1 Re-Negotiating Mining Contracts The Case of Liberia Raja Kaul February 7, 2008

2 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

3  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 The Case of Liberia: Government Policy on Re-Negotiating Contracts

4  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 The Case of Liberia: Determining Which Contracts to Negotiate

5  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 The Case of Liberia: The Review Preparation and Negotiation Processes

6  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 The Case of Liberia: The Review Preparation and Negotiation Processes (Continued)

7  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 The Case of Liberia: The Review Preparation and Negotiation Processes (Continued)

8  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 The Case of Liberia: The Review Preparation and Negotiation Processes (Continued)

9  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 The Case of Liberia: The “Amended” Agreement