LETTERS TO THE EDITOR — Experienced lawyers essential for work in foreign jurisdictions

No one can disagree with the comments made by Stephane Brabant (“Mining companies urged to note differences in laws,” T.N.M., July 14/97). They are applicable to any foreign jurisdiction, even those “similar” to Canada, Australia and the United States. Corporations that do not heed that advice can end up with very expensive egg on their faces.

However, I do have one criticism — or more accurately, a warning — with respect to the closing paragraph. In-house legal departments are, unfortunately, becoming a necessity for carrying on business, but they should never be relied upon to be fully familiar with foreign laws. They have quite enough to do in keeping up-To-date with their own jurisdiction.

A corporation active in a foreign jurisdiction may have an in-house expert on the laws of that area, but unless that expert is actively engaged locally, he or she may not be up-To-date. In such a case, he or she will probably be relying on the written law. As we all know, local bureaucrats and courts can sometimes interpret the letter of the law in strange and unexpected ways.

These types of things will be known to a knowledgeable local counsel. There is no substitute for an active and varied local practice for keeping current.

By all means, corporations should formulate policies and procedures with the help of in-house counsel, but these should be reviewed and critiqued by a knowledgeable lawyer actively practising in the area. Time and annoyances may also be saved, if, before putting pen to paper in-house, a long chat is had with such a lawyer. That discussion will probably yield far more than just hard law; it will probably yield practical advice.

The comments made in the article address the subject of foreign law and legal systems, but of equal importance are foreign practices within the industry, including the types and nature of deals common to the jurisdiction. It is not of much use to present a farm-in proposal if the concept is unknown or unacceptable to local land owners. Equally, the generosity of offering a 5% net smelter return royalty (which may be common in a neighboring jurisdiction) when local practice calls for a maximum of 4% can be expensive and will, no doubt, result in a change in the expectations of local landowners.

Karl J.C. Harries, Q.C., P.Eng.

Kingston, Ont.