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AGREEMENT
Between
The Government of Afghanistan (“Government”)
And
MCC-Jiangxi Copper Consortium (“MCC”)
Concerning Security for the Aynak Copper Project (the “Security Agreement”)
This Security Agreement is made this__25_day of November, 2008 between the
Government and MCC (the “Parties”).
Whereas
(A) The Ministry of Mines and MCC have entered into a Mining Contract under
which MCC lias been granted the mineral rights for the Aynak Copper Deposit
(the “Mining Contract”);
(B) The Mining Contract, incorporates a Memorandum of Agreement between the
Parties concerning Security which identifies project security as an essential
component of the development of the Aynak Copper Project;
(C) The Memorandum of Agreement concerning Security requires the Parties to
conclude a security agreement within two months of the effective date of the
Mining Contract; and
(D) The Parties wish to allocate security responsibilities for the Aynak Copper
Project.
In consideration of the commitments and obligations set forth in this Security Agreement, the
Parties agree as follows:
1. Security Coordination Committee
(1) The Government shall establish a Security Coordination Committee which
will serve as the mechanism for the Government to discuss and resolve security
issues relevant to the development and operation of the Aynak Copper Project in
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Logar Province and the maintenance of a stable security environment at and in the
vicinity of the Aynak Copper Project, and ensure full coordination between the
Parties, through close consultation and information sharing.
(2) The Minister of Interior and the Minister of Mines shall appoint a Chairman
of the Security Coordination Committee. The Security Coordination Committee
will include representatives from the following:
a. Ministry of Interior;
b. Ministry of Mines;
c. National Directorate of Security;
d. Independent Directorate of I.ocal Governance;
e. Logar Provincial Council; and
f. Other national or international security forces, as
appropriate, which may be identified at a later date.
(3) The Security Coordination Committee will meet on a regularly scheduled
basis or when requested by one of its members.
(4) The Chairman of the Security Coordination Committee shall be the contact
between the Security Coordination Committee and MCC and shall ensure that
security issues raised by MCC are promptly communicated to the Security
Coordination Committee.
2. Establishment of Security Conditions
(1) The Parties acknowledge and agree that the competent, professional performance of
the security responsibilities set forth in this Security Agreement is the best method for
establishing and maintaining adequate security conditions for the Aynak Copper Project,
taking into account the range of factors currently affecting security in Afghanistan. On
this basis, the Parties acknowledge and agree that compliance with the terms of this
Security Agreement shall be determined by the performance of each of the Parties in
undertaking its specific responsibilities under this Security Agreement. The Parties
further acknowledge and agree that breaches of security by third parties shall not
constitute a breach of this Security Agreement, except to the extent that the third party
breach was due to the intentional misconduct or gross negligence of either of the Parties.
For the purpose of this Security Agreement, the term “gross negligence” shall mean the
reckless failure to use reasonable due care in the performance of the obligations
established for the Parties under this Security Agreement. Finally, the Parties
acknowledge that as security conditions improve in Afghanistan, the responsibilities
established under this Security Agreement may be subject to modification to reflect the
security conditions that may exist in the future.
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(2) The Parties aeknowledge and agree that this Security Agreement shall only address
security for the mining, mineral processing facilities, infrastructure, installations and
other assets, including roads, authorized under the Aynak Mining License that arc
constructed and operated for the purpose of mining, and processing of ore into saleable
commodities. The Parties further acknowledge and agree that this Security Agreement
does not address security for other facilities, infrastructure, installations or assets that are
identified in the Mining Contract, including, but not limited to, the coal mine, power
plant, power transmission lines, and mining facilities associated with the production of
limestone, phosphate and quartz (silica). Security for such other facilities, infrastructure,
installations and assets will be covered under the relevant Ancillary Agreements.
Moreover, the Parties acknowledge and agree that the Government shall be primarily
responsible for establishing and maintaining security for any facility, infrastructure,
installation or other asset for which security responsibilities arc not specifically allocated
pursuant to this Security Agreement or under the relevant Ancillary Agreements.
3. Afghan National Police (“Aynak Protection Unit”)
(1) The Government shall establish and dedicate a force of fifteen hundred
(1500) Afghan National Police (“Aynak Protection Unit”) to provide security for
the Aynak Copper Project. The Aynak Protection Unit shall be garrisoned in
Logar Province, in reasonable and sufficient proximity to MCC’s facilities to
allow for the establishment and maintenance of adequate security conditions and
to allow for adequate and appropriate response to security concerns that may arise
in the Aynak Copper Project area. The Government agrees that the Aynak
Protection Unit will be appropriately ai d adequately equipped and provisioned to
enable it to undertake its security obligations with respect to the Aynak Copper
Project.
(2) The Parties acknowledge and agree that the Aynak Protection Unit shall
constitute the primary security force for the Aynak Copper Project provided by
the Government under this Security Agreement. The provision of other Afghan
National Security Forces will occur in accordance with the requirements
established in Section 4 of this Security Agreement.
(3) The Parties acknowledge and agree that the Aynak Protection Unit will
undertake its security operations under this Security Agreement in a manner
consistent with its legal authority under applicable Afghan law and its obligations
under international treaties and agreements with respect to matters covered by this
Security Agreement. At all times during the term of this Security Agreement, the
Aynak Protection Unit will remain under the jurisdiction and operational control
of the Government.
(4) The Parties acknowledge and agree that the Aynak Protection Unit assigned
to the Aynak Copper Project will focus its security efforts outside of MCC’s
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facilities and will be the only security force authorized to enter MCC’s facilities.
The Parties acknowledge and agree that inspections of MCC’s facilities related to
its mining activities shall be conducted by the Mining Inspectorate of the Ministry
of Mines in accordance with its inspection authorities under the Minerals Law.
The Aynak Protection Unit shall only enter MCC’s facilities under the following
circumstances: 1) at the request of MCC or 2) upon the approval of MCC, which
shall not be unreasonably or unlawfully withheld. The Aynak Protection Unit
shall not carry any weapons when entering MCC’s facilities under the above
circumstances. In the event that the Aynak Protection Unit enters MCC’s
facilities under the above circumstances, MCC shall provide armed MCC security
personnel, as necessary, to accompany the Aynak Protection Unit and cooperate
with the Aynak Protection Unit in the performance of its mission. The Aynak
Protection Unit shall be authorized to enter MCC’s facilities and carry weapons,
without MCC’s approval, in the event of extraordinary security circumstances.
When entering MCC’s facilities, the Aynak Protection Unit shall be required to
comply with any health, safety or other reasonable operational requirements
established by MCC for visitors to its facilities.
(5) The Parties acknowledge and agree that the Government will assign
additional local law enforcement personnel that shall be responsible for law
enforcement and security at the employee housing, medical facilities, schools,
religious facilities, shopping, recreational and other socially beneficial facilities
that MCC will establish pursuant to the Mining Contract. The Parties agree that,
upon the presentation of identification and appropriate written authorization, as
determined by the circumstances, local law enforcement personnel shall be
authorized to enter socially beneficial facilities established by MCC for the
purposes o fundertaking legally authorized law enforcement and security
operations in accordance with the requirements of this Security Agreement.
(6) The Parties acknowledge and agree that the Aynak Protection Unit shall
coordinate its security efforts and cooperate with MCC’s security personnel and
other Afghan National Security forces, as necessary, to establish and maintain
adequate security conditions for the Aynak Copper Project.
(7) To promote the coordination of scci rity efforts between the Parties and to
ensure that operational security issues are resolved promptly in a cooperative
manner, the Parties agree to establish an Operational Security Committee. The
Operational Security Committee will consist of two (2) representatives each from
the Aynak Protection Unit, Mining Inspection Department of the Ministry of
Mines and MCC with an independent chairman to be appointed by the Minister of
Interior in consultation with the Ministc of Mines. The Operational Security
Committee will meet on a regularly scheduled basis, as agreed by the Operational
Security Committee, to discuss and resolve operational security matters. The
Operational Security Committee shall report to the Security Coordination
Committee, established under Section 1 of this Security Agreement, on a regular
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basis or when operational security matters are identified by the Operational
Security Committee that requires referral to the Security Coordination Committee.
(8) The Government shall provide MCC with an estimated schedule of the
deployment of the Aynak Protection Unit and the commencement of de-mining
within one (1) month of the effective date of this Security Agreement.
4. Other Afghan National Security Forces
(1) The Parties acknowledge and agree that additional Afghan National Security
forces may be provided by the Government on an as needed basis to support the
Afghan Aynak Protection Unit dedicated to the establishment and maintenance of
adequate security conditions for the Aynak Copper Project. The determination of
need shall be established by the Security Coordination Committee upon the
request of any of its members.
(2) In the event of a security emergency, MCC shall contact the Ministry of
Interior directly to request the deployment of additional Afghan National Security
forces to respond to the security emergency.
5. MCC Security Personnel
(1) The Parties acknowledge and agree that MCC shall be primarily responsible
for security inside the boundary of MCC’s facilities. For the purpose of this
Security Agreement, MCC’s facilities boundary shall be the area defined by MCC
within the Aynak Mining License in which are located the mining, and mineral
processing facilities, infrastructure, installations and other assets, including roads,
authorized under the Aynak Mining License that are constructed and operated for
the purpose of mining, and processing of ore into saleable commodities. The
Parties further acknowledge and agree that this Security Agreement does not
address security for other facilities, infrastructure, installations or assets that are
identified in the Mining Contract, including, but not limited to, the coal mine,
power plant, power transmission lines, and mining facilities associated with the
production of limestone, phosphate and quartz (silica). Security for such other
facilities, infrastructure, installations and assets will be covered under the relevant
Ancillary Agreements.
(2) MCC shall register its security personnel as required by the Ministry of
Interior.
(3) MCC shall comply with all requirements established by the Ministry of
Interior concerning the type, possession, transport and use of weapons by MCC’s
security personnel.
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(4) MCC’s security personnel shall coordinate their security efforts and cooperate
with the Aynak Protection Unit and other Afghan National Security forces, as
necessary, to establish and maintain adequate security conditions for the Aynak
Copper Project.
(5) To ensure the coordination of security efforts between MCC’s security
personnel and the Aynak Protection Unit, MCC shall be a member of and
participate in the Operational Security Committee established pursuant to Section
3(7) of this Security Agreement.
(6) MCC’s security personnel shall be authorized to detain, search, and obtain
basic information from any person who enters MCC’s facilities without
authorization. MCC’s security personnel shall immediately contact the Aynak
Protection Unit and inform it of the detention of any unauthorized entrant.
MCC’s security personnel shall be authorized to detain any unauthorized entrants
until Aynak Protection Unit arrive at the detention location and take the
unauthorized entrants into custody. The Parties acknowledge and agree that
MCC’s security personnel are prohibited from using excessive or deadly force
except in self-defense or in the defense of MCC personnel from physical attack.
(7) The Parties acknowledge and agree that MCC’s security personnel shall be subject
to all applicable Afghan laws. Violations of applicable Afghan laws by MCC’s security
personnel shall be reviewed and adjudicated in accordance with all applicable due
process requirements established under applicable Afghan law.
(8) MCC’s security personnel shall be considered to be employees of MCC, subject to
normal Afghan labour laws and comply with all requirements of the Ministry of Interior
in relation to security obligations.
(9) MCC shall be required to hire and employ 100% Afghan nationals for its security
personnel in accordance with the employment requirements established in the Mining
Contract. The 100% employment requirement shall not apply to security managers or
other senior security professionals hired by MCC to oversee and direct the operations of
MCC’s security personnel. MCC shall compensate Afghan nationals hired as security
personnel at rates not lesser than rates paid to similar Aynak Protection Unit personnel.
(10) MCC shall bear all costs related to its security purposes.
(11) MCC shall ensure discipline among its security personnel.
(12) MCC’s security personnel shall be entitled to the same freedom of movement and
communications and use of transportation and communications equipment as other PSCs
operating in Afghanistan, subject to MCC’s compliance with applicable registration and
notice requirements established under Afghan law.
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6. De-Mining and Management of Unexploded Ordinance
The Government shall be primarily responsible for the removal and proper management
of land mines and unexploded ordinance discovered in the Aynak Project Area. The Parties
acknowledge and agree that the removal and proper management of land mines and uncxploded
ordinance is a necessary condition for the commencement of exploration, drilling, sampling and
other field work by MCC. In recognition of this requirement, the Government shall initiate de-
mining activities promptly following the effective date of this Security Agreement. Any land
mines or unexploded ordinance discovered during the life of the Mining Contract shall be
disposed of by the Government immediately.
7. Duration
The Parties agree that this Security Agreement will take effect immediately upon
execution by the Parties. This Security Agreement shall expire upon the expiration or termination
of the Mining Contract, or as otherwise mutually determined.
8. Amendments
The Parties mutually agree that this Security Agreement may be amended by the written
consent of the Parties and will be revised as necessary.
9. Complete Agreement
This Security Agreement, consisting of the above Sections 1-9, shall be adopted and
incorporated into the Mining Contract as an enforceable part of the Mining Contract. Any issues
not specifically addressed by this Security Agreement shall be governed and resolved in
accordance with the relevant sections of the Mining Contract. This Security Agreement shall
become effective upon execution by the Parties. This Security Agreement shall be executed in
English in four (4) originals with each Party holding two (2) originals and in Dari. In the event
that a dispute arises under this Security Agreement between the English and Dari versions, the
English text shall be definitive as to the terms, conditions, rights and obligations of the Parties
under this Security Agreement.
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Agreed
This
MCC-Jiangxi Copper Consortium