IHC stops govt from acting on sugar report, demands response over mill owners’ petition

Islamabad High Court (IHC) Chief Justice Athar Minallah on Thursday barred the government from acting on the recommendations of the investigation report of the Sugar Inquiry Commission, which blamed industry barons for misuse of public money and cartelisation leading to massive price hike of the commodity in the country.

The court issued the stay order for 10 days — when the next hearing is fixed — after representatives of the sugar industry agreed to sell the commodity at Rs70 per kilogramme during this time.

Justice Minallah gave these orders while hearing an appeal filed by the entire sugar industry, including family members of Pakistan Tehreek-i-Insaf (PTI) leader Jahangir Khan Tareen, opposition leader Shehbaz Sharif and federal minister Khurso Bakhtiar, against the inquiry commission.

The petitioners claimed that the probe report “exceeds the constitutional mandate and limitations of a Federal Commission of Inquiry constituted under the 2017 Act, as it trespasses into matters within the exclusive legislative and executive domains of provinces”.

The chief justice inquired about the commission’s findings regarding the price hike to which the Khan responded: “The commission mentioned a lot of reasons in its 324-page report.”

The lawyer added that the commission had recommended that the Federal Board of Revenue, Federal Investigation Agency and National Accountability Bureau should take action against those implicated.

IHC chief justice asked mill owners how much of their produce is sold to the public.

“It’s a simple thing […] 30 per cent of the sugar should be sold to the public.

“Sugar is a need of a layman [and] the government should also take steps in this regard,” Justice Minallah remarked, adding: “Commission did not give any finding regarding the convenience of the layman. The purpose for which the commission was formed was not addressed.”

The judge further said: “This court does not usually interfere in the matters of the executive but sugar is a requirement of a labourer. They (government) are giving subsidies on Coca Cola, why aren’t they providing basic rights to the public?”

In response to a question, the industry’s lawyer informed the court that in November 2018, sugar price was Rs53 per kg, to which the chief justice remarked it had increased to Rs85 in a span of just two years. The counsel did not comment on this.

Justice Minallah said the court will issue a stay order if mill owners agree to sell the commodity at Rs70 per kg until the next hearing, to which their counsel agreed. The judge also asked Additional Attorney General Tariq Khokhar if the Centre would oppose the court’s option, to which Khokhar responded in the negative.

The court issued notices to all respondents named in the petition, including the federal government, and directed the registrar office to fix the hearing of the case after 10 days.

Sugar probe report

Last month, the government had made public an inquiry report submitted by sugar inquiry commission, which blamed key political figures and government functionaries for wrongdoings within the industry. Among those implicated by the commission are PTI leader Jahangir Tareen and PML-Q MNA Moonis Elahi.

The commission was critical of the role of Planning and Development Minister Asad Umar, Adviser to the Prime Minister on Commerce and Industries Razak Daw­ood and Punjab Chief Minister Usman Buzdar on the issue of sugar export subsidy as they failed to satisfy the commission.

These three key government functionaries and former prime minister Shahid Khaqan Abbasi had appeared before the commission and recorded their statements on the issue of grant of sugar subsidy.

The commission, which was formed to probe the recent sugar crisis in the country, observed that during 2017-18, Rs10.7 per kg subsidy was granted by the Economic Coordination Committee (ECC) of the cabinet only for export of two million tonnes of sugar (Sindh was granted an additional subsidy of more than Rs4bn). A decrease of Re1 per kg of subsidy meant saving of more than Rs2bn.

Even if observations of the Finance Division were to be ignored and only adjustments of Rs5.10 per kg considered, this would have saved more than Rs10bn. The major export subsidy was availed after January 2018. Therefore, timely intervention could have saved billions of rupees for the national exchequer.

According to the report, Pakistan exported more than four million tonnes of sugar over the past five years and more than Rs29 billion had been given to sugar mills in terms of export subsidy.

“Exporting sugar with subsidy means that we are exporting on international rates which are lower than the cost of production claimed by sugar mills and the differential cost is being paid from the taxpayers’ hard-earned money,” the report said.