IMPACTS OF STRONG JUDICIAL SYSTEM
     ON ORGANIZATIONAL EFFECTIVENESS
                IN PAKISTAN

                      ...
II. LITERATURE REVIEW                               efficiently as possible. All such invasion is seeded through a
       ...
Million for Technical Assistance). The purpose of this             Mr. Abdul Haseeb Khan, Legal Consultant at Ministry of
...
information to establish the relationship between judicial            recognition as eligibility, qualification and requir...
official registration with any government office. Once an idea       with the state affairs. The private corporal and orga...
view and generate the ideas for progress of the country; and to      [12] The NEWS Blog (2009). The NEWS [Online].
improve...
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IMPACT OF STRONG JUDICIAL SYSTEM ON ORGANIZATIONAL EFFECTIVENESS IN PAKISTAN [AUGUST 2009]

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The scenario of judicial system of Pakistan, after restoration in 2008, 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.

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IMPACT OF STRONG JUDICIAL SYSTEM ON ORGANIZATIONAL EFFECTIVENESS IN PAKISTAN [AUGUST 2009]

  1. 1. 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, In the context of judiciary’s role on strong economic stature, after restoration, can put strong impact on the organizational every country emphasizes on firm judicial support to its effectiveness through a proper watch and security as means of national level. In China, top judge called for judicial support resistance to the fraud, and accountability of the organizations to to ensure economic growth, on March 2009. The Supreme enhance competitiveness through proper merit. The research People's Court President Wang Shengjun called for augmented defines the theory that strong system of judiciary is necessary to supervise the working. It is believed that and mentioned by hard work to grant judicial support to ensure steady and highly regarded lawyers and the corporal spokesmen that the relatively rapid growth of China's economy. He warned that current downfall of the industrial and corporate sector of problems China faced along with the global economic Pakistan is due to the low sense of organizational security and condense might translate into legal cases of new challenges to lacking a strong forum to defend their rights. The research the country's courts. China's courts had repeatedly offered to evaluates the fundamental impacts and conclusions devised from help build a constructive atmosphere for the country's scoring a strong judiciary in Pakistan. economic growth [10]. I. INTRODUCTION “Free judiciary ensures economic security”, said Chief Justice of Pakistan Iftikhar Muhammad Choudhary on addressing the A judicial system or judicature is a structure of courts which Multan Bar Council on July 26th, 2008. Investment shies away govern and manage justice in the name of the supreme or from economies and countries that do not have an independent state, and is also a method for the resolution of disputes. A judiciary [11]. It is a question of supply and demand. Without strong judicial system enables to magnify and clarify the investment there can be no increase in production and issues against the system of laws and regulations whether opportunities of employment. Without increase in production governmental or private organizations, corporate, institutions capacity, net employment used to decrease and unemployment and company firms. go up. The salaries also went down in case of more An organization, or a corporate, has to deal public and the unemployed people competing for the same number of jobs. government parallel, from training educational institutes to The importance of independent judiciary is necessary for textile and power generation, the customers of an organization survival of democracy. No strong and stable parliament could fall in from all fields, as they form a certain cycle of be constructed on the debris or ruins of an independent dependence on each other. A dispute or clash resolution in judicial edifice. An independent judiciary is, in fact, the most interests, social aspects related to and by the industries, significant protection available to parliament. There can be no concerning the welfare of the society, inflation and deflation democracy without law. Without an independent justice control are among the few; all the governing characteristics system democracy remains in jeopardy and eventually are to be monitored by an independent law system where degrades into lawlessness and anarchy. This initiates the justice is favored only. It is believed that a proper regulation fleeing of investors from a country when there is no proper or of contract and corporate laws and implementation can justified state of administration. 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.
  2. 2. II. LITERATURE REVIEW efficiently as possible. All such invasion is seeded through a single mishandling on accessing the justice. A “seemingly” A. Judicial System Of Pakistan little can lead to ultimate nightmare of a country, especially for under-developed countries like Pakistan. As it has been According to the Bench-book of District Judiciary, Pakistan globally observed the situation our country has gone through 2002, the judicial approach is explained as: and still going, the emphasis of the study is to highlight how “A person, who listens to both sides, treats both fairly, judges good and working judiciary can enlighten the economic only on the evidence, recognizes his own prejudices, sector; focusing the business and development sector of recognizes what is relevant, reasons logically and impartially, Pakistan. seeks information when needed, has unlimited patience and B. Judiciary And Organizations’ Relationship courtesy. Then, applying these principles; reaches a decision firmly, excluding all other considerations and consequences. The judiciary plays a strong role of a bridge between This is, of course, perfection”. [1]. For every civilized and Legislature and Executive. Organizations majorly face the humane state, the judiciary works not only encircled by the fiscal issues throughout the world, and that is where the constitution alone, but it also has its own norms. These norms judiciary secures the rights and ensures security on monetary are the by-product of the historical, cultural, psychological and recoveries. The basic corporal cases filed by the executives of social setup. Pakistan has its own, unique judicial culture. the business field are primarily economic issues and frauds Pakistan’s judicial culture strongly emphasizes on Public with the organizations. Secondly are the disputes to be Power as a trust, which has been introduced in the Section 24- resolved either with clients or the contractors in some cases. A General Clauses Act, and in the code of conducts established by Supreme Judicial Council. The key principles of investment are; (i) Active law- enforcement/judiciary, and (ii) life security. It is obvious that In the context of this study and research, the rule of the natural an investor in the country, bringing new business justice set upon is that justice must not only be done, but must opportunities for the currently presiding organizations in the be seen to be done. This is only possible if all the principles country, would require peace and safety for its money. Many and values of the judicial conduct are strictly observed. The businessmen migrated their businesses to USA and Europe faith of the public in the judiciary is the focal point of every due to strong structure of the states. legal system; and it should be thoroughly conserved. The confidence and reliance for accountability and fairness in the In an overall scenario, the role of judiciary is to strengthen the country by depending on the doors of judiciary boosts the financial institutions of a country. That is possible by enabling motivational factors for prospering in the respective fields. the recoveries on-time, without any delay. Justice delayed is Rather it is educational grounds or industrial sectors, free and Justice denied. fair judiciary has a vital application for success. Mr. Umer Hanif Khichi, Advocate High Court and Country In this framework, if the judiciary fails to meet the above Legal Advisor of CITI Bank, Pakistan, had to file in 150 cases mentioned (or declared) set of rules and services, anarchy for the banks. About Rs. 5 Million were deadlocked as bursts out. The calamity in the country causes instability and recoveries were stopped as courts were not working and relative flux. So this insecurity will cause undesirable effects lawyers put on the strike. RBS (Royal Bank of Scotland) in to the economy in terms of discouraging investment. Pakistan faced major financial crunch and had to roll back Instability and riots further damages the infrastructure and from the country, as the banking courts were ineffective as the cripples the public services as well (as being witnessed in past lawyers forced strike on 3rd November, 2007. Due to judicial years). crises, every second costs a dollar. Many a people fled from Pakistan with the loans and no one was there to arrest and The disorder also means people can't go to their jobs and the interrogate them. administrative systems are in a catastrophe, meaning that the factors of production are underutilized. Asides all the social C. Current Scenario consequences, the economy will lose out on investment and the GDP starts to tank. In such conditions, economy will be In the year 2001, the government of Pakistan started a judicial generating inside its Production Possibility Boundary (PPB) program called Access to Justice Program (AJP) as the Asian which means it’s not using all its resources fully and Development Bank (ADB) gave Pakistan a loan of US $350 Million (Program loan of US $330 Million and US $20
  3. 3. Million for Technical Assistance). The purpose of this Mr. Abdul Haseeb Khan, Legal Consultant at Ministry of program was to guarantee justice for every single common Privatization, Pakistan, puts a serious note of organizational man/woman to get fair and swift justice at his/her doorstep. ineffectiveness in the past years with the government policies. The curriculum got implemented by the year 2008 with We live on short-term policy-making and depend upon loans establishing the Program Management Unit in Islamabad and by World Bank. Poor policy regulations are to be blamed for Provincial Program Management Units at four Provincial the current business structure. Pakistan is an agricultural state headquarters. The share for Federal Department was 40% of (or was we can say), but due to the fascination towards the entire loan and 60% for Provincial Sectors [2]. Asides the industrialization, our country got lost in the transition. This Program Loan, the Technical Assistance loan activities were has emerged since Zulfiqar Ali Bhutto’s regime. The used to strengthen five policies; (i) Judicial performance, (ii) industrialist looks for incentives; such as continuous power Legal empowerment and education, (iii) Public safety and supplies, tax relief, cheap labor etc. For that reason, many prosecution, (iv) Administrative justice (v) Fiscal reforms in inappropriate decisions are made in seeking the personal judicial sector [3]. This program was to boost the system of benefits. One example is a textile mill in Hattar (NWFP), law and order, but unfortunately all the loan was swallowed cotton irrigation in Faisalabad (Punjab) and finishing in on the physical revamping of the offices and courts of Karachi (Sind). The transportation charges and management is Islamabad. hideous and an intangible problem for the industrialist. Other issues are related with the poor regulatory authorities in Irrespective of this, for an action encountered in March 2007, Pakistan. In the year 2008, Pakistani rupee depreciated the judicial crisis faced by Pakistan cost our national, social steeply, when the country’s foreign exchange reserves fell to and organizational setup very heavily. Losing the faith and less than half of current level of over $11.8 billion. That confidence in courts and law, the nation depressed and proved devastating for many companies dependent on deprived from the system opted the hard way to fight justice revenues in dollars and imports. National airline, oil refineries for the justice. Focusing the corporate sector, many and petroleum marketing companies were battered as rupee industrialists and businessmen faced fiscal crisis due to poor cost of imports surged out of control. The SBP (State Bank of state image of Pakistan for foreign investment opportunities Pakistan) has refused to obstruct by taking on the load of oil and business establishment. The poor accountability stature payments again. “The central bank fears that it won’t be able and booming fraudulent was reported by almost every to meet annual foreign debt obligations, if continued to pay for corporal person in the field, once asked. It reflected that a oil imports,” a former banker said [12]. judicial stability in the country works as a strong, defensive force for organizations to promote a stable image. Pakistan’s stock markets have tanked as the common man is destroyed. Main concern of the businessman is that law and The system has to be cleansed, as that the independent order is in perfect shape, so that the business can flourish. judiciary makes independent decisions. Pakistan is facing States are strong by making strong policies. The new judicial huge power crises which are the fatal result of ineffective and policy is mentioned to be strictly followed, as per the order of poor court decisions made in 1991, when the Independent the Supreme Court, and is yet to be implemented. Power Projects got a set-back from the newly-formed government’s lease benefits upheld, offered by the previous III. RESEARCH METHODOLOGY government. The courts gave order in the favor of the new government, without catering the national interest. Machinery The research strategy involves previous studies, organizational on the port; government changed; losses in billions. That was and corporal surveys, discussions with the law-making bodies the time when World Bank advised india to get electricity and following the code of corporal laws and their effects by from Pakistan as we had a surplus. Now, due to those rebates the Law, Justice and Human Rights Division, Ministry of Law and heavy mechanization projects rejected, we are facing & Justice, Government of Pakistan. In-depth exchange of power losses today. This is a huge impact, as now Karachi information regarding the views of the executives running the Electric Supply Company (KESC) has nothing to pay to organizations will be correlated with the current judicial WAPDA (Water and Power Development Authority, scenario, which will result in establishing the vital relationship Pakistan). Rather their had been strong judicial system and the of judicature and organization within any country of the world national interest had been catered, there wouldn’t had been (special focus on Pakistan). Because of the topic being very such a critical issue today. HUBCO was shut down in Pakistan extensive and having far-reaching scope of laws and due to the same reason also. regulations, only the vital and general aspects with ample
  4. 4. information to establish the relationship between judicial recognition as eligibility, qualification and requirement. system and the organizational effectiveness. Defects in the current scenario have interchanged these meanings to fulfill the monetary and pecuniary requirements, IV. IMPACTS ON THE ORGANIZATIONS a person with high financial stature, strong political background and solid support of class is declared to be on A. Accountability merit. Ignoring the high competitive stature, strong The first and foremost important impact of a strong judicial educational background and solid support of hard work, our system is Accountability. This statement is generally state structure becomes one big member of the autocracy, considered for political and governmental organizations and as kicking the democracy from the back doors. Role of strong a state monitoring action. But as in a role of a judiciary, it is judicial impact on this state of affairs is as there will be an liable for it to monitor the entire private sectors also. As in the available forum to raise this issue. So as the rightfully concept of leadership, accountability is the recognition of deserving personals get the place. The bright side of fair merit responsibility for actions, product, decisions, administration, system is that people with high skills and knowledge, in the governance and implementation of proper and rectification of certain field of required expertise, may glorify and gleam the improper ruling principles [3]. Compelling the governance of outputs with perceptively productive results. a company or an organization to work properly, on the basis of Mr. Mian Hanif, Advocate High Court, stated with great fair justice with the employees boosts the empowerment factor disappointment that in Islamabad High Court (IHC), the within the organizations and sets a qualitative example of judges were appointed without any criteria. Not a single judge leadership and results in the favor of the organization. Quality was up to the mark or even qualified even so as to understand of production is favored and checked so as the customers’ the basic most concepts of law and judiciary. That laid the requirements are totally fulfilled. Rule of strong judiciary will foundation of wrong decisions which directly affected the hold people accountable going against the legislative organizational structure. It is a favorable gesture for the authorities. Quality of output being the prime concern of the judiciary on the order of Supreme Court, now, to shut it down end-user (rather from the field of education or material), this and all the appointed judges to be deposed. area must be catered for, and accountability is the best solution. Kabraji & Talibuddin, the top corporate law firm of Pakistan, undertakes all forms of Civil and Commercial work. Kairas B. Fraud-Resistance Nader Kabraji and Salman Talibuddin, are both the corporate Fraud is an intentional deceptive action for gaining personal giants of Pakistan. On the order of Chief Justice of Pakistan, advantages on resulting severe harm to the victim. Deceiving Mr. Kabraji has been appointed the new Chief Justice of and dishonesty are prime movers of organizational destruction Baluchistan High Court, and Mr. Talibuddin as Chief Justice in the corporate sector worldwide. One common term coined of Sind High Court. These are the first few steps towards by the Criminal Law Jurisdiction is called “Fraud for Profit”, development and welfare for the corporate structure of which concerns the industrialists and related professionals. Pakistan, and the good results are awaited in future. These frauds include numerous gross misrepresentations D. Securing Copyrights including: income or assets are exaggerated, collateral and the length of employment is falsely shown or fictitious Copyrights fall under the Law of Intellectual Property. employment is reported, and employment is backstopped by Copyright apply to a wide range of creative, intellectual, conspirators; these are some common issues in many of the scientific, or artistic forms, or works. Copyright laws have organizations in Pakistan, and even worldwide. Defense of the been standardized to some extent through international organizations under criminal law act on fraud can be achieved, conventions such as the Berne Convention and Universal and judiciary plays a vital role in prosecution of fraudulent. Copyright Convention. These multilateral treaties have been Because once the true picture of employments, assets and ratified by nearly all countries, and international organizations income are brought to surface, the competition enhances, and such as the European Union or World Trade Organization the organization gains the competitive advantage. require their member states to comply with them [4]. Pakistan is a member of Berne Convention and is included in the list of C. Merit System for Judges parties to the international copyrights agreement. In all Merit means value, worth and advantage. In our daily countries where the Berne Convention standards apply, communication and interpretation, this word gained the copyright is automatic, and need not be obtained through
  5. 5. official registration with any government office. Once an idea with the state affairs. The private corporal and organizational has been reduced to tangible form, for example by securing it sector has enlightened the view that having a strong and fair in a fixed medium (such as a videotape, or a computer file), judiciary system arises faith and builds up poise and assurance the copyright holder is entitled to enforce his or her exclusive that a firm forum exists to protect and defend the rights and rights. However, while registration isn't needed to exercise law suits to go against even the state (if wrongly accused). A copyright, in jurisdictions where the laws provide for sense of security from fair and strong judiciary basically registration, it serves as prima facie (meaning on its first enhances the organization’s morale and driving forces. appearance) evidence of a valid copyright and enables the copyright holder to seek statutory damages and attorney's fees. G. Organizational Welfare Protection of copyrights is an essential and critical issue. Imagine the pleasure of living in a place, where one knows, Every individual/ firm strives to protect its copyright from any exist accountability and justice for all. Similar is the case for illegal use. In case of any misuse, the owner can seek justice the organizations. When organizational members know that from court. A strong judicial system ensures speedy action they will be liable for any wrong doing, they will avoid against any such illegal act. following the wrong path. This will promote meritocracy, E. Foreign Investment honesty and ethical working practices not only in the organizations, but also in the country as a whole. This tends to Foreign investment plays a key role in the economic stability introduce the quality perspective of organizational of any country. The foreign investor will only invest in a arrangement in Pakistan, where law system prevails, and our country having a conducive environment for business organizations work soothes to brighten effective and conduction, having political stability, facilitates business productive outcomes. activities and operations, and above all, has a strong judicial system. A strong and fair judicial system reflects a gentle V. CONCLUSION image of the country for foreign investment. This strengthens After the much awaited restoration of nation’s view on free the investor’s confidence and he/she knows that there is a and fair judiciary, after March 2009; many expectations have strong court to look after him in case of any fraud, as arose with the judiciary as a gleaming light from the Almighty discussed before. Thus, this builds his/her trust for investing in Allah and a few forceful impacts have been catered on the country. A picture of political, financial and environmental discussion with the experts on the view. The role of strong stability is featured through the judiciary of a country judiciary can definitely boost the effectiveness and usefulness persuading free and fair rights to the public of every sector. As of our organizational setup. Promoting the quality of witnessed when former President Pervez Musharraf resigned, governance, quality of production, and quality of law the stock market showed elevation, the national currency grew eventually enhances the quality of the nation. The ultimate stronger and political scenario of the country grew more and goal of a strong judicial system will be the improvement in more stable. These are the vital and most necessary factors to Quality of Pakistan. gain the investors’ eyes and confidence for enhancing the business opportunities and, hence, boosting the effectiveness A strong judicial system is an icon of a strong nation. Inject of our corporal and organizational association. the quality of law to project the quality of the nation. Organizations play vital and developing role for a country, and Pakistan’s key textile exports depend on imported raw by establishment of a strong, fair and free judicature scheme material like synthetic fiber and artificial silk yarn besides promotes accountability, merit, honesty, security options and, plant equipment, which is imported on regular basis. most importantly, foreign investment (as declared by the field experts). We can see a country changing its own fate by F. Sense of Security struggling and fighting for independent judiciary, believing to Strong judiciary acts as a guard for defending and protecting change the course of action being applied not going in the the rights of any organization. Any organizational member, nation’s favor. And organizational structure of the country irrespective of any post/position can seek justice from the plays a prominent role in nations’ development; rather court if he/she has been wrongly penalized. The organizations educational or corporal. A strong judicial system puts a strong have clear dealings with society and public relations. This impact on organizations’ effectiveness and efficiency, and that gives birth to many misunderstandings and quarrels between is the purpose of this research to promote and produce a valid the organization and society, and even the clash resolution experience for the law-makers and the people of Pakistan to
  6. 6. view and generate the ideas for progress of the country; and to [12] The NEWS Blog (2009). The NEWS [Online]. improve the quality of Pakistan. The quality of law affects the Available: quality of organizations, and finally, that affects the quality of http://www.thenews.com.pk/blog/blog_details.asp? id=205 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

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