8 November 2021-
Pakistan has implemented several important legal amendments in recent years that provide a budgetary oversight role for Parliament and advance access to information on the federal level; and that some regions have adopted laws to tackle conflicts of interest and provide a framework for whistleblowing, a new civil society report on the implementation of Chapter II (Preventive Measures) and Chapter V (Asset Recovery) provisions of the UN Convention against Corruption (UNCAC), authored by the Pakistan Institute of Legislative Development and Transparency (PILDAT) finds. The report, which is intended as a contribution to the currently ongoing second cycle UNCAC implementation review of Pakistan, was produced with technical and financial support from the UNCAC Coalition.
However, more work needs to be done to effectively implement UNCAC provisions. Reform efforts should be aimed at:
- building up the budgetary oversight of Parliament,
- advancing access to information,
- establishing a federal framework to establish reporting mechanisms and protect whistleblowers,
- regulating conflicts of interest through a federal law,
- improving regulation and oversight for political financing, and
- strengthening the independence and effectiveness of anti-corruption bodies as well as the effectiveness of the judiciary.
Furthermore, the report calls for a consultation of stakeholders, including civil society, in the drafting process of new legislative initiatives and of the budget. In addition, the report calls for continuing efforts to strengthen the anti-money laundering and terrorism financing framework and its implementation, and for the establishment of a central asset recovery office.
The Pakistani government is currently finalizing its self-assessment checklist. A country visit by the peer-reviewing countries was planned but was delayed because of the COVID-19 pandemic. Some civil society organizations were supposedly involved in the review, and hopefully, the key documents will be published on Pakistan’s UNODC country profile page.
Read the full Civil Society Report in English here or at the bottom of this page. The translated report in Urdu will be available soon.
The following are some of the main findings according to topic:
Political parties have to report on contributions they received and on campaign expenses to the Election Commission of Pakistan (ECP), which is mandated to verify the receipt and returns immediately. This documentation is then accessible to the public, but only upon paying a fee to access it, and only for the duration of one year. Cases of alleged financial irregularities of political parties have remained under investigation by the ECP for many years, including cases of alleged illegal foreign funding related to several mainstream parties, some of these cases dating back to 2014, exposing institutional weaknesses in the oversight of political financing.
Access to Information
Pakistan has access to information laws at the federal level, and in all four provinces. At the federal level, the 2017 Right of Access to Information (RAI) Act upgraded the previous legal framework, including expanding the scope of disclosure, reducing exemptions, and providing a right to appeal with a dedicated Pakistan Information Commission. Some landmark cases on access to information have resulted in the release of information key to promoting accountability of decision-makers, such as the release of attendance records of members of the National Assembly and the Punjab Assembly.
In other areas important to the fight against corruption, access to information has been restricted: In November 2020, the Pakistan Information Commission ruled that asset declarations of top officers of the National Accountability Bureau (NAB) should not be disclosed due to privacy concerns. In 2017, the Chief Justice of the Lahore High Court a historic initiative by revealing the detail of his assets and liabilities.
Asset declarations of public and elected officials
Electoral candidates have to submit a declaration of assets and liabilities and extensive information including about the taxes paid to the Electoral Commission. While these statements used to be accessible to the public on the ECP’s website, this is no longer the case although still made public through printed government notifications. The National Assembly has yet to adopt a national law addressing conflicts of interest of public officials after the competent committee of the Assembly has not recommended two draft bills on this matter for adoption. Meanwhile, the provinces Punjab (in 2019) and Khyber Pakhtunkhwa (in 2016) have passed conflict of interest laws that are required to established Conflict of Interest and Ethics Commissions. However, both these Commissions have not been constituted so far.
While all elements of the budget, such as revenues and expenditures, are included in the budget documents and disclosed, the level of detail included in budget documents varies. While a performance-based budget report is regularly published online, the audit reports of the Auditor General are not made available on the website. Parliamentary scrutiny of public finances has moved forward recently: The budget for the financial year 2020-2021 is the first one since the adoption of the 1973 Constitution that will be adopted by Parliament under the Public Finance Management Act (PFMA), 2019. The parliament had not adopted a law for 47 years to regulate the public accounts of the federation until the adoption of the PFMA 2019, which finally closed this gap.
Lack of public consultations
Civil society, the private sector, and other relevant stakeholders are generally not consulted during the drafting of new legislation. New rules on the removal and blocking of online content deemed to be unlawful were drafted without the involvement of affected stakeholders. These rules will apply to all social media companies operating in Pakistan and may also affect posts and reporting on alleged corruption and other forms of wrongdoing, as well as public access to free and open internet. The media, however, freely reports on legislation while under consideration by the parliament. This, indirectly, involves the public in the process but only to a limited extent.
Pakistan does not have a federal law on whistleblower protection and reporting mechanisms. The province of Khyber Pakhtunkhwa is the only region with a whistleblower law adopted in 2016. However, the province’s Commission to protect whistleblowers created by this law has not been formed even five years after the adoption of the law.
Higher judiciary is generally perceived as independent and of integrity. However, some of the decisions involving top politicians and some judges of the superior judiciary in Pakistan have created a perception among a section of the population that the judiciary may be subjected to pressure by powerful segments of the society.
At the same time, the judiciary has yet to resolve problems facing the lower courts where ordinary Pakistani citizens remain much more likely to encounter the judicial system. The pendency of cases lying with the Higher Judiciary is on a record high as 42,762 cases remain pending in the Supreme Court of Pakistan as of January 2020. The rate of pendency has risen almost 100% during the past five to seven years.
Politicization of anti-corruption bodies
In recent times, there have been several cases filed against politicians and public officials. While some government officials are under investigation, more cases link to opposition party leaders, contributing to the perception that the NAB has become politicized and is targeting certain political leaders. The accountability process in Pakistan continues to be perceived as a tool of political engineering by the government. Attempts have been made to improve the National Accountability Ordinance (NAO) 1999, or the NAB law, which is at the center of the anti-corruption framework. Various meetings were held between the opposition parties and the government to discuss the proposed amendment to NAO, 1999 but so far, no agreement on a reform has been reached.
Private sector transparency
Every company is required to maintain an up-to-date register of its ultimate beneficial owners. While the beneficial ownership information is available to law enforcement agencies like the NAB and other stakeholders such as banks and financial intelligence units, this information is not accessible to the general public. The company registry under the Securities and Exchange Commission Pakistan (SECP) e-services project does not publish the identities of the legal and natural persons involved in the establishment and management of corporate entities, however, their names are available in an online search. The company registry also does not disclose beneficial ownership to the public.
Money laundering cases are being investigated. Between 2013 and 2018, Pakistan’s law enforcement agencies undertook 2,420 investigations of suspected money laundering cases, resulting in 354 prosecutions. However, the sole case resulting in convictions was of the former Prime Minister, Nawaz Sharif – a case that was dealt with on a priority basis upon the decision of the Supreme Court.
Pakistan remains on the grey list of the Financial Action Task Force and is currently implementing a FATF action plan to address gaps and weaknesses in its anti-money laundering framework. The FATF, however, has acknowledged after the last plenary session that Pakistan has made substantial progress and implemented a major part of the Action Plan.
Recommendations for Priority Actions
The following points are key recommendations for the government and other involved institutions in Pakistan for action or consideration in improving its compliance with UNCAC provisions:
- Make the UNCAC review process more transparent, for instance, by involving the general public, and civil society in particular. The government of Pakistan is also encouraged to share the self-assessment checklists and full country reports for both review cycles with the public, or at least the independent civil society organizations dealing with transparency. An update on the state of compliance with UNCAC should be published in the Annual Report of the National Accountability Bureau (NAB), which is the focal institution of UNCAC in Pakistan;
- Establish a clear parliamentary oversight mechanism for UNCAC implementation in Pakistan. The Parliamentary Standing Committees on Law, Justice, and other relevant subjects should play a more active role in the oversight of the implementation of UNCAC in Pakistan. It is the duty of parliamentarians to require the Executive to follow national and international obligations, and for the government to openly report to Parliament on the fulfillment of international obligations;
- Amend the National Accountability Ordinance (NAO), 1999, also known as the NAB law in the light of superior court observations such as the provision of bail, collective decision-making for crucial decision-making such as arrests, etc. The matters relating to other government organizations such as tax, and regulation of businesses should be left for those organizations such as the Federal Board of Revenue (FBR ) and SECP to deal with.
- Adequately identify, analyze and understand the country’s Money Laundering and Terror Financing risks in order to be able to implement a risk-based approach to combating Money Laundering (ML) and Terror Financing (TF) in Pakistan;
- The Election Commission of Pakistan (ECP) should make effective arrangements to strictly monitor election-related expenses for better enforcement of the law; develop legislation to fix and enforce an election spending limit on political parties in Pakistan, and provide the Election Commission of Pakistan (ECP) with sufficient human and financial resources in order to effectively enforce election expense related laws;
- Engage in legislative reform to allow the private sector, workers, civil society, economic experts, and the general public to provide input before the passage of the annual budget;
- Introduce and pass a Federal Conflict of Interest law;
- Adopt a Federal law on the reporting and protection of whistleblowers, which includes adequate reporting mechanisms and protective measures.
- Improve implementation and awareness of freedom of information laws in Pakistan and adopt measures to promote an institutional culture of transparency, open data, open-door policies, and regular communication between the government and civil society;
- Implement mechanisms that allow for civil society consultations in legislative drafting processes;
- Substantially improve and effectively enforce Pakistan’s MLA framework, including by making information on the number of incoming and outgoing requests easily available to the public;
- Adopt a legal framework in order to establish a central asset recovery office for a coordinated, open, and transparent approach to asset recovery.