- UNCTAD, Management of Commodity Resources in the Context of Sustainable Development: Governance Issues for the Mineral Sector, UNCTAD/ITCD/COM/3/18 February 1997.
- Competitiveness, as measured by market share, is largely based on costs of production, including the costs of public policies as regulatory requirements, royalties, income taxes and tariffs. See J Tilton, ‘Mineral endowment, public policy and competitiveness—A survey of issues’ in Competitive strength in mineral production, Proceedings of an International Conference held on 3 June 1992 at Luleå University, Sweden. As to transaction costs, first used by Coase to mean the ‘costs of market transactions’, they have been defined as ‘search and information costs, bargaining and decision costs, and policing and enforcement costs’. See R H Coase, The Firm, the Market and the Law (Chicago University Press, Chicago, 1998), pp 6–13.
- The literature on this topic sometimes includes use of the expression ‘security and continuity of tenure’. The second element is intended to emphasise the need for stability over time. In this article the terms ‘security of tenure’ and ‘security and continuity of tenure’ will be used indiscriminately, since the former implies both aspects, in the author's view.
- See (a) C Johnson, ‘Ranking Countries for Mineral Exploration’ (August 1990), 14 Natural Resources Forum, No 3; see also (b) J Otto, ‘A Global Survey of Mineral Company Investment Preferences’, in ESCAP/UNDP, Mineral Investment Conditions in Selected Countries of the Asia-Pacific Region, United Nations, ST/ESC AP/1197, 1992, 330342. See also (c) D R O'Neill (1992), ‘Mining Investment in Africa: An Australian Perspective’, in Proceedings of the International Seminar on the Role of the Mineral Sector in the Economic Development of Africa’, Ouarzazate, Morocco, 27–30 April (UNCTAD/COM/7). For a cross-comparison of the results of these surveys, see UNCTAD, supra n 1, 15–19.
- See under heading ‘Concept of security of mineral tenure’.
- W Onorato, and P Fox, ‘The Role of the World Bank and other Multilateral and Private Sector Finance Institutions in Resources Development in Developing Countries’, 41 Rocky Mountain Mineral Law Foundation, Chap 7, 1–38.
- C Saravia-Frías, The Modern Concept of Security and Continuity of Tenure: Argentina-Chile, LLM Dissertation (CEPMLP, University of Dundee, 1998), p 31.
- Tenure has been defined, in general terms, as a right, term, or mode of holding or occupying. In relation to land, tenure is the direct result of feudalism, which separated the dominium directum (the dominion of the soil) which is placed mediately or immediately either in the crown, or in the feudal landlords, from the dominion utile (the possessory title), the right to the use and profits in the soil. See a general definition in Blacks Law Dictionary, p 1470. In the case of continental Europe, the political power was fragmented in a network of feudal landlords. See J Vildósola Fuenzalida, El Dominio Minero y el Sistema Concesional en América Latina y el Caribe (Mining Domain and the Concession System in Latin America and the Caribbean) (OLAMI/ECLAC, Caracas, 1999), p 53.
- Some countries have also regulated other phases of mining through prospecting or reconnaisance licences, and even phases beyond exploitation as processing concessions in Peru.
- See some aspects of this question in D Barberis, Negotiating Mining Agreements: Past, Present and Future Trends (Kluwer Law International, London, 1998).
- See in general, T Wälde, ‘Mineral Development Legislation: Result and Instrument of Mineral Development Planning’ (1988), 12 Natural Resources Forum, 177–178.
- For reviews of literature on the subject see T Wälde, ‘Lifting the Veil from Transnational Mineral Contracts. A Review of Recent Literature’ (1977) 1 Natural Resources Forum, 166–285, to understand the form and substance of such emerging forms of mining agreements. From the same author, see also ‘Third World Mineral Development: Recent Issues and Literature’ (1984), 2 Journal of Energy and Natural Resources Law, 282301, and ‘Permanent Sovereignty over Natural Resources: Recent Developments in the Minerals Sector’ (1983), 7 Natural Resources Forum, 253–263.
- J Salacuse, ‘From Developing Countries to Emerging Markets: A Changing Role for Law in the Third World’ (Winter 1999), 33 The International Lawyer, 875–890.
- See Wälde, supra nil, 177–178.
- Ibid.
- By 1992, a survey showed that since 1985, over 90 nations had either adopted new mineral sector laws, made a major revision to existing laws or were working on draft legislation intended to promote foreign investment. See J Otto, ‘Global Transition in Mining Laws and Tax Systems’, CPMLP Policy Seminar Paper SP4, University of Dundee, Dundee, Scotland (1992).
- (a) J Otto, ‘Foreword: The Changing Regulatory Framework for Mining Ventures’ (1996), 14 JERL, p 251. See also on this topic some regional studies as (b) K Naito, J Otto, D Smith and H Myoi, ‘Legal Aspects of Exploration and Mining: A Comparative Table of Mining Law in Asia’ (1999), 17 JERL, pp 1–12. As an example of a study on the transformations of mining law in Poland in the move towards a market economy, and the weaknesses in its implementation and in issues such as mining tenure and security of title, see (c) A Linpinski and J Otto, ‘New Polish Mining and Petroleum Legislation’ (1996), 14 JERL, 325–345.
- See (a) D Webb, ‘Legal System Reform and Private Sector Development in Developing Countries’, and (b) I Shihata, ‘Preface. Good Governance and the Role of Law in Economic Development’, in A Seidman, R Seidman and T Wälde (eds) Making Development Work: Legislative Reform for Institutional Transformation and Good Governance (Kluwer Law International, London, 1999), at pp 33 and xvii–xxvi, respectively.
- R Brown and A Gutteiman, Asian Economic and Legal Development: Uncertainty, Risk and Legal Efficiency (Kluwer Law International, London, 1998).
- The International Bank for Reconstruction and Development/The World Bank, World Development Report 1997: The State in a Changing World (Oxford University Press, New York, 1997). See also Salacuse, supra n 13.
- See Onorato and Fox, supra n 6.
- See (a) The World Bank, Strategy for African Mining, World Bank Technical Paper No 181, Africa Technical Department Series (Mining Unit, The World Bank, Industry and Energy Division, Washington DC, 1992). See also (b) The World Bank, Industry and Mining Division—Industry and Energy Department, World Bank Technical Paper No 345: A Mining Strategy for Latin America and the Caribbean (The World Bank, Washington DC, 1996).
- T Daintith, The Legal Character of Petroleum Licences: A Comparative Study (University of Dundee, CPMLP and Energy and Natural Resources Committee of the IBA, 1981).
- On privately orientated common law mineral right systems see M Dale, ‘Security of Tenure as a Key Issue Facing the International Mining Company: A South African Perspective’ (1996), 14 JERL, 298–309, although this regime is currently under revision.
- See comments in The World Bank, Strategy for African Mining, supra n 22(a), at p 20.
- T Wälde, ‘Investment Policies and Investment Promotion in the Mineral Industries’ (1991), 6 ICSID/ Foreign Investment Law Journal, 1 (Spring), at 102.
- ESCAP/UNDP, Mineral Investment Conditions in Selected Countries of the Asia-Pacific Region, UN ST/ ESCAP/1200, New York, 1992), at 141, 228 and 262 respectively.
- A comparative survey of mining legislation indicating their relative security of tenure shows some of these options in different regimes. See G Akpan, ‘Towards a Regime of Secured Tenure in the International Mining Industry’ (1998), 1 OGLTR, 31–33.
- R Brown, ‘New Mining Codes: Salient Features’, Proceedings of Workshop on Promoting, Regulating and Negotiating with Transnational Corporations in the Mineral Sector, held 8–13 December 1986, Kathmandu, Nepal, UNCTC, New York.
- J Otto, ‘Criteria for Assessing Mineral Investment Conditions’, in ESCAP/ UNDP, Mineral Investment Conditions in Selected Countries of the Asia-Pacific Region, supra n 27. See also Otto, supra n 17(a), at 251. See also Onorato and Fox, supra n 6 at 7–21.
- See Onorato and Fox, supra n 6 at 7–22.
- The author has specified some key tenure questions relevant to security of tenure, and identified the diverging interests of both governments and companies in each sequence. See (a) J Otto, ‘Legal Risk Analysis for Mining Projects’ (CPMLP Seminar Paper No SP14, Dundee, 1994). See also (b) J Otto, F Chand, C Foong, ‘Guidelines for a National Mineral Policy’ in Mineral Development Policy and Planning Project, UN, Department of Technical Cooperation for Development, 1990, where security of tenure is defined as the ability to maintain a right to minerals from exploration stage on through mining. In another study, the author has developed a series of questions indicating the types of regulatory risks affecting mining investment in the exploration, transition, mining and reclamation periods of the mining sequence. J Otto, ‘Mineral Sector Regulation and Capital Investment’ in Metal Mining Agency of Japan and Malaysian Chamber of Mines, Proceedings of Workshop on New Mining Legislative Frameworks in Asian Countries, Kuala Lumpur, Malaysia, 1997.
- See Akpan, supra n 28, at 27.
- M K Omalu and A Zamora, ‘Key Issues in Mining Policy: A Brief Comparative Survey on the Reform of Mining Law’ (1999), 17 JERL, 38. This is a brief but comprehensive study on contemporary issues in mining policy based on three countries’ experience (Chile, Ghana and Indonesia).
- Ibid.
- See The World Bank, A Mining Strategy for Latin America and the Caribbean, supra n 22(b), at pp xv and 14.
- Ibid, at p 14. See also Omalu, supra n 34. See also The World Bank, Strategy for African Mining, supra n 22(a).
- T Wälde, ‘Methods of Mineral Investment Promotion’, in UN Regional Seminar on Mining Exploration and Investment Potential in West Africa, 11–15 December 1989, Yamoussoukro, Côte D'Ivoire, at 339.
- See Akpan, supra n 28, at 27.
- J Otto, ‘The Exploration and Mine Development Regulatory Time Dilemma’ (Dundee: CPMLP Professional Paper PP15, 1995).
- C Andrews, ‘Mining investment promotion: a view from the private sector’ (1991), 15 Natural Resources Forum, 50–58. See also The World Bank, Strategy for African Mining, supra n 22(a), at 23.
- See Otto, supra n 30 at 16. See also Saravia-Frías, supra n 7, who has proposed a holistic definition and interpretation of the ‘modem concept of security of tenure’.
- See Onorato and Fox, supra n 6, at 7–22.
- The authors cite the offshore minerals laws of Namibia and Australia as examples of laws allowing such retention rights. Ibid, 723. Wälde has also suggested that a solution to this dilemma may be found in a ‘mine development moratorium’ by agreeing to a waiting period during which the company retains title, but has to cooperate if development proves feasible, possibly with another company. See Wälde, supra n 26, at 103. See also The World Bank, Strategy for African Mining, supra note 22(a), at 25.
- See Onorato and Fox, supra n 6, at 7–23. The suspension of construction of the Las Cristinas project in Venezuela illustrates the conflicts that may arise from such a situation. See World Gold, ‘The low gold price forces Placer Dome to suspend Las Cristinas’, Mining Journal, August 1999. An extract is available at http://www.mining-journal.com/GOLD/Wg-O899d.htm.
- See, generally, Andrews, supra n 41.
- Some US$4 billion is spent on mining projects each year, and during the period 1995–2000, 35 per cent was spent in South America, 20 per cent in each of North America and Africa, 12 per cent in Australasia and the balance in Europe. In addition, according to the fourth survey conducted by Mining Journal of the most attractive emerging countries for mineral investment, Latin America has, as in the previous four years, emerged as the recipient of most mining interest, with very high ratings given to Chile, Peru, Brazil and Argentina (Mining Journal, London, 22 October 1999), at 1–3.
- For the general features of legal reform in the mineral sector in Latin America see J L Ossa Bulnes, ‘Mining Legislations in Latin America: Reform and Modernisation’ in Mineral Development in America, Mineral Law Series, Vol 1997, No 5 (Rocky Mountain Mineral Law Foundation, Denver, 1997). A legal overview of the predominant legal mining regimes in Latin America in the 1970s evidenced a shift from the private concession system to agreements such as joint ventures and services contracts, see G Cano, ‘Régimen Jurídico de la Gran Minería en Latinoamérica’ (Legal Regime of Large-Scale Mining in Latin America), (1977-B) La Ley, 787.
- F Sanchez Albavera, G Ortiz and N Moussa, Panorama Minero de América Latina a fines de los añosnoventa (Latin American Mining Overview towards the end of the 1990s), (CEPAL/ECLAC, Santiago, 1999), 59.
- Chilean Organic Constitutional Law of Mining Concessions No 18,097 (1982); Chilean Mining Code, Law No 18,248, Official Gazette, 13 October 1983.
- See Omalu, supra n 34, at 17and 23. See also La Havana Declaration, ECLAC, 1994, and F Sanchez Albavera, ‘Las Reformas Mineras y los Desafios de la Globalizacion’ (Mining Reforms and Globalisation Challenge, ECLAC, 26 October 1994), in the Regional Seminar on the Modernisation of Mining Legislation in Latin America and the Caribbean, Havana, Cuba, 14–16 November 1994. See also V Delgado, A Comparative Study on Security of Tenure Under Argentine, Chilean and Peruvian Mining Legislation—with Focus on the Scope of Title and Mining Contracts, LLM Dissertation (CEPMLP, University of Dundee, 1999).
- S D Colton, A J Driggs and F Ferguson, ‘Mineral Location and Concession Systems in Latin America’, Rocky Mountain Mineral Law Institute, Vol 8-1/8-50, p 4.
- See The World Bank, A Mining Strategy for Latin America and the Caribbean, supra n 22(b).
- New Peruvian General Mining Law, Compiled Text, Supreme Decree No 014–92- EM, Official Gazette, 4 June 1992. Bolivian Mining Code, Law No 1777, 17 March 1997, Official Gazette, Year XXXVII No 1987. Argentine Mining Code, Compiled Text, Decree 456/97, Official Gazette, 30 May 1997.
- The recent mineral law in Mongolia shows the adaptation to the ‘Chilean Model’. See D Galsandoij, Mongolia Mineral Resources and Mining Opportunities (Watkiss Studios Ltd, Bedfordshire, 1998).
- The essential features of the system were already embodied in the old colonial legislation designed by Spain to rule its colonies in America, as the Ordenanzas del Perü (1574) and the Ordenanzas de Nueva España-México (1783).
- See Ossa Bulnes, supra n 48.
- In Chile, Peru and Bolivia the shape, location and demarcation of claims is done by a system of UTM (Gauss Krugger in Argentina). The application of the so-called ‘grid-system’ in Peru and Bolivia has led to the elimination of the previous requirement to survey and demarcate the boundaries of the claim in the area. See (a) E Catalano, ‘The Legal System of Mining Concessions in Argentina’; (b) T Cuentas Bascopé, ‘A General Outlook of Bolivian Mining: The New Mining Code’, in Mineral Development in America, Mineral Law Series, Vol 1997, No 5 (Rocky Mountain Mineral Law Foundation, Denver, 1997), papers 2-D and 2-C respectively.
- See in general, Wälde, supra n 11. See also (a) J McOuat, Can Canada's Free Entry System Survive? Mitigating the Threats to Security of Tenure in Canada's Mining Industry, LLM Dissertation (University of Dundee, Dundee, 1994). See also (b) P Crowson, International Mining: A Perspective, in Global Issues for Mining Development: Industry Consolidation, the Environment, Human Rights and Community Participation (CEPMLP Dundee Annual Mining Seminar, 21–25 June 1999).
- J Otto, ‘Mineral policy, legislation and regulation’ in Mining, Environment and Development, Advance Copy, UNCTAD, at p 6.
- Ibid, at p 7.
- Commission of the European Communities, Communication from the Commission: Promoting sustainable development in the EU non-energy extractive industry (Brussels, COM (2000) 265 final, 2000).
- See G Reíd, ‘Encouragement Provided for Resource Investment and Impediments Created by Selected Foreign Jurisdictions’, AMPLA Yearbook 1994, pp 269–307.
- M Hunt, ‘South East Asian Economies, Resource Projects, Country Risk and the Changing Investment Environment and Mining Laws of this Region’, in Investment and Development in South East Asian Mining, Bangkok, 21–23 February 1994, at p 4.
- See (a) S Vinogradov and L Worika, ‘Global Stakeholders: the Impact of International Law on the Resources Industry’, in Rocky Mountain Mineral Law Foundation, International Resources Law Projects: Straddling the Millennium, Mineral Law Series, Vol 1999, No 2, paper 11A. See also (b) G Pring, J Otto and K Naito, ‘Trends in International Environmental Law Affecting the Minerals Industry’ (1999), 17 JERL, Volumes 1 and 2, 39–55 (Part I) and 151–177 (Part II), 1999. Please note that most of the South American countries referred to have passed new legislation aimed at regulating the environmental impact of mining projects. In connection with the Mercosur countries, it has been said that the challenge lies in perfecting those systems, and creating additional mechanisms that enable greater degrees of sustainability. See P Gonzalez, 21st Century Challenges Facing the Mercosur Mining Sector (An Institute of the Americas Roundtable Report, Buenos Aires, 1999), available at http://www.iamericas.org/sectors/mining.html.
- G Akpan, The Rise of Environmental and Human Rights Issues and Implications for Mineral and Petroleum Investment, LLM Dissertation (University of Dundee, Dundee, 1997). Also available at http://www.dundee.ac.uk/cepmlp/journal/html/vol6–5.html
- It may be noted that the landowner has been a typical stakeholder in those regimes dividing surface and underground ownership.
- See Crowson, supra n 59(b).
- J Epps and A Brett, ‘Engaging Stakeholders’, in J Otto and J Cordes (eds), Sustainable Development and the Future of Mineral Investment (United Nations Environment Programme, Paris, 2000).
Journal of Energy & Natural Resources Law
Volume 19, 2001 - Issue 1