1. ROLE OF LAWYER IN THE DEVELOPMENT OF LARGE MINING PROJECTS
Focus on Francophone Africa
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2. A major challenge for stakeholders and legal profession
Challenge of advising on a large international investment
Challenge of advising on an investment of long term nature
Challenge of advising on development of associated infrastructures
Challenge of advising on a public private partnership venture
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3. The main issues: project description
The stages of development of a mining project
The initial exploration
The development phase
Conceptual studies: order of magnitude
Prefeasibility
Feasibility
Financing
The investment phase
The operation phase
Example of large project
The need to invest and to operate
A mine
A rail way
A port
The need to benefit from other public infrastructure
The need to benefit from reliable power and water sources
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4. The main issues for legal advisers
How to appraise the legal, regulatory and procedural risks ?
How to organize the process of identifying and mitigating the risks and reward in an acceptable manner?
Who is judging the acceptability of the balance between risks and reward?
A good appraisal of the role of the stakeholders
The mining company
The State
The Communities
The Lenders
The IFIs
The NGOs
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5. The involvement of legal advisers
During conceptual and prefeasibility phase
Due diligence
Compilation of law regulations & practices
Identification of the main issues
Organization of the legal team
During feasibility phase
The substance of the advice
The general conclusion: need to adapt, improve or secure the legal and regulatory framework for the project
The process : how to engage with the authorities? What methodology? For which purpose? Examples:
land issues,
resettlement issues,
stability of the regulations,
tax and custom regime,
investment protection guarantee,
early termination,
dispute avoidance,
Arbitration.
The outcome: a mining investment agreement having a legal status
How to prepare, negotiate and conclude?
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6. A prerequisite: avoiding cross-cultural legal misunderstanding
If the project is developed by numerous companies or engineers and constructors from a Common Law country legal culture, a good knowledge of the main differences between Common Law and Civil Law systems is essential
1. Key considerations
Common Law world does not distinguish between public and private contract law
Civil / Administrative Law countries are governed by equitable public contract law principles
In the Common Law world, the law derive mostly from case law: in the civil law world the law derives mostly from codes or from authoritative cases often establishing best practices and concepts
In Common Law world there are few concept or legal principles of general references
The reasoning in the Common Law world is essentially bottom up
The reasoning from Civil Law world is essentially top down.
Many Civil Law countries have a regulatory institution dealing with the contractual relationships between the public and the private sector. Example: French Administrative Court : “Council of State”
2. Consequences
In order to reach a similar level of legal certainty and equilibrium between rights and obligations in each system the following is generally necessary.
The contract conditions need to be more comprehensive and detailed in the Common Law world
An outside regulator is more necessary in the Common Law than in the Civil Law world
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7. The organization of legal advisers team
The credentials
Which quality for which purpose?
Local specialists
International investment specialists
Legal culture
The importance of “administrative law”
The language issue
Environmental specialists
Mining specialists
Public infrastructure specialists including concessions and PPP
Railway
Port
Power
The team: need of integrated team
The team leader
Outside or in house : the issues
How to select the team?
How to engage with governments and to have the best guarantees of result ?
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8. Conclusion A major challenge for all mining companies
Many lessons learnt and among others:
Learning by doing always leads to problems
The substance of advice in francophone civil law Africa is quite different from other countries and from Common Law world (French mother tongue is generally a prerequisite)
Outcome in terms of content of documentation, letters and procedure substantially different
Engaging with the authorities very different from other countries and from the Common Law world. Understanding the leverage and downside of seniority and how to optimize is essential
Integrated approach between substance and process essential
Need of lawyers having a broader range of skills than usual
Good team is made of three layers or legal advisers with different seniority, language and other skills
From those lessons it is easier to understand why some of projects in civil law Africa could be developed more easily and at a lower cost
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