The Benazir Employees Stock Option Scheme (BESOS) was launched on August 14, 2009 by the PPP-led federal government to empower workers of major state-owned enterprises (SOEs). The scheme set aside 12% of the federal government’s shares in eligible SOEs (such as PPL, OGDCL, SSGC) into Employee Empowerment Trusts (EETs). Trusts collected dividends from these shares, splitting the income 50-50 between cash bonuses for workers and a revolving fund (managed by the Privatisation Commission) for share buybacks for retiring/deceased employees.

After years of litigation, the Supreme Court of Pakistan ruled in detailed orders (October 22, 2020) that BESOS had been implemented unconstitutionally. It held that the federal cabinet bypassed the Council of Common Interests (CCI), required under Article 154 of the Constitution to approve changes in federal-provincial public property. As a result, no law of Parliament had authorized the transfer of state equity into private trusts. The Court ordered that all BESOS shares and accumulated trust funds be returned to the Federal Consolidated Fund (FCF).

In June 2026 Pakistan Petroleum Limited (PPL) announced that 200,057,318 ordinary shares held by the PPL Employees Empowerment Trust have been transferred back to the government. This moved the government’s direct stake in PPL from 67.51% to 74.86%. Similar transfers have taken place at other SOEs. While the state’s treasury gains billions of rupees and clearer balance sheets (the Finance Ministry has even directed all BESOS balances to the FCF), many former trust beneficiaries say they have lost a crucial source of income and job security.

In Dera Bugti Home to Pakistan Major Gas Companies including OGDCL and PPL, local workers and ex-union leaders report that trust-funded agreements, such as guaranteed Bonus and retirement benefits, have been abruptly voided. Former PPL labour leader Ghulam Qadir Bugti told Balochistan Dispatch that hundrerds of labours were ended unilaterally after the judgment. He said workers feel “abandoned,” lamenting that “justice for the poor has ended.” No comprehensive data on how many PPL employees have been affected is publicly available, but thousands are believed to have participated in BESOS or received its dividends. Eligible employees lost a highly profitable bonus stream when oil and gas SOEs earned windfall profits (trust distributions had occasionally reached billions per year across the sector).

The economic fallout is sharp: government revenues and fiscal transparency improved (over 28 billion rupees of dividends were being held in BESOS funds, now flowing back into the national budget), but labourers have lost direct cash payments. Experts note that the ruling underscores constitutional supremacy and fiscal order, but workers and activists warn of a morale and productivity hit. Many local labourers in Balochistan are now demanding that the government OGDCL and PPL replace the lost income and provide legal redress.

This report examines

(1) the legal and political background of BESOS.
(2) the Supreme Court litigation and its findings.
(3) the mechanics of the trust/share scheme and the precise assets returned.
(4) documented effects on OGDCL and PPL’s workforce (especially in Dera Bugti).
(5) statements from government, party and company officials.
(6) the broader socio-economic implications.

Background:

The BESOS Trust Scheme

In August 2009, the federal cabinet (then led by President Asif Ali Zardari) approved BESOS, which offered 12% of the government’s shares in about 80 SOEs to their eligible employees. PPL and OGDCL were among the largest participants.

The approved structure was as follows:

Employees Empowerment Trusts (EETs): For each SOE, a trust held 12% of the government’s shares (for PPL, this trust held 200+ million shares).

Dividend Split: All dividends generated by these shares were split 50-50. Half the cash was distributed directly to eligible employees as periodic bonuses. The other half was credited to a Central Revolving Fund (CRF), managed by the Privatisation Commission, to finance mandatory share buybacks for retiring or deceased workers under predefined criteria.

Eligibility: Only employees on the payroll as of August 14, 2009 (and remaining for five-year vesting) were eligible to benefit. In practice this covered permanent and long-term contractual staff.

Federal records show that 236,306 employees in 59 SOEs were enrolled in BESOS structures (though active participation was lower). At its peak, BESOS was a significant drain on state resources: by 2019, a cabinet assessment estimated Rs28.004 billion was “stuck” in trust accounts (including Rs117.601 million at the Privatisation Commission). (This sum represented unpaid employee bonuses/retirement funds). Some critics had long complained that BESOS diverted public assets without legislative sanction.

Legal Challenge and Supreme Court Ruling

From 2014 onward, BESOS was challenged in court. The key issue was Article 154 of the Constitution, which mandates that decisions affecting federal-provincial public assets (like SOE shareholdings) must be approved by the Council of Common Interests (CCI), a body of federal and provincial representatives. Plaintiffs argued the federal cabinet had bypassed the CCI and that no parliamentary law authorized BESOS.

High Court Rulings (2016-2018): In 2016, a three-member bench of the Islamabad High Court invalidated certain trusts on technical grounds, but in January 2018 the Sindh High Court unanimously found BESOS unconstitutional. It held the cabinet’s 2009 approval violated Article 154. (The Supreme Court later upheld the SHC ruling and set aside the earlier IHC judgment.)

Supreme Court, Oct 22, 2020: The apex court issued a detailed order declaring BESOS “executed in breach of Article 154”. It emphasized that the federal cabinet had no authority to reassign state equity without involving the provinces. The Court nullified the scheme outright, stating that all government shares and accumulated trust monies must be returned to the Federal Consolidated Fund. (In other words, the trusts were illegal, and employees’ “ownership” of dividends was void from the start.)

Following this ruling, the Supreme Court also upheld the principle that executive action cannot carve out exceptions to constitutional requirements. In doing so it overturned a 2016 Islamabad High Court decision and affirmed the Sindh High Court’s 2018 judgement. The SC did not examine workers’ rights per se, but focused strictly on constitutional procedure.

By mid-2020, therefore, BESOS had been declared null and void. In April 2022, the Finance Division issued directives confirming the court’s decision: all SOEs should immediately deposit any BESOS-related funds into the Federal Consolidated Fund. Federal Cabinet instructions (2019) had already resolved to stop further transfers to the trusts and to return around Rs28 billion of dividends to the state.

Mechanics of Share Transfers

As a result of the SC verdict, SOEs have been systematically transferring BESOS trust shares back to the government. On June 24, 2026 PPL announced via PSX notice that it had transferred 200,057,318 ordinary shares from the PPL Employees Empowerment Trust back to the Government of Pakistan. This was the entire balance of the Trust. PPL stated the transfer was “pursuant to the decision” of the Supreme Court (appeals C.A.421-423/2018, C.A.19-K/2019, CP.852/2018). After the transfer, the government’s direct stake in PPL rose from 67.51% to 74.86%. Comparable share transfers have occurred at other beneficiary companies (for example, OGDCL and PSO) following identical court orders.

No funds were exchanged in these transfers: the stock merely moved from one government-controlled entity (the trust) back into the state’s ownership. However, all dividend flows and buyback funds that had accumulated with the Trust since 2009 have also effectively been reclaimed by the Treasury. PPL has not publicly broken out the total rupees involved, but Business Recorder notes the aggregate BESOS-related pot for various SOEs was on the order of tens of billions.

Trust Dividend Payouts (Pre-Judgment):

Before the scheme was quashed, PPL’s employees eligible under BESOS received a share of the government’s 12% stake in PPL. When PPL declared dividends, half of the 12% dividend pool was paid into the Employees Trust. That cash was then pro-rated to each eligible employee as a bonus (similar to a profit-sharing bonus). The other half went into the Privatisation Commission’s Central Revolving Fund for mandatory buybacks. For example, when PPL posted record profits, the BESOS trust paid out large bonuses to thousands of workers. (BESOS dividends were reported running into billions of rupees during peak years, though company-level breakdowns are not public.)

Impact on Workers in Dera Bugti:

The Supreme Court ruling and subsequent share transfers have terminated the BESOS trust’s operations. Affected employees no longer receive those trust dividends, and the revolving fund for buybacks has been absorbed by the state. For the PPL and OGDCL workforce (now about 20,000 people nationwide), this means a permanent loss of a cash income stream. These workers had come to expect BESOS payments whenever PPL was profitable, especially given recent windfalls in oil/gas revenue.

In Dera Bugti specifically, the local impact has been severe:

Loss of Trust Bonuses: Many tribal labourers and contractual staff in Dera Bugti have lost significant cash bonuses. Local accounts suggest BESOS payments had contributed meaningfully to household incomes for those workers. Without public wage increases to compensate, workers say they are struggling.

Retirement and Death Claims: The dissolution of the BESOS Trust has also disrupted pending retirement settlements. Previously, when a worker retired or died, their share of the trust (or a cash equivalent from the CRF) was payable by the trust. Workers and union reps say a backlog of such claims, reportedly numbering in the hundreds at PPL, is now in limbo. With the funds returned to the government, there is no longer an autonomous mechanism to pay these dues. Former trust members fear delays or shortfalls in receiving their legally entitled sums.

Broad Labor Sentiment: The verdict has “polarized” labour communities, say observers. One local activist commented to Balochistan Dispatch that the court decision “has ended justice for the poor.” He accused PPP leaders of “denouncing Benazir’s decision” (referring to BESOS), saying that calls into question the party’s pro-worker image. Meanwhile, youth organisations in Bugti allege it is “entirely unjust” that PPL has not fulfilled even basic local promises (such as water projects and jobs) after extracting billions in profits from Balochistan.

The workers’ perspective is that BESOS was, by design, a form of worker co-ownership intended to dissuade strikes and boost productivity. Losing it removes that incentive. They argue that, beyond immediate cash, BESOS grants made workers feel like stakeholders; its undoing has left many demoralized. At the same time, PPL maintains that it is simply complying with court orders and that any employment matters would be handled per company policy .
Government, PPP OGDCL and Company Responses

Government sources (Finance Division and Privatisation Commission) have treated the BESOS case as a constitutional and fiscal issue. After the Supreme Court verdict, official directives emphasized fiscal discipline: Reclaiming ~Rs30 billion into the treasury was highlighted as a major benefit. Senior officials told Business Recorder that winding up BESOS would improve the federal budget outlook and align with IMF/World Bank calls for transparency. The Finance Division, at one point, recouped state shares and demanded that SOEs deposit all BESOS reserves into the Consolidated Fund immediately. In sum, the state’s position is that the scheme was illegal (as ruled) and that reclaiming assets is a necessary restoration of public finance order.

The PPP (the party which introduced BESOS) has not publicly challenged the Supreme Court’s legal ruling, but party leaders nonetheless tout the scheme’s original intent. For example, PPP Chairman Bilawal Bhutto-Zardari praised BESOS in May 2023, noting that it “gave free shares” to employees and citing it as one of Benazir Bhutto’s pro-worker measures. He positioned himself as a champion of labour rights, promising new welfare schemes if PPP returned to power. However, the party has been largely silent on the specific Dera Bugti grievances post-ruling. There is no indication that PPP-led governments (federal or provincial) have moved to compensate affected workers since 2020.

PPL itself issued the stock exchange notice on June 24, 2026 detailing the transfer of 200 million shares back to the government. In that notice, PPL’s only comment was that the transfer was “pursuant to the Supreme Court’s decision,” and it confirmed the new shareholding percentage. PPL did not comment on labour issues. The company’s 2024 annual report (pre-transfer) had stated only that BESOS was a contingent liability for the government, not for PPL; PPL funded its share of dividends via government allocations. It appears PPL views BESOS now as solely a government matter. We have not located any statement from PPL management about employee payouts or the retrenchment of trust-related contracts.

Financial and Fiscal Implications

For the Federal Treasury: The primary effect is positive: vast state assets and cashflows are now consolidated under government control. Business Recorder estimated that SC compliance could add “over Rs30 billion” to the Federal Consolidated Fund. The direct recapitalization of the treasury strengthens public finances at a time of budget shortfalls. It also simplifies SOE accounting: formerly, 12% of equity and related income were split off into opaque trusts; now the full earnings stay in the SOEs and any dividends flow to the government. Finance Ministry officials have welcomed this clarity, noting it aligns with constitutional requirements and removes the cumbersome trust apparatus. They argue it also proves that the state cannot use politically-driven schemes to distribute public wealth without formal process.

For Workers and Local Economy: The immediate fiscal winner is the government; the loser is the workforce. The PIB (Petroleum Division) had at times considered replacing BESOS with alternate arrangements, but no concrete proposals have emerged. In the absence of trust payouts, workers effectively earned 0% on that 12% stake going forward, whereas previously, even outside strike actions, they received 50% of its dividends. The reversion of shares has also erased workers’ perceived “ownership” interest, which may affect morale. Some experts warn of possible labour unrest or demands for new compensation; indeed, local leaders in Dera Bugti have threatened protests if their grievances are not addressed.

In the regional economy of Dera Bugti, many households depended on BESOS income. Losing this money may increase poverty and dissatisfaction. Some Baloch rights activists Including Lal khan Bugti and Munsif Bugti point out that after absorbing local lands and providing no adequate jobs, resource companies are now accused of reneging on community obligations.