The Federal Cabinet has approved either to amend prevalent National Accountability Bureau (NAB) Ordinance 1999 or promulgate new law to contain "arbitrary" powers of Chairman NAB, official documents available with Business Recorder reveal.
"Constitution of independent supervisory committee to oversee NAB's affairs as the current NAB system is arbitrary and not suitable to the country's parliamentary federal system. Furthermore NAB Ordinance 1999 either be amended or a new law in place be promulgated as under the present law NAB Chairman enjoys arbitrary powers and law is in favour of prosecution to the disadvantage of the accused," the documents quote recommendations of four-member committee headed by outgoing Law Minister, Farooq H Naek. Minister for Religious Affairs, Khurshid Shah, the then Minister for Finance, former Minister Abdul Hafeez Shaikh and Minister for Information, Qamar Zaman Kaira were members of the committee.
The committee held a number of meetings with different stakeholders including Transparency International Pakistan, Competition Commission of Pakistan (CCP), etc and finalised the following recommendations: (i) documentation of the economy, corporatisation, effective business and more efficient and active role by the Federal Board of Revenue(FBR) with regard to unregulated banking transactions; (ii) automation of revenue record which will not only reduce litigation but also various transactions regarding the land can ably be regulated; (iii) privatisation of Public Sector Enterprises (PSEs) where possible and introduction of Holding Companies Structure instead of existing PSEs; (iv) the independent role of the FBR needs to be re-defined keeping in view the tax avoidance through finding loopholes, tax fraud and weak tax collection mechanism; (v) there is need for Preparation of National Anti-corruption strategy with effective implementation to tackle this serious issue; (vi) strengthening of the office of Auditor-General of Pakistan would bring better results by checking corruption in Government departments; (vii)
urgent measures be taken for disposal of court cases involving million of rupees of Government revenue, which are pending for years; (viii) introduction of special pay packages for certain departments create disparity among the employees, which requires due attention of the Government and transparent procedure for appointments on merit through FPSC needs to be adopted and a Committee may also be constituted for the MP scales position; (ix) the assets of the civil servants, bureaucrats, army officers, judges and their dependants should be published; (ix)comprehensive training programs be chalked out for the Government employees; (x) better co-ordination among the various departments and Government organisations; and (xi) role of media be given due importance with promulgation of effective laws to check defamatory statements.
Ms Rahat Kaunain, Chairperson of the Competition Commission of Pakistan, opined that there is a need to look at corruption from a holistic point of view and focus needs to be shifted from people to systems and processes. Corruption is to be identified as inefficiency, which results because of procedural lapses. She further pointed out that the figures on corruption provided by the NAB have increased the anxiety of general public and would result in loss of faith in the State. She stressed the need for identification of a few key institutions in Pakistan which can serve as role models for building the national image with extended reach, transparency, evolution of processes, timeline, magnitude of impact and value system; examples of NADRA and Motorway Police were quoted. She suggested that the accountability mechanism should be transparent, fair and should not be a cause of harassment and scandals. Replying to a query raised by the chair on the root cause of corruption and ways of preventing it, she replied that procedural lapses, discriminatory application of rules and scarce employment opportunities were the main causes of corruption. Further, the status quo is another problem as the Government officials are afraid of making policy decisions. In response to a query from Dr Hafeez Shaikh, Kaunain replied that the Competition Commission of Pakistan does not directly deal with corruption as internationally collusion is not considered as corruption. However, she suggested that public procurement laws and rules needed to be revamped to reduce corruption.
Muhammad Ali, Chairman SECP, while discussing the definition of the corruption given by the Transparency International and the World Bank stated that misuse of office or power, gain or benefit and deviation from norms are three key elements which together could be classified as corruption. He further stated that corruption is primarily viewed as a governance issue, which includes poor law enforcement, archaic and weak internal compliance system. Thus addressing corruption effectively involves both pubic administration and corporate governance. He pointed out that undocumented economy in Pakistan, un-regulated banking transactions, benanami transactions, hawala, hundi, and un-regulated real estate sector are conduits of gains from corrupt practice. Moreover, he stated that figures given by the NAB are unrealistic keeping in view the size of the economy. He suggested the following steps for improving the situation; which have brought tangible results in countries such as Turkey, Indonesia and Malaysia: (i) corporatisation and effective business regulations; (ii) documentation of the economy, automation of revenue record and effective supervision by FBR of the daily banking transactions; (iii) establishment of Real Estate Regulatory Authority and Gold Exchange the country; (iv) privatisation of, Public Sector Enterprises (PSEs) where possible and introduction of Holding Companies Structure instead of PSEs; and (v) independent role of FBR needs to be re-defined keeping in view the tax avoidance through finding loopholes, tax fraud and weak tax collection mechanism.
Syed Asad Ali Shah, Chartered Accountant, questioned the figures quoted by the NAB that Pakistan was losing Rs 13 billion each day because of corruption. He argued that this sweeping figure gives a very wrong perception - both domestically and internationally. The NAB should actively work to eradicate corruption from the country. He stressed the need for an active national anti-corruption strategy. Describing greed as the main root cause of corruption, he gave following recommendations for reducing corruption: (i) Law on accountability be passed urgently; (ii) there is an immense need of independent supervisory committee to oversee NAB's affairs as the current NAB system is arbitrary and not suitable to the country's parliamentary Federal System; (iii) regulatory bodies and other national institutions should be strengthened. Regular courses and training programmes may be introduced for capacity building and enhancement of effectiveness of institutions and their employees; (iv) zero-tolerance strategy against fraud and corruption be adopted; and (v) preparation of national anti-corruption strategy with effective implementation to tackle this serious issue.
The Chairman as well as members of the committee lauded the role being played by Nadeem Afzal Chan, the Chairman Public Accounts Committee. Chan presented a number of suggestions for the consideration of the Committee to wipe out corruption, which are as under: (i) regulatory bodies need to play their roles; (ii) discretionary powers should be used prudently and SRO culture should be discouraged; (iii) strengthening of the office of Auditor-General of Pakistan would bring better results by checking corruption in Government departments; (iv) urgent measures be taken for disposal of court cases involving million of rupees of government revenue, which are pending for years;(v) the introduction of special pay packages for certain departments create disparity among employees, which requires due attention of the government and transparent procedure of appointments through FPSC needs to be adopted and a committee may also be constituted for the MP Scales position; (vi) suo motu power of NAB needs to be curtailed immediately; and (vii) the assets of the civil servants, bureaucrats, judges and their dependants should be published.
The 3rd meeting held on December 18, 2012, was attended by the Chairman, NAB, and D.G. FIA. The Chairman NAB, Admiral Fasih Bokhari (Retd) appreciated the steps taken by the Federal Government towards eradication of corruption in Pakistan. He suggested that other political forces of Pakistan should also attend these meetings. He further stated that he has tried to address the systemic problems in the regulation system of the country and there is no intention to highlight these factors with any political intent.
He gave a detailed presentation in which he highlighted various factors responsible for corruption. At the outset, he pointed out that the most common modes of corruption in Pakistan are bribery, embezzlement, kickbacks and incompetent regulatory mechanisms. He compared Pakistan's position globally with respect to corruption using international sources, such as the Global Competitive Index, Human Development Index and the Corruption Perception Index (CPI). He opined that the failure of the system of governance and terrorism are the main reasons for this increase in the levels of corruption in the country.
Bokhari said certain areas where automation could lower levels of corruption. These include: (i) revenue department, down to Patwari level; (ii) land grabbing/encroachments; (iii) loans/wilful defaults; (iv) over staffing/ ghost employment. He termed delays in mega projects and incompetence as other sources of corruption. He made the following recommendations: (i) non-performing Regulators be restructured and made accountable for performance; (ii) NAB be made totally autonomous and independent; (iii) appointments be made on merit; and (iv) accountability of the NAB be watched by legislatures.
Muhammad Anwar Virk Director General (DG) FIA, along with Additional Director-General (AIG) FIA, Islamabad, apprised the committee on the establishment of an Anti-corruption Wing, headed by the ADG in the FIA. This Anti-Corruption Wing works on the basis of source report, complaints received from citizens, and in some cases from the government departments. The ADG further briefed the committee regarding working of the FIA Anti-Corruption Wing. He said that in case of inquiry against the government servants above BS-18 the approval of the Additional Secretary is mandatory and the department is unable to investigate the matter without his approval. In this regard, he stated that the Ministry of Interior had issued a directive. The Committee directed him to provide a copy of that directive for perusal. The Committee further directed that a complete list of the complaints received, investigations conducted, prosecutions and convictions may be provided grade/department-wise, on the given performa.
The ADG further stated abuse of power, job and financial insecurities, discriminatory pay packages amongst employees of different departments are main causes of corruption in the public sector. He also informed the committee of the problems being faced by the FIA in performance of its functions.
The Committee appreciating the significance of the issue of training, unanimously resolved and directed that the Ministry of Interior is to make special arrangements for required training, which shall be mandatory for the all the officers of FIA. FIA also provided year-wise data for the last 10 years relating to corruption cases.
In the meeting held on December 24, 2012, the Director of the Directorate of Anti Corruption Establishment Khyber Pakhtunkhwa focused on the corruption prevalent in public sector in Khyber Pakhtunkhwa. Giving figures of the provincial budget, with a current and development expenditures break-up, he highlighted some vulnerable areas in the execution of the provincial Government expenditure. He revealed that technical staff responsible for execution of development projects was involved in embezzlements in certain schemes and claimed that the amount of commission/ kickbacks represented 20% of the cost of these projects.
The causes of corruption mentioned by him included poverty, terrorism, political instability and undue interference in the public Sector, weak institutional control and supervision, greed and excessive ambitions, inadequate remuneration of the public servants and moral failure.
The Director suggested a number of steps towards eradication of corruption from the province: (i) need of political will to address the menace of corruption; (ii) stopping blame-game; (iii) stoppage of external influences in the Government departments (postings/transfers); (iv) addressing issue of job security of the officials; and (v) special attention should be paid to the motivation of employees.
The representative from Sindh Government stated that government departments in Sindh lack requisite trained/ skilled staff. He stressed the need for pre-service training, in-service training and promotional exams for the employees. He revealed that a number of Committees have been formed to improve the working of the Sindh Government.
He suggested that special committees be formed to guide relevant departments on prevention of corruption. These committees with an autonomous status should meet on a monthly basis. He stressed the need for creating awareness in public, taking preventive measures and enforcing of laws. He gave certain recommendations for tackling corruption: (i) corrective measures be taken to improve educational institutions and identify the exact number of ghost schools and take remedial measures; (ii) need to bring police reforms in the province; (iii) moral education required along with legislation to prevent corruption; (iv) law and order situation requires immediate attention of the provincial managers; (v) arrangements be made for an early disposal of court cases relating to corruption; (vi) efforts be made to bring good governance in the province; (vii) comprehensive training programmes be chalked out for government employees; (viii) steps be taken for the implementation of laws; and (ix) formation of autonomous anti-corruption committees.
He further added that there are approximately 40,000 ghost employees in government departments. Ahmed Saeed, President ICAP, opined that the volume of corruption is only an estimation and cannot be accurately assessed; the general public tends to assume that it is at a very high level. He suggested that such perception of public can be removed by hiring professional CAs at federal and provincial levels, who have played their role in KESC and PSO, etc. CAs assist in development and implementation of internal controls to check corruption.
He identified the main causes leading to corruption in Pakistan as weakness in governance, misuse of authority, absence of accountability, non-implementation of policies, absence of a central watchdog, incompetent staff, lack of reliable inspections and absence of meaningful training programmes in financial services field. The representative of Balochistan Anti Corruption Establishment (ACE) gave an overview of various anti-corruption laws in the province and revealed the working of Anti-corruption Committees in the province.
The fifth meeting of the Committee was held on January 22, 2013. On behalf of Transparency International Pakistan, the meeting was attended by Sohail Muzaffar and Sayyed Adil Gilani. Sayyed Adil Gilani gave his views. After giving an overview of whole scenario, he presented recommendations to enhance the image of Pakistan at the international level, which are as follows: ( i ) A letter to the Government of Switzerland under Article 25(1) of the Avoidance of Double Taxation Treaty and Return of illicit Assets Act or RIAA with Switzerland be sent and negotiation be made to get Tax on Pakistan nationals deposit in Swiss Banks on the pattern of the UK deal.
The UK and Swiss Governments have agreed a deal to tax the bank accounts of UK citizens and transfer the money directly to the Treasury without revealing the identity of account holders. The accounts in Swiss banks will be taxed at the rate of between 19% and 34% on the principal sum hidden, depending on how long the account has been running. In 2013, the Swiss will tax the bank accounts of the UK taxpayers and transfer the money directly to the Treasury, but without revealing the identity of the account holders.
(ii) National Accountability Ordinance, 1999 be amended as currently the Chairman NAB enjoys very vast powers; (iii) under the Public Accounts Committee (PAC), Public office holders shall also include armed forces, judiciary and private sector involved incorruption in Government funds.
(iv) Freedom of Information Ordinance, 2002 be revised, and Right to Information Bill introduced by Sherry Rehman on 11th October, 2011, be passed by the Parliament. All information under Freedom of Information Ordinance be made available on websites of all ministries/departments/organisations to comply with Constitution Article 19A.
(v) Only a taxpayer or Dhal payer agriculturist should be allowed to buy property, cars and weapons.
Gilani further recommended certain steps to combat corruption and to bring good governance which are as follows: ( i) all appointments/promotions of civil servants and heads of public sector enterprises be merit-based on predetermined selection criteria; (ii) appointments of Auditor-General of Pakistan, Chairman NAB/DGs Province, DG FIA, all Ombudsmen, Chairman FBR, Attorney General/Advocate-General and Chairman FPSC be made in consultation with the Opposition Leaders of National as well as Provincial Assemblies;(iii) all regulatory authorities be made fully autonomous and financial independent, answerable to the Public Account Committee without any nomination by the Government; (iv) asking the foreign Government for return of Pakistani unpaid tax money lying in their banks;(v) model of Motorway police as in Punjab be introduced in other provinces of Pakistan;(vi) political parties should discourage corrupt members;(vii) land record to be computerised;(vii) control of Ministry of Information be de-regulated on Government advertisements;(viii) all state-owned urban land only be disposed of by open public auctions and ;(ix) all government officers of BS-20 and above including civilians, Armed Forces and Judiciary, must not be allowed to accept any employment or consultancy of any private sector undertaking, before expiry of a period of 5 years after their retirement.