Daily Times

So how has China’s law fare against corruption been successful despite its mammoth geography and population size? In our view, some of the reasons behind China’s successful law fare are the following.

First, China has demonstrated the political will and resolve to uproot corruption from within the system.  If history is any guide, all previous attempts at uprooting corruption in Pakistan have focused on settling political scores and selective accountability.

Second, over the years China has embarked on a journey to craft a regime of anticorruption laws which recently manifested in the consolidation of anti-corruption laws governing both the public and the private sectors. In March 2018, two new  “super agencies” were created to separately regulate the public and the private sector.

The “super agency” regulating the public sector is the National Supervision Commission (NSC) which replaces the earlier predecessor agency and unifies the anti-corruption functions that were earlier spread among a number of national level agencies.  The NSC has increased investigative scope and powers and these now extend to heads of state-owned companies, public health care, scientific research and educational institutes. NSC’s powers include obtaining evidence from individuals and companies, seizure of assets and data and recommending cases for prosecution.

The “super agency “regulating the private sector in China is the State Administration for Market Regulation (SAMR) which includes a consolidation of (i) the predecessor agency, (ii) the General Administration of Quality Supervision, Inspection and Quarantine, (iii) the Certification and Accreditation Administration, (iv)the Standardization Administration of China, and (v) the China Food and Drug Administration.

China’s lawfare against corruption can offer a useful lesson or two to uproot the scourge of corruption and take meaningful steps towards the creation of the Naya Pakistan envisaged by Prime Minister Kha

Another example of the China’s raging law fare against corruption is amendments (in January 2018) to the Anti-Unfair Competition Law (AUCL) which is the law dealing with commercial bribery by individuals and companies in China. Under the amended AUCL, commercial bribery now includes offering money or goods or any other means in order to seek a transaction opportunity or competitive advantage (art.7, AUCL). Similarly, AUCL enhances the net of bribery recipients by making accountable (i) employees of “transaction counterparties”, (ii) entities or individuals entrusted by “transaction counterparties” to handle relevant transaction matters or affairs, and (iii) individuals and companies who use their position or influence to affect a transaction.  Another penetrative mechanism introduced in AUCL is employer’s vicarious (strict) liability for employees’ misconduct relating to the seeking of a transaction opportunity or competitive advantage. AUCL also provides the regulators with further enhanced powers which include the power to seize and hold financial assets relating to financial bribery and the power to access bank accounts of parties suspected of engaging in bribery.

AUCL amendments are emblematic of China’s resolve to take law fare against corruption to the grassroots and thus drain the swamp of corruption infested with intermediaries in the economic ecosystem who are typically conduit for unlawful financial transactions. Similarly, making owners and senior management of companies responsible for acts of employees is another additional arsenal being used in China’s law fare as it would compel the private sector to conduct audits to avoid suspect commercial transactions and thus do proper house-keeping.

China’s law fare is not merely a crystallization of laws on paper. Rather, it has been we a ponized in action. According to one source – Visualizing China’s Anti-Corruption Campaign, China File (August 2018)- the anti-corruption campaign has resulted in “sweeping up some 2 million officials of both high rank and low”. According to the aforementioned source, just in the first half of this year, some 302,000 investigations are underway in China. The anti-corruption law fare has also netted political heavyweights who were previously considered untouchable.  These include General Xu Caihao (former Vice Chairman of the Central Military Commission) and Bo Xilai (former Minister of Commerce and a prominent member of the Politburo and Communist Party Secretary).

In the authors’ view, the reasons behind the success of China’s law fare against corruption are: (i) a clear delineation of laws governing the public and private sectors; (ii) creation of independent regulatory bodies (super agencies)regulating the public and the private sectors to streamline enforcement mechanisms by doing away with inefficiency; (iii) amendments to existing anti-corruption laws to enhance the penetrative reach of those laws; and (iv) above all, a strong and committed political will to uproot corruption from all segments of society through across the board accountability.

Although Pakistan and China are poles apart in terms of the constitutional framework, forms of government and state structure, Pakistan should undertake a detailed study of the Chinese anti-corruption law fare model from all perspectives.  Some questions that Pakistan needs to address include (but are not limited to) the following: Does Pakistan require stand-alone superagencies to separately regulate the public and private sectors? To answer this question, Pakistan may need to take a holistic view of the National Accountability Ordinance, 1999 (NAO) with a new set of legal eyes. Another important question that Pakistan needs to ask is what are the different forms of corruption that are rampant in Pakistan that require laws, and whether the existing anti-corruption laws are adequate to tackle corruption and corrupt practices.

In the authors’ view, Pakistan’s anti-corruption laws are inadequate and require up gradation and substantial amendments to bring them in line with Pakistan’s international obligations under the United Nations Convention against Corruption (the “Convention”).  To this effect, Pakistan would need to consider inclusion of all-encompassing provisions in anti-corruption laws to tackle “intermediaries” (the proverbial smaller fishrotting the economic ecosystem). For example, in the NAO 2009, this would include a catch-all clause to supplement the list of public officials [(art. 15 (a) of the Convention)].

In Pakistan, there is also an urgent need to take measures to enhance data-collection systems and forge coordination between various state institutions in order to achieve effectiveness of their enforcement measures and do away with inefficiency.

For the successful implementation of the Convention, serious efforts are also required for training in specialized areas such as forensic accounting, etc., as well as foreign training in reputable organizations with emphasis on relevant anti-corruption case studies and on-site assistance by anti-corruption experts.

Adequate transparency, predictability and proportionality would need to be ensured while entering into plea bargains and out-of-court settlements (art. 30, para. 1 of the Convention). It is painful to note that little attention has been given to the quality and continuous prosecutorial, investigative and other specialized training of NAB and other agencies (art. 36 of the Convention). Only well-trained officials with proper training can meaningfully implement Pakistan’s law fare against corruption.

It is further advised in light of the Chinese experience, that Pakistan must implement checks and balances over the watchdog anti-corruption agencies and take them to task in the event of abuse of power or failure to pursue their mandate and responsibilities. In light of the foregoing, it is important that discretionary powers of Chairman NAB and violations of due process of law (especially Article 10A of the Constitution of Pakistan) must end to make the process of accountability transparent and free from public criticism.  All anti-corruption laws of Pakistan must shift the burden of proof on the accused. Needless to say, the edges of anti-corruption laws must be sharpened to introduce severe criminal and civil penalties for violations.

No doubt, Pakistan faces an uphill battle against corruption. Pakistan’s economy – rather its survival as a nation – now depends on tackling corruption. China’s law fare against corruption can offer a useful lesson or two to uproot the scourge of corruption and take meaningful steps towards the creation of the Naya Pakistan envisaged by Prime Minister Khan.

Dr. Ikram Ul Haq is an Advocate of the Supreme Court and Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email: ikram@huzaimaikram.com

Hassan Aslam Shad is a practicing international lawyer and a graduate of Harvard Law School. Email: veritas@post.harvard.edu

Published in Daily Times, November  10^th 2018.