The legal issues on a project can be broad and include many different levels of government. Most local governments have various permits, such as business licenses and building permits, required to do work. Some projects will have security issues and will work with local law enforcement.
Workforce laws vary significantly in country, regional, and local jurisdictions. The hiring and management of workers can be a complex and time-consuming issue for some projects. Companies not used to working in a union environment will invest project resources in learning and adapting to the new environment. Scheduling holidays, supporting maternity leave, and dealing with workforce reduction issues surrounding project closeout will vary in each environment, industry, and project. Understanding and managing workforce issues on a project can be simple or very complex.
National, regional, and local taxes require a project tax approach or policy on most international projects and some domestic projects. Duties for equipment and material brought into a country add complexity to the procurement plan. Equipment used temporarily to execute the project, such as a crane, is treated differently than permanently installed equipment, such as a pump. In some countries, a third party is hired to expedite the flow of materials through complex custom processes.
Copper Mining in Argentina
The new president of Argentina instituted a program to encourage economic development. One of the projects to support this program was a copper mining project in northern Argentina. This is the desert area of Argentina with a basic agrarian economy. A joint venture was formed with the encouragement of the Argentina government between a Canadian and Australian Company with all three entities owning a share of the new company.
The conceptual design work was done in Canada with support from offices in Chile, Argentina, and the United States. A U.S. contractor was awarded the contract to design, procure equipment, and build the mine. The project leadership team included members from the United States, Canada, Australia, Argentina, Chile, Puerto Rico, Cuba, and Lebanon. Materials were procured, transported, and brought through customs from twenty-one different countries. Legal issues on this project consumed a great deal of management attention and sometimes affected the project execution. Materials were occasionally delayed in customs, people with critical skills could not get visas to enter Argentina, and which country’s laws would apply to the contracts had to be debated.
Not every project will have significant legal issues. When legal issues are involved, they are typically significant and will add to the complexity of the project. Understanding the legal issues than can affect the project and developing a plan to address these issues will reduce the complexity of the project.
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