Experts and guidelines needed for negotiating contracts for Africa’s resources

Addis Ababa, 23 April 2015 (ECA) – If Africa’s natural resources are to benefit its people, petroleum and mining contract negotiations can no longer be limited to technical experts but must be broadened to include specialists such as lawyers, tax specialists, economists, environmentalists, sociologists, or political scientists. To address some of the challenges related to benefits from natural resources, the Economic Commission for Africa (ECA) is hosting a two-day Policy Dialogue on the Challenges Faced by African States in Mining and Petroleum Contract Negotiations in Addis Ababa on 5 and 6 May 2015.

In collaboration with the African Minerals Development Centre (AMDC) and the African Institute for Economic Development and Planning (IDEP), the ECA and the African Union experts on Africa’s Mining Vision and on contract law are to meet with delegations from mining and petroleum producing African states to establish, among other things, a network of African Experts for negotiations of mining and petroleum contracts.

The paradox that resource rich countries have produced resource-poor populations can be mitigated through the creation of a continental « multidisciplinary» framework for the exchange of experience. In addition to creating a network of experts, participants will leave the dialogue sessions with a better understanding on how to align the existing set of legal and regulatory instruments in Africa with the African Mining Vision. 

Adopted by African Union (AU) Heads of State in 2009 and spearheaded by the AMDC since 2013, the African Mining Vision calls for a structural transformation of the minerals sector through enhanced linkages with the local economy, increased value addition, promotion of local content and empowerment, and a judicious and prudent use of mineral revenue to build up other forms of capital that can outlast the currency of mining.  The session is therefore also meant to provide a platform for advocacy for gender equity in the extractive industries for better performance and provision of livelihoods.

Delegates plan to leave the Policy Dialogue with tangible ideas in the form of practical guidelines on fundamental rules to be followed in contract negotiations by negotiators in the field of petroleum and mining.

The participants aim to develop “model contracts” that may be used by member States in the process of mining and petroleum contract negotiations. These negotiations can culminate in “win-win” partnerships, taking into account both international legal rules and specific requirements established by the African Mining Vision.

Foreign investors and multinational corporations are often the main beneficiaries, with source countries receiving a very low share of revenue while the extraction may ultimately inflict long-term damage to the environment and eventually destabilize the national economies.  Hence, African states recognize that the complexity of contract provisions and the applicable legal and fiscal regimes, business and technical require the participation of competent experts from other fields such as law, taxation, economy and humanities working in “multidisciplinary” teams.

Directors of mining, natural resources, high level officials of petroleum producing member States, regulators, environmentalist and beneficiation experts and practising lawyers will attend the Policy Dialogue.  Countries interested in strategies for ensuring community beneficiation and reduction of illicit financial flows are urged to attend. 

Issued by:

ECA External Communications and Media Relations Section
PO Box 3001
Addis Ababa
Tel: +251 11 551 5826