Protecting our resources

 

Sir, – Your call for a pause in the issuing of exploration licences until the end of the year to allow the Oireachtas committee on communications, natural resources and agriculture to conduct a rigorous review is correct (“Protecting our resources”, August 29th).

The “obsolescing bargain” model tells us that host countries are at their most vulnerable when setting the terms for resource-seeking multinational corporations in advance of their making any investments in the host country. By contrast such corporations’ negotiating power tends to get eroded over time following their investment in the host country.

This suggests that at a very minimum the terms for any future licences should incorporate a review clause within a relatively short timescale of revenues accruing to the licensees.

Resource-seeking corporations are nothing if not pragmatic in their behaviour. If they perceive host governments as a soft touch, then they will play such governments for fools and secure terms that can border on the rapacious. If, however, host governments deploy even the slightest modicum of business savvy in their dealings with such entities, they are pragmatic enough to accept terms that yield reasonable returns for both themselves and the host country.

As they currently stand, it is not at all clear that the terms governing Ireland’s exploration licences to resource-seeking corporations can deliver anything even remotely close to reasonable returns for Ireland. – Yours, etc,

LOUIS BRENNAN PhD, FTCD,

Professor, School of Business,

Trinity College Dublin,

Dublin 2.