IMPACTS OF STRONG JUDICIAL SYSTEM ON ORGANIZATIONAL EFFECTIVENESS

IN PAKISTAN

Fahad Mahmud Mirza and Muhammad Waqas Masoud

Abstract - The current scenario of judicial system of Pakistan, after restoration, can put strong impact on the organizational effectiveness through a proper watch and security as means of resistance to the fraud, and accountability of the organizations to enhance competitiveness through proper merit. The research defines the theory that strong system of judiciary is necessary to supervise the working. It is believed that and mentioned by highly regarded lawyers and the corporal spokesmen that the current downfall of the industrial and corporate sector of Pakistan is due to the low sense of organizational security and lacking a strong forum to defend their rights. The research evaluates the fundamental impacts and conclusions devised from scoring a strong judiciary in Pakistan.

I. INTRODUCTION

A judicial system or judicature is a structure of courts which govern and manage justice in the name of the supreme or state, and is also a method for the resolution of disputes. A strong judicial system enables to magnify and clarify the issues against the system of laws and regulations whether governmental or private organizations, corporate, institutions and company firms.

An organization, or a corporate, has to deal public and the government parallel, from training educational institutes to textile and power generation, the customers of an organization fall in from all fields, as they form a certain cycle of dependence on each other. A dispute or clash resolution in interests, social aspects related to and by the industries, concerning the welfare of the society, inflation and deflation control are among the few; all the governing characteristics are to be monitored by an independent law system where justice is favored only. It is believed that a proper regulation of contract and corporate laws and implementation can definitely put strong impact on any such organization, and enables to compete and gleam in the sectors of education, engineering, agriculture and law firms itself.

In the context of judiciary’s role on strong economic stature, every country emphasizes on firm judicial support to its national level. In China, top judge called for judicial support to ensure economic growth, on March 2009. The Supreme People's Court President Wang Shengjun called for augmented hard work to grant judicial support to ensure steady and relatively rapid growth of China's economy. He warned that problems China faced along with the global economic condense might translate into legal cases of new challenges to the country's courts. China's courts had repeatedly offered to help build a constructive atmosphere for the country's economic growth [10].

“Free judiciary ensures economic security”, said Chief Justice of Pakistan Iftikhar Muhammad Choudhary on addressing the Multan Bar Council on July 26th

The importance of independent judiciary is necessary for survival of democracy. No strong and stable parliament could be constructed on the debris or ruins of an independent judicial edifice. An independent judiciary is, in fact, the most significant protection available to parliament. There can be no democracy without law. Without an independent justice system democracy remains in jeopardy and eventually degrades into lawlessness and anarchy. This initiates the fleeing of investors from a country when there is no proper or justified state of administration.

, 2008. Investment shies away from economies and countries that do not have an independent judiciary [11]. It is a question of supply and demand. Without investment there can be no increase in production and opportunities of employment. Without increase in production capacity, net employment used to decrease and unemployment go up. The salaries also went down in case of more unemployed people competing for the same number of jobs.

II. LITERATURE REVIEW

A. Judicial System Of Pakistan

According to the Bench-book of District Judiciary, Pakistan 2002, the judicial approach is explained as:

“A person, who listens to both sides, treats both fairly, judges only on the evidence, recognizes his own prejudices, recognizes what is relevant, reasons logically and impartially, seeks information when needed, has unlimited patience and courtesy. Then, applying these principles; reaches a decision firmly, excluding all other considerations and consequences. This is, of course, perfection”. [1]. For every civilized and humane state, the judiciary works not only encircled by the constitution alone, but it also has its own norms. These norms are the by-product of the historical, cultural, psychological and social setup. Pakistan has its own, unique judicial culture. Pakistan’s judicial culture strongly emphasizes on Public Power as a trust, which has been introduced in the Section 24-A General Clauses Act, and in the code of conducts established by Supreme Judicial Council.

In the context of this study and research, the rule of the natural justice set upon is that justice must not only be done, but must be seen to be done. This is only possible if all the principles and values of the judicial conduct are strictly observed. The faith of the public in the judiciary is the focal point of every legal system; and it should be thoroughly conserved. The confidence and reliance for accountability and fairness in the country by depending on the doors of judiciary boosts the motivational factors for prospering in the respective fields. Rather it is educational grounds or industrial sectors, free and fair judiciary has a vital application for success.

In this framework, if the judiciary fails to meet the above mentioned (or declared) set of rules and services, anarchy bursts out. The calamity in the country causes instability and relative flux. So this insecurity will cause undesirable effects to the economy in terms of discouraging investment. Instability and riots further damages the infrastructure and cripples the public services as well (as being witnessed in past years).

The disorder also means people can't go to their jobs and the administrative systems are in a catastrophe, meaning that the factors of production are underutilized. Asides all the social consequences, the economy will lose out on investment and the GDP starts to tank. In such conditions, economy will be generating inside its Production Possibility Boundary (PPB) which means it’s not using all its resources fully and

efficiently as possible. All such invasion is seeded through a single mishandling on accessing the justice. A “seemingly” little can lead to ultimate nightmare of a country, especially for under-developed countries like Pakistan. As it has been globally observed the situation our country has gone through and still going, the emphasis of the study is to highlight how good and working judiciary can enlighten the economic sector; focusing the business and development sector of Pakistan.

B. Judiciary And Organizations’ Relationship

The judiciary plays a strong role of a bridge between Legislature and Executive. Organizations majorly face the fiscal issues throughout the world, and that is where the judiciary secures the rights and ensures security on monetary recoveries. The basic corporal cases filed by the executives of the business field are primarily economic issues and frauds with the organizations. Secondly are the disputes to be resolved either with clients or the contractors in some cases.

The key principles of investment are; (i) Active law-enforcement/judiciary, and (ii) life security. It is obvious that an investor in the country, bringing new business opportunities for the currently presiding organizations in the country, would require peace and safety for its money. Many businessmen migrated their businesses to USA and Europe due to strong structure of the states.

In an overall scenario, the role of judiciary is to strengthen the financial institutions of a country. That is possible by enabling the recoveries on-time, without any delay. Justice delayed is Justice denied.

Mr. Umer Hanif Khichi, Advocate High Court and Country Legal Advisor of CITI Bank, Pakistan, had to file in 150 cases for the banks. About Rs. 5 Million were deadlocked as recoveries were stopped as courts were not working and lawyers put on the strike. RBS (Royal Bank of Scotland) in Pakistan faced major financial crunch and had to roll back from the country, as the banking courts were ineffective as the lawyers forced strike on 3rd

C. Current Scenario

November, 2007. Due to judicial crises, every second costs a dollar. Many a people fled from Pakistan with the loans and no one was there to arrest and interrogate them.

In the year 2001, the government of Pakistan started a judicial program called Access to Justice Program (AJP) as the Asian Development Bank (ADB) gave Pakistan a loan of US $350 Million (Program loan of US $330 Million and US $20

Million for Technical Assistance). The purpose of this program was to guarantee justice for every single common man/woman to get fair and swift justice at his/her doorstep. The curriculum got implemented by the year 2008 with establishing the Program Management Unit in Islamabad and Provincial Program Management Units at four Provincial headquarters. The share for Federal Department was 40% of the entire loan and 60% for Provincial Sectors [2]. Asides the Program Loan, the Technical Assistance loan activities were used to strengthen five policies; (i) Judicial performance, (ii) Legal empowerment and education, (iii) Public safety and prosecution, (iv) Administrative justice (v) Fiscal reforms in judicial sector [3]. This program was to boost the system of law and order, but unfortunately all the loan was swallowed on the physical revamping of the offices and courts of Islamabad.

Irrespective of this, for an action encountered in March 2007, the judicial crisis faced by Pakistan cost our national, social and organizational setup very heavily. Losing the faith and confidence in courts and law, the nation depressed and deprived from the system opted the hard way to fight justice for the justice. Focusing the corporate sector, many industrialists and businessmen faced fiscal crisis due to poor state image of Pakistan for foreign investment opportunities and business establishment. The poor accountability stature and booming fraudulent was reported by almost every corporal person in the field, once asked. It reflected that a judicial stability in the country works as a strong, defensive force for organizations to promote a stable image.

The system has to be cleansed, as that the independent judiciary makes independent decisions. Pakistan is facing huge power crises which are the fatal result of ineffective and poor court decisions made in 1991, when the Independent Power Projects got a set-back from the newly-formed government’s lease benefits upheld, offered by the previous government. The courts gave order in the favor of the new government, without catering the national interest. Machinery on the port; government changed; losses in billions. That was the time when World Bank advised india to get electricity from Pakistan as we had a surplus. Now, due to those rebates and heavy mechanization projects rejected, we are facing power losses today. This is a huge impact, as now Karachi Electric Supply Company (KESC) has nothing to pay to WAPDA (Water and Power Development Authority, Pakistan). Rather their had been strong judicial system and the national interest had been catered, there wouldn’t had been such a critical issue today. HUBCO was shut down in Pakistan due to the same reason also.

Mr. Abdul Haseeb Khan, Legal Consultant at Ministry of Privatization, Pakistan, puts a serious note of organizational ineffectiveness in the past years with the government policies. We live on short-term policy-making and depend upon loans by World Bank. Poor policy regulations are to be blamed for the current business structure. Pakistan is an agricultural state (or was we can say), but due to the fascination towards industrialization, our country got lost in the transition. This has emerged since Zulfiqar Ali Bhutto’s regime. The industrialist looks for incentives; such as continuous power supplies, tax relief, cheap labor etc. For that reason, many inappropriate decisions are made in seeking the personal benefits. One example is a textile mill in Hattar (NWFP), cotton irrigation in Faisalabad (Punjab) and finishing in Karachi (Sind). The transportation charges and management is hideous and an intangible problem for the industrialist. Other issues are related with the poor regulatory authorities in Pakistan. In the year 2008, Pakistani rupee depreciated steeply, when the country’s foreign exchange reserves fell to less than half of current level of over $11.8 billion. That proved devastating for many companies dependent on revenues in dollars and imports. National airline, oil refineries and petroleum marketing companies were battered as rupee cost of imports surged out of control. The SBP (State Bank of Pakistan) has refused to obstruct by taking on the load of oil payments again. “The central bank fears that it won’t be able to meet annual foreign debt obligations, if continued to pay for oil imports,” a former banker said [12].

Pakistan’s stock markets have tanked as the common man is destroyed. Main concern of the businessman is that law and order is in perfect shape, so that the business can flourish. States are strong by making strong policies. The new judicial policy is mentioned to be strictly followed, as per the order of the Supreme Court, and is yet to be implemented.

III. RESEARCH METHODOLOGY

The research strategy involves previous studies, organizational and corporal surveys, discussions with the law-making bodies and following the code of corporal laws and their effects by the Law, Justice and Human Rights Division, Ministry of Law & Justice, Government of Pakistan. In-depth exchange of information regarding the views of the executives running the organizations will be correlated with the current judicial scenario, which will result in establishing the vital relationship of judicature and organization within any country of the world (special focus on Pakistan). Because of the topic being very extensive and having far-reaching scope of laws and regulations, only the vital and general aspects with ample

information to establish the relationship between judicial system and the organizational effectiveness.

IV. IMPACTS ON THE ORGANIZATIONS

A. Accountability

The first and foremost important impact of a strong judicial system is Accountability. This statement is generally considered for political and governmental organizations and as a state monitoring action. But as in a role of a judiciary, it is liable for it to monitor the entire private sectors also. As in the concept of leadership, accountability is the recognition of responsibility for actions, product, decisions, administration, governance and implementation of proper and rectification of improper ruling principles [3]. Compelling the governance of a company or an organization to work properly, on the basis of fair justice with the employees boosts the empowerment factor within the organizations and sets a qualitative example of leadership and results in the favor of the organization. Quality of production is favored and checked so as the customers’ requirements are totally fulfilled. Rule of strong judiciary will hold people accountable going against the legislative authorities. Quality of output being the prime concern of the end-user (rather from the field of education or material), this area must be catered for, and accountability is the best solution.

B. Fraud-Resistance

Fraud is an intentional deceptive action for gaining personal advantages on resulting severe harm to the victim. Deceiving and dishonesty are prime movers of organizational destruction in the corporate sector worldwide. One common term coined by the Criminal Law Jurisdiction is called “Fraud for Profit”, which concerns the industrialists and related professionals. These frauds include numerous gross misrepresentations including: income or assets are exaggerated, collateral and the length of employment is falsely shown or fictitious employment is reported, and employment is backstopped by conspirators; these are some common issues in many of the organizations in Pakistan, and even worldwide. Defense of the organizations under criminal law act on fraud can be achieved, and judiciary plays a vital role in prosecution of fraudulent. Because once the true picture of employments, assets and income are brought to surface, the competition enhances, and the organization gains the competitive advantage.

C. Merit System for Judges

Merit means value, worth and advantage. In our daily communication and interpretation, this word gained the

recognition as eligibility, qualification and requirement. Defects in the current scenario have interchanged these meanings to fulfill the monetary and pecuniary requirements, a person with high financial stature, strong political background and solid support of class is declared to be on merit. Ignoring the high competitive stature, strong educational background and solid support of hard work, our state structure becomes one big member of the autocracy, kicking the democracy from the back doors. Role of strong judicial impact on this state of affairs is as there will be an available forum to raise this issue. So as the rightfully deserving personals get the place. The bright side of fair merit system is that people with high skills and knowledge, in the certain field of required expertise, may glorify and gleam the outputs with perceptively productive results.

Mr. Mian Hanif, Advocate High Court, stated with great disappointment that in Islamabad High Court (IHC), the judges were appointed without any criteria. Not a single judge was up to the mark or even qualified even so as to understand the basic most concepts of law and judiciary. That laid the foundation of wrong decisions which directly affected the organizational structure. It is a favorable gesture for the judiciary on the order of Supreme Court, now, to shut it down and all the appointed judges to be deposed.

Kabraji & Talibuddin, the top corporate law firm of Pakistan, undertakes all forms of Civil and Commercial work. Kairas Nader Kabraji and Salman Talibuddin, are both the corporate giants of Pakistan. On the order of Chief Justice of Pakistan, Mr. Kabraji has been appointed the new Chief Justice of Baluchistan High Court, and Mr. Talibuddin as Chief Justice of Sind High Court. These are the first few steps towards development and welfare for the corporate structure of Pakistan, and the good results are awaited in future.

D. Securing Copyrights

Copyrights fall under the Law of Intellectual Property. Copyright apply to a wide range of creative, intellectual, scientific, or artistic forms, or works. Copyright laws have been standardized to some extent through international conventions such as the Berne Convention and Universal Copyright Convention. These multilateral treaties have been ratified by nearly all countries, and international organizations such as the European Union or World Trade Organization require their member states to comply with them [4]. Pakistan is a member of Berne Convention and is included in the list of parties to the international copyrights agreement. In all countries where the Berne Convention standards apply, copyright is automatic, and need not be obtained through

official registration with any government office. Once an idea has been reduced to tangible form, for example by securing it in a fixed medium (such as a videotape, or a computer file), the copyright holder is entitled to enforce his or her exclusive rights. However, while registration isn't needed to exercise copyright, in jurisdictions where the laws provide for registration, it serves as prima facie (meaning on its first appearance) evidence of a valid copyright and enables the copyright holder to seek statutory damages and attorney's fees. Protection of copyrights is an essential and critical issue. Every individual/ firm strives to protect its copyright from any illegal use. In case of any misuse, the owner can seek justice from court. A strong judicial system ensures speedy action against any such illegal act.

E. Foreign Investment

Foreign investment plays a key role in the economic stability of any country. The foreign investor will only invest in a country having a conducive environment for business conduction, having political stability, facilitates business activities and operations, and above all, has a strong judicial system. A strong and fair judicial system reflects a gentle image of the country for foreign investment. This strengthens the investor’s confidence and he/she knows that there is a strong court to look after him in case of any fraud, as discussed before. Thus, this builds his/her trust for investing in the country. A picture of political, financial and environmental stability is featured through the judiciary of a country persuading free and fair rights to the public of every sector. As witnessed when former President Pervez Musharraf resigned, the stock market showed elevation, the national currency grew stronger and political scenario of the country grew more and more stable. These are the vital and most necessary factors to gain the investors’ eyes and confidence for enhancing the business opportunities and, hence, boosting the effectiveness of our corporal and organizational association. Pakistan’s key textile exports depend on imported raw material like synthetic fiber and artificial silk yarn besides plant equipment, which is imported on regular basis.

F. Sense of Security

Strong judiciary acts as a guard for defending and protecting the rights of any organization. Any organizational member, irrespective of any post/position can seek justice from the court if he/she has been wrongly penalized. The organizations have clear dealings with society and public relations. This gives birth to many misunderstandings and quarrels between the organization and society, and even the clash resolution

with the state affairs. The private corporal and organizational sector has enlightened the view that having a strong and fair judiciary system arises faith and builds up poise and assurance that a firm forum exists to protect and defend the rights and law suits to go against even the state (if wrongly accused). A sense of security from fair and strong judiciary basically enhances the organization’s morale and driving forces.

G. Organizational Welfare

Imagine the pleasure of living in a place, where one knows, exist accountability and justice for all. Similar is the case for the organizations. When organizational members know that they will be liable for any wrong doing, they will avoid following the wrong path. This will promote meritocracy, honesty and ethical working practices not only in the organizations, but also in the country as a whole. This tends to introduce the quality perspective of organizational arrangement in Pakistan, where law system prevails, and our organizations work soothes to brighten effective and productive outcomes.

V. CONCLUSION

After the much awaited restoration of nation’s view on free and fair judiciary, after March 2009; many expectations have arose with the judiciary as a gleaming light from the Almighty Allah and a few forceful impacts have been catered on discussion with the experts on the view. The role of strong judiciary can definitely boost the effectiveness and usefulness of our organizational setup. Promoting the quality of governance, quality of production, and quality of law eventually enhances the quality of the nation. The ultimate goal of a strong judicial system will be the improvement in Quality of Pakistan.

A strong judicial system is an icon of a strong nation. Inject the quality of law to project the quality of the nation. Organizations play vital and developing role for a country, and by establishment of a strong, fair and free judicature scheme promotes accountability, merit, honesty, security options and, most importantly, foreign investment (as declared by the field experts). We can see a country changing its own fate by struggling and fighting for independent judiciary, believing to change the course of action being applied not going in the nation’s favor. And organizational structure of the country plays a prominent role in nations’ development; rather educational or corporal. A strong judicial system puts a strong impact on organizations’ effectiveness and efficiency, and that is the purpose of this research to promote and produce a valid experience for the law-makers and the people of Pakistan to

view and generate the ideas for progress of the country; and to improve the quality of Pakistan. The quality of law affects the quality of organizations, and finally, that affects the quality of Pakistan.

Inject the Quality of Law, to Project the Quality of Nation.

REFERENCES

[1] The Judicial Approach, Benchbook of District Judiciary, Pakistan, 2002.

[2] Law, Justice and Human Rights Division, Ministry of Law & Justice, Government of Pakistan, 2009.

[3] Jabbra, J. G. and Dwivedi, 0. P. (1989), Public Service Accountability: A Comparative Perspective, Kumarian Press, Hartford, CT.

[4] Broussard, Sharee L. (2007). The Copyleft Movement: Creative Commons Licensing.

[5] Chemin, Matthieu (2007), The Impact of the Judiciary on Entrepreneurship: Evaluation of Pakistan’s Access to Justice Programme

[6] Wolfgang K. C. Köhling (2000), The Economic Consequences Of A Weak Judiciary: Insights From India

[7] Addis Ababa (2007), Deepening The Judiciary’s Effectiveness In Combating Corruption [8] Dakolias, Maria (2003), The Role of the Judiciary for Economic and Social Development [9] Sherwood, Robert M. (2002), Judicial Performance: Its Economic Impact In Seven Counrties [10] Xinhua, (2009, March 24). China Daily [Online]. Available: http://www.chinadaily.com.cn/china/2009 03/24/content_7610570.htm [11] Irtaza, Muhammad (2008, July 26). The Nation [Online]. Available: http://www.nation.com.pk/pakistan-news-newspaper daily-english-online/Politics/26-Jul-2008/Free-judiciary ensures-economic-security-Iftikhar

[12] The NEWS Blog (2009). The NEWS [Online]. Available: http://www.thenews.com.pk/blog/blog_details.asp? id=205