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ISLAM AND BUSINESS ETHICS.
Abdul Lateef Adegbite.
Introduction.
It is an honor for me to be asked to deliver this lecture at your inaugural business
luncheon. Given the background of the membership of your organization, you
have surely selected an appropriate topic for the lecture. The discourse that
follows would clearly bring out the nobility of your intentions and insha – Allah
assist in the attainment of your objectives of which the projection of Islamic
ideals is perhaps paramount.
Yes, the exercise is welcome, and I dare say long overdue. The Nigerian
Muslims have tended to be reticent, almost abandoning the arena of public
debates to proponents of other faiths who noisily bestride the field as though
they solely possess the truth. No thanks to the kind of political system the
country operates, and which is overwhelmingly Christian – inspired and
directed, the door has been slammed on Islam, thus denying it a meaningful role
in the shaping of Nigeria’s political, social and economic structures. The
Muslim impact may be feeble now, but the future cannot be foreclosed. The
signs are that the Muslims would rise again and re – assert their ascendancy,
which the British colonial rule annulled about a century ago.
The platform provided by this luncheon marks an important step in the long
journey to the future, and as the Chinese would put it, the journey of a million
miles necessarily beings with a step. The host
Dr. Abdul Lateef Adegbite is the Secretary – General, Nigerian Supreme Council for
Islamic Affairs (NSCIA).
organization has begun well; it must sustain the journey by focusing on different
aspects of life and highlighting the Islamic alternative to what obtains now, with
a view to making an objective choice as the occasion arises.
Charity beings at home. It is therefore apt that the encounter should take off
from the Business Sector, since The Forum is largely constituted by young
Business Leaders who are destined to play crucial roles in the shaping of Nigeria
of tomorrow.
Economic issues now dominated the world. Nigeria cannot, therefore, take a
back seat in these matters, if she is to realistically aspire to the status of a
developed country in the new millennium. Be that as it may, the economic
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agenda must be set right. It is our submission that the content and
implementation of Nigeria’s new economic order must borrow some Islamic
principles and practices with a view to creating an efficient, equitable and
humane individual well-being everywhere in the land.
Islam and Business Transactions.
Business transaction in Islam is three dimensional like any human action. It
must therefore satisfy the interests of the affected parties and the community as
a whole; above all, it must be in consonance with the commandments of Allah.
In other words, every business transaction is morality-laden and is thus religiondriven. It follows that the objective of any business activity as well as the
process of realizing it must meet the criteria set down by Shariah.
Unlike under the Western system, where business transactions are essentially
materialist and therefore secularist, the notion is quite different in Islam. Here,
faith looms large, the goal being to attain Maqasid al-Shariah, that is human
well-being . . . (falah) and the good life (Hayat Tayyibah). Indeed, all human
endeavours and activities target Maqasid al-Shariah and are considered fulfilled
if they also attract the pleasure of Allah, while at the same time, fulfilling the
immediate needs of the two or more parties involved.
It is thus apparent that the dominant ingredient of Maqasid is faith; which in
essence is the tap root of business ethics in Islam. It follows that it is not
possible to engage in any activity, business or otherwise which Islamic faith
prohibits such as usurious dealings, production of alcohol, gambling, ambiguous
forms of sale, etc. Even when pursuing legitimate business, one
must avoid means, techniques and processes which connote deceit, fraud,
dishonesty and exploitation Where Islamic system obtains the violation of
business ethics may attract treble sanction: the particular infraction would vitiate
the transaction; the infraction may constitute a crime, while Allah’s blessing
would be withheld and punishment may also follow in the hereafter.Some
examples of the business ethics recognized by Islam would be pertinent.
Business Ethics in Operation.
A cursory survey of some of Islamic Business Ethics would show that their
underlying principles are rational and are such that promote fair dealings
between parties to any business transaction, while at the same time enhancing
the stability of the community and manifesting the fear of Allah generally.
(i)
Fair dealing: The requirement of justice in all situations is basic and
absolute. Any business dealing that is unjust is void:
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” O ye who believe! Stand out firmly for Allah, as
witnesses to fair dealing; and let not the hatred of
others to you make you swerve to wrong, and depart
from justice. Be just, that is next to piety, and fear
Allah for Allah is well acquainted with all what ye
do.”
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(ii)
Sharing and Caring.
Muslims are required to display a spirit of caring in their business dealings, conscious of Islamic
brotherhood. Where this occurs, the propensity to cheat others would not be there. Good faith would
always permeate the conduct of business relationship. The business arena must therefore not operate
like a battle field. The admonition of a Muslim author, M. Umer Chappa is apposite. “Competition is
hence to be encouraged to the extend to which is healthy, raises efficiency, and helps to promote
human well-being the overall objectives of Islam. As soon as it crosses the limits and contributes to
snobbery and jealousy and promotes ruthlessness or mutual destruction it must be corrected”. Islam
and the Economic Challenge: (1995) p. 207. The learned writer then cited the Glorious Qur’an in
support of his position.
“To each is a goal to which Allah turns him; then strive together (as in a race)
towards all that is good wherever ye are Allah will bring you together. For Allah
hath power over all things.”
Qur’an 2:148
Again,
“Help ye one another in righteousness and piety but help ye not one another in
sin and rancour fear Allah; for Allah is strict in punishment.”
He also illustrated his position with a Sunnah of the Prophet (peace be upon him) “Do not despise each
other, do not turn your back toward each other, and do not vie each other (in worldly things), but be like
brothers, creatures of the One God.”
(iii)
Property as Trusteeship.
Allah forbids knowingly devouring the property of others (Qur’an 2:188). This principle imposes
heavy obligation on all Muslims and discourages misuse of the property of others and even one’s
own as well. It thus discourage cheating, forgery and fraud committed against other persons and
institutions. It is not permitted therefore to take undue advantage over others in property matters.
Acquisition of property deviously or a vainglorious use of property is forbidden as this may amount
to social abuse. In the same vein, environmental pollution and degradation would offend the property
trust principle and would therefore not be treated as legitimate business.
(iv)
Sanctity of Contract and Commercial Integrity.
Respect for agreement mutually entered to is a first principle in business transaction and the Qur’an
repeatedly upholds it in a number of passages. Seven Hadiths too deal with this matter. Contract must
however be clearly and fairly concluded. A doubtful sale such as one relating to unidentified goods
would not be upheld. The Prophet (peace be upon him) has declared that it would be illegal for a
seller to sell a thing that he knows to be defective without informing the buyer of the defect. Indeed,
Islamic law is emphatic in the requirement for exact measure or weight in the sale of goods such as
grains. The well known authority in this point is Allah’s own declaration:
‘’ Woe to those that deal in fraud. Those who, when they have to receive by
measure demand full measure. And when they give by measure or weight give
less than due. Do they not they think that they will be called to account? On a
mighty day, a day when all mankind will stand before the Lord of the Worlds’’
Qur’an 83:1-6
(v)
Avoiding Misdescription or Misrepresentation.
Islam insists on candour, and full disclosure in business transaction as a demonstration of good faith
by the contracting parties. Misdescription of goods or deliberate misrepresentation to attract
patronage or lure a party to endorse a deal, is irregular and is therefore frowned upon by Islam. The
Prophet (peace be upon him) has taught us that such exaggerated posture would rob the transactions
of Allah’s blessings. “The swearing (by the seller) may persuade the buyer to purchase the goods, but
they will be deprived of Allah’s blessings.” Modern advertising practices raises important question,
for example, as to whether prevalent advertising techniques would satisfy the Islamic standards of
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accurate and measured description of goods and services, offered to the public. The English Common
Law principle appears too liberal as it is hinged on the doctrine of caveat emptor, while the Civil
Law approach which obtains in the European Countries appear closer to the Islamic position in that
anyone who ascribes special qualities to any product may be asked to justify the claims in the court.
(vi)
Discouragement of Excessive Wealth through Prohibition of Usury and the Encouragement of
Charity
Most commercial abuses spring from greed. The desire to accumulate wealth, for instance, may
encourage resort to unfavourable business practices. This problem is indirectly attacked in Islam by
the emphatic prohibition of usury in every situation by Allah.
“O ye who believe fear Allah, and give up what remains of your demand for
usury, if ye are indeed believers.”
“If ye do it not, take notice of war from Allah and His messenger.”
The taboo placed on usurious dealing is to promote fairness in business transactions. Islam also goes further
to enjoin charitable disposition among Muslims:
“Allah will deprive usury of all growth but will give increase for deeds of
charity for He loveth not creatures ungrateful and wicked.”
Qur’an 2:276
The havoc that interest has caused many businessmen and institutions need no elaboration in the Nigerian
context. Yet the strong hold of Western culture in our country has continued to blind us to the evils of our
banking system. Happily the Nigerian laws have now provided for the establishment of Islamic banking;
though it is not so called. The authorities preferred to adopt the name “Profit and Loss Sharing Bank”.
Muslims must avail themselves of this welcome development. Still in the field of banking, another Islamic
practice commends itself, namely liberal attitude towards an incapacitated borrower who for reasons
beyond his control is unable to repay his loans and would require more time or even substantial or total
debt forgiveness. Modern banking practice tends to be indifferent in this situation, a hard-line that has
ruined many a business man or business organization. But in Islam, Allah has ruled:
“If the debtor is in a difficulty grant him time till it is easy for him to repay but if
ye remit it by way of charity that is best for you if ye only knew.”
The International Institution Lenders like the World Bank, IMF, European Union, and Sovereign Lenders
like the USA, Britain, Germany and France have refused to know. Rather they continue to exact a pound of
flesh from Debtor Countries of the Third World including Nigeria, which are suffering under the crushing
weight of their National Debt. These countries are getting poorer; they continue to pile up more debts with
resultant diminishing standards of life for their citizens, who have become the wretched of the earth.
Another useful institution that has helped to reduce the concentration of wealth in the hands of a few and
has correspondingly helped to narrow the gap between the rich and the poor, the haves and have-nots, is
Zakat. Under this arrangement a definite proportion of the acquired wealth of Muslims is due to the poor,
and for other recognized charitable causes.
(vii)
The Supremacy of the Law.
Many a benevolent law or rule, that help to safeguard business ethics in some legal systems could be
abrogated or modified to the detriment of society by the legislature. This development is not possible
in respect of a number of Islamic business ethics, especially, those that have come under our search
light today. This is because these principles are laid down in the Shariah, which is a supreme law
placed beyond the caprice of the rulers, whether an elected democratic government or under a
dictator. Here is a big plus for the thriving business stability.
Conclusion.
Qur
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From the foregoing, it would have been seen that not only are business ethics recognized in Islam, they are
well established and entrenched. Of course, it is arguable if we can find a country in the world today where
the applicable Islamic rules are fully observed. Even in Saudi Arabia, departures are occurring more and
more from due observation of those business rules and practices rooted in the Shariah, on the pretext that
the Western model is more practical in the increasing globalization of the World Economy. In any event, in
such international commerce like oil and gas business, shipping and telecommunications, religious laws
may be unsuitable for application, especially since affected parties may subscribe to differing religions.
While this argument is tenable, it still behoves Muslims to vigorously project their laws, many aspects of
which manifest merits of fairness and consistency.
It is fair to add though, that modern states may find it less practical to operate Islamic
Laws in complex areas like banking and finance. Yet, because Western type of Laws tend
to be weak in moral content, we have witnessed large scale economic dislocation and
social inequity in recent times resulting in failed banks and general economic distress in
many countries. Nigeria in this regard is an interesting case study. Perhaps if Islamic
system had fully obtained, the large scale financial mismanagement and looting of the
treasury indulged in by our immediate past leaders would not have occurred! Such
corrupt leaders would not have successfully overridden the law, and would have had to
face an indictment. Our consolation is that all corrupt people are bound to face the wrath
of Allah in the Hereafter. The Prophet (peace be upon him) in his characteristic
discerning way has alerted us about these untoward developments when he prophesied:
“A time will come when we will not care how one gains one’s money legally or
illegally.” (Sahih al-Bukhari Vol. III, par. 275.) Let us consider this piece with yet
another reference to the citation by the Prophet (peace be upon him) on the remarks
credited to Allah on the need to maintain fair dealings in our business relation: Almighty
Allah said: “I am a third party to every two partners, so long as neither of them betrays
the other. If any of them cheats the other, I would depart their company.”