The Case of Liberia: Renegotiating Contracts

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Re-Negotiating Mining Contracts The Case of Lib
eria
Raja Kaul February 7, 2008
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Table of Contents

• THE CASE OF LIBERIA
• The Governments 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 reviews 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