The new agreement for the development of the Reko Diq mine in Balochistan was declared legal by the Supreme Court on Friday. With the Canadian company Barrick Gold Corporation, the deal has been made.
The deal, valued at $9 billion US, is Pakistan’s largest-everSC verdict investment. By investing appropriately, the nation will receive fifty percent of the project’s profits. Out of Pakistan’s half offer, there are further groupings.
In a unanimous decision, the Supreme Court of Pakistan declared the agreement legal in response to a presidential request for its opinion on the Reko Diq deal under Article 186 of Pakistan’s constitution. Chief Justice of Pakistan (CJP) Umar Ata Bandial issued the 13-page verdict today (Friday).
The project is getting money from companies owned by the state. Pakistan will split the profit equally between Balochistan and Pakistan.
In the reference that was sent to the Supreme Court on October 15, 2022, the president asked two legal questions: (1) whether the government of Pakistan or the government of Balochistan can enter into an international agreement in accordance with the Supreme Court’s decision in the Molvi Abdul Haq v. Federation of Pakistan 2013 Case; and (2) whether the proposed Foreign Investment (Protection and Promotion) Act 2022 would be in accordance with the constitution.
SC verdict
The court stated that the constitution prohibits legislation targeting national assets and that the provinces can modify mineral laws.
The court stated, “The new agreement contains nothing illegal.” It added that the agreement was not in opposition to the top court’s 2013 decision.
Additionally, the SC disclosed that the agreement was not environmentally harmful.
The court also noted that the experts had informed it that the provincial and federal governments had signed the agreement. The Balochistan Assembly, on the other hand, supported the agreement once it was given confidence.
The majority of employees will be Pakistanis, per the Reko Diq agreement. This is not for any one individual but rather for Pakistan. The court stated, “This agreement contains no illegal provisions.”
The court stated that Barrick Gold Corporation had assured it that labor laws would be enforced and that the business would also carry out its social responsibility.
Barrick Gold is not the only company to benefit from the foreign investment bill. The court stated, “Companies that will invest more than $500 million dollars are eligible for the foreign investment bill.”
Reko Diq agreement
Imran Khan, the prime minister at the time, made the announcement in March of this year that the successful agreement with the Canadian company for the development of the Reko Diq mine in Balochistan would result in the creation of 8,000 new jobs for the people.
He had tweeted, “I congratulate the nation and people of Balochistan on the successful agreement for the development of the Reko Diq mine with Barrick Gold.”
Barrick Gold Corporation confirmed in a separate statement that they had reached an agreement with the Balochistan and federal governments on a “framework that provides for the reconstitution of the Reko Diq project.”
Barrick “will be the operator of the project” and “will be granted a mining lease, exploration licence, surface rights, and a mineral agreement stabilizing the fiscal regime applicable to the project for a specified period,” according to the mining company.
“The federal and provincial governments, in addition to the Supreme Court of Pakistan, will be involved in the process of finalizing and approving definitive agreements, including the stabilization of the fiscal regime in accordance with the mineral agreement. The statement stated, “The project will be reconstituted, including the resolution of the damages originally awarded by the International Centre for the Settlement of Investment Disputes and disputed in the International Chamber of Commerce,” if the definitive agreements are executed and the conditions to closing are met.
Later, the agreement’s specifics were shared by Shaukat Tarin, the finance minister at the time. He said that Barrick Gold would keep half of the shares, and the rest would be split between the federal government and the Balochistan provincial government.
State-owned Oil and Gas Development Company (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan (GHPL) would each receive 25% of the federal government’s revenue.
Presidential reference
On the advice of Prime Minister Shehbaz Sharif, President Dr. Arif Alvi, however, filed a reference with the Supreme Court in October to get its opinion on the deal.
In the reference that was sent to the Supreme Court on October 15, 2022, the president asked two legal questions: (1) whether the government of Pakistan or the government of Balochistan can enter into an international agreement in accordance with the Supreme Court’s decision in the Molvi Abdul Haq v. Federation of Pakistan 2013 Case; and (2) whether the proposed Foreign Investment (Protection and Promotion) Act 2022 would be in accordance with the constitution.
What is the case of Molvi Abdul Haq?
Previously, the agreement that governs the Reko Diq project was known as the Chaghai Hill Exploration Joint Venture Agreement (CHEJVA).
In 2011, Barrick Gold and Antofagasta Company applied to the Mines and Mineral Development Department of Balochistan for a mining lease extension for their exploration.
After the department turned down their request, the two companies sued the governments of Pakistan and Balochistan at two different international forums over the $240 million they spent on exploration.
The public authority of Pakistan confronted a suit for explicit execution in the expansion of rent in the Worldwide Place for Settlement of Venture Questions (ICSID) while the Balochistan government needed to confront a case in the Global Court of Discretion (ICC). The matter was decided against Pakistan by the ICSID, which met all of the investor’s demands.
On January 7, 2013, the Supreme Court ruled that CHEJVA was unconstitutional and illegal.
The Reko Diq project lacked due diligence and violated fundamental legal requirements, according to the court.
In 2019, the ICSID’s tribunal announced a $6.927 billion award against Pakistan for violating the agreement, which was filed by the investor companies once more. Pakistan was also ruled out by the ICC.
Report Originally Published on The News
