Of corruption & accountability

Dr. Ikramul Haq & Abdul Rauf Shakoori

Pakistan is blessed with natural resources and is geographically well-placed in the heart of Asia, a strategic position that highlights its importance in connecting different regions. The vibrant human resource which is largely represented by youth can be utilised in an efficient way to uplift Pakistan. However, corrupt practices lead to mistrust and disruption in a society which ultimately affect both stability and growth. 

The hazard of corruption twigs out from poor governance, abuse of authority and lack of transparency which is a direct threat to economic stability. It undermines institutional strength and overall values of the society, thus jeopardising sustainable growth and rule of law. Corruption also hinders business environment by compromising impartiality and rule of law. Thus, the inflows of investment, due to bribery and corruption, are disrupted causing unemployment, low foreign exchange reserves, high inflation and inadequate health and educational facilities etc. for citizens.

Corruption creates the perception of unfairness and promotes leakages which ultimately weaken the government’s ability to tax the rich resulting in improper utilization of resources for improving the society as a whole. In underdeveloped economies like Pakistan, the governments’ spending is always rated low due to wasteful projects to incentivize the few, close to power circles at the cost of public at large. Sensible use of available resources can have a positive economic and social impact in areas like health and education. Pro-rich policies adversely affect lower income classes that rely heavily on public services for their basic necessities.

Successive civil and military governments in Pakistan have used anti-corruption slogans merely as a tool to achieve political objectives. The former Prime Minister and Chairman of Pakistan Tehreek-i-Insaf (PTI), Imran Khan, built his entire political career on the slogan of fight against corruption but his four year rule proved to be an utter failure in curtailing it. Rather it is disappointing to note that Imran Khan and some of his cabinet ministers were/are named in various corruption scandals though yet not formally indicted. It is also alleged that they have been maligning the institutions and during 2018-2019 fake cases against political opponents were registered. Claims that office of National Accountability Bureau (NAB) was misused for political victimization, and complaints against its chairman now retired, were ignored. He is also accused of sexual harassment as head of Commission of Inquiry on Enforced Disappearances, established in 2011 recently revealed by the Public Accounts Committee—read report published in an English daily on July 7, 2022 [PAC recommends removal of Javed Iqbal as head of missing persons commission].

It is alleged that the previous government blackmailed the former Chairman of NAB to initiate fake inquiries against opposition leaders. Resultantly, NAB as prime watchdog against corruption lost its credibility. Thus investors dissuaded from investing in Pakistan due to lack of credibility of institutions and perpetual political instability therefore Pakistan’s ranking dropped 23 times during the PTI government’s rule on corruption perception index. Pakistan was ranked 117 in 2018 that dropped to 140 in 2021.  

The struggle against corruption is a daunting challenge. War against corruption cannot be waged without devising an independent and effective legal framework and operational capacity. However, in Pakistan it appears that personal likes and dislikes of powerful elites, militro-judicial civil complex and politicians, has made the entire system dysfunctional. In the last 75 years we have failed to develop a single institution that could have effectively uprooted corruption as well as enjoying confidence of the masses. Similarly, courts have also been allegedly facilitating arbitrary arrests of politicians and key functionaries of bureaucracy, damaging the cause of justice losing the public’s confidence in the country’s judicial system.

The investigation and prosecution branches of all anti-corruption agencies in Pakistan lack capacity and competence. They have very poor understanding of matters relating to financial crimes. Their appointments are mostly based on personal choice of powerful quarters. Appointments in NAB are classic examples of promoting favouritism. In a case heard by the honourable Supreme Court of Pakistan regarding illegal appointments in NAB, Mr. Justice Qazi Faez Isa raised the question of unlawful appointment of a particular Director General (DG) of NAB apparently lacking requisite qualifications for the job. The Apex Court further observed, as reported in the media, that section 28(g) of the National Accountability Ordinance (NAO) 1999 was ultra vires to Article 240 of the Constitution of Islamic Republic of Pakistan [“the Constitution] that relates to appointments conditions of service to Pakistan. One DG NAB, Lahore, faced the charges of fake degree in Supreme Court but was later exonerated. The same DG NAB is recently blamed by one Tayyaba Gul for stripping off her clothes and making her videos to show to her husband.  

One factor putting us low in the global corruption perception index is our weak regulatory framework that is poorly designed, in utter disregard of global best principles to ensure transparency. For example, it is fundamental principle of law that burden of proof rests with the prosecution but in the NAB law, onus of proof is shifted on the accused. Now, the incumbent government has tried to change it by introducing amendments in the NAO 1999. In the past, NAB used to charge the accused at initial stage without discharging the necessary onus so when contested before superior courts, it could never sustain. Secondly, it is a fundamental right enshrined in Article 12 of the Constitution that no criminal law shall take effect retrospectively. However, in blatant violation of the land’s supreme law, NAB law was made effective from January 1 1985 and continues to be valid till date.

Yet another factor that needs to be taken strictly into account is maintaining privacy of personal data/matters of the accused. Sharing of information must remain strictly official with specific directions about data confidentiality but in Pakistan few select journalists have recently claimed that top officials of key institutions have been sharing with them record and case files of various politicians, implicated in NAB cases to harm their repute. Such kinds of breach are not tolerated in any civilised society upholding rule of law. The Apex Court needs to investigate this matter and if verified, culprits must be punished to prevent serious breach of privacy that can cause irreparable damage to the overall accountability process. This testifies to the fact that accountability process in Pakistan has mainly been for arm twisting and political management.

In our case, due to selective accountability and arbitrary judicial decisions, corruption has infested all segments of society and destroyed the country’s economic standing. Resultantly, global lenders have started requiring a comprehensive framework to avert corruptions. The recent negotiation with the International Monetary Fund (IMF) is a classic example of global concerns attached to our measures against countering corruption. 

Similarly, Pakistan is dealing with the Financial Action Task Force (FATF) since 2016 when for the first time it warned us about our deficiencies in Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) Regime. Despite addressing the major part of technical compliance, we have failed to win the trust of this global community in countering financial crimes. Pakistan being a responsible state should act in accordance with standards set by FATF et al.

Though we have comprehensive laws and regulations but these are arbitrarily used against opponents while the real culprits, due to their strong connection with the powerful elite club, escape prosecution. Reports of corruption scandals alluded to the PTI government in various sectors such as sugar, wheat, ring road project, Tosha Khana, are linked to those at the helm of affairs. Other allegations are related to medicine prices, BRT, LNG etc. including taking favours from a known real estate tycoon and using a friend of the First Lady as proxy which still need to be investigated on merit and after fulfilling requirements of Article 10A of the Constitution.

For curtailing corruption, the first and important step is to reform our judicial system. An independent judiciary not only strengthens the country’s democratic culture but also ensures fulfilment citizens’ of basic rights under the constitution—ultimately creating a congenial environment for society and businesses. The process of appointing judges to superior judiciary and their accountability should be revised. This role should solely be the prerogative of parliament. The concept of self-accountability through judicial commission needs reconsideration. This can be inferred from the cases of Mr. Shaukat Aziz Siddiqui and Mr. Justice Qazi Faez Isa. Moreover, in the last few years some judgements related to high profile political cases became controversial allegedly for want of jurisdiction under Article 175A of the Constitution proving that without putting proper checks and balances in place, we cannot strengthen our institutions to eliminate corruption.

Moreover, international institutions and regulatory bodies frequently update their methodology to combat this international challenge. Financial institutions and lenders who work closely with world economies are trying to implement global best practices to ensure rational utilisation of allocated resources. We also need to realise that with changing technological trends, governments can benefit from advanced tools to eradicate corruption. First the legislature needs to devise a clear legal framework for any information sharing mechanism for domestic as well as global community to follow illicit flow of funds obtained through corruption and corrupt practices. The government should integrate tax administration and agencies involved in detecting and preventing corruption.

We have to implement Article 5 of the United Nations Convention against Corruption which requires that each state takes an effective and coordinated approach to the prevention of corruption. The government should develop and implement comprehensive anti-corruption policies to encourage the participation of public and private sectors. The government should ensure rule of law and promote transparency in public administration. It should also set up helpline and promote the culture of speaking up so that people can freely report any incident related to corruption. An overall culture of transparency alone can promote compliance; in this regard the open government model with free access to information can help in discouraging corrupt practices.  In this regard, the role of strong and determined political leadership is critical to exhibit reform agenda, develop institutions with appropriate resources and regulatory support to ensure accountability for all. Otherwise, we as a nation will continue to face embarrassment before the international community.

_______________________________________________________________

Dr. Ikramul Haq, Advocate Supreme Court, specialises in constitutional, corporate, media, ML/CFT related laws, IT, intellectual property, arbitration and international tax laws. He is country editor and correspondent of International Bureau of Fiscal Documentation (IBFD) and member of International Fiscal Association (IFA). He isVisiting Faculty at Lahore University of Management Sciences (LUMS) and member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE).

Abdul Rauf Shakoori, Advocate High Court, is a subject-matter expert on AML-CFT, Compliance, Cyber Crime and Risk Management. He has been providing AML-CFT advisory and training services to financial institutions (banks, DNFBPs, Investment companies, Money Service Businesses, insurance companies and securities), government institutions including law enforcement agencies located in North America (USA & CANADA), Middle East and Pakistan. His areas of expertise include legal, strategic planning, cross border transactions including but not limited to joint ventures (JVs), mergers & acquisitions (M&A), takeovers, privatizations, overseas expansions, USA Patriot Act, Banking Secrecy Act, Office of Foreign Assets Control (OFAC).

The recent publication, coauthored by these writes with Huzaima Bukhari, is:

Pakistan Tackling FATF: Challenges & Solutions

https://www.amazon.com/dp/B08RXH8W46  and  https://aacp.com.pk/