Musharraf-era fiasco: Commerce ministry in the dock for unfit wheat export

Aside from a $3 million loss, the country’s reputation also took a hit.

ISLAMABAD:

The law ministry has advised the Public Accounts Committee (PAC) to put the senior officials of the ministry of commerce serving in the Musharraf era on trial for exporting wheat unfit for human consumption to Iraq in 2001.

Pakistan not only suffered a loss of $3 million after the consignment was rejected, but its reputation was badly affected in the world market as a consequence of this.

The fresh legal advice might land the former chairman Trading Corporation of Pakistan (TCP) Syed Masood Alam and the then commerce minister in trouble as both gentlemen were at the helm of affairs when these shipments were made to Iraq and were rejected by the Iraqi authorities.

PAC had sought the advice of the law ministry after the Auditor General of Pakistan had brought up the matter of the shipment of sub-standard wheat. The PAC wanted to know from the law ministry whether proceedings could be started against the accused despite a lapse of ten years.

Law Minister Dr Babar Awan in his opinion sent to the PAC secretariat has now explained that the TCP remained criminally negligent and did not exercise due care. Awan said acts and omission fall squarely  within “mischief or abuse of authority, criminal breach of trust and wilful fraud on the national exchequer in favour of a few and detrimental to the interest of the nation.” This of course requires immediate legal action under the criminal/penal laws, Law Minister Dr Awan wrote in his legal opinion.

The law ministry says that an opinion was sought by the ministry of commerce on the directions of the PAC on the contract and other documents regarding the quality of shipment, to determine whether due care and prudence had been exercised by the TCP.

According to the case referred to the law ministry, the TCP had signed a contract on February 20, 2001, with M/S Grain Board of Iraq for the export of 100,000 metric tons of wheat. A quantity of 61,928 metric tons of that wheat was rejected by Iraqi authorities on the grounds that it was not fit for human consumption. As a result, the TCP was forced to sell the cargo to an alternative buyer at a throw-away rate.

The sale of the shipment to another party in Dubai  resulted in a total loss of $3 million. The Iraqi authorities reported that the consignment also contained 0.2 per cent sand.

Earlier, an audit explained in its para related to the signing of a defected contract agreement by the TCP that it did not contain a provision for pre-shipment inspection and arbitration.

In the absence of pre-shipment inspection and arbitration clauses, the rejected wheat had to be sold to the alternative buyer at a much lower rate.

The audit observed that due care should have been applied at the time of signing the agreement.

Published in The Express Tribune, March 11^th, 2011.