Daily Times

Baluchistan is Pakistan’s province of superlatives: the largest province, it is the most neglected province in terms of infrastructure development, education etc. but also the richest province in terms of natural resources including the world largest copper and gold reserves. These reserves will play an important role in Baluchistan’s and Pakistan’s development if and when explored. Given the details of the RekoDiq drama it may also be the most mismanaged province of Pakistan and may be the most corrupt, at least in the past? This last assumption is probably going too far; there are others more corrupt but for more skilful in hiding it. The decision of an arbitration tribunal of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) that recently brought a verdict awarding about US$ 6bn in damages to TCC in arbitration claims filed against Pakistan in 2010. In 2013 a three-member bench of the Supreme Court headed by the then Chief Justice of Pakistan Iftikhar Muhammad Chaudhry declared the “Chagai Hills Exploration Joint Venture Agreement” null and void in a short order.

This verdict of ICSID is a real shock for the financially stressed Pakistan and one wonders from where the money will come to pay this. And pay we will have to! There are no real options for appeal are there, our legal experts should think if that was an option in such a situation because it would cost more money with another uncertain result. Looking at the history of the RekoDiq deal one has to admit that according to international contract laws the verdict is probably right. The Baluchistan government in 2010 refused to give mining licenses to TCCP though the contract they has signed was stipulating this. The real and underlying problem is that the contract that the TCC is insisting on is not only disadvantageous and unprofitable for Baluchistan and Pakistan but it is also contrary to existing Pakistani laws. This contract including all the later additions and modifications that made it worse for Pakistan should never have been signed by those who did sign it. And when we are now hearing cries to fix responsibilities for the damage done it is surely not the then Baluchistan government who refused the licenses or the SC and Iftikhar Chaudhry who in 2013 declared the contract null and void according to Pakistani laws. Both entities tried to pull the ripcord in an all-out wrong and unfavourable contract that entitled a foreign company not only to explore the original deposits in a ten square kilometre territory but gave them hold over thousands of square kilometres for exploration purpose with even judicial rights in the area. In addition, the profit sharing is fixed at 75% for TTCP and 25% for Baluchistan with Baluchistan having to make most of the infrastructural and other investments in a basically undeveloped desert area.

But the question ‘who’d done it’ though it has to be asked for accountability reasons will neither help to bring the money required to pay the fine nor show a way for how to proceed from here

The fact is that is the contract was immoral but then there is no morality in business of this size, especially in the looting of resources of an under-developed country. While a company investing money is certainly entitled to a certain profit margin but such an one-sided contract as the one TCC obtained surreptitiously from a corrupt and /or unprofessional bureaucracy and go-in-betweens of questionable character is certainly a major fraud. That is our major problem, courts tend to go according to the wording of the laws and contracts, thereof, they ignore the spirit that should be foremost in delivering justice. The details of the genesis of this scandal has been meticulously explored and described by Maqbool Ahmad in an in-depth article in The Herald titled “Magic Mountains: The RekoDiq gold and copper mining project”. It is available on internet. Based on that narrative if responsibility has to be fixed one should rather search among the people who constituted the so-called Baluchistan Development Authority (BDA) that in 1993 signed the Chagai Hills Exploration Joint Venture Agreement (Chejva) with BHP Minerals, incorporated in Delaware, United States! On name that has been mentioned by Maqbool Ahmad in the article is that of one Ata Muhammad Jafar, the BDA chairman at that time who arrived at the provincial secretariat in Quetta on 13 July 1993 and wanted the Chief Secretary to sign the file immediately. The file contained the draft agreement for the creation of the joint venture. How did the agreement get signed on 29 July, only 16 days later despite the fact that the Additional Chief secretary did not let the file bypass official procedures and observed that the draft required, among other things, to be vetted by the Provincial Finance, Law and Planning departments? At that time BHP Minerals was not even registered in Pakistan which would have been a basic requirement for the deal.

Who gave the waiver to BHP Billiton to palm off its 75% share in TCC, and at what profit even before a ton of ore was mined? Why were the Chileans and Canadians risking life and limb, as well as their investment, in such a dangerous area? And most mysterious of all, why were they not making the smelting plants in Pakistan, instead of shipping the concentrate abroad?

There are many more frauds after 1993 that made the situation worse for Baluchistan that have been recorded by Maqbool Ahmad. But the question ‘who’d done it’ though it has to be asked for accountability reasons will neither help to bring the money required to pay the fine nor show a way for how to proceed from here.

The writer is a defence and security analyst