Govt set to legislate to protect foreign investment

Decision to enact law was prompted by growing complaints from investors

ISLAMABAD:

The federal government has decided to legislate to protect foreign investment in the country in the future after its experience with the Reko Diq project.

The proposed bill also aimed to protect investors from unnecessary court proceedings, parliamentary sources said.

The legislation would be enacted in line with the presidential reference on the Reko Diq settlement agreement filed with the Supreme Court.

The sources said a Senate session would be convened for this purpose.

They added that the Foreign Investment Protection Bill would protect investors from unnecessary hassles.

The legislation would provide a safe environment for foreign investors in the country.

The decision to enact the legislation was prompted by growing complaints from foreign investors, the sources said.

Discussions were under way as to whether the bill should be tabled in the Senate first or the National Assembly, they added.

On Friday, the SC declared that the settlement agreement between the Pakistani government and two international companies, Antofagasta and Barrick Gold Corporation, for the revival of the Reko Diq mining project was legal.

Chief Justice of Pakistan Umar Ata Bandial announced the 13-page short order after a five-judge larger bench of the apex court reserved its decision on November 29 in the presidential reference on the matter.

The settlement agreement was signed in March and the presidential reference sought the SC’s opinion on whether or not its 2013 verdict prevented the Centre and provincial governments from entering into the implementation pact again.

The SC observed in its order that in the settlement deal, there was no violation of the apex court’s 2013 judgment, which had declared the first agreement as void.

“The process for the reconstitution of the Reko Diq project has been undertaken transparently and with due diligence. The agreements are being signed by authorities duly authorised and competent to do so under the law,” the order, authored by Justice Ijazul Ahsan, read.

However, although the federal government has received a favourable opinion from the SC on the settlement agreement for the Reko Diq project, more measures are required before the signing of the pact between Pakistan and Barrick Gold before the December 15 deadline.

The Sindh and Balochistan assemblies have already passed resolutions in favour of the proposed agreements.

Now, the National Assembly will have to pass the Foreign Investment (Protection and Promotion) Bill, 2022.

These steps will need to be taken before December 15.

In case the settlement agreement is not signed before December 15, the country will have to pay $4 million per day as interest on the $5.9 billion penalty imposed by the International Centre for Settlement of Investment Disputes (ICSID) on July 12, 2019. Similarly, Pakistan will also have to pay $100 million to the other complainant company, Antofagasta.

Senior lawyers wondered that when both parties had agreed to an out-of-court settlement in the month of March, then why did the government delay in initiating the steps to meet the pre-conditions before the formal agreement.