The document introduces the International Bar Association's (IBA) Model Mining Development Agreement (MMDA) project. The IBA established the mining law committee to develop the MMDA, which aims to provide a template for investor-state mining agreements based on international best practices. The committee drafted an initial version of the MMDA and is conducting consultations with governments, industry, civil society and others to refine it before presenting at an IBA conference in October 2010. The MMDA project is intended to balance the interests of host countries, communities and investors in the mining sector.

2. Public Finance Transparency
Program
Hosted by the Soros Foundation – Kazakhstan
Contract transparency in the extractive sector
as an important means of sustainable
development in Kazakhstan
An introduction to
the International Bar Association’s
Model Mining Development Agreement
Peter Leon
Chair, IBA Mining Law Committee
Astana, Kazakhstan
25 – 26 August 2010

3. Overview of Presentation
• The International Bar Association (“IBA”)
• The IBA‟s mining law committee
• The Model Mining Development Agreement (“MMDA”) project
– origins
– objective
– format
– the development process to date
• Conclusion
• Questions

4. The IBA
• The IBA, established in 1947, is the world‟s leading organisation of
international legal practitioners, bar associations and law societies
• The IBA has a membership of more than 40,000 individual lawyers and
197 bar associations and law societies spanning all continents. It has
considerable expertise in providing assistance to the global legal
community
• Grouped into two divisions – the Legal Practice Division and the Public
and Professional Interest Division – the IBA covers all practice areas
and professional interests. Through the various committees of the
divisions, the IBA enables an interchange of information and views among
its members as to laws, practices and professional responsibilities relating
to the practice of business law around the globe
• Additionally, the IBA‟s high-quality publications and world-class
conferences provide unrivalled professional development and network-
building opportunities for international legal practitioners and professional
associates
• The mining law committee, which is one of the IBA‟s 78 committees, is
responsible for the MMDA project

5. The IBA’s mining law
committee
• The mining law committee comprises 14 officers, all of whom
are legal practitioners from different parts of the world
• The mining law committee, together with five other IBA
committees, form the IBA‟s Section on Energy, Environment,
Natural Resources and Infrastructure Law (“SEERIL”)
• The objective of the mining law committee is to promote an
interchange of information, ideas, views and knowledge among
individual members of the committee as well as international
practitioners, as to the laws, practices and procedures affecting
minerals and mining in the global legal community

6. The origins of the MMDA project
• In April 2009, after initial discussions with the World Bank, the
mining law committee resolved to initiate a major project to
develop a model mining development agreement based on
international best practice principles to serve as a
negotiation template for investor-state agreements in the
mining sector in developing countries
• The mining committee will present the first version of the Model
Mining Development Agreement at the IBA‟s annual meeting, in
Vancouver, Canada, on 3 - 8 October 2010
• The MMDA project is to remain a 'living process' beyond its
initial presentation in October 2010, with new best practices
included as they are developed

7. The origins of the MMDA project
(II)
• The MMDA project has been developed in recognition of:
– the fundamental role that foreign investment plays in the mining
sector in the growth of many developing economies and, in turn, the
improvement of living standards in mine or near mine communities
– the negative impact, for example, environment damage, which mines
can have on surrounding communities is significant
– host governments have developed strong views on the role that mining
companies should play in the sustainable development of mine
communities
– there is a need to address the growing resistance of such
communities to mining operations that prove to be of little benefit to
them
– anti-corruption legislation has become more pervasive under both the
law of many developing countries and under international law, which
has led to a call by international organisations, non-governmental and
civil society organisations for increased transparency in international
resource extraction agreements

8. The origins of the MMDA project
(III)
• Mining companies are increasingly concerned about the need for a “social
license to operate”, which includes obtaining local community support
• At the same time, mining companies require certainty in terms of the legal
regime governing their mining operations and stable investment conditions
under which to operate in order to ensure the long term security of their
investments
• It has become imperative that foreign investment in the mining sector
fosters sustainable development while protecting the interests of the host
governments, mine communities and investors in an equitable way
• Many developing countries, however, do not have developed mining codes
which deal with these issues
• The need for the MMDA project arose from uncertainty as to what
constitutes best practice in investor – state agreements in the mining
sector
– the Democratic Republic of Congo's controversial contract review is a key
example of a disagreement between a host state and investors regarding what
constitutes best practice in an investor-state agreement

9. The objective of the MMDA project
• The MMDA project is primarily aimed at producing a draft model
mining development agreement based on international best practice
principles in the mining industry
• The MMDA is intended to be used as the basis of negotiations to
improve investment agreements entered into by mining companies
and host governments in jurisdictions where:
– „mature‟ mining codes are not in place;
– a mining code requires supplementation by private contract; or
– it can serve as a template for agreements with state-owned mining entities
• The MMDA will endeavor to address the matters that a potential
investor, mining company, government or civil society representative
may expect in a basic mine development agreement, such as security
of tenure, regulatory certainty, and clarification of the rights and
obligations of government and investors

10. The objective of the MMDA
project (II)
• There are a number of important points to note:
– the MMDA is a mining development agreement, and not an
exploration agreement or a community development agreement
– the MMDA is a basis for the development of an investor-state
agreement, and thus does not deal with local level issues in detail
– it is not intended that every nation adopt the MMDA, rather it is
simply a negotiation tool that governments and investors may
consider

11. The format of the MMDA project
• The MMDA takes the form of a publicly accessible web-based product
– Access to the MMDA project website, www.mmdaproject.org, is currently
controlled by means of a password, which is shared by, inter alia, members
of the committee, invitees to the two international consultations, sponsors
and collaborators
– The username is “mmda” and the password is “pr00f”
• The MMDA provides:
– multiple alternative clauses for key contractual points
– commentary explaining the uses of the alternative clauses
• This is to enable it to be adaptable and relevant to a broad range of
scenarios that mining companies and host governments face with the
negotiation of each new mining agreement
• This format also allows for easy amendment so that it may be included
in a mining law, or be used as guidelines

12. The development process to date:
the drafting process
• In 2009, the mining law committee established a working group to
manage the drafting process
• The working group compiled a confidential database of agreements
from different jurisdictions on which to draw during the drafting
process, and subsequently deconstructed these agreements to
identify provisions that represent viable best practice alternatives
for each specific subject
• The working group then undertook the revision of the draft
provisions as legitimate concerns and ideas were raised through
the consultation process
• Draft version 1.0 of the MMDA has been published on the MMDA
website

13. The development process to date:
the consultation process
• In order to develop the MMDA, broaden the base of
participation as well as ensure the legitimacy, transparency
and openness of the MMDA project, the working group,
together with representatives of key stakeholders, inter alia,
governments, industry, civil society groups, and universities, is
currently undertaking a detailed consultation process
• Two international consultations have taken place in 2010:
– the World Mines Ministries Forum in Toronto on 6 March 2010, with
government and civil society representatives
– a civil society forum, which was held in Toronto on 24 and 25 April
2010, which involved civil society representatives and other
industry experts

14. The development process to date:
the consultation process (II)
• Further consultations are to take place in the run-up to the IBA‟s
annual meeting, in Vancouver, Canada, including:
– the Public Finance Transparency Program, hosted by the Soros
Foundation, Kazakhstan, on contract transparency and model
mining development agreements in the extractive sector of
Kazakhstan in Astana, Kazakhstan
– a stakeholder review meeting of the United Nation's Economic
Commission for Africa's ("UNECA") international study group
framework report, organised by the African Union ("AU"), set to
take place in Addis Ababa, Ethiopia, on 1 to 3 September 2010
• The mining law committee has also established links with other
governmental and non-governmental organizations who are
involved in similar initiatives in order to draw on their experience
and resources

15. Conclusion
• It has become imperative that foreign investment in the mining sector
fosters sustainable development while protecting the interests of the
host governments, mine communities and investors in an equitable way
• The MMDA is based on international best practice principles and is
intended to serve as a negotiation template for investor-state
agreements in the mining sector in developing countries
• The working group has completed draft version 1.0 of the MMDA,
which has been published on the MMDA website
• The consultation process is ongoing. There are a number of
consultations scheduled to take place in the run up to the the IBA‟s
annual meeting, in Vancouver, Canada, on 3 - 8 October 2010
• We view your feedback and comments on the draft version 1.0 MMDA
as well as the process going forward, as important to the consultation
process
• The MMDA project is to remain a 'living process' beyond its initial
presentation at the IBA Annual Meeting in October 2010, with new best
practices included as they are developed

16. Questions?

17. Thanks