A lawyer who has been associated with the Reko Diq case for more than a decade sits

in his office located on a main road in Lahore. He has appeared before national and
international courts and has also written in newspapers on the issue.
On the condition of anonymity, he reveals that, when he decided to take up the case
first, he had imagined it to be yet another dispute over land ownership and resource
extraction that lawyers deal with routinely.
When, however, the Supreme Court ordered in 2011 that all the official documents
related to it be submitted to it, this led to some astounding revelations. “When we saw
the documents, we could not believe our eyes,” he says. Every subsequent hearing,
according to the lawyer, entailed a new disclosure that would change the nature of the
case altogether.
No official document pertaining to the Reko Diq case – which involved the Balochistan
government and a consortium of foreign mining companies – was, indeed, available to
the public before 2011. Balochistan’s former finance secretary Mahfooz Ali Khan
reveals that even the Chief Secretary of the province saw an agreement about it
between the provincial government and the mining companies in 2008. “Before that,
Reko Diq would be brought up in many conversations but nobody knew what that
agreement included,” he says.
Courting controversy
Reko Diq first caught public attention, at a provincial level if not at the national one, in
2006 after a former Jamaat-e-Islami lawmaker Abdul Haque Baloch moved the
Balochistan High Court against the parties that had signed an agreement to work in
Reko Diq. Called Chagai Hills Exploration Joint Venture Agreement (CHEJVA), this
agreement came into effect on January 1994. Baloch contended that CHEJVA was in
violation of the Balochistan Mining Concession Rules 1970 and that, under it, no
substantial work had been carried out by the mining companies who “are only sniffing
around deposits of Reko Diq and making money”. He, therefore, requested the court to
declare CHEJVA illegal and liable to be set aside.
The petition was based on two news reports on mining operations at Reko Diq. These
were published in two English dailies, The News and Business Recorder, in 2004 and
2006 respectively.
On June 26, 2007, Amanullah Khan, the then Chief Justice of Balochistan High Court,
dismissed the petition stating that the petitioner was not an “aggrieved person” in this
case, that he could not question a past and closed transaction after a period of 13 years
and that there were other remedies that he could seek if he wished to challenge the
violation of the Balochistan Mining Rules of 1970 and 2002 committed by the
signatories to CHEJVA.
The most important declaration by the Chief Justice, however, was that the court would
not exercise its jurisdiction to adjudicate any factual controversy since it could not make
its own findings by becoming a “court of facts”.
Right after the dismissal of this petition, Tethyan Copper Company (TCC) -- a
consortium of foreign mining companies that had become a central party to CHEJVA in
2006 -- began preparations to obtain mining rights in Reko Diq. Its application for a
mining license offered two percent royalties to the provincial government which is
considered by many experts to be lower than the globally recognized rates.
Tethyan Copper Company offered only two percent royalties to the provincial
government which is considered by experts to be lower than globally recognized royalty
rates. (Photo credit: Arab News)
The government of the people
Nawab Aslam Raisani, who became Balochistan’s Chief Minister after the 2008
elections, was highly suspicious of CHEJVA. As soon as he stepped into power, his
suspicion led him to review and revise the government’s position on it.
After two years of deliberations, Raisani decided to unilaterally revoke CHEJVA so, on
December 24, 2009, the revocation was officially notified. He also announced that the
government would start its own mining operations in Reko Diq so, consequently, the
Executive Committee of the National Economic Council (ECNEC) – a high-level
committee of the federal cabinet -- approved the Balochistan Copper and Gold Project
to start mining operations in a place called Tanjeel located within the Reko Diq area.
(The project was led by nuclear scientist Dr Samar Mubarakmand. It was closed down
in 2015 because of unsatisfactory work and no substantial output.)
Six months after Raisani’s decision to repeal the agreement, TCC submitted a pre-
feasibility report to the provincial government in July 2010 based upon years of its
exploratory work in Reko Diq. On the basis of this report submitted on February 15,
2011, TCC sought a mining license.
One of the most important questions the Supreme Court had to address was the
legal validity of the relaxations the government had provided to mining
companies in 1994 from the Balochistan Mining Concession Rules (BMC 1970).
The government maintained that it had provided these relaxations using the Rule
98 of the BMC 1970. The court, however, decided that the rule only allowed
governments to use such vested power in cases of hardship and special
circumstances.
The feasibility report stated that copper ore extracted from Reko Diq would be crushed,
converted into slurry and transported to Gwadar by means of a long pipeline. It would,
from there onwards, be shipped to foreign smelters and refineries. Legal experts term
this as a straightforward robbery of Pakistan’s resources since no government can
continuously monitor the amount minerals flowing through a pipeline extending over
more than six hundred kilometers.
A lawyer associated with the Reko Diq case says that building that pipeline was not
even feasible He reveals: when the government’s lawyers hired mining engineers, they
examined the terrain between Reko Diq and Gwadar and concluded that it would be
virtually impossible to build a long pipeline between the two places given the unsuitable
geology.
Amanullah Kanrani, who has also represented Balochistan government at the
international courts, believes that TCC’s feasibility report was not even authentic. “The
company was given 13,000 square kilometers of land at Reko Diq but it provided a
feasibility report for only a five square kilometer area. Within those five square
kilometers, it had dug 15 holes for exploration but its report included the findings of two
holes.” He similarly reveals that the provincial government also acquired information
through other means which contradicted TCC’s claims.
In other words, Kanrani is claiming that TCC was intentionally hiding the amount of
minerals it had found at Reko Diq.
Consequently, the TCC’s feasibility report as well as mining license application were
rejected by the Balochistan government in November 2011. “Keeping in view the wishes
and aspirations of the people of Balochistan, the elected provincial government is
bound, morally and constitutionally, to safeguard the interest of its people and protect its
resources from exploitation,” a government statement said.
The Supreme Court declared in January 2013 that CHEJVA had been executed contrary to the
provisions of Mineral Development Act 1948, the Mining Concessions Rules 1970, the Contract
Act 1872 and the Transfer of Property Act 1882. (Photo credit: Geo News)
The Court strikes again
The 2007 dismissal of the petition against CHEJVA by the Balochistan High Court was
preceded by a nation-wide lawyers’ movement for an independent judiciary. When
Iftikhar Muhammad Chaudhary took charge as the Chief Justice of Pakistan in 2009 as
a result of this movement, Abdul Haque Baloch moved the Supreme Court against the
Balochistan High Court’s decision. Many seasoned lawyers and senators also filed
petitions against CHEJVA in the meanwhile.
On February 8, 2011, the Supreme Court “directed the production of entire record
relating to CHEJVA”. The court would later state that the record threw up “made
shocking disclosures of extensive irregularities and corruption.” Based on these
revelations, the Balochistan government decided not to defend CHEJVA.
One of the most important questions the Supreme Court had to address during the
hearing of the petitions was the validity of the exemptions the provincial government
had provided to the mining companies in 1994 from the Balochistan Mining Concession
Rules (BMC 1970). The government had maintained that it provided those exemptions
using Rule 98 of the BMC 1970. The court, however, declared that Rule 98 allowed the
government to give such exemptions only in cases of hardship and special
circumstances which, according to the judges, did not exist in Reko Diq’s case. They,
therefore, termed the exemptions to be illegal.
The Supreme Court also declared in January 2013 that CHEJVA was executed contrary
to the provisions of Mineral Development Act 1948, the Mining Concessions Rules
1970, the Contract Act 1872 and the Transfer of Property Act 1882. It, therefore, was
declared to be “illegal, void, and non est.”
The Supreme Court’s decision, however, did not foresee how it would affect the
arbitrations already going on in an international court. Sensing that the Supreme Court’s
verdict would go against it, TCC had filed a case at the International Court for
Settlement of Investment Disputes (ICSID) – an arbitration court based in Switzerland.
The case at ICSID was filed on November 28, 2011. TCC pleaded in it that, due to the
revocation of CHEJVA and its mining licenses, the time and money (more than $300
million as per its own claims) it had spent in Reko Diq were wasted so Pakistan should
be made to compensate it for the loss.
Supreme Court should have asked the parties to sign a new agreement under
legal and constitutional principles to restart mining activities at Reko Diq. They
think that prescribing such a revamp of agreements would have “taken away
TCC’s justification to go to the international courts.”
A lawyer who represented Pakistan government in ICSID says that Pakistan was not
able to build a strong case there because it had hired multiple independent lawyers
instead of pitching a unified legal team. “Every lawyer works with a particular strategy
which is why multiple strategies by multiple lawyers did not allow Pakistan to build a
consistent narrative in ICSID. On the contrary, TCC had hired a single legal firm which
represented it throughout the case,” he says.
According to this lawyer, another reason behind Pakistan’s inability to make a strong
case was its counsels’ insistence that its highest court had declared CHEJVA illegal
even though these lawyers knew that “international courts are not bound by the
decisions made by a particular country’s court.”
TCC, on the other hand, also invoked the bilateral investment treaty signed by Pakistan
and Australia in 1998 which binds the Pakistani government to protect investments
made by Australian companies in Pakistan.
After a lengthy hearing, ICSID accepted TCC’s plea in 2019 that its mining licenses as
well as CHEJVA were revoked contrary to legal principles. The court also declared that
Pakistan was liable to pay 5.967 billion US dollars as reparation to TCC. (Pakistan has
appealed the decision and proceedings on its appeal are yet to start.)
Legal experts say that Pakistan could have preempted these proceedings at ICSID if it
had taken a different course after the Supreme Court’s decision. Their preferred course
includes the trial and conviction on corruption charges of those government officials who
were involved in the signing of CHEJVA. If this course had been taken, they believe, it
would have helped Pakistan build a stronger case since “international courts do not
protect investment agreements based on corrupt practices.”
These experts also say the Supreme Court, in addition to repealing the CHEJVA
agreement, should have asked the parties to it to sign a new legally valid and restart
mining activities at Reko Diq. They believe that, by prescribing such a roadmap, the
Supreme Court would have “taken away TCC’s justification to go to the international
courts.”
Amanullah Kanrani offers another reason for Pakistan’s defeat at ICSID. He alleges that
Pakistan lost the case because “international arbitration forums are indeed biased
towards multinational companies.”
He explains this by saying that ICSID usually has a three-member arbitration panel; two
members of this panel are nominated by each of the two contending parties while it is
supervised by a neutral chairperson. “Pakistan first nominated Aziz A Munshi and then
Shahid Hamid (both renowned Pakistani legal experts) but both of them were rejected
on unfair grounds. TCC, thus, got a favorable panel which then did not heed to
Pakistan’s claims,” Kanrani says.

Aslam Raisani claims that his government was threatened by the consortium of mining
companies after he decided to stand against their interests. (Photo credit: Azadi News)
Collateral damage
Kanrani further alleges that Raisani’s government was also destabilized by the
consortium of mining companies after he decided to oppose their interests. “His
government apparently was sacked after Hazaras were killed in bomb blasts in Quetta
but these killings did not end even after his sacking. The violence in Balochistan was so
prevalent then that Raisani himself survived two attempts on his life. I, therefore, have
no doubt that the Reko Diq case had too much to do with his sacking,” he says.
This claim is also echoed by Raisani who told The News right after his government’s
sacking in 2013. “I am not shocked at my sacking. I was prepared for this day for over
three years. I was being pressurized to start negotiations with the global copper
companies over Reko Diq. They offered me money and tried to bribe me but I refused to
be bought, I refused to meet or entertain them,” he told the newspaper.
Title image: www.ausimmbulletin.com
 
Note: This is the third part of a series of reports on Reko Diq gold mine project.
Here is the link to Urdu translation. 
Click here to read the second part in English. Here is the link to Urdu
translation.
Click here to read the first part in English. Here is the link to Urdu translation.