Resource nationalism – the modern day ‘Native Title’

AFRICA DOWNUNDER: Perth – Resource nationalism is scaring the global resources sector and is being seen by many as a modern day “native title controversy”, a leading Australian resources lawyer believes.

Speaking in Perth on the first day of the 2012 Paydirt Africa Downunder conference, Gilbert and Tobins Lawyers partner Michael Blakiston said many in the sector were becoming increasingly disenchanted by the issue, but questioned whether such pessimism was warranted.

“You don’t need to look that far back to remember the initial concern that Native Title caused,” Blakiston said.

“It may have taken many years, but we did find a re-alignment with native title legislation where all related parties are today sharing an economic outcome.

“The same is occurring with resource nationalism.

“And let’s just not concentrate on Africa – this is a worldwide phenomenon that is not just about economics.

“This is a cyclic event – resource nationalism hasn’t happened over past 1-2 years.

“Today there is a massive realignment occurring in the industry, and the issue needs to be continued to be debated. Not simply with raw emotion, but rather with a level of intelligent engagement and understanding.”

In a wide-ranging presentation, Blakiston said that Governments of all persuasions needed to listen to what stresses the resources industry.

He said it was simply not viable for Governments to ignore reality and believe they can develop major resource projects on their own using bilateral or multi-lateral finance.

He indicated the temptation of some Governments to take projects away from the original proponents and award them to other players would come at significant cost, including that country’s sovereign reputation as a safe place to invest.

He warned that subsequent project proponents may be less concerned about acting responsibly and in accordance with international standards in order to ensure the economies of the project.