A multinational mining company with operations in one or more Latin American countries – countries with diverse cultures and widely different stages of social and economic development – is invariably faced with significant challenges that dictate the need for periodic legal checkups or diagnoses of its projects on a case by case basis.
Challenges Faced by Multinational Mining Companies
Some of the challenges multinational mining companies face in Latin America include the following:
- Communication problems with the company’s Latin American offices, often as a result of language barriers and/or the failure of in-country personnel to recognize critical timing requirements, may make it difficult to obtain complete and accurate information on the status of in-country operations.
- The locations of the company’s Latin American offices – often far removed from the company’s home office – frequently result in host country personnel making decisions on their own, without seeking appropriate senior management input or approval.
- Home office executives and their North American counsel may be unaware of potential problems faced in a given Latin American country and the consequences imposed by the host country’s legal system. All Latin American countries operate in civil law jurisdictions (there are a variety of types of civil codes), which may be unfamiliar to North American common law
- Legal documents in Latin America may be extremely formalistic and rigid, in large measure because they are based on civil law. These documents tend to be sparsely worded, often accompanied by unacceptable explanations that omitted items are “understood” or “unnecessary.”
- The laws in a given Latin American country may provide severe remedies (g., prejudgment attachment of bank accounts, pretrial detention or even criminal proceedings) that can significantly disrupt or paralyze a Company’s in-country operations.
Goals of an Effective Mining Legal Diagnosis
Some of the goals sought to be achieved in connection with an effective mining legal diagnosis of a mining company’s Latin American operations include: Continue reading