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

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. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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