Finally, the federal government has decided to ‘regulate’ the regulators in the country by placing them under the ‘administrative control’ of their ‘respective’ ministries. Through an administrative order passed by the Prime Minister last week, the status of as many as five independent regulatory agencies was instantly reduced to the subsidiaries of their so-called line ministries. Earlier, the Cabinet Division was exercising such control over these important regulatory agencies. These regulators includes the National Electric Power Regulatory Authority (NEPRA), Oil and Gas Regulatory Authority (OGRA), Pakistan Telecommunication Authority (PTA), Frequency Allocation Board (FAB) and the Public Procurement Regulatory Authority (PPRA).

This decision made by the federal government will hardly help in improving the performance and efficiency of these regulators. Instead, it would only further deteriorate the already-decaying regulatory regime in the country. NEPRA and OGRA are two important energy sector regulators meant for protecting the consumers’ right in the country. Strangely, these regulators too have been placed under the very policy-makers in the federal ministries against whom they are supposed to protect the consumers. Presently, this controversial decision is being perceived as a first step towards undermining the independent character of these regulators by making them subservient to the government just like the accountability institutions in the country. Moreover, this decision simply shows how the incumbent government has become habitual in running the affairs of the state in an arbitrary and rather monarchical fashion.

A regulatory agency is generally a creature of the legislature, which is meant for enforcing specific laws and regulations. It essentially preforms two basic functions - the formulation of the specific standards, and strict enforcement of these standards. Thus it not only sets the rules of the game but also does ensure the compliance of these rules by all the players in the playground. It also performs certain quasi-legislative and quasi-judicial functions. So, while discharging its entrusted functions, it somehow acts as a watchdog and a whistle-blower simultaneously. Although a regulatory agency is an independent entity established through a legislative act, yet the executive branch of the government is considered to be the responsible for its general evaluation and performance. However, the executive is never allowed to interfere with its independent functioning. Its independence and autonomy are always ensured by all means.

The Washington-based World Justice Project is an independent, multi-disciplinary organization working to advance the rule of law around the world. The Rule of Law Index, prepared by it, is an important quantitative assessment tool designed to evaluate and assess the extent to which countries adhere to the rule of law in practice. The regulatory enforcement is one of the eight important dimensions of this Index. This dimension necessarily shows how effectively the regulations are enforced in each country independent of the influence of public officials and private interests. Similarly, the ‘Worldwide Governance Indicators’ is a program funded by the World Bank to measure the quality of governance in over 200 countries. It also recognises the quality of regulation in each country as one of the six important dimensions of good governance. Therefore, an efficient regulatory regime can play a crucial role in ensuring good governance as well as rule of law in any country.

The Rule of Law Index Report 2016 indicates the miserable state of the regulatory regime in Pakistan. It ranks Pakistan 109 in regulatory enforcement among 113 assessed countries in the world. So Pakistan is simply the worst country in terms of regulatory enforcement not only in South Asia but also in the world. Indeed, this situation is very disappointing and rather alarming. It is really worrisome that now a war-torn country like Afghanistan and other least-developed African countries are enjoying better rankings than Pakistan in various international surveys and assessments. In fact, we have just made a mess of our entire regulatory mechanism in the country.

We have established many regulatory institutions, both at federal as well as provincial level, in Pakistan. However, the performance of these regulatory bodies is anything but satisfactory. The individuals at the helm of these regulatory bodies have constantly been entangled in numerous controversies ranging from their professional competence, capacity and efficiency to their personal integrity. In fact, these regulatory agencies have badly failed in ensuring an efficient regulatory regime in the country. Instead, they have been giving rise to various controversies and financial scams. The ex-chairman OGRA Tauqir Sadiq was arrest by the NAB for his alleged involvement in Rs 82 billion scam (the biggest scam in the history of Pakistan). Similarly, a former chairman of NEPRA was also named in the RPP scam a few years ago.

The independent character of a regulator is generally considered its most significant characteristics. In fact, an independent governing board can only safeguard the independence of a regulatory body. Regrettably, there hardly exist any comprehensive legal mechanism to independently select the members of these governing boards. Most of the positions in the governing boards of these regulators are occupied by the individuals who are either nominated by the federal and provincial governments or simply are the ex-officio members from various ministries and attached departments. So these individuals have been more inclined towards protecting the sectional interests of their provinces and departments than ensuring an efficient regulatory regime. Similarly, the political appointee always try to appease their political masters at the cost of transparency and merits.

Financial as well as administrative autonomy is sine qua non for the smooth and effective functioning of regulators. This is the reasons all regulators are encouraged to function independently, without any political interference. The recent decision made by federal government to transfer the administrative control of the important regulators from the Cabinet Division to their so-called line ministries is by no means a right or prudent decision. Now the officers and decision-makers in these regulatory bodies will certainly look towards Section Officers and Federal Secretaries to get resolved matters pertaining to their service, pay and perks. Thus their autonomy and impartiality would be compromised in some way. Earlier, the Prime Minster of Pakistan, being the minster in-charge of Cabinet Division, used to exercise general supervision over these regulators. Compared to the Cabinet Division, the line ministries are more likely to have certain conflicts of interest vis-à-vis these crucial regulators.

The general inefficiency and the culture of red-tapism prevailing within the regulatory agencies are being cited as the very reasons behind federal government’s recent decision regarding the important regulators. It was stated that the inability of these regulators to take quick decision was adversely affecting the execution of various mega-projects under the CPEC. Reportedly, some Chinese investors have also expressed their serious concerns in this respect. In fact, this would only be a lame excuse for government’s inappropriate decision. Surely, all the administrative agencies of the state, including the regulators, are always supposed to protect the economic interests of the state under all circumstances. Now if the foreign investors become dissatisfied with the quality of the dispensation of justice in Pakistan, will we place our superior courts under the control of Federal Ministry of Law and Justice?

Our economic mangers have long been endeavouring to bring the FDI’s in Pakistan by attracting the foreign investors. Moreover, the federal government also intends to privatize the loss-making SOE’s in the country to reduce burden on the national kitty. So an efficient regulatory regime can help conveniently achieve both economic objectives. By enforcing the relevant laws and standards, the regulators usually create a conducive environment for the foreign investment. Similarly, the regulators have also an important role to play in the post-privatized period to protect environment, consumers’ rights etc. This very fact was also essentially admitted by the so-called Washington Consensus.

It is quite unfortunate that the government has never made any serious endeavour to improve the efficiency and institutional capacity of various regulators functioning in the country. Instead, it has been dealing with these regulators on ad-hoc basis. It has also been undermining their independent character by making them subservient to it as the federal government recently did by directly placing five important regulators under various federal ministries. Certainly, some comprehensive structural and functional reforms are quite imperative to improve the working and general efficiency of these regulators. They must be allowed to operate freely, independent of political interference. These bodies should be run by some honest, upright, competent and dedicated persons. The efficiency and performance of these statutory entities can be improved by making them independent and accountable at the same time.