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Agreement should be for a fixed time period, preferably 20-25 years. Fiscal regime should be based on a Host Government's sharing in the true profits. Fair market charges should be made for water and for the use of surface rights.
Agreement should be for a fixed time period, preferably 20-25 years. Fiscal regime should be based on a Host Government's sharing in the true profits. Fair market charges should be made for water and for the use of surface rights.
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Agreement should be for a fixed time period, preferably 20-25 years. Fiscal regime should be based on a Host Government's sharing in the true profits. Fair market charges should be made for water and for the use of surface rights.
Droits d'auteur :
Attribution Non-Commercial (BY-NC)
Formats disponibles
Téléchargez comme DOC, PDF, TXT ou lisez en ligne sur Scribd
Where a Host Government shares in profits, Evaluate whether authorisations will be based the operator’s recovery of its original costs in solely on work programme, cash bidding or a computing profits could be spread out over a combination of the two. specified period of years, or limited each year by a specified percentage of the value of Time Period production. An agreement should be for a fixed time period, preferably 20-25 years, rather than for Minimum Royalty “so long as minerals can be profitably A royalty equal to a percentage of the fair produced”. market value of production each year, regardless of profitability, preferably on a Exploration work programme sliding scale increasing progressively with A work programme should be agreed, price or revenue. detailing what is to be done and when, A Host Government should be assured of including drilling, and requiring the minimum annual revenue, as a rental or expenditure of a specified minimum amount. royalty. There may be forfeiture penalties if the work is not performed. Payments for surface and water rights Fair market charges should be made for water Delivery of Data and for the use of surface rights. All information resulting from exploration, Where a fixed annual charge is agreed, including interpretation should be obtained by provision should be made for automatic the Host Government which should have the adjustments by a price index for changes in property rights to that information subject to the cost of living. confidentiality. Subject to the operator’s right to use the Accounting Procedures information for purposes of the Contract. Contract expenditures must qualify under rules which prohibit “gold plating”. Prospect Size & Relinquishment Regular audits according to established The size of a prospect area should be limited. procedures. If a comparatively large area is to be subject to relinquishment provision requiring the Tax Status operator to give up percentages of the Tax accounting should parallel contract exploration area over a period of time. accounting procedures. Assessable income should be exclusive of Sharing Profits operating costs and depreciation. No tax The fiscal regime should be based on a Host indemnification should be given. Government’s sharing in the true profits, including tax credits and allowances and other Bonuses direct or indirect subsidies, preferably on a Cash bonuses should be considered: on sliding scale increasing progressively with signature, on discovery, and perhaps at revenues or profitability, after the operator has different production levels, keyed to the value recovered its original costs. rather than the quantity or production. A Host Government should be assured that an A Host Government should not trade off a operator will not overprice affiliated company share of the profits or a higher royalty for transactions so as to siphon off profits. immediate cash payments (“front end” money) if this is not to its long term economic advantage.
Page 1 Checklist 1. Continued
Employment Preferences Indemnification
Nationals should be assured of genuine A Host Government, officers, employees and employment and promotion preferences in all agents, should be fully indemnified against all employment categories (including supervisory, liabilities arising out of operations. Continued administrative, technical and managerial). Records & Reporting Commitments to provide educational All pertinent information should be recorded opportunities and on the job training to qualify on a regular basis, with financial information for employment and promotion. recorded in accordance with agreed upon Local Content & Preferences accounting principles (not just those “generally Enterprises owned by Nationals should obtain accepted”), and reports rendered at least preferences in providing goods and services quarterly. through pre-qualification, Inspection & Monitoring Possible edge or set-aside of 10 -15% in Officials and their advisers should be assured competitive bidding the right in respect all operations and books Must be competitive in quality. and records at all times. Concurrence in Basic Decisions Assignment The Host Government should be assured that Host Government consent should be it will take part in the basic decisions that necessary for any assignment of any interest determine how the land will be used and the including changes in shareholder control. value of these resources realized. These should include concurrence in decision Insurance, Guarantees & Performance on the location of drill holes or wells, plant, Bonds equipment, infrastructure and access routes; Operators should be required to carry the size, method and rate of operations; appropriate insurance in adequate amounts the impact of operations on air, surface and for all operations. Performance bonds should also be required sub-surface water, and on community unless the Operator’s performance is facilities, conservation, reclamation and guaranteed by parent corporations with restoration programmes, marketing adequate assets, including cash reserves. arrangements; and annual operating budgets, where the Host Government share profits.