CPEC chal­lenge

The Pak Banker - - 4EDITORIAL - Sikan­der Ahmed Shah

THE China-Pak­istan Eco­nomic Cor­ri­dor has be­come a con­tentious political is­sue. Re­cently, the KP chief min­is­ter re­proached the cen­tre and Pun­jab. He said CPEC's western route travers­ing KP had been re­stricted only to the roads whereas ma­jor in­vest­ment and en­ergy projects (eg fi­bre op­tic lines, rail­way tracks etc) linked to CPEC were be­ing planned on the east­ern route.

While CPEC's do­mes­tic di­men­sions are hotly de­bated within Pak­istan, few have fo­cused on the in­ter­na­tional an­gle. Re­al­is­ing CPEC is con­tin­gent upon en­forc­ing mul­ti­ple agree­ments en­tered into be­tween China and Pak­istan. Un­der in­ter- na­tional law, Pak­istan is cat­e­gorised as a 'du­al­ist state' ie for treaties signed by Pak­istan to be lo­cally bind­ing, im­ple­men­ta­tion leg­is­la­tion is re­quired do­mes­ti­cally through the fed­eral leg­is­la­ture. From the per­spec­tive of na­tional law, the process is con­sid­ered the rat­i­fi­ca­tion of treaties signed ear­lier.

The Pak­istani govern­ment has en­tered into sev­eral trade and in­vest­ment treaties with China that pre­date CPEC but that still have im­mense rel­e­vance, in­clud­ing the China-Pak­istan Bi­lat­eral In­vest­ment Treaty (1989), China-Pak­istan Free Trade Agree­ment (2006), and the China-Pak­istan Agree­ment on Trade and Ser­vices (2009). For CPEC, Pak­istan has inked many more deals in­clud­ing over 50 MoUs.

Un­der the Vi­enna Con­ven­tion on the Law of Treaties, any agree­ment gov­erned by in­ter­na­tional law qual­i­fies as an en­force­able treaty when it is ex­pressed in writ­ing be­tween the states that in­tend to com­mit them­selves. The in­tent to bind need not be ex­pressed and can be in­ferred from the cir­cum­stances.

It is in light of this rule that the In­ter­na­tional Court of Jus­tice, in a case be­tween Qatar and Bahrain, found con­sent im­plied in the gen­eral min­utes of a meet­ing, in turn, cre­at­ing a bind­ing treaty. Even pacts be­tween states that do not meet Vi­enna Con­ven­tion re­quire­ments can qual­ify as bind­ing in­ter­na­tional agree­ments un­der cus­tom­ary in­ter­na­tional law cre­at­ing re­spon­si­bil­i­ties, and - in the case of a breach - reme­dies.

Thus, from an in­ter­na­tional law per­spec­tive, vir­tu­ally all agree­ments and MoUs signed by Pak­istan are legally en­force­able treaties, even if th­ese ac­cords are con­sid­ered soft-law or non­bind­ing in­stru­ments by many do­mes­tic stake­hold­ers. While Pak­istan con­tin­ues to as­sume new in­ter­na­tional obli­ga­tions, vir­tu­ally none of th­ese com­mit­ments has re­sulted in the pas­sage of the cor­re­spond­ing do­mes­tic leg­is­la­tion. In fact, the process of rat­i­fi­ca­tion of in­ter­na­tional treaties is far from clear un­der the Pak­istani do­mes­tic le­gal frame­work.

Many CPEC-linked treaties and ac­cords, do not ex­clu­sively deal with one but sev­eral forms of in­vest­ment and com­mer­cial ac­tiv­ity which ap­pear to fall un­der the Fed­eral Leg­isla­tive List: Part I and II, as well as un­der the resid­ual ju­ris­dic­tion of the provinces, of­ten at the same time. In­vest­ments per­tain­ing to ports, rail­ways, min­er­als, oil, nat­u­ral gas and elec­tric­ity re­quire pol­icy for­mu­la­tion and regulation by the Coun­cil of Com­mon In­ter­ests. If a prov­ince is dis­sat­is­fied with its de­ci­sion, the mat­ter is re­ferred to par­lia­ment and put to a joint vote of both houses. Fur­ther, if smaller fed­er­at­ing units feel that CPEC is be­ing ap­pro­pri­ated by the larger provinces they might also be hes­i­tant to pass pro­vin­cial leg­is­la­tion to im­ple­ment CPEC obli­ga­tions in ar­eas that fall un­der their resid­ual ju­ris­dic­tion. All this political ac­tiv­ity, or in­ac­tiv­ity, can de­lay the im­ple­men­ta­tion of CPEC.

Af­ter the pas­sage of the 18th Amend­ment, the provinces were em­pow­ered to man­age their fis­cal affairs more in­de­pen­dently and to raise funds through var­i­ous forms of tax­a­tion, sur­charges and roy­al­ties. A year ear­lier, the sev­enth NFC Award was mod­er­ately ap­pre­ci­ated by the smaller provinces for achiev­ing a more eq­ui­table dis­tri­bu­tion of fed­eral rev­enue.

To­day, it is un­cer­tain how the re­cently cre­ated spe­cial eco­nomic zones (with their cor­re­spond­ing tax regimes) for CPEC will af­fect the fis­cal pow­ers and rev­enue-gen­er­at­ing ca­pac­ity of the provinces granted un­der the amend­ment. Fur­ther, be­cause of the ter­ri­to­rial am­bi­gu­ity of Fata and Gil­git-Baltistan, con­fu­sion ex­ists over shar­ing of rev­enues or rents with th­ese ad­min­is­tra­tive units. In con­text, the role of the Na­tional Eco­nomic Coun­cil and CCI for har­mon­is­ing fed­eral-pro­vin­cial ties vis-à-vis CPEC is not clear.

As a rule, Pak­istan should only en­ter into treaties for which it has the req­ui­site do­mes­tic political con­sen­sus and af­ter it has cre­ated the nec­es­sary political and le­gal space for their ex­e­cu­tion. Once it en­ters into a treaty, it is bound to make it part of do­mes­tic law and to ex­pe­di­tiously im­ple­ment its obli­ga­tions.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.