The Supreme Court declared on Friday the new Reko Diq agreement, which was signed between the Pakistan government and two international firms in March for the revival of the long-stalled mining project, as legal as it issued its opinion on the presidential reference pertaining to the project case.
“There is nothing illegal in the new Reko Diq agreement,” the SC said in a 13-page document containing the court’s brief opinion. The order was read out by Chief Justice of Pakistan Umar Ata Bandial who headed a five-person panel.
A five-judge bench of the apex court led by the chief justice on November 29 reserved its opinion on the reference in which the government sought opinions on whether a 2013 judgement by the apex court prevented the federal and provincial governments from entering into the implementation agreement afresh.
Barrick Gold arrived at an out-of-court settlement with Pakistan earlier this year to withdraw the case from an international arbitration court. The court endorsement was a condition of the settlement to resume mining, Reuters reported
“The Balochistan Assembly was also given a briefing on the deal. The Reko Diq agreement is also valid in environmental terms.”
According to the Reko Diq Agreement, the document said most of the labourers would belong to Pakistan.
“Reko Diq agreement is for Pakistan not for individuals.”
The Constitution of Pakistan does not allow the contract against national assets, the apex court said and added that provinces could change laws related to minerals.
It added that the federal and provincial government signed the agreement after taking international experts opinion. “The company assured that the workers’ rights will be taken care of. Through the project, investments will be made in social projects,” it said.
The lawyer assured the court that projects for social development would be started. Moreover, Barrick Gold has assured that the law pertaining to the salary would be “fully implemented”.
“There is no illegal clause in the contract. The Foreign Investment Bill is not exclusively for Barrick Gold, it is for every company investing more than $500 million,” it said.
The apex court said that all the judges had a unanimous decision, however, Justice Yahya Afridi did not answer the first question of the reference regarding whether the agreement was of public interest or not.
Justice Yahya Afridi declared that the first question of reference was a policy matter, and added that he would give his opinion in a written note.
President Dr Arif Alvi moved a reference on October 18, seeking the apex court’s opinion on the proposed reconstitution of Reko Diq project in Balochistan and interpretation on whether its 2013 judgement in the case prevented the federal and provincial governments from entering into the implementation agreement and the constitutionality of the proposed Foreign Investment (Protection and Promotion) Bill 2022.
The SC held 17 hearings on the presidential reference and reserved the opinion on November 29.
Balochistan Chief Minister Abdul Quddus Bizenjo termed the decision historic and an acknowledgement of efforts to protect the economic independence and resources of the province.
The federal and Balochistan governments and two international firms — Antofagasta PLC and Barrick Gold Corporation — have reached an agreement in principle on a framework to reconstitute the Reko Diq project, and a pathway for Antofagasta to exit the project on March 20, 2022.
“Penalty of approx $ 11 bn is off set, $10 bn will be invested in Balochistan creating 8000 new jobs,” the-then prime minister Imran Khan had sain in a tweet.
As per the new agreement, the Barrick Gold Corporation – the mining company – would retain 50 per cent share, while the Government of Balochistan would get 25 per cent share, and the rest 25 per cent share would be attributed to the state-owned enterprises’ Oil and Gas Development Company (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan (GHPL).
The-then finance minister Shaukat Tarin, in a press conference alongside Hammad Azhar and Balochistan CM Mir Abdul Quddus Bizenjo, said that an agreement was signed in 2006 among a Canadian Company Barrick Gold, a Chilean company Antofagasta plc, and governments of Pakistan and Balochistan to extract gold and copper from the Reko Diq mines reserve.
As per the old agreement, 37.5 per cent share each was given to the two foreign companies and 25 per cent share was to be given to the Goverment of Balochistan.
The agreement was suspended in 2011 due to a dispute over the legality of its licensing process. As a result, the International Court of Arbitration leveled a $6.4 billion award on the federal government while at the same time the London Court of Arbitration was also imposing another $4 billion fine on Pakistan.
As a result, an agreement was settled on March 20 under which Antofagasta decided not to participate in the reconstituted project and withdrew from its claim of $3.9 billion in place of $900 million. The $900 million would be paid by the three SOEs and in return they would get the 25% share of the project.
