Moreover, the passage of the Foreign Investment Bill 2022 also symbolizes a positive step forward just when the country perhaps may be in need of one. The Reko Diq project promises nearly $10 billion worth of investment in the province of Balochistan and will also focus on social uplift initiatives in particular such as roads, schools, hospitals and the creation of technical training institutes for mining. The investment is estimated to also create 8,000 new jobs.

The bill was passed despite reservations from Balochistan’s political parties – especially JUI-F and BNP Mengal, which are part of the federal government – over the Reko Diq agreement. However, Balochistan government counsel had told the court that the province stood to earn $32 billion in revenue in the next 47 years from this project.

As per the court order, the Balochistan Development Authority (BDA) entered into the Chagai Hills Exploration Joint Venture Agreement (CHEJVA) with a foreign investor having 75 per cent shareholding and BDA having 25 percent shareholding plus two percent royalty on July 7, 1993.

Subsequently, in the year 2006, the foreign investor was succeeded by Tethyan Copper Company Pty Ltd., Australia (TCCA). TCCA in turn was acquired by Barrick Gold Corporation (BGC) and Antofagasta in equal shares. Under CHEJVA, BGC and its partner had the exclusive right to prospect and explore for copper and gold in the Reko Diq area. Between 2006 and 2011, TCCA invested in mineral exploration and developed detailed plans for mining at Reko Diq.

According to the presidential reference filed in the court, between 2006 and 2011, TCCA invested more than $240 million in exploration activities and developing detailed plans for mining at Reko Diq.

TCCA collected and tested hundreds of thousands of meters of core samples, making it possible to confidently map the deposits and develop a plan to extract and process them. The results of TCCA’s thorough study, engineering, and analysis were summarised in a feasibility study, which outlined in detail TCCA’s planned mine development.

The feasibility study comprised 21 volumes with 235 appendices and ran to nearly 18,000 pages, covering topics as wide-ranging as pit design, metallurgical processing, tailings disposal, emission control, water management, human resources, port facilities, procurement and power supply. During this time, TCCA discovered commercial grade copper and gold.

On February 15, 2011, TCCP submitted a mining lease application to the Director General of the Licensing Authority, the Mines and Mineral Development Department of Balochistan, to convert its then existing exploration license into a mining lease in connection with the development of a mining project in the vicinity of the Reko Diq Project.

The application was supported by the feasibility study and other documents required under Rule 47 of the 2002 Balochistan Mineral Rules (BMR).

On September 21, 2011, the licensing authority rejected the mining lease application and he on November 15, 2011, denied the Mining Lease Application.

Upon this, TCCA initiated two international arbitration claims. First, against the government of Pakistan (GoP) for violating its obligations under the agreement between Australia and the Islamic Republic of Pakistan on the Promotion and Protection of Investments (the “Pak-Aus BIT”), which was subsequently registered and administered by the International Centre for Settlement of Investment Disputes and second, against the Government of Balochistan, for claims arising under the CHEJVA, which were subsequently registered and administered by the International Court of Arbitration of the International Chamber of Commerce (ICC).

In the ICSID arbitration, TCCA initially sought an order from the ICSID tribunal that the GoP take all steps necessary to approve the mining lease application and grant all related permits, approvals, and authorisations required for TCCA to develop the mineral deposits subject to the mining lease application as well as an order for interim relief.

The application for interim relief was decided by the ICSID Tribunal vide its order on December 13, 2012. Subsequently, TCCA gave up its claim for specific relief and instead restricted its claim to damages.

As pre conditions, the federal government filed a presidential reference seeking Supreme Court opinion on two questions. Whether the earlier judgment of the Supreme Court reported as [Maulana] Abdul Haque Baloch v. [Government of Balochistan], PLD 2013 SC 641 or the laws, public policy or Constitution of Pakistan prevent the government of Balochistan and the GoP from entering into the implementation agreement and the definitive agreements or affect their validity? Secondly, if enacted, would the proposed Foreign Investment Bill, 2022 for its protection and promotion be valid and constitutional?

On December 9th, the Supreme Court noted that the agreements on the Reko Diq project are in fact legal. The supreme court stated, “The parameters set out in Abdul Haque Baloch’s case (PLD 2013 SC 641) and the reasons for the same, have been duly addressed by the Federal and Provincial Governments.

The process for the reconstitution of the Reko Diq project has been undertaken transparently and with due diligence. The agreements are being signed by authorities duly authorised and competent to do so under the law. To ensure transparency and fairness, expert advice on the financial, technical and legal issues involved has been sought from both local as well as independent international experts or consultants on the terms settled in the agreements.

“The agreements have been put in place after due deliberation and have not been found by us to be unconstitutional or illegal on the parameters and grounds spelt out in Abdul Haque Baloch’s case ibid. Likewise, the rationale, basis, legality and vires of the FI Bill 2022 as well as the amendments to its schedules and annexures and the amendments incorporated through SROs, provided the resolutions are passed by the Sindh and Balochistan Provincial Assemblies and the Bill is passed by the Parliament after following due process, shall be duly enacted as required under the Constitution. And such laws and regulatory measures do not in any manner violate the Constitution or the Law”, says the short order authored by Justice Ijaz ul Ahsan.

The order said that the Foreign Investment Bill 2022 was not limited exclusively to the Reko Diq project. Instead, it provides a framework for the grant of investment incentives which will, subject to the provisions of the Bill, be available to all investments of US$ 500 million or more. The fact that the Reko Diq project is the first to be identified as a ‘qualified investment’ under the FI Bill 2022 does not render the statute as ‘person-specific’.

The court had noted that the proposed Foreign Investment Bill 2022 will not only pave the way for the implementation of the Reko Diq project in its present form but will also facilitate and encourage direct foreign investment in similar mining projects and other high capital intensive industries in which direct foreign investment is required to be encouraged through guarantees assured by laws and regulatory measures.

Following the SC opinion, Balochistan Assembly passed a resolution in favour of the settlement of the Reko Diq project. The Sindh Assembly had already passed the such resolution. Parliament also passed Foreign Investment Bill 2022.

The Federal Cabinet on Tuesday gave formal approval to sign the final deal for the Reko Diq project on December 15, 2022. The federal cabinet meeting chaired by Prime Minister Shehbaz Sharif was held at the PM House. Sources said that cabinet members belonging to BNP (Mengal) and JUI (F) did not attend the meeting in protest. In the meeting, a detailed discussion was held on the restructuring of the Reko Diq project, said a statement of the PM House.

On the other hand, Akhtar Mengal said that Balochistan could not be treated as a business partner to get a share from the Reko Diq project.

He added that Reko Dig mines are the land of Balochistan province and their people have the first right to get the benefit.

The BNP-M chief said that his political party was not taken into confidence over the legislation for foreign investment in the project. He added that the federal government approved the bill without consulting them. Mengal said that Jamiat Ulema-e-Islam Fazl (JUI-F) and BNP have jointly opposed the bill and both political parties will make important decisions soon. He also threatened to mull over the option of dissociation with the ruling coalition.

Balochistan National Party (BNP-Mengal) and National Party held separate protest rallies in Quetta and other parts of the province on Sunday against the bill passed by the parliament on the Reko Diq agreement.