South America may not be the easiest place to do business, but the work and opportunities available for resource-based industries — and the lawyers who represent them — can be most interesting and very profitable.
As point men go, the decision makers at Macleod Dixon llp obviously have a lot of faith in the abilities of Glenn Faass. After five years of living in Moscow, where he ran the Calgary-based law firm’s office, while co-founding others in Kazakhstan and Mongolia, Faass (pronounced “foss”) was sent in 1997 to Caracas, Venezuela, to open yet another office. The move came several years after the country’s massive oil and gas industry was opened to foreign investors and service providers, fuelling a need for legal representation.
That window of opportunity began to close just months after Faass arrived, however, with the election of the country’s socialist president, Hugo Chávez, a virulent critic of globalization and U.S. foreign policy, whose inflammatory words and threatening actions created — and continue to create — both political and economic uncertainty in Venezuela and neighbouring countries. “Our timing was impeccable,” Faass quips in a phone call from London, where he now heads Macleod Dixon’s English law practice group. “But we’ve managed to do very well.”
That’s putting it mildly. From the two legal professionals (including Faass) at its inauguration a decade ago, Macleod Dixon’s office in Caracas now boasts 46 lawyers. In addition to being the first, and still the only, major Canadian law firm to hang a shingle there, Macleod Dixon is also the biggest foreign firm in the Venezuelan capital, and one of the biggest practices there, period. In particular, it boasts the most legal professionals working in the resource industry in Venezuela — more, by Faass’ count, than the number in all the other foreign firms there combined.
And that’s not all. The experience and expertise garnered in Venezuela has served as a platform for Macleod Dixon’s expansion — with Faass leading the way — into other South American countries. In addition to being involved in several major mining- and resource-related projects in English-speaking Guyana and many of the continent’s Spanish-speaking countries — including the five Andean countries: Colombia, Ecuador, Peru, Bolivia, and Chile — Faass has represented his firm on many projects in Brazil.
He also spearheaded the opening of an office in Rio de Janeiro in 2001, when Macleod Dixon became the first foreign firm to be licensed in that exotic city, the capital of a resource-rich state that produces, among other things, 80-plus per cent of Brazil’s oil and gas offshore.
As a result, just 11 years after it first established a beachhead in South America, the region now ranks as Macleod Dixon’s biggest area of operation outside Canada in every important major term of reference, including head count and revenues. “Our trajectory there has always been up,” says Faass. “And we’re continuing to build bridges and expand into other areas.”
While Macleod Dixon has made the most significant and visible inroads into the region, it is not the only Canadian law firm doing business there — not by a long shot. In fact, of the half-dozen national and large regional Canadian firms contacted for this story — essentially a who-what-when-where-and-why overview of Canuck lawyers working in South America (rather than the larger region of Latin America) — all are actively engaged in the region and are eager to do more. Much more.
Their interest isn’t hard to understand. Since the mid-1990s, when commodity prices began their record-setting ascent on world markets, resource-rich South America has been a red-hot investment destination for blue-chip Canadian companies, lenders, and developers. According to a statistical snapshot of Latin America and the Caribbean from Canada’s Foreign Affairs and International Trade Department, which looks at the region as a whole, Canadian investments there have risen from $6 billion in 1990 to an eye-popping $100 billion in 2007.
That’s four times more than Canadians have invested in Asia. Similarly, Canadian exports to a region that 2.5 million Canadians visit annually (more than any other destination outside the United States), and which has accounted for approximately 11 per cent of immigrants to Canada this decade, also rose by a whopping 93 per cent between 2003 and 2007, when two-way trade surpassed the $20-billion mark. Canada also now ranks as the third-largest investor in South America and is a major player in the mining industry there.
With no deal in sight for the creation of a free-trade area of the Americas, whispers during the current U.S. presidential election that both candidates want to either drop out of or renegotiate NAFTA, and the failure this summer of World Trade Organization talks aimed at further liberalizing the multilateral global trade system, it’s little wonder that Canada is eager to sign and continue to pursue bilateral free trade, labour co-operation, and environmental agreements with several countries on the continent, including Chile, Peru, and Colombia. (See sidebar on page 37.)
“We are in the Americas for the long haul — as people who share common political values, as economic and business partners, as neighbours,” Prime Minister Stephen Harper said during a trip to the region in July 2007, to mark the 10th anniversary of the Canada-Chile Free Trade Agreement.
That deal was the first of its kind for Canada in the region. “Canada can play a dynamic role working with our partners in the hemisphere to build a prosperous and safe neighbourhood of nations committed to democratic values and social inclusion,” said the PM.
