IN THE SUPREME COURT OF PAKISTAN  
(Original jurisdiction) 
 
 
 
 
 
Present: 
 
 
 
 
Mr. Justice Jawwad S. Khawaja 
 
 
 
 
Mr. Justice Khilji Arif Hussain 
 
 
 
 
Mr. Justice Gulzar Ahmed 
 
Constitution Petition No: 46 of 2013. 
(Application by Mr. Abdul Hakeem Khoso Advocate) 
 
 
 
 
And 
Civil Misc. Application No: 278-Q of 2013. 
(Application by Sardar Abdullah Jan against Mari 
Petroleum Company Ltd.) 
 
 
 
 
And 
Human Rights Case No: 36052-S of 2013. 
(Application by Abdul Ghafoor for redressal of  
his grievance against ENI Gas Field Jamshoro). 
 
 
In attendance: 
 
 
For the Petitioner (s):   
Mian Abdul Rauf, ASC (Not Present) 
For the Applicant (s):   
Mr. Anwar Mehmood Nizamani, Adv. (Not Present) 
Syed Iftikhar Hussain Gillani, Sr. ASC (Not Present) 
 
For the Federation:  
 
Mr. Shah Khawar, Addl. AGP (Not Present) 
For Govt. of Sindh:  
 
Mr. Adnan Karim Memon, Addl. Advocate General 
For Govt. of Balochistan:  
Mr. Naseer Ahmed Bangalzai, AAG (Not Present) 
For Govt. of Punjab:   
Mr. Hanif Khatana, Addl. A.G (Not Present) 
For Govt. of KPK:  
 
Mr. Abdul Latif Yousafzai, A.G (Not Present) 
Amicus Curiae:  
 
Mr. Khalid Javed Khan, AG Sindh.  
For M/o P & NR:  
 
Mr. Nazir Ahmad Malik, Dir (L) 
For M/o Finance: 
 
Mr. Muhammad Furqan Khan,   
 
 
 
 
 
 
 
Dy. Secretary Finance 
 
For SSGC:  
 
 
Mr. Asim Iqbal, ASC 
For Mari Petroleum Co.:  
Mr. Khaleeq Ahmed, ASC 
For OGDCL:   
 
Mr. Irfan Babar Khan, GM (CSR) 
For UEPL :  
 
 
Nemo 
 
Date of Hearing: 
 
28.10.2013 (at Karachi). 
 
 Const. P. 46 of 2013 
 
2 
 
 
 
 
 
 
J U D G M E N T. 
Jawwad S. Khawaja, J.  Pakistan has been blessed with a diverse array of natural 
resources including mineral oil and natural gas. The people of Pakistan are the ultimate 
owners of such resources through their Governments and State controlled entities. The Oil 
and Gas Development Corporation Limited (OGDCL) which is a State enterprise and 
more than 25 other Companies, domestic and international, are engaged in exploration 
and mining of oil and gas in various districts covering in excess of 30% of the land area of 
Pakistan. The activities of these Companies inevitably have a disruptive effect on the 
populations residing in the areas where they operate.      
 
2. 
The world of today is no longer one of unbridled capitalism and laissez-faire. 
Corporate enterprises doing business the world over are being forced to consider the 
impact of their activities on the immediate social and environmental surroundings, 
habitat and infrastructure and on the people of the areas where such enterprises operate. 
While Corporate Social Responsibility (CSR) may be voluntary, the Government, 
recognizing the importance of activities of companies in the oil and gas sector, has 
incorporated provisions in contracts and official policies, setting out obligations of oil 
Exploration and Production (E&P) Companies operating in Pakistan. The present case 
deals with these contractual and legally mandated obligations of E&P Companies towards 
the environment and the societies living in areas where these Companies are engaged in 
the exploration and extraction of mineral oil and gas. 
3. 
The present case also emphasises the importance and utility of Article 184(3) of the 
Constitution as will be evident from the circumstances considered below. This is 
highlighted by the manner in which this matter has arisen and has been taken up by this 
Court in exercise of jurisdiction under Article 184(3) of the Constitution. 
4. 
While it is necessary for the economic well being of the country that the natural 
resources and mineral wealth of the country be exploited for the public weal, it is, at the 
same time, necessary that the welfare of the people residing in areas where E&P 
Companies operate, is not adversely impacted and also that the inhabitants benefit from 
the economic activity resulting from such operations and from the natural/mineral 
resources extracted from their local areas. This Court has had an expansive approach 
 Const. P. 46 of 2013 
 
3 
when setting the boundaries of the right to life in the celebrated judgement of Shehla Zia v. 
Federation of Pakistan (PLD 1994 SC 693), with later precedents highlighting the continuing 
expansion of this approach for which reference can be made to the cases titled General 
Secretary, West Pakistan Salt Miners Labour Union (CBA) Khewra, Jhelum v. Director, 
Industries and Mineral Development, Punjab, Lahore (1994 SCMR 2061) and Abdul Wahab v. 
HBL (2013 SCMR 1383).  
5. 
This matter has its genesis in a simple event organised by the Tando Adam Bar 
Association (District Sanghar). The oath taking ceremony of the elected Office bearers of 
the Association  took place on 10.4.2013. The Chief Justice of Pakistan was invited as Chief 
Guest to administer the Oath of Office to such office bearers. Mr. Abdul Hakeem Khoso 
Advocate, President of the Tando Adam Bar Association, in his speech on the occasion 
said inter alia, that “our district [Sanghar] has a number of oil and gas fields and the oil exploring 
companies are acting in violation of law and the terms and conditions of the [petroleum concession] 
agreements which they executed with the Government of Pakistan whereby they are bound to 
control environmental pollution, provide jobs and gas facility to the local people … [and] spend 
specified amount[s] on the [local] infrastructure such as roads, schools, hospitals and the 
betterment of local people”. A copy of the speech was marked by the Chief Justice to the 
Human Rights Cell (HRC) of the Court, for a report which was numbered as HRC 
No.13371-S/2013. Comments were sought by the HRC from the Secretary, Ministry of 
Petroleum and Natural Resources (MPNR) and OGDCL. The comments were not found 
satisfactory and it was, therefore, directed that the matter be put up in Court as a petition 
under Article 184(3) of the Constitution. Thus the first hearing of the case took place on 
19.8.2013. Thereafter, the matter was listed by the Court on various dates of hearing at 
Islamabad and at Karachi on 19.9.2013 and lastly on 28.10.2013 when judgment in this 
matter was reserved.  
6. 
It is important to note that the Ministry of Petroleum and Natural Resources 
through the Director General Petroleum Concessions (DG PC) regulates and oversees the 
grant of permits, licenses and leases for exploration, development and production, to E&P 
Companies. Such licenses and leases are in respect of blocks covering specific 
geographical areas located in various districts. At times exploration blocks straddle the 
 Const. P. 46 of 2013 
 
4 
boundaries of administrative districts. The MD OGDCL and DG PC first appeared in 
Court on 19.8.2013 and 9.9.2013 respectively in response to notices issued to them. 
Thereafter, a number of persons who became aware of the proceedings filed applications 
for being impleaded as intervenors in the case. Amongst these applicants were Sardar 
Abdullah Khan belonging to District Harnai (Balochistan) who sought action against Mari 
Gas Company, Roshan Ali of Ghotki (Sindh) and Nasir Khan Khattak, Member National 
Assembly from Karak (KPK). They filed applications against E&P Companies operating 
within their respective local areas. The primary thrust of these applications was that E&P 
Companies that were operating within the home districts of the applicants were failing to 
fulfil their contractually mandated obligations in respect of the welfare and uplift of their 
areas of operation. The hearings in this case have shown that these complaints are not 
without substance and that the Federal, Provincial and Local Governments have failed to 
ensure performance of the obligations of E&P Companies.      
7. 
From the manner in which this case has arisen it is encouraging to note that 
public-spirited people such as Mr. Abdul Hakeem Khoso Advocate and Mr. Anwer 
Mehmood Nizamani Ex-President District Bar Association Sanghar had not only taken 
note of the adverse impact of E&P Companies active within District Sanghar but had 
taken the important step of bringing the matter to the attention of the Chief Justice at the 
oath taking in Tando Adam. The significance of Article 184(3) of the Constitution in 
enforcing the fundamental rights of the people all over Pakistan without the necessity of 
having a petitioner from each district is evident from the present case. In the ordinary 
course it would have been extremely difficult logistically and financially for a public-
spirited resident of District Sanghar to file and pursue legal recourse in the Civil Courts or 
in the constitutional Courts. Even if such recourse had been taken it would have remained 
confined to issues relating to District Sanghar. It is only on account of Article 184(3) of the 
Constitution and the willingness and ability of the Court to take notice suo motu that the 
entire country spread over more than 105 Districts has been brought within the compass 
of one initiative taken by a Taluka Bar Association and then proactively dealt with by the 
Human Rights Cell of the Court and then in Court hearings. It should be obvious from the 
facts of this case that conventional methods of seeking legal redress can be grossly 
 Const. P. 46 of 2013 
 
5 
inadequate for people without sufficient means, particularly when they may be pitted 
against more resourceful individuals and corporate entities. This case sums up the 
rationale behind Article 184(3) of the Constitution, and the wisdom and foresight of the 
framers who sought an egalitarian polity by equalising the ordinary citizen with those of 
greater resources and means, in matters of "public importance with reference to the enforcement 
of the Fundamental Rights" guaranteed by the Constitution.       
8. 
Before delving into the submissions made before us during these proceedings, it is 
necessary to lay out the legal regime of the social welfare obligations of E&P Companies. 
There is a simple calculus underpinning this case which has been the reason why the 
Court has taken proceedings under Article 184(3) of the Constitution. Simply put, the E&P 
Companies operating in Pakistan are contractually obliged to make specified payments in 
lieu of exploration rights and privileges, as will be discussed shortly. According to a 
report submitted by the DG PC (CMA 6508/2013), over the years these contractual 
commitments of E&P Companies have amounted to many millions of US Dollars. 
Furthermore, as per presentation on Welfare Obligations of E&P Companies submitted by 
the MPNR, the total sum of royalty payable by these Companies in rupees was more than 
Rs.160 billion in respect of crude oil and more than Rs.293 billion in respect of gas 
extracted from the various districts in Pakistan in which the E&P Companies are active. 
These are very substantial amounts considering particularly the inadequacy of funds 
available to ensure even the very basic needs of the people of Pakistan such as clean 
drinking water and quality education. These sums, it may be reiterated, are vested 
beneficially in the People. It is all the more important in this context that enforcement of 
the contractual commitments of E&P Companies in relation to social welfare obligations 
etc. are properly monitored and rigorously enforced. Those responsible for ensuring 
fulfillment of these payment obligations including the DG PC, the Provincial and Local 
Governments are fiduciaries of the people in this respect and it is their duty to recover the 
agreed social welfare obligations and to ensure spending of the same in the most efficient 
and optimal manner for the benefit of the people.  
9. 
Some of these obligations are expressed in monetary terms while others such as 
employment and training opportunities are specified differently. At this point, a brief 
 Const. P. 46 of 2013 
 
6 
overview of the contractual commitment of E&P Companies can be made. As a standard 
practice, a Petroleum Concession Agreement (PCA) is entered into between an E&P 
Company and the Government, through the President of Pakistan. A PCA grants an E&P 
Company the licence to explore and extract oil, gas and hydrocarbons from a specified 
area for a specified period of time. A typical PCA contains clauses which ensure the 
development, capacity building and environmental protection of the area from which the 
E&P Company extracts oil and gas. It is clear, therefore, that E&P Companies must fulfil 
the social welfare obligations which they agree to in the PCA they sign with the President 
of Pakistan. In this respect, it is helpful to reproduce the following clauses of the 
Exploration Licence for a Petroleum Concession Area, which was placed on record by the 
learned Additional Attorney-General for Pakistan: 
" 
. . . 
5) 
The Licencees shall simultaneously with the grant of the Licence but no 
later than thirty (30) days thereafter enter into a Concession Agreement 
with the President (of Pakistan) for the Licence Area... 
6) 
. . . 
(e)  
The unskilled persons to be engaged as labour should be taken from the 
inhabitants of the area particularly where the work has to be carried out 
with preference to displaced landowners. Rest of the manpower will also be 
taken from the area if available. Locals of the area will be considered for 
grant of subcontracts provided their terms are competitive. 
(u)  
The forest property will not be damaged and in case damage occurs during 
any survey, the Licencees shall be responsible for it as per provisions of the 
Forest Act. 
(v)  
The Licencees will not use forest roads without permission. However, 
where the use of these roads is permitted, the Licencees will be responsible 
for proper maintenance of such roads. 
zb. 
 Investment in social welfare schemes and training will be made in 
accordance with the provisions of the Petroleum Policy, 1997 [now 2012]. 
The Licencees provide the manpower requirements (Category-wise) during 
different phases of operation to DG PC for approval. 
zd.  
The Licencees will strictly follow the environmental protection and 
pollution control laws and guidelines as notified by the Government from 
time to time. 
 
10. 
The PCA for the aforesaid area reads as under in relation to social welfare 
obligations: 
 Const. P. 46 of 2013 
 
7 
29.10 The Working Interest Owners, other than the GOVERNMENT 
HOLDINGS, 
shall 
be 
required, 
in 
consultation 
with 
local 
administration/Provincial Governments and the Ministry, to undertake schemes of 
Social Welfare such as fight against narcotics, promotion of sports, rehabilitation of 
the mentally retarded and handicapped children, improvement of educational 
facilities, drinking water, health, roads, and grant of scholarships for local students 
and shall spend during the period prior to Commercial Production period not less 
than twenty thousand US Dollars (US $20000) per year. After the commencement 
of Commercial Production in the Area, the following minimum amounts will be 
spent during each year: 
 
Production Rate 
(BOE/day) 
Amount/Year 
(US Dollars) 
For all Zones 
Less than 2000 
2000 – 5000 
5000 – 10000 
10000 – 50000 
More than 50000 
20000 
40000 
75000 
150000 
250000 
 
These amounts will be increased from time to time by mutual agreement of the 
Working Interest Owner mentioned above and THE PRESIDENT.  
 
Subsequent changes in the Petroleum Policy have enhanced these financial obligations. 
The current policy is that announced in 2012. 
11. 
As noted above, E&P Companies are actively exploring nearly one-third of the 
land area of Pakistan. In view of the vast numbers of people affected by the issues arsing 
herein, the case was deemed to raise matters of public importance relating directly to their 
fundamental rights; especially those guaranteed in Articles 9 and 14 of the Constitution. 
The Court sought replies and a number of reports from the MPNR, OGDCL and the DG 
PC. The Court also considered the applications submitted by the various parties from 
Harnai, Ghotki and Karak, to join the proceedings as detailed above. The conclusion 
arrived at by the Court was that the social welfare obligations imposed on E&P 
 Const. P. 46 of 2013 
 
8 
Companies were not being met. To this extent the DG PC acknowledged that the 
concerned agencies and E&P Companies had taken these obligations casually and also 
that there was inadequate monitoring and enforcement to ensure that such obligations are 
fulfilled.  
12. 
The stipulation of social welfare obligations is not limited to the PCAs. The 
learned Advocate-General Sindh, Mr. Khalid Javed Khan was requested to assist the 
Court as amicus curiae. He graciously accepted this responsibility and fulfilled it 
admirably. He also submitted his report wherein it was noted that binding social welfare 
obligations under the heads of social welfare, employment, training, production bonuses, 
marine research and royalty arose under successive petroleum policies, with the 
Petroleum Policy 2012 currently in the field. Furthermore, he submitted that the MPNR 
has issued separate guidelines for use of social welfare funds, production bonuses and 
marine research; and that the governments of Sindh and KPK have adopted these 
guidelines. The two provinces have also issued separate guidelines on production 
bonuses under the Petroleum Policy 2012. (These financial obligations are, for ease of 
reference, collectively referred to as the social welfare obligations.)  
13. 
The Petroleum Policy 2012 prescribes different percentages for each use. Ten 
percent of onshore royalty is to be used “in the district where oil and gas is produced for 
infrastructure development”. Onshore production bonuses are to be used for “social welfare 
projects in and around the respective contract areas”. Social welfare funds are to be used “to 
give lasting benefit to the [local] communities”. Seventy five percent of the marine research 
and coastal area development fee is to be utilised for “coastal area development”. 
Employment is for Pakistani nationals and training includes “internships/scholarships and 
training of local inhabitants”. It may be mentioned that unlike onshore production bonuses, 
production bonuses from offshore areas are not specifically required to be spent on the 
social welfare of local inhabitants. In any event, most of the social welfare obligations 
contained in successive Petroleum Policies have been reflected in the PCAs.  
14. 
Under the revised Social Welfare Guidelines issued by the DG PC dated 
20.04.2009, social welfare schemes involve only the relevant MNA, DCO and the 
concerned E&P Company. The schemes are prepared by the E&P Company in 
 Const. P. 46 of 2013 
 
9 
consultation with the local administration (in the context, just the District Coordination 
Officer), endorsed by the concerned MNA, executed by the E&P Company in 
coordination with the DCO, and monitored by the DCO who issues a completion 
certificate to the E&P company in respect of each social welfare scheme. The E&P 
Companies are also required to submit annual certificates from their statutory auditors 
showing that they have complied with social welfare obligations under the PCA and the 
Guidelines. During the course of hearings in this case it has become evident that either 
these processes are non-existent on ground or are undertaken without due care and 
diligence. Certification through auditors is currently not required to ensure proper 
utilization of funds appropriated towards a scheme. It is relevant that paragraph 6.3 of the 
Petroleum Policy 2012 authorises the DG PC to take “enforcement action” against any 
company “non-compliant with the terms of a permit, licence, lease, agreement and/or the Rules”. 
Enforcement, it appears, is almost non-existent. It is also quite apparent that the Social 
Welfare Guidelines dated 20.04.2009 are more in the nature of a suggested arrangement 
and do not create any institution or body within which the MNA, DCO and the E&P 
Company are formally supposed to perform their responsibilities. Nor do the Guidelines 
set out procedures for ensuring financial and implementation discipline. From the 
hearings in this matter, it is our view that enforcement actions need to be taken actively 
by the DG PC so that social welfare obligations are met in a timely manner.   
15. 
The guidelines for utilization of marine research fee dated 14.04.2009 create a 
committee called the Petroleum Marine Development Committee (PMDC). The 
Committee consists of MNAs and MPAs of the area, the DCO, two representatives of the 
E&P companies, and one representative each of the DG PC, National Institute of 
Oceanography and Centre of Excellence in Marine Biology (CEMB) of the Karachi 
University. The Committee is mandated to “approve the projects” and periodically review 
the implementation of such projects. The DCO is exclusively responsible for collecting 
and managing due production bonuses directly from E&P companies and execution of the 
schemes approved by the PSDC. The projects are required to be executed through third 
parties who are in turn required to provide completion certificates endorsed by the DCO 
to the DG PC and E&P Company. Completed schemes are supposed to be handed over to 
 Const. P. 46 of 2013 
 
10 
the local government. There are, in our view, certain aspects of these guidelines which 
may be inadequate for the purpose of ensuring optimum utilization of available funds for 
the maximum public good. 
16. 
The guidelines for utilization of production bonuses dated 29.10.2009 are similar to 
the marine research fee guidelines. These guidelines create a Petroleum Social 
Development Committee (PSDC) consisting of MNAs and MPAs having their 
constituencies in the District, District and Tehsil/Taluka Nazims, DCO and an E&P 
Company representative. The PSDC is mandated to “identify, prepare and approve 
sustainable schemes for the benefit of the Community” and periodically review the 
implementation of such schemes. The DCO is exclusively responsible for collecting and 
managing production bonuses directly from E&P companies and for execution of the 
schemes approved by the PSDC. Furthermore, completed schemes are supposed to be 
handed over, funded, and managed by the local government. However, there is no 
obligation under these Guidelines on anyone to evaluate a scheme or to produce any 
completion certificates as to the implementation (successful or otherwise) of a welfare 
scheme.  
17. 
The KPK government has issued regulations under the Petroleum Policy 2012 for 
utilization of onshore production bonuses. The KPK regulations are very similar to the 
Federal guidelines on the subject, except that the Committee to approve and review the 
projects replaces district and tehsil nazims with a representative of the concerned [DCO] 
at the District, Assistant Commissioner of concerned Tehsil and Divisional Monitoring 
Office (DMO) of Monitoring and Evaluation Directorate, P&D Department. The 
Government of  KPK  has  also,  by  way  of  good  governance, issued guidelines dated 
24-3-2012 for utilisation of royalties from oil and gas in the source districts. Under these 
guidelines, specified schemes are meant to be executed, supervised and monitored by a 
committee consisting of the DCO and MPAs from the district. The schemes also require 
clearance from all competent forums on the pattern of ADP schemes. 
18. 
It is also worth mentioning that Mr. Hakeem Khoso brought to light a directive 
issued by the Prime Minister dated 15-9-2003 which stipulated that “[t]he Prime Minister 
has been pleased to direct that gas be provided to villages falling in the radius of 5-KM from the gas 
 Const. P. 46 of 2013 
 
11 
source (Zamzama Gas Field, Tehsil Johi, District Dadu, Sindh). Prime Minister was further 
pleased to announce that this principle would apply to all gas fields and that gas may be provided 
to all the surrounding localities/villages falling in the radius of  5 km of all Gas Field, on priority 
basis.” (emphasis added). The reply filed by the MPNR on 29.06.2013 stated that the 
“Prime Minister’s directives [were] pertaining to the villages in the gas producing field Zamzama 
District Dadu and not for those Blocks which are situated in District Sanghar”. The Ministry’s 
stance is a clear deviation from the express words of the Prime Minister’s directive as 
highlighted above. 
19. 
From the foregoing discussion, it is apparent that the district is the basic 
administrative unit used for determining the entitlement to and the disbursement of 
social welfare obligations. There seems to be a proliferation of committees with varying 
memberships under different guidelines. For example, in the case of KPK, different 
committees and varying administrative regulations have been specified for utilization of 
royalty, production bonuses, and social welfare obligations, despite the fact that all three 
of these committees are meant to be District level and are charged with ensuring proper 
utilization of the funds accruing to the District on account of its petroleum resources. The 
geographical source and intended use of these various funds require that the same should 
be administered by the same body, even if these are under separate guidelines issued by 
separate authorities and through separate bank accounts as per the policy and contractual 
obligations of the Federal and Provincial governments. 
20. 
We also note that at present there is no central database or map showing which 
exploration blocks fall within which revenue district and tehsil/taluka and to what extent. 
The DG PC however, during the hearing informed the Court that the concession blocks 
had been mapped onto the administrative districts where the blocks straddled district 
boundaries. This would enable the DG PC and concerned functionaries to determine the 
area falling within a District and to then ascertain the proportionate amount available for 
a district from one concession or block. Efficient and smooth allocation and utilization of 
various welfare funds payable by E&P Companies to the relevant districts require that 
amounts due to such districts be pre-determined (just as they are in the relevant 
Petroleum Policy) and are independently verifiable and centrally available. This cannot be 
 Const. P. 46 of 2013 
 
12 
done by leaving the E&P Companies and the local inhabitants at the discretion of the 
DCO alone. The same consideration also applies to utilization of royalties in source 
districts as per the Petroleum Policy 2012. Moreover, the local inhabitants of relevant 
districts – the intended beneficiaries of welfare funds – have been allowed no direct 
participation in proposing new schemes or to object to ongoing or completed schemes. It 
seems all the more unreasonable that completion certificates of the welfare spending 
should be issued without inviting their comments. It is therefore necessary that public 
participation is ensured to receive and address the views of intended beneficiaries of each 
ongoing and completed welfare scheme. After all it is these beneficiaries who are the real 
owners and recipients of the benefits resulting from welfare schemes.         
21. 
Throughout the proceedings, it became clear to us that the current framework for 
the administration and disbursement of social welfare obligations is inadequate. 
Therefore, the Court has considered aspects of the utilization of these available funds, 
where such utilization can be streamlined and optimized, thereby ensuring that 
transparency and public access to these funds is duly translated into enforcement of the 
fundamental rights of the People, guaranteed to them, inter alia, by Articles 9 and 14 of the 
Constitution and the Principles of Policy enunciated in Chapter 2 of Part II of the 
Constitution. Here it is appropriate to refer to a submission made by Mr. Khalid Javed 
Khan learned amicus curiae. He, in his capacity as Advocate General Sindh has assisted the 
Court in the case of toxic effluent entering Manchhar Lake and the hazards connected 
therewith, resulting in death of marine life, degradation of an ecosystem and harm to the 
life and health of the local community. The learned amicus curiae pointed out that for 
efforts to cleanse and detoxify Manchhar Lake, funds are required but are presently 
unavailable. He submitted that funds generated by social welfare obligations under PCAs 
could be used for such projects, considering particularly that E&P Companies are active in 
and around District Dadu where Manchhar Lake is located. This is just one example of the 
possibilities and potential for utilization of such funds for the uplift of the living 
standards of the population of a source district and for reducing the environmental 
depredation in the concerned district. 
 Const. P. 46 of 2013 
 
13 
22. 
Although the preparation of appropriate guidelines is a policy matter falling 
within the executive domain, our examination of the present status of collection, 
expenditure, administration etc. of  social welfare funds and the preparation of guidelines 
shows that this aspect of the matter has not received the requisite attention. The rights of 
the people in the funds generated on account of social welfare obligations have a direct 
nexus with the fundamental rights mentioned above. These funds have either remained 
unutilized or have been under-utilized or the use of these funds has not been adequately 
monitored to ensure evaluation of spending. As an initial measure, therefore, we direct as 
under:- 
a) The DG PC and the relevant Provincial Government shall ensure 
diligent collection and monitoring of social welfare obligations of E&P 
Companies. 
b) The DG PC, the relevant Provincial Government and the Local 
Government within the area of activities of an E&P Company shall 
ensure optimum utilization of social welfare funds, production bonuses 
and other sums such as marine research fee, as are generated on 
account of the contractual obligations of E&P Companies. This shall be 
done in an open and transparent manner by ensuring that consistent 
with Article 19A of the Constitution [Right to Information], the local 
population has available to it, all relevant information relating to such 
funds. 
c) The Provincial and Local Governments shall review the existing policy 
guidelines and, where necessary, make suitable amendments to ensure 
that as far as may be, one Committee be constituted for each district or 
tehsil/taluka to ensure coordinated and effective use of the aforesaid 
funds. Keeping in view the provisions of Article 140A, the Local 
Governments established in each tehsil/taluka be given due 
representation or a voice on such Committee in line with the said 
constitutional provision which requires "each Province … [to] devolve 
 Const. P. 46 of 2013 
 
14 
political, administrative and financial responsibility and authority to the 
elected representatives of the Local Government".  
d) Guidelines may be framed by the Federal and Provincial Governments 
in reasonable detail so that social welfare obligations can be monitored 
and the expenditure of funds can be examined in an open and 
transparent manner. The Committee for utilization of funds should; 
i) 
ensure that the social welfare obligations of E&P Companies 
are fulfilled; 
ii) 
proposed schemes receive due publicity and inputs from the 
final recipients and beneficiaries or their representatives; 
iii) 
evaluate progress and completion of welfare schemes; 
iv) 
have public hearings for receiving local level inputs in 
respect of selection, completion etc. of welfare schemes. 
e) Once every sixth months, the DCO shall effect the publication of a 
notice online and in the most widely-read newspaper in the district, 
announcing a public hearing to solicit any comments or reservations 
that the inhabitants of the district in general, and the purported direct 
beneficiaries of the scheme in particular, may have with regard to the 
schemes completed, initiated, or ongoing during the preceding six 
months. A list of all such schemes shall be included in the public notice 
along with their location, budget and current status. 
f) Such notices for public hearings shall be sent to all district level trade 
organisations, chambers of commerce, Bar Associations and other 
prominent organisations and social welfare organisations. Notices shall 
also be sent to the provincial ombudsmen. Such public notices of the 
public hearings shall also be promptly placed on the website of the 
district government, if it has one.  
g) A report in respect of completed schemes shall be sent to the Federal 
and Provincial Ombudsmen and to the Human Rights Cell of this 
Court. 
 Const. P. 46 of 2013 
 
15 
h) The DG PC shall prepare a comprehensive account of the amounts due 
to each district from the various E&P Companies operating therein 
under the heads of social welfare obligations, production bonuses, and, 
if applicable, marine research fee. The estimated figures for royalties 
due to each district may also be included in this account. A statement of 
this account shall be made within 45 days and shall be submitted in 
Court. The account shall be displayed in Urdu, English and regional 
languages on the website of the MPNR.  
i) The DG PC shall solicit half-yearly reports from all licence/lease 
holders in respect of their social welfare obligations towards the local 
community, including among other things, the locations, budgets and 
status of schemes completed, ongoing, or initiated during those six 
months.  
j) 
The DG PC shall use his enforcement powers under PCAs actively and 
diligently to seek compliance with the terms of the PCAs.  
k) The Ministry of Petroleum and Natural Resources shall, ensure 
implementation of the Prime Minister's directive of 15.09.2003 and 
provide gas to “all the surrounding localities/villages falling within the 
radius of 5km of all Gas Fields, on priority basis” as directed, in accordance 
with law. 
23. 
The DG PC shall coordinate with the Provincial Chief Secretaries and/or 
concerned Secretaries with the object of preparing a report in line with the aforesaid 
directives. The report preferably should contain suggestions/recommendations which are 
practical and workable keeping in view the objective that the social welfare funds are 
duly collected and properly spent for the benefit of beneficiaries i.e. the local people in 
concerned districts. For the purpose of collating information/data in a readily usable form 
and for analysis of the same, the help of Professor Anjum Nasim, Senior Research Fellow, 
Institute of Development and Economic Alternatives, an experienced academic, may be 
sought by the DG PC.  
 Const. P. 46 of 2013 
 
16 
24. 
The case  shall  be  listed  for  hearing after 45 days to consider the report of the 
DG PC and steps taken pursuant to the aforesaid directions and for further orders if 
appropriate.   
 
 
 
 
 
Judge 
 
 
 
 
Judge 
 
 
 
 
Judge 
 
 
 
 
Announced on  27.12.2013 at LAHORE.   
 
 
 
 
Approved for reporting.   
A. Rehman. 
 
Const. P.46/2013

 



  
   


 
  


   
 



 
  
 


 

(OGDCL)
  



  


   

(25)
 



 
  


   





 



   

     
 

2


  






  




 

  



  




   

   

   
     
  



   

  





 
 


 



  
   
184(3)
 
 
3




 
     


4

 
  






  
  

   
  


  

    
 

 

  
  

(PLD1998SL 693)
 
 


 

 

  


  

 (1994SCMR2061)
  
   


  

(2013SCMR1383)
   

   



2013
 
10
  
5


 

 






  

 
 

 



 
   


 

      



  
   
Petroleum Concession Agreement/PCA

  


 
  

 

  
  

 
 

  




 

 





   
 

 
13371-S/2013

  


 
(OGDCL)
 




   
 


184(3)

 
 

28
   

201219

  



 

 



2013


2
  
(DG PC)
   


6
 

 
  
    
     


  
   
  
 
     

         

 






2013

 19
 
 



(OGDCL)
  

 
 





20139

  

 
  
 




  





      






  
 
     




  








  


  

  
 


  




     





    

  
    



  
  

 
  
 
  
7
  
  


 
   
  
  


    

  

 






 



  
  





  
 
  
     

 
 
  
  
184(3)


3

 



    








184(3)

   

  

 
 

 
 


 

105

     

 
    

 




 

 
 

 

 


   
  




 


 
    
184(3)




   

   
   


  



 

 

   






  


 


8
 

  
 
   



   
 
       

 







  

  

184(3)


  
  
  

 
(CMA6508/2013)




DG PC



  

  

   
60


(Royalty)
  

 


   
 

 
 
93

2
 



  


 


  




 
   
  

  

4



 
     
  

 


  
 

 
    
DG PC



 
   











  
 
  

  
9



  
 

  
 



   
(PCA)

 





 






 

 
 



 
    
   






 
  

 

   
 

        


 


   


   


 
 

(30)
  
  

5








6






(c)

     
  


 




  

   






5



 


  
(u)

  

  

 

 

  

(v)
        



     




 
2010


1997

 



zb

  


 




 




 


     
(zd)

  





 
   
(PCA)
 


(10




/
  
  
29.10



     


  




   


  

   

   

    
(20)
 


6
BOE
 

 
  





2,000
5,0002,000
10,0005,000
50,00010,000

50,000
20,000
40,000
75,000
150,000
250,000

  
   




  
 
  

  




2012
 



  





 

(11


  

 



    





  
    

14


9

   

 ( O G D C L )



 
    

  

   
 
 


 
 
(DG PC)



 
 



 
      
 


 



  

    


 


(DG PC)
      


 
   



  

 


  
 



7


   
  
(PCA)
 
12
 
 

  
 


  



 
  

  


  
 



  
   


  
2012
 
    



      


    

   
  




  

     
 


 
 


 













 
    
 
2012


13
      


(10)
 
(Onshore Royalty)
 
  
 


  

 



  
    


 

   


  

  





    

 

 
  

















(PCA)

    


  

 

   
2009
 
20 14
        


(DCO)


 

8





DCO
  

   
DCO


    

 

DCO




 


 

DG PC

           




    

(PCA)




  
  


     

 


 
  


   
 


  


    

(DG PC)


2012



     
 
 

 

 




 

2009 
 
20
  



 

DCO
 









 


  
   







DG PC
    
  

 




    
  


 
2009
 
24

     
15
 

   
DCO
 
     
 

(National Institute of Oceanography)



DG PC
(Centre of Excellence in









 
 
   


Marine Biology)
9










 
 





DCO





 

 

 
DG PC
 


DCO
   


    

=
 

 






  

2009

 29
  
   

16


   
 
  


 


DCO
  
  

  


  
 
   


 

  



  










 



DCO
  




 

 




  
   
 

 







   

 





 


2012
  

17
 
   


  

    


 
 DCO


   
  


  
    
 



 


  

     
(DMO)


   
  
 

10
  
 
 




DCO
     
2012

 24



ADP



    

 






15
  
 

 
  



   
18
   
 



 
  
2013
  
  
(5)



  

 


 
  
  
   

        
  
    

( 5 )



 




2013 
 29
   

   
  

  




 



  
 

 
 
 



  
19
  
  


 

     



 


  
   


  
    

 

 


     
 

   
   



  




 


  
   
 


  





 

 

 
20
11

   
 
  



 

       
DG PC

 


 
 

DG PC



  


 
     

  


   
 
    
 


     
 




   



 
 









2012

 



DCO
 

 










 







 

  
 


  
  

    












  
  

 
 

  
 

  
21





 


 





   







 

14  9

    
 

  

    
 

   




 




 
  

12
      
 



 




 




 

(PCA)





 



 
 







   
 



 



 




 

(policy matter)
 

 
  

22

   
       
 

   
  
   




    

 

    
  
 

   

  
   


 



 


 



  
DG PC 



 



 

 




DG PC


    
    

  


 

  




19A
   


     
  







 
 




 


13


 


 




 



140A
     

 


   

 

 






 

   

  

 

  


  
     
 
  




  



 

i






  


  
ii
  
  






iii 
     
iv
  





  

 
  
DCO
   



 
    

  

 
 

  


   
  

  

 
  




 

 
 

 
  
  


   

 


14






  

 


   



 
  


 





      

  




  

  

 

 
DG PC

   
  
  
 


     

  
  

 

(45)
  
 



 

  






 






  
   

DG PC



(6)
 

   



  
  
  

 
   
DG PC


(PCA)






 200315
   

 







 
 
  
 
 

  
 
    

  
   
(5)
 



15






  
DG PC 23

       

    

  
 
 
 

 
DGPC

 










    

     


  




  

    
 





DG PC 24

(45)




16
