Patchy scholar oversight makes global syariah authority unlikely Megat Hizaini Hassan

September 29, 2010SEPT 29 The idea that syariah advisors are subject to supervision is not exactly something new.At the international level, for example, the Auditing and Accounting Organisation of Islamic Financial Institutions (AAOIFI) in Bahrain already publishes a syariah standard on stipulations and ethics of fatwa (Islamic law ruling) for Islamic financial institutions as well as several governance standards on the role of syariah supervisory boards (currently being reviewed by AAOIFI).The Islamic Fiqh Academy of the Organisation for Islamic Conference in Saudi Arabia in April 2009 issued a resolution on syariah supervision for Islamic banks, while the Islamic Financial Services Board in Malaysia in December 2009 published a standard on syariah governance systems for Islamic financial institutions.The initiatives at the international level are further complemented by efforts in certain jurisdictions: Malaysia, for example, has implemented various measures concerning syariah supervision as part of its regulatory framework for Islamic banking, takaful (Islamic insurance) and Islamic capital market (investment funds, structured products and sukuk).So, while supervision of syariah advisors is acknowledged as being important for the Islamic finance industry, as may be seen from the initiatives mentioned above, most countries have not yet taken active steps to implement such syariah supervision systems as part of the regulatory framework for Islamic finance.As such, since most jurisdictions may not yet have in place proper syariah supervision systems for Islamic finance, it may be premature to expect any coordinated approach for supervision of syariah advisors globally, at least not in the near future.As for who should supervise syariah advisors, such a task may be left to regulators in each country who would be in the best position to undertake the role of supervision. However, such regulators must have people who understand Islamic law and Islamic finance as well as syariah governance requirements to ! ensure t hat supervision is performed effectively.As for whether syariah advisors should be accountable for the proper implementation of their rulings, the short answer would be yes, if in the first place the syariah advisors themselves are in a position to know whether their rulings are subsequently implemented.There may be situations whereby the syariah advisors are not informed of (or indeed have any say on) the progress of the matter after a ruling is issued, and in these situations it would be unfair to put the blame on syariah advisors who may have been kept in the dark.If there are proper syariah supervision systems in place, then such situations should not occur. In any case, it would be highly unlikely for a syariah board to disclaim responsibility for its own ruling, as such action would reflect badly on the syariah board itself and the personal reputation of each member of the syariah board. Reuters* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.
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