Reposted from Express Tribune | June 29, 2012 | Link to full story

By Zafar Bhutta

ISLAMABAD: British High Commissioner to Pakistan Adam Thomson has said that the verdict in international arbitration on the Reko Diq saga may have chilling affects on foreign investors.

"Supreme Court of Pakistan's verdict in certain cases whether it relates to Reko Diq or others is a sign of discouragement for foreign investors," Adam Thomson said while talking to selected journalists on Wednesday night.

Tethyan Copper Company (TCC) filed for international arbitration to protect its legal rights after Balochistan rejected its mining lease application. Tethyan Copper - a joint venture between Chilean copper producer Antofagasta and Canada's Barrick Gold - owns the massive Reko Diq project in Balochistan with reserves estimated at 2.2 billion tons of gold and copper.

"There is a risk of misconception from some of its decisions and Reqo Diq is the latest one," He said that Pakistan should think carefully about it.

Responding to questions about litigation between government of Pakistan and international companies, the British High Commissioner said that a strong judicial system will not only uphold Pakistan's interest but was extremely important to foreign companies.

He said that Pakistan and the United Kingdom signed a Bilateral Investment Treaty (BIT) in 1994 providing protection to companies in both countries. Pakistan is attracting British companies after promulgation of this agreement, he added.

He said that the 10% increase in trade compared to the previous year was not bad keeping in mind the global recession.

"UK-based exploration company Premier Oil has been working in the oil and gas sector of Pakistan for the last 10 years," he said adding that there are more such companies.

He said that British companies are doing very well in Pakistan which reflected from their profits. "These companies also face challenges with regulatory bodies being the biggest challenge," he said. Although, he said, Pakistan in South Asia is comparatively a good place to do business, corruption is also a problem as few companies find it difficult to work in certain sectors.

UK has very stringent Anti-Bribery Act which governs UK companies in Pakistan so that they would stay clean. "Some changes in reorganisation in government, ministries, regulatory bodies after the 18th Constitutional Amendment are also challenging to those British companies considering to invest in Pakistan," he said adding that perception of insecurity is very high among them. "When I'm in UK, I try hard to overcome such impressions," he added.

"India is second largest investor foreign manufacture holder in UK," he said adding that all Pakistani companies should also see UK as a gateway to European Union. "We are the second largest investor in Pakistan and aim to become the largest," he concluded.

Published in The Express Tribune, June 29th, 2012.