A more powerful voice for business - Tonio Borg

The Malta Chamber of Commerce, Enterprise and Industry, incorporating the Chamber of Commerce and the Federation of Industry, will be a stronger organisation with a more powerful voice, Acting Prime Minister Tonio Borg said yesterday.

He was winding up the debate on the second reading of a Bill to amend the Commercial Code in view of the amalgamation of the two organisations involved in the commercial and industrial sector.

Dr Borg said the Chamber and the FOI felt they should unite, rather than separate, their resources, giving everyone an example.

They felt that with the removal of protectionism and the introduction of the euro, the policies of two organisations converged. They took similar stands on various national issues of direct economic and commercial issues and so they could become amalgamated.

At the beginning of his address Dr Borg spoke about reforms which had taken place, some with and others without the opposition's concurrence.

He said that many amendments had been introduced in the Commercial Code in the past years. One major amendment was moved by the late Justice Minister Joe Fenech for both civil and commercial cases to be decided by the same court. This was not the case in the past when there used to be a lot of delays until a decision about which court should decide the matter was taken.

Other measures approved in the last legislature included that through which a creditor could send a debtor an official letter rather than take him to court if he was owed up to Lm10,000. If the letter was not contested within a month, it gained the validity of a sentence.

Labour MP Owen Bonnici called on the government to amend the Commercial Code as soon as possible as a thorough reform of certain sections of the Code had been long overdue. There were sections which had not been amended since their introduction in 1927.

Dr Bonnici said that the Commercial Code should reflect present times and proposed that all legislation pertaining to the maritime sector be incorporated in a new Commercial Code, which should also regulate other commercial sectors including activities by estate agents.

The commercial code should not be amended on the same lines as the Civil Code and the Minister for Justice should make proper consultations.

Dr Bonnici called on the government to appoint a Commission, chaired by Mr Justice Philip Sciberras to overhaul the Commercial Code.

The new code should consider international commercial relations and reflect business with EU commercial partners.

Dr Bonnici referred to the framework which implemented the UN convention on international commerce, which differs from the framework adopted by businesses in EU member states. He referred to the Brussels regime established in 1968, and developments over the years, to harmonise trade procedural laws.

He added that in 2001 the Brussels regime established the right for traders to go to court in their own country in case of breach of contract by a foreign trader. However, there were a lot of difficulties regarding jurisdiction by the courts regarding domicile as not all EU member states give the same meaning to this concept.

Concluding, Dr Bonnici said that Malta had a role to play in a European Commission action plan to harmonise laws, introduced in 2003.

Opposition spokesman for the economy and the self-employed Gavin Gulia said the members of the Chamber of Commerce and the Federation of Industry were important economic players and their representative power would now be strengthened. The merger was an important step forward for Malta's success as it would be consolidating commercial resources. This was a catalyst for the private sector to consolidate its activities.

Malta today had a more open economy and this fusion would help the country face bigger challenges ahead.

The SMEs and micro enterprises were Malta's commercial backbone. Indeed, of these, there were 33,112 in Malta and 1,986 in Gozo.

Dr Gulia said the economic results of the first half of the year were of concern. A GRTU survey last June showed that businessmen wanted the government to stimulate the economy and lower the energy surcharge. They said that expenses were always on the rise, primarily because of energy costs.

There were other economic indicators that were showing cause for concern. NSO statistics showed that exports in July and August were down by €60.3 million or 10 per cent and imports of consumable items in August alone fell by six per cent. Nowhere in the EU, the drop in imports was as pronounced as in Malta.

Saying that Malta was passing through this phase because of the world economic slowdown was a fallacy. Despite the crises, all EU countries' exports were on the rise.

Since September 2007, Malta has also been experiencing a slowdown in economic growth - from four per cent to 3.2 per cent and now to three per cent.

The only thing that increased was public spending in the first quarter. This was because of the general election. The government had always said that the private sector should be the motor to drive the economic growth. However, it was thanks to government spending that the rate of economic growth had not been slower.

And this was reflected in the deficit which has gone out of hand to the point that it was at the same level of 2004. All the caution that the government had taken has been thrown to the wind, he said.

The problem was one of lack of competitiveness and this was a problem that the government must address by stimulating the economy. Even the Eurostat consumer confidence index had gone down. The government must not introduce the proposed energy tariffs.

Dr Gulia said it was interesting that even the PN last month told the government to motivate the economy and stimulate the self-employed. The government's answer a few days later was the announcement of the energy tariffs.

People in business were concerned. Those in the tourism sector have already signed contracts with tour operators for incoming traffic based on the old energy surcharge. Now they were lumped with a charge which was 245 per cent of the old surcharge.

Businesses were going to bear the full brunt of the energy tariffs and this would lead to unemployment. The government must have realised that the economy was in shock and was now dealing again with the social partners in the MCSED to see how to soften the impact.

Concluding, Dr Gulia called on the government to introduce the General Accounting Principles for Small Enterprises, GAPSE, which has been promised since December last year. Among other things this proposes to lower VAT for the small enterprises to five per cent.

José Herrera (MLP) said the time was ripe to re-think the way the courts had been organised. He suggested the introduction of the Commercial Courts because commercial cases had to be dealt with differently. Commercial laws have become more complex and there were a substantial number of cases of litigation between foreign companies registered in Malta.

He said there are over 40,000 registered companies in Malta with an annual increase rate of 15 per cent.

Dr Herrera said that as a result of the serious legal framework in the maritime sector, Malta enjoys a good reputation in the sector. He suggested the establishment of an International Maritime Court.

The format of the Commercial Code should be changed because it does not incorporate all commercial legislation in Malta. He concluded that commercial laws should be well defined and incorporated in one code.