31 July 2008
The end of 2003, it was clear that most foreign investments were not only bogus and exploitative but that they also fueled insecurity in the Ecowas subregion with Liberia as epicenter.
The UN has had to save Liberia's natural resources by imposing a blanket sanction on mineral and forest products and to call for the review of other service-oriented investments such as telecommunication, Maritime, and port management, amongst others.
This prompted the Sirleaf Administration to issue Executive Order 1 annulling all concessionaire and other large-scale agreements pending review and revision and giving full force to the Investment Code of Liberia. But are these instruments working?
The National Legislature says there are troubling lapses and the Executive Mansion agrees, raising the question of how close the President and her lieutenants are on the question of granting investment licenses.
The Analyst Staff Writer looks at the prevailing debate over BRE and the characters of the public officials involved.
Nullification and Votes of No Confidence
President Ellen Johnson-Sirleaf has nullified the $150 million agreement three of her lieutenants signed on behalf of the government of Liberia with the Buchanan Renewable Energy (BRE) Liberia Inc.
The President reportedly took the action, Monday this week, after the Lower House of the National Legislature, sensing fraud in the transaction with BRE, conducted hearings and subsequently declared "votes of no confidence" in the officials involved.
The officials on whom the House slammed the "votes of no confidence" rating after separate appearances to explain the roles played in the BRE Agreement are National Investment Commission (NIC) chairman, Dr. Richard Tolbert; Acting Finance Minister Tarnu Mawolo; and Deputy Justice Minister Cianneh Johnson.
An Executive Mansion press released, Monday, quoted the President as saying that the US $150 million investment agreement signed by NIC chairman Dr. Richard Tolbert and co-signed by representatives of the ministries of Justice and Finance cannot obtain legal affirmation because those who signed it have no right under the laws of Liberia to do so.
The unauthorized signing of the agreement aside, the President reportedly supported the House's argument that the 90% duty-free privilege granted the BRE, which the NIC reportedly sought to augment by 10%, diverted millions of tax dollars that could have gone into the 2008/2008 National Fiscal Budget to help ease poverty and improve development initiatives.
The House's "votes of no confidence", which faces reconsideration, fell short of accusing the two deputy ministers and the NIC chairman of corruption, attempted corruption, or economic sabotage, the latter being capital offense in Liberia.
But House sources say the august body seems poised to take their findings to the Executive Mansion with recommendations for full-scale legal investigation for any wrongdoing under the laws of Liberia.
Presidential Pun and Enduring Questions
Speaking to Journalists at the residence of 2008 Independence Day Orator, Dr. Saku Malakpa, President Sirleaf said the NIC boss appeared unable to convince the lawmakers regarding his role in the legalization of the BRE investment agreement and that the failure left her with no option but to declare the agreement null and void, pending further review.
The President gave no date for the review, nor did she say whether any fraud or flaw were detected in the agreement beyond the present hullabaloo that those who signed it on behalf of the government did not seek appropriate executive and legislature backing and confirmation.
She then surprised many by asserting that notwithstanding the scandal and the clamor in the House for punitive action against Tolbert and his cohorts, "the NIC Boss has done a good job by promoting the image of Liberia's investment climate in a very short time".
The President's reason for nullifying the agreement that had existed for more than a year under her nose seems not plausible to many critics and independent observers.
According to some of these critics and observers, the President's decision may have been intended to preempt and diffuse the emerging tension in parliament thereby narrowing or stopping in its tracks, suspicion that the Executive Branch may have supported and signed the BRE contract in contempt of the National Legislature and in complete disregard to the new investment laws.
Observers say the President's preemptive action of nullifying the BRE agreement without considering how that action will impact the project currently in place and the confidence of investors in the commitment of the Liberian government to investment protection left much to be desired and raised more questions than provided answers.
"Moreover, the President surprised us when she said she was nullifying an agreement she probably supported or closed her eyes to at the detriment of possible full investment benefits to the Liberian people simply because Mr. Tolbert did not convince parliament," said senior economic student Jacob V. Steven of the African Methodist University in Monrovia.
He said by relying on Tolbert to convince the legislators purely on what seems legal and done with the consent of the President, being the chief administrator of government, raises the question of how closely the President's lieutenants were being monitored for propriety.
"Is the President saying that Tolbert, Mawolo or whoever the Finance Minister sent, and Johnson took upon themselves to sign a US $3.6 million investment agreement without briefing and seeking the President's blessing even if that does not require her signature? Isn't that ridiculous a disclaimer the President is putting forth?
Isn't she revealing an inner weakness - uncoordinated granting of investment rights to individuals and groups without administrative approval - that portends danger for the nation's economic recovery efforts?" wondered another observer, schoolteacher Wleh K. Togbah of VP Road in Monrovia.
Togbah said the President's statement may make perfect scapegoats of the officials involved with the BRE contract to save face but that that does very little to absolve them of the possible charge of "economic sabotage" which CDC is demanding as appropriate to deter others from taking similar actions in the future.
Analysts however say there are indications of flaw in the BRE agreement and that there was a need for the Lower House and the Executive Mansion to harmonize their actions into a legal whole to ensure that public officials henceforth do not take the administration of public good as their exclusive domain.
The BRE Agreement, Concessions, Contentions
"The facts will speak for themselves when the time is right and the Liberian people will know the games that are afoot," Tolbert said shortly after the House's probe.
He complained of being singled out for House probe even though he was just one of three signatories to the agreement on behalf of the Liberian government.
But there was to be no discrimination in the House's attempt to get into the heart of the BRE investment agreement that it considers signed illegally without the ratification of the National Legislature. The House summoned the two remaining officials and upon listening to them, also slammed a vote of no confidence on each of them.
Like chairman Tolbert, Deputy Justice Minister Ciannah Johnson conceded wrongdoing for signing the agreement but with no motive to breach the law or to seek personal fortune.
She termed her action taken "in good faith", noting that she was misled by the Executive Summary to attest the agreement, which was actually a US$150 million outlay rather than the US$3.4 million agreement it was said to be.
But unlike Minister Johnson and Chairman Tolbert, whose concession to wrongdoing he questioned, Acting Finance Minister Mawolo contended that neither the signing of the BRE agreement, nor the granting of the 100% duty-free privileges to BRE was illegal or error of judgment.
He said both actions lie within the scope if authority of the NIC and authorized agents of the ministries of Finance and Justice.
Under the investment law of Liberia, he said, the legalization of any investment agreement below US $10 million required the affirmation and signatures of the Chairman of NIC and authorized signatories of the ministries of Justice and Finance.
He contended that in the BRE case, the company proposed a US $150 million investment package in phased implementations and that currently, the BRE was operating on the initial phase with a US $3.6 million outlay.
Under the Liberian investment law, it is only contracts with outlays of US10 million and above that require the signatures of the President of Liberian and the ratification of the National Legislature prior to execution.
With such low initial outlay then, he argued, it would have been out of place and outside the law to have required the President to sign the agreement or to require the National Legislature to ratify it.
He did not say at which point the BRE agreement would require the signature of the President and the National Legislature since each phase and agreement take only a fraction of the full $150 million investment with or without reference to the phase before or after it.
But he noted that he, together with the NIC chairman and the deputy justice minister, acted legally in both cases. He revealed that the BRE was currently investing in woodchip production, as initial project, without saying what it entails and how it benefited government's economic recovery efforts.
He also did not say whether or not the piecemeal launch of the BRE projects was intended to avoid being held legally by presidential endorsement and legislative ratification to invest US $150 million in Liberia.
According to observers, it is not clear what the presidential nullification means in terms of the continued operation of BRE Liberia Inc., which protesting NIC employees said over the weekend has provided employment for more than 700 Liberians over a one-year period.
Also what is not clear, they say, is what impact the "vote of no confidence" will have on the officials of NIC, Finance, and Justice since it lies within the exclusive domain of the President of Liberia to replace or prosecute them and not the House that is blowing the whistle.
In a related development, a press statement by the Buchanan Renewables, Power following the signing ceremony held at the Lands, Mines & Energy said that the company plans to construct the 35-megawatt power generation plant near Kakata in Margibi County beginning in early 2009.
"The power plant will be fueled with wood chips from Liberia rubber trees that are beyond their useful life and must be removed to make way for new and productive rubber trees.
The electricity provided from renewable sources will be sold at a much lower price than currently available, and will be transmitted to the Liberia Electricity Corporation's grid by the end of 2010," the BRE statement noted.
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