The theory of retributive justice is one of the core philosophies of law which dictates that whenever anyone breaks the law, they should suffer in return. Only then, justice can prevail. However, the suffering of the criminal should be proportionate to the severity of the crime. The person who breaks the law should neither receive a slap on the wrist for a great crime, nor should they be imprisoned indefinitely for a minor offence.
The theory itself is based on the divine decree – “an eye for an eye”. In short, punishment should always fit the crime. But in reality, this theory isn’t always applied in letter and spirit.
In some instances, the scope of the punishment, instead of getting limited to the criminal, extends to innocent third-parties or even the victims. When this happens, the punishment becomes an affront to justice. The recent case of an alleged fraud committed by a few senior executives of an oil marketing company (OMC) is one such instance. In this case, the entire petroleum industry and the hundreds of thousands of people associated with it are facing the consequences of the crime committed by a handful of people.
According to the Federal Investigation Agency (FIA), a few executives of an OMC, a state run bank, and other commercial banks were involved in the “country’s biggest” Rs54 billion financial fraud. The FIA claims that some of the oil company’s senior managers misused the Letter of Credit facility granted by banks between 2015 and 2020 and the banks, including the state-run bank, lent billions of rupees to the company. The federal agency has identified more than two dozen suspects that it believes were involved in this financial scandal.
In an ideal world, every single person that was involved in this financial scandal would have faced the full force of the law and their punishment would be in accordance with their crime. But in reality, the numerous people serving in the OMC and other petroleum companies, who had nothing to do with the financial fraud, are being made to pay.
In the aftermath of the scandal, the reasonable course of action for the banks would be to get back to their basics and prudently exercise banking laws and practices before extending loans to OMCs. But instead of doing this, the banks, particularly the state run bank, have altogether nearly stopped extending credit to petroleum companies. The representative bodies have approached the State Bank to resolve this issue, but so far, no meaningful progress has been made.
It has become nearly impossible for OMCs and even the oil refiners to avail Letter of Credit facilities, which is hampering their ability to purchase crude oil and refined products in a timely manner. The business model of most petroleum companies is one that entails low-margins but has high volumes. In order to run their business efficiently, the oil companies rely on financing facilities extended by banks. But with the financial sector that is reluctant to lend any support, the OMCs and refineries will likely face a challenging situation and might not continue operating smoothly.
It is important to remember that petroleum companies are a critical part of Pakistan’s economy. They not only make substantial contributions to the national exchequer in the form of duties, levies, and taxes but also provide fuels like petrol and diesel on which virtually all other industries depend. If the petroleum industry faces a cash crisis and comes to a standstill, the national economy will suffer.
This nightmare scenario can be avoided if the principles of law are upheld. For justice to be served fairly, it is important to distinguish the culprits – the individuals – from the company. The company, in this case, is the entire oil industry.
Khizar Hayat
Karachi
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