7 January 2013

Liberia: Pres. Sirleaf Gets Tough -Outlaws PUP; Lifts Tariffs on Rice, Cement

There had been streams of media reports last month alleging that several foreign investors, fronted by unscrupulous Liberians, have been abusing the government-issued private use permits (PUP) at the expense of the nation's economic recovery. The Sirleaf Administration introduced the permit in 2006 as part of the Forestry Reform Act. It allows landowners to benefit from the exploitation of forest resources on their properties. The media report prompted many Liberians to decry the abuse and urge the government into action. Some critics even suspected the Sirleaf Administration of silent collusion. But the president is not taking any speculative accusation in strides. She is getting tough on so-called scoundrels, much as she is tackling suppressive rice and cement prices. The Analyst, reports.

President Ellen Johnson-Sirleaf, over the weekend, issued three executive orders temporarily banning the issuance of private use permits (PUP) and renewing the lifting tariffs on two threshold commodities – rice and cement.

This issuance of three crucial orders, back-to-back, observers say, has shown the toughest side of the president in recent memories.

Coming in the wake of allegations that her administration has been weak on official graft, even as the prices of basic commodities soared over the means of ordinary Liberians, they say the president appears prepared to combat corruption as she works to realize her dream of transforming Liberia beginning 2013.

"But just what are the executive orders and what does each of them intends to achieve?" is the question many are asking.

Moratorium on PUP

Executive Order 44, which the president issued last Friday, imposed indefinite temporary moratorium on the issuance and use of the private use permit (PUP).

The order says the moratorium will protect the Liberian forest from illegal and unfair exploitation by unscrupulous foreign investors and their Liberian covers, some of whom are public officials or agents of individuals in positions of power and influence.

As of the promulgation of the order last week, the government has suspended all activities involving or related to the felling or exporting of logs under any PUPs granted, authorized, or approved by the Forestry Development Authority (FDA).

The order says the moratorium applies to all individuals, communities, groups, and associations who are holders of PUPs. It also applies to all logging activities of any person, whether natural or juridical, who holds a PUP and operates in Liberia under any other logging license.

The Sirleaf Administration, through the order, has directed the relevant ministries and agencies of Government to take appropriate actions to remedy the situation.

The government expects these institutions to pursue criminal prosecutions where necessary and conduct reviews of the relevant legal and regulatory framework, validation of deeds, audit of the Forestry Development Authority, public sensitization, and such other necessary measures.

The government did not say when it would lift the moratoriums, which critics say is likely to affect, adversely, legitimate business interests without necessarily achieving the goal of weeding out scoundrels or protecting the nation's forest resources.

However, not only is the government regarding the issuance of the order as timely and proper, it is arguing that the nation and the economy stand to benefit from the measures taken.

"The mismanagement of the PUPs poses a threat to the efficient, effective, and sustainable management of our forests, it is imperative to impose a moratorium to protect the national interest," the order contends.

The Executive Mansion says Executive Order 44 became imperative after the report of the Special Independent Investigating Body reported massive fraud, misrepresentations, abuses, and violations in the application of the National Forestry Reform Law.

The government instituted the Special Independent Investigating Body in August 2012 to investigate allegations of misrepresentations and abuses in implementing the law that allows for issuance of PUPs.

The body's report revealed that the abuse of the issuance of private use permits is so rampant that "this inter-generational asset has been severely threatened".

President Sirleaf began taking action on PUP abuse on Monday, December 31, 2012, following initial review of findings and recommendations of the Special Independent Investigating Body.

The body recommended that the government take series of measures to address the legal, social, economic, and administrative implications it discovered.

In order to achieve these feats, the body recommended the establishment of a Special Prosecution Team at the Ministry of Justice to prosecute all violations of the law in relation to PUPs by government officials, PUP holders, community leaders, logging companies and others.

In addition, it called for the reconstitution of the Board of Directors of the Forestry Development Authority (FDA), a full audit of FDA, and review of the legal and regulatory framework governing the management of community forest and private user permits.

By this review, the body believes the government will ensure intended reforms of the forestry sector, as embodied in the National Forestry Reform Law and the Community Rights Law.

Besides, the body recommended the establishment of national inventory of logs across the country by a National Inventory Team, with logs harvested in contravention of the moratorium or under PUPs subjected to appropriate legal action.

The body prefers confiscation and public auctions, amongst other measures, with proceeds going to settle tax obligations to government and to benefit communities affected by PUP abuse. Added to this, it prefers validation by the Land Commission of all deeds granted for PUPs, to establish their authenticity and offer advice on associated property and use rights for all categories of these deeds.

Finally, the special body recommended the implementation of public education program on the need for community support for government's efforts to conserve the nation's forests and permit only legitimate use consistent with the law.

Some say the body's findings and recommendations promise sound basis for the protection of the nation's forest resources, but observers say with the silence of Executive Order 44 regarding implementation, the nation only needs to watch and see.

That bring the president's other two weekend executive actions to the fore.

Lifting of tariffs on rice and cement

Concomitantly on January 4, 2013, the president issued Executive Order 45 and 46 in efforts to keep the prices of rice and cement, both mainly imported commodities, from soaring in the face of international fluctuations and local demands.

Executive Order No. 45, titled, "Extension of Executive Order No. 19, Suspension of Tariff on Rice," states that the Government of Liberia, in its desire to continue bringing relief to the public, is extending Executive Order No. 19.

Executive Order No. 19 had suspended tariff on rice as classified under tariff Nos. 1006.30.00 (in packing of more than 5kg or in bulk); 1006.30.00 (in packing of at least 5kg); and 1006.40.00 (broken rice) under the Revenue Code of Liberia Act 2000 with immediate effect.

The administration says it has decided to extend the suspension because the assessment and evaluation it conducted recently of the causes of increases in the price of strategic commodities indicated that rise in the prices of these commodities would create untold hardship for ordinary Liberians.

Previous Executive Orders, Nos. 11 and 19 also suspended import tariff on rice to correct this particular situation.

"In the interest of national reconstruction and development", President Sirleaf also, on Friday, issued Executive Order No. 46, titled, "Re-Instituting the Suspension of the Protective Tariff on Cement".

According to the order, the government has reinstituted the suspension of the US $2.00 protective tariff per 50 kg bag of Portland cement imposed under the Revenue Code of Liberia, tariff No. 25.23. As was the case under the preceding Executive Order No. 31, the government also provides certain incentives to local industries like CEMENCO, to step up cement production for domestic use.

The government believes the action it took over the weekend will protect the consuming public by mitigating the adverse effect from the global price increase in certain strategic commodities, including cement, the cost of which continues to rise on the market to the disadvantage of the consumers and the national reconstruction efforts.

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