Roundtable on Managing Political Risk for Extractive Industry Investments

Date: April 13, 2015 1:00-5:00pm. Reception to follow.
Location: Orrick, Herrington & Sutcliffe, 51 West 52nd Street, NY, NY 10019

CCSI and Orrick, Herrington & Sutcliffe hosted a roundtable discussion among corporate counsel, outside counsel, government officials, and political risk insurance providers to discuss how companies face and manage political risk. The roundtable was a closed discussion about the challenges companies face when investing abroad, strategies for managing political risk, and the benefits and limitations of due diligence practices and standards, political risk insurance and investment treaties.

This discussion was based on the premise that the shared goal of public and private stakeholders is a mutually beneficial, long-term investment relationship, which translates into widespread development benefits for the population and enables a reasonable return on investment. The potential for shared benefits is particularly high with investments in extractive industries, which are often capital intensive, require substantial infrastructure and supply chain investments, and often last for many decades. On the other hand, political risks for such investments are similarly high, particularly when the investment has a major footprint in a host community or is large with respect to the national economy. With this discussion, we hoped to advance a dialogue about whether and in what circumstances political risk hinders overseas investment in the extractive industries, and how companies, governments, and other institutions can effectively mitigate that risk.