Mining 2017: Corporate Counsel Q&A
Juan García-Montúfar, Anglo American Perú
In an exclusive interview with Who’s Who Legal, Juan García-Montúfar discusses the changing role of in-house lawyers, the qualities he looks for when instructing external counsel, adapting to the fall in commodities prices and the challenges of achieving innovation and sustainability while adhering to a legal framework.
Founded in South Africa in 1917, Anglo American has since grown to become one of the largest mining companies in the world, boasting 113,000 people worldwide and a revenue which in 2015 hit $23 billion. The company produces copper, platinum, diamonds, coal, nickel and iron ore with mining operations across North and South America, southern Africa, and Australia.
Juan García-Montúfar possesses legal experience both in-house and in private practice, having previously held the position of legal manager of the Institute for the Defence of Competition and Protection of Intellectual Property, as well as a partner at Rubio, Leguia, Normand & Asociados. He is an active arbitrator at the Lima Chamber of Commerce and a member of the legal committee of the British Peruvian Chamber of Commerce, while also the legal manager at Anglo American Perú.
Tell us about your role at Anglo American.
As legal manager I am in charge of all legal matters of Anglo American in Peru, including the Quellaveco project and the exploration division. In addition I am also involved in some international transactions of the exploration division, mainly in the Americas.
You have previously worked in private practice, spending over 15 years at Estudio Rubio Legal Normand Asociados. What led you to a career in-house?
An important driver to make the change to in-house was the opportunity to be more involved in the business, particularly in the decision making process. My work as in-house counsel provides me with a very different perspective that allows me to better understand my client’s needs, their expectations and the impact that legal advice has on the overall business.
How has the role of the in-house lawyer changed over the last few years?
There was a perception of the in-house lawyer as one that most likely would provide legal advice on problem assessment rather than issue management, within the law mandate.
I think that in recent years that perception has changed, more in-house lawyers are now perceived as being an integral part of the solution process for complex issues, by showing the internal clients the way in which things can be done within the law.
It is clear that as lawyers we are also part of an organisation that has to meet goals, we need to work together with our internal clients towards those goals, while being restricted by what the law mandates.
What qualities do you look for in a practitioner when looking to instruct external counsel?
I would say that there are three important qualities for an external counsel: knowledge of the area of practice; responsiveness to the client’s needs; and knowledge of the business.
The three are key to successful legal advice because an answer based on a review of the law that has no practical application is basically useless, just as receiving a late response since the needs of the business will not be met.
Do you tend to hire the firm or individual?
I think in many cases it is a mix. I look for an individual with the required skills, but it is very important to have someone with the support of a firm that will allow him to support us in more complex transactions.
For example, you can have an expert on M&A, but there is little he or she can do to support the client if practicing on their own – M&As are complex transactions that would require different legal practice areas to be involved.
Tell us about any recent projects that your team has been working on. Which law firm(s) did you hire?
We have been working in some infrastructure contracts for the Quellaveco project with the help of Estudio Rodrigo, Elias & Medrano, as well as power contracts with the help of Rubio, Leguia, Normand & Asociados.
The past few years has seen commodity prices plummet and a subsequent drop in share values in mining companies. How has Anglo American adapted to overcome this challenge?
In view of the market conditions, Anglo American underwent a thorough review that led to a restructuring plan – as announced by our CEO in February – that aims to focus the company on its core portfolio of diamonds, PGMs and copper. As a result of this portfolio restructuring, Anglo American is in the process of divesting its non-core assets – including underperforming assets from its core commodities- while actively working on being more efficient by way of reducing costs.
Do you see this change in strategy from mining companies having a great impact on the legal market?
I would say that this change will call for a more efficient and cost-effective provision of legal services. Under these circumstances law firms will need to find more creative ways to charge for their services (besides the typical hourly fee), since in-house counsel are subject to more pressure to reduce costs, while keeping the quality of the services received.
The company prides itself on its strong focus on innovation and sustainability. Do you often find it challenging to maintain this vision while adhering to a legal framework?
No – I consider that assuming that the legal framework is a limitation to innovation might be unfair. On the other hand, in our role as legal counsel, we have got to stress that any of said innovations must be firmly within the boundaries of the rule of law.
Within the legal framework there are numerous possibilities for implementing innovation. Sometimes, besides assessing thoroughly the spirit of law, a constructive interaction with the authorities to openly discuss those possibilities can prove to be the best way to ensure that the right decisions are being taken while implementing innovation.
Sustainability is no less important. As a mining company we should always remember that we are being invited into a community, so we need to be grateful for that and learn to respect and care for the communities as valuable stakeholders and for the environment we share with them.
Experience in Peru has shown that a mining project cannot be developed in opposition to its neighbours. That is something worth remembering.
How do you envisage the Peruvian mining sector developing over the next few years?
Perú is a mining country. As such, there is an important pipeline of mining projects in Peru awaiting the right market conditions, and other circumstances, for their development. In addition, the government has stated their willingness to support mining projects provided they comply with the law and maintain a healthy relationship with its stakeholders. I am sure that the future is bright but we have to be a bit patient for the right conditions to exist again.