johnny west: how extractives contracts interact with governance
TRANSCRIPT
Presentation to the EITI Board Abidjan, October 16th, 2013Johnny West, OpenOil
How extractives contracts interact with governance
1)Contracts live in a complex natural habitat2)Negotiation is permanent3)There is a lot NOT in the contracts4)Contracts are a tangled web
Four rules of thumb about extractives contracts
National legal framework Regulations Extractives sector laws Constitution General laws (eg labour, environment, human rights)
International legal framework Conventions Investment Treaties
1) Contracts in their natural habitat
Which can be very different...
Let's talk about that later Future gas finds Future oil finds Accounting Procedures
Placeholder language “generally accepted international practices” “prudent” “diligent” “use reasonable efforts”
2) The contract as framework for permanent negotiation
“as soon as reasonable”
Renegotiation within the contract
Predictable financial results Fiscal regimes are formulae, not hard numbers Future: price is unknown Past & Present: capital and operating costs unknown
Technical and Geological Data How much resource What techniques are used to get it.
3) What extractives agreements don't include...
Formula, not numbers (Ghana)
Afghanistan Technical Data 1
Afghanistan Technical Data 2
Paperchase: how long does an agreement last? (Iraq)
Article 3: Term of Contract Article 1: Definitions Article 39: Signature, Ratification and Effective Date But btw, please read the whole contract...
4) The contract as complex web
Swings and roundabouts
Swings and roundabouts
1)Contracts live in a complex natural habitat2)Negotiation is permanent3)There is a lot NOT in the contracts4)Contracts are a tangled web
Four rules of thumb about extractives contracts
Four countries: finance minister not seen the contracts A missed phone call scotches a bid round Joined-up government would include ministries of
finance, economy, environment, justice, labour, auditor-general, local.
Negotiation and monitoring stages. Government brief is inherently more complex
The challenge of contracts in the governance space
Government learning curve is accelerating Contracts are becoming more standardised Flexible (sliding scale) terms becoming more common
But the picture is changing... slowly...
Ecuador: civil society voice
Peru: interactive mapping
Resourcecontracts.org
Global compare and contrast...
Public domain analysis
Public interest financial modelling. This...
...could turn into this...
...and this...
Patterns start to emerge...
