Only the guilty need indemnity laws

The cover of secrecy enjoyed by different actors in the power sector of Bangladesh allows cases of corruption and mismanagement to abound.

Eresh Omar Jamal

Eresh Omar Jamal

The Daily Star


Why do government officials working in our energy sector need indemnity to do their job? What is it they fear? That their corruption may get exposed? VISUAL: Kazi Tahsin Agaz Apurbo

August 29, 2022

Bangladesh has a terrible history with indemnity laws. In 1975, the martial law regime led by Khandaker Mushtaque Ahmed passed an indemnity ordinance to protect the killers of Bangabandhu Sheikh Mujibur Rahman and his family members, which the Awami League government scrapped after assuming power in 1996. Similarly, the Bangladesh Constitution’s Fifth Amendment passed by the second parliament had validated and ratified all actions of the martial law regimes between August 15, 1975 and April 9, 1979. And another martial law ruler, Ershad, indemnified himself and all his actions through the passing of the constitution’s Seventh Amendment in 1986.

In 1988, in the Anwar Hossain Chowdhury vs Bangladesh case, the Supreme Court said the power of judicial review was a basic feature of the constitution and could not be taken away or curtailed even by amending the constitution. Ultimately, both the fifth and seventh amendments were declared illegal and void.

After the so-called restoration of democracy, the BNP first brought back this authoritarian practice by indemnifying the joint forces against legal actions during Operation Clean Heart in 2003. In 2015, the High Court again scrapped that, paving the way for the families of the victims of the operation to seek justice.

In a similar authoritarian exercise, the Awami League passed the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act in 2010, indemnifying the government for its actions in the energy sector from judicial proceedings. Though it was initially passed under the guise of urgent power generation necessities, it has proven to be anything but that. The government, despite protests from experts, kept on extending this indemnity for more than a decade. And today, the national energy crisis we are facing is a direct result of the corruption and nepotism that the government has allowed to take place using the indemnity law.

According to energy expert Dr Ijaz Hossain, despite government sycophants boasting its energy policy success, “the [energy] crisis has been there all along,” and the government, due to external factors, is being “compelled to recognise it now as it cannot hide [it] any longer.” “Bureaucrats got themselves engaged in corruption without any fear because of the indemnity offered in the law, and it led to a complete regulatory failure,” said Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB).

That after spending thousands of crores of taxpayers’ money we are back to the days of load-shedding that we saw some 10-15 years back is a clear testament to this government’s failed energy policy.

Now that the cat is out of the bag, is it any wonder that a recommendation has been made to a parliamentary standing committee to bring back a martial-law-era provision to shield the officials of the state-run Petrobangla from legal proceedings, for supposedly “acting in good faith”? Supporting this, the additional attorney general argued that if any official who performs duties in the interest of Petrobangla gets “immunity or indemnity,” they will do their job freely and without fear. But if I may ask, who is stopping the officials of Petrobangla – the more common name for Bangladesh Oil, Gas and Mineral Corporation – from doing their duties? The citizens sure aren’t – the government never listens to their concerns when it comes to the energy sector in particular, and most matters that concern the state in general. And what is it that they fear? That they might get exposed for their corruption?

A day after the media reported on this absurd recommendation, the Parliamentary Standing Committee on Public Undertakings expressed shock at the widespread irregularities in the state-run Bangladesh Petroleum Corporation (BPC). According to the committee’s findings, “There is little transparency in the state-run BPC,” which hasn’t had any external audit of its accounts in the last 10 years.

In the 2012-13 fiscal year, the comptroller and auditor general (CAG) found irregularities of Tk 9,295.4 crore in the two previous fiscal years, and the BPC’s explanation to the CAG’s objections was not satisfactory. According to the 2012-13 audit report, the BPC lost Tk 708 crore in interest for failing to collect dues of Tk 5,957 crore from three distributing companies: Padma, Meghna and Jamuna. “This allowed those distributors to pay their officials extra money as incentive bonuses.” Its other irregularities, the list of which is extensive, also cost huge amounts of public resources that could have been utilised to cushion against the crisis today.

Given the cover of secrecy enjoyed by different (particularly government) actors in the power sector of Bangladesh, who can really say that similar corruption and mismanagement haven’t been happening in Petrobangla?

Previous indemnity laws in the sector, aside from providing cover for corruption and nepotism, created a scope for the Bangladesh Power Development Board (BPDB) to pass the financial burden, mostly caused by private sector projects effected under the law, onto the end consumers without attending to the issues that plagued the country’s power generation and transmission system. For example, a recently released research on power purchase between 2004 and 2017 found that uncompetitive deals with some private power plants resulted in high power prices that cost taxpayers around USD 1 billion a year in subsidies. The study also explored how consumer prices are marked up by “collusive investments” by politically well-connected investors, and how the BPDB has bought power from some power plants at 25 percent higher price than other identical power plants.

Additionally, “collusive contracting” has contributed to sectoral corruption, such as more expensive plants receiving orders before their lower-cost counterparts. “The government’s contracts with high-cost rental power plants state that if they were not given orders for power, they would still be paid for 60 percent of the power they could have produced,” according to a report in this daily. This has led to the payment of enormous amounts of capacity charges over the years, which has been pushed onto the end consumers.

According to Bangladesh Working Group on External Debt (BWGED), the government paid a staggering Tk 72,567 crore to private power generators in capacity charge over the decade until 2021, which corresponds to the BPDB’s piling losses of Tk 76,115 crore incurred over the same period of time. The BWGED’s member-secretary explained it perfectly, “The capacity charge could be defined, in other words, as a means of transferring public money to private pockets, sometimes to foreign companies.”

According to Jahangirnagar University professor Anu Muhammad, between 2011-12 and 2021-2022, various private companies involved with Bangladesh’s power sector were given Tk 90,000 crore. Out of this, almost Tk 60,000 crore was given to just 12 companies – not to produce electricity, but to sit idle. The highest recipient among them was the Summit Group, followed by some UK and Malaysia-based groups, the United Group, the Orion Group, and some Indian companies. And, as it turns out, the amount of money that is being paid to different Indian companies such as Reliance and Adani, other foreign companies and top Bangladeshi power companies is bigger than the loans that Bangladesh is seeking from multilateral organisations such as the International Monetary Fund (IMF).

Had the power sector indemnity laws not created such fertile grounds for corruption, not only would we not be in this crisis, but we may not have had to borrow money either, putting our future at risk. That is why any attempt to legitimise further indemnity laws must now be opposed by the people at all costs.

Eresh Omar Jamal is assistant editor at The Daily Star. His Twitter handle is: @EreshOmarJamal

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