ISLAMABAD: The government has decided to establish a specialised tribunal to resolve disputes expeditiously between industry and investors aimed at facilitating them onsite, well-informed sources told Business Recorder.
The decision was taken at the first meeting of the working group, constituted by the SIFC in its sixth Executive Committee meeting held on October 24, 2023 under the chairmanship of Minister for Privatisation, Fawad Hasan Fawad.
Chief Secretaries of Punjab, Sindh, KPK, Balochistan, Secretary Privatisation Division, Secretary Power, Secretary SIFC and representatives of Board of Investment, Privatisation Division and Ministry of Industries and Production attended the meeting.
‘Investors are getting facilities through SIFC’
The Board of Investment highlighted the Economic Zones/Investment Regimes in Pakistan, the SEZ journey since 2012-13, Investment landscape, major issues/impediments being faced by existing SEZs (Policy level and Development issues), lessons learnt and proposed a future National SEZ Framework.
The participants of the meeting, including representatives of the provinces, highlighted issues and impediments faced by them during the discussion and made valuable suggestions for improvements.
The participants argued that there are various authorities operating/working, with no single umbrella authority to take decisions.
The provincial and federal authorities, to be housed under one roof for providing one stop services is not likely to resolve the issues or bring quick disposal/decision-making in the process unless authority is delegated to the concerned officer housed therein through legislation.
Further, the issue of obtaining NOCs, from all authorities, would remain and the applicant will have to go through multiple organizations, instead of one authority, with specific timelines, taking decisions on behalf of all entities.
The One Stop Service law proposed by BoI, has been finalized after consultation with the provincial entities, however it can further be strengthened for processing and granting all approvals at the level of SEZs across Pakistan without any recourse to any other entity
It was also discussed that the Federal and Provincial authorities are (and would) keep on seeking approvals, directly or indirectly, from their respective authorities housed in Federal or Provincial Headquarters. Majority of the provinces, and federal entities, were not willing to let go of their authority/powers in this regard.
The sources said the meeting also concluded that there were certain inconsistencies in laws e.g. turnover tax on SEZs has been re-imposed through the Finance Act, 2022, the inconsistency of taxation (25% on SEZs versus 15% on others) and overlaps of STZs with other applicable laws (limiting STZs to technology with no manufacturing/service business in STZs and harmonization of STZ law with SEZ law and other statutes) need to be addressed.
The exercise of powers under Articles 144, 146 and 147 were also discussed but a few provinces expressed reservation over the fact that being a provincial subject, they would like to exercise executive authority over the issue. The provinces were advised to consult the relevant authorities in this regard to be discussed in the next meeting.
After detailed discussion the following decisions were arrived at: from the international best practices and study of successful Economic Zones, it has been established that following four pre-conditions should be available/prevalent for establishment of an SEZ: (a) Zone should be in a close proximity of a Port (and if not possible then close to a Railway line); (ii) Zone should be in proximity of raw materials, either imported or local; (iii) Zone should have an abundance of human resource, either skilled or unskilled; and (iv) a framework, backed by law, with clear authority assigned for resolution of issues instead of dispersed authority vested in multiple entities.
It was also decided that an Open Source Solutions (OSS) framework, with dispersed authority between Federal and Provincial authorities will not be an ideal scenario. It would be appropriate if either of the Article 144 or Articles 146 or 147 are invoked to provide for a single government (Federal or Provincial) to exercise executive authority in the matter. This would require the consent of the respective governments i.e., either the Federal Government or the provincial governments.
The meeting decided that in order to resolve the disputes expeditiously, it would be appropriate that a specialized tribunal, preferably onsite, is created with the purpose of dispute resolution to facilitate the industry and investors.
