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2007 – A Year of Change for the ICA

Avatar for Jim.Robinson By Jim.Robinson|March 31, 2009

In a continuation of the trend toward internationalization which was embarked upon in 2003 when the Liverpool Cotton Association changed its name to the International Cotton Association, 2007 has brought significant changes to ICA’s structure and its membership. We hope these changes will broaden its base and extend its reach, allowing the benefits of ICA membership to be enjoyed by more companies and more individuals in more countries. In the process, we hope our outreach efforts will help educate participants in the world cotton trade concerning the rights and obligations of buyers and sellers of cotton, and in so doing, further strengthen the industry’s commitment to the sanctity of contracts. Following two years of extensive research and discussions with members, the Board of Directors produced a new membership structure which will take effect in January 2008. This new structure will be much simpler than the previous one, with fewer categories of membership, namely Registered Firms, Affiliated Industry Firms, and Individual Members. The costs of maintaining the Association will be shared more evenly among the membership than was the case in the past. We also will embark on a new membership drive in 2008 with the hope of broadening our membership base further, and thus making membership more affordable.

We also are engaged in a parallel effort to make our arbitration training course available to parties in more countries. We hope this will not only increase the number of ICA-trained arbitrators around the world who can help resolve disputes locally, but will also result in an increased level of understanding of the importance of contract commitments to all parties. The course is available online via our website, and we plan to offer examinations to interested parties at various cotton meetings around the world as we did at the American Cotton Shippers’ Association Meeting last May in Dallas. Beginning in 2008, arbitrators must have passed the basic level course and examination in order to undertake an ICA arbitration. By instituting this requirement, the Board of Directors feels the arbitration process will be strengthened.

The Arbitration Strategy Committee currently is engaged in designing and testing the Advanced Level Two Course for Arbitrators. At some point in the next few years, this will become a requirement for active arbitrators. There may be some continuing education requirements as well, something that is quite common in many industries. This strategic direction is meant to ensure that there will be a broad-based cadre of qualified arbitrators available to help parties resolve disputes which may arise.

Continued Cooperation

The ICA continues to maintain communication with other cotton associations around the world on subjects of mutual interest. In 2006, the Bremer Baumwollbörse adopted ICA rules and was granted a permanent seat on the ICA Rules Committee. Discussions continue with other cotton associations along the same line. We also are very pleased to welcome the Chinese Cotton Association (CCA) as a new member of the Committee for International Cooperation Between Cotton Associations (CICCA). In its role as the Secretariat of CICCA, the ICA continues to promote the sanctity of contracts and the enforcement of arbitration awards with the help of CICCA member associations.

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Our seminar on International Trade in Raw Cotton was extremely successful in its 31st year, attracting 28 participants from 16 countries. During an intensive two-week course, the students listened to some 38 presentations covering a wide range of topics in the cotton trade offered by true professionals in each subject.

Outreach efforts around the world have continued apace this year supported by staff, board members, and past and present officers of the Association. ICA presentations were made in Mumbai at the East India Cotton Association Conference; in Accra, Ghana, at the African Cotton Association Meeting; in Urumqi, China, at the China Cotton Association Conference; and in Dallas, Texas, at the American Cotton Shippers Association Meeting. Future events include the ITMF meeting in Cairo, the ICAC meeting in Turkey, the Australian Cotton Shippers Meeting in Surfers’ Paradise, and the AFCOT meeting in Deauville, France.

The ICA’s Annual Conference and Dinner will be held Wednesday, October 3, through Friday, October 5, 2007. This year’s event will offer presentations on supply and demand from noted experts on U.S., Chinese, Indian, Brazilian, Central Asian and African cotton on Thursday and Friday afternoon. There will be a Town Hall Reception with the Lord Mayor on Wednesday night, and the usual parties with local companies on Thursday, followed by the ICA Annual Dinner in the Anglican Cathedral on Friday. Surprise entertainment should help make this year’s dinner a memorable event, and we look forward to seeing you there.

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What are the biggest issues in the global cotton industry that ICA members are facing now and in the next few years?
There are several large and significant issues facing ICA members. Since the ICA is a global organisation with members in around 60 countries, whatever is of importance to the trade generally is naturally of similar importance to our members. As a responsible organization we must be responsive to the concerns of our membership, but in addition, we believe we have a broader duty to the cotton industry at large to promote those concepts we espouse, such as the sanctity of contract and good trading practices.
The issue of defaulters is always high on the list of our concerns and we are actively pursuing ways of addressing this universal problem. For example, the ICA’s Good Trading Practices Committee is seeking to encourage dialogue between parties to a dispute to promote settlement where possible. Assistance has also been sought from local associations in a bid to resolve long-standing disputes.
In pursuit of our ideals, we have an ongoing program of education via workshops in a number of countries in Africa and Asia to explain our principles at grassroots level. In addition, we have a commitment to expand our pool of arbitrators internationally and to provide training, followed by qualifying examinations, for both existing and aspiring arbitrators. We will follow these up with continuing education and professional development programs to ensure high, consistent standards of service to the industry.
Everyone is aware of the shift in the balance of power in the cotton industry to Asia in recent years, particularly to China. The ICA is at the forefront of maintaining a healthy dialogue with all cotton trading nations, including China.

How has the ICA benefited from technology upgrades in all facets of the cotton industry, and how does this benefit the ICA membership?
The advance of technology over the last decade has been significant, especially in the IT sector. Cotton trading companies nowadays utilize more and more electronic means to conduct invoicing, L/C and contracting, although the conventional human touch element has always been important. Unavoidably, the ICA has to keep abreast of the latest development in technology. The areas of importance to the Association’s activities include much easier, instant communication with the membership, websites and the electronic contract.
The electronic contract is of potential benefit to all members but specifically those small to medium cotton traders and spinners, as they generally do not have an in-house electronic system to generate contracts. With the ICA electronic contract, trading partners can produce a contract conveniently, concisely, securely, using the latest ICA Bylaws and Rules to protect themselves

As the cotton industry experiences changes and growth in the 21st century, new companies and players emerge from around the world? If you were discussing ICA membership with a prospective member, what would you tell them were the advantages of the organization?
The ICA is the world’s premier cotton association and over three quarters of the worldwide contracts for the purchase/sale of raw cotton are made subject to the ICA’s Bylaws and Rules. This implies that in the event of a dispute arising between the contracting parties there can be automatic recourse to ICA Arbitration. The ICA arbitral system is well known throughout the industry and is a tried and tested system of dispute resolution, with access to a list of knowledgeable and experienced arbitrators. ICA membership is regarded as a mark of good standing within the cotton trade, subject to a strict code of conduct.

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