The Bahrain Chamber of Commerce and Industry (BCCI) is poised for significant change following a parliamentary decision to overhaul its voting system. On Tuesday, Parliament approved a new law altering the weight of votes in BCCI board elections, effectively replacing the 2020 capital-linked scale with a more tiered, 15-band system. This move, aimed at fostering greater representation and addressing concerns about the dominance of large firms, now heads to the Shura Council for final review. The core of the debate centers around BCCI elections and ensuring a balanced voice for all members.
A Shift in Voting Power: Understanding the New BCCI Law
The existing voting system, implemented in 2020, assigned voting power based directly on a company’s declared capital. This meant companies with larger capital holdings received a disproportionately higher number of votes, ranging from 2 votes for undeclared capital to 256 votes for firms with BD 5 million or more.
The new law introduces a 15-band system. While still factoring in capital, it significantly narrows the gap between large and small businesses. Voting power now starts at 1 vote for undeclared capital up to BD 1,000, and incrementally increases by one vote per band, culminating in 15 votes for companies with capital exceeding BD 1 billion. This finer gradation aims to address imbalances in influence.
Why the Change? Arguments for Greater Equity
Proponents of the change argue that the previous system was heavily skewed towards larger corporations, effectively silencing the voices of small and medium-sized enterprises (SMEs). MP Jalal Kadhem voiced a longstanding concern, stating that the BCCI leadership had historically been dominated by a small group, impeding broader economic decision-making.
The argument rests on the belief that SMEs, representing over 80% of Bahrain’s private sector, deserve a fairer representation in shaping the Chamber’s policies. There are also accusations that some large firms exploit loopholes by creating inactive “small” records to qualify for government tenders reserved for smaller businesses, undermining genuine SMEs. This proposed change is perceived as a step towards fulfilling Article 18 of the Bahrain Constitution, which promotes equality and fairness.
Opposition and Concerns Regarding the Revised System
Despite the Parliament’s approval, the new law faced substantial opposition from several key stakeholders. The Government, the Ministry of Industry and Commerce, the BCCI itself, and the Bahrain Association of Banks all advocated for retaining the 2020 capital-linked structure.
Their reasoning centers on the importance of weighting votes based on economic contribution. Larger investors inherently take on greater risks and are significant drivers of job creation and overall economic output. Therefore, they argue, their influence within the BCCI should reflect that reality. Furthermore, concerns were raised that frequent changes to the voting rules could create instability and deter investment in Bahrain’s business landscape. This debate also touches on the broader topic of Bahrain business regulations.
Procedural Details and Government Response
The path to approval wasn’t without its scrutiny. Committee chairman Ahmed Al Salloom addressed concerns about delays in processing the law, detailing the timeline from its return to the committee in November to the ultimately positive vote. He highlighted the receipt of ministerial responses in April and a revised proposal put forward in November.
Minister of Parliamentary Affairs Ghanim Al Buainain underscored the limited role of the Cabinet in the legislative process, clarifying that the final decision rests with Parliament. He also pointed out that Parliament accelerated the bill’s progression, bypassing the standard one-week period for governmental review. However, existing provisions in the council’s rules already allow the government to request a one-month extension for further consultation if needed.
Calls for Enhanced Collaboration and Investor Confidence
MP Hassan Ibrahim expressed support for the existing capital-weighted system, arguing it provides a logical and proportional representation. He warned against the potential for eroding investor confidence, particularly given the current trend of Bahraini businesses relocating operations abroad. He emphasized the crucial role of the private sector in employment, with over 40,000 registered commercial entities and approximately 110,000 employees. This underscores the importance of a stable and predictable environment for economic development in Bahrain.
Ibrahim also highlighted a lack of effective coordination between Parliament, the Ministry of Industry and Commerce, and the BCCI. The joint committee intended to facilitate communication has met infrequently, hindering a unified approach to addressing the concerns of the private sector.
In conclusion, the approved law marks a significant turning point for the Bahrain Chamber of Commerce and Industry. While intended to provide a more equitable representation for SMEs in BCCI elections, it has sparked debate regarding the appropriate balance between economic contribution and political influence. The legislation now awaits review by the Shura Council, and its ultimate impact on Bahrain’s business climate will depend on how effectively concerns are addressed and collaboration is fostered between all stakeholders. The outcome will be closely watched by businesses of all sizes, keen to understand how the future of the Chamber – and their voice within it – will unfold.
