Chambers of Commerce : private versus public law status

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(1)Economic Perspective 1 CHAMBERS OF COMMERCE - PRIVATE VERSUS PUBLIC LAW STATUS by Jacqueline Gilmour, Policy Analysis Research Unit, Glasgow College which Introduction represents level. Chambers of Commerce have attracted relatively all the Chambers at national Although strong links exist between Chambers, each maintains its total the independence little interest in Britain as a subject for study. and neither the regional Chambers nor the national This organisation could be the result of their apparently limited influence in British economic affairs has hierarchical authority over any and Chamber. the regional Chambers operating under the 1956 Chamber development. In (West) Germany there are now 69 Chambers and The aim of this article is to survey briefly functions and Commerce roles within of their British Chambers status as organisations, stressing limitations such an arrangement and of the of private benefits and then to Law which gives the Chambers public law A national organisation, the 'Deutscher und Handelstag' (DIHT) was founded in inherent funded problems experienced by many continental Chambers in international economic development, them with the advantages 1861, It by the Chambers and has an important is role especially in Europe, with representatives in Brussels. which operate under public law status. also Chambers of Commerce: status. Industrie dissolved in 1939 and reinstated in 1949. and contrast 9 maintains regular contacts It with other employers' organisations, with the ministries general information the German Parliament, the Bundestag. and Being free The Chambers of Commerce can be traced back to the from State control, it is in a position to express end publicly its members' views on economic matters. of the originated Britain 16th in The oldest Marseille (France) in and established century. in Germany they one 1599. In became respectively in Glasgow in first 1783 and In Britain, regional there are 87 local -Chambers operating Chambers either and under Companies Acts or Royal Charter. These the local economic activities led to a grouping of are Association economic actors. British Cologne in 1803. They were created everywhere The French Revolution abolished them as corporate entities; however, eleven later who in 1802, they were reinstated by saw in the Chamber system a perfect the economic introduced the agents. in many European Napoleonic The invasions. Many of Commerce - tool occur of makers was Chambers a Commerce' as it is without legal British Confusion in Britain regarding the term of national organisation with representatives on some and European consultative bodies. system countries Chambers Napoleon communication between the political policy and years recognised and belong to the 8 the can 'Chamber definition of and therefore may be used by a variety of associations following which countries even include commerce, industry, trade. servicing and It greatly complicates the task of retained the principle of Chamber organisation. studying British Chambers as each Chamber operates In France the Chambers were legally recognised vary under as state approved establishments in 1832 and received public law status in 1898. These are local Chambers, 22 regional Chambers, 10 Chambers Chambres and de the 'Assemblee Commerce et now d'Industrie' 151 members (Ayr) to size 6,500 can members (London). 152 overseas permanente its private constitution and the from des (APCCI), In Europe, the Chambers in Britain, Ireland operate under private law Belgium status and while France, Germany, Italy, Greece and the Netherlands 64

(2) have public law status. trade. They associations All the Chambers regarding have their functioning. some internal common features organisation and The membership is composed of firms belonging to the commerce, industrial and sectors. also the In Italy, the agricultural service sector included and in the Netherlands it representatives of employers and is is both employees local, also by differ from the fact that employers' Chambers rather than national, role to enables them to focus their have play. information, knowledge and their actions on the local debate. The protect Chambers serve, their economic represent and the interests of the member firms in sector of industry, commerce and service in area. This relatively wide coverage offers into the The Chamber members are elected by the economic reality of their area, its strength, its by problems and its insight to the membership a comprehensive any their organisations which form the Chambers' membership. for a set term of office and can be re-elected Chambers a It needs. Their aim the membership for a set term of office and can be represent, to protect, promote and re-elected membership while participating in local for different lengths of elected members officers and a President, except in the President Industry. themselves is appointed by The members receive The executive Italy the where Minister no for their services to the Chamber. principle time. elect of remuneration One unwritten is to their own firm and should not become secondary is that the members' first duty to their Chamber's activities. work for various (commerce, etc) The elected committees or members departments industry, export, transport, according to their interest and training expertise, Each committee is normally chaired by a member the executive. This facilitates development; of the assist Chambers of world Commerce affects to their economic however, the differing legal industrialised These is status throughout their the functions. functions determine, and at the same time are dependent upon, their representativeness. The broad functions of the Chambers can be defined as providing services, either freely or with charge, to industrial and commercial firms and represent the membership in their a to consultative role. of communication and cohesion between the different committees and the general policies of the Chamber. The services include: such as provision data on companies, newsletters, lists of of information market information, distributors or agents, advice on legal or financial matters; of librarian The elected voluntary staff of the assisted by a permanent salaried includes a general secretary or Chambers is staff. chief This executive who heads the permanent staff, is responsible the smooth close works collaboration with the President and members either running of the Chamber and of the executive. He can be members depending on the in other nominated by the President or the executive elected for or the Chambers' facilities; export of of documentation, particularly such as the ATA carnets, the origin, the foreign trade requirements; and mailing for facilities; of training courses members which can include accountancy, marketing, languages etc but also in some countries Germany, Italy), vocational the Chambers training for are the (France, involved workforce; Chambers are self-financed. Their originates from three main sources: which can be voluntary or membership is compulsory; in tax fees income subscriptions form for where services; promote export and trade. their role and functions Many abroad continental Chambers play a specific role in the planning sometimes the commercial management sites, administration revenues from administered activities. Chambers of Commerce: to of in of the ports and and industrial or development airport of stock exchanges (Germany), provision of housing the and facilities (France), and in in of The Chambers also organise and often accompany missions The of secretarial services which include telex, fax technical information and transfer. constitution. for certificates in promotion the of tourism. To many people, Chambers of Commerce are organisations, representing and prestige promoting interests of commerce and industry. They not be compared with the trade associations the should whose The consultative and representative role Chambers upon financial represent and whose membership is confined to that involved. of action is limited to the trade 65 of resources Where the and the Chamber the depending their legal status, their membership, they field at local level varies greatly their personalities organisation is

(3) strongly regional co-ordinated (France, Germany), Chambers and the national body the play actively, towards training which they an as one of the keys towards improved active representative and consultative role at the regard economic efficiency and productivity. various levels of the political strata. While Chambers under voluntary membership status providing organising (Britain) are unable to prestige especially aspect the enveloping British the Chambers, is emphasised by the Chambers themselves. this prestige element associated organisation to attract members. the often They with services involve and chambers in the the directly affecting their members (in majority small firms) but affecting the issues Chambers, basic only deliberation The some trade missions, most UK themselves of wider issues, not economic development of the whole community. use their This is not to Recruitment deny the value of the services and functions which the Chambers do perform - but attracting members and preserving their membership are new for the existence of the British Chambers. operate. They are private, Chambers' This is due to the legislation under which the Chambers Recruitment becomes an important part of vital are British matter or, Time and which with is essentially for an an internal no direct connection general aims of the Chambers. the resources therefore diverted and utilised activity autonomous and independent limited-company organisations activities. with the Thus prestige like the Glasgow Chamber, they operate under royal becomes charter. established under voluntary membership: it is for recruitment. be is Their funding is insecure as membership voluntary and this affects the scope of their a important tool for the Chambers It will activities in a variety of ways. argued later that the opportunity to directly 1. a influence policy-making decisions could prove Range of services more powerful participation. The services provided and their cost have are the Chambers. area Large variations exist between of and not in the provision of most to the business community in and Chambers, with the larger Chambers - in terms attracting of membership - being in a position to They offer tool exclusivity services directly related to the financial position of recruitment The British Chambers do consequently membership this is their method denied must compete with a variety to of them. of public better services both in relation to standards and private sectors agencies offering similar and services to business and commerce. extent, thus attracting more members. Within Britain it becomes difficult to assess and compare various render the role and influence Chambers the Chamber as exercise (by far too many futile. the of The largest the Representativeness variations in London the stresses the fact that while the services provides compare favourably in spectrum The UK) voluntary Chambers it of with character of the British implies that only a limited businesses will become members number of their local Chamber for whatever their reason. its continental counterparts under public law status, the depth of provision is the The London Chamber has 5,000 businesses important difference in most areas whether in registered information, capital city Chamber, Paris, operating training documentation, or export promotion. education and Considering education and training, for instance, the Chambers short-term provide a range of courses, and with a limited public UK 1989). The courses, award diplomas of education 40 to 60% of with further 245,000 Chamber of another under businesses Commerce, The British Chambers therefore can be the total business community in their of area. and manage This limited representativeness has important and higher consequences: their going towards education and training. have (London has while said to represent only a small proportion French and German Chambers create and develop establishments represented status registered mostly impact. law or a legal requirement, which they budgets They (a) fulfil Chambers under voluntary membership never 66 pretend to represent the can whole

(4) business community. Their range of budget of the Chambers - directly action will therefore be limited as will on their makers. and limited consequences: impact They on the policy are mostly involved in number of local a issues and the voluntary the memberships' services sold - dependent subscription has two main those affecting their individual memberships. (a) The permanent staff has to be maintained at a minimum level. (b) They may not reflect distribution within some may sectors within the sectoral their be the Chamber. district: (b) over-represented This will The budgetary restrictions the salaries offered to affect staff their range of activities and the issues may affect imposed the the on permanent levels of competency which a Chamber can afford. debated as mentioned above. Voluntary membership: (c) The Chamber organisation cannot to national coverage Within the British Chambers, geographical sectors are without Chamber greatly on whether to representation system or as the Chamber many in the area is relatively inactive. Their legitimacy This can be lack of legitimacy challenged. can adversely affect their role and limit their of influence. economic Functions field related development to will not the maintain views the vary voluntary of membership or lobby government for introduction Chambers (d) the positive features pretend of even important the law with on a the the status. matter nor Some is neither controversial expense of time, associated membership public feel that the sufficiently justify a effort consultation matter. and of They to funds the put full forward arguments in favour of the status quo: necessarily become the responsibility of the Chambers but be given to other (a) economic agencies. Under the voluntary system, Chambers have with similar free services, in the spirit of the market Membership composition and staffing to compete against other economic agencies must competition: standards and be maintained. services They must attract and The majority of firms joining the UK chambers retain their members by their own efforts and are qualities. small members and medium-sized firms. experience difficulties themselves businesses from in the in demands of order to devote time running of their Chamber. Many freeing their to Considering does the bearers becomes restricted. not deny the competence and duty, issues but considered analysis. choice it may limit both the of constraint and Another issues to be placed their factor depth preserved, among the members with no decisions sections of the membership. the cohesion (c) Their fully of chambers of on of compromise the be on policy maintain membership and its independent status freedom of action and gives the intervention any issue 'they' wish to consider and it is the governmental, public or private organisation. Chambers to has level: to (d) be They them can to approach 'sub-contract' and some lobby of alienating their other organisations thus solving the This leads to a of action staff Should limitation a and/or course of action problem over-staffing. become obsolete they can, with relative rapidity, give staffing, any activities by participating in the funding of support permanent cannot consultation, allegiance. and dilution of its influence. considering and via allows contraction of the Chambers' range of When membership the maintain or increase their membership consensus the work affecting the of Chamber number considered upon of Consensus decisions, is paramount in order to This hard elected members devote to their views deliberation firms the Chamber of Commerce, the choice office The ignored. that an already limited number of potential join (b) the their flexibility. the 67 their to another project, hence adding to

(5) These the desirability influence and with afforded by public law status to many arguments can easily be repudiated wider range legitimacy of actions, of by the of action and implementation individual Chambers. national levels, At co-ordination rest regional of and aims and policies takes place, shadowing the administrative continental Chambers. and political structures. Chambers operating under public law status (France, Germany) The Chambers are not merely a 'pressure group' on behalf of business but an independent organisation Under public law status, the Chambers become with the resources and the power to raise official public organisation with specific duties, in the interest of the whole community. responsibilities only of and accountability. Membership the Chamber is compulsory and encompasses whole of industry and commerce within district. main sources: sold a Their funding originates and emanating from react to policy, they pro-act three Public law status: the negative features services the various organisations they manage. An important accusation often voiced against the adoption of public law status is its 'closed shop' quality resulting from the compulsory membership. their members, In an era of free market liberal ideology any form Chambers have an active role in the economic of Apart the policy decisions. defined from membership subscriptions, profits the issues They not from providing services to management and development of their Districts are deeply involved in local affairs. local, regional must and even central consult the recommendations Through the influence voice Chambers taken policy business incorporated local have their consideration. businesses in The local development and extra activities acquires businesses. can unwanted only membership is also criticised for As as inflicts large on the small businesses thought to impose services: Chambers a large and very are tax large (administration, members policy makers). its far is it for firms internalise many of the functions fulfilled by the documentation, in burden it defend and promote the narrower interests of their but those of the whole community on business financial concerned, become not Compulsory can Chamber Chambers legislation negative connotations. law, makers decisions and the demands. By policy and into Chamber, and information, export, training, even access to Chambers an economic pursuits. Conclusion The main tools at their disposal include: extensive and secure financing; legitimate status; Public expertise and right of access to information. official law Functions Legal status confers to the Chambers responsibilities in the provision of development defined government. the within their district. can of be assigned to them Most member firms do economic by central not perceive compulsory membership to the Chamber as an 'one door1 approach which saves time and financial imposition but see the Chamber as an extension of resources, their own firm through which they can benefit from services. and It offers the business community minimises the duplication of facilitates eventual communications a services between their bestows on pertaining to any aspects and duties status position the provision of common services and also co- ordinate the demands, responses and the actions of the political and economic agencies. the economic community in their area. The legal status also offers some the Chamber movement. all Chambers are responsibilities the paramount representative uniformity identical in and policies - it would aim of of the local responsive to local needs. Chambers: economic to that Private revenue freedom nullify dependent to Chambers, This does not imply affairs be and However, all Chambers must operate within defined legal boundaries and a variety Chambers, of functions will be the even if the ultimate of all decisions realm on status of allows the action but this on the financial their Chambers freedom complete is resources closely of membership, the their representativeness and the competence of the staff they can attract. Historical development status of the Chambers as well as the of their presidents or key members executives will affect the role and the 68 and personality and chief functions

(6) the Chambers can undertake. main sources: community The organisation of the Chambers of Commerce provide a valuable directions - business world. become link - to be between policy used makers Chambers in both and the At a time when concerted actions ever more vital in the face competition can and insecurity of of increased markets, would become the platform where the common to favour would the Chambers, the business and the government; most Chambers the status quo as Public law seem status impose a total structural change for they do not perceive the necessity. role which The marginal and influence on policies they may have at the moment seems to fit their needs; either public or private and may not therefore be press for more public inclined responsibilities; interests meet and where measures can be taken and present implemented. business more compulsory requirements in an era of In Britain, a variety of agencies - government is most unlikely to impose to the public, private and/or mixed - exist and are being free created (SDA, Local Enterprise Company is now being constituted. dividing and hindering making Enterprise Trusts, confusing the participation uniformity of LEC business and etc), community, co-operation, actions and difficult. By Its market ideology. aims private are to bring together become economic development: tools for local economic Chambers expression and development. the public local the and authorities and the training agencies in order to identify the economic active organisation, business sectors, the operating under public law status the Chambers can the A new on needs of of the area and promote its with public law status, the commerce organisation could have fulfilled the task. The debate remains open, mostly on an academic basis, as to whether Britain should confer law public status to the Chambers of Commerce. early 1980s central government, Heseltine, inner through the Michael involved the Chambers in the issue city rejuvenation. responsibilities legitimacy problem In could While give the Chambers But with why or functions have a realistic should the increase business be the responsibility dilemma of in definition 'A Chamber institution by for the ex president (France) offers chambers of a operating is the between most power appropriate at the highest level and the structural needs, even the most modest ones.' be provide or industrial References should local This, for example, seems to be for vocational and Commerce funding. community central of under public law: Any to finance for services which, in their view, government? possible the of financing and staffing experienced matched of Pierre Lanvers, Chamber more and influence, there still exists responsibilities remark Nimes accrued many Chambers when faced with extra demands. added of The the training. Forster, study N "Chambers of Commerce. of A their role in the UK and in comparative other EEC countries", Industrial Aids Limited, 1983. Various schemes have been put into practice by the government skilled with limited success labour sectors. shortages However, in considering some individual firms the King, R "Local Corporatism: Leeds and its chamber industrial of Commerce", Public Money Journal, Vol. 2, No. 4, are March 1983. reluctant to divert significant resources often towards training since returns cannot be guaranteed. Lanvers, P "line Chambre de Commerce, Pourquoi Faire?", Chotard & Associes Editeurs, 1982. Public law status would place the British Chambers in a similar counterparts They the position with to their the advantages continental listed above. and develop would truly represent, promote economic interests of their locality and community at seem reside to Pressure for large. in The main ideology London Chamber of Commerce, "Chambers of Commerce: The Challenge objections Murray, and attitudes. Paper from Internal Market, the real change could originate of the 1992 EEC 1989. three S 38, "Talking to Local School of University of Bristol. 69 Business", Advanced Urban Working Studies,

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