At Josh and Mak International, our team of qualified legal experts is dedicated to providing comprehensive guidance and assistance in various aspects of mining law in Pakistan, particularly in the Sindh, Baluchistan, and KPK regions. We understand the complexities and challenges faced by mining sector companies and offer specialized advice tailored to your specific needs. Here are the key areas in which we can assist you:
- Royalties and Local Tribes/Residents: We provide advice on negotiating royalty arrangements and addressing issues related to local tribes or residents. Our team can help in suggesting settlement options, drafting contracts, and ensuring compliance with the FATA Government Regulation 2012.
- Mining Permit Issues: We offer guidance on matters concerning mining permits, especially in cases where the status is unclear. This includes addressing challenges arising from permits expanding across provincial or district borders, particularly in the KPK region.
- District Rules and Overlapping Boundaries: Our experts can provide advice on how district rules should apply in cases where there is an overlap of boundaries within a mine. We help you navigate the legal complexities and ensure compliance with relevant regulations.
- Mining Permit Applications: We assist mining sector companies in applying for mining permits. Our team can help with the inspection of local registers for permits and licenses, ensuring compliance with regulatory requirements.
- Mining Permit Revocation and Tax Issues: We offer advice on situations involving mining permit revocation due to allegations of tax evasion. We can also guide you on meeting reclamation obligations associated with mining activities.
- Taxation: Our experts provide guidance on taxation matters as per the requirements of the Tax Directorate General. We assist mining permit holders in obtaining tax registration numbers (NPWP) and ensure compliance with tax regulations.
- Private and Public Sector Disputes: We offer legal advice on joint ventures in the mining sector, both in public and private partnerships. Our team can guide you on bidding for projects in the mining sector for foreign companies in partnership with local companies. We also provide assistance with import/export regulations for foreign companies.
- Legal Aspects of Training and Sustainable Mining: Our experts can advise on the legal aspects of training local human resources, particularly in areas such as blasting techniques and modern mining methods. We also offer guidance on sustainable mining practices to minimize environmental degradation and ensure compliance with environmental regulations.
- Health, Safety, and Emergency Evacuation: We provide legal advice on health and safety regulations in mines, including provisions for emergency evacuation in case of accidents. Our team ensures compliance with relevant laws and regulations to safeguard the well-being of workers.
- Legal Framework and Legislation: We offer insights into the current legal framework for mining activities in the region, including leasing, dispute resolution mechanisms, and potential legal reforms. We can provide specific opinions on the application and operation of various legislation relevant to the mining sector, including but not limited to:
- FATA Government Regulation 2012
- Mines Act, 1923
- Mines Maternity Benefit Act, 1941
- Coal Mines Labour Welfare Fund Act, 1947
- Regulation of Mines and Oil fields and Mineral Development (Government) Control Act, 1948
- Regulation of Mines and Oil fields and Mineral Development (Government) (Amendment) Control Act, 1976
- Pakistan Mining Concession Rules, 1960
- Mining Concession Rules, 1970 (Baluchistan Amendment)
- Mining Board Rules, 1951 (Amendment)
- Mining Concession Rules, 1960 (Sindh Amendment)
- KPK Mining Concession Rules 2005 (especially clauses relevant to royalties)
- Pakistan Environmental Protection Act 1997
Why Choose Josh and Mak International:
- Our team has in-depth knowledge and experience in mining law in Pakistan. We stay updated on the latest legal developments and provide accurate and effective guidance to our clients.
- We understand that each mining project is unique. We take the time to understand your specific requirements and provide customized solutions that address your concerns.
- We prioritize the needs and goals of our clients. Our team actively listens to your concerns, provides clear explanations of legal options, and keeps you informed throughout the process.
- We adopt a proactive approach to identify potential legal issues, mitigate risks, and ensure compliance with relevant laws and regulations. Our aim is to help you achieve your objectives while minimizing legal complications.
Contact Us Today!
If you require expert guidance and support in mining law matters in Pakistan, Josh and Mak International is here to assist you. Our team is dedicated to providing comprehensive legal solutions tailored to your specific needs. Contact us today to schedule a consultation and take the first step towards navigating the legal complexities of the mining sector with confidence.Introduction
While Pakistan is one of the best locations for setting up a mining business, the lack of a solid legal framework results in a nuanced situation for foreign investors. The primary issue is the lack of any modern properly legislated Mining Law or Mining Act, enforced in a legal manner duly backed by the action of a parliament. However, what we do have is a set of various procedural laws and policies made by respective provincial governments and a National Mineral Policy at federal level. Problems arise due to the scattered nature of such procedures, while most of these piecemeal mining regulations currently exist in the form of promulgated notifications. As most of these laws have not gone through the proper process of parliamentary debates and procedures for validation, there is a growing concern that they may be a product of bureaucratic and political manipulation, which may affect the interests of foreign investors seeking to invest in the mining industry of Pakistan.
Despite this legal vacuum, the Pakistan mining sector has been attracting international foreign investment, the most recent being in January 2016 when Pakistan signed a number of coal mining agreements for the Tharparkar region (Sindh), which should result in an estimated 3.8 million tonnes of coal production per annum. After the Reko Diq saga, it seems that this project will be a good omen for the local economy with China’s banks and private companies supplying US$1.5 billion in loans, while Pakistan will contribute US$500 million via private and public finance.
As of 2016, marble mining activities have increased in the Khyber Pakhtun Khwa (KPK) province, especially the Federally Administered Tribal Areas (FATA). The only problem is that conventional blasting and lack of sophisticated techniques causes much marble waste. From a legal and technological perspective, it would be fair to say that there much room for improvement in mining, geological and surveying techniques and legally, the mining industry faces a lot of challenges due to the red tape involved in the procurement of licences from the relevant government authorities. There are known irregularities in auctions, and foreign companies often complain of bias against their interests in mining licences.
Other problems include the factum that the local laws do not support mining companies in the event that such local or foreign companies are unable to maintain their solvency and service their existing debt.
A more significant discovery in the past few years has involved the discovery of multiple iron-copper-gold deposits near Chiniot in the Punjab. Many questions have been raised, however, regarding the feasibility of mining such deposits
Pakistan has over 5,000 operational mines of copper, gold, bauxite, lead, zinc, iron and chromite. There are also massive reserves of non-metallic minerals comprising salt, gypsum, clays, barite, phosphate, dolomite and limestone in the country.
II LEGAL FRAMEWORK
The Regulation of Mines and Oilfields and Mineral Development (Government Control) Act, 1948 (as amended in 1955, 1964 and 1976) and its related rules provide the basic framework for granting and managing mining rights in Pakistan. The Act and the rules are the main instruments of administration, compliance and dispute resolution in respect of Pakistan’s minerals.
The federal government and the four provincial governments administer the Act through their separate rules with respect to the minerals assigned to them. Thus, the federal government administers the Act in respect of oil, natural gas and nuclear energy and minerals, and the provincial governments administer it in respect of other minerals.
At federal level, the Ministry of Petroleum and Natural Resources and the Director General of Petroleum Concessions, which comes under the Ministry, regulate the mining industry. The Departments of Mines and Minerals are organised into three divisions:
a Licensing;
b Exploration Promotion; and
c the Inspectorate of Mines (Federal DG Petroleum and Natural Resources).
The mining sector of the four provinces of Pakistan (i.e., Punjab, Baluchistan, Sindh and KPK) are regulated by the local offices of the Director General of Mines and Minerals. Azad Jammu Kashmir (AJK) and Gilgit Baltistan are governed federally through the offices of the Director General of Petroleum and Natural Resources.
The federal government, with the cooperation of provinces, published the National Mining Policy in 1995. Currently, the main source of law is the National Mining Policy 2013. Besides this, there are many laws and statutes governing the mining sector at both federal and provincial levels.
The recent 18th Constitutional Amendment, and its effect upon Article 172-3, should have meant that the share and control of the province and the federal government would be divided between the provincial and local governments for minerals, oil and natural gas, but this has remained an ambiguous issue so far and the mining sector has not entirely devolved to the provinces so far. A more dynamic effort to create a provincial level policy has been that of KPK, where Fuzail Siddiqui, a Pakistani-Canadian geoscientist of repute, was the focal person and principal author of the Khyber Pakhtunkhwa Mineral Policy 2014. The document was judged as being of sufficient merit to be launched with some fanfare by Imran Khan, Chairman of Tehreek-e-Insaaf, the ruling political party of Khyber Pakhtunkhwa, on 7 July 2014. However, despite its dynamic and modern formulation, little has been seen in terms of its practical application so far, due to political disturbances in the region. It is important to note that, unlike mining, natural oil and gas fall under the domain of the federal government and are not subject to provincial decisions, although it has been suggested that the 18th Amendment may have changed this position. The rules and procedures are also different for the oil and gas sector, with the framework being composed of yearly offshore and onshore Petroleum Concession Rules, Petroleum Policies and other laws. However, the basic Act for both petroleum and minerals remains the Regulation of Mines and Oilfields and Mineral Development (Government Control) Act 1948 (see Section II, supra) and its related rules, which provide the basic framework for granting and managing petroleum and mineral mining rights in Pakistan.
III MINING RIGHTS AND REQUIRED LICENCES AND PERMITS
i Title
From this point onwards, any reference to the ‘Rules’ includes:
a the KPK Mining Concession Rules 2005;
b the Sindh Mining Concession Rules 2002;
c the Punjab Mining Concession Rules 2002; and
d the Baluchistan Mining Concession Rules 2002.
As per the National Mineral Policy 2013, the ownership of minerals other than nuclear minerals and those occurring in special areas (FATA, Islamabad Capital Territory (ICT) and International Offshore Water Territory (IOWT)) is a provincial subject under the Constitution. Provincial governments and federating units are responsible for regulation, detailed exploration, mineral development and safety concerns in these operations, whereas geological/geophysical surveying and mapping, national and international coordination and formulation of national policies and plans are federal responsibilities. In line with Constitution Articles 172(2) and 172(3), as given by the 18th Amendment in 2010, the federal and provincial governments jointly endorse this policy, which provides for appropriate institutional arrangements, a modern regulatory framework, internationally competitive fiscal and regulatory regimes and a programme to expand Pakistan’s geological database. This policy document also emanates from the Constitutional position as laid down in Articles 70 and 97. The respective government may, by notification in the official gazette, make rules for the grant or transfer of mineral concessions or titles in respect of any mineral falling in its domain.
ii Surface and mining rights
As per the Rules the rights of the holder of a mining lease or exploring licence give them the right to enter and occupy the surface land that comprises the exploration area for the purpose of carrying out exploration operations, subject to the rights of surface-holder. This also includes the right to take and divert water on, or flowing through, such land and use it for any purpose necessary for exploration operations subject to, and in accordance with, the provisions of law for the time they are in force. The Rules confer the right for the erection or construction of ancillary works in the reconnaissance area as may be reasonably necessary. Under the exploration licence or the mining lease, there is an entitlement to carry out such other operations, including the erection or construction of ancillary works on the surface land, as may be reasonably necessary for, or in connection with, the mining or exploration operations, removal, selling or disposal of the same. Under the provincial Rules, the holder of a mineral title is not allowed to carry out exploration or mining operations at, or upon, any point within a distance of 50 metres from the boundary of the exploration area with permission. The same rule applies while working close to a railway line, reservoir, canal or other public works or when building or carrying out surface mining operations near public places. Notice must be given to the Licensing Authority at least a month in advance regarding occupying, clearing and preparing any land for mining purposes. Reasonable compensation to the local population may also have to be paid in the form of indemnification to the local authority, against third party claims for damage, injury or disturbance. Also, under the Rules, the licensee or a lessee shall allow existing and future licence or lease-holders of any area that is within, or adjoins, or is reached by the land held by the licensee or the lessee, all reasonable facilities of surface or underground access thereto, on the terms and conditions as may be determined by the Licensing Authority.
iii Additional permits and licences
For the purpose of acquisition of rights, an application needs to be made to the relevant authority for the grant of a reconnaissance licence. For minerals that come under the domain of the federal government, the application has to be made to the Director General of Petroleum and Natural Resources. In the case of minerals falling under the administrative domain of the relevant province (where the minerals are found), the application has to be made to the Director General of Mines and Minerals of that respective province. No proprietary rights are required, and applications are entertained on a first come, first served basis (R.82 of the Rules). The concession rules for all four provinces allow for a type of ‘exclusive’ reconnaissance licence based on certain conditions and financial standing of the applicant. A reconnaissance licence can only be for a period of 12 months or less.
An exploration licence is granted after application for the intended area or location to the provincial government authority (DG Mines and Minerals), and there is no prerequisite for a reconnaissance licence in this case. An exploration licence is available on a first come, first served basis and sometimes it can also be achieved through periodic auctions of mineral-rich locations by the concerned provincial governments.
The prerequisite to a deposit retention licence is a mandatory exploration licence. An exploration licence is available on a first come, first served basis and is for a maximum of three years with two renewals allowed. A mineral deposit retention licence (MDRL) is granted when an exploring licence-holder makes a significant mineral discovery – at that point, he or she may apply for an MDRL, which is an incentive for successful exploration licence holders who cannot exploit a mineral due to commercial issues. The MDRL is available for two years and is then followed by a mining lease (the MDRL can be skipped if the party conducting exploration has the requisite funding to begin mining work). The grant of a mining lease confers an exclusive right for mining in an area. On application, the government can convert the exploration and MDRL licence into a mining lease. Another method of acquiring a mining lease is through auction in case of proven reserves (that are discovered at the expense of the government).
Reconnaissance rights cannot be transferred. Exploration rights can be transferred but only after two years (possibly after a renewal). Mining rights can, however, be transferred subject to the legal requirements pertaining to foreigners and notification to the relevant licensing authorities regarding the transfer and assignment of titles.
Reconnaissance rights cannot be mortgaged. Mining rights (mining lease and licences) and exploration licences can, by nature, be easily mortgaged to raise finance, but no transfer of an exploration licence shall be permissible before two years elapse from the issuance of the licence. Complications can, however, arise in a situation where the lessee wants to surrender the lease or licence. In such a case, if the lease has been mortgaged or charged in favour of a financing institution, the licensee or the lessee shall not be entitled to surrender the lease in whole or in part, except with prior approval in writing of the Licensing Authority.
The owner of a mining lease or licence can sub-contract the technical mining activities to third parties or enter into partnerships with other legal entities (they can subcontract but not sublet – see, for example, Rule 170 of the KPK Mining Concession Rules), but that individual or corporate entity remains the sole owner of the licence, with all its rights and obligations. Also, during an assignment, a lessee cannot divide the leased area between the partner and the partners, as the case may be, without prior approval of the Licensing Authority.
Under the Rules, more than one licence or lease may be granted to the same person. In cases where two different minerals are inter-bedded or closely located, the Licensing Authority has the power to direct the licensee or lessee, as a compulsion, to get the grant for systematic mining operation and utilisation of a second mineral, within three months. Failing this, the main lease or licence may be cancelled.
The Licensing Authority has the power to grant the title to explore one mineral over one area to a person. However, in case of discovery of another mineral over the same area, the right of acceptance or refusal for the grant to explore for the second mineral would be offered to the licensee within a specified period. If it is refused, it may mean that the Licensing Authority has deleted any viable portion of the area containing the other mineral for grant to another person, or will grant a mineral title over the same area for the other mineral or mines in favour of any other person.
The holder of a right to conduct reconnaissance, exploration and mining is also entitled to exercise rights over residue deposits on the land concerned, but, particularly in the case of a new discovery, a fresh application has to be made to the provincial or federal Licensing Authority (whichever has jurisdiction) for permission to exploit those residue deposits. In such a case, the government has a pre-emptive right to purchase these deposits.
Under the National Mineral Policy 2013, minerals other than nuclear minerals and those occurring in special areas (FATA, ICT and IOWT) are a provincial subject under the Constitution. See Section III.i, supra.
Under the Pakistan Offshore Petroleum (Exploration and Production) Rules 2003, the rights to explore and mine can be granted apart from petroleum rights offshore. Therefore, two different licences can exist: one for petroleum; and one for minerals in the same area. The authority in charge in this case is the federal and not the provincial government.
iv Closure and remediation of mining projects
As per the Rules, the licensing authority has to be notified regarding the closure of a mine. This closure may be based on a voluntary termination of the duration of the lease, a blacklisting or the refusal of the authority to renew the lease. At this point, the lessee must return the premises in appropriate condition, dealing with the buildings and structures on the surface at their own expense. Any security deposits to the authority will only be refundable when any outstanding dues as well as damages to the site are accounted for.
At the expiry, surrender or determination of a licence or a lease, the licensee or the lessee, as the case may be, is obligated to deliver to the Licensing Authority the demised premises and all mines in a proper and workable state save in respect of any working as to which the Licensing Authority may have earlier sanctioned abandonment, in which case he or she shall securely plug any bores and fill up or fence any holes or excavations that he or she may have made in the land to such extent as the Licensing Authority may require. The lessee or the licensee is also required to restore the surface of the land and buildings and other structures not belonging to him or her, which he or she may have damaged in the course of prospecting or mining.
IV ENVIRONMENTAL AND SOCIAL CONSIDERATIONS
i Environmental, health and safety regulations
The Licensing Authority has the right to demarcate and create safety zones in relation to structures erected on land to which the mineral title relates. During surface operations, the lessee is also forbidden from damaging trees, the environment, road structure, public areas (mosques or parks, etc), agricultural land and any reserved or protected forest parts. The lessee or licensee is entitled to take clear measures to prevent damage to the environment, and, where some adverse impact on the environment is unavoidable, take measures to minimise such impact.
Sections 17–22 of the Mines Act 1923 govern health and safety in the mining sector. The new Mines Safety Act, Minerals Act and Illegal Mining Measures Act with specific application to the Khyber-Pakhtunwa province are expected in 2014, depending on approval from the parliament. Many basic agendas for health and safety have already been discussed in the recently launched KPK Mineral Policy 2014.
The Rules denote a clear obligation upon the owners, mining lessees and the mining officials to keep track of health and safety violations on a mining site. The Licensing Authority has the power to carry out routine inspections and levy fines for such violations.
ii Environmental compliance
No mineral title can be granted unless the application is accompanied by an environmental impact assessment in terms of the Environmental Protection Act 1997, and shall identify the extent of any adverse effect that the plan for development and operation of the mine and the carrying out of the programme of proposed mining operations would be likely to have on the environment and on any monument or relic in the area over which the lease is required, and proposals for eliminating or controlling that effect. In addition to this, there is a requirement on behalf of the application to present valid proposals to the Licensing Authority for the prevention of pollution, the treatment and disposal of waste, the safeguarding, reclamation and rehabilitation of land disturbed by mining operations, the protection of rivers and other sources of water, and for monitoring and managing any adverse effect of mining operations on the environment. The lessees and licensees are also covered in special provisions under the Rules for the handling of reserved and protected forests during their operations.
iii Third-party rights
In Pakistan, indigenous peoples are the various tribal groups. Those with Pakistani nationality should not have problems getting a competitive response from the auction of leases by the provincial governments. Pakistan does not have any national mineral policy provisions on indigenous and tribal peoples, including those residing in FATA and Provincially Administrative Tribal Areas. While Pakistan has been a signatory to ILO Convention 107 on Indigenous and Tribal Populations since 1960, it has so far not signed the ILO Convention 169 on indigenous and tribal peoples.
In one recent case,[4] a Constitutional petition was made challenging the right of government regarding mines and minerals, including issues of land compensation and surface rent. The petitioners sought cancellation of notices issued by authorities, asserting that their predecessor-in-interest was the owner of a river bed, who had leased out said property to a company for mining of minerals. In response thereof, respondents issued notices to parties to said lease. This was based on the claim that they, being the legal heirs of their predecessor-in-interest, were owners of suit property as per a previous declaration by the competent court of law. It was successfully argued by the government authorities that, under provisions of the Constitution and Section 49 of the West Pakistan Land Revenue Act 1967, read with the Khyber Pakhtunkhwa Concession Rules 2005, all mines and minerals had been declared to be government property, and that under Rr142 and 204, the Director and Director General were authorised to issue licence regarding the mining of minerals to interested persons through auction, and landowners had right to surface rent payable by the lessee concerned through the Mineral Department. Under Section 49 of the West Pakistan Land Revenue Act 1967, all mines and minerals had been declared to be property of the provincial government, and the Khyber Pakhtunkhwa Mining Concession Rules, 2005 had been framed in that regard. Provisions of Section 49 of the West Pakistan Land Revenue Act 1967 were clear on the subject, and no exception could be made.[6]
V OPERATIONS, PROCESSING AND SALE OF MINERALS
i Processing and operations
There are no special regulatory provisions relating to processing and further beneficiation of mined minerals but recent experience with the Reko Diq case suggests that in the future, the state’s policies may be angled more towards provisions such as those requiring the smelting or further industrial processing of precious metals to be done locally (for the purposes of job creation) instead of sending the raw material abroad for processing
ii Sale, import and export of extracted or processed minerals
There is no clear-cut legal restriction on the sale or export of minerals subject to proper excise and tax payments by the entity carrying out the operations.
iii Foreign investment
Even though the Reko Diq matter has sent a negative message to the international community regarding the risk of expropriation, Pakistani laws clearly set out the guarantee that foreign investors need not be concerned about this:
a the Protection of Economic Reforms Act 1992 provides that no foreign industrial or commercial enterprise established or owned in any form by a foreign or Pakistani investor shall be compulsorily acquired or taken over by the government; and
b the Foreign Private Investment (Promotion and Protection) Act 1976 guarantees that a foreign investor in an industrial undertaking may, at any time, repatriate capital and profits.
Both (a) and (b) apply to the mining sector and its operations. Reko Diq was a one-of-a-kind investor–state dispute, which had a unique judgment. Additionally, the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act 2011, which gives effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) 1958 was passed with the aim of providing security to foreign investors. Interestingly enough, it was held not to apply to the Reko Diq scenario by the Supreme Court.
It is worth mentioning the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act 2011, which gives domestic effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) 1958, to which Pakistan was already a signatory. It is being said that this makes the recognition and enforcement of foreign arbitral awards in Pakistan relatively easier than it was before. However, after the Reko Diq case, it has become clear that the interpretation of what qualifies as a ‘foreign award’ may cause many problems for investors in the future, particularly in the mining sector.
VI CHARGES
The latest details in this regard are contained in the National Mineral Policy 2013. These taxes, levies and compulsory fund contributions are contained in various taxation-based rules and regulations. Mining companies are subject to Income Tax in the form of Minimum Corporate Tax. Relief is allowed from taxation on refining or concentration of mineral deposits, development and pre-commencement expenditure. Ring-fencing means that a mining company will be assessed for income tax on the entirety of its mining operations in Pakistan. The double taxation provisions apply here, especially in terms of taxing dividends, and withholding tax provisions apply to non-resident contractors. A tax set at 15 per cent shall be deducted from the gross amount paid to a non-resident person on account of royalties and fees for technical services.
Mining companies are subject to sales tax, additional profits tax and a resource rent tax rate based on profitability levels. Foreign companies and their non-Muslim stakeholders are exempt from zakat. Depending on its organisational size, the mining entity may be liable to contribute towards the Workers’ Profit Participation Fund, Workers’ Welfare Fund, Workers’ Children Education Cess, Employees’ Social Security Contribution, and Employees’ Old-Age Benefits. There is also an excise duty levied on minerals as well as the surface rent and compensation. There is tax relief available on importing mining machinery and industrial raw materials for Pakistani mining companies and the mineral industry generally.
The details of such royalties payable to the state are contained in Rule 65 of the Rules. In the case of minerals other than base metals or coal, for example, the royalty is determined based on the fair market value of the mineral or group of minerals.
VII OUTLOOK AND TRENDS
In 2015, an interesting matter came to light. Internationally renowned geologist, Fuzail Siddiqui, approached our law firm in 2015 for the filing of an interesting writ petition. The background of the matter was that the geologist had advised the then-secretary of Mines and Minerals, Punjab to help with inclusion of taking into account international standards in implementation of the National Mineral Policy in 2013. International standards now have a legal requirement that conduct of mineral exploration and reporting of results must be done by a ‘Qualified Person’ who has at least a BSc Degree in Geology, experience in the type of mineralisation and membership of an authorised professional organisation. However, this aspect of the National Mineral Policy implementation has remained in abeyance so far, and Fuzail Siddiqui is now leading a writ petition to ask the courts to order the implementation. He is convinced that adaptation of the legal concept of Qualified Person is one change that will trigger the process of much desired efficient and effective increase in the contribution of minerals to the betterment of the economy of Pakistan.
The years 2015–2016 have been a continuation of ongoing debates on the interpretation and effect of the 18th Amendment upon Article 172(3). The oil and gas producing provinces are entitled to have 50 per cent ownership and management control over mineral resources in their respective regions. There is an ongoing tussle of interpretation between provinces and the Federal Ministry of Petroleum and Natural Resources on Article 172(3). This is because the confusion has caused Sindh to claim its exclusive right in the extension of exploration licences to oil and gas companies, while Baluchistan has demanded that the Ministry of Petroleum and Natural Resources be abolished. This has halted many hydrocarbon and mining projects in the past year, hence a consensus framework between the federal petroleum ministry and respective provinces is long overdue.
Authored by Barrister Aemen Maluka
[1] Aemen Zulfikar Maluka is executive director and founder of Josh and Mak International.
[2] www.dawn.com/news/780568/the-reko-diq-saga.
[4] 2015 CLC 1762 Fateh-Ul-Mulk Ali Nasir v. Government Of Khyber Pakhtunkhwa (Peshawar-High-Court) which involved Section 49 Of The Khyber Pakhtunkhwa Mining Concession Rules, 2005, Rr 142 & 204 – Notification No. 10/31-Sota. Ii (Hd) 173 Dated 31 July 1975, published in N-WFP Government Gazette, Extraordinary, Dated 5 August 1975 – Constitution Of Pakistan Articles 199, 23, 24, 172 and 173.
[6] It was further added that under Government of Khyber Pakhtunkhwa Notification No.10/31-SOTA.II(HD)173, dated 31-7-1975, all rivers, river beds and rivulets had been declared to be state property.
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