Reko Diqheads (Updated)

Remember this story in The News on November 3 by its Group Editor, Shaheen Sehbai? The front page 'expose' of an allegedly massive corruption scandal around the Reko Diq copper and gold mining project in Balochistan set tongues wagging all over Pakistan and among Pakistani expatriates abroad. The scale of the scandal was said to dwarf all previous scandals. The headline screamed:

"$260 billion gold mines going for a song, behind closed doors"

 Front page of The News on November 3, 2010

Now, in case you didn't follow the story or do not remember the exact words Mr. Sehbai used in his typically convoluted but bombastic style, let me briefly remind you what the investigative story said. Mr Sehbai begins by building conspiratorial suspense, clearly implying that President Zardari and his partymen are on the take to sell national wealth down the river to line their own pockets:

"Quietly, and below the media radar, some 20 top corporate bosses and lobbyists of two of the world’s largest gold mining groups have been meeting President Asif Zardari, Prime Minister Gilani, Governor State Bank and others in Islamabad throughout last week, pressing them to quickly hand over one of the world’s biggest gold and copper treasures found in Balochistan at Reko Diq, worth over $260 billion, to their companies, and for peanuts. Before these highly enticing visits of the mining tycoons to clinch the deals, which followed intense behind-the-scene negotiations and bargaining through middle men, some highly bizarre developments have been taking place, leaving experts and the rest of the mining world stunned, amazed and confused."

He expands on this tone:

"There is a plethora of documents, which prove that almost everybody involved is trying to deceive everybody else, the real picture is never presented, misleading statements and even contradictory claims have been made in the media, the issue has been kept confused as the real mega deal is maturing fast behind closed doors."

Citing the New York Times story that posited that Afghanistan was sitting on reserves of lithium worth up to a trillion US dollars (a story, it should be pointed out, that has itself been seriously questioned as a Pentagon attempt to sway public opinion in the US), Mr. Sehbai adds:

"Pakistan, it is estimated in mining circles, has more deposits than Afghanistan, so the enormity of the riches and the cost of the backdoor deals can easily be guessed. “It would be the mother of all the deals and grandfather of all the corruption cases in Pakistan, put together,” according to one expert. Reading the piles of documents, statements, interviews and legal papers available with The News, the picture that emerges is one of a grand deception, loot and plunder that never happened before on such a scale and the facts, untruths, half-truths, attempts to sabotage, frauds and backdoor bribes, are all documented. It all started in the Musharraf era but once the massive scale of the stakes involved became apparent to the PPP government, the Raisani/Zardari camp quickly jumped into the fray to renegotiate the deal, behind closed doors."

So far so good. I was hooked. Imagine my surprise then, when in an 'appearance' on tonight's Kehnay Mein Kya Harj Hai programme on Geo, Sehbai seemed to backtrack from the thrust of his story. You can see his opening salvo in the first few minutes of the following clip:


Part 1:




Basically, Sehbai says this is an old story, that he didn't really break the story and that all he did was raise questions about the murkiness of the deals being made so that someone could investigate it properly. Say what? I thought he had already worked it all out for us! In fact, I was so shocked at the weak defence of his sensational story (the host, Mohammad Mallick, then helps him out by saying that Sehbai's actually not accusing anyone directly of anything, he just wants things that are shrouded in mystery to be made clear) that I actually sat up and began to watch the programme with interest.

Sehbai really had me intrigued when he subsequently added that he had over 1,000 documents lying with him but that it is impossible to make sense of them by reading them in two to four days (so that's how long Sehbai worked on his investigative piece!), claiming that his story was actually a plea for someone to "go deeply into this and find out what is going on." I was intrigued, you see, because I kind of remembered Sehbai referring to a "deep study" of the documents in his possession, after which he had made the following declaration (as quoted above):

"Reading the piles of documents, statements, interviews and legal papers available with The News, the picture that emerges is one of a grand deception, loot and plunder that never happened before on such a scale and the facts, untruths, half-truths, attempts to sabotage, frauds and backdoor bribes, are all documented."

I am only reiterating that quote to drive home the point that Mr Sehbai has just shown himself to be either a coward or one of the most intellectually dishonest reporters to grace journalism in Pakistan. I also decided to go back and re-read his story and lo and behold certain other things began to stand out for me. For one, his source seems to be a representative of an American mining company with ties to the US establishment (keep in mind that the mining company being attacked in his piece is a Canadian-Chilean joint venture):

"“Because there is no effective investigating agency like NAB operating in the country, it is just the right case for the Supreme Court and the Chief Justice of Pakistan to pick up the issue, put a hold on whatever is going on before any binding contracts and deals are signed, which may cause losses of billions of dollars, yes billions of dollars to Pakistan,” according to a corporate executive involved in the mining industry, based in New York. His company chairman is a reputed former three-term Congressman."

Vested interests, anyone?

Look, I am not so naiive as to think that a multi-billion dollar business deal such as this could take place in contemporary Pakistan without a huge amount of kickbacks and commissions (there is enough evidence that indicates every major deal involves corruption at various levels). But surely, one must also consider the motivations of corporations (and governments) that make such allegations about business rivals only so that they may perhaps themselves get a piece of the pie.

But even more interesting is that the entire basis of Sehbai's report is called into question by the representative of the company targeted, Tethyan Copper Company (TCC), on the Geo programme, which also brings in Balochistan politicians Lt. General (retd) Abdul Qadir Baloch (former Governor Balochistan and MNA of the PMLN) and Senator Dr Abdul Malik, President of the National Party for comments. Even the US$260 Billion figure seems, from the programme, to have been a product of Sehbai's flawed understanding of mining concepts. Samia Ali Shah, the Manager Corporate Communications for TTC more or less reduces the entire distinguished panel and the host, Mallick, to grasping at rhetoric and anecdotal hearsay. For those of you interested, I would strongly urge you to watch the whole programme, the remainder of which (following on from above) is provided below. It really is an eye-opener for all the wrong reasons:


Part 2:




Part 3:




Part 4:




I should probably reiterate that I am in no way arguing that everything about the Reko Diq deal is above board, that TCC is a model company or that there are no issues with the fairness of what Balochistan and Pakistan stand to actually gain from the exploitation of its mineral wealth. (I have heard enough rumours in Balochistan and elsewhere not to make any such judgement, especially without all the information.) And of course the media manager of a multinational is going to do what she is paid to do, i.e. defend her company. But irrespective of the undoubtedly exploitative nature of trans-national companies, what this programme clearly shows is the absolute and cringe-worthy understanding of economic issues across the board among most journalists and politicians. I have yet to understand why some journalists insist on writing on issues they don't even understand themselves.

You want to take on the big bad wolf of international extractive capitalism? At least get not only your facts but also your concepts right. To try and take them on with such half-baked knowledge is suicide.



: : : UPDATE : : :

Further intellectual dishonesty. Today's The News (November 10) carries a story on the back page, ascribed to the Monitoring Desk,  with the heading "Reko Diq Company accepts probe by independent commission." The story tries to spin the embarrassing blowing up of Shaheen Sehbai's claims in his face and the participants' and host's inability to ever corner the company on any facts, by saying:

"The Tethyan Copper Company Pakistan (Private) Limited, a joint venture between two major Canadian and Chilean mining companies, working on the multi-billion dollar controversial gold and copper mines project at Reko Diq in Balochistan agreed on Tuesday to set up an independent commission of experts to examine the numerous confusing aspects of the huge mining deal to the satisfaction of both the public and official stakeholders including the Balochistan government.

The spokesperson of the Tethyan Copper Company (TCC), Samia Shah conceded in the TV show “Kehnay Mein Kia Harj Hai?”, hosted by Mohammed Malick on Tuesday night, that her company will welcome such an independent commission. Other participants of the programme while welcoming this development however insisted that such an expert commission must be chosen and paid for by the government of Balochistan to exclude any possibility of the company influencing the commission’s findings."

As you may verify from the recording of the programme posted above earlier, rather than "conceding" anything, Ms. Shah had, in effect, dared (in a polite way) the participants to come up with facts and figures to contradict her/ TCC's claims through any independent commission. In addition, the last line the para quoted above is, simply, pure and utter fabrication. In fact, Mohammad Mallick had tried his best to get Ms. Shah to agree to TCC paying for the expert commission, more than once saying that the company had enough "dollars" to fund it and that he was trying to save the government money. It was Ms. Shah rather than "other participants" who pointed out that TCC paying for an expert commission might compromise the perception of its independence and refused to do commit to it.

When will The News' / Jang Group editors learn to take contradictions with some grace?