AFTER more than five years of delay, a proposed law that seeks to regulate and monitor activities of the private courier and logistics service providers in the country is entering final stages of approval.

The National Assembly has already passed the bill for setting up the Pakistan Courier and Logistics Regulatory Authority (PCLRA) on the pattern of many other regulators for media, energy, telecommunications, water resources, etc. The proposed PCLRA Act of 2018 has to pass through the scrutiny of the upper house of parliament before becoming a law.

A legal and regulatory void arose after courier companies mushroomed, as the state-run Pakistan Post struggled to cope with emerging service challenges. Likewise, the logistics service providers also emerged in the private sector. In both cases, the sectors remained generally unregulated except for basic registrations under the local government and company laws.

The need for regulation was felt after increasing terrorist activities, including despatch of contraband and other anti-state material

All of the courier and logistics service providers, estimated to be more than 300 across the country, would have to obtain formal licences from the PCLRA.

The 11-member regulatory body to come into being after the law is passed will be responsible for setting rules and regulators for improved competition, and for revenue collection and consumer protection. The proposed regulator will have a chairman and 10 members, including six senior officers of the ministries of communications, commerce, ports and shipping, railways, finance, and law and justice besides director general of Pakistan Post.

It will have three private sector members including two representatives of private courier services and logistics service providers and a legal member. The term of office for all members and chairman shall be three years except for representatives of six ministries.

The use of explosives in large quantities during recent terror attacks in the country and their transportation through such firms prompted the government to introduce the legislation. There were also reports in the past of the spread of anthrax bacteria through courier and post that caused health-related issues.

“The need for a regulatory mechanism (for courier and logistics firms) was felt after increasing terrorist activities, including dispatch of contraband and other anti-state material,” noted the National Assembly Secretariat, saying that the Ministry of Interior had also advised taking measures to check such activities. Separately, the government is working on a piece of legislation to regulate sales and purchase of explosives, including acid.

The 22-member standing committee of the National Assembly that scrutinised the bill in detail concluded that it was critically important to protect the interest of consumers, the state, and the courier and logistics service providers “to create fair conditions for all market operators through competition in terms of quality, accessibility, affordability, safety, security, and to bring the operations of such firms within the ambit of law and regulatory framework”.

The proposed regulatory authority would not only regulate the functions of courier, cargo and logistics services but also generate funds for the government and set tariffs for courier services in a transparent and fair manner.

Currently, private couriers, cargo and logistics service providers are handling packets and parcels for customers but are operating without any regulatory regime. They are free to fix their charges and usurp government revenue through non-payment of general sales tax and other taxes. Under-pricing and invoicing are reported to be running rampant, and consumers have no formal forum to register their complaints or seek protection of their rights.

On top of that, their mail is also not subject to any checking through legal means, even though some opaque arrangements have been put in place on the desire of security agencies to guard against transmission of anti-state material.

The regulatory authority would be responsible for providing a level-playing field to all stakeholders in the courier business, ensure rational rates of various services provided, and set financial and operational standards for issuance of licenses to the private firms.

The courier, cargo and logistics service providers would be responsible under their licence to protect the sovereignty, security and integrity of Pakistan, and respect social, religious and cultural values. They must ensure that their operations do not contribute towards violence, terrorism, racial, ethnic or religious discrimination, sectarianism or extremism.

The courier service licence-holders would be bound to extend full cooperation with the designated law enforcing agencies with regard to checking of mail and courier material.

The regulatory authority would be required to take decisions on the application for a licence within 60 working days and revise licence renewal fee from time to time. The licence shall have a validity of two years.

The licences would not be granted to a person who is not a citizen or resident of Pakistan, or to a foreign unregistered company organised under the law of any foreign government.

Published in Dawn, The Business and Finance Weekly, February 26th, 2018

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