ICA Preview: Moving Forward with Transparency
September 29, 2011 1. Since the incredible volatility began three years ago, how have ICA’s priorities changed, if at all?
The volatility in the market in 2008 and more recently has pushed risk management to the top of the agenda for many companies – especially the ICA. Going forward, the main priority for us is to ensure that the ICA Bylaws & Rules are fit to cope with this increased volatility – especially around Rule 225/226 and price discovery. In addition, we also need to work harder to ensure that the ICA provides a safer trading environment for all parties. Membership of the ICA has to mean something and it should be an outward sign of trust in this volatile market.
2. What are the top challenges ICA leadership needs to meet in the coming year?
The huge increase in arbitrations and appeals as a result of this volatility has focused attention on the ICA’s arbitration system.
The system relies very heavily on people with extensive experience of the cotton trade to participate in tribunals and appeal committees. Arbitrators also need to be trained to a level where they have enough knowledge of English contract law and arbitration law to debate the issues and make decisions fairly, impartially, and in line with the law. We know that arbitrators have less and less time to devote to the ICA and to participate in arbitration tribunals. That is why a recent paper was approved by the ICA Board to look at ideas to radically “modernize” our arbitration system, drawing on best practice in other commodity associations.
With the increased volatility and increased number of disputes, it is easy to see how the old “battle lines” may be drawn between buyers and sellers. The ICA Board has worked very hard to ensure that the ICA is representative of all parties in the trade. That hard work is starting to pay off: ICA membership increased by more than 15% last year and we now have a more diverse membership, representing all sectors. Moving forward, the challenge is to retain that membership and ensure that each member feels there is value in being a member, and that they truly believe that they have a voice in the future direction of the ICA.
It is very difficult to know how the current situation will develop during the coming year — these are unprecedented times and, as such, they bring new and unforeseen challenges. It is important that the ICA is able to tap into the strength and resource of its membership and is able to react and deal with these challenges in a timely and well-thought-out way — no rash decisions or ‘knee jerk’ reactions. We need to stay ahead of the game and lead the way.
3. What things need to happen for this year’s conference and trade dinner to be considered a success?
Numbers are an obvious, visible sign of success, but we believe that networking events like this help to strengthen the cotton community. We hope that “Moving Forward” will create a sense of unity, focus and optimism for the coming year. We want delegates to make more new business contacts, share ideas and best practices so they can leave Liverpool revitalized and ready to face the future — whatever it may bring.
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