Drafting & Negotiation of Investment Agreements
Historically,
the mining industry relied extensively on investment agreements with national governments
for the development of major mining projects. From the 1950’s through the 1980’s,
such investment agreements tended to be designed to create a comprehensive legal
and regulatory framework for the particular investment involved.
Since the early 1990’s, although some such agreements continue to b negotiated in
certain environments, the international trend has been towards the reliance on agreements
that stabilize rather than replace the terms of existing national legislation on
minerals licensing and the related fiscal, export-import, foreign exchange and environmental
and social rights and obligations of minerals exploration and production companies.
In addition to negotiating mineral investment agreements and assisting in the resolution
of disputes thereunder, Duncan & Allen has conducted studies of the use of such
agreements in the world-wide mining industry for The World Bank and has developed
model investment and stability agreements for use in conjunction with the minerals
legislation of several countries.
In reforming the legal framework of the mining sector in Madagascar, Duncan &
Allen assisted the Malagasy in developing an original form of investment agreement
for large scale investments that guarantees the Malagasy government a sufficient
and stable stream of revenues from large mining projects while giving the investors
generally recognized legal, tax, foreign exchange and customs advantages, but not
exemptions, as well as the stability of such provisions.
For purposes of ease of administration and transparency, the terms of the investment
agreements were standardized in an investment law for large scale mining projects
which applies in a non discriminatory manner to all investments of a specified size.
Those investments must be certified by governmental decree pursuant to a simple
and transparent procedure outlined in the law and its implementing regulation. The
initial investments under this framework are being made in 2007.