Without the specific of the WFT ever being released, we can only comment on what has been reported in the press.  If the press is correct in quoting the various government officials on how this WFT applies, we would have serious concerns.  Our views on the key concerns are summarized as follows: 

Though we are not legal experts, the way that this WFT supposedly operates, i.e., each mining company negotiates with the government individually to set a base price for commodity in which the 70% WFT is to be levied (which applies to that company alone), is not a law that can be entrenched in the new constitution. 

What is being proposed, in reality, is that government officials be give "carte blanche" in negotiating with each company an independent contract that could vary from company to company.  This contract certainly is legally binding, but it is not a law.  Laws are supposed to be applied universally and without discretion or prejudice.  Would the Ecuadorian citizens go that far as to grant government officials that much authority in levying a tax at "a case by case" level and also on a very discretionary basis?

A tax levied at 70% with no regard to profitability is simply put - all of the above.  For example, a company would have to pay this tax even if it has a business loss simply because commodity price it contracted at has exceeded the base price level.  The basis of fair taxation has to be established on the correlation between revenues and costs, i.e., profit.  This tax has totally disregarded this underlining principle.  Besides, the 70% rate is unreasonably high.  The government has no financial investment in a business venture and yet just because the commodity price has gone up, which is no guarantee of increased profitability, it takes its abnormally high tax bite up front. 

If that is the case, should there be a proposal for a corresponding tax reduction if commodity price falls?

This repressive tax will not help Ecuador build a mining industry and can only result in a no win situation for both the mining industry and the Ecuadorian people.

3.  There are ways to create a fairer, less discretionary and better WFT.

We truly appreciate the new Ecuadorian government wanting to build a mining industry as a means of creating jobs locally and increasing its revenues.  We also has no issue with the government wanting mining companies to share some of the excess profits with the local populace.  

One of the many proven ways is through levying a scaled surtax based on taxable earnings above certain levels.  The Canadian government has in the past on many occasions introduced special surtaxes on extraordinary earnings.  Such surtaxes would still be based on taxable earnings, hence whatever additional future costs would be reflected.  More importantly this is not done on commodity price alone (which is no guarantee of profitability) and it is in the spirit of "fair taxation".  Simply put, if the mining companies make more money, Ecuador makes more money.  

There are also many administrative issues if the WFT is approved at the current form (e.g., whether it is applied on a company wide basis, or mine by mine basis).  As well, this tax would simply kill all the marginal mining projects, hence it would not entice the prospect of improving employment.  We are certain others would have commented on many of these other issues already.

In closing, we hope the Ecuadorian government would, after evaluating all the public input, chooses the most balanced approach in launching this WFT for the benefit of all mining companies, the Ecuadorian people, and the investors.

Yhank you.