401 West Georgia St.
CIM MES Vancouver is pleased to present the following seminar:
Political Risk Insurance as a Management Tool for International Business Risks
This sponsored seminar provides the attendee an introduction into foreign investment risks for which Political Risk Insurance (PRI) is ideal as a method of transfer and mitigation of potential risks that could unfavourably affect the ownership, financial and operational viability of an investment in a foreign jurisdiction. Extractive and non-extractive industry experts with operations, insurance, legal and accounting experience will be leading the interactive seminar.
An overview of PRI from the Extractive Industry will be provided by Jim Gowans, P. Eng, formerly Co-President of Barrick Gold Corporation (Now President & CEO of Arizona Mining Inc. and Chair of the Board of Dominion Diamonds). Jim has extensive knowledge of PRI products; there are many case studies where many companies have lost their foreign investment assets due to failure to implement a strategic plan to protect their foreign.
An overview quantifying the potential investment risks from an insurance position will be provided by Roger Schwartz, Aon Crisis Management Senior Vice President – Political Risk Practice Winston-Salem, North Carolina. Roger has extensive foreign jurisdiction extractive and non extractive industry risk analysis and insurance procurement experience.
An overview of the political risk insurance protections available from Export Development Canada (EDC) will be presented by Matthew Jerke, Underwriter, EDC, as an example of the type of PRI provided by export credit agencies globally.
An overview of the political risk insurance protections available from MIGA will be presented by Marcus Williams, as an example of the type of PRI provided by multilateral organizations such as the World Bank and regional development banks.
The seminar has been designed for company executives, managers, accountants, bankers, legal advisors and consultants who are planning or have completed a foreign jurisdiction investment in the extractive and/or non extractive industries.
Alan Franklin, Global Business Risk Management (GBRM), Managing Director, Vancouver
James Gowans, Arizona Mining Inc., President & CEO, Vancouver
Roger Schwartz, Aon Crisis Management Senior Vice President – Political Risk Practice Winston-Salem, North Carolina
Matthew Jerke, Underwriter, Export Development Canada, Calgary
Marcus Williams, Multilateral Investment Guarantee Agency (World Bank Agency) Sector Manager (Acting) – Energy & Extractive Industries Operations Group, Washington, DC
Keith Minty, Chief Operating Officer, Aurvista Gold Corporation and Partner, GBRM, Toronto
3:30 to 3:50pm
3:50 to 4:00pm
Welcome Address and Presenters Introductions
Alan Franklin – Global Business Risk Management, Managing Director, Vancouver
4:00 to 4:20pm
Political Risk Insurance (PRI) Introduction: Alan Franklin
Introduction to foreign investment risks for which PRI is ideal as a method of transfer and mitigation (It can be both) – Important to understand the potential risks in order to understand how this insurance product can assist a company!
- Direct expropriation risks – the government expropriates project.
- Indirect or creeping expropriation – the government sterilizes the project.
- Cancellation of licenses or concessions through court orders (Galway Gold example).
- Currency inconvertibility.
- Non-Repatriation of capital or profits – particularly concerning in countries that profess currency transfers are open, but then put bureaucratic hurdles in the way of transfers to delay for years.
- Project becomes inaccessible due to blockades, insurrection etc. (may be temporary) or court orders the project to be closed.
4:20 to 4:40pm
What is PRI – an Overview: Roger Schwartz
Political risk may deprive a company of its assets, restrict its ability to fulfill a contract and / or prevent it from meeting loan repayments. The range of potential scenarios is very broad but all could have a critical impact on the balance sheet. Since 1972 AON has developed a successful business in providing PRI to protect clients’ foreign investments.
- What is a PRI product, what are the insurance product differences that are offered by insurance companies for foreign investment risk protection?
- What risks does a PRI product cover and how can such a product be cost beneficial to a company considering a foreign investment?
- Who demands that a company carry foreign investment PRI?
- Who are the major PRI issuers – multilateral organizations, export credit agencies, commercial insurers?
- What are the product pricing structures?
- What considerations favorable/unfavorable affect payout of a PRI policy?
4:40 to 5:00pm
Export Development Canada – PRI Product Overview: Matthew Jerke
- Conditions for obtaining PRI.
- Benefits of PRI from EDC.
5: 00 to 5:20pm
Multilateral Investment Guarantee Agency (MIGA) PRI Product Overview: Marcus Williams
- Who is MIGA?
- PRI products offered by MIGA.
- Conditions for obtaining PRI.
- Benefits of PRI from MIGA.
- Partial Risk Guarantees from World Bank – what they are and how they operate.
5:20 to 5:45pm
Extractive Industry Knowledge of PRI Products: James Gowans
Management knowledge of PRI products is limited – many companies have lost their foreign investment assets due to failure to implement a strategic plan to protect their foreign investment. Optimistic management planning and/or not understanding the country risks have resulted in shareholders losing their investment.
- Extractive industries knowledge of PRI products.
- Considerations that management and company board of directors should use to accept or reject a foreign investment PRI product.
- Foreign investment risks that a company should not accept.
- How has PRI been beneficial or not beneficial to extractive industry companies?
5:30 to 6:00pm
Panel Discussion with All Presenters
Gabriel Resources (www.gabrielresources.com) had their project sterilized by the Romanian government due to environmental issues in the proposed mining area, unfavorable acceptance by regional residents of inadequate social economic benefits regional communities. Significant false information concerning cyanide pollution generation and containment at mine site by environmental groups (i.e.: Sierra Fund), and political internal wrangling within the ruling government party of the Romanian government.
Panel discussion questions include:
- Why would a company like Gabriel not acquire PRI to protect their investment against potential risks?
- What would be management and board of directors’ considerations in not acquiring PRI?
- Would corporate risk knowledge (hiding head in sand) of PRI coverage be an issue? Is this an industry marketing or product pricing issue?
Questions and Answers
6:00 to 6:30pm
Meet and Greet – Refreshments
Tuesday, 31 January 2017
3:30 – 6:30 pm
401 West Georgia St., 12th Floor
Seminar is complimentary and seats are limited. Register by Friday, January 27 to secure your place. Please RSVP by replying to Vancouver@cimmes.org if you are interested in attending. This is also an excellent networking opportunity and there is no charge to attend.
Keep up to date by checking us out at: www.cimmes.org
Thank you to our sponsor, AON Canada, for providing the space and their generous support!
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