Enlivening legal system for promoting investment
Md Joynal Abdin | Published:
September 02, 2018 21:51:14
September 06, 2018 21:57:44
Indian subcontinent inherited the British legal system since the colonial days. As a result, Bangladesh had a very structured legal system since its inception. The country has about 45 Acts/Laws relevant to investment, business, trade and commerce in various sectors. In addition, there are more than 10 policies providing incentives and support to promote private sector investment in various sectors. Existing investment, business, trade and commerce related Acts/ Laws and policies of the country could be classified into 18 different categories. Such as-
I. INVESTMENT-RELATED LAWS: Investment relevant laws of Bangladesh are: The Foreign Private Investment (Promotion and Protection) Act, 1980; The Bangladesh Export Processing Zones Authority Act, 1980; The Investment Board Act, 1989; The Bangladesh Private Export Processing Zones Authority Act, 1996; The Bangladesh Economic Zones Act 2010; and Bangladesh Investment Development Authority (BIDA) Act 2016 etc.
II. INVESTMENT-RELATED POLICIES: Investment-related policies are: Private Sector Power Generation Policy of Bangladesh 2004; Bangladesh Private Sector Infrastructure Guidelines 2004; SME Policy Strategies 2005; Policy Guidelines for Enhancement of Private Participation in the Power Sector 2008; National Tourism Policy 2009; Renewable Energy Policy of Bangladesh 2009; Plot Allocation Policy in BSCIC Industrial Estate 2010; Policy and Strategy for Public-Private Partnership (PPP) 2010; Export Policy 2015 - 2018; Import Policy Order 2015-2018; and National Industrial Policy 2016 etc.
III. TRADE, COMPANIES, COMMERCIAL OR MERCANTILE LAWS: These include: The Contract Act 1872; The Partnership Act 1932; The Drugs Act 1940; The Bangladesh Small and Cottage Industries Corporation Act 1957; The Negotiable Instruments Act 1881; The Drugs (Control) Ordinance 1982; The Bangladesh Standards and Testing Institution Ordinance 1985; and The Companies Act 1994 etc.
IV. SECURITIES AND EXCHANGE LAWS: The Securities Act 1920; The Securities and Exchange Ordinance 1969; and The Depository Act 1999 etc.
V. TAXATION, CUSTOMS & REVENUE LAWS: The Customs Act 1969; The Income Tax Ordinance 1984; The Value Added Tax Act 1991; The Travel Tax Act 2003; and The Finance (2008-09 FY) Act 2009 etc.
VI. BANKING & FINANCIAL INSTITUTION LAWS: The Banking Companies Act 1991; The Financial Institutions Act 1993; and The Money Laundering Prevention Act 2009 etc.
VII. INSURANCE LAW: The Insurance Act 2010.
VIII. LAND/PROPERTY LAWS: The Transfer of Property Act, 1882; and The Registration Act, 1908.
IX. IMPORTS-EXPORTS & SHIPPING LAWS: The Bills of Lading Act, 1856; and The Imports and Exports (Control) Act, 1950.
X. LABOUR AND INDUSTRIAL LAWS: The EPZ Workers Association and Industrial Relations Act, 2004; and The Bangladesh Labour Act, 2006.
XI. CONSUMER LAW: The Consumer-Right Protection Act, 2009.
XII. INTELLECTUAL PROPERTY LAWS: The Patents and Designs Act, 1911; The Copyright Act, 2000; and The Trade Mark Act, 2009; etc.
XIII. FOREIGN TRADE & FOREIGN EXCHANGE LAW: The Foreign Exchange Regulation Act, 1947
XIV. ICT LAWS: The Information and Communication Technology Act, 2006; and The Bangladesh High-Tech Park Authority Act, 2010
XV. PUBLIC PROCUREMENT LAW: The Public Procurement Act, 2006.
XVI. ENVIRONMENTAL LAW: The Bangladesh Environment Conservation Act, 1995.
XVII. PROCEDURAL LAWS: The Arbitration Act, 2001; and The Artha Rin Adalat Ain, 2003 (The Money Loan Court Act 2003).
XVIII. TOURISM LAWS: The Bangladesh Tourism Reserved Area and Special Tourism Zone Act, 2010.
Introduction of business-related major laws and policies could be narrated as follows:
- THE FOREIGN PRIVATE INVESTMENT (PROMOTION AND PROTECTION) ACT, 1980: This is a landmark Act for facilitating and promoting foreign investment in Bangladesh. It was adopted on April 01, 1980 by the government. Main objective of this Act was to provide promotion and protection of foreign private investment in Bangladesh. This Act allowed foreign entities to development of capital, technical and managerial resources of Bangladesh; discovery, mobilisation or better utilisation of the natural resources. It resulted in strengthening of the balance of payment of Bangladesh, increasing employment opportunities and the economic development of the country.
- THE BANGLADESH EXPORT PROCESSING ZONES AUTHORITY ACT, 1980: This is another first generation Act while government shifted its direction from nationalisation towards free market economy and private sector development. This Act was adopted on December 26, 1980. It was formulated to establish the Bangladesh Export Processing Zones Authority (BEPZA). BEPZA is responsible for creation, development, operation, management and control of export processing zones (EPZ) and for matters connected therewith. EPZ is a name of success in Bangladesh to attract foreign investment and increase the export/ international trade of the country.
- THE INVESTMENT BOARD ACT 1989: This Act was adopted on March 02, 1989 to establish the Board of Investment (BoI). Objective of the BoI was to inspire investment in private sector and organise investment-related logistic support for promotion of private sector. Primarily, the BoI was attached with the Ministry of Industries and later it was looked after by the Prime Minister's Office (PMO). BoI has recently been abolished by the government and a new entity called Bangladesh Investment Development Authority (BIDA) was created under the Bangladesh Investment Development Authority Act 2016. BIDA is the country's principal private investment promotion and facilitation agency. The Act was created on September 01, 2016. The Act mandated BIDA for providing diversified promotional and facilitating services with a view to accelerating industrial development of the country.
- NATIONAL INDUSTRIAL POLICY 2016: The government adopted the latest industrial policy in 2016 titled 'National Industrial Policy 2016'. This policy emphasised upon achieving the status of middle income country (MIC) through sustainable environment-friendly industrialisation by 2021. With this view in mind, National Industrial Policy 2016 emphasised upon development of small and medium enterprises (SMEs). New potential sectors along with the service sector got attention in this policy. It defined different segments of industries, identified high priority sectors, management of industrial wastage, and protection of intellectual property rights. This policy adopted a time-bound action plan for the first time to facilitate proper implementation and monitoring.
- SME POLICY STRATEGY 2005: The government adopted SME Policy Strategy in 2005. Its successor SME Policy Strategy 2016 is in under final review of the Ministry of Industries. SME Policy Strategy 2005 focussed on the government's commitment to SMEs as a vehicles for quality of life improvement, economic growth and poverty alleviation of the common people. The primary role of the government was determined as a facilitator of removing policy obstacles and neutralising market failures and providing necessary promotional support. SME Policy recommended establishing an apex organisation titled 'SME Foundation' to look after the wellbeing of SME sectors. It identified 11 potential SME sectors namely Electronics and electrical; Software development; Light engineering and metal working; Agro-processing /agri-business/plantation agriculture/specialist farming/tissue-culture; Leather-making and leather goods ; Knitwear and ready-made garments; Plastics and other synthetics; Healthcare & diagnostics; Educational services; Pharmaceuticals/ cosmetics/toiletries; designer, aesthetically-challenging, personal wear and effects; as SME booster sectors.
- THE EXPORT POLICY 2015 - 2018: The Export Policy 2015-2018 was adopted by the government on September 09, 2015. This policy focused on increasing productivity of the export-oriented sector, ensuring quality of exportable products in competitive price, diversification of export items and market destination, special attention to ICT-based and service export, selecting a priority list, selecting one focal point at all Bangladeshi embassies abroad, activating commercial wings of the embassies to build commercial relations with respective countries in order to increase export of Bangladesh.
- THE IMPORT POLICY ORDER 2015-2018: The Import Policy Order 2015-2018 of Bangladesh was adopted by the government on February 10, 2016. This policy focussed on controlling imports of Bangladesh to ensure quality of permissible imported products, control import of conditionally importable products. This policy determined standards for importable goods for ensuring human, animal and plant life safety and security in Bangladesh.
- THE BANGLADESH SMALL AND COTTAGE INDUSTRIES CORPORATION ACT, 1957: The Bangladesh Small and Cottage Industries Corporation (BSCIC) Act was adopted during the Pakistan regime on May 21, 1957. Main objective of this Act was to establish a Corporation for the purpose of promoting the development of small and cottage industries in the country. BSCIC played a very significant role in promotion and development of cottage, micro and small industries of the country. There are 79 BSCIC industrial estates established by the organisation. BSCIC is working to develop and promote cottage, micro and small industries of Bangladesh.
- THE BANGLADESH STANDARDS AND TESTING INSTITUTION ORDINANCE, 1985: The Bangladesh Standards and Testing Institution (BSTI) Ordinance was adopted on July 25, 1985. Main objective of this Act was to establish an institution for standardisation, testing, metrology, quality control, grading and marking of goods. Standardisation and ensuring proper quality of products is a very important issue for the safety of life and wealth. Ensuring world class quality is the most significant criteria of a product to enter the export market. Therefore, strong capacity of BSTI could play a vital role in maintaining safety and the product's quality in domestic market while also ensuring quick growth of export.
- THE COMPANIES ACT, 1994: The government adopted the Companies Act on September 12, 1994. This is the Bible of joint stock limited company, Associations, NGOs operating in Bangladesh. Actually, this is the compiled and updated version of few older Acts related to the companies and other associations. It provides the guiding principle for incorporating, managing day to day operation, profit sharing, sustaining or dissolution of all sorts of companies in Bangladesh. It is a safeguard for investors, guide book for operating companies and associations in Bangladesh. It controls registration, classification, MoA & AoA management, role of the directors, transferring of ownership.
- THE DRUGS (CONTROL) ORDINANCE, 1982: The Drugs (Control) Ordinance was adopted by the government on June 12, 1982. Main objective of this ordinance is to control manufacture, import, distribution and sale of drugs. Therefore, it is a sector-specific ordinance for the pharmaceuticals industry of Bangladesh. Pharmaceutical is one of the major contributory sectors of Bangladesh. At present, Bangladesh is almost self-sufficient in medicine. Bangladeshi pharmaceutical companies are exporting their products to 107 countries, including Germany, USA, France, Italy, UK, Canada, Netherlands and Denmark etc.
- THE CONTRACT ACT, 1872: This is one of the oldest Acts during the British period enacted on April 25, 1872. This is the legal framework related to sign, manage and dissolution/ void of contracts. This Act is practised by most of the commonwealth states. Therefore, it is universal in type.
- THE PARTNERSHIP ACT, 1932: This is another inherited Act practised in Bangladesh since British period. This act was enacted on April 08, 1932. Main objective of this Act is to define and direct how to manage the rules relating to partnership.
- TAXATION, CUSTOMS AND REVENUE-RELATED LAWS: Bangladesh's revenue sector is operated and controlled under four acts and one ordinance. These are the Customs Act 1969, The Finance (2008-09 FY) Act 2009, The Income Tax Ordinance 1984, The Travel Tax Act 2003, and The Value Added Tax Act 1991.
- INTELLECTUAL PROPERTY RIGHTS-RELATED LAWS: Bangladesh has three separate Acts related to copyright, patent and trademark titled the Copyright Act 2000, the Patents and Designs Act 1911 and the Trade Mark Act 2009 to protect all sorts of intellectual rights of the innovators.
Finally, it can be stated that Bangladesh has good system in place to promote, preserve and ensure safety and security of the private sector investment by local or foreign investors. The only shortcoming is in enforcing, implementing and imposing all these laws uniformly without political influence. Uniform enforcement of these laws with adequate and qualified manpower can offer optimum benefit to the system.
Md Joynal Abdin is Executive Director, DCCI Business Institute (DBI). (Views are of the writer's own and DCCI or DBI is not responsible in any way.)