Konsultasi Muamalat

Dr Mohamed Ali Elgari needs no introduction to the world of Islamic finance. In a recent report by Mushtaq Parker for Arab News, he discussed the issue of Shariah governance in the Islamic finance industry. Two major observations from this report are:

1. It is high time that Shariah governance in Islamic finance is addressed impartially, and in a transparent and positive way

2. The authority to issue fatwas should not be centralized or monopolized by one authority or body of Shariah scholars.

Do his assertions imply that present Shariah scholars who dominate the Shariah Boards of IFIs are partial/biased? Do they imply that these scholars hide important information? Why does the industry tend to seek services of a handful of scholars again and again? Does Dr Elgari’s concern reflect an endorsement/ disagreement with the Malaysian practice of centralized and regulated Shariah advisory (diversity of fiqhi interpretations is a strength)? Indeed the Securities Commission Malaysia (SC), requires Shariah advisors to be restricted to advise one institution in a particular market segment, which would prevent tendencies to monopolize, something that Dr Elgari feels is highly desirable.

Parker’s report also refers to the practice of drawing a line of distinction between an Islamic economist and a Shariah scholar. As Parker quotes Dr Elgari, a UCLA trained economist, dismissing the centralization of fatwa issuing authority “Shariah scholars are just like the rest of us. There is no special power bestowed in them. Hence, their authority is derived from political and not Shariah sources. We all know that the centralization of power is the shortest route to tyranny,”

Here are a few other suggestions by Dr Elgari that throw up many issues for discussion.

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Strong Shariah governance would lead to a lively Shariah discourse with the widest possible participation and the broadest acceptance.

A road map for strong Shariah governance.

i) Shariah decisions must always be supported by a body of evidence;

ii) Shariah declarations must always be capable of being defended by those who issued them with the same vigor with which they were issued;

iii) Shariah decisions must be feasible taking into consideration circumstances as they are. Hence to suggest Qard Hassan in place of Tawarruq as prescribed by the recent resolution of the OIC Fiqh Academy, “is asking Islamic banks to do something that is not doable”;

iv) empowering the power of voting. Although consensus may be desired, most often in Shariah boards it is a compromise that is reached. Dissent is not welcomed which gives rise to a perception of a patriarchic relationship between Shariah board members;

v) procedures for the reversal of fatwas because Shariah scholars are not infallible and they do mistakes which have to be retracted and corrected. This process has to be done very carefully and with consideration because a sudden reversal of a position could be a shock that may be damaging to a financial institution or to the Islamic banking industry at large and could also have retrospective implications;

vi) ethics of disagreement where Shariah scholars must learn to tolerate and respect opposing views which are also valid under the Shariah;

vii) greater consultation because Shariah discourse is not the exclusive preserve of the scholars; and

viii) a fatwa must remain personal and the scholar’s whose signature appears on any document or fatwa must remain accountable for that fatwa.