Eradication of Corrupt Business Practices Ordinance, 1998
Ordinance V of 1998
An ordinance to provide for the eradication of corrupt business practices.
WHEREAS it is expedient to provide for the eradication of corrupt business
AND WHEREAS the National Assembly is not in session and the President is
satisfied that circumstances exist which render it necessary to take immediate
NOW, THEREFORE, in exercise of the powers conferred by clause (1) of Article
89 of the Constitution of the Islamic Republic of Pakistan, the President is
pleased to make and promulgate the following Ordinance:-
- Short title, commencement and extent:
- (1) This ordinance may be called the Eradication of Corrupt Business
Practices Ordinance, 1998.
- (2) It shall come into force at once.
- (3) It extends to the whole of Pakistan and shall apply also to acts
committed at any place outside Pakistan.
- In this Ordinance, unless the context otherwise requires:
- (a) "company" means a company incorporated under any law
relating to the incorporation of companies, and includes any foreign juridical
- (b) "contract" includes an understanding giving rise to any
liability (pecuniary or otherwise), the grant of a right, lease, licence,
concession, premium or conferment of any privileges:
- (c) "Government" means the Federal Government, a Provincial
Government, a local body and shall include any statutory body or any body in
the public sector or a body established, controlled, managed or owned by the
Government or in which the Government has a controlling share or interest;
- (d) "indirectly" includes through any broker, associate,
affiliate, sponsor, promoter, director or shareholder;
- (e) "person" means a natural or juridical person; and
- (f) "specified contract" means a contract of a value exceeding
one hundred million rupees in relation to such industry or industries as may be
specified in the schedule.
- Corrupt business practices:
- A person is said to commit a corrupt business practice if he, directly or
indirectly, gives, or agrees to give, a commission, gratification, bribe,
finder's fee or kickback, whether described as consultation fee or otherwise,
with the object of obtaining or modifying a contract, permission, sanction,
licence or other benefit in whatsoever form from the government.
- Explanation: A consultancy agreement entered into with a person in
good faith and as a bona fide arms length transaction for the rendition of
commercial services at market related rates and not intended as an indirect
payment intended to circumvent the above provision, shall not be deemed to be a
corrupt business practice provided that it is, if so required by the
government, disclosed to it for purposes of ascertainment.
- Punishment for corrupt business practices:
- Whoever commits a corrupt business practice shall be guilty of an offence
punishable with imprisonment for a term which may extend to seven years, or
with fine, or with both.
- In the event of a corrupt business practice having been committed by a
company, the chief executive, by whatever name designed, the country manager or
incharge (if any) and every director or officer involved shall be liable to be
proceeded against and punished accordingly unless he had no knowledge of, or
involvement in the offence.
- Offence of strict liability:
The offence punishable under section 4 shall be one of strict liabilities and
it shall not be a defence to the charge that the person giving, or agreeing to
give, a commission, gratification, bribe, finder's fee or kickback, whether
described as consultation fee or otherwise, with the object of obtaining or
modifying a contract, permission, sanction, licence or other benefit in
whatsoever form from the government was compelled, coerced, intimidated or
induced to give or agree to give, the same.
- Contract obtained through corrupt business practice to be void:
Any contract obtained by any person from the government by resort to corrupt
means shall, as against the government, be void and notwithstanding anything
contained in any law or contract to the contrary, no court, tribunal,
arbitrator or other forum, shall, as against the government, enforce or permit
to be enforced, or acted upon, any such contract.
- Declaration not to commit corrupt business practice:
- Any person entering into a specified contract with the government shall, on
demand, furnish a declaration sworn on oath that he has not given, or agreed to
give, and shall not give, any commission, gratification, bribe, finder's fee or
kickback, whether described as consultation fee or otherwise, for obtaining or
modifying any contract, permission, sanction, licence or other benefit in
whatsoever form from the government.
- Every specified contract entered into with the government shall include,
and be deemed to include, a term that the person entering into a contract has,
or will on demand, furnish a declaration under sub-section (1).
- Declaration in relation to existing contracts: (1) Every
person who has entered into a specified contract with the government which has
not yet been fully implemented shall, within seven days, or such further period
as may be specified by the government, on service of a notice, furnish a
declaration sworn on oath as to whether or not he has, directly or indirectly,
given, or agreed to give, any commission, gratification, bribe, finder's fee or
kickback, whether described as consultation fee or otherwise, to any person for
obtaining or modifying the said contract.
- A contract shall be deemed not to have been implemented in full if any
obligations are subsisting thereunder and shall include cases in which
contracts or modifications thereof, were obtained through promoters, sponsors,
directors, share holders, affiliates, associates or brokers.
- Where a company which is required to furnish a declaration fails to
furnish it, the government shall stand absolved from all obligations under the
contract with such person, without prejudice to its right to recover damages or
- No criminal proceedings shall be initiated against a person making a
true declaration, under sub-section (1) in relation to existing contracts, of
any commission, gratification, bribe, finder's fee or kickback paid by him,
directly or indirectly, for obtaining or modifying a contract, permission,
sanction, licence or other benefit in whatsoever form from the government.
- Notwithstanding the provisions of section 6, the government may, in the
public interest, and for reasons to be recorded, agree to re-negotiate an
- Declaration by companies:
- Where the person obtaining a specified contract from the government, or
required to file a declaration is a company, the declaration shall be furnished
on oath by the chief executive of the company of a person duly authorized by
the board of directors of the company in this behalf. In the case of a foreign
company a confirmatory declaration shall, in addition, be made on oath by the
person in charge of its operation in Pakistan (if any);
- In the event of a false declaration having been given it shall not be a
valid defence for the declarant to claim that he was personally unaware of the
- Punishment for false declaration:
Where a person furnishes a false declaration, he shall be guilty of an offence
punishable with imprisonment for a term which may extend to three years, or
fine, or both, and shall also be liable to pay an amount equivalent to the
concealed amount to the government.
- Cognizance of offences:
No court shall take cognizance of an offence punishable under this Ordinance
except on a complaint made by order of, or under authority of, the Federal
Government or an officer empowered in this behalf by the said Government.
- Inquiry in relation to offences:
- The Federal Government may appoint any government servant, or any other
person who is an advocate of a High Court, or is a qualified chartered
accountant within the meaning of the Chartered Accountants Ordinance, 1961 (X
of 1961), or is a banker to carry out an enquiry in relation to any declaration
made, or required to be made, under this Ordinance and such government servant
or person shall have all the powers of a Civil Court, while trying a civil suit
under the Code of Civil Procedure, 1908 (Act No. V of 1908), in respect of the
following matters, namely:
- summoning and enforcing the attendance of any person and examining him
- requiring the recovery and production of any documents whether within or
- receiving evidence on affidavit; and
- issuing commissions for the examination of witnesses or documents.
- Nothing contained in sub-section (1) is intended to, or shall have the
effect of, restricting the powers of any police officer for or in relation to
any offence committed under this Ordinance.
1. Energy sector industry that is to say electricity and gas.