ISLAMABAD: The Supreme Court declined to interfere in executive decisions when it held on Monday that the Punjab government had rightly banned the setting up of sugar mills or expanding the installed capacity of the existing ones.

“Since the government has issued the impugned Dec 6, 2006, notification, which is based on valid reasons, we do not think there will be any point to give reasons for declining an application seeking establishment of a new sugar mill or expanding an existing one,” said a verdict authored by Justice Qazi Faez Isa.

A two-judge bench headed by Justice Ejaz Afzal had taken up a set of four appeals against the Feb 26, 2013, Lahore High Court judgement on the petitions filed by Punjnad Sugar Mills, Tariq Khan Mazari, Begum Syed Iqbal and Arshad Javed Ahmed. They had challenged the provincial government’s authority to ban installation of sugar mills under the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963.

The Punjab sugar industry includes 46 mills of which 45 are functional with a sugarcane crushing capacity of 2.9 million tonnes per year and surplus production of 0.76m tonnes. The mills have never utilised 100 per cent of their crushing capacity because of unavailability of sufficient sugarcane.

Dismissing the appeals, the judgement said that the notification was undoubtedly within the executive authority of the government but it would not be immune from a challenge if it could be demonstrated that it was issued for mala fide or ulterior purposes and thus against the public or national interest.

The verdict also touched upon the state of affairs in Punjab and regretted that the cherished objective of transparency in governance had been obfuscated.

“Unfortunately Chief Minister Shahbaz Sharif has continued on the path of favouritism as it has transpired that despite ban, a number of sugar mills were given permission to be set up in Muzaffargarh and Rahim Yar Khan districts.”

Alarmingly, two sugar mills were allowed to be set up after the issuance of the notification, the judgement said. Since those facts came to the fore incidentally and were not subject matter of the appeals, it would not be appropriate to state anything further as the same may be subject matter for investigation and litigation.

The judgement also referred to the April 8, 2011, recommendation of a committee constituted by the chief minister and comprising the chief secretary, secretaries of industries, agriculture and food and representatives of the Lahore Chamber of Commerce and Indus­try and the Punjab Sugar Mills Association.

The committee had recommended a ban on the establishment of sugar mills and enlargement of existing ones throughout the province.

The industries secretary had told a committee meeting that the imposition of the ban on establishment of sugar mills was in line with the federal government’s position that the promotion of sugar cane production was not in the national interest in view of its substitution effect on cotton and wheat crops and being a water intensive crop, its harmful role, particularly in depleting groundwater resources.

Pros and cons

Similarly, the chief secretary had said that applications for setting up new/mini sugar mills mostly came from cotton growing belt of Punjab. The attraction of this area for the investors is mainly on account of high sugarcane recovery but if this trend is encouraged, the demand for additional sugarcane would come at the expense of cotton crop when sugar requirements of Punjab can easily be met from the existing capacity of sugar mills.

The agriculture secretary had expressed the fear that the lifting of the ban on the establishment of sugar mills would affect cotton production which was around 10m to 13m bales against the demand of 15m to 16m bales.

Supporting the contentions of the experts, the judgement also cited a number of ecological, environmental, agricultural, industrial and financial reasons like: Punjab has an arid climate but sugarcane consumes far more water than other crops by tapping into groundwater/aquifers inducing water scarcity by depleting aquifers.

Moreover, sugarcane stubble remains rooted in the soil after the crop has been harvested and, therefore, the second (wheat) crop cannot be grown on such land whereas it can be grown on the land from which cotton has been harvested. Thus sugarcane adversely affects food security.

According to the committee report, textile industry is being starved of locally available cotton and, as a result, cotton has to be imported by using scarce foreign exchange because textiles are a major foreign exchange earner. Besides, the international price of sugar is lower than the local price and, therefore, sugar does not have export potential.

Published in Dawn, July 26th, 2016