CHAPTER 5 NORTH AMERICAN AND LATIN AMERICAN ATTORNEYS WORKING TOGETHER: DO WE UNDERSTAND EACH OTHER?—AND—THE SHAKY FRAMEWORK OF VENEZUELAN MINING LAW
| Jurisdiction | United States |
(Nov 1997)
NORTH AMERICAN AND LATIN AMERICAN ATTORNEYS WORKING TOGETHER: DO WE UNDERSTAND EACH OTHER?—AND—THE SHAKY FRAMEWORK OF VENEZUELAN MINING LAW
Omar E. Garcia-Bolivar
Uisdean R. Vass
Macleod Dixon
Caracas, Venezuela
NORTH AMERICAN AND LATIN AMERICAN ATTORNEYS WORKING TOGETHER: DO WE UNDERSTAND EACH OTHER?
Presentation for the Rocky Mountain Mineral Law Foundation conference in Santiago de Chile, November 3, 1997.
I- Introduction.
a) Who?
b) Where?
c) Why?
II- Structural differences in the approach.
a) Common Law v. Civil Law.
b) Precedent v. Code.
c) Change v. Constancy.
i) strategizing in fluid law environments
ii) strategizing in unchangng law environments
iii) strategizing in no law environments
iv) when one country can be more than one of those.
d) Technical analysis v. Practical application. The issue approach.
e) Legal education.
i) Graduating at 22
ii) Interning during law school
iii) When bar admission is a formality
iv) Suffering under the Socratic method.
f) Growing up in a statist economy.
i) Avoidance of taxes
ii) Technical statutes and contracts vs. General principles
iii) Importance of governmental officials
iv) Importance of administrative law
v) Centralization.
g) Lawyers picking up after cowboys.
h) Do we really have title?
III Let's speak my language.
a) The protocols of selecting the language.
i) When English?
ii) When Spanish or Portuguese?
iii) When should you speak what is not your native language?
The dangers of imperfect communication.
The dangers of not trying.
iv) They are listening to you speak your language.
b) Interpreters: Help or hindrance?
i) Is it enough to speak slowly and very loud?
ii) Speaking to be interpreted.
iii) What to watch out for in interpretation or translation.
IV. Let's write in my language.
a) Contracts in English?
b) Mandatory in Spanish or Portuguese?
c) Multiple language contracts
d) Business Cards.
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THE SHAKY FRAMEWORK OF VENEZUELAN MINING LAW
An article prepared in October 1997 for submission to Rocky Mountain Mineral Law Foundation—Institute on Mineral Development in Latin America
GENERAL
Although justly famous for its oil, Venezuela's lesser-known resources include significant mineral deposits. Currently, precious metals are the major focus. As Amazonas and Bolivar states are known to have important gold deposits, and the mining potential of Merida, Sucre and Aragua is also high. CVG, a state mining corporation, has estimated unexploited Venezuelan deposits to include eight thousand metric tons of recoverable alluvial and vein, and that US$1.7 billion has been invested in gold projects since 1993.
In some senses, Venezuelan mining law is equally rich. Its complex and ad hoc evolution has been the subject of many learned academic papers. Adding to that number is not our object. Nor do we aim to provide an historical analysis. Instead of detailing the development of mining law by ordenanza to 1854, or the ten-and-counting mining code revisions since, we would prefer to provide a practical introduction to major legal issues for mining companies in today's Venezuela.
The legal framework for Venezuelan mining is scattered among various instruments. The most important are the 1961 Venezuelan Constitution and the 1945 Mining Code, but there are also presidential, governmental and ministerial decrees, resolutions and instructions. As a result, the law is not modern, cohesive, accessible or user-friendly. Predictably, competing interpretations are common. Some important provisions have operated for specific periods and then been repealed amid questions as to validity. All of this maximizes the role of lawyers in a Venezuelan mining project.
This legal chaos is often cited as one significant reason for the low contribution which mining makes to the Venezuelan GDP and the currently anemic interest of foreign investors in what are believed to be very substantial Venezuelan mineral resources.
The Mining Code has been in force since 1945 and provides the general legal framework for mining in Venezuela. Under this legislation, precious minerals are owned by the State. Accordingly, the right to explore for and to exploit them where located must be acquired from the State, as represented by its executive, the national government, and that government's responsible agency, the Ministry of Energy and Mines.
Title 1 of the Mining Code provides for staked concessions, and Title 3 provides for discretionary concessions. Those two kinds of concessions, together with the CVG work contract, form the three basic sources of Venezuelan mineral exploration and exploitation rights.
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PRE-1977 STAKING
Under the Mining Code, prospectors may denounce (i e stake) mineral claims, except on areas reserved by the national government. Staking gave the prospector the right to receive from the Ministry of Energy and Mines a concession for the staked area. However by Decree 2039 of February 1977, the State reserved the entire territory of Venezuela. The effect was that the government effectively staked all minerals throughout the country for which concessions had not already been granted...
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