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Pakistan: Federal Government Introduces Ordinance to Ban Food Hoarding by Traders Capitalizing on COVID-19 Pandemic

(Apr. 28, 2020) On April 17, 2020, the Pakistani media reported that a new ordinance had been promulgated by the president of Pakistan, Dr. Arif Alvi, to discourage hoarding of essential commodities by traders aiming to create artificial shortages and raise prices. On April 19, the minister for law and justice, Farogh Naseem, stated during a news conference that the government had introduced an ordinance “on the directives of Prime Minister Imran Khan” to “check hoarding of essential commodities amidst spread of coronavirus” and said the new ordinance “contains [a] three-year sentence, summary trial and confiscation of the material for hoarding of wheat, sugar, flour, ghee, sanitizers, face masks and other essential items.”

The following day, Gulf News reported that since the outbreak of the coronavirus in Pakistan, “the government has been receiving complaints of shortage of essential food items and medical products … and Prime Minister Imran Khan had repeatedly warned those behind this artificial shortage of stern action.” Moreover, a number of raids have been “conducted by the Islamabad police and the district administration on big businesses,” during which police seized large quantities of masks and sanitizers.

The Covid-19 (Prevention of Hoarding) Ordinance, 2020 will be enforced in the Islamabad Capital Territory, a federal territory of Pakistan that includes the federal capital of Islamabad. The ordinance reportedly applies to both individual dealers and corporations. According to the newspaper Dawn, the ordinance stipulates that “[a]ny dealer who is found to hoard any scheduled articles shall be guilty of an offence punishable with simple imprisonment up to three (3) years and fine equivalent to 50 per cent of the value of the scheduled articles involved in the case.” Thirty-two scheduled items are listed in the ordinance:

tea, sugar, milk, powdered milk, milk and food for infants, edible oil, aerated water, fruit juices and squashes, salt, potatoes, onions, pulses, fish, beef, mutton, eggs, gur [molasses], spices and vegetables, red chili, medicinal drugs, kerosene, rice, wheat, flour, chemical fertilisers, poultry feed, surgical gloves, face masks, N-95 masks, sanitisers, surface cleaning products, pesticides, match stick[s] and isopropyl alcohol.

The ordinance is said to empower a special magistrate under the Criminal Procedure Code (CrPC) 1898 to take “cognisance of an offence under the ordinance.” The ordinance also reportedly stipulates that “[a]n officer may arrest any person without warrant against whom there is credible information that he has committed an offense under this ordinance.” The ordinance also says that “[i]f an offence under this ordinance [is] committed by a company or body corporate or a partnership or other association or body of persons or individuals, every director, manager, secretary, member or other officer, the principal, primary or beneficial owner or agents thereof shall, unless he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention, be deemed to be guilty of such contravention and shall be liable to punishment under this ordinance.”

The ordinance also provides “rewards for informers in case their information leads to conviction of a hoarder where 10% of the auction proceeds of the hoarded articles will be given to the informer as reward.” Dawn news also reports that

[t]he ordinance said every dealer would be bound to provide information regarding production, import, export, purchase, stock, sale or distribution of any of the scheduled articles to the deputy commissioner who can inspect and/or verify the books, registers and premises. The failure [to provide information] or [the providing of] false information by dealers will result in a punishment of up to three years imprisonment and fine of Rs1 million [about US$6,205]. Speculative dealings, market manipulation, creating artificial, false or misleading appearance with respect to the price of market for the scheduled articles would also be punishable with up to three years imprisonment and fine of Rs1 million.

Ordinances and laws on hoarding are being prepared or have been issued in the provinces of Punjab, Khyber Pakhtunkhwa, and Balochistan as well, and the law minister has also reportedly urged the Sindh chief minister to devise a similar law.