PROBE INTO SUGAR SCANDAL

The National Accountability Bureau had started inquiry into the 'sugar scandal' after receiving directive from the federal government

From SHAMIM AHMED RIZVI, Islamabad
Mar 27 - Apr 02, 2006

The turn around taken by the National Accountability Bureau (NAB) in respect of the probe into sugar scandal which had started only a week ago is most mysterious giving rise to many questions agitating the public minds. Those who were predicting that NAB probe was just an eyewash have proven right. They predicted that the Bureau could not proceed against political heavyweights of the ruling party who owned most of the sugar Mills in the country and had earned billions by creating artificial shortage of sugar in the country.

The allegation repeatedly made by the leaders of the opposition parties that NAB was there only to harass and hound those opposing the rulers has also been substantiated by the sudden and abrupt decision of the agency to shelve the probe. In early stages of its inquiry NAB found that the person who had created artificial shortage of sugar leading soaring prices were high and mighty of the ruling party and its supporters. They thought it expedient to shelve the probe without giving any finding.

The National Accountability Bureau had started inquiry into the 'sugar scandal' after receiving directive from the federal government. A NAB team had formally held a meeting with officials of Ministry of Food, Agriculture and Livestock (Minfal) and discussed sugar production data and sugar stocks lying with the mills, besides taking relevant documentary material which could be helpful in reaching final conclusion. The NAB team, accordingly met Commerce Ministry officials on Thursday where the role of Ministry in relation with sugar price was to be examined in detail.

However, the Bureau's 4 members team questioned the officials of Ministry of Food, Agriculture and Livestock (Minfal) and Commerce Ministry with the aim of fixing responsibility either on the concerned government department or the private sector, including the millers. A couple of days ago, the Bureau had also briefed 'like minded' journalists on the issue and held the millers responsible for persistent sugar crisis, saying that the millers did not release sugar in accordance with the sugarcane price at which they procured from the farmers.

A delegation of Pakistan Sugar Mills Association (PSMA), headed by Zaka Ashraf, held a meeting at Presidency, with Chairman NAB and Prime Minister's Advisor on Finance, Dr. Salman Shah, to clarify their position and what they communicated to the government before the crisis started.

The PSMA demanded that the inquiry launched by the NAB should be stopped as it was sending wrong signals to the market.

The NAB announced the suspension of its inquiry last Monday, explaining that while preliminary investigation was in progress, "a lot of hue and cry was raised by various quarters, giving an impression that the NAB inquiry was contributing to further escalation in sugar prices ". Who those quarters might be is obvious. The Pakistan Sugar Mills Association (PSMA) had demanded the inquiry to be stopped saying it was sending wrong signals to the market. A press report also mention that a few days ago, while briefing journalists on the issue, NAB had held the millers responsible for the sugar crisis, pointing out that they did not release sugar in accordance with the price at which they had procured sugarcane from the farmers. NAB, in its press release said that the impression that inquiry could contribute to further escalation of sugar prices, though totally misplaced, could have caused further hardships for the consumers.

At any rate, it is hard to understand how a probe into profiteering and a suspected wrongdoing could have contributed to pushing the sugar prices further up. On the contrary, ordinary people had felt reassured when the government started taking various remedial measures such as releasing buffer stocks and permitting import of the commodity in gig lots, which should have dispelled the impression that the shortage would continue. Since the probe aimed at punishing those responsible for the crisis, it lent further credit to government efforts.

There are reports of a further rise in sugar prices after the shelving of the NAB inquiry, and those who had this probe abandoned must have noted the spurt with a sense of satisfaction. This is not the first time the government has stopped a good move in its tracks. As far back as June last year, a report had disclosed that the Monopoly Control Authority (MCA), had conducted a study of the market on the direction of Prime Minister Shaukat Aziz. An MCA official told Page that on the basis of the study the authority had reached "the conclusion that sugar mill owners have formed a cartel to fix prices at their own," and consequently the MCA "had suggested punitive action against those who were part of the cartel." But as it turned out, MCA failed to issue show cause notices to the cartel members, who included some of the most influential people in the federal as well as provincial government. Little surprise then that the NAB probe, too, has been shelved on a flimsy pretext.

The NAB decision and its tacit approval by the government by keeping mum on the issue has shaken public confidence in government agencies and fee concerned about the plight of the poor consumers. If the government has been honest, the important thing was to establish, whether the crisis was the outcome of the sugar cartel's manipulative tactics or it had something to do with some systematic weakness. In either case, responsibility needs to be placed where it belongs and the culprits dealt with accordingly. Unfortunately, so far the government has remained shy of adopting measures that secures the interests of ordinary consumers.

The government should take notice of the fact, often pointed out by experts, that all the existing pieces of legislation concerning sugarcane, sugar and sugar mills provide protection to sugar industry only and there has never been devised any adequate policy on provision of commodity to the consumers by the government.

Addressing a meeting of the Consumer Forum on sugar crisis at Rawalpindi Press Club last week. Project Coordinator at the Network for Consumer Protection Mohsin Babar said "ironically the government has not included sugar into the list of necessary (daily use) commodities, neither it has fixed sugar prices so far" Babar said, adding that provincial governments have been thus fixing the 'minimum support price' of sugarcane giving much room to industrialists for raising the product's (sugar) price. "Even government seems hapless before the mighty sugar industry so what to say about consumers, he said adding that the Trading Corporation of Pakistan has also been earning billions of rupees by getting extra profit in sugar trade like influential sugar mill owners. "The TCP that had bought sugar at reduced rates from sugar mills last year has sufficient quantity of commodity at present. The TCP is selling its stock to utility stores instead of bringing it to open markets for sale," and consequently the utility stores were selling sugar to consumers at great profit.