2024 PLD 985 SUPREME-COURT

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VS S.3, Second, Third Sched. & Preamble---Regulation of Mines and Oilfields and Mineral Development (Government Control) (Amendment) Act (XVI of 2022), Preamble---Constitution of Pakistan, Arts. 144, 147 & 186---Reko Diq mining project---Settlement/implementation agreement signed between the Government of Pakistan/Government of Balochistan and two international firms (Antofagasta PLC and Barrick Gold Corporation) for the revival of the stalled Reko Diq mining project---Reference by the President under Article 186 of the Constitution seeking the Supreme Court's opinion on whether an earlier judgment of the Supreme Court reported as Abdul Haque Baloch v. Government of Balochistan (PLD 2013 SC 641) or the laws, public policy or Constitution prevented the federal and provincial governments from entering into the Implementation Agreement and the Definitive Agreements [Agreements] regarding the Reko Diq mining project or affected their validity?; and, whether, if enacted, would the proposed Foreign Investment (Protection and Promotion) Bill, 2022 ('FI Bill 2022') be valid and constitutional?---Supreme Court opined that the parameters set out in Abdul Haque Baloch's case (PLD 2013 SC 641) and the reasons for the same, had been duly addressed by the Federal and Provincial Governments; that the process for the reconstitution of the Reko Diq project had been undertaken transparently and with due diligence; that the Agreements were being signed by authorities duly authorized and competent to do so under the law; that to ensure transparency and fairness, expert advice on the financial, technical and legal issues involved had been sought from both local as well as independent international experts/consultants on the terms settled in the Agreements; that the Agreements had been put in place after due deliberation and were not unconstitutional or illegal on the parameters and grounds spelt out in the Abdul Haque Baloch's case (PLD 2013 SC 641); that likewise, the rationale, basis, legality and vires of the 'FI Bill 2022' as well as the amendments to its schedules and annexures and the amendments incorporated through SROs, provided the resolutions to such effect were passed by the Sindh and Balochistan Provincial Assemblies and the 'FI Bill 2022' was passed by the Parliament after following due process, shall be duly enacted as required under the Constitution, and such laws and regulatory measures did not in any manner violate the Constitution or the law---Detailed answers given by the Supreme Court to the questions posed in the Reference provided. Citation Name: 2024 PLD 985 SUPREME-COURTBookmark this Case VS S. 3, Second & Third Sched. & Preamble---Regulation of Mines and Oilfields and Mineral Development (Government Control) (Amendment) Act (XVI of 2022), Preamble---Constitution of Pakistan, Art. 186---Reko Diq mining project---Settlement/implementation agreement signed between the Government of Pakistan/Government of Balochistan and two international firms (Antofagasta PLC and Barrick Gold Corporation) for the revival of the stalled Reko Diq mining project---Reference by the President under Article 186 of the Constitution seeking the Supreme Court's opinion on whether an earlier judgment of the Supreme Court reported as Abdul Haque Baloch v. Government of Balochistan (PLD 2013 SC 641) or the laws, public policy or Constitution prevented the federal and provincial governments from entering into the Implementation Agreement and the Definitive Agreements [Agreements] regarding the Reko Diq mining project or affected their validity?; and, whether, if enacted, would the proposed Foreign Investment (Protection and Promotion) Bill, 2022 ('FI Bill 2022') be valid and constitutional?---His Lordship opined that in respect of the President's first question, the record reflected that the parameters set out in the judgment passed in Abdul Haque Baloch case were properly addressed and the requirements under the relevant provisions of law and the Balochistan Mineral Rules, 2002 ("BMR, 2002') were fulfilled---Agreements were in line with relevant provisions of law and rules---Reconstitution of the Reko Diq project would enable the newly constituted Reko Diq Mining Company (Private) Limited ("RDMC") to restart work at Reko Diq, which would be beneficial for all the stakeholders---It will also facilitate and attract local and foreign investment, create employment opportunities, and uplift the backward areas of the Province of Balochistan---As far as the President's second question with regard to the constitutionality and validity of the proposed Foreign Investment (Protection and Promotion) Bill, 2022 ("FI Bill, 2022") was concerned, His Lordship answered it in the affirmative---Government of Balochistan has established the Balochistan Mineral Resources Limited ("BMRL") which has already been assigned a 15% share in the RDMC---Purpose of establishing BMRL is to secure the ownership rights of the minerals of the Province of Balochistan by entering into joint venture agreements with any potential investors, local or foreign---Thus, any future agreement with regard to mineral resources in the Province of Balochistan where significant data and information regarding a potential mining site is available, may be through the BMRL by way of a competitive bidding process, being the ordinary rule and the best option under the circumstances---However, in case of limited information regarding mineral deposits, the Government of Balochistan may adopt different licensing procedures, keeping in view the relevant provisions of law, rules, regulations, and policies---Additionally, to reach a more comprehensive and favourable agreement in the future with respect to large-scale mining of precious minerals, the Government of Balochistan ought to get assistance from reputable international mineral experts, financial and legal advisors, for their proper assessment in terms of their quantity and evaluation, and for the execution of compact, realistic, and workable agreements---This will not only safeguard the interests of the Province but will also reduce the likelihood of dispute(s)---Besides, with regard to large-scale mining, especially for precious minerals, the Government of Balochistan may also get input from and the endorsement of the Provincial Assembly---It would be appropriate for the Government of Pakistan and the Government of Balochistan to take initiatives and adopt measures by allocating a fixed portion of the proceeds of their shares and royalty arising from the Reko Diq project for the benefit of future generations in a wealth fund, on terms and conditions to be determined by the Govern-ment of Balochistan. Citation Name: 2024 PLD 985 SUPREME-COURTBookmark this Case VS art. 186---Opinion rendered by the Supreme Court in its advisory jurisdiction under article 186 of the Constitution---Scope---Such an opinion is not only legally binding but also final. Citation Name: 2024 PLD 985 SUPREME-COURTBookmark this Case VS S. 3, Second & Third Sched. & Preamble---Regulation of Mines and Oilfields and Mineral Development (Government Control) (Amendment) Act (XVI of 2022), Preamble---Constitution of Pakistan, Art. 186---Advisory jurisdiction of the Supreme Court---Scope---Matters of public policy---Reko Diq mining project---Settlement/implementation agreement signed between the Government of Pakistan/Government of Balochistan and two international firms (Antofagasta PLC and Barrick Gold Corporation) for the revival of the stalled Reko Diq mining project---Reference by the President under Article 186 of the Constitution seeking the Supreme Court's opinion on whether an earlier judgment of the Supreme Court reported as Abdul Haque Baloch v. Government of Balochistan (PLD 2013 SC 641) or the laws, public policy or Constitution prevented the federal and provincial governments from entering into the Implementation Agreement and the Definitive Agreements [Agreements] regarding the Reko Diq mining project or affected their validity?---His Lordship opined that part of the question referred by the President as to whether 'public policy' prevented the Government of Balochistan and the Government of Pakistan from entering into the Implementation Agreement and the Definitive Agreements or affected their validity ought not to be responded to by the Supreme Court in its Advisory Jurisdiction---Given the scope and extent of the Advisory Jurisdiction of the Supreme Court, the Supreme Court should have abstained from stating its opinion on part of the question relating to public policy for two reasons: first, the said part of the question did not cross the threshold of being a 'question of law', and that too as a jurisdictional pre-condition for invoking the Advisory Jurisdiction of the Supreme Court under Article 186 of the Constitution; and second, that matters of policy were best left to the other organs of the State -- the Executive and the Legislature -- to respect the fundamental principle of 'Trichotomy of Power' as enshrined in the Constitution---Courts should be cautious of dabbling in policy matters, as these involve the intricate interplay of technical and economic elements requiring the balancing of competing interests, a forte of the functionaries of the Executive or the elected members of the Legislature, and not the unelected judges of the superior Courts---When one tests the legal validity of the Implementation Agreement and the Definitive Agreements on the touchstone of public policy, what emerges is not simply a 'question of law', but a web of complex commercial mining transactions, transcending international borders, thus giving rise to 'polycentric issues'---Such complex transactions do not cross the threshold of being justiciable as 'questions of law' under the Advisory Jurisdiction of the Supreme Court. Citation Name: 2024 PLD 985 SUPREME-COURTBookmark this Case VS art.172(3)---Mineral resources---Sustainable mining---Intergenerational Equity Principle---Scope---Intergenerational Equity Principle is one of the important aspects concerning the use and rights of future generations---It states that every generation holds the Earth in common with members of the present generation and with other generations, past and future---This principle is the foundation of sustainable development and articulates a concept of fairness among generations in the use and conservation of the environment and its natural resources---Natural resources are also to be inherited by future generations, therefore, the Federal as well as the Provincial Governments being the trustees on behalf of their people must not ignore the rights of future generations when taking any decision in this behalf---as such, mining must be performed in a sustainable manner and the proceeds arising out of their respective shares may be allocated, utilized, and invested in such way to ensure that future generations receive the benefit of their inheritance---One of the options in this behalf or otherwise for each Government is to adopt an investment strategy such as the establishment of a Sovereign Wealth Fund---They may park and invest a fixed portion of revenue arising from the proceeds of mining projects in the said fund. Citation Name: 2024 PLD 985 SUPREME-COURTBookmark this Case VS art. 172(3)---Constitutional position on mineral resources---Under article 172 of the Constitution, minerals (except for mineral oil and natural gas) if located in a Province shall vest exclusively with the Government of that Province, and in any other case, with the Federal Government---Respective Governments are guardians of such resources and have exclusive rights to freely exploit, manage, control, and dispose of the same, subject to the applicable laws, rules, regulations, and policies, in a manner beneficial to their peoples---Thus, the Constitution holds and protects the Provinces' Permanent Sovereignty to freely exploit and determine the use and disposal of their natural resources---It is, therefore, the obligation of the Federal Government to accept and respect the property rights of each Province, as guaranteed by the Constitution---Since minerals are provincial subjects, therefore, the Government of Pakistan must not undermine and encroach upon the jurisdiction of the Provinces, nor should the rights of their people be infringed---While entering into international agreements governed by Bilateral Investment Treaties in respect of minerals, the role of the Government of Pakistan is restricted to the extent of facilitating, advising, and coordinating with the Province concerned, with the utmost care as to avoid any violation under the international commitments---In order to properly explore, manage, control, and dispose of mines and minerals, the Provinces which have not enacted statutes and framed rules and regulations, may do so.

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