1 See paras. 1 and 2 of Declaration on the Establishment of a New International Economic Order, UN Doc. A/RES/3201 (S-VI) 1974.

2 multinational corporations in world development 182-83 (UN Pub. Sales No. E73II.A.11, 1973). source: multinational corporations in world development 182-83 (UN Pub. Sales No. E.73II., A. 11, 1973).

3 Resolutions of the 6th and 7th Special Sessions of the General Assembly: namely, The Declaration and Program of Action in the Establishment of a New International Economic Order—Resolutions 3201 (S-VI) and 3203 (S-VI) 1974; The Charter of Economic Rights and Duties of States—Resolution 3281 (XXIX) 1974; and Resolution 3362 (S-VII) 1975, on Development and International Economic Cooperation.

4 See generally O. Schachter, sharing the world's RESOURCES (1977).

5 D. N. Smith & L. Wells, JR., Negotiating Third World Mineral Agreements: Promises As Prologue 27-37 (1975).

6 Hancock, K., 2 Survey Of British Commonwealth Affairs 182, cited in S. Asante, Property Law And Social Goals In Ghana 164 (Ghana Universities Press, 1976).Google Scholar

7 The terms of petroleum concessions in other regions ranged from 60 to 75 years. See Zakariya, Legal and Institutional Aspects of Petroleum Exploration in Petroleum Co-operation among Developing Countries, UN Doc. ST/ESA/57 (1975), at 44.

8 See, e.g., the terms of numerous diamond concessions granted by the Ghanaian African Chiefs to Consolidated African Selection Trust at the beginning of this century. Agreements in possession of the author. In this article the author makes use of several agreements that are in his possession.

9 GA Res. 1803, 17 UN GAOR, Supp. (No. 17) 15, UN Doc. A/5217 (1962).

10 UN Doc. A/RES/3201 (S-VI) 1974.

11 UN Doc. A/RES/3281 (XXIX) 1974.

12 For an account of these developments, see generally Schanze and Others, Mining Agreements in Developing Countries, 12 J. World Trade L., 135-73 (1978); Walde, Lifting the Veil from Transnational Mineral Contracts, 1 Nat. Resources Forum 227 (1977); Zorn, New Developments in Third World Mining Agreements, id. at 239.

13 Anaconda Co. v. Overseas Private Investment Corp., reprinted in 14 ILM 1210, 1227-28 (1975).

14 E.g., under the partnership agreement between the Jamaican Government and Kaiser Aluminum and Chemical Corporation, the Government and Kaiser appointed an equal number of representatives to the Executive Committee of the joint venture.

15 Lipton, Fiscal aspects of negotiating third world mineral agreements, 59 Transactions Of The Society Of Mining Engineers 260 (March 1976).

16 The joint venture between the Ghana Government and Lonrho Ltd. of London in respect of Ashanti Goldflelds Corporation, 1973; joint venture between Ghana Government and Consolidated African Selection Trust in respect of diamond mines in Ghana, 1973; joint venture agreements between the Zambian Government and Zambian Anglo-American Ltd. and the Roan Selection Trust Ltd. in respect of Zambian copper mines, 1970; the Diminco Agreement between the Sierra Leone Government and the Sierra Leone Selection Trust Ltd. in respect of a diamond undertaking, 1970; the association agreement between the Government of Panama (Cerro Colorado Mining Development Corporation) and Texasgulf Inc., 1976. Thus, while the Diminco Agreement provides for 6 Government directors and 5 SLST directors, section 102 of the Articles of Association of the National Diamond Mining Co., Ltd., the new company constituting the joint venture, provides as follows: In addition to any other applicable requirements of law, the following actions will require the affirmative vote of three-fourths of all the Directors of the Company. Such affirmative vote shall not be unreasonably withheld by any Director having regard to the interests of the Company and of the shareholders who appointed that Director. (i) The termination of the operations of the Company or the sale, transfer or disposal of all or any part of the assets of the Company (save in the normal course of business) or the assignment or grant of any of its concession, mining or other rights to others or any amalgamation or reconstruction of the Company or to which the Company is a party. (ii) The issue of additional shares or any security convertible into share capital or the borrowing of any funds or the creation of any charges or the making of loans or the giving of guarantees. (iii) The appointment or removal of the Auditors of the Company or any subsidiary, provided that the Directors shall be at liberty by a simple majority to appoint in addition the Government Auditor or any other auditor to audit the accounts of the Company. (iv) Any purchase or sale of any product or asset or any other transaction carried out otherwise than on the best commercial terms reasonably available or in the normal commercial activities of the Company. (v) Any restriction on the effective implementation of Agreements with Government or any amendment variation or termination of any such Agreement. (vi) The expenditure by the Company of any funds or the making of any commitments in respect of any new mining operation or facility or the making of any expenditure contribution, disbursement, contract or commitment in any business or undertaking which may be considered by at least three Directors to be outside the ordinary course of business. (vii) The appointment of any committee or local board or attorney whose powers include the doing of any of the acts specified in this paragraph of this Article.

17 Smith & Wells, supra note 5, at 44.

18 Anecdote: A government director, after his return from a board meeting of a joint venture held in London, sent an appreciative note to the English managing director of the company for the wonderful cuisine at the directors’ lunch. He was oblivious of the fact that after that superb lunch the English directors got them to revalue the assets of the company resulting in very substantial tax benefits for the company.

19 E.g., with respect to the Colombia nickel agreement with Chevron and Hanna Mining Company, the Colombian Government appointed a technical committee which inter alia advised Government representatives on the board of directors of the joint venture on the technical aspects of the operations. Smith & Wells, supra note 5, at 44.

20 E.g., Swaziland.

21 Many petroleum-producing countries have established national petroleum agencies for this purpose. After terminating the management’ agreement with Roan Selection Trust Ltd. and Zambian Anglo-American Ltd., the Zambian Government established its own agencies to undertake the management of the copper mines and the marketing of the production of the mines. Another good example is the Nigerian National Petroleum Corporation.

22 Management agreements between the Ghana Government and Lonrho Ltd., Consolidated African Selection Trust Ltd., and United Africa Company, in respect of joint ventures in gold mining, diamond mining, and timber production, respectively; the Diminco Agreement between the Government of Sierra Leone and Sierra Leone Selection Trust Ltd. in 1970; the various agreements between the Nigerian Government and the various petroleum companies in which Nigeria has acquired a 55% equity interest; most of the original joint venture agreements between petroleum-producing countries in the Middle East and Latin America and petroleum companies prior to the 100% takeover of such companies; the 1970 joint venture agreement between the Zambian Government and Roan Selection Trust Ltd. and Zambian Anglo-American Ltd.; the partnership agreement between the Jamaican Government and Kaiser Aluminum and Chemical Corporation, 1977.

23 The partnership agreement between the Jamaican Government and Kaiser Aluminum and Chemical Corporation, 1977.

24 Note 16 supra.

25 Anaconda v. OPIC, supra note 13, at 1228-29. Similarly, Lonrho's intention to retain effective control over the Ashanti goldfields after the acquisition of 55% equity interest by the Ghana Government was scarcely veiled in the draft management contract it submitted to the Ghana Government in 1973. Lonrho's definition of “technical management” virtually amounted to a reassertion of the status quo unequivocally emphasizing control in the key areas. Vide, for example, the following components: 1. Preparation and execution of annual and long term programmes for mining, mine development, diamond drilling, shaft sinking and exploration. 2. Preparation of annual working cost budgets. Control of expenditure relative to the budgets set. 3. Drawing up of annual and long term forecasts of capital expenditure. Control over capital expenditure authorised. 4. Preparation of detailed programmes for engineering construction and control of their execution. 5. Advice and direction of all metallurgical processes and control over the operation of the treatment plant. 6. Organisation and control of efficient procedures for stores, ordering, purchasing and accounting. 7. Supervision of, and control over, the accounting function of the mine: maintenance of proper records and books of account for statutory purposes and the provision of management information and the receipt and payment of all moneys. ,8. Provision of proper procedures for the transfer, refining and sale of gold, silver and other minerals won. 9. The investment of any surplus funds in short term securities in the normal turn of business.

26 Anaconda v. OPIC, supra note 13, at 1237.

27 Id. at 1238.

28 See Commonwealth Secretariat, The Legislative Framework, Agreements And Financial Impositions Affecting The Mining Industry In African Commonwealth Countries 7.39 (London).

29 Address by President Kenneth Kaunda, August 31, 1973. Id. at 7.38.

30 This is the effect of sections 9(a) and 8(a) of the Mining Concession Agreement dated April 28, 1960, as amended, among the Liberian Government, the Liberian American-Swedish Minerals Co., and Bethlehem Steel. However, a full economic analysis of this agreement would be incomplete without reference to the substantial benefits in the form of infrastructure which accrued to the country. These include a 165-mile railroad, a harbor of 42-foot depth, extensive harbor facilities (one storage area, a loading dock, equipment for the loading and handling area), auxiliary facilities such as power generator and transmission facilities, and repair shops, housing, schools, churches, hospitals, communication facilities, water supply and sewerage treatment plants, airports, and service roads to accommodate the technical supervisory and working forces. The joint venture also undertook to augment commercial port facilities in the harbor to accommodate general commerce.

31 See The Legislative Framework, supra note 28, at 7.34.

32 Ibid. It has been alleged that the quotation for AAC's stock in respect of its Zambian copper interests went up on the London Stock Exchange with the announcement of the joint venture arrangements.

33 Lipton, supra note 15, at 261.

34 Formulations of the Chairman of the Ad Hoc Inter-Governmental Working Group on major principles and/or issues related to the activities of transnational corporations, UN Doc. E/C.10/AC.2/8 (1978).

35 Also known as Société Generate de Surveillance, it provides inspection services under contract to several developing country governments that lack the expertise to control the quality of imports supplied by foreign suppliers.

36 See generally, papers on control submitted by Professor Edith Penrose to the Round Table on Negotiations organized by the UN Center on Transnational Corporations, April 24-28, 1978.

37 QUoted In Fabbikant, R., Oil Discovery And Technical Change In Southeast Asia—Legal Aspects Of Production Sharing Contracts In The Indonesian Petroleum Industry 137 (Institute Of Southeast Asia Studies. Singapore, 1973).Google Scholar

38 Smith & Wells, supra note 5, and FABMKANT, supra note 37.

39 Zakariya, supra note 7, at 51.

47 Cárdenas, New characteristics of the juridical framework of the exploitation of natural resources in the Latin American context (paper prepared for the United Nations Center on Transnational Corporations).

41 Ibid.

42 Ibid.

43 Art. 2(a).

44 Art. 2(f).

45 Art. 2(f).

46 Cárdenas, supra note 40.

47 Smith & Wells, supra note 5, at 49.

48 Ibid.

49 The financial benefits of modernized concessions, such as the renegotiated Bougainville Copper Agreement between the Government of Papua New Guinea and Bougainville Copper Ltd. in 1974, could be substantial. See Faber, Bougainville renegotiated —An analysis of new fiscal terms, Mining Magazine, December 1974, at 446.

50 E.g., agreements which the National Iranian Oil Co. concluded in 1974 with CFP in France and DEMINEX of the Federal Republic of Germany. Under these contracts the 2 transnational corporations undertook to pay a signature bonus of $6 million and $65 million, respectively, and to spend a minimum of $40 million and $65 million, respectively, on exploration over a 5-year period. They also agreed to pay production bonuses. By way of remuneration, they were only guaranteed the right to purchase a certain amount of the actual production, between 35 to 40% over a 15-year period at a certain discount ranging from 3 to 5% of the market price. In both agreements the transnational corporations provided risk capital for purposes of exploration and development. But there were appropriate provisions for recouping these expenditures during the production phase (see Zakariya, supra note 7, at 53).

51 Lipton, supra note 15, at 59.

52 See, e.g., production-sharing contract between Pertamina and Phillips Petroleum Co. Indonesia and Tenneco Indonesia Inc., dated March 22, 1975, as amended June 30, 1975.

53 Id., section V, point 1.3(a).

54 Fabrikant, supra note 37, at 138-39. Fabrikant qualifies this analysis with the suggestion that the only significance of postponing the transfer of title is that it might inhibit legal actions brought by contractors against purchasers of nationalized oil, since, in theory, the Government could pass title to a third party before the oil reached the point of export. This would seem to be valid, but it is doubtful whether it is appropriate to refer to the petroleum diverted by the Government in breach of the contract as nationalized, since title to such petroleum would be already vested in the state.

55 Id. at 129.

56 Id. at 130.

57 Section VI, subsection 1.4 of the agreement.

58 However, recent reports indicate that the Indonesian Government has conducted a major inquiry into allegations of grave misconduct against Pertamina.

59 Un Economic Commission For Europe, Analytical Report On Industrial Cooperation Among European Economic Countries (Un Pub. Sales No. E.73Ii.E11, 1973).