THE sum the international tribunal for investment settlement has awarded the Tethyan Copper Company (TCC) is a cool $5.9 billion. This nearly equals the IMF bailout of $6bn that Pakistan has been negotiating for months, and that has now been approved, albeit with many strings attached.
Prime Minister Imran Khan has set up a commission to fix responsibility for this staggering loss. Meanwhile, the TCC has signalled its willingness to negotiate the amount we finally fork out. But there is little doubt that after winning its case after years of arbitration in which Pakistan is said to have spent $100 million in legal fees, we will have to pay the firm a large percentage of the amount of the award.
However, I fear the prime minister’s commission will be wasting its time because we know who was ultimately guilty of causing this colossal loss. In his freewheeling days as Pakistan’s chief justice, Iftikhar Chaudhry went about his merry way, issuing suo motu notices, humiliating politicians and bureaucrats, and even removing an elected prime minister. He has also caused the exchequer massive losses by his cavalier disregard of economic realities. The Reko Diq disaster was only one of a series of ill-informed judgements that we are having to pay for years after his retirement. This newspaper carried a recent editorial going over this case in some detail.
Had Chaudhry permitted the privatisation of the Pakistan Steel Mills to go through, taxpayers would not be saddled with the billions of debts this white elephant devours every year.
The disaster was only one of several questionable judgements.
In both cases, Chaudhry cited corrupt practices as reasons for his intervention, although this was not proved at any stage. In fact, some have asked whether it would not have been preferable to overlook any suspected transgressions on the part of the entities mentioned in order to avoid the billions in penalties and losses that we are now stuck with.
Another thing the higher judiciary ignored at that time, at our peril, was that to attract foreign investments, we need to establish our credentials as a country where investors have a level playing field. As it is, interference by institutions in the affairs of others makes it very difficult to conclude deals and make a profit. This can lead to a poor reputation for the country.
This is especially true of long-gestation projects in the mining sector. TCC, for example, spent $220m over five years to undertake detailed technical and financial studies of the potential of the copper and gold deposits at Reko Diq. No wonder the company felt aggrieved when it was told that it would not be granted a mining licence. Although its case was upheld by the Balochistan High Court, the Supreme Court under Iftikhar Chaudhry very quickly overruled the judgement and brought the project to a halt.
And this brings us to a crucial point: should cases be taken on if technical expertise is lacking and the realities of global finance do not appear to be well understood? Reko Diq is the perfect example of how to discourage investment.
If the prime minister’s commission finds that Iftikhar Chaudhry was responsible for coming to a decision that led to this loss, what will this government do? Ask him to reimburse the $5.9bn? A mild rebuke is the best we can hope for.
It does seem that accountability is for politicians and civil servants only. The military establishment claims it has its own in-house anti-corruption mechanisms in place. True, the Supreme Judicial Council is operational, but we must ask how often we have heard of judges facing charges for suspected wrongdoing over the years. In fact, a huge backlog of cases has been allowed to accumulate (2m and counting) in courts across Pakistan.
Against this backdrop, it is somewhat surprising to assume that our judiciary has the answers to Pakistan’s many ills. The recently (and mercifully) retired chief justice, Mian Saqib Nisar, enjoyed being in the limelight so much that he constantly issued edicts on everything from clean drinking water to school fees to how dams should be financed and built. So much so that he brought the work of the government — never very swift — to a virtual halt. Some say that he connived with higher forces to bring down Nawaz Sharif.
So it is refreshing to have a chief justice who does not feature daily on the front pages of our newspapers. Indeed, most people in other countries would be hard-pressed to name their senior-most judge.
There was a time when judges would decline invitations to social events to avoid a possible conflict of interest. Now a judge of an accountability court can confess to hobnobbing with a dubious character, and telling him he was pressurised to give a guilty verdict against Nawaz Sharif. How times have changed.
Published in Dawn, July 20th, 2019