SOUND FROM THE UNDERGROUND

Turkey 2012 | ENERGY & MINING | INTERVIEW

TBY talks to Baran Umut Baycan, Founding Senior Partner of Baycan Law Office, on mining sector expertise, new regulations, and assisting companies as they invest.

Baran Umut Baycan
BIOGRAPHY
Baran Umut Baycan was called to the bar in November 2000. Between 1999 and 2002 he worked at Iplikçioðlu Law Office, and later worked at Park Holding and ATV Television Legal Department. Baycan Law Office was established in Istanbul in 2005. He is also a member of the Istanbul Bar Association, and the General Manager of HPD Law Magazine.

What experience does Baycan have in Turkey's mining sector in terms of working with local and international companies?

Of our portfolio, 80% of our clients are dedicated to mining law, and that includes both foreign and local mining companies. In addition, companies that seek to invest in the mining sector request us to be their consultant. We operate on the basis of legal and investment consultancy services, which we provide with our best efforts. Baycan Law Office has operated in the mining sector since 2004. We represent companies in different areas of mining, including coal, gold, silver, and copper. Recently, we have begun offering consultancy services regarding oil and gas opportunities. We provide legal assistance from the exploration license stage, to the operation and development stages, as well as during and after production. We help our clients as they establish a company in Turkey, advising each on issues of labor and construction laws and investment requirements such as finding a local partner. We encourage partnerships, as they have strategic importance for Turkey and foster effective operations and local investment. Working with a strategic local partner is not compulsory, but it speeds up the process of familiarization with the country. Baycan Law Firm has witnessed many positive results from these partnerships, and local knowledge also helps companies maintain close relationships.

What has been the impact of the new mining regulations on investment activity in Turkey?

The mining regulations have been changed to provide a better investment environment for companies in the mining business. The amendments and new regulations have changed the atmosphere and opened up the pathways to investment for mining companies that utilize know-how and financial resources. This type of regulation attracts foreign investors to Turkey and creates a fair business atmosphere. Our country's positive approach to FDI has created incentives for investors and is very helpful for the industry.

How would you characterize the joint-venture trend in the mining sector?

There are several types of joint-venture trends in the sector. To achieve the best results, I suggest that a joint venture is formed between a foreign company with a good level of know-how and solid financial resources and a domestic company that has strategic value and an interest and focus in the local mining business. These joint ventures create value-added, and will almost certainly lead to the most positive solution. The foreign company creates value by saving financial and logistic sources with the help of local partner. The local company creates value by receiving mining sector-related knowledge and technology through the foreign partner, and thus both parties create value-added through a joint-venture project.

What are the major challenges facing international firms that seek to invest in the local mining sector, and how can they be overcome?

International investors face the same challenges in Turkey that can be encountered throughout the world: a new country with different values, a set of regulations, and a variety of people. Investors need time to understand the existing investment atmosphere of the new country. Time is one of the most important aspects in business, as spending resources means spending money. However, this is not a very difficult obstacle to overcome. The importance of a local partner in a new location helps companies to understand the target country of the project, saves time, and allows enterprises to focus on business. This positively influences how the local people and government in the country approach an investor.

What is your outlook for the mining and energy sector in Turkey in the medium term?

Considering the results of production and investment scales, it is clear that the Turkish mining sector is growing. The developments in the sector and the growing number of investments is encouraging. The existing approach and support for investment and industry regulations provides a healthy and transparent environment for business. Our Minister of Energy, Taner Yıldız, Mining Bureau Manager, Mehmet Hamdi Yıldırım, and the department managers of the Mining Bureau are always ready and reachable for any investor—foreign or local—to provide them with the most comfortable investment atmosphere. In the medium term, I expect more attention and investments from both local and foreign companies in addition to more partnerships that create employment, good incomes, and opportunities for the country and its people. Regarding energy, the sector is an important item on Turkey's agenda for the coming decade, and nuclear power plants may provide a solution for our energy resources. The construction of two is already planned, but this number may be increased a four, which would easily meet Turkey's energy demand.