Identifier
Created
Classification
Origin
07KABUL1173
2007-04-10 07:21:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kabul
Cable title:
Afghanistan: Aynak Copper Deposit: Request For World Bank
how-toVZCZCXRO9292 PP RUEHDBU RUEHIK RUEHPW RUEHYG DE RUEHBUL #1173 1000721 ZNR UUUUU ZZH P 100721Z APR 07 FM AMEMBASSY KABUL TO RUEHC/SECSTATE WASHDC PRIORITY 7395 INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0425 RUCNAFG/AFGHANISTAN COLLECTIVE RUEHZG/NATO EU COLLECTIVE RUEKJCS/OSD WASHINGTON DC RUEKJCS/JOINT STAFF WASHINGTON DC RUEKJCS/SECDEF WASHINGTON DC RHMFIUU/HQ USCENTCOM MACDILL AFB FL RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC RUEAIIA/CIA WASHINGTON DC RHEFDIA/DIA WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RHMFIUU/DEPT OF ENERGY WASHINGTON DC RUCNDT/USMISSION USUN NEW YORK 3933
UNCLAS KABUL 001173
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/FO (Deutsch),SCA/RA, AND SCA/A
CENTCOM FOR CG CFC-A
DEPT PASS AID/ANE, OPIC, AND TDA
PLEASE PASS USGS (MEDLIN, MIRZAID)
NSC FOR AHARRIMAN
TREASURY PASS TO LMCDONALD, ABAUKOL, AND JCIORCIARI
OSD FOR BRZEZINSKI
COMMERCE FOR DEES
E.O. 12958 N/A
TAGS: EMIN ECON ENRG EFIN ETRD ELTN PGOV AF
SUBJECT: Afghanistan: Aynak Copper Deposit: Request For World Bank
to Support Services of a Recognized International Legal Firm
This message contains SENSITIVE BUT UNCLASSIFIED information.
Please protect accordingly.
UNCLAS KABUL 001173
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/FO (Deutsch),SCA/RA, AND SCA/A
CENTCOM FOR CG CFC-A
DEPT PASS AID/ANE, OPIC, AND TDA
PLEASE PASS USGS (MEDLIN, MIRZAID)
NSC FOR AHARRIMAN
TREASURY PASS TO LMCDONALD, ABAUKOL, AND JCIORCIARI
OSD FOR BRZEZINSKI
COMMERCE FOR DEES
E.O. 12958 N/A
TAGS: EMIN ECON ENRG EFIN ETRD ELTN PGOV AF
SUBJECT: Afghanistan: Aynak Copper Deposit: Request For World Bank
to Support Services of a Recognized International Legal Firm
This message contains SENSITIVE BUT UNCLASSIFIED information.
Please protect accordingly.
1. (U) This is an action request message - see para 5.
2. (SBU) Septel reported on the status of the competitive bidding
process for the Aynak copper deposit. It also highlighted how
important it is that the GOA gets this right. If the process
stalls, there is any hint of non-transparent dealings, or either
side is seen to have received an unfair bargain, the experience will
have a chilling impact on an already difficult investment climate.
In particular, if there is a perception among the Afghan people that
a multinational company has "swindled them out of their national
asset," it would significantly damage the prospects for future
projects involving foreign investment. It would be difficult to
reverse the harm.
3. (SBU) The competitive bidding process to date has gone well, in
large part due to the World Bank's technical assistance for the
Ministry of Mines (MOM). The World Bank has funded advisors to MOM
and retained American consultants Gustavson Associates to guide MOM
through the process. We understand, however, that the World Bank
assistance, does not allocate resources to hire a legal firm to
advise the MOM in the upcoming negotiations in June with the winning
bidder. The selected bidder will undoubtedly bring a team of
heavy-hitting international attorneys to the negotiating table. MOM
will need equally competent international legal expertise to assist
in the negotiations and to provide practical training to one or more
Afghan attorneys. This is critical for ensuring that the GOA gets a
fair bargain and is able to navigate the complex commercial,
technical, and financial issues that bear on success.
4. (SBU) We believe that, as with the technical assistance on Aynak
privatization received by MOM to date, the assistance for legal
support should also be provided by a multilateral development
institution such as the World Bank. We do not believe that the USG
should fund this assistance directly. Prior experience elsewhere
has demonstrated that USG funding for legal consultants in a
commercial negotiation process can be sensitive as it often leads to
accusations of bad faith and bias in favor of U.S. interests.
5. (SBU) ACTION REQUEST: Given the importance to Afghanistan of
the Aynak project in of itself and as a precedent for foreign
investment and future development of its natural resources, Embassy
requests that Washington agencies urge World Bank management to
extend the Bank's technical assistance to include services of a
recognized international legal firm familiar with mining
transactions to advise MOM in its negotiations with the winning
bidders.
Norland
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/FO (Deutsch),SCA/RA, AND SCA/A
CENTCOM FOR CG CFC-A
DEPT PASS AID/ANE, OPIC, AND TDA
PLEASE PASS USGS (MEDLIN, MIRZAID)
NSC FOR AHARRIMAN
TREASURY PASS TO LMCDONALD, ABAUKOL, AND JCIORCIARI
OSD FOR BRZEZINSKI
COMMERCE FOR DEES
E.O. 12958 N/A
TAGS: EMIN ECON ENRG EFIN ETRD ELTN PGOV AF
SUBJECT: Afghanistan: Aynak Copper Deposit: Request For World Bank
to Support Services of a Recognized International Legal Firm
This message contains SENSITIVE BUT UNCLASSIFIED information.
Please protect accordingly.
1. (U) This is an action request message - see para 5.
2. (SBU) Septel reported on the status of the competitive bidding
process for the Aynak copper deposit. It also highlighted how
important it is that the GOA gets this right. If the process
stalls, there is any hint of non-transparent dealings, or either
side is seen to have received an unfair bargain, the experience will
have a chilling impact on an already difficult investment climate.
In particular, if there is a perception among the Afghan people that
a multinational company has "swindled them out of their national
asset," it would significantly damage the prospects for future
projects involving foreign investment. It would be difficult to
reverse the harm.
3. (SBU) The competitive bidding process to date has gone well, in
large part due to the World Bank's technical assistance for the
Ministry of Mines (MOM). The World Bank has funded advisors to MOM
and retained American consultants Gustavson Associates to guide MOM
through the process. We understand, however, that the World Bank
assistance, does not allocate resources to hire a legal firm to
advise the MOM in the upcoming negotiations in June with the winning
bidder. The selected bidder will undoubtedly bring a team of
heavy-hitting international attorneys to the negotiating table. MOM
will need equally competent international legal expertise to assist
in the negotiations and to provide practical training to one or more
Afghan attorneys. This is critical for ensuring that the GOA gets a
fair bargain and is able to navigate the complex commercial,
technical, and financial issues that bear on success.
4. (SBU) We believe that, as with the technical assistance on Aynak
privatization received by MOM to date, the assistance for legal
support should also be provided by a multilateral development
institution such as the World Bank. We do not believe that the USG
should fund this assistance directly. Prior experience elsewhere
has demonstrated that USG funding for legal consultants in a
commercial negotiation process can be sensitive as it often leads to
accusations of bad faith and bias in favor of U.S. interests.
5. (SBU) ACTION REQUEST: Given the importance to Afghanistan of
the Aynak project in of itself and as a precedent for foreign
investment and future development of its natural resources, Embassy
requests that Washington agencies urge World Bank management to
extend the Bank's technical assistance to include services of a
recognized international legal firm familiar with mining
transactions to advise MOM in its negotiations with the winning
bidders.
Norland