By:Nimra Tariq
On 12 July 2019, the International Center of Settlement of Invest Disputes, otherwise known as ICSID, ordered the government of Pakistan to pay 5.9billion dollars in damages to Tethyan copper company over the denial of mining lease for a project in Balochistan . This was the largest fine ever levied against Pakistan by the international court and the second largest fine in the ICSID’s history
Named after a mountain in the remote chagai hills of district chagai ,and wedged within 100 miles of Pakistan western boardees with both Iran and Afghanistan,the story of reko diq begins in 1993 when the Balochistan development authority assigned an agreement with the American-based mining firm BHP Minerals ,known as the chagai hills joint venture agreement or CHEJVA,it’s key feature were: A 75% stake for the BHP in the venture with 25% held by BDA , exclusive rights to certain areas for mineral exploration and assurances from the provincial government on receiving a mining lease after the submission of it’s feasibility study. Notably the joint venture agreement was approved by caretaker government between elections and without any competitive bidding. But despite that,there was intially little fuss created over the agreement.And in the year 2000 the provincial government even added an addendum to the CHEJVA, through which it clarified the BDA role in the agreement as an agent of the government of Balochistan . In the same year ,BHP which had not made any substantial progress in the project,sold it’s stake in the reko diq mine to an Australian firm Mincor,which in turn sold it onwards in 2006 . And so by 2006 Reko diq was being run by an Australian-incorporated firm TCC owned inturn by British mining company Antofagasta and Canadian mining company Barrick Gold with a 50% stake each. The new owners then signed an updated version of CHEJVA with government of Balochistan in 2006
For about 13 years since the signing of the initial agreement,the Reko diq remained legally in the clear,until 2006 when a former MNA of jamaat- e- islami , Molana Abdul Haq Baloch ,filed a petition claiming that the entire agreement was illegal and corrupt and hence should be annulled. While tha Balochistan high court dismissed the petition it did lead to CHEJVA being placed on the record for first time, having previously only seen by a few bureaucrats in the federal and provincal governments . The Allegations,combined with the long passage of time with little progress on the ground as well as the ownership of the project changing hands several times ,resulted in public perception turning against the project. By the time ,there was a growing media narrative that the deal has been signed in corrupt manner that deliberately undervalued the size of the mineral reserved at Reko diq.So by 2010 when TCC submitted it’s feasibility study along with the application for a mining license,the government of Balochistan renounced it’s earlier support for the project and in November 2011 rejected the application.
However ,the federal government with the support of Balochistan government set up it’s own Reko diq mining committee chaired by Dr Samand Mubarakmand,a prominent nuclear scientist who gave the worth of mine of about 100s of billions of dollars to supreme court and could easily be extracted by his expertise
After the rejection of the mining lease, TCC went ahead and filed for damages at ICSID . Six years latest it ruled in favor of TCC and two years after that it determined that Pakistan owed $5.9 billion in damages on the other hand, Dr Samand Mubarakmand after spending 1.6 billion rupees and achieving virtually nothing the project shut down in 2015. To that end, ICSID tribunal made several assumptions,each of which was problematic at its best . First,ICSID arbitrary decided that TCC would have received an automatic renewal of the proposed 30 year mining lease ,contrary to the position of the provincal and federal governments. Second,the TCC would have received a 15 year tax holiday , despite no evidence of such proposal. Third,that they would have paid below mandatory statutory royalty rates despite any such agreement ,and fourth that environmental standards would have been met despite the project requiring vast amount of water in an area with extreme water stress . Unfortunately once a tribunal decision Is made by ICSID ,the developing countries like Pakistan can not appeal. But in the mean time the government of Pakistan has to address one unavoidable fact ; it must start negotiating deals on the basis of public interest rather than private gain.
In the end , Reko diq is a huge authority for not only Balochistan but for Pakistan itself . It the 5 biggest mine of gold and copper in the world. Balochistan has much resources that it could alone fulfill the natural needs of Pakistan but unfortunately till now there is not much work done by the Government of Pakistan.what is more painful is that,even though Balochistan had enough natural resources but still it’s poor as compared to other provinces or cities of Pakistan . Balochistan had always been neglected and never made its existence useful , which painful for most of the balochi citizens,they are suffering from proverty,lack of best educational institutions, hospitals and even they are lacking their major facilities.
If the government of Pakistan start taking useful steps for Balochistan it would be very useful not only for balochi people but also for the development and improvement in stability of Pakistan . Still now the Reko diq mining has unsolved and mystery for most of us.
But the problem is that Reko diq is not the only case of Pakistan but there are many such cases which are remain there . Pakistan has always been facing such agreement and cases but if wise steps not taken it would result in a diaster for many of us and not our country would face it . Our government should be wise from now to onwards and be more restrict aware to our agreements with foreign countries. Or else the corrupt companies like TCC will not let us grow! And will find ways to damage us as much as they can .Also we as a citizens of Pakistan should be more active and aware, and should deal with our country minor problems more responsibly .