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The Company shall, when purchasing goods and services required with respect to Mining Operations, give first preference, at comparable quality, delivery schedule and price, to goods produced in the State and services provided by the State citizens or businesses, subject to technical acceptability and availability of the relevant goods and services in the State.

*See additional examples at 5.1 Customs Duties.

Example 1
4. Procurement

4.1 The Company shall, on a periodic basis, identify and invite registration of businesses in [Country] (particularly in the [Region] and with particular emphasis on businesses directly or indirectly majority owned by [Country] citizens) which are capable of supplying materials, equipment and services to the Company.
4.2 Where materials, equipment and services required for the implementation of the Scheduled Programmes are manufactured or substantially assembled (or in the case of services, are procurable) within [Country] from a business or businesses registered pursuant to Clause 4.1, such business(es) shall have the opportunity to tender and if a tender submission from any such business:

(i) meets the specifications of the invitation to tender;
(ii) is competitive in price with international sources; and
(iii) meets the quality standards and delivery requirements of the Company;
then the Company shall not discriminate against such business(es) in its award of such tender.

4.3 In assessing the tenders from local contractors and suppliers, the Company will consider the extra costs it would incur if it was to grant the contract to a foreign supplier or contractor. These extra costs shall include, but are not necessarily restricted to, wharfage costs, shipping costs, stevedoring costs, customs clearance costs, customs duties, and demurrage charges.
4.4 A Committee shall be formed, comprised of one member from each of the Ministry, the local government, the Company and a representative of the Ministry of Commerce, Trade & Industry, which shall monitor the supply and procurement of goods and services to the Facilities.
4.5 The Committee shall operate during the term of this Agreement and the Company shall furnish it with reports every six (6) months comprising the following information:

(i) a list of successful tenderers which shall include the items supplied, residence of tenderers and the reasons for awarding the tender; and
(ii) a list of unsuccessful locally based tenderers which shall include reasons for not awarding the tender.

5. Local Business Development

5.1 The Company shall:

(a) comply with the Local Business Development Programme so as to encourage and assist the establishment of businesses within [Country] (particularly in the [Region] and with a particular emphasis on businesses directly or indirectly majority owned by [Country] citizens) to supply materials, equipment and services to the Company, provided that the Company shall not be obliged to grant or lend money to any person or provide technical or other support to them;
(b) conduct an annual review of progress being made on the implementation of the Local Business Development Programme and make such variations to it as required by changing circumstances; and
(c) designate a responsible person experienced in setting up and managing small business enterprises:

(i) to assist [Country] citizens who wish to or have set up businesses to offer services to the Company and the Facilities;
(ii) to assist in the implementation of the Local Business Development Programme and variations thereof;
(iii) to liaise with the appropriate officials from [Government]; and
(iv) to compile and maintain the register referred to in Clause 4.1.

5.2 The Company may, with the consent of [Government] (which consent shall not be unreasonably withheld), amend or alter the Local Business Development Programme, with a view to securing the maximum benefit to the establishment of [Country] businesses from the Facilities. If the Company is unable to comply with some or all of the Local Business Development Programme as a result of circumstances or events beyond its control then such non-compliance shall not constitute a default under this Clause 5 and the Company may give notice of alternative or revised plans for the Local Business Development Programme.
5.3 Should the Company give notice pursuant to Clause 5.2, [Government] shall within thirty days (30) either:

(a) approve those alternative or revised plans; or
(b) meet with the Company to discuss and agree upon the alternative or revised plans.

5.4 If the discussions under Clause 5.3 do not lead to [Government]’s approval of alternative or revised plans and the Company considers [Government]’s decision to be unreasonable, the Company may elect to refer the reasonableness of [Government]’s decision to a Sole Expert in accordance with Clause 19.
5.5 If the Sole Expert determines that [Government]’s decision is not unreasonable, he shall identify to the Company such changes to the Local Business Development Programme as will be necessary to bring such programme into compliance with [Government]’s requirements in this regard and the Company shall elect whether to amend the programme accordingly or to retain the original programme. However, if the Sole Expert determines that [Government]’s decision is unreasonable, he shall declare his determination to both Parties and the proposed amendment or alteration to the Local Business Development Programme shall be deemed approved.

Example 2
9.4 Preferences
Notwithstanding its right to contract with any third party and to the extent allowed by applicable Laws, Licensee shall

(i) give preference to equipment, materials, services, and finished products manufactured in [name of host country], provided they are competitive in economic and technical terms, price, operational parameters, and delivery terms; and
(ii) in conducting its Exploration Activities and Mining Activities, give priority to the services of the indigenous people of [name of host country] or businesses owned by them, including using air, water, rail, and other transport services, provided such services are competitive in price and in efficiency and quality for performing activities of a similar nature and within similar timeframes. Such preferences, however, shall be subject to such indigenous people or businesses providing the same indemnifications and insurances and assuming the same liabilities as those in Licensee’s standard contracts with other contractors that are similar in nature.

REFER TO MMDA DISCLAIMERS AND MMDA USER’S GUIDE
PRIOR TO ANY USE OF THIS DOCUMENT.

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