Legal Consequences for Hoarding and Stockpiling Violations in Bangladesh

Introduction

The illegal hoarding and stockpiling of critical goods in Bangladesh have become a major concern in recent years, especially during times of crisis and instability when these goods are in short supply. Storing or withholding necessities in excess of the permissible quantity or duration with the intent to create artificial shortages and manipulate pricing is known as hoarding or stockpiling and is a prohibited activity. It is against the law in Bangladesh to engage in activities that are harmful to the public interest or the national economy.

Hoarding or dealing in the black market can result in the death penalty, life imprisonment, or harsh imprisonment for up to 14 years and a fine under the 1974 Special Powers Act. Moreover, the Essential Articles (Price Control and Anti-Hoarding) Act, 1953, requires traders to mark the maximum prices of essential articles and sell them without refusal. The government conducts frequent operations to detect and punish hoarders and stockpillers of essential commodities such as rice, soybean oil, onions, and so on. Recently, a number of business ventures around the country were punished for illegally stockpiling rice.

Definition

The Special Powers Act, of 1974, says in section 2(e) that hoarding is storing anything more than the legal limit of that thing by any law. A person who does this without a good reason, for example, rice, onion, sugar, etc., is a hoarder.

The Foodstuffs (Prevention of Harmful Activities) Act 2023, says in section 2(6) that hoarding is storing foodstuffs more than the amount allowed by the government or any authority to create shortage or change prices. A person who does this on purpose, for example, rice, wheat, oil, etc., is a hoarder.

The Essential Articles (Price Control and Anti-Hoarding) Act, 1953, says in section 8 that stockpiling is not selling or supplying any essential item in normal quantities as per the demand and supply. A person who does this, for example, medicine, salt, kerosene, etc., is a stockpiller.

Impact or Consequences

• Hoarding and stockpiling can create an artificial scarcity of essential commodities, such as food, medicine, fuel, etc., which can affect the availability and accessibility of these items for the general public, especially the poor and vulnerable sections of society.
• Hoarding and stockpiling can lead to price manipulation of essential commodities, which can increase the cost of living and inflation, and reduce the purchasing power and welfare of the consumers.
• Hoarding and stockpiling can cause market distortion and inefficient allocation of resources, which can hamper the production, distribution, and consumption of essential commodities, and affect the growth and development of the economy.
• Hoarding and stockpiling can also pose health and environmental risks, as some commodities may deteriorate or expire over time, or may be stored in unhygienic or unsafe conditions, which can cause contamination, spoilage, or wastage.
• Hoarding and stockpiling can create social unrest and violence, as people may resort to protests, riots, looting, or vandalism to express their dissatisfaction or frustration with the shortage or high prices of essential commodities.
• Hoarding and stockpiling can undermine the rule of law and good governance, as some hoarders or stockpilers may use their political or economic influence to evade or manipulate the legal system or to bribe or coerce the authorities or the media.
• Hoarding and stockpiling can damage the reputation and credibility of the government and the market, as people may lose trust or confidence in their ability or willingness to ensure the availability and affordability of essential commodities.
• Hoarding and stockpiling can affect the international trade and relations of Bangladesh, as it may violate the agreements or obligations with other countries or organizations, or may invite sanctions or retaliations from them.

Laws and regulation

The Special Powers Act, 1974

The act was a law that aimed to prevent scarcity and profiteering during a crisis by banning hoarding or dealing in the black market of any goods or commodities. The act defined the terms hoarding and dealing in the black market in section 2 as follows:

Hoarding: Stocking or storing anything beyond the legal limit (section 2(a)).

Dealing in the black market: Selling or offering for sale anything above the legal price (section 2(b)). The act prohibited both hoarding and dealing in the black market in section 3, which stated: No person shall hoard or deal in the black market. The act also prescribed the penalties for these offenses in section 4 as follows:

Hoarding for gain: Death penalty, imprisonment for life, or rigorous imprisonment up to 14 years, and fine (section 4(1)).

Hoarding for any other purpose: Imprisonment up to 3 months, and fine (section 4(2)).

Dealing in the black market: Death penalty, imprisonment for life, or rigorous imprisonment up to 14 years, and fine (section 4(3)).

The Essential Articles (Price Control and Anti-Hoarding) Act, 1953

The act was a law that aimed to control the supply and price of essential commodities, which were defined in section 2 as:

“Essential commodity” means any article which is declared by notification under section 2 of the Control of Essential Commodities Act, 1956 (East Pakistan Act No. I of 1956), to be an essential commodity.

The act required traders to display the government-fixed prices of essential articles in section 3, which stated: Every trader shall mark the maximum prices fixed by the Government on any essential article and exhibit them in a conspicuous place in his shop or godown.

The act prohibited traders from withholding or refusing to sell essential articles in section 4, which stated: No trader shall withhold from sale or refuse to sell to any person any essential article in quantities not contrary to the normal practices of his business.

The act prescribed the penalties for violating its provisions in section 5, which stated: Whoever contravenes the provisions of section 3 or section 4 shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand Taka, or with both.

The Production, Storage, Movement, Transportation, Supply, Distribution, and Marketing of Food Grains (Prevention of Prejudicial Activity) Act, 2023

The act was a law that aimed to regulate the food supply chain of grain food products such as rice, wheat, and corn. The act was based on two previous laws – the Food (Special Courts) Act, 1956, and the Foodgrains Supply (Prevention of Prejudicial Activities) Ordinance, 1979. The act introduced stricter punishments and new offenses to prevent manipulation in the food supply chain from the production to the marketing stage. The act defined the penalties for hoarding food products in section 6 as follows:

Section 6(1): Whoever hoards any food product in excess of the quantity fixed by the Government shall be punishable with imprisonment for life, which shall not be less than fourteen years.

Section 6(2): Whoever hoards any food product for any purpose other than gain shall be punishable with imprisonment for a term that may extend to three months, and the Court may also impose a fine.

The Control of Essential Commodities Act, 1956

The act was a law that enabled the government to declare and regulate any commodity as essential for the community. The act defined an essential commodity in section 2 as:

“Essential commodity” means any commodity which is declared by notification under this section to be an essential commodity.

The act authorized the government to fix the maximum prices of any essential commodity in section 3, which stated: The Government may, by order, fix the maximum prices at which any essential commodity may be sold or bought.

The act prohibited any person from violating or obstructing any order made under this act in section 4, which stated:

Section 4(1): Whoever contravenes any order made under this Act shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with both.

Section 4(2): Whoever obstructs any person exercising any power or discharging any duty conferred or imposed by this Act shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with both.

The Consumer Rights Protection Act, 2009

The act aimed to protect consumers from unfair trade practices. It is stated in section 2(8) that a consumer is someone who buys or uses goods or services for himself or someone else with his permission. It is stated in section 2(37) that an unfair trade practice is any trade practice that harms consumers by using unfair or deceptive methods for goods or services. It gave examples of unfair trade practices in section 37, such as lying, misleading ads, hoarding, adulteration, defective goods, substandard services, etc. It set up a National Consumer Rights Protection Council in section 4 and a Directorate of National Consumer Rights Protection in section 5 to watch and enforce the act. It said in section 40 what the punishments are for breaking the act, such as:

Section 40(1): Up to five years in jail, or up to fifty lakh Taka fine, or both for unfair trade practices.

Section 40(2): Up to ten years in jail, or up to one crore Taka fine, or both for adulterated goods.

Section 40(3): Up to three years in jail, or up to ten lakh Taka fine, or both for defective goods.

Section 40(4): Up to two years in jail, or up to five lakh Taka fine, or both for substandard services.

The Competition Act, 2012

The act aimed to enhance competition, stop anti-competitive practices, protect consumers and ensure free trade. It said in section 2(1) that an anti-competitive practice is any agreement or practice that hurts or may hurt competition in the relevant market. It gave examples of anti-competitive practices in section 19, such as price fixing, output or supply restriction, market division, bid rigging, dominance abuse, etc. It set up a Bangladesh Competition Commission in section 5 to carry out and enforce the act. It said in section 38 what the punishments are for breaking the act, such as:

Section 38(1): Up to ten percent of the average turnover of the last three years or five crore Taka fine, whichever is more for anti-competitive practices.

Section 38(2): Up to fifty lakh Taka fine or up to three years in jail, or both for not following any order or direction of the Commission.

Section 38(3): Up to fifty lakh Taka fine or up to three years in jail, or both for giving any false information or hiding any important information.

The Essential Services Act, 1958

The act was a law that let the government declare and control any service as essential for the community and ban any strike or lock-out in such service. It said in section 2(1) that an essential service is any service that the government declares as such by notification under section 3. The act let the government make orders for keeping or increasing the supply of any essential commodity or for making sure its fair distribution and availability at fair prices in section 4, which said: The Government may, by order, regulate or prohibit the production, supply and distribution of, and trade and commerce in, any essential commodity. The act banned any person from breaking or encouraging any order made under this act in section 7, which said:

Section 7(1): Whoever breaks any order made under this Act shall be punished with jail for up to three years, or with a fine, or with both.

Section 7(2): Whoever urges or incites anyone to break any order made under this Act shall be punished with jail for up to three years, or with a fine, or with both.

The authority that can monitor market  

According to the Mobile Court Act, of 2009, a magistrate can conduct a mobile court anywhere within his or her jurisdiction and take cognizance of any offense that is punishable under any law with imprisonment for up to two years or with a fine or with both. The magistrate can also seize any property or document that is related to the offense and order its disposal according to law.

The Trading Corporation of Bangladesh (TCB), which is a state-owned enterprise under the Ministry of Commerce, operates as a market stabilizer by importing and selling essential commodities at subsidized prices through its outlets and mobile trucks across the country. The TCB also monitors the market prices and stocks of essential commodities and reports to the government.

The Anti-Corruption Commission (ACC), is an independent statutory body that investigates and prosecutes corruption cases, including those related to hoarding and profiteering of essential commodities. The ACC also conducts raids and searches on suspected hoarders and profiteers and seizes their illegal stocks.

The Consumers Association of Bangladesh (CAB), is a non-governmental organization that works to protect the rights and interests of consumers in Bangladesh. The CAB conducts surveys and research on the market prices and quality of essential commodities and publishes reports and recommendations. The CAB also raises awareness and educates consumers about their rights and responsibilities.

Conclusion

Hoarding and stockpiling of essential commodities in Bangladesh can have serious legal, economic, and social consequences. The government has enacted laws and regulations to prevent and punish these violations, imposing harsh penalties such as imprisonment or death. Various bodies and organizations, such as the TCB, the ACC, and the CAB, work to ensure the availability and affordability of vital goods, protect consumer rights, and curb corruption and unfair trade practices. To effectively combat hoarding and stockpiling, strict enforcement, public awareness, and collaboration are essential. By doing so, the government of Bangladesh aims to promote the well-being of its citizens and foster a fair and prosperous society.

The Writer Md. Shahidullah Mansur is an Apprentice Lawyer, Dhaka Judge Court.