KARACHI: Pakistan will set up an investigation commission to probe into who is responsible for its latest predicament after a World Bank arbitration court ordered Islamabad to pay damages worth $5.8 billion to a copper company over a 2012 dispute over the lease to a mine in Pakistan’s remote southwestern province of Balochistan.
Tethyan Copper Company, TCC, a joint venture company of Barrick Gold of Canada and Antofagasta Minerals of Chile, discovered huge mineral wealth more than a decade ago in Reko Diq, at the foot of an extinct volcano near Pakistan’s frontier with Iran and Afghanistan.
On Friday, the International Center for Settlement of Investment Disputes (ICSID) announced the details of its verdict, which includes compensation of over $4 billion as the fair market value of the Reko Diq project at the time of the mining lease denial, and interest of $1.753 billion.
“Prime Minister has directed the formation of a commission to investigate into the reasons as to how Pakistan ended up in this predicament, who were responsible for making country suffer such a loss and what are the lessons learnt, so that mistakes made are not repeated in the future,” a statement issued by the office of the attorney general of Pakistan said late Saturday.
Pakistan’s federal and provincial government of Balochistan are mulling a future course of action following the verdict.
“For now, the government of Pakistan reserves its right to pursue any and all legal remedies available to it under the ICSID regime, the international law and all other relevant laws to safeguard its interests,” the statement added.
The ruling has come at a sensitive time for the government of Prime Minister Imran Khan, which earlier this month signed a $6 billion bailout agreement with the International Monetary Fund to stave off a balance of payments crisis, and is struggling to attract foreign investors. The ICSID verdict, if implemented, will be a huge setback.
However, William Hayes, chairman of the board of TCC expressed his willingness to work with Pakistan toward a negotiated settlement on Friday, a move Pakistan has welcomed.
The statement said Pakistan “welcomed this approach to work toward a mutually beneficial solution that works for both sides.”
TCC says it had invested more than $220 million by the time Pakistan’s government, in 2011, suddenly refused to grant a mining lease needed for it to keep operating.
This has turned the spotlight on the business climate in Pakistan and become a test of its ability to attract significant foreign investment.
Legal experts in Pakistan are suggesting the formation of a judge’s panel to resolve investment related disputes before they damage investor confidence.
“A panel of retired judges needs to be constituted which can be approached by investors to examine the cases and come to the terms to resolve the matter,” Ahmer Bilal Soofi, a lawyer and member of Pakistan’s board of investment, told Arab News.
“If the parties go toward the settlement after this judgment, that would be a positive signal for international investors,” he said.
For its part, Pakistan has assured investors it will protect their legal rights in the country.
“Pakistan welcomes investors and assures them that their lawful rights, interest and assets shall always be protected by Pakistan,” the statement added.
The Reko Diq Mining Project is a $3.3 billion investment project for a copper-gold open-pit mine. The deposit is expected to rank among the world’s biggest untapped copper and gold mines and the initial project was to have an estimated mine life of 56 years.
Pakistan to investigate Reko Diq case after expensive court verdict
Pakistan to investigate Reko Diq case after expensive court verdict
- Tethyan Copper Company has expressed a willingness to reach a negotiated settlement
- A judges panel should examine international investment arbitration cases in Pakistan, legal experts say
Pakistan says EU notes progress on rights commitments during GSP+ compliance discussions
- The review formed part of a wide-ranging EU-Pakistan Joint Commission meeting held in Brussels
- The two sides also covered irregular migration, climate cooperation and safe Afghan refugee return
ISLAMABAD: The European Union reviewed Pakistan’s compliance with its preferential GSP+ trade scheme this week and welcomed progress on key human rights commitments, according to a statement on Saturday, as Islamabad seeks to protect access to European markets vital for its export-led growth strategy.
The EU’s Generalized Scheme of Preferences Plus (GSP+) grants duty-free access to most European markets for eligible developing countries in return for their commitment to implement 27 international conventions covering human rights, labor standards, environmental protection and good governance. Pakistan, which has benefited from the scheme since 2014, is one of the biggest beneficiaries, with the EU its second-largest trading partner and a destination for roughly a third of its exports.
Pakistan’s GSP+ status has come under scrutiny in the past after, in April 2021, the European Parliament adopted a resolution calling for an immediate review, citing concerns over violence against religious minorities, curbs on media freedom and broader human rights issues. The move followed widespread anti-France protests in Pakistan over the publication of anti-Islamic caricatures, which EU legislators said raised questions about Islamabad’s commitment to fundamental freedoms.
“Both sides reviewed Pakistan’s progress on the implementation of the 27 international conventions as required under the GSP+ framework,” the foreign office said in a statement circulated in Islamabad. “The EU welcomed progress made in bringing Pakistan’s application of the death penalty in line with international standards and encouraged further steps in this regard.”
“It also recognised important first steps against torture, as well as the creation of a Commission on Minorities,” it added.
IRREGULAR MIGRATION, CLIMATE COOPERATION
The discussions took place during the 15th meeting of the EU–Pakistan Joint Commission, held in Brussels on Dec. 17, where officials also addressed irregular migration, including cooperation on the return and readmission of migrants without legal status, and legal mobility pathways under the bloc’s broader migration framework.
The foreign office statement came just a day after Greek authorities said they rescued more than 500 migrants from a fishing boat in the Mediterranean, adding that the group included several Pakistani nationals, highlighting continued migration pressures despite tighter controls.
Climate cooperation was another focus, with both sides reviewing ongoing collaboration on climate resilience, disaster risk reduction and sustainable development, areas of growing importance for Pakistan after repeated climate-related shocks.
The meeting also touched on the situation of Afghan refugees.
The statement said the EU welcomed the ongoing discussions between Pakistan and the UN refugee agency “to identify and compile a list of vulnerable cases, to ensure their adequate protection.”
“The EU appreciated that Pakistan is hosting millions of Afghan nationals for over four decades,” it continued. “They emphasised that any return must be safe, dignified and in line with international standards.”
The two sides agreed to continue engagement under the EU–Pakistan Strategic Engagement Plan, a framework guiding cooperation on political dialogue, trade, development, security and people-to-people exchanges, with the next joint commission meeting scheduled to be held in Islamabad next year.
