ISLAMABAD: The federal government on Monday suffered a setback when the Islamabad High Court (IHC) set aside a notification placing five regulatory bodies under their line ministries.
IHC Justice Athar Minallah set aside the government’s notification placing the Oil and Gas Regulatory Authority (Ogra), National Electric Power Regulatory Authority (Nepra), Pakistan Telecommunication Authority (PTA), Frequency Allocation Board (FAB) and Public Procurement Regulatory Authority (PPRA) under the control of the relevant ministries.
The notification was issued by the Pakistan Muslim League-Nawaz government on Dec 19, 2016.
In the short order issued on Monday, Justice Minallah said that the federal government shall be at liberty to place the matter before the Council of Common Interests (CCI) for a decision, pursuant to powers conferred under Article 154 of the Constitution.
The constitutional provision, Justice Minallah noted, unambiguously provided that the formulation and regulation of policies in relation to matters contained in part II of the Federal Legislative List fell exclusively within the ambit of the CCI.
Similarly, the verdict said, the CCI had been expressly mandated to supervise and exercise control over regulatory authorities established under federal laws.
Ogra, Nepra, FAB, PTA and PPRA to function under Cabinet Division until CCI decision on their fate
Justice Minallah observed that the arrangement prior to the issuance of the notification — when the regulatory authorities were being run by the federal government through the Cabinet Division — shall continue until “varied, altered or amended” pursuant to a decision by the CCI.
Mohammad Nawaz, a worker of former chief justice Iftikhar Mohammad Chaudhry’s Pakistan Justice and Democratic Party (PJDP), had challenged the notification through his counsel Sheikh Ahsanuddin.
The petitioner had cited the prime minister’s principal secretary, cabinet secretary, petroleum secretary, water and power secretary, information technology secretary, finance secretary and the chairmen of Ogra, Nepra, PTA, PPRA, FAB, and the All-Pakistan CNG Association as respondents.
The PJDP assailed the Cabinet Division’s notification of Dec 19, which placed administrative control of the five regulatory bodies under the ministries whose activities and functions they were supposed to watch, monitor and regulate under the law.
In the petition, Mr Ahsanuddin argued that the move violated Articles 153 and 154 of the Constitution, which deal with the CCI’s role in issues relating to gas, electricity and petroleum.
The counsel stated that it was clearly mentioned under Part II of the Federal Legislative List that matters related to gas, petroleum and electricity be controlled by the CCI, which should supervise the regulatory bodies.
Having direct control of Ogra, he said, the federal government had allowed the CNG station retailers, rather than a regulatory body, to fix their own prices.
The petitioner apprehended that ordinary people would be left at the mercy of big businesses and multinational companies who would make undue and unjustified profits without being accountable to regulatory authorities.
He added that the same could happen in the case of electricity, telephone and gas prices for domestic use.
By making the autonomous and independent bodies subservient to the ministries, the government had dealt a serious blow to the transparency of business deals and there seemed to be a clear conflict of interest, since the ministries were stakeholders in the policy-making process.
Earlier on Feb 21, the Lahore High Court (LHC) had suspended the notification, observing that the prime minister should have sought approval from the CCI before issuing it.
Pakistan Tehreek-i-Insaf Secretary General Jahangir Tareen and a citizen, Ali Irfan, had filed identical petitions before the LHC in this regard.
The government decided to transfer the regulators to their line ministries as a result of resistance from two key regulators — Nepra and Ogra — in implementing directives of the relevant ministries on matters of public interest, particularly tariff issues.
The ministries of water and power and petroleum had regularly complained to the prime minister about these regulators.
It was pointed out that without changing the regulatory environment, the Nandipur power project and the Sahiwal coal-fired project would never become economically viable, but regulators would not allow higher system losses in electricity and gas distribution to be passed on to the consumers.
Similarly, major energy projects would continue to face challenges, putting into question the government’s commitment to end the energy shortfall by 2018.
Over the past few months, the superior courts made a numbers of decisions that have not been easy for the government to digest.
In November last year, the apex court dismissed a review petition regarding the prime minister’s power to take executive decisions. The court observed that the prime minister was not above the cabinet and he could not act unilaterally in matters pertaining to financial issues.
In addition, the Supreme Court recently upheld an IHC decision regarding the promotions of bureaucrats and endorsed the high court’s verdict that set aside a controversial office memorandum empowering the Central Selection Board to reject the promotion of an officer who secured 97pc marks.