Sardar Akhtar Mengal of the Balochistan National Party (BNP-Mengal) has threatened to quit the collation government over the Reko Diq project and its supposed “extraction” of unfair profit from the copper and gold deposits that belong to the province. His supporters within Parliament ignore the fact that the federal government has the right to engage foreign companies to extract a mineral lying beyond the local extraction capacity of Pakistan. As far as the Mengal challenge is concerned, the Supreme Court this month “declared the new Reko Diq mine deal legal and urged all provinces to amend their laws in accordance with the agreement.” The court also observed that the Balochistan Assembly was taken into confidence regarding the deal, adding the law did not allow agreements on national resources in violation of the Constitution.
The BNP-M and the Jamiat Ulema-e-Islam (Fazl) have opposed the two constitutional resolutions adopted by the Balochistan Assembly to facilitate the Reko Diq project, saying the federal government did not take them into confidence on the bills passed in the Senate and National Assembly. He indicated in a TV show that if the issue was not resolved, his party might part ways with the PMLN-led coalition government.
In 2013, a three-judge bench of the Supreme Court headed by then-Chief Justice Iftikhar Muhammad Chaudhry had stated the agreement reached in 1993 on Reko Diq “was in conflict with the laws of the country.” However, this decision had come under fire when a $10 billion penalty was imposed on Pakistan by the International Center for Settlement of Investment Disputes (ICSID) for “violation of contract.” The Supreme Court’s decision to declare the new deal “legal” is seen as a corrective measure, with the promised $9 billion deal touted as the biggest-ever investment in Pakistan’s history.
The apex court’s ruling has also held—and the Constitution does not forbid—disposal of public assets other than through a competitive process “so long as such disposal has the support of the law.” The new deal also has a clearly defined share of income from the mine—50 percent for Canadian firm Barrick Gold; 25 percent for the Balochistan government; and 25 percent for the federal government divided equally among three state-owned entities, the Oil and Gas Development Corporation Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Pakistan Limited (GHPL). In a sense the conflict is less over Balochistan’s share in the revenue, and more over Article 147 of the Constitution, which allows provinces to “entrust to the federal government functions in relation to any matter to which the executive authority of the province extends.”