Towards a broader tribunal system

Regulatory review by a tribunal or other such institutions is a universal practice

ISLAMABAD:

The Supreme Court has recently ordered the federal government to establish an electricity tribunal forthwith.

The Appellate Tribunal for electricity sector has been provided in the Electricity Law 2015. It could not be implemented partly due to active and passive opposition from the National Electric Power Regulatory Authority (Nepra) itself.

Such opposition was actually ill-placed for Nepra suffered due to the lack of an intermediary fast-action institution like a tribunal.

Under the current situation, the affected parties file petitions in higher courts where cases remain pending for years and Nepra determinations and punitive actions remain unimplemented, diluting its image and authority.

A classic case is K-Electric, which succeeded in avoiding many Nepra edicts, which the Supreme Court took cognisance of and led to court intervention, which ordered the setting up of the Appellate Tribunal.

Apparently, the Appellate Tribunal will dilute some authority of Nepra by providing for a review institution, which is the requirement of fairness and justice. No institution, except for the Supreme Court, can be given absolute powers without recourse to a fair review by a third party.

Regulatory review by the tribunal or equivalent institutions is almost a universal practice. It does not pertain to only electricity but also covers oil and gas, competition institutions and others.

The Oil and Gas Commission in Canada, the Electricity Tribunal in India and similar institutions in Europe are ready examples.

This writer has the honour of initiating the proposal for an electricity tribunal in 2014 (when electricity crisis was at its peak) while holding the position of member energy at the Planning Commission.

Actually, a combined institution should have been proposed by including the oil and gas sector, which also suffers from the same regulatory issues as the electricity sector. The role of tribunals may differ from country to country, varying with the degree of economic controls, role of market, etc.

In a developing economy, pricing is a major issue while in developed countries, safety, environment, Right of Way, etc are the major issues.

Competition tribunal

In Pakistan, the tribunal system is working fairly well in the taxation, employment and business sectors with varying degree of success and effectiveness. There are labour courts and tribunals. Federal Service Tribunal is a good example.

Competition Commission of Pakistan (CCP) is suffering from the same syndrome whereby the affected parties resort to higher judiciary to delay and dilute CCP’s determinations and actions.

A classic case is of the sugar sector, which has managed to maintain a cartel, despite CCP interventions, as has been reflected in recent inquiries. A sugar industry case is pending with the Sindh High Court since 2009.

Competition tribunal may have reduced the intensity of the issue, if not totally eliminate it. There is an appellate procedure within the CCP as it is in Nepra. However, it is within the organisation and does not offer much efficacy and satisfaction to the appellant, which compels him to go to high court.

It is a separate thing but a matter of concern that the existing tribunal has been inactive as well due to the lack of required appointments at the members’ level. Tribunals have to be independent of the authority issuing orders, as is the case of the Competition Appellate Tribunal in India and Competition Appellate Board in Singapore.

Tribunals do offer fast and effective justice and address complaints and grievances, and also facilitate effective implementation of regulatory decisions. Higher judiciaries in many countries reject unnecessary litigation by the affected parties and do not generally admit applications against tribunal decisions.

Underdeveloped mineral sector

The mineral sector also requires a tribunal system. Had it been there, perhaps, Reko Diq complications could have been avoided, although in that case corruption and misplaced ultra-patriotism by a section of the elite created the mess that we find ourselves in.

The mineral sector in the country is rather underdeveloped, mostly being run by the Artisanal or small and medium enterprises (SMEs). The sector’s development would be facilitated by tribunal adjudication.

In oil and gas exploration and production licensing, there are similar issues of grievance handling, which may benefit from a tribunal, in addition to other oil and gas sector companies’ issues.

Construction contracting in the energy sector has been marred by award disputes and cost/ payment claims. The proposed tribunal could cover this aspect as well. The cumulative impact of the aforementioned proposals will tremendously lighten the load on judiciary and fast-track grievance handling.

However, there is an intimidating cost aspect. Countries have combined regulatory institutions. In most countries, there is one regulator for the electricity and gas sector, as these are interrelated.

Same specialists cannot possibly adjudicate in these highly specialised institutions. Only legal, administrative and some other skills may be common and overhead costs can possibly be reduced.

Gas companies are suffering from slow processing, delays and at times controversial and arbitrary decisions. There is a great need for a tribunal in the oil, gas and mineral sector.

While there is a case of strengthening the Oil and Gas Regulatory Authority (Ogra), an independent appellate tribunal is required to check the exercise of arbitrary powers.

If Nepra is being constrained and controlled through a tribunal, same measures are required in the case of Ogra. Consideration should be given to add these energy sub-sectors to the already legislated electricity tribunal by renaming it as the energy tribunal or energy & minerals tribunal.

Alternatively, a new tribunal for the residual uncovered energy sub-sectors may have to be established. Tribunals cost money but high court proceedings cost money as well as time, affecting and overloading the normal justice system.

The writer is former member energy of the Planning Commission

 

Published in The Express Tribune, October 19^th, 2020.

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