© GIZ / Dirk Ostermeier
EXAMPLES OF CONNEX SUPPORT
CONNEX Support activities have been implemented in a number of countries. First pilot measures started already in late 2015 in Liberia and until now, more than ten countries have directly benefitted from CONNEX support.
CONNEX support can be requested during direct (re)negotiations as well as during the pre-negotiation phase when a government is preparing for upcoming (re)negotiations.
We have implemented a number of successful pre-negotiation support measures that allow governments to make informed decisions have been implemented. Examples include, among others:
- Guinea, Liberia and Tanzania: Review and revision of financial models for resource projects, including capacity development in financial modeling for the relevant government institutions.
- Mali and Mozambique: Capacity development on the design and implementation of contract negotiations in general have been implemented, using planned negotiations as case studies whenever possible.
- Mali: A technical workshop on mine closure as base for further future support measures in the country.
- Kyrgyzstan: Support to the Government regarding important issues to consider for a successful tendering process.
Requesting governments have endorsed the CONNEX approach, which combines direct negotiation support with targeted capacity development, as highly valuable with long-lasting effects.
DIRECT NEGOTIATION SUPPORT
Direct negotiation support is at the core of CONNEX activities. Currently, CONNEX is engaged (or preparing for engagement) in five countries, supporting the governments in large-scale contract negotiations, as well as renegotiations.
In all cases, CONNEX experts sit along with government officials in the negotiations rounds in order to provide ad-hoc support to the negotiation teams. In addition, CONNEX experts work very closely with the negotiation teams in further discussing the general goal and objectives the government would like to achieve while preparing the details for the next negotiation rounds.
The support provided differs in its scope. In order to help visualize the sorts of support we deliver, we have provided below some information on a few direct negotiation supports we have or are currently providing.
Please note: The countries where CONNEX currently provides or prepares for direct support are kept anonymous for confidentiality reasons.
- A country approached us with a request concerning a leading global mining company operating a project that is the single largest contributor to the country’s GDP. The company was not fulfilling its contractual financial and developmental (infrastructure) obligations to the country and had exploited deposits differently than agreed. Renegotiations were requested and the government required support in monitoring compliance review and revising the financial model for the project.
- A country that was about to issue a call for tenders on two projects (one greenfield, one brownfield) approached us with a request to provide support in the process. The support they require includes first evaluating the geological data, and then supporting the tender process – reviewing and revising the tender specifications, as well as preparing a financial model. For the brownfield project, they first require an analysis of the market conditions under which international investors would be interested in the project.
- A country that had just began negotiating a mining convention with a company that has already concluded a feasibility study approached us with a request for legal support in the process. The legal team would have to draw up a mining convention that articulates with national, regional and international laws. They would also have to develop the legal instruments attached to the mining convention, provide advice regarding the optimal legal structure for the country in the convention, as well as drafting and preparing all auxiliary contracts. In addition, the team was required to be part of the rounds of negotiation.
- A country approached us with a request to work with them on the largest mineral project in the country. The project was initially negotiated (and shortly thereafter amended) following a period of particular turmoil in the country. More than a decade after the initial negotiation and amendment, the governance landscaped has changed significantly, and the project has changed hands. Our client is planning to renegotiate the agreement for the project – to reflect current government policies and to ensure equitable sharing of the benefits. The team working with the negotiating team comprises legal, financial, strategic and technical (in the relevant mineral) expertise. The support spans the preparatory work pre-negotiation, and extends to support during negotiation rounds.
In one of these cases, a CONNEX financial expert who was assisting the negotiations team in a number of negotiations and renegotiations. When necessary, he was joined by a mineral expert who was able to provide the substantial technical information on the basis of which further discussions could take place. First results showed that the advisor was able to identify hidden revenue options for the government through the adjustment of the financial model amounting to up to estimated 250 Mio USD when fully realized.
For the upcoming months and years, further implementation of requests for direct negotiation support activities are expected. Our experiences so far have provided evidence for the significance and relevance of multidisciplinary support, which may be needed at once, but also at different stages of the negotiation process.
Further information on examples of CONNEX Support are constantly added, with attention to confidentiality. The CONNEX Support Unit makes efforts to collect and present direct feedback from the requesting governments on the quality and value added of the support received.