Lack of Oversight, Official Bias Led to China Winning the Aynak Copper Tender in Afghanistan

Lack of Oversight, Official Bias Led to China Winning the Aynak Copper Tender
in Afghanistan

WASHINGTON, Oct. 15 /PRNewswire-USNewswire/ -- A report on the Aynak Copper
tender in Afghanistan shows that a Chinese firm won the rights to one of the
world's most valuable copper deposits in Afghanistan in 2007 through a flawed
process that made it impossible for Western companies to win the bid against
state-supported Chinese companies who include government aid with their bid.

James R. Yeager, who served as an Advisor to the Ministry of Mines in
Afghanistan during the tender process, said no independent oversight existed
to insure true transparency of the process.

"Unless there is change in the process to make it open and transparent and
unless the U.S. government establishes a policy for resource development to
assist the private sector, China will continue to gain undue influence on the
Afghan economy and ultimately Afghan society as a whole," Yeager said. "This
will be harmful to everything America is trying to accomplish in bringing
stability, and a self-sustaining market economy to Afghanistan."

Former Congressman Don Ritter, who has been engaged with Afghanistan for 30
years, said something must be done so that the billions of dollars and lives
sacrificed by the U.S. in Afghanistan are given some credit in the contract
process.

"The bottom line is this: we need a policy on developing mines and minerals
and oil and gas in Afghanistan that allows an honest, open competitive
process," Ritter said. "Otherwise, the market economy so crucial to the
future of the Afghan people and the governance of the country will be
dominated by the Chinese way of doing business."

The 78 page report took 18 months to produce and details the step-by-step
process of how the copper tender was steered to the Chinese firm. In addition
to Yeager, a voluntary group of individuals dedicated to the future of
Afghanistan contributed to this report. It outlines a series of
recommendations Yeager says will insure that future tenders are transparent
and will benefit not only the businesses competing but also the Afghan people:

-- There must be due diligence of the bidding firms. The track record of
firms in previous contracts must be considered. This was not allowed
by
the Afghan Mines Ministry for the Aynak tender. Due diligence must
include independently collected background information.
-- The donor community must provide more support to the Afghan minerals
sector. This is not happening now.
-- Both the World Bank and the donor community must be engaged in active
oversight of the tender process. In this case, the World Bank
instigated powerful government action and then removed itself from the
process, leaving it to the Mines Ministry alone.
-- The Transaction Advisor must be independent on the Ministry of Mines
and
must be allowed to meet with officials outside the Ministry itself.
The
Minister of Mines prevented that in this case.
-- There must be local public participation in the process from start to
finish. In this case, the Minister of Mines refused to initiate a
formal public information and outreach program.

-- Western embassies must be more engaged in the process and be better
informed of western companies' efforts.

"It is essential that western officials in Afghanistan understand the
influence that vast monies, operating under an 'Eastern business model'
framework can conflict with enlightened Afghan goals for the country," Yeager
said. "Otherwise, all the rest of their efforts, military and economic, will
go for naught."

SOURCE James R. Yeager

Larry Hart of Hartco Strategies, +1-202-262-1168,
larry.hart@att.blackberry.net