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NEW YORK — Monrovia, the capital of Liberia, is not an easy place to do business. Fourteen years of civil war have left most of the city without electricity or running water. (Government offices and some businesses use less-than-reliable generators.) The rutted roads are dirt, and they turn to mud in the city’s pelting rains. The literacy rate is only 25 percent, so qualified support staff is hard to find. And doing it yourself is a laborious option: Just to communicate by e-mail, government officials have to go out to an Internet cafe and use a Yahoo account. These are not the sort of conditions that corporate lawyers from Cravath, Swaine & Moore are accustomed to. Fortunately for Cravath partner Joel Herold and his colleagues, the firm’s agreement to assist the government of Liberia in its negotiations with Mittal Steel Co., the world’s largest steel company, didn’t actually require them to go there. Instead, top Liberian officials came to them — and Herold and his associates tackled this pro bono project, involving round-the-clock negotiations over the course of about five months (Cravath lawyers spent 750 hours on the project), in one of Cravath’s well-appointed conference rooms in midtown Manhattan. If that made this international pro bono project a bit less of an adventure for the American lawyers involved, it didn’t limit the benefits that it provided to Liberia and its president, Ellen Johnson-Sirleaf. Liberia, one of the poorest countries in the world, is actually rich in natural resources — principally iron ore, timber, rubber, and gold. But those industries were largely destroyed by a prolonged civil war and the brutality and corruption of former President Charles Taylor and his inner circle. As Africa’s first elected female head of state, Johnson-Sirleaf, the Harvard-educated former World Banker who’s been at Liberia’s helm since 2005, is trying desperately to turn that around. Although widely hailed as a new hope for her country and for Africa as a whole, she has only a small window of opportunity in which to do that before skeptical Liberians lose faith. The renegotiation of the billion-dollar iron ore mining contract with Mittal Steel, something she’d pledged to complete by the end of her first year in office, was central to her ability to do that. Keeping their client in elected office is not the sort of consideration that lawyers like Herold usually have to worry about. Although a partner at Cravath, the 33-year-old Herold has a general corporate practice and had never negotiated a major natural resource concession contract before, let alone one on behalf of the fragile government of an impoverished country. And although Herold had a senior associate, a visiting attorney from the United Kingdom, and a summer associate working on the project with him, natural resources isn’t one of Cravath’s specialties; that’s probably why the firm was able to take on the project in the first place. When the International Senior Lawyers Project, at the request of Johnson-Sirleaf, started asking top American law firms to help out, most declined due to conflicts of interest. But Robert Joffe, a litigator and then Cravath’s managing partner, was intrigued by the opportunity. “Liberia had just come through a horrendous crisis, and this is a key period in Liberia’s history,” says Joffe, who in the late 1960s left Cravath to work in the Ministry of Justice in Malawi on a Ford Foundation fellowship. “So anything that can be done to help stabilize and grow the economy in Liberia is an important thing to do.” He passed the project on to the corporate department for review. Liberia already had a contract with Mittal, but it had been negotiated by the U.N.-administered interim government that assumed control after the 2003 peace agreement that led to Taylor’s exile. The cash-strapped interim government couldn’t afford to hire experienced outside lawyers to advise it. And its own officials were no match for the experienced corporate attorneys from the Paris office of Cleary Gottlieb Steen & Hamilton who were negotiating the contract for Mittal. The result was a contract that sealed great terms for Mittal but left Liberia vulnerable to being drastically underpaid in terms of royalties and taxes. So when Johnson-Sirleaf took office, she insisted that the contract be renegotiated. Mittal, reluctant to flatly oppose the “Iron Lady,” as her supporters fondly call her, relented. As Jean-Pierre Vignaud, the Cleary partner who negotiated the deal on behalf of Mittal, put it: “You don’t start a 25-year relationship with this large an investment in a confrontational atmosphere with the government.” DEAL-MAKERS But first, the Cravath lawyers had to understand why the deal was so bad for Liberia. That wouldn’t be easy for lawyers with no experience in the natural resources business. Fortunately, Robert Hillman, a law professor at the University of California, Davis and former general counsel of StarKist Foods Inc., had plenty of experience negotiating large international resource concessions. Through the International Senior Lawyers Project, he had already signed on to help out. And he brought in Louis Wells Jr., a professor at Harvard Business School and expert in the iron ore business who had helped Liberia negotiate a contract with Mittal back in the 1960s. Still, Herold faced a steep learning curve. “My first task was going through the contract and saying, �OK, I understand how these work now.’ On my second reading I could see what were the areas of concern.” The first concern was that Mittal was allowed under the contract to unilaterally set the price of the iron ore that it mined and sold to its own subsidiaries, so it could drastically reduce the taxes and royalties it would pay the government. The second was even more delicate. “The contract on its face seemed to indicate that Liberians had turned over control of some of the country’s railroads and ports to the company to use for loading and unloading iron ore,” says Herold. “As a political matter, an issue of nationalism, you couldn’t have an agreement that relinquished control over that.” These had all become hot political problems at home. Eugene Shannon, the Liberian minister of lands, mines, and energy; Morris Saytumah, the minister of state for finance, economic, and legal affairs; and Natty Davis, adviser to the president, spent weeks negotiating in Cravath’s New York conference rooms. Wells, the Harvard professor, says Cravath played a critical role. “They’d had experience in business negotiations, and they’re very good at finding ways to move things along — from the details, like who drafts what, to the role of memoranda of understanding, to what you nail down now and what you let float,” says Wells. The Liberians did most of the actual negotiating themselves, after much discussion and strategizing with their legal team. But at least one Cravath lawyer was in the conference room and available for consultation at all times. By the time the final contract was signed in Liberia on Dec. 28, it had established that Liberian iron ore would be priced according to the international market and that royalties and taxes would be paid accordingly. The control of ports and railways was returned to Liberia. A five-year tax holiday for Mittal included in the earlier contract was eliminated. And the company will no longer be exempt from any new Liberian human rights or environmental laws. The new contract is expected to create thousands of jobs in Liberia — no small thing in a country where more than 80 percent of the population is unemployed. The agreement has been widely hailed in the international press. Even the harshest critics of the old contract, such as the London-based watchdog group Global Witness Ltd., which in 2006 released a 68-page report attacking the previous deal with Mittal, have commended the changes. In May, after ratification by the Liberian parliament, the contract was signed into law. To be sure, the contract didn’t solve everyone’s concerns about the development of iron ore in Liberia. Like most natural resource development contracts, this one is covered by a confidentiality clause, and it will be difficult for Liberians to monitor revenues that the government receives from Mittal and to ensure that they’re spent wisely. “It is good that the Liberian government brought Mittal back to the negotiating table and good that Mittal renegotiated the contract, but it needs to be transparent,” says Patrick Alley, director of Global Witness. In the meantime, building on its success going up against Mittal, Liberia has turned to the renegotiation of another critical contract for the country: its 80-year rubber contract with Firestone Vineyard LLC. Joseph Bell at Hogan & Hartson is working on that matter. For his part, Herold is satisfied with the job done, and he says he’s never had such appreciative clients: “It’s just really nice to have someone appreciate the work you did for them. And it became obvious to us that it was really an important thing for the country. That was very satisfying.”
Daphne Eviatar is a staff writer for The American Lawyer , an ALM publication.

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