12 September 2006 Foreign powers more protective of resource assets
Foreign governments in places like Bolivia are getting more protective of their nation's resources assets, according to Marsh's latest Political Risk Briefing. The Briefing, issued out of the Political Risk Practice in Australia, reports that some foreign powers could be more likely to overturn concessions or licenses granted to Australian investors with stakes in mining and exploration activity. Such actions may be motivated by nationalist interests, such as a desire to preserve a scarce resource for domestic markets and future generations, rather than a pure financial motivation to receive a higher share of the returns. Head of Marsh's Political Risk Practice in Australia, Martin Phelan, said the Bolivian government's actions in May to nationalise their state's oil and gas resources reportedly affected up to 21 foreign companies. "The actions of the Bolivian Government are symptomatic of a phenomenon that may prove increasingly widespread and will almost certainly not be confined to emerging markets," said Martin. Martin said that the basic principles of risk management can be applied to assess, mitigate and transfer the risks specifically associated with investment or trade activity in emerging markets. Contact Martin Phelan or Ashley Pattison for more information or to obtain a copy of
the Briefing. |
