Cases & Deals

Jones Day supports the establishment of a negotiation support facility for governments in emerging markets

Clients Vale Columbia Center on Sustainable International Investment

Jones Day has been working with the Humboldt-Viadrina School of Governance in Berlin and the Vale Columbia Center on Sustainable International Investment at Columbia University to create a managed fund, which would support expert advice to developing countries in the negotiation of foreign investment contracts. Large-scale, complex investment contracts related to natural resources, infrastructure, privatizations, and other areas are among the most important contracts that governments world-wide negotiate with private firms. In emerging markets, these contracts are among the most important means to generate funds to drive economic growth and development. Sub-optimal contracts prevent a country from enjoying the full long-term benefits of its assets, including through a loss of public revenue, resource degradation and depletion, environmental or safety hazards, and protests by local communities. Poorly negotiated contracts also increase the risk of corruption, expropriation and pressure to renegotiate – all of which weaken the rule of law in fragile countries and disrupt the operations enabled by those contracts. Unfortunately, in many developing countries, government officials do not have the capacity to negotiate such contracts. They need help.

Humboldt-Viadrina and the Vale Columbia Center have launched an effort to establish a Negotiation Support Facility that would provide negotiation assistance for governments around the world. The facility would arrange for multi-disciplinary teams to assist governments prepare for and conduct negotiations, ready to step in when governments need timely and affordable advice before and during negotiations. The facility would establish and manage an escrow account that would fund expert teams requested by governments. The fund also would be available to support local capacity building and contract administration.