Haunted story of Rikodiq

Haunted story of Rikodiq

Khaleeq Nazar Kiani
This week Rikodiq, a jinx for the establishment was again in the limelight. The m-embers of the Balochistan assembly have shown reservations about the secret proposed agreement on Rikodiq. Eight-een members special committee constituted to see all that. To surprise many, NAB has taken notice of the misplaced Rikodiq record. It may be a coincidence that reportedly the record of the Zardari case is also missing.
2006 was a troubled year in Balochistan due to the killing of Nawab Akbar Khan Bugti. Bomb explosions, attacks on Sui pipelines, and innocent killings were the daily news. In such an environment a joint venture agreement with an international leading mining company for the exploration of copper and gold in the remote Chaghi district was a very positive development.
Rikodiq, a small village in the Chaghi district got the world attention when Tethyan Copper Company filed its request for arbitration with the International Centre for Settlement of Investment Disputes (“ICSID”) alleging that Pakistan has violated the treaty signed between Australia, Pakistan on 7 February 1998 for the Promotion and Protection of Investments denying a mining lease to Tethyan Copper Company Pakistan (Private) Limited that, deprived TCCA of the value of its investments.
The case took seven years and the Award was finally announced on 12 July 2019 after splitting hairs of the case. At one time Pakistan filed a proposal of disqualification of the entire tribunal including its appointee which was declined.
The experts from the Pakistan side raised objections to the feasibility study and tried to convince the tribunal that the water, environment, social risks, security were not properly catered for. Further, they criticized the geology, and metallurgy that affect the value of the project. Some arguments were embarrassing portraying a bleak picture of the country. For example that the company was planning to build a mine in:-
“One of the most dangerous places in the world” and that the security situation in Balochistan has worsened from 2006 to 2011 and continuing thereafter.
Balochistan’s political and security context is described as “hellish complexity” and that the political risk in Pakistan is referred to as “Extreme.
From 2006 to 2011, Pakistan “slid down the rankings for ease of doing business” and adds that while Balochistan’s capital city, Quetta, “remained near the bottom,” the situation in rural areas was worse.
Specifically, unclear processes for obtaining permits and “a web of regulatory agencies and an array of permits at all different levels”
Interestingly the TCC in its counterarguments successful y proves that despite some difficulties, Pakistan is a good destination for any foreign direct investment. The tribunal announced the Award in favor of TCC which is the second-largest in the history of the ICSID. Pakistan has to pay an amount of USD 4,087 million-plus pre-award and post-award interest on the principal amount at a rate corresponding to the US Prime Rate plus 1 percentage point, compounded annually. It has further to bear, arbitration cost of an amount of USD 3,763,194.02 and TC-C’s expenditure of an am-ount of USD 59,447,-596.60. Pakistan incurred the expenditure of an amount of USD 25,456,790 and the post-Award interest is accruing at a rate of USD 700,000 per day.
The tribunal Award is so huge and its consequences are so big that it warrants an impartial investigation to fix the responsibility. The Award of 629 pages should be discussed page by page and debated in Balochistan Assembly. Why double standards in dealing with the same nature of cases? Mr. Irshad Ali Khokhar (DG MPNR) a witness from Pakistan accepted that the Dudder project continued to pay 2% royalty. Saindak may also be paying less than a 5% statutory rate. Why it was not contested when pointed out that the Saindak mine, which has been operating for many years appeared to be allowed to operate without having an approved ESIA (Environ-ment and Social Impact Assessment)? If relaxation of rules is illegal as decided by Supreme Court in the Rikodiq case then how did it become legal in Dudder and Saindak? Saindak has been allotted an east ore body in violation of the mineral policy and the Balochistan assembly did not discuss it nor has the NAB taken the cognizance. No petition in the court for such violation. Why?
NAB is also investigating and trying to gather some credible evidence acceptable to the courts and where it matters but to date despite the support of powerful establishment fails to dig out any credible evidence. Few retired bureaucrats were grilled but still except the “Aziz diaries” nothing credible is available for the prosecution that too was refused for forensic despite an order from the tribunal.
Now if NAB is serious then it must turn the investigation from hatching the corruption evidence for the satisfaction of the ICSID to apprehend real culprits. Why did DG and Secretary Mines cancel the TCC application without merit and on weak grounds which were not defendable despite hiring internationally best experts? In the eyes of the tribunal “none of the reasons given in the “Notice of Intent to Reject” could have justified the denial of the Mining Lease. Why Baloc-histan Government deviated in the Supreme Court from its earlier stance in the Balochistan High Court?
Balochistan will never forget the foul played by a jack of all trades nuclear scientist who portrayed a rosy picture and wasted billion of poor people’s money in Rikodiq as he has done in the past with the Thar coal gasification project then went scot-free.
The Supreme Court Judgment on Rikodiq is not appreciated at large and has further damaged the fragile reputation of the judiciary. The country paid the heavy price of such judicial activism.
Pakistan got some temporary relief when ICSID granted a stay order on the enforcement of the Award with tough conditions That Pakistan shall provide an unconditional and irrevocable bank guarantee or letter of credit for 25% of the Award, plus accrued interest from a reputable international bank based outside of Pakistan, pledged in favor of Claimant. A letter from the Ministry of Finance shall also be provided that, to the extent, the Award is not annulled, it will recognize the Award rendered by the Tribunal as final and binding and any amount of the Award attached or received by Claimant will not be subject to the intervention of Pakistan’s courts initiated by the executive branch of the Pakistani government.
Now the leading business groups of the country (Arif-Habib group, Lucky cement, Liberty group, and Mari Petroleum Company) are trying to open this jackpot and formed the NRL Company to explore the mineral sector. NRL submitted an unsolicited proposal along with feasibility EIA and financial model of Tanjeel area for exploration EL 100 formerly EL5 (all-otted to TCC) under PPP mode with BMEC (Provi-ncial mineral Company). BMEC board has given the go-ahead to the NRL for the future JV as the EL 5 all-owed to TCC is now allotted to BMEC. The basic id-ea behind the formation of NRL is how to bring back the Barrack gold and Ana-fogosta to Pakistan but it is learnt that only one company is still interested but on its terms which are very tough.
It was very much clear to everyone that not Balochi-stan or Pakistan have the c-apacity and resources to d-evelop such a mega-mine t-hen who was from behind t-he scenes assuring the av-ailability of that level of ca-pacity and resources. The I-CSID decision has turned the table. To answer the un-answered questions will sa-ve the country in the future.

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