|17 October 2009
Proper Investment Contracts Can Ensure Local Benefits from Natural Resources
In Tanzania, as in many other parts of Africa, increasing exploration for oil, gas and minerals is accelerating the interest of investors in the local extractive industries. Laws, regulations and well-negotiated contracts will be decisive for Tanzanians and their opportunities to fairly and equally benefit from their country’s natural resources.
At worst, poorly prepared investment contracts can deprive African countries of the benefits they deserve, resulting in further poverty, corruption and conflicts.
“We all know that effective contract negotiations are of critical importance, particularly in Africa where many countries rely almost exclusively on private investors for exploiting their natural resources”, stated UNDP Tanzania Country Director Alain Noudehou at the opening of the Training Workshop on International Practices for Negotiating and Drafting Investment Contracts in the Extractive Industries, held in Bagamoyo on 12-16 October.
This professional training workshop on investment contracts was the first of its kind in Tanzania. It was targeted at experts taking part in Government negotiation teams: lawyers, economists, finance experts and geologists.
Participants came from the Attorney General Chambers, Prime Minister’s Office, Ministry of Finance and Economic Affairs, Bank Of Tanzania, Tanzania Revenue Authority, Ministry of Minerals and Energy, Tanzania Electric Supply Company (TANESCO) and Ministry of Natural Resources and Tourism.
The workshop was opened by Hon. Mathias M. Chikawe, Minister of Constitutional Affairs and Justice, who encouraged the participants to utilize this training to improve Tanzania’s performance in negotiating, drafting and managing investment contracts.
The Minister reminded the participants that in their work with investment contracts they were acting on behalf of 40 million Tanzanians, and therefore have a moral and professional duty to undertake their obligations with the highest levels of integrity.
This workshop was the first activity arranged within the ongoing UNDP Africa Regional Project for Capacity Development for Negotiating and Regulating Investment Contracts. Several African countries are to benefit from the project.
In the Tanzanian context, the proposed approach is capacity development for negotiating and regulating investment contracts both at the individual and institutional levels and ensuring a win-win situation in new investment contracts.
The Minister of Constitutional Affairs and Justice said that the Government’s main objective in improving its capacity in relation to these contracts is ensuring that Tanzania’s natural resources are used to the maximum level in the fight against poverty and in the attainment of the Government’s Development Vision 2025.
Recent experiences from a number of countries tackling issues related to extractive industry investment contracts were highlighted in the workshop with case studies and roundtable discussions.
There was active discussion on a wide range of topics related to negotiating and managing investment contracts such as emerging markets as investment destinations, the role of investment agreements, fiscal and tax matters, stabilization, lenders, government cooperation and support, and arbitration.
The workshop was led by two partners from the law firm White & Case, Ms. Tanneke Heersche and Mr. John Riggs. They participated through the International Senior Lawyers Project (ISLP), which provides voluntary, pro-bono legal advice and training. The workshop was facilitated by the Regional Project Manager Raja Kaul.