stuffing the import / export goods. They had
meetings with customs inspectors and terminal operators. It was observed during the visits that a set procedure
is followed, however all organizations ultimately blamed the exporter for not complying with the import /
export standards and international packaging qualities. This was stated to be the main reason for the destruction
of goods during checking.
Government of Pakistan
Ministry of Commerce
Trade Dispute Resolution Organisation(TDRO) State Life Building No.5 (Phase-I),
Jinnah Avenue, Blue Area, Islamabad
Ph. 051-9223027-33
Fax. 051-9223029
E-Mail: info@tdro.gov.pk
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