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E.O. 12958 N/A 
TAGS: EMIN ECON ENRG EFIN ETRD ELTN PGOV AF
SUBJECT: Afghanistan: Aynak Copper Deposit: Request For World Bank 
to Support Services of a Recognized International Legal Firm 
 
This message contains SENSITIVE BUT UNCLASSIFIED information. 
Please protect accordingly. 
 
¶1.  (U) This is an action request message - see para 5. 
 
 
 
¶2. (SBU) Septel reported on the status of the competitive bidding 
process for the Aynak copper deposit.  It also highlighted how 
important it is that the GOA gets this right.  If the process 
stalls, there is any hint of non-transparent dealings, or either 
side is seen to have received an unfair bargain, the experience will 
have a chilling impact on an already difficult investment climate. 
In particular, if there is a perception among the Afghan people that 
a multinational company has "swindled them out of their national 
asset," it would significantly damage the prospects for future 
projects involving foreign investment.  It would be difficult to 
reverse the harm. 
 
¶3. (SBU) The competitive bidding process to date has gone well, in 
large part due to the World Bank's technical assistance for the 
Ministry of Mines (MOM).  The World Bank has funded advisors to MOM 
and retained American consultants Gustavson Associates to guide MOM 
through the process.  We understand, however, that the World Bank 
assistance, does not allocate resources to hire a legal firm to 
advise the MOM in the upcoming negotiations in June with the winning 
bidder.  The selected bidder will undoubtedly bring a team of 
heavy-hitting international attorneys to the negotiating table.  MOM 
will need equally competent international legal expertise to assist 
in the negotiations and to provide practical training to one or more 
Afghan attorneys.  This is critical for ensuring that the GOA gets a 
fair bargain and is able to navigate the complex commercial, 
technical, and financial issues that bear on success. 
 
¶4.  (SBU) We believe that, as with the technical assistance on Aynak 
privatization received by MOM to date, the assistance for legal 
support should also be provided by a multilateral development 
institution such as the World Bank.  We do not believe that the USG 
should fund this assistance directly.  Prior experience elsewhere 
has demonstrated that USG funding for legal consultants in a 
commercial negotiation process can be sensitive as it often leads to 
accusations of bad faith and bias in favor of U.S. interests. 
 
¶5.  (SBU) ACTION REQUEST:  Given the importance to Afghanistan of 
the Aynak project in of itself and as a precedent for foreign 
investment and future development of its natural resources, Embassy 
requests that Washington agencies urge World Bank management to 
extend the Bank's technical assistance to include services of a 
recognized international legal firm familiar with mining 
transactions to advise MOM in its negotiations with the winning 
bidders. 
 
Norland