The inspection by the US team to the plants at Jebel Ali Free Zone and at Muscat raised concerns about the imposition of the quota system. The 24th part of a series describing the unknown triumphs and travails of doing international business
AK Ramdas
I had come to Dubai to spend the weekend with the family and arrived on Thursday night and had directly reached the Indian Sports Club, which was not far away from my home. I was also the honorary general secretary and had a lot of paper work to complete, before reaching home that night.
Next morning, being a Friday, we had the morning shift only, and I went to see Perera at the Finetex Plant at Jebel Ali. After a quick lunch with the staff, I returned back to the city to be with family and friends.
On Monday morning, I was in the Finetex plant to review the production and planned export shipments when, Sultan Sulayem’s secretary called to confirm that a special foreign delegation was en route to the factory and I should take personal care. Less than couple of minutes later, they were actually at our site, accompanied by a few officers from the Free Zone, led by Saif Sultan!
Only, when I was introduced, I came to realise that they were the inspectors from the USA, who had come to see the plant. This meant they would make a technical assessment of actual staff and machinery, origin of raw materials, labour strength and whether the goods exported from the plant, and thus from the UAE, were actually ‘made’ there or not!!! Saif also explained that I was the secretary of the JAGTA, and would be able to provide all information and assistance about the plants in the Free Zone, and of course give them any other information relating to plants operating outside in Dubai itself, apart from other six emirates.
For facilitating their work, I called in the few English-speaking supervisors to help them and made it clear that they were free to move anywhere within the plant, check anything and everything they wanted; regardless of the location, such as the warehouses, stores, incoming and outgoing production and raw material details, and our records. I suppose this process may have lasted for a little more than two hours.
They had other hand-picked names, which they chose at random, from the list of exporters they had and they wanted to inspect. On the Free Zone officials’ request, and which they accepted, I accompanied the US team to a few other sites in the zone and outside.
This surprise visit took the best part of the day. By the time we finished the surprise visits to various plants, it was late and as no further information was required from our side, I left around 5.30pm and reached Muscat by about 10pm. Perera had alerted Francisca of my late arrival and soon after dinner I hit the sack, as our production would actually commence by 7am sharp.
It was almost five days later, when I received a call from the Chamber of Commerce and Industry, Muscat, confirming the arrival of the US delegation to inspect various manufacturing facilities and that they were already at one site, and we would be next!
An hour later, they turned up and it was one of the inspectors who immediately recognized me, as the secretary of JAGTA from Dubai! Some of the staff members had taken out their cameras to took photos of the inspection, which the inspector objected; we stopped with apologies.
The team went around inspecting the manufacturing facilities which lasted for about an hour. This included relative documents of arrival of fabrics and accessories, shippers and so on. At that point of time, some finished materials were ready for shipment and online packaging was going on, which they inspected thoroughly.
They declined to accept any hospitality, like they did in Dubai and moved on to the next site.
This surprise visits meant that the imposition of a quota system was imminent and all the manufacturers began to worry about the procedure for allocation of these quotas. Some manufacturers had specialized in hosiery goods; some had exclusive lines of production of shirts; others for blouses; some for trousers and some of the larger units had multiple production lines, manufacturing all the above items. It was going to be a mind boggling exercise.
There were doubting Thomases who felt that in a short while this industry will have to shut down and began secretly discussing the methodology to be followed for buying and selling the quota, a practice that was already prevalent in many exporting countries like India, Pakistan, China, Hong Kong and Sri Lanka.
There were a few others who knew the industry and trade well and so without worrying about the quota system went ahead, in full swing, to accept and manufacture, whatever they were making, in large quantities, by increasing their shifts.
And the bulk of the US importers also gladly supported, sometimes, in meeting the extra airfreight costs by introducing sharing so that the goods could reach the country.
We had series of meetings in the Chambers of Commerce and Industry; and, in fact, the major and the first meeting was organized by JAGTA, outside the Free Zone, so that non-members from all the emirates could participate. Some of the officials came as ‘observers’ as they could not ‘officially’ take the lead in doing such activities. Yet, I must say the Free Zone authorities backed us to the hilt. The Dubai Chamber of Commerce and the ministry officials were most cooperative in these activities. Without their guidance and support the industry would not have lasted the two decades that it did!
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)
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