Pakistan has been fined $5.8 billion by the International Center for Settlement of Investment Disputes (ICSID) of World Bank, in the Reko Diq case, filed by Tethyan Copper Company (TCC). The ICSID announced its decision on Friday, July 12, 2019.
The ICSID had been working on the site back in 2010 and had discovered massive gold and copper reserves in RekoDiq, which is an area of the Chaghai region of Pakistan’s Balochistan province. The reserves are estimated to be worth more than $500 billion. The TCC applied for a mining lease in 2011 and the provincial government of Balochistan, in the same year, rejected the request. On Jan 12, 2012, TCC registered a case against Pakistan in the ICSID and claimed $11 billion for damages and for violation of the agreement. The Supreme Court (SC) of Pakistan declared the agreement between the Balochistan government and TCC void on Jan 7, 2013.
TheICSID ruled against Pakistan on March 21, 2017, but had not calculated the damages faced by the TCC. The TCC had claimed that they had already spent $220 million on the site, back in 2010, while trying to discover the reserves and were planning to invest over $3 billion to construct a state of the art gold and copper refinery. On July 12, 2019, the World Bank made a 700 pages verdict against Pakistan and imposed a $4.08 billion fine along with $1.87 billion interest, to be paid by Pakistan to the TCC.
Pakistan and the TCC tried to settle the dispute outside the court but all efforts proved to be futile, mainly due to the SC verdict against the TCC.
The TCC officials told that they have been trying to come to a settlement with Pakistan and are still willing to talk to Pakistan to come to a mutually beneficial agreement. The company also highlighted the fact that they would not back off from the demand for repercussions against the damages done to the company.
Meanwhile, Pakistan’s PM has directed that a committee should be set up to investigate the matter. The committee is to investigate the reason for this disaster and find out the officials involved in creating this mess and to avoid any such blunders in the future.