Irrigation Partnership (Musaqat) - Scope of Standard

Transcription

1. Shari ’ah Standard No. (50): Irrigation Partnership (Musaqat) Statement of the Standard 1. Scope of the Standard This Standard covers the Shari’ah rules and requirements for Irrigation Partnership (Musaqat) and its applications in the activities of Islamic financial institutions. It does not cover other forms of agricultural partnership as they have separate Shari’ah standards dedicated to them. 2. Definition of Irrigation Partnership (Musaqat) A contract between the owner of an orchard or its usufruct and a worker (irrigator) agreeing to share the produce according to specific ratios stipulated at the time of contract. 3. Permissibility and Description of the Contract Irrigation Partnership (Musaqat) is a permissible contract that becomes binding on commencement of the work or if mutually agreed between the two parties not to terminate the contract before its expiry. 4. Elements of Irrigation Partnership 4/1 Offer and acceptance should be exchanged explicitly or implicitly by means of a recognised form of indication. 4/2 Each of the two parties should be legally competent. 4/3 The relevant trees should be identified, arable (productive), and in need of irrigation and plant husbandry. 5. Conditions of Validity (Prerequisites) 5/1 The contract should stipulate for each party a predetermined, defined, indivisible share of the produce. 5/2 The work should be restricted to the husbandry of the crop and trees. The owner may not (in this contract) demand any additional work from the worker (irrigator). 1180
2. Shari ’ah Standard No. (50): Irrigation Partnership (Musaqat) 5/3 The contract is valid until the time of harvest or for a defined period in which the crop is normally enough for harvest. 6. Duties of the Worker (Irrigator) 6/1 The worker (irrigator) is obligated to care for the trees and crops as per agreement with the owner and customary requirements, including: 6/1/1 Carrying out plant husbandry by watering, pollinating, fertilising, weeding, maintaining and cleaning irrigation channels, pruning, controlling pests, harvesting and performing seasonal work that is usually required for each type of tree. 6/1/2 Not commissioning or subcontracting a third party to carry out his work without the permission of the owner. If he does so, the owner of the trees has the option to ratify the third party contract or reject it. 6/2 The worker (irrigator) may employ others to assist him to carry out part or all of the contracted work. 6/3 The worker (irrigator) acts in a fiduciary capacity and is not liable for any loss arising from other than wilful misconduct, negligence or breach of the terms of the contract. In such a case, he is liable to indemnify the owner against any actual loss caused, but remains entitled to his share of the crop. 7. Duties of the Owner of the Trees The owner should facilitate for the worker (irrigator) full access to the trees (subject of contract), and remove any impediments which may hinder the work of the worker (irrigator). 8. Joint Duties of the Worker (Irrigator) and the Owner of Trees 8/1 After harvesting, the worker (irrigator) and the owner are obligated to take care of the crop, each in proportion to his share. Prior to harvesting, the worker (irrigator) is obligated to take care of the crop unless custom or a term of the contract dictates otherwise. 1181
3. Shari ’ah Standard No. (50): Irrigation Partnership (Musaqat) 8/2 The worker (irrigator) and the owner are responsible for the expenses of the Irrigation Partnership in proportion to their shares, including any Takaful insurance, unless they agree otherwise. 8/3 The worker (irrigator) is solely responsible for performing the work customarily undertaken by workers (irrigators) in similar Irrigation Partnerships and such work does not entitle him to any increase in his share of the crop as he is already contractually obligated to carry it out. If he hires others to perform his work, their wage is his sole responsibility and should not be taken from the overall crop. The worker (irrigator) may hire, on the account of the Irrigation Partnership, others to perform work that is customarily beyond the scope of his duties. 8/4 If the worker (irrigator) refuses to complete the term of the Irrigation Partnership after commencing work or entering into the contract, the owner should demand performance from him. If the worker (irrigator) stops working before the crop materializes he is not entitled to any share. If he stops working after the crop materializes but before it is ready for harvest, a third party should be hired to complete the work and his wage should be deducted from the worker’s (irrigator’s) share after the crop is harvested and sold. If the worker’s (irrigator’s) share is not sufficient to pay the third party’s wage, the worker (irrigator) must make up the difference. If the worker’s (irrigator’s) share of the crop is more than the third party’s wage, he keeps the difference. 8/5 In an Irrigation Partnership (Musaqat) that is due to terminate when the crop materializes or is ready for harvest, if the owner does not enable the worker, and this occurs before the crop materializes, then the owner shall be requested to enable the worker (irrigator) to complete his work. If the owner does not enable the worker (irrigator), then the worker (irrigator) shall be entitled to a wage at the market rate for similar work. If this occurs after the crop materializes, the worker (irrigator) is entitled to his stipulated share of the crop. 1182
4. Shari ’ah Standard No. (50): Irrigation Partnership (Musaqat) 9. Division of Produce 9/1 In principle, all recurring produce of the trees should be shared as part of the crop, such as fruits, palm leaves etc. unless the parties agree to restrict their sharing arrangement to just the fruits. 9/2 The worker (irrigator) is entitled to his share of the crop on an indivisible basis as soon as it materializes. 10. Contingencies in Irrigation Partnerships 10/1 If the crop does not materialize at all or is completely destroyed by a natural disaster, the worker (irrigator) is not entitled to anything. If the natural disaster destroys only part of the crop, the parties divide what remains according to their stipulated shares. 10/2 If the crop does not materialize during the stipulated term, the worker (irrigator) has the option either to stop working or to continue his work without a wage until the crop materializes and thereafter takes his share. If he stops working without a valid excuse, he foregoes his right to a share of the crop when it materializes. If he has a valid excuse, he is entitled to the portion of his share that corresponds to the period of time worked in proportion to the total time the crop took to materialize. 11. Trees Belonging to Third Parties and Usurped Trees 11/1 If it transpires that the trees belong to a third party, the crop will then belong to him (the third party). In this case, the worker (irrigator) is entitled to a wage or compensation from the other party (the usurping party) at the market rate for similar work but not exceeding (what would have been) his share of the crop. 11/2 If the worker (irrigator) enters into an Irrigation Partnership (Musaqat) with a party who, unbeknown to the worker (irrigator), has usurped the trees, then the produce, if any, will belong to the owner of the trees and the worker (irrigator) will be entitled entitled to a wage at fair market rate. But if the worker (irrigator) knew that the trees were usurped, then he is not entitled to any remuneration. 1183
5. Shari ’ah Standard No. (50): Irrigation Partnership (Musaqat) 12. Termination of Irrigation Partnership Contract (Musaqat) The Irrigation Partnership (Musaqat) contract terminates upon the occurrence of any of the following: 12/1 Harvest and division of the crop, if the Irrigation Partnership was linked to the produce of a specific season. 12/2 Completion of the agreed term and division of the crop in accordance with Item 10/2. 12/3 Death of the worker (irrigator) or liquidation of the institution carrying out the work if the Irrigation Partnership (Musaqat) contract stipulates that the work is non-assignable. If there is no such stipulation, the successor has the option to complete the work on the same terms, either himself or by hiring workers (irrigators), in return for the deceased’s (or liquidated institution’s) share of the crop. If the successor chooses not to complete the work, the owner may complete the work himself or by hiring others and upon materialization of the crop, the successor of the worker (irrigator) is entitled to receive a wage at the market rate for similar work for the period of time worked by the deceased (or liquidated institution) but not exceeding his (or its) stipulated share of the crop. 12/4 Death of the trees that are the subject matter of the contract or inability of the trees to bear fruit. 12/5 Passing of a season without any fruit. 13. Revocation of Irrigation Partnership Contract (Musaqat) 13/1 Irrigation Partnership (Musaqat) contract is revocable by mutual consent of the two parties (Iqalah). 13/2 The owner can revoke the contract in the following situations: 13/2/1 When the worker (irrigator) is unable to perform the work, in which case the following apply: 13/2/1/1 If the worker (irrigator) is unable to work for a reason outside his control, such as an illness, he is entitled to receive a wage 1184
6. Shari ’ah Standard No. (50): Irrigation Partnership (Musaqat) at the market rate for similar work for the period of time worked. 13/2/1/2 If the worker (irrigator) is unable to work for a reason within his control, he is entitled to receive a wage at the market rate for similar work for the period of time worked. He is also liable to indemnify the owner for actual loss suffered, as determined by experts. 13/2/2 When the worker (irrigator) stops working and it is not possible to enforce him (to fulfil the terms of the contract). 13/3 The worker (irrigator) is entitled to revoke the contract if the owner refuses to allow him to work. [see item 8/5] 14. Zakat Due on Irrigation Partnership (Musaqat) See Shari’ah Standard No. (35) on Zakat, item 5/4/9. 15. Some Applications of Irrigation Partnership (Musaqat) in Financial Institutions 15/1 The institution may enter into Irrigation Partnership (Musaqat) contracts with the owners of trees and then hire workers (irrigators) to carry out the work. 15/2 The institution can own trees and enter into Irrigation Partnership (Musaqat) contracts with other parties to carry out the work. 16. Date of Issuance of the Standard This Shari’ah Standard was issued on 21 Safar, 1434 A.H., corresponding to 4 January 2013 A.D. 1185