The 'demise' of regulatory bodies

The government has decided to forfeit the independence of the regulatory authorities of Pakistan by transferring them from the Cabinet Division to the respective line ministries, thereby diluting their autonomous status to much of a line function. The government submitted the summary titled "Transfer of regulatory authorities from the cabinet division to respective line ministries" on the agenda of the meeting of the Council of Common Interests (CCI) held this week.
The provinces of KP and Sindh are reported to have opposed the centre's move to bring the regulatory bodies under the respective ministries fearing infringements of their independence in decision making. Of special concern to them are regulators OGRA and NEPRA who have a delicate function to perform: dispense justice and ensure fairness in revenue distribution. KP has a much greater reliance on the revenue from Tarbela dam and other hydropower projects in KP and also the oil and gas production in its territory.
The KP Chief Minister demanded withdrawal of the said summary from the agenda of CCI. He is reported to have stated that "critical decisions of national importance and far reaching consequences should not be taken in haste and without proper framework. The transfer involves long-term implementation for rights of the provinces. There is a need for a detailed and careful deliberation at our end before we firm up our viewpoint for consideration of the CCI which for sure cannot be done in a short span of one day". The concerns of the provinces that the change is an infringement on the independence of the regulators has merit. Also, it appears true that much is being done in haste and without any home work.
The dilution of the independence of the regulators is not only a matter of concern to the rights of the provinces but the concerns and consequences for other stakeholders are far more complicated and severe. For that one must attempt to truly comprehend the reasons behind the formation of regulators in Pakistan and the necessity of their presence to conduct international businesses as per internationally acceptable fair business practices and norms.
The whole foreign and local investments in the power, oil and gas industry is based on the strength of the independence of OGRA and NEPRA. Much of the multinationals presence in Pakistan is on the strength of fair implementation of intellectual property rights by IPO (Intellectual Property Organisation) of Pakistan and many more such regulators having an influence on the economy of Pakistan.
There are 18 main regulatory bodies in Pakistan: NEPRA, OGRA, PEMRA, FBR, NAB, State Bank of Pakistan, Election Commission of Pakistan, Security Exchange Commission of Pakistan, IPO, Public Procurement Regulatory Authority and others. The regulators of Pakistan are provided protection under the constitution of Pakistan to perform their duties in the interest of the nation and the people of Pakistan. They are to conduct their responsibilities free from political influence and interference.
The conduct and tenure of heads of the Regulatory Bodies are provided protection under the constitution of Pakistan to enable them to work independently. The regulators are fully autonomous. They, however administratively report to the Cabinet Division.
Unfortunately, however, regulators have surrendered their constitutional independence by being subservient to the dictates of the government of the day and vested interests. But the government move would deprive them of whatever little independence they have in them. Their autonomous status would be compromised and they are inevitably likely to function as one of the departments of the ministry in a line function , following much of the ministry's interests and dictates, then as an independent body balancing the interests of the government, the investors, the provinces and the public.
Lately, the government appears to be in haste in re-structuring the state machinery to make it more compliant and subservient to the political influence and dictates. Little does the government, however, realise that this is a profoundly unwise move.
Last week, the Chairman of SECP announced the Companies Ordinance 2016, which categorically gives power to the federal government to appoint and remove the Chief Executive Office of public sector companies making them venerable to the pleasure and dictates of the government. No professional and dynamic talent would opt to take up a such a job. The result will be inferior quality of governance of the public sector enterprises which are already hit hard by incompetence, corruption and losses.
It is ironical that the legislators placed by the public in the assemblies and Senate do not bother to challenge such defaults of the government effecting the public in any effective and meaningful manner. Any item which they appear to take seriously and with one voice is the one related to the increase in their emoluments.