Mining Disputes in Latin America

Introduction

The mining sector continues to be an important industry to Latin America. Mining plays a major role in the region’s GDP and contributes significantly to its exports. Peru, for instance, is the world’s second largest producer of copper, silver and zinc, as well as Latin America’s largest producer of gold. Peru’s mining sector is responsible for 10 per cent of Peru’s GDP and 60 per cent of its exports.[2] Chile is the world’s top copper producer and the world’s second largest producer of lithium, and the mining industry accounts for 11 per cent of its GDP and over 50 per cent of its total exports.[3] Production is expected to remain important to Latin America in the years to come.

The region’s mineral-rich resources and exploration potential makes it an attractive forum for investment. The interactions between investors and the host state, surrounding communities and other actors (such as service providers and business partners) all have potential to give rise to disputes. This chapter provides an overview of mining disputes in the region.

We first explore certain human rights and environmental issues, which are becoming increasingly relevant to investor-state disputes in the mining industry. We also discuss certain issues that are unique to the extractive sector in relation to the quantification of damages. We then provide an overview of the common types of commercial disputes in the sector, such as disputes involving joint venture arrangements, offtake and streaming agreements and construction contracts.

The increasing relevance of human rights and environmental issues in investor-state disputes in the mining sector

When it comes to human rights, participants in the mining sector (as well as the business community as a whole) have been guided by the UN Guiding Principles, previously ‘soft’ norms with no binding legal effect. On 31 August 2021, however, the Inter-American Court of Human Rights approved the settlement of a case brought on behalf of lobster divers in the Miskito region, ruling that every Member State of the American Convention on Human Rights (ACHR) is obliged to comply with the principles set forth in the UN Guiding Principles.[4] As a result, the 24 Latin American and Caribbean nations that are party to the ACHR are now obliged to require their companies to carry out the ‘corporate responsibility to respect human rights’, as set forth in the Guiding Principles.[5]

The Miskito Divers case, and the hardening of previously soft norms,[6] is but one example of recent developments reflecting a trend that international human rights issues are becoming increasingly relevant to the extractive industry in Latin America.[7] These trends will undoubtedly impact the nature and extent of ways in which the mining sector interacts with the surrounding communities and environment. The following sections explore the different ways that human rights and environmental issues have arisen and the efforts taken by actors to address those issues. We first discuss the increased prevalence of states raising counterclaims for alleged harm to the environment or violations of human rights. We then explore the legal framework and mechanisms for community consultation and social licence to operate, as well as a handful of recent illustrative cases.

States asserting environmental or human rights counterclaims

Known instances of states bringing counterclaims in investor-state disputes remain relatively rare. Stories of success are even fewer. Recently, however, there has been an increase in state practice of raising human rights or environmental claims to demand claimants compensate for alleged harm to the surrounding environment or peoples. This section provides a discussion of the different ways in which these issues have arisen in investor-state disputes involving the extractive sector in Latin America.

Much debate has centred on the issue of whether a mechanism exists for states to raise counterclaims in investment treaty arbitration. Commentators have observed that investment treaties are inherently one-sided, because they exist to guarantee the rights of foreign investors against mistreatment by host states.[8] This asymmetry suggests that the dispute mechanisms contained in investment treaties will similarly be one-sided.[9]

Accordingly, known instances of states bringing counterclaims remain relatively rare. Tribunals have only awarded monetary damages for counterclaims in two known cases (Burlington v. Ecuador and Perenco v. Ecuador), both of which involved environmental counterclaims.[10] The claimants in these cases, parties to a consortium for oil exploitation in the Ecuadorian Amazon region, brought treaty claims against Ecuador after it terminated production-sharing contracts following its enactment of a 99 per cent windfall profits levy on oil production.[11] Ecuador brought counterclaims in each case, arguing that the claimants breached domestic law and must pay compensation for the environmental damage they caused.[12] In Burlington, the claimant and Ecuador entered into a compromise in which the claimant agreed not to contest the tribunal’s jurisdiction over Ecuador’s counterclaim. The Burlington tribunal ultimately found that Ecuador had breached its obligations under the bilateral investment treaties (BITs) applicable to the claimant, and awarded the claimant damages in the amount of roughly US$379 million.[13] The Burlington tribunal also found for Ecuador on the counterclaims, and ordered the claimant to pay roughly US$41 million to Ecuador, US$39 million of which was for damage to the environment.[14] The Perenco tribunal similarly found that Ecuador had breached the BIT and ordered Ecuador to pay roughly US$449 million to the claimant, less US$54 million, which it awarded to Ecuador on its environmental counterclaims.[15]

Only a handful of counterclaims have proceeded on the merits outside of Burlington and Perenco. These other tribunals, however, stopped short of finding in favour of the respondent states or awarding monetary damages on the counterclaims.[16]

For example, the tribunal in Urbaser v. Argentina found it had jurisdiction over the respondent’s counterclaim where the applicable investment agreement, the Spain–Argentina BIT, contains a dispute-resolution clause that was sufficiently broad to allow either party to bring a claim.[17] Argentina alleged that by failing to make the investments that they undertook to make in a water concession, the claimants had failed to ‘guarantee . . . the basic human right to water and sanitation’ of the ‘health and the environment of thousands of persons, most of which lived in extreme poverty’, in violation of the ‘principles of good faith and pacta sunt servanda that are recognized both by Argentine law and by international law’.[18] The tribunal noted its ‘reluctan[ce]’ to find that ‘guaranteeing the human right to water is a duty that may be born [sic] solely by the State, and never borne also by private companies like the Claimants’.[19] The tribunal reasoned, however, that while the claimants had an obligation to ‘abstain’ or ‘not to engage in activity aimed at destroying’ basic human rights,[20] this is distinct from the state’s ‘obligation to perform’ or ‘enforce the human right to water’.[21] The tribunal ultimately found that the claimants did not breach any human rights obligations, and denied Argentina’s counterclaim.

In another example, the Aven v. Costa Rica tribunal found it had jurisdiction over the respondent’s counterclaim demanding that the claimants pay restitution for causing ‘considerable environmental damage’ throughout the course of their real estate development.[22] The tribunal analysed the DR-CAFTA and found no ‘reason of principle to declare inadmissible a counterclaim in which the respondent state claims that the foreign investor has breached obligations’ under the relevant provisions of the DR-CAFTA and that it had ‘prima facie jurisdiction over the counterclaim filled in by the Respondent’.[23] The tribunal, however, dismissed Costa Rica’s counterclaim on the basis that it was procedurally deficient under the governing UNCITRAL Arbitration Rules.[24]

While not mining cases, Urbaser and Aven are instructive to understanding the growing role that human rights and environmental issues may play in investor-state disputes in the region. For instance, these awards were cited extensively by both parties in the pending Kappes et al. v. Guatemala case concerning a dispute over two mining projects for the exploitation and exploration of gold and silver, and will undoubtedly play a role in its outcome.

In the Kappes case, the United States claimants brought claims against Guatemala in 2018, alleging that it breached the DR-CAFTA when, in the midst of growing community opposition, the Guatemalan government suspended the claimants’ mining activities at the Progreso VII mining site and the claimants’ right to export minerals.[25] The claimants alleged that, as a result of Guatemala’s breaches, they had been unable to enjoy the benefits of their investment in a separate mining site, the Santa Margarita project site, in light of their inability to obtain an exploitation licence, as well as the community protests that prevented them from accessing the site.[26] Notably, the Guatemalan government justified its actions partially on the basis that the claimants had failed to engage in the increasingly prevalent issue of community consultation, which we explore further in the following section.[27]

In its December 2020 Counter-Memorial, Guatemala raised a counterclaim for ‘Environmental Remediation’.[28] Relying on Urbaser and Aven, Guatemala argued that the claimants had ‘failed to comply with Guatemalan law’[29] and that Guatemala ‘should not be left in the position of not only having to pay the costs of this arbitration proceeding, but also remedy the environmental damage caused by Claimants’.[30] Guatemala requested that the tribunal order the claimants to pay US$2 million towards ‘the costs of remediation and restitution of the area affected by Claimants’ activities’.[31] In reply, the claimants argued that the tribunal lacked jurisdiction over Guatemala’s counterclaims, which also must fail because Guatemala ‘has not even attempted to demonstrate that Claimants . . . have caused any environmental damage’ and ‘its counterclaim is premised on pure speculation that it may, in the future, suffer damages’.[32] The case is pending so it remains to be seen whether Guatemala will prevail on its environmental counterclaims.

While the known instances where respondents have prevailed remains few, actors in the extractive industry should pay heed to the rising trend of respondents bringing counterclaims demanding that claimants pay for alleged harm to the environment or human rights. Private investors and stakeholders operating in this industry will benefit from consulting the relevant environmental standards and human rights guarantees in international law (and the laws of the host state) to ensure their operations are compliant and commit to complete transparency in connection with their efforts to comply with these norms. Actors will further benefit from engagement and coordination with local communities, which we explore in the following section.

Importance of community consultation and ‘social licence’ to operate

In the extractive sector, mining companies face the challenge of striking the right balance between business priorities and societal expectations. The interaction between sustainability and economic objectives in connection with obtaining and maintaining a ‘social licence’ has gained crucial importance and sparked intense debate. At the other end of the scale, governments too must strike the right balance between attracting and sustaining foreign investment, including protecting the rights and security of the investors and their projects while, at the same time, ensuring that the legitimate interests of communities are respected and protected. In this section, we discuss the international legal framework surrounding the process of community consultation, which imposes obligations at the state level, and the elusive concept of the ‘social licence’ to operate, which may have a binding effect on private actors.

Legal framework for community consultation

The two major international instruments that lay a foundation for community consultation are the International Labour Organization’s Convention concerning Indigenous and Tribal Peoples in Independent Countries (ILO 169 or the Convention) and the United Nations Declaration on the Rights of Indigenous Peoples of 2007 (UNDRIP). The scope of each instrument, however, is limited. As their names reveal, each instrument centres only on the rights of indigenous peoples[33] and only ILO 169 carries the binding force of an international treaty.

ILO 169 was enacted in 1989 and, since then, 22 countries, most of them Latin American, have ratified it.[34] One of the salient features of ILO 169 is that it requires states to implement mechanisms and procedures that allow them to consult indigenous peoples before undertaking or authorising any project that could affect their interests. With respect to extractive activities, ILO 169 requires that states establish and maintain procedures to consult indigenous peoples ‘with a view to ascertaining whether and to what degree their interests would be prejudiced, before undertaking or permitting any programmes for the exploration or exploitation of such [mineral or sub-surface resources] pertaining to their lands’.[35]

Under ILO 169, the obligation to ensure that indigenous peoples are consulted in the context of a project rests with the state and not with the private companies.[36] Yet, not all ratifying countries have incorporated ILO 169 into their legal system, and those that have do not incorporate or implement it uniformly. This is particularly evident with certain principles that are set forth in the Convention, such as the principle of free prior and informed consent, often referred to as FPIC. FPIC can be defined as the right of indigenous peoples to be involved in the decision-making process of the development of projects affecting their lands and resources, though there currently exists no international consensus on the scope of FPIC.

ILO 169 outlines procedures that states are required to follow to engage in good faith consultations with ‘the objective of achieving . . . consent’.[37] The Convention adopts principles guiding how community consultations should be undertaken but does not impose an obligation of result, agreement or consent.[38] Further, ILO 169 does not provide indigenous people with a veto right that can be exercised against a specific project.

Although most of the Member States to the Convention expressly recognise the indigenous people’s right to FPIC, historically, the lack of clear implementing regulations left its application in a state of ambiguity. In more recent years, however, both ILO 169 and UNDRIP have had an important influence in the development and implementation of state legislation. Some of the principal mining countries in Latin America have enacted legislation implementing and building upon the concept of FPIC.[39]

Peru is a good example of this new dynamic. Peru’s Regulations on Citizen Participation in the Mining Subsector[40] (Supreme Decree No. 028) and implementing Ministerial Resolution 304[41] incorporate ILO 169 Article 15 into local legislation.[42] These regulations provide for a formalised community consultation process prior to the project receiving exploitation permits.[43] Supreme Decree No. 028 confers on Peru the responsibility of guaranteeing the right to citizen participation.[44] At the same time, it makes clear that ‘[t]he consultation does not grant the populations the right to veto the mining activities of the authority’s decision’.[45]

Clear legislation, like Supreme Decree No. 028, not only serves to protect communities’ rights, but also provides legal certainty to mining companies with respect to the scope of FPIC. As set forth in the summary of cases below, in asserting defences to treaty claims, states have claimed it is the mining companies themselves that must guarantee the right of consultation of the indigenous communities, while that duty is, in fact, that of the state. States often also justify measures affecting mining companies’ rights by alleging that outreach activities were not enough. Investment arbitration tribunals have rejected such arguments by analysing the investors’ and states’ respective conduct in light of ILO 169 local implementing regulations. In Bear Creek v. Peru, for example, the tribunal found that the relevant question was not whether the claimant could have gone further in conducting outreach activities as Peru alleged, but whether Peru could claim that such further outreach was legally required in Peru.[46]

ILO 169 and UNDRIP address the role of governments, and not of the private sector with respect to FPIC. While not rising to the level of international law, several international standards relevant to mining activities have articulated the expectation that companies obtain FPIC.[47] Some of these standards include, for example, the IFC Social Performance Standards, [48] the OECD Guidelines for Multinational Enterprises[49] and the UN Guiding Principles on Business and Human Rights,[50] which (as noted above) has recently been given legal effect by the Inter-American Court of Human Rights judgment in the Miskito Divers case. Notably, in 2014, the UN Global Compact issued a ‘Good Practice Note’ recommending that companies adjust their policies and procedures to address the right to FPIC found in UNDRIP.[51] Although these standards are not binding upon companies, ignoring them may impact a company’s ability, for example, to obtain funding from financial institutions to develop the relevant project or, as discussed in the following section, to secure the ‘social licence’ to operate.

The ambiguous concept of ‘social licence’ to operate

Social licence, or social licence to operate[52] (SLO), is a multifaceted and often unwieldy concept that plays an important role in the context of social disputes in connection with extractive activities. Unlike the FPIC, SLO focuses on the actions that firms in the private sector should perform to meet the expectations of local communities and other stakeholders. While certain best practices may exist, neither international instruments nor local laws impose a clear-cut obligation on mining companies to obtain SLO. Rather, SLO is a behavioural standard that ‘emerged as an industry response to opposition and a mechanism to ensure the viability of the sector’.[53] The licence is obtained by gaining acceptance and trust to proceed with the project in question from the concerned stakeholders.[54]

In this context, the term has been incorporated into mainstream discussion during the last couple of decades and deemed as decisive for enhancing business reputation within the mining industry. Definitions abound and vary, denoting a difficulty to capture a universal meaning or a practical form of measurement.[55] Despite conceptual and terminological difficulty, however, few would disagree in considering it as a source of legitimacy for envisioning, undertaking and concluding a project.

The undefined scope of SLO complicates the certainty desired by private actors who operate natural resource projects in foreign jurisdictions. By most measures, gaining SLO depends on voluntary action taken by private companies, which sometimes goes beyond simply meeting legal requirements or complying with the norms of a certain legal system. Multiple mining projects have been frustrated by extra-legal impacts in recent times, either because companies remain uncertain on how to develop a successful SLO approach or because governments, instead of supporting and protecting the right of investors, choose to support actors who object to a given project.[56]

The process to gain SLO grows in complexity when a project impacts different communities that claim to have a stake in the project. In these situations, it is difficult to deploy actions that satisfy the demands of a myriad of individuals, which usually overlap or exclude one another. Companies have opted to carry out what is often referred to as ‘best practices’, which basically consist of strict standards that consider most factors involved in a mining project, usually in the form of a ‘community relations’ programme or a strategy for substantial engagement. Nevertheless, observance of a best practices strategy cannot guarantee that a given mining project will not face social opposition.

With almost no legal footing, communities question how SLO can protect their rights to seek modifications in or even achieve cancellation of investment projects. The intangibility and lack of clear parameters of the SLO may also result in uncertainty for investors. The success of a mining project may be left to the mercy of community members or other individuals who have personal or political interests that drive them to object to a particular project, beyond the legitimate interests of the true stakeholders.[57]

Relevant investor-state arbitration cases

Bear Creek Mining v. Peru

In 2007, Peruvian authorities issued a public necessity decree authorising Bear Creek to acquire the rights to different mining concessions that formed the Santa Ana mining project in a remote part of the Puno region, near the Bolivian border.[58] The government revoked the public necessity decree in June 2011 in response to the social unrest that was taking place in the Puno region. Bear Creek was not notified in advance, nor was it given an opportunity to be heard.

In the arbitration, Peru blamed Bear Creek for the social unrest, alleging that its outreach activities were insufficient. In analysing Peru’s argument, the tribunal acknowledged that ‘even though the concept of “social license” is not clearly defined in international law, all relevant international instruments are clear that consultations with indigenous communities are to be made with the purpose of obtaining consent from all the relevant communities’.[59] However, the tribunal observed that the relevant question was not whether the claimant could have gone further in conducting outreach activities, but whether Peru could claim that such further outreach was legally required and whether its absence caused or contributed to the social unrest.[60]

In responding to this question, the tribunal found that Peru could not allege that the investor’s conduct contributed to the social opposition engulfing the project, because the Peruvian authorities were aware of, approved and endorsed the claimant’s multiple outreach activities, including its comprehensive citizen participation plan. Evidence showed the state was largely absent from this remote region. The tribunal further held that: ‘Respondent, after its continuous approval and support of Claimant’s conduct, cannot in hindsight claim that this conduct was contrary to the ILO Convention 169 or was insufficient, and caused or contributed to the social unrest in the region.’[61] The tribunal observed, in response to Professor Philippe Sands’ dissent,[62] that the ILO Convention imposes conduct and not result obligations only on states, so even if the social licence was not achieved, the legal issue was whether the investor employ its best efforts in good faith to reach an agreement with the communities. Absent any valid reasons to justify the presidential decree that revoked the investor’s rights, the tribunal determined that an indirect expropriation had occurred.[63]

Copper Mesa v. Ecuador

In this case, the investor brought a claim against Ecuador because of Ecuador’s termination of the company’s title to several concessions, including that of the massive Junín project.[64] Ecuador argued that the Junín concession was revoked as part of a legitimate reform of its mining regime adopted for the purposes of protecting public health and the environment, where the requirement to consult the local population on the basis of an environmental impact study (EIS) was specifically intended to protect the residents and local communities and to reduce the environmental impacts of mining activities. Ecuador claimed that the investor failed to secure the approval of local communities required for the EIS approval, and instead its senior personnel directed violent acts committed on its behalf.

While the tribunal did find that the termination that stemmed from Ecuador’s mining reform amounted to an expropriation, it did not delve into whether the laws and regulations that were enacted as part of the reform were in Ecuador’s national interests. In this respect, the tribunal observed that it was not a regulator and deferred to Ecuador’s sovereign right to regulate. As for the Canada–Ecuador BIT’s fair and equitable treatment and full protection and security standards, the question for the tribunal was whether Ecuador should have provided more support to Copper Mesa against the protesters to facilitate the investor’s consultation and EIS obligations. The tribunal ultimately found that Ecuador breached the treaty because rather than encouraging the anti-miner’s physical blockade of the Junín concessions, ‘the Respondent should have attempted something to assist the Claimant in completing its consultations and other requirements for the EIS’.[65]

Notably, the evidence established that several of the claimant’s senior personnel in Quito were directing violent acts against anti-mining protesters (including firing guns and spraying mace at civilians), in violation of Ecuadorian criminal law, significantly fuelling the social tension. As a result, the tribunal found that the injury was not caused solely by respondent’s wrong and reduced the damages awarded by 30 per cent.

Lupaka Gold Corp v. Republic of Peru

The claimant in Lupaka v. Peru lodged a claim under the Canada–Peru BIT, alleging it lost access to the Invicta Project to mine gold, silver and copper in the Andes Mountains in Peru due to violent blockades by surrounding communities, which Peru failed to dissolve in contravention of its treaty obligations.[66] In response, Peru argued it fulfilled its obligations under the Canada–Peru BIT and that the claimant’s loss of its investment was caused by, inter alia, the claimant’s ‘failure to obtain support for the Invicta Project from local rural communities’.[67] Peru claims that the claimant had failed to engage with and draw support from the local rural and indigenous community, as required under Peruvian law, international law, and industry practice.[68] In support of its defence, Peru asserted that the claimant: ignored the community’s expressed concerns over the environmental impact of the mining project;[69] entered into project financing with a timeline that ‘forced it to rush negotiations’ with the surrounding community;[70] made repeated demands for forceful intervention from the Peruvian government; and further aggravated community relations by deploying a private security company to use force and violence rather than peaceful dialogue.[71] The case is pending, so it remains to be seen how the tribunal will analyse Peru’s defences.

Trends in calculating damages in mining disputes

Calculating damages in investment mining disputes is typically a complex exercise given the scale of mining projects and the extractive nature of the industry. Tribunals have grappled with how to choose among different valuation methodologies in mining disputes, which are aided by ‘real world’ valuation guidelines adopted by industry players such as CIMVAL.[72]

The cost and risks of exploration and development of mining projects are ‘front-end loaded’, and resource development companies are particularly susceptible to expropriation after they have incurred the exploration risks and expended capital development costs.[73] Adopting a purely sunk-costs-based approach may not sufficiently compensate claimants for the significant risks they have taken at the time of the respondent state’s breaching conduct, which would have the chilling effect of discouraging investors from investing in exploration activities, especially in emerging economies where FDI is most needed.

A discounted cash flow (DCF) valuation is often more appropriate to estimate expected future cash flows of the project to quantify damages in mining disputes. If there is enough information, future profitability from projects can be readily and reliably measured. The pre-production phase of extractive projects typically involves a great deal of information and data gathering. Miners in the developmental stage often engage experienced professionals with established techniques to conduct feasibility studies to establish proven or probable reserves.[74] These types of studies typically lend themselves to serving as the bases for DCF analysis. Other bases for DCF analysis, such as projections of expenses and revenue, can also be forecast with reasonable certainty in mining projects.[75] For instance, the established international market for mineral resources provides reasonable certainty for pricing and demand,[76] and the usual players engaging in major mining projects are often companies with proven reserves and histories of profitable operations.[77] In addition, market demand and prices are routinely forecast by market analysts, and exist irrespective of any individual project. Indeed, DCF analysis aligns with international mining industry valuation standards and mining industry practice, and real-world counterparties in the mining sector use DCF analysis with great frequency in connection with buy-and-sell transactions.

The following tribunals have approved or adopted the DCF method to calculate damages in mining disputes.

Gold Reserve v. Venezuela

In Gold Reserve, the tribunal reasoned that ‘the DCF method is a preferred method of valuation where sufficient data is available’, and applied an income-based DCF methodology to assess damages in a dispute over a frustrated gold and copper mining project in Venezuela stemming from permit delays.[78] In calculating damages, the tribunal reduced the claimant’s proposed DCF value for certain factors such as: lower projection of quantum of mineral deposits, a delay in obtaining relevant approvals, which reduces early revenues, and a higher country-risk premium.[79]

Crystallex v. Venezuela

The tribunal in Crystallex v. Venezuela favoured an income- or market-based forward-looking approach where the claimant, a gold miner, had established future profitability with a ‘significant degree of certainty’.[80] The Crystallex tribunal was assessing damages suffered by the claimant in an indirect expropriation of a gold mining contract that started with a permit-denial and ended with recision of the contract. Although Crystallex lacked a track record of profitability (‘because it never started operating the mine’), the tribunal found the claimant had met its burden of proving profitability because it had completed exploration activities and feasibility studies and managed to confirm proven and probable reserves.[81] The tribunal noted that gold was an asset for which costs and future profits can be estimated with greater certainty than other consumer products or commodities.[82]

Tethyan Copper v. Pakistan

The tribunal in Tethyan Copper applied DCF valuation analysis to a pre-­operational mining project in a dispute involving a denied mining licence and lease for undeveloped copper and gold deposits.[83] The tribunal held that the claimant only had to show a ‘reasonable and sufficient basis’ for its valuation, and rejected Pakistan’s ‘absolute certainty’ standard of proof for damages.[84] The tribunal concluded that no ‘fundamental uncertainties’ precluded its reliance on the DCF method, pointing to an intensive feasibility study and the commitment of the project’s two owners who had substantial and ‘impressive’ experience in operating copper and gold mines globally.[85]

Other cases

If a project is in too early a stage, some tribunals have declined to apply a DCF analysis, opting instead for a costs-based approach. For instance, the sharply divided tribunal in South American Silver v. Bolivia rejected the DCF approach in favour of a costs-based approach after finding that the mining project at issue was in an early stage of development where the miner had not conducted a feasibility study, lacked certainty that metals could be economically extracted, and had mostly inferred resources, not mineral reserves.[86] The tribunal in Copper Mesa v. Ecuador also rejected the DCF approach, observing that the mining project was at an early exploratory stage with no track record as an actual mining business and that the miner’s chances of moving beyond the exploratory stage were ‘slender’.[87]

Although not a Latin America case, the tribunal in Mohammad Ammar Al-Bahloul v. Tajikistan is instructive and further demonstrates how DCF analysis is well-tailored to serve the idiosyncrasies of calculating damages in the extractive industry. The Al-Bahloul tribunal reasoned that DCF analysis is appropriate to quantify damages in the pre-operational phase of hydrocarbon projects due to the fact that hydrocarbon reserves around the world provide the requisite data that lay the foundation for future cash flow projections.[88] The Al-Bahloul tribunal, however, ultimately rejected the DCF approach after finding that no hydrocarbons had been detected in the reserves at issue.[89]

The Bear Creek v. Peru tribunal similarly acknowledged that the DCF method was appropriate for valuing pre-operational projects, but ultimately rejected its application. A critical issue for the tribunal was the unlikeliness of obtaining the necessary social licence from local indigenous communities who strongly opposed the mine, which led to widespread, protracted – and sometimes violent – social unrest.[90] Given these circumstances, the tribunal concluded that a willing buyer was unlikely to pay a price calculated by the DCF method.[91]

It is the authors’ opinion that investor-state tribunals whose task is to measure ‘fair market value’ should be far more open to using DCF in mining disputes. It is the methodology that real-world market participants invariably use as the preferred method, irrespective of the life-stage of the project. Indeed, even early-stage projects typically contain sufficient data to reliably predict future income streams given the plethora of market data available to estimate the costs to bring, and the revenue that will obtain from, a mine in production. In contrast, a sunk-costs approach bears no relation to fair market value and often generates a windfall to the expropriating state at the expense of the foreign investor.

Trends in commercial disputes in the mining sector

Aside from the potential disputes that may arise from investors’ interactions with the host state and surrounding communities, actors may also encounter problems arising from business arrangements, which in the mining sector can take many different forms. Parties with extractive rights may wish to seek financing or to spread the risk associated with projects in an industry that is inherently high-risk. Parties may also enter into commercial relationships to sell the extracted minerals, contracts for construction of the mine, or service contracts to develop and operate the mine. In this section, we discuss common commercial relationships in the mining industry and the disputes that typically arise from them.

Joint ventures

Joint venture arrangements are common in the mining industry. A joint venture can be defined generally as a joint undertaking in which two or more parties share risk, profits, and control. Parties may enter into joint venture agreements for a variety of reasons, including to secure access to capital, technology, or expertise, to share or spread risk, or to satisfy legal requirements.[92] In particular, smaller miners or state-owned entities holding mining rights may wish to seek capital from larger miners that are interested in exploration but do not wish to assume all the risk.[93]

Disputes between joint venture partners may arise in a variety of ways. For example, disputes may arise when the partners disagree about the operations and management of the joint venture.[94] Disputes may also arise with respect to the buy-out or valuation of minority interests or transferability of participating interests, which may trigger certain rights to the remaining parties to the venture, such as the right of first refusal (ROFR) or right of first offer (ROFO). The dispute between Barrick Gold, Xstrata Copper, Goldcorp Inc, and New Gold Inc. in connection with the El Morro copper and gold mining project in Chile, provides an illustrative example of issues arising from ROFR.[95]

In that dispute, Xstrata originally owned 70 per cent of El Morro and New Gold owned the remaining 30 per cent.[96] The shareholders’ agreement between Xstrata and New Gold provided that each party had a ROFR over the other’s shares, triggered when one party received a third-party offer for its shares. Barrick entered into a sale agreement for Xstrata’s 70 per cent interest in El Morro in 2009,[97] conditional upon New Gold waiving or not exercising its ROFR.[98] Subsequently, New Gold and Goldcorp entered into an agreement whereby Goldcorp agreed to lend New Gold’s subsidiary the funds needed to exercise the ROFR (in the amount that Barrick offered to Xstrata) so that New Gold’s subsidiary could purchase Xstrata’s 70 per cent interest, which then allowed Goldcorp to acquire the shares of that New Gold subsidiary with an additional sum.[99] Barrick challenged this transaction in an Ontario Court, but ultimately failed.[100]

Another example of a mining-related joint venture relationship going sour is the Jindal Steel & Power v. Empresa Siderúrgica del Mutún dispute. The India-based claimant entered into a joint venture agreement with the respondent, a Bolivian state entity, in order to develop the El Mutún iron ore project in Santa Cruz, Bolivia.[101] In 2001, the claimant initiated an International Chamber of Commerce dispute, alleging that the respondent did not fulfil its obligations under the joint venture contract when it failed to obtain access to the land for the project.[102] The claimant also alleged that the respondent cashed bank guarantees in contravention of the joint venture agreement. In a 2014 award, the tribunal found in favour of the claimant and ordered the respondent to pay US$22.5 million in damages, including repaying US$18 million for the bank guarantees that the respondent illegally cashed.[103]

Offtake/streaming agreements

Offtake and streaming agreements are two examples of the most common alternative arrangements for parties seeking financing outside joint ventures or equity sales. An offtake agreement can be defined as a contract between a producer and an offtaker to sell and purchase all or part of the producer’s future production, typically from a specified mining project, at a set price. Offtake agreements are similar to ‘spot’ sales agreements, except they concern future production.[104] Streaming arrangements provide the right to purchase all or a portion of the precious metals produced from a base mine at a price determined for the life of the transaction by the agreement.[105]

Disputes regarding offtake agreements take the same general forms as disputes arising from mineral sales contracts. Metals and minerals sales disputes typically involve quantity of delivery, quality of metals or minerals, delivery conditions, or payment or pricing.[106] Disputes related to streaming agreements may arise when either the producer or the streamer attempt to unilaterally terminate the streaming contract.[107] For example, if production cost is higher than the purchase price in the streaming agreement, then the mining company is forced to sell at a loss. On the other hand, if production cost is lower than the purchase price, then the mining company will profit to the detriment of the streaming company. The parties may also disagree about the allocation of operational, financial and political risks, which may also lead to disputes.

Construction

In the mining sector, owners holding mining rights often contract with other parties to develop and construct a mining project. Mine development and construction often involve an engineering component, including a detailed feasibility study, detailed engineering and procurement planning, and a construction component, including construction of the mine itself as well as supporting infrastructure. The main types of construction contracts that parties use for international mining projects are engineering, procurement and construction (EPC) contracts and engineering, procurement and construction management (EPCM) contracts.[108] EPC contracts involve a single contractor handling all design, procurement and construction components, and are typically lump sum.[109] EPCM contracts feature one contractor responsible for designing the contract and managing contractors and subcontractors to perform the actual construction, and tend to be cost-reimbursable or ‘cost plus’.[110]

Disputes in construction often arise with respect to changes in the scope of work (or ‘change orders’), which are virtually inevitable in any large construction contract. Disputes resulting from change orders typically arise from EPC contracts because they are usually lump sum in nature.[111] Other types of mining construction disputes may involve disagreements regarding invoicing, risk allocation, indemnification and insurance mechanisms between the parties.[112]

The ongoing dispute between Barrick Gold Corporation and Fluor Daniel touches on certain of these common issues in construction mining disputes. This dispute arose after Barrick retained Fluor and an Argentinian company, Techint (Fluor/Techint) to perform EPCM services in connection with the construction of a gold mine and ore processing facility straddling the border of Chile and Argentina.[113] Barrick terminated the contracts for convenience in 2013 and in 2016, filed a notice of arbitration against Fluor/Techint ‘demanding damages and/or a refund of contract proceeds paid of not less than $250 million under various claims relating to Fluor/TECHINT’s alleged performance’.[114] Few details about this case are publicly available, but we understand that this dispute remains pending.

Concluding remarks

We expect that the mining industry will continue to play an important role in the Latin American economy in the coming years. Investors looking to develop a project would benefit from understanding the types of disputes that may arise in this sector. Investors should look to human rights and environmental standards for guidance and engage with surrounding communities to avoid conflicts with both the host states and local communities. Investors should also be mindful of the common types of commercial disputes arising to better manage risks and issues.


Footnotes

[1] Henry G Burnett and Craig S Miles are partners at King & Spalding. The authors express their sincere thanks to Emma Nguyen, associate at King & Spalding, for her invaluable contribution to this chapter.

[2] The International Trade Administration, Peru – Country Commercial Guide, Mining Equipment and Machinery (7 October 2021).

[3] The International Trade Administration, Chile – Country Commercial Guide, Mining (25 January 2022).

[4] Miskito Divers (Lemoth Morris et al.) v. Honduras, Inter-American Court of Human Rights, Judgment, ¶¶ 1, 5, 31, 47 (31 August 2021).

[5] id., ¶ 47.

[6] Relatedly, certain countries, including Germany, Norway and Switzerland, adopted laws requiring the companies based in those countries (and, in Germany and Norway, foreign companies doing business therein) to conduct due diligence into whether the company’s activities may affect the human rights of third parties. These laws are enforceable by fines, and in Germany’s case, by exclusion from public procurement. These laws make it incumbent upon companies engaged in mining activities to thoroughly vet the potential impact of projects well ahead of time. See V Mascarenhas et al., ‘Top Ten Developments in Business and Human Rights in 2021’, New York Law Journal (8 February 2022).

[7] Another recent example is the new draft constitution in Chile, which will be voted upon by the people through a national plebiscite in September 2022. Regardless of the outcome of the plebiscite, which is far from certain, the draft constitution contains provisions greatly expanding the rights of indigenous people to land, territories and resources including water rights in newly defined indigenous territorial autonomies. See, e.g., Consolidado Normas Aprobadas para la Propuesta Constitucional por el Pleno de a Convención (Consolidated Norms Approved for the Constitutional Proposal by the Convention Plenary), Chapter 4: Derechos Fundamentales, Article 21; id., Chapter 5: Medio Ambiente, Article 4.

[8] Y Kryvoi, ‘Counterclaims in Investor-State Arbitration’, 2012 Minn. J. of Int’l L. 216, 218 (2012); Scherer et al., ‘Environmental Counterclaims in Inv. Treaty Arb.’, 36 ICSID Review 2, 413, 414 (2021).

[9] id.

[10] Burlington Resources Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Counterclaims (7 February 2017); Perenco Ecuador Ltd. v. Republic of Ecuador, ICSID Case No. ARB/08/6, Award (27 September 2019).

[11] Burlington Resources Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Liability, ¶ 107 (14 December 2012); Perenco Ecuador Ltd. v. Republic of Ecuador, ICSID Case No. ARB/08/6, Decision on Jurisdiction, ¶ 1 (30 June 2011).

[12] Burlington Resources Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Counterclaims, § V.B.1 (7 February 2017); Perenco Ecuador Ltd. v. Republic of Ecuador, ICSID Case No. ARB/08/6, Interim Decision on the Environmental Counterclaim, ¶ 5 (27 September 2019).

[13] Burlington Resources Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Counterclaims, ¶ 1075 (7 February 2017).

[14] Burlington Resources Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Reconsideration and Award, ¶ 635 (7 February 2017).

[15] Perenco Ecuador Ltd. v. Republic of Ecuador, ICSID Case No. ARB/08/6, Award, ¶ 1023 (27 September 2019).

[16] Urbaser SA and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. Argentina (Urbaser v. Argentina), ICSID Case No ARB/07/26, Award (8 December 2016); Hesham TM Al-Warraq v. Republic of Indonesia (Al-Warraq v. Indonesia), UNCITRAL, Award (15 December 2014); Antoine Goetz et consorts v. Republique du Burundi (Goetz v. Burundi’), ICSID Case No ARB/95/3, Award (10 February 1999); Davin Aven et al. v. Costa Rica (Aven v. Costa Rica), Case No. UNCT/15/3, Final Award (18 September 2018).

[17] Urbaser v. Argentina, ¶ 1143 ICSID Case No. ARB/07/26) (8 December 2016) (citing Article IX(2), Spain–Argentina BIT (1992)).

[18] id., ¶ 1156.

[19] id., ¶ 1193.

[20] id., ¶ 1199.

[21] id., ¶ 1210.

[22] Davin Aven et al. v. Costa Rica, Case No. UNCT/15/3, Final Award, ¶ 720 (18 September 2018).

[23] id., ¶ 742.

[24] id., ¶¶ 746–47.

[25] Daniel W Kappes and Kappes, Cassiday & Associates v. Republic of Guatemala (Kappes & KCA v. Guatemala), Notice of Arbitration, ¶¶ 4–5, 68, 72, 74, 77 (9 November 2018).

[26] Kappes and KCA v. Guatemala, ICSID Case No. ARB/18/43, Notice of Arbitration, ¶¶ 50, 74, 77 (13 March 2020).

[27] Kappes and KCA v. Guatemala, ICSID Case No. ARB/18/43, Guatemala’s Counter-Memorial, § III (7 December 2020).

[28] id., § IX.

[29] id., § IX.B.

[30] id., ¶ 939.

[31] id.

[32] Kappes & KCA v. Guatemala, ICSID Case No. ARB/18/43, Claimants’ Reply, § III.G, ¶ 602 (11 June 2021).

[33] The subject of self-identification as indigenous peoples is treated in ILO 169. In addition, domestic laws may affect which parts of the population can appropriate the characterisation of indigenous peoples.

[34] The complete list of the 22 signatory countries is: Argentina, Bolivia, Brazil, Central African Republic, Chile, Colombia, Costa Rica, Denmark, Dominica, Ecuador, Fiji, Guatemala, Honduras, Mexico, Nepal, the Netherlands, Nicaragua, Norway, Paraguay, Peru, Spain and Venezuela. Fourteen are Latin American. Naturally, they all have significant indigenous populations.

[35] Article 15, ILO 169.

[36] Articles 6, 7 and 15, ILO 169. See also International Labour Organization, Report of the Committee of Experts on the Application of Conventions and Recommendations, International Labour Office, Geneva, Switzerland, at 767 (March 2010).

[37] Article 6(2), ILO 169.

[38] Commentary of Experts on the Application of Conventions and Recommendations, International Labour Conference, 100th Session. (2011). General Observation, Indigenous and Tribal Peoples, at 787–88.

[39] Burnett and Bret, Arbitration of Int’l Mining Disputes: Law and Practice, ¶ 10.20 (Oxford Univ. Press 2017).

[40] Supreme Decree No. 028-2008, Regulations on Citizen Participation in the Mining Subsector (Supreme Decree No. 028).

[41] Ministerial Resolution No. 304-2008-MEM-DM, Regulating the Citizen Participation Process in the Mining Subsector (24 June 2008).

[42] Supreme Decree No. 028, Article. 4 (‘The right to consultation referred to in Convention 169 of the International Labour Organization on Indigenous and Tribal Populations in Independent Countries is exercised and implemented in the mining subsector through the citizen participation process regulated by these Regulations’).

[43] Burnett and Bret, Arbitration of Int’l Mining Disputes: Law and Practice, ¶ 10.20 (Oxford Univ. Press 2017).

[44] Supreme Decree No. 028, Article 3.

[45] Supreme Decree No. 028, Article 4.

[46] Bear Creek Mining Corporation v. Republic of Peru, ICSID Case No. ARB/14/21, Award, ¶ 408 (30 November 2017)

[47] Sonoda, Juan, ed. (2016). Indigenous Rights in South America: FPIC and Other Key Issues for Natural Resource Development, Colorado, United States. Rocky Mountain Mineral Law Foundation at 11.

[48] Performance Standard 7, Indigenous Peoples, International Finance Corporation (‘The Performance Standards are directed towards clients, providing guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way, including stakeholder engagement and disclosure obligations of the client in relation to project-level activities’) (1 January 2012).

[49] Organisation for Economic Co-operation and Development (2011), OECD Guidelines for Multinational Enterprises, 2011 Edition, OECD Publishing, Paris, https://doi.org/10.1787/9789264115415-en.; see also Sonoda, Juan, ed. (2016). Indigenous Rights in South America: FPIC and Other Key Issues for Natural Resource Development, Colorado, United States. Rocky Mountain Mineral Law Foundation at 11.

[50] Guiding Principles on Business and Human Rights, United Nations 2011 (Article 18: ‘In order to gauge human rights risks, business enterprises should identify and assess any actual or potential adverse human rights impacts with which they may be involved either through their own activities or as a result of their business relationships. This process should . . . (b) Involve meaningful consultation with potentially affected groups and other relevant stakeholders, as appropriate to the size of the business enterprise and the nature and context of the operation.’).

[51] A Good Practice Note endorsed by the United Nations Global Compact Human Rights and Labour Working Group on 20 February 2014, United Nations Global Compact. See also Sonoda, Juan, ed. (2016). Indigenous Rights in South America: FPIC and Other Key Issues for Natural Resource Development. Colorado, United States. Rocky Mountain Mineral Law Foundation at 11.

[52] In literature, the concept has been linked to the notion of ‘corporate social responsibility’. The BNET Business Dictionary (2009) defines SOL as ‘a voluntary approach that a business enterprise takes to meet or exceed stakeholder expectations by integrating social, ethical, and environmental concerns together with the usual measures of revenue, profit and legal obligation’. For a comparison between similar instruments, see Gordon, Kathryn. (2001), The OECD Guidelines and Other Corporate Responsibility Instruments: A Comparison, OECD Working Papers on International Investment, 2001/05, OECD Publishing.

[53] Owen, John R and Deanna, Kemp, ‘Social License and Mining: A Critical Perspective. Resources Policy’ 38 at 29–35 (2012).

[54] Business for Social Responsibility (BSR) (2003). ‘The Social License to Operate’, San Francisco, United States.

[55] See, e.g., Gehman et al., Social License to Operate: Legitimacy by another Name? New Frontiers. The Institute of Public Administration of Canada (2017) (recognising that the investigation regarding social licence as a term has grown exponentially in the last years and gives rise to intense debates).

[56] Often, social actors can be motivated by interests unrelated to the true nature and impact of the project.

[57] Although scholars have attempted to define who can be considered a legitimate stakeholder, there is still much debate around this concept.

[58] The Peruvian Constitution does not allow foreigners to acquire mining concessions within 50 kilometres of the country’s border, unless a declaration of public necessity is secured from the Peruvian government.

[59] Bear Creek Mining Corp. v Peru, ICSID Case No. ARB/14/21, Award, ¶ 6 (30 November 2017).

[60] id., ¶ 408.

[61] id., ¶ 412.

[62] id., ¶¶ 412–15.

[63] id., ¶¶ 412–16.

[64] Copper Mesa Mining Corp. v. Republic of Ecuador (Copper Mesa v. Ecuador), PCA Case No. 2012-2, Award (15 March 2016).

[65] id., ¶ 6.83.

[66] Lupaka Gold Corp. v. Republic of Peru (Lupaka v. Peru), ICSID Case No. ARB/20/46, Claimant’s Memorial, ¶¶ 2–16 (1 October 2021).

[67] Lupaka v. Peru, ICSID Case No. ARB/20/46, Respondent’s Memorial on Jurisdiction and Counter-Memorial on the Merits, ¶ 25 (24 March 2022).

[68] id., § II.B.

[69] id., ¶ 221.

[70] id., ¶ 158.

[71] id., ¶ 22.

[72] See CIMVAL Guidelines, available at https://mrmr.cim.org/en/standards/valuation-guidelines-for-mineral-properties/ (last visited 27 July 2022).

[73] Hardin, Laura and Chris Milburn, ‘Valuation of “Start-Up” Oil and Gas and Mining Projects’, The Arbitration Review of the Americas 2011 at 11.

[74] ibid., at 13–14 (2010).

[75] ibid., at 14–15.

[76] PwC, “2015 International Arbitration damages research,” at 8, available at https://www.pwc.com/sg/en/publications/assets/international-arbitration-damages-research-2015.pdf (last visited 7 July 2022).

[77] ibid.

[78] Gold Reserve Inc. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/09/1, Award, 22 September 2014, ¶ 831. An income-based DCF methodology estimates a project’s future cash flow by projecting production, price and demand, and capital and operating costs, and then adjusting for timing and risk. See Darrell Chodorow and Florin Dorobantu, ‘Damages in Oil and Gas and Mining Arbitrations’, The Guide to Damages in International Arbitration, 4th ed (2021).

[79] Gold Reserve Inc. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/09/1, Award, 22 September 2014, ¶ 848.

[80] Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, ¶¶ 877, 879.

[81] Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, ¶ 878.

[82] Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, ¶¶ 879.

[83] Tethyan Copper Company Pty Limited v. Islamic Republic of Pakistan, ICSID Case No. ARB/12/1, Award, 12 July 2019, ¶¶ 2, 301.

[84] Tethyan Copper Company Pty Limited v. Islamic Republic of Pakistan, ICSID Case No. ARB/12/1, Award, 12 July 2019, ¶ 290, 301.

[85] Tethyan Copper Company Pty Limited v. Islamic Republic of Pakistan, ICSID Case No. ARB/12/1, Award, 12 July 2019, ¶332, 333.

[86] South American Silver Limited v. Bolivia, PCA Case No. 2013-15, Award, 22 November 2018, ¶¶ 823, 857, 858.

[87] Copper Mesa v. Ecuador, PCA Case No. 2012-2, Award 15 March 2016, ¶¶ 7.24, 7.27.

[88] Mohammad Ammar Al-Bahloul v. The Republic of Tajikistan, SCC Case No. V (064/2008), ¶¶ 74–75.

[89] Mohammad Ammar Al-Bahloul v. The Republic of Tajikistan, SCC Case No. V (064/2008), ¶ 76.

[90] Bear Creek Mining Corp. v. Peru, ICSID Case No. ARB/14/21, Award, ¶ 152–155, 565–569 (30 November 2017).

[91] Bear Creek Mining Corp. v. Peru, ICSID Case No. ARB/14/21, Award, ¶ 598, 600, 602 (30 November 2017).

[92] Burnett and Bret, Arbitration of Int’l Mining Disputes: Law and Practice, ¶ 7.03 (Oxford Univ. Press 2017).

[93] See Reuters, ‘Big miners plug into battery metals joint ventures’ (3 February 2022).

[94] Burnett and Bret, Arbitration of Int’l Mining Disputes: Law and Practice, ¶ 7.07 (Oxford Univ. Press 2017).

[95] id., ¶¶ 7.08–7.10.

[96] Gelowitz et al., A Battle of Mining Giants Regarding Rights of First Refusal: Ontario Superior Court of Justice Upholds Goldcorp’s Acquisition of a 70% Interest in El Morro Mining Project (July 2012); Burnett and Bret, Arbitration of Int’l Mining Disputes: Law and Practice, ¶ 7.08 (Oxford Univ. Press 2017).

[97] Reuters, ‘Xstrata sells El Morro to Barrick for $465 million’ (12 October 2009).

[98] Gelowitz et al., A Battle of Mining Giants Regarding Rights of First Refusal: Ontario Superior Court of Justice Upholds Goldcorp’s Acquisition of a 70% Interest in El Morro Mining Project (July 2012).

[99] id.

[100] Burnett and Bret, Arbitration of Int’l Mining Disputes: Law and Practice, ¶ 7.10 (Oxford Univ. Press 2017).

[101] Jindal Steel Bolivia S.A. v. Empresa Siderúrgica del Mutún, ICC Case No. 18398/CA/ASM, Final Award, ¶ 12 (19 December 2011).

[102] id., ¶ 148.

[103] id., ¶ 121. Note that the award was partially set aside in 2015 at the seat of arbitration. Jindal Steel Bolivia S.A. v. Empresa Siderúrgica del Mutún, ICC Case No. 18398/CA/ASM, Order of the Commercial Court of the City of Santa Cruz de la Sierra (18 February 2015).

[104] Burnett and Bret, Arbitration of Int’l Mining Disputes: Law and Practice, ¶ 8.43 (Oxford Univ. Press 2017).

[105] id., ¶ 8.36.

[106] id., ¶ 9.19.

[107] id., ¶ 8.41.

[108] id., ¶ 9.10.

[109] id., ¶¶ 9.11–9.12.

[110] id., ¶ 9.13.

[111] id., ¶ 9.17.

[112] id., ¶ 9.18.

[113] Fluor Corp., Notes to Consolidated Financial Statements at F-25 (2021).

[114] id.

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