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CPEC challenge

Published Feb 22, 2016 01:23am

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The writer is former legal adviser to the Ministry of Foreign Affairs and a faculty member at Lums.
The writer is former legal adviser to the Ministry of Foreign Affairs and a faculty member at Lums.

THE China-Pakistan Economic Corridor has become a contentious political issue. Recently, the KP chief minister reproached the centre and Punjab. He said CPEC’s western route traversing KP had been restricted only to the roads whereas major investment and energy projects (eg fibre optic lines, railway tracks etc) linked to CPEC were being planned on the eastern route.

While CPEC’s domestic dimensions are hotly debated within Pakistan, few have focused on the international angle. Realising CPEC is contingent upon enforcing multiple agreements entered into between China and Pakistan. Under international law, Pakistan is categorised as a ‘dualist state’ ie for treaties signed by Pakistan to be locally binding, implementation legislation is required domestically through the federal legislature. From the perspective of national law, the process is considered the ratification of treaties signed earlier.

The Pakistani government has entered into several trade and investment treaties with China that predate CPEC but that still have immense relevance, including the China-Pakistan Bilateral Investment Treaty (1989), China-Pakistan Free Trade Agreement (2006), and the China-Pakistan Agreement on Trade and Services (2009). For CPEC, Pakistan has inked many more deals including over 50 MoUs.


There is not much focus on the international angle of CPEC.


Under the Vienna Convention on the Law of Treaties, any agreement governed by international law qualifies as an enforceable treaty when it is expressed in writing between the states that intend to commit themselves. The intent to bind need not be expressed and can be inferred from the circumstances.

It is in light of this rule that the Inter­national Court of Justice, in a case between Qatar and Bahrain, found consent implied in the general minutes of a meeting, in turn, creating a binding treaty. Even pacts between states that do not meet Vienna Convention requirements can qualify as binding international agreements under customary international law creating responsibilities, and — in the case of a breach — remedies.

Thus, from an international law perspective, virtually all agreements and MoUs signed by Pakistan are legally enforceable treaties, even if these accords are considered soft-law or nonbinding instruments by many domestic stakeholders.

While Pakistan continues to assume new international obligations, virtually none of these commitments has resulted in the passage of the corresponding domestic legislation. In fact, the process of ratification of international treaties is far from clear under the Pakistani domestic legal framework.

Many CPEC-linked treaties and accords, do not exclusively deal with one but several forms of investment and commercial activity which appear to fall under the Federal Legislative List: Part I and II, as well as under the residual jurisdiction of the provinces, often at the same time. Investments pertaining to ports, railways, minerals, oil, natural gas and electricity require policy formulation and regulation by the Council of Common Interests. If a province is dissatisfied with its decision, the matter is referred to parliament and put to a joint vote of both houses.

Further, if smaller federating units feel that CPEC is being appropriated by the larger provinces they might also be hesitant to pass provincial legislation to implement CPEC obligations in areas that fall under their residual jurisdiction. All this political activity, or inactivity, can delay the implementation of CPEC.

After the passage of the 18th Amendment, the provinces were empowered to manage their fiscal affairs more independently and to raise funds through various forms of taxation, surcharges and royalties. A year earlier, the seventh NFC Award was moderately appreciated by the smaller provinces for achieving a more equitable distribution of federal revenue.

Today, it is uncertain how the recently created special economic zones (with their corresponding tax regimes) for CPEC will affect the fiscal powers and revenue-generating capacity of the provinces granted under the amendment. Further, because of the territorial ambiguity of Fata and Gilgit-Baltistan, confusion exists over sharing of revenues or rents with these administrative units. In context, the role of the National Economic Council and CCI for harmonising federal-provincial ties vis-à-vis CPEC is not clear.

As a rule, Pakistan should only enter into treaties for which it has the requisite domestic political consensus and after it has created the necessary political and legal space for their execution. Once it enters into a treaty, it is bound to make it part of domestic law and to expeditiously implement its obligations. At present, the politics of federalism and the absence of domestic legal reordering and preparedness has created a strong possibility of CPEC projects being subjected to unscheduled delays, even possible cancellations, exposing Pakistan to liability for violating its international commitments.

The writer is former legal adviser to the Ministry of Foreign Affairs and a faculty member at Lums.

Published in Dawn, February 22nd, 2016



The views expressed by this writer and commenters below do not necessarily reflect the views and policies of the Dawn Media Group.


Comments (8) Closed



syed Feb 22, 2016 08:31am

it appears from the article that the writer has been privileged to have had some access to the CPEC documents whereas most of the people of Pakistan are absolutely clueless as to what has been agreed to by our government without our consultation. Having had decades of interaction with Chinese, including at government level, they do not delve deep into the intricacies of legal matters such as ratification by provinces or parliaments and hold foreign governments responsible and liable for implementing the agreements that they had signed. A case in point is a similar agreement that China has signed with Vietnam, with which the Vietnamese are not too happy as they perceive that they will just provide a support service for China to carry out its economic and military goals.

Satyameva Jayate Feb 22, 2016 09:51am

Many people outside Pakistan said right in the beginning that CPEC will be Too Much Ado about Nothing. Those people were right with Sui Gas, Reko Diq, Thar Coal, Diamer Bhasha and Gwadar.

Feroz Feb 22, 2016 03:46pm

When the left hand does not know what the right hand is doing, we get this confusion. Every day the federal government is reassuring the KPK and Baluchistan governments that they will get a fair share of the investments and both eastern and western corridor will be built simultaneously. Knowing the Pakistani government record of being economical with all facts, no citizen believes the government. Lack of transparency should not lead to a situation where smaller Provinces feel shortchanged. That will give rise to ethnic and other social issues, with undesirable consequences.

Divergence Feb 22, 2016 04:36pm

If some nation is determined to overcome all obstacles, it can do so very easily despite having reservations, which are natural. Pakistan has proven to be one such nation that is indecisive about most projects that would have proven to be game changers for Pakistan. The top most prominent factor behind such quibbling is the element of corruption, which Pakistani nation has been abundantly blessed with. It is also worthwhile to note that some external factors are also putting barriers in the way of any major project, and such external factors are facilitated by internal factors within Pakistan. At the end of the day, it is your own willingness to take small steps and overcome any obstacle

Sunil Feb 22, 2016 10:34pm

CPEC is a win win situation for China, can save shipping oil and gas, instead of taking around.

tamil Feb 22, 2016 11:45pm

CPEC ...the magic pill that will cure cancer.

Raj Patel Feb 23, 2016 12:49am

The word "Game changer" is famous in Pakistan. It will definitely changes the Game of Pakistan !!!!!!!!!!!!!!!!!

Iqbal Ali Feb 23, 2016 12:57am

@syed Totally agree with your analysis. Most agreements China has been signing with economically weaker nations have not been on equal footing, something Pakistan has always demanded in bilateral relations. Is CPEC is an infrastructure for China to be used in critical situations or emergencies only? We are still seeking an answer for this question and I know Chinese will never give a straight answer but their actions will tell all.