Court hints at charging mineral water companies for groundwater

Chief Justice of Pakistan (CJP) Mian Saqib Nisar has directed a chartered accountant firm to conduct a forensic audit of a bottled mineral water brand, and directed the latter’s counsel, Barrister Aitzaz Ahsan, and representatives of other bottled water manufacturing companies to sit together and bring forth a viable plan to rationalise the purchase price of groundwater.In pursuance to court orders, the chief executive officers of various bottled water companies turned up before a two-judge bench at the Lahore registry, hearing a suo motu case against the extraction of groundwater by international and local bottled water companies.“Companies drilling to access groundwater have made profits worth billions of rupees but they paid nearly nothing to the government,” the chief justice regretted.Nisar remarked that a litre of water is sold for Rs50, but only one-eighth of this price is given to the government.“An international mineral water company earned Rs6bn in profit in just a year. Anyone using natural water resources needs to be taxed,” he said. “The children of Pakistan will not have access to water if this situation continues.”The chief justice told Ahsan that the court wants to regulate groundwater extraction by every industry like it did with the cement industry.Justice Ijazul Ahsan said that the companies selling water are paying the lowest price to obtain the natural resource as compared to the rest of the world.Aitzaz Ahsan extended arguments to defend his client.He is of the view that the business of companies selling bottled water differs from other industries as they extract groundwater and purify it before selling it.However, he said, other industries release polluted water after using the groundwater.Justice Ahsan noted that the company earned an average profit of Rs6bn from the bottled water business, but was unwilling to pay a rational price for extracting groundwater.However, counsel Aitzaz Ahsan insisted that the amount quoted by the bench was not profit, but rather the company’s sale figures.Chief Justice Nisar told the counsel that the court would order the government to waive the existing price of water (0.4 paisa per litre) as a charity if his client/company was not able to pay a rational price.The chief justice directed the company to deposit a bank surety of Rs1bn when Aitzaz Ahsan sought one-month time for deliberations with stakeholders and government authorities to rationalise the water price.“It is better to ask them to take their all investment back to Switzerland,” the counsel responded to the chief justice’s order.Chief Justice Nisar then asked the counsel not to exploit the situation by warning that foreign investors would be discouraged due to the judicial proceedings.“One cannot escape regulations being a foreign investor,” the chief justice added.The top judge also lamented that the conduct of the companies showed they did not want to contribute to the country’s economy.He ordered a forensic audit of the water company and appointed Kaukab Jamal Zubairi, an expert in auditing, brushing aside Aitzaz Ahsan’s reservations.The counsel had insisted that the task be given to one of top four chartered accountancy firms, saying that a recent audit on the Pakistan Kidney and Liver Transplant Institute (PKLI), conducted by Zubairi, contained grave factual errors.Aitzaz Ahsan also asked the chief justice to give them/ company one month “to present our own report on this, then after that you might get a forensic audit done”.The chief justice rejected his both pleas and directed Zubairi to complete the audit within 15 days.He also instructed his staff to randomly purchase bottles of famous mineral water companies for their analysis.