Download The Case of Liberia: Renegotiating Contracts

Re-Negotiating Mining Contracts
The Case of Liberia
Raja Kaul
February 7, 2008
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Table of Contents
THE CASE OF LIBERIA
• The Government’s Policy on Re-Negotiating Contracts
• Determining which Contracts to Re-Negotiate
• The Review Preparation and Negotiation Processes
• The “Amended” Agreement
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The Case of Liberia: Government Policy on Re-Negotiating Contracts
 Liberia – January 16, 2006
 A ‘National’ Policy on Concession Re-Negotiations
 Part of a national strategy for poverty reduction
 Revitalizing the economy – a policy of economic
growth and sustained development
 Clearly articulated and consistently applied across all
sectors of the economy
 A Mandate – The Policy of “Review”
 A Policy Supported by the International Community
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The Case of Liberia: Determining Which Contracts to Negotiate
 Major Concession Agreements and Commercial Contracts
 The Basis for Review
 Within the Contract
 Outside the Contract – “A Mandate to Review”
 The “Real” Costs of Review vs. the Benefits
 Managing Expectations – Local and International
 Time and Resource Constraints
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The Case of Liberia: The Review Preparation and Negotiation Processes
 The Inter-Ministerial Council on Contract Review
 Purpose
 Performing a comprehensive and inclusive contract
review guided by Government policies on economic
growth and sustainable development
 Identifying and prioritizing all issues
 Building internal consensus and developing
ownership and broad base support within the
Government for the review’s objectives and
results
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The Case of Liberia: The Review Preparation and Negotiation Processes (Continued)
 The Inter-Ministerial Council on Contract Review
 Deliverable
 A consensus report to the President and contract
negotiating team
 Council Structure
 Headed by the sector (e.g., Mining) Minister
reporting to the President
 Other Ministers, their technical experts and invited
outside experts
 Participating Ministries, Agencies and Input Providers
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The Case of Liberia: The Review Preparation and Negotiation Processes (Continued)
 The Negotiating Team
 Ultimately determined by the President
 Chaired by sector (e.g., Mining) Minister
 Comprised of other relevant Ministers, agency heads
(e.g., Finance and National Investment Commission) or
their deputies, and advisors and outside experts
 Optimal number of people on the team has required
the right balance of politicians and technocrats with
the experience, skills and time commitment (cost)
required
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The Case of Liberia: The Review Preparation and Negotiation Processes (Continued)
 Establishing Negotiating Priorities
 Report from the Inter-Ministerial Council
 Input from Outside Experts Selected to be on the
Negotiating Team
 Broad negotiating principles established by the President
 Reaching Consensus During Negotiation and the Path of
Escalation
 Selecting a Venue for Negotiations
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The Case of Liberia: The “Amended” Agreement
 Gaining Legislative and Public Approval of the
modifications to the Agreement
 Telling the story of the negotiations
 A new partnership with the Investor based on compliance by
both parties to the terms of the “Amended” Agreement
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