THE FORIEGN INVESTMENT (Protection and Promotion) ACT, 2022

Yousaf Amanat & Associates | View firm profile

On December 14th, 2022, Pakistan passed perhaps its most useful and important law regarding foreign investment so far.

The law accords protection to “qualified investments”. Qualified investments have been defined as those investments which fall within First Schedule of the Act and to fall within the First Schedule of the Act the qualification is that investment should be at a minimum of USD 500 million. This is a good qualification. For investment to be USD 500 million or beyond you would as a foreign investor definitely want to protect the same.

In a major progressive act, the law further provides that the qualified investment will continue to enjoy protection even if this law is repealed or amended unless the overriding law specifically provides otherwise.


Exemptions from: taxes, cesses and customs duties, labour laws such as the worker’s welfare fund.  Ease of dealing in foreign exchange.

Secrecy in banking regulations as well as immunity from taxation authorities as to source of funding of accounts.


Creation of the office of an investment ombudsman for looking into complaints of investors under the Act.


In case of conflict with other laws, the Act to prevail.


The Reko Diq Project becomes the first qualified investment under the Act.

The Supreme court of Pakistan declared an Agreement signed between the Government of Pakistan, Barrick Gold and Antofagasta PLC as legally binding. And I just cannot believe that I lived to see this day.

It was exactly 09 years ago when I while sitting in the same Supreme Court of Pakistan witnessed the Chief Justice of Pakistan declare the mining lease and the efforts of Barrick and Antofagasta’s SPV TCC to acquire the mining lease as well as the Chagai Hills Joint Venture Agreement and with it BHP Billiton’s efforts as completely illegal.

I and the entire legal team was crest fallen. For a year we had tried our best that this day should not come. We would later realize that having succeeded in managing to deflect all attacks by a very gung-ho Chief Justice to the international arbitration process was in fact our real victory.

For the next 09 years Barrick and Antofagasta launched a brilliant legal strategy before the ICC and ICSID. They patiently went through the processes, the malicious news campaign launched against them in Pakistan, harassment of their employees in Pakistan and the unrealistic offer of negotiations from one government to the other. They prevailed. The project has been revived. The Supreme Court of Pakistan has ratified an Agreement between the Government of Pakistan and Barrick for the restart of the Project. Barrick is a 50% shareholder in the Project with the rest of the shareholding divided between Pakistan’s stated owned entities and the province of Baluchistan.


This is a massive project and ushers the opening of the mining industry in Pakistan. The Tethyan Belt is rich beyond imagination in both copper and gold. The Reko Diq Project is estimated to last for a total of 40 years but the belt has numerous other exploration sites which can usher in many other Barricks and BHPs. The Reko Diq Project alone has the potential to yield its investors a whopping USD 11 billion. Tanjeel, next to the Reko Diq Project is another potential source for Copper and Gold. The untapped potential of the Tethyan Arc is very real.


For a Project as massive as the Reko Diq Project you need the Government on your side. The military establishment which provides security to Projects in volatile areas such as Balochistan perhaps did not understand the magnitude of the Project. Misconceptions were created by the local media as well as the Government’s legal team that Barrick and Antofagasta would lose the arbitration and that in fact Pakistan processed the technical know how to operate the Project. For a country where this was to be the first mining project, it is beyond me how we believed that we possessed the technical know how to operate the Project.

I think once the Government realized that neither were they going to win the legal battle nor did they possess the legal know how on operating the Project, everything and everyone else just basically fell into place.

Because this is an article related to the law, I will stress on the fact that Barrick and Antofagasta followed the legal process to the T. From the various notices we sent to the Government under the Chagai Hills Joint Venture Agreement regarding the initiation of the dispute to patiently following the Arbitration process before ICSID and ICC, the companies demonstrated to the Government of Pakistan that should they be denied their legal right in the future too without just cause, the Government would lose.

The creation of the Foreign Investment (Protection and Promotion) Bill, 2022 is a case in point.

BHP Billiton back in 1996 had legally acquired concessions, the only difference between BHP and Barrick/Antofagasta was that the Government was not involved in an international Arbitration with BHP.

The massive Arbitration Award has been the game changer.


The Lesson for investors: follow the legal process. Use international arbitration clauses in agreements. When the clause exists do not under any situation submit to the jurisdiction of the local court.

The Lesson for the Government; let’s not mess things up this time. The Mining Industry will be the business game changer for Pakistan.

About the Author:

The author was counsel for TCC during the pre feasibility and feasibility for the Reko Diq Mining Project and had to endure the then Chief Justice during the Reko Diq matter in the Supreme Court of Pakistan.

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