Before the start of a contract negotiation, the host government should determine its national negotiating position, taking into account the feasibility studies and impact assessments that have been conducted as well as the positions of different government ministries and agencies.
Given that negotiations inevitably require some compromise to reach a final agreement, determinations also need to be made as to which provisions of the contract/ objectives are non-negotiable (the “deal breakers”), which are desirable and which points could be conceded in a negotiation in order of areas of higher and lesser priority.
If any additional research, information, or expertise is required for the negotiation to bolster the host government’s position, it should also be carried out at this stage. For example, governments may wish to engage legal counsel well in advance of the direct contract negotiations to assist with the negotiation process.
Key Tools At This Stage
How to Understand Mining Contracts, How to Understand Oil Contracts, ResourceContracts.org, OpenLandContracts.org, NPV Model To Analyze Concessionary Arrangements, Model Mining Development Agreement, Fiscal Analysis of Resource Industries (FARI)
