The Informer (Monrovia)

11 January 2013

Liberia: Special Independent Investigating Body Report On the Issuance of Private Use Permits (PUPs)

document

Photo: Charles Akena/IRIN
Unscrupulous loggers cutting down trees.

ACKNOWLEDGMENTS

The Special Independent Investigating Body (SIIB) acknowledges and appreciates all those who have contributed to their work.

Firstly, the SIIB appreciates the support received from the Government of Liberia and it various functionaries, particularly the President for her consistent support, and the Ministry of State for being available at all times during the period of this investigation.

The SIIB is also very appreciative to the Advisors - the US Forest Service, European Forestry Institute, and the Environmental Protection Agency for their invaluable support to the SIIB.

Additionally, the SIIB recognizes and appreciates all individuals, communities, companies, agencies and the general public for their cooperation in providing valuable information and submissions to the SIIB which greatly enhanced this work.

The SIIB is most appreciative of the Liberian Institute of Certified Public Accountants (LICPA) for making their premises available unhindered throughout this work. The SIIB also recognizes the services of staff of the LICPA for always willingly providing services to the SIIB.

LIST OF MEMBERS OF THE SPECIAL INDEPENDENT INVESTIGATIVE BODY

Members

James Dorbor Jallah

Chairman

Felecia Coleman, Association of Female Lawyers

Member

Father James Selle

Member

Diasmer Bloe

Member

Thomas Doe Nah, CENTAL

Member

Kou Dorliae, Ministry of Justice

Member

Advisors

European Forestry Institute

United States Forest Service

Environmental Protection Agency

ACRONYMS

ARL

Atlantic Resources Limited

CBD

Convention of Biological Diversity

CFMC

Community Forestry Management Committee

CNDRA

Center for National Documents and Records Agency

CRL

Community Rights Law

EIA

Environment Impact Assessment

EPA

Environmental Protection Agency

FDA

Forestry Development Authority

FMC

Forest Management Contract

FVI

Foreign Venture Incorporation

GIS

Geographic Information System

GPS

Geographic Positioning System

LACC

Liberia Anti-corruption Commission

MFA

Ministry of Foreign Affairs

MLME

Ministry of Lands, Mines and Energy

NFMS

National Forestry Management Strategy

NFRL

National Forestry Reform Law

NOTC

Nature Orient Timber Corporation

NSA

National Security Agency

PPCA

Public Procurement and Concession Act

PUP

Private Use Permit

SDI

Sustainable Development Institute

SGS

Société Générale de Surveillance

SIIB

Special Independent Investigative Body

SR

Southeast Resources

TSC

Timber Sale Contract

TTI

Tropical Timber Incorporated

UFC

Universal Forestry Corporation

TABLE OF CONTENTS

Acknowledgement...............................................................................................i

List of Members of the SIIB ...............................................................................ii

Acronyms ..........................................................................................................iii

Executive Summary..........................................................................................vii

Introduction .................................................................................................1

Methodology ................................................................................................3 2.1 Mandate ........................................................................................3 2.2 Assumptions .................................................................................4 Analyses ........................................................................................................5

Administrative Failures................................................................................7 3.1 Violation of Moratorium on PUP .................................................8 3.2 Promulgation of Regulations for PUP ........................................10 3.3 MLME Role in Validation of Land Deeds....................................11 3.4 FDA Field Verification Memorandum.........................................14

NFRL and CRL Violations .........................................................................19 4.1 Land Held Collectively Ineligible for PUP...................................19 4.2 Violations of Existing Licensing Requirements..........................22 4.3 Relationship of PUP with Underlying Deed...............................26 4.4 Failure to Obtain Permission from Landowners........................26 4.5 Term of Years for PUP..................................................................27

Non-compliance with National Forest Management Strategy...................29

Alternative Uses/Threat of Large Scale Forest Conversion........................31

Financial Transactions for PUPs ................................................................33 7.1 Payments to FDA..........................................................................33 7.2 Payments under Social Agreement..............................................35

The Concession System ..............................................................................37

Culpability of Individuals & Institutions...................................................41

Recommendations .....................................................................................47

Annexes ......................................................................................................51 Annex 1: Terms of Reference ...............................................................53

Annex 2: Catalogue of PUP Licenses ...................................................57

Annex 3: Land Commission Report ....................................................67

Annex 4: List of Interviewees and Interviews......................................70

Annex 5: Analyses and Findings of Individual PUPs..........................71

EXECUTIVE SUMMARY

In August 2012, President Ellen Johnson Sirleaf established a Special Independent Investigating Body (the "SIIB") to investigate allegations related to the issuance of Private Use Permits (PUPs). This Report was completed by the SIIB following a comprehensive review of PUPs. The Report addresses the legality of the Forestry Development Authority (FDA) issuance of PUPs, the legal status of PUPs, and provides guidance toward a full resolution of the legal and policy issues identified.

This report synthesizes more than three months of investigation and findings by the SIIB commissioned by the President of Liberia to review the issuance of PUPs by the FDA. A PUP is one of four commercial forestry licenses conceived through a rigorous reform process and its intent is to allow private landowners to utilize commercially viable forest assets situated on their property. Unfortunately, contrary to the original intent, PUP issuance has become a mechanism for communities distributed in sections, clans, chiefdoms and districts across the country to engage in commercial forestry in violation of the law. At an alarming rate, community members and individuals sought approvals for PUP licenses and negotiated poor social agreements with tacit agreement of FDA Senior Management who in turn exploited the weaknesses in the sector to the detriment of the Government and the Liberian People.

As of the date of this report, according to information received by the SIIB, FDA has issued sixty-three (63)1 PUPs totaling 2,532,501 hectares; 23% of the land area of Liberia. Two PUPs were issued during the tenure of John T. Woods, former Managing Director of FDA: Monica Cooper (PUP 15, April 14, 2009) and Mary Kpoto/Lofa Development Corporation (PUP 1, November 25, 2009) for 203 hectares and 4058 hectares respectively. From April 11, 2010 to December 19, 2011, the remaining 61 PUPs were issued by FDA during the tenure of Moses D. Wogbeh. During 2011, the issuance of PUPs progressively increased, so that while a total of 23 PUPs were issued in the first half of 2011, the remaining PUPs were issued in the latter half of the year, with 32 being issued between August and November 2011. Astoundingly, seventeen (17) PUPs were issued on October 6, 2011 with a land area totaling 1,114,246 hectares.

The level of abuse of power and public trust that characterized the transactional relationship that evolved amongst various actors in the forestry sector, was led and sanctioned by FDA. The legal framework, including the National Forestry Reform Law (NFRL), Community Rights Law (CRL), Public Procurement and Concessions Act (PPCA), FDA regulations, and other laws have been willfully violated to such an extent that the effective governance and management of the forestry sector has been undermined and its viability threatened.

A significant contributor to the current PUP situation is the failure of FDA to promulgate regulations prior to the issuance of PUPs. Even in the absence of regulations, FDA purposefully granted PUPs in violation of the existing legal framework and failed to develop standards for the process. One cross-cutting finding elaborated below is that FDA operated in this matter, and apparently commonly does so, almost entirely independent of any formal standard formulated in guidelines, procedures, or implementing regulations.

The SIIB envisions that the findings and recommendations of this Report will result in a new set of reforms that are necessary if the forestry sector is to function properly and within its legal framework. The recommendations contained in this report are intended to improve governance of the sector and FDA to protect national interest and ensure greater benefits to the people of Liberia.

KEY FINDINGS

That the Management of the FDA, SGS, and operators violated the moratorium placed on Private Use Permits by the FDA Board of Directors. Suspended FDA Managing Director Moses Wogbeh's failure to communicate the order of the Board of Directors until June 15, 2011 was intentional and constitutes insubordination. However, SGS, operators and communities had reason to know of the Moratorium and should have acted in compliance with it. Even after the June 15, 2011 notice FDA, SGS, and operators continued to operate in violation of the Moratorium.

That the FDA management failed to promulgate regulations governing the issuance and operation of PUP. Senior managers at FDA took advantage of the lack of regulations in ways that were unconscionable, illegal, and a violation of the public interest.

Reviews of the underlying land deeds used in the issuance of PUP licenses revealed major inconsistencies and further abuses perpetrated by FDA management. There were fundamental flaws in the Ministry of Lands, Mines and Energy's (MLME's) validation process for the deeds. An assessment completed by the Land Commission indicated that that of the fifty-nine (59) land deeds reviewed, fifty-seven (57) are not eligible for the PUP license because the deeds presented evidences collective ownership and therefore must operate under the requirements of the CRL.

That regulatory agencies involved in the PUP licensing process, including the Ministry of Lands, Mines and Energy (Land, Survey and Cartography Department) and the Environmental Protection Agency were negligent in carrying out their regulatory responsibilities as required by law. Further, the Land, Survey and Cartography Department approved fraudulent conveyance of land in issuing Certificates of Correction in violation of the law.

The NFRL requires that either the applicant for a PUP is the landowner or has permission from the Landowner. There is insufficient evidence that permission from the landowner was obtained, even where the letter requesting a PUP was from the "landowner." In many cases, the letter of request for a PUP had one signatory with no supporting documentation that other members of the District/ Chiefdom/Section were consulted. In cases where the operator applied on behalf of the communities, there was no written proof that the communities were consulted or agreed his/her representation.

FDA failed to exercise due care and legal prudence in review of documentation presented for issuing PUPs. Documents revealed errors in dates, signatures, deeds and associated documents such as social agreements and memorandums of understanding. Some of the actions by FDA indicated culpability by officials of the FDA in cohort with individuals working for companies and communities.

That the FDA failed to comply with the National Forest Management Strategy (NFMS) that states in its objective that the FDA - allocate and manage Liberia's remaining 4.39 million hectares of forest as either forest management contract areas, and timber sales contract areas, community management areas, or protected areas to capture, develop and preserve the wide range of forest resource benefits. Under the NFMS, 2.5 million hectares of forest was found suitable for commercial use. The NFMS envisioned thirteen (13) new protected forests to be maintained for conservation in compliance with Liberia's obligation under the United Nations Convention on Biological Diversity (CBD), bringing the total of protected areas to 1,141,813 hectares. The NFMS was completely disregarded during the process for granting PUPs. The actions of FDA have jeopardized Liberia's conservation goals and the ability of Liberia to meet its obligation under the CBD.

The field verifications memorandums written by FDA to justify issuance of PUP were falsified in many cases and did not support the grant of PUPs in others. Field verifications dated in 2011 were purportedly completed in 2009-2010, in many cases prior to the request for a PUP.

Review of social agreements signed by landowners and operators are inadequate, as they do not justly compensate the land owners (generally communities) for the exploitation of their forest resources. The social agreements are constructed in a template that in many cases make vague references to projects that the operators will implement. One theme that resonated across operators was the construction of one clinic at US$12,500 in the third year of operation and beginning the construction of two schools value at US$14, 500 in the second year. Employment is referenced, but many community members cannot access jobs because they do not have the capacity.

RECOMMENDATIONS

First, and perhaps most importantly, in order to begin to redress the obscurity that allowed this deplorable situation to have developed, the SIIB recommends that this report and all of the associated records and analysis be made public. In particular, to address each of the individual legal and policy transgressions observed during the investigation of PUPs, the SIIB recommends the following, to be undertaken with all deliberate speed:

Private Use Permits

An Executive Order should be issued giving effect to the recommendations of the SIIB.

All PUPs issued by the FDA are void as their issuance preceded promulgation of standard qualifications as required by the NFRL Section 5.3(iii).

Individually revoke all PUPs for failure to comply with NFRL Section 5.2, various requirements of Section 5.6, Regulation 107-07(64), and other regulations as more specifically listed in the individual assessments (Annex V).

Convene a Special Panel to include SGS, FDA, Ministry of Finance, Internal Audit Secretariat and independent members to conduct an inventory of all logs that have been felled in PUP operations.

Institute confiscation proceedings for the auction of logs catalogued in the inventory.

Order the Land Commission to conduct an extensive evaluation of all Deeds submitted for PUPs and make recommendations consistent with the NFRL, the CRL, and other laws of Liberia.

Regulations currently being developed for PUPs must specify procedural standards for demonstrating private ownership, documentation required for acquiring and demonstrating permission from the landowner, the term of years for the license, and other essential terms for the license in consonance with Liberian law; in addition, these regulations must be developed in meaningful consultation with stakeholders.

An independent audit of FDA be conducted and the findings made public and appropriate action(s) taken.

FDA must develop a recording system for all documents related to forestry licenses and social agreements.

Government Entities

Suspended Managing Director Moses Wogbeh should be dismissed from the FDA and government service for gross misconduct, abuse of power, economic sabotage, and insubordination to the FDA Board of Directors; and prosecuted appropriately.

Cllr. Benedict Sagbeh, FDA Legal Counsel be dismissed from FDA for conniving with FDA Management and various individuals in the fraudulent issuance of PUPs; and a complaint of his unethical behaviors and ethical failures and moral turpitude be reported to the Grievance and Ethics Committee of the Liberian National Bar Association for disciplinary action. That he be barred from providing any future legal services to the Government of Liberia.

Messrs. John Kantor, FDA Technical Manager; Towon Nyenty, FDA GIS Coordinator; and Jangar Kamara, FDA Commercial Manager be dismissed from FDA and Government Service for orchestrating the falsification of government records and receiving illegal payments from PUP operators. The above listed individuals should be further investigated by the Ministry of Justice and LACC and if convicted be made to restitute payments received illegally.

The Chairperson of the Board of Directors, Minister Florence Chenoweth be suspended for one month for her failure to provide proper oversight to FDA and failing to conduct due diligence in the issuance of PUPs.

The Board of Directors should be appropriately reprimanded for breach of their fiduciary duty, the duty of care owed to the FDA, failing to conduct due diligence and to provide effective oversight of FDA operations and in the issuance of PUPs.

The Board of Directors of FDA should be required to establish and institute appropriate guidelines for reviewing, approving, and attesting to the actions of FDA.

The Board of Directors should establish and institute mechanisms for receiving and investigating claims made against FDA management.

Dr. Sizi Subah, Deputy Minister of Agriculture be appropriately reprimanded for signing per procurationem and failing to conduct due diligence in attesting to 17 PUPs dated October 6, 2011.

Mr. Maxwell C. F. Gwee, Director of Cartography Services at the Ministry of Lands, Mines and Energy should be dismissed forthwith from MLME and barred from holding any position involving land transactions or resource licensing. Mr. Gwee should be investigated by the Ministry of Justice for fraudulent conveyance of land.

Mr. David Blaye, County Surveyor for Grand Bassa County should be dismissed for fraudulent conveyance of land and gross misconduct.

The Ministry of Justice and the Ministry of Finance must conduct an analysis and issue a formal opinion on the current tax and fee requirements of commercial forest license holders and whether the market can bear them.

Companies

Atlantic Resource Limited should be required to pay all tax arrears on FMC "P" and be permanently barred from engaging in commercial forestry activities for violation of NFRL 20.6(a)(i) and NFRL 20.6(a)(ii) and for orchestrating fraudulent activities in Liberia's forest sector.

That Atlantic Resource Limited affiliated companies including Forest Venture, Nature Orient Timber Corporation, Southeast Resources should be permanently barred from engaging in commercial forestry activities for violation of NFRL 20.6(a)(i) and NFRL 20.6(a)(ii) and for orchestrating fraudulent activities in Liberia's forest sector.

That EJ and J Corporation and its Chief Executive Officer Eliza Kronyann be prevented from engaging in commercial forest activities unless an independent panel makes a determination that the company has the financial and technical capacity to operate a commercial forestry license independently.

That Sarah Miller is prevented from representation, management, or service as an agent of any PUP and/or community forestry except on land proven to be personally owned by her as verified and validated by the Land Commission.

Amb. John Gbesie, Messrs. Augustus Abram and Ben Kofie be barred from engaging in commercial forestry activities in Liberia, and be further investigated and prosecuted by the Ministry of Justice for fraud and violation of Section 20.6(a) of the NFRL.

That the Ministry of Justice prosecutes all individuals who submitted PUP applications with forged land deeds.

That all the above listed companies that have exported timber be made to compensate communities as per their memorandum of understand and social agreements. That all payments for cubic meters of timber felled be immediately paid into escrow accounts created for this purpose. That those companies whose social agreements specify that a clinic (valued at US$12,500) and schools (US$14,500) be made to immediately pay said amounts to the escrow account.

That the illegal actions of Atlantic Resources and its associated companies be further investigated by the Ministry of Justice. a. Atlantic Resource

b. Forest Venture

c. Nature Orient Timber Corporation

d. Southeast Resources

Forestry in General

That the government engages with holders of FMCs and TSCs and other stakeholder to determine the financial viability of FMCs and TSCs, and identify the burden associated with various fees and taxes that companies have to pay to operate.

FDA must develop and publicize a fee structure for administrative and other costs associated with forestry licenses.

That Capacity building initiatives should be instituted to educate communities on the vary forestry licenses and to support the expeditious implementation of the CRL.

1. INTRODUCTION

Concerns regarding the issuance of PUPs surfaced mid-2011 with requests from the Sustainable Development Institute (SDI) to FDA for copies of all PUPs. On January 10, 2012, FDA provided the requested copies of PUPs to SDI. In response, the NGO Coalition sent a letter to the Managing Director of FDA dated January 12, 2012 raising concerns that PUPs were being issued at an alarming rate and scale and that "with the rapid increase in the volume of timber produced from PUPs, it is likely that PUPs would become the main producers of logs in Liberia." The Letter requested that FDA halt issuance of PUPs and inform its Board of Directors of the concerns raised by the NGO Coalition. It is unclear if any action was taken by FDA in response to this request.

Over the course of the year, the NGO Coalition, the news media, and independent research reports have continued to raise concerns, highlighting observed flaws in the issuance of PUPs. Due to the high proliferation of PUPs and the strong opposition of forestry stakeholders, the FDA Board of Directors placed a moratorium on the operation of inactive PUPs and the issuance of new PUPs. The Board's moratorium was effective February 2012. Despite this moratorium, timber felling and shipment continued unabated.

In August 2012, President Ellen Johnson Sirleaf established a Special Independent Investigating Body (the "SIIB") to investigate allegations related to the PUPs. In President Sirleaf's appointment letter, the SIIB was given 60 days to complete its investigation. This Report was completed by the SIIB following a comprehensive review of Private Use Permits (PUPs). The Report addresses the legality of the process followed by the Forestry Development Authority (FDA) to issue PUPs, the legal status of PUPs, and provides guidance toward a full resolution of the legal and policy issues identified.

2. METHODOLOGY

Following a short planning phase, the SIIB began its investigation in September 2012. It quickly became apparent that due to the complexity of the issues presented, the volume of information received, and logistical challenges in reaching the sites of the PUPs, completing the investigation within the 60 days originally granted by the President would be impossible. As a result, the SIIB requested and was granted an extension to complete the investigation by December 19, 2012. This report is the result of an extensive investigation, which included a desk study, assessment of all known PUPs, interviews, and field visits.

2.1 Mandate

The primary task of the SIIB, as outlined in the Terms of Reference (Annex 1), was to determine whether the letter and spirit of the National Forestry Reform Law of 2006 (NFRL) and the Community Rights Law of 2009 (CRL) were followed during the permitting process, and to make recommendations based on these findings to the President. The Terms of Reference required that the SIIB review and assess whether the application for PUPs were in compliance with the requirements of the NFRL and to determine whether allocated PUPs are consistent with the National Forest Management Strategy. Additionally, the SIIB was specifically mandated to: Verify that land deeds submitted along with applications for PUPs are legal.

Determine whether there is a legally binding contract between the landowner and the company or individual holding or operating the PUP.Verify that agreements with communities situated in the PUP area were willingly signed by communities, are beneficial to those communities, legally enforceable, and being applied.

We must clearly state that the Body's investigation did not include criminal investigations into the actions of individuals or entities. This Report identifies instances of professional misconduct, fraudulent activities, violations of the forestry and other laws, and failure of individuals in their roles as fiduciaries. We have made no conclusions as to the criminality of individual conduct. Due to the complex nature of the issues involved and time constraints, the SIIB centered its investigation on the review of PUPs and providing guidance for resolution of the legal and policy issues identified in order to move the forestry sector forward. Where fraudulent activities have been uncovered, the SIIB recommends that the Ministry of Justice and Liberia Anti-corruption Commission (LACC) conduct further investigation and take appropriate legal action.

Finally, while the mandate of the SIIB was specific to the facts, legal, and policy issues surrounding Private Use Permits, the Body's findings and conclusions in some cases extend beyond the PUPs. As one of the four commercial timber licenses in Liberia's forestry sector, many of the implementation challenges identified during the investigation of PUPs are affecting the sector more broadly. In addition, this matter is substantially intertwined with questions about land rights, particularly rights held by communities. This investigation also touches on issues related to these rights. While our recommendations are focused most specifically on the issuance of PUPs, because some findings and conclusions have broader implications, some of our recommendations also go beyond the defined scope of the Private Use Permits.

Process

The investigation was completed in five stages: (1) preparation and planning, including informationalpresentations and interviews, (2) Assessment of PUPs (3) Interviews of relevant parties, (4) field visits, and (5) Evaluation and compilation of the Report. The SIIB convened several times each week, conducted background research and analysis, and carried out field visits. Specifically, the SIIB's activities included:

Reviewing legal authorities, records publicly available, and records provided by government entities, companies, communities, and individuals.

Interviewing stakeholders from all sectors related to PUPs including relevant ministries and agencies, PUP holders, companies operating PUPs, community members, and advocacy groups. A complete list of all interviewees is included as Annex 4.

Publicly requesting any records or documents related to PUPs that were issued; sixty-three (63) PUPs were received and reviewed

Presentations by subject-matter experts

2.2 Assumptions

In order to conduct the analysis, the SIIB needed an analytical framework against which to measure the steps that were taken and the standards that were applied, if any. The SIIB did not receive any supporting documents related to the application process from FDA. In the interviews, FDA management confirmed to the SIIB that in addition to the lack of implementing regulations for PUPs, there are no written guidelines, procedures, or standards for the PUP application process.

Thus, several assumptions were necessary to establish a standard against which to compare the process that was followed. First, it was necessary to identify the activity that initiates the process of applying for a PUP. Included with records received for several PUP licenses are letters from communities or companies requesting that FDA grant a PUP. In the absence of any indication of another first step, the SIIB has assumed that such a letter is the application and thus begins the process for obtaining a PUP.2

Second, in the absence of any regulations specific to the PUP, the SIIB used the applicable provisions of the commercial forestry regulations (the ten core regulations) to identify subsequent requirements. These include pre-certification of companies and submission of annual harvesting certificates, business plans, and operating plans. FDA provided no documentation related to compliance with these requirements.

Where related information was received by the SIIB from the companies themselves, the SIIB assumed FDA used the information during the application process unless there was evidence to the contrary.

3. ADMINISTRATIVE FAILURES

The PUP is one of four commercial forestry licenses the FDA is authorized to grant under Section 5.6(d) of the National Forestry Reform Law of 2006 (NFRL).3 Much of the current confusion regarding PUPs stems from the failure of FDA to develop regulations for the application, grant, and management of PUPs prior to applying this provision of the law. Although the shifting landscape of land ownership rights in Liberia has led to alterative interpretations of the language in the NFRL about PUPs, former Managing Director of FDA, Mr. John Woods, and other drafters of the NFRL, have stated unequivocally that the intent of the drafters was that commercial forestry would be focused on the concession system, namely Forest Management Contracts (FMCs) and Timber Sales Contracts (TSCs). PUPs were intended as a residual grant for private landowners who would convert their land to other uses.

As of the date of this report, according to information received by the SIIB, FDA has issued sixty-three (63)4 PUPs totaling 2,532,501 hectares, 23% of the land area of Liberia. Two PUPs were issued during the tenure of John T. Woods, former Managing Director of FDA: Monica Cooper (PUP 15, April 14, 2009) and Mary Kpoto/Lofa Development Corporation (PUP 1, November 25, 2009) for 203 hectares and 4058 hectares respectively. From April 11, 2010 to December 19, 2011, FDA issued the remaining 61 PUPs during the tenure of Moses D. Wogbeh. During 2011, the issuance of PUPs progressively increased, so that while a total of 23 PUPs were issued in the first half of 2011, the remaining PUPs were issued in the latter half of the year, with 32 being issued between August and November 2011. Astoundingly, seventeen (17) PUPs were issued on October 6, 2011 with a land area totaling 1,114,246 hectares.

Table 1: Private Use Permits Issued by County

County

No. of PUP

PUP Area (hectares)

Gbarpolu

7

673,179

Sinoe

12

423,642

Grand Gedeh

7

271,680

Lofa

5

271,277

Grand Bassa

11

204,752

River Gee

3

160,422

Rivercess

4

145,981

Grand Kru

4

105,959

Nimba

1

79,263

Grand Cape Mount

2

78,564

Bong

4

66,569

Maryland

1

28,847

Margibi

2

22,366

Total

63

2,532,501

This analysis considers the legality of the issuance of these 63 PUP licenses. It is structured based on the violations and failures identified during the course of the investigation.

3.1 VIOLATION OF MORATORIUM ON PRIVATE USE PERMITS

In January 2012, based on an anonymous whistleblower leaflet and at the behest of the President, FDA Board of Directors ("the Board") convened a special session for the purpose of investigating allegations raised in the leaflet. Following its special session, the Board concluded that "FDA senior management was not in violation of any laws, regulations governing the forestry sector at the moment; however a more detailed study is needed to make a definite determination." Effective February 2012, the FDA Board placed a moratorium on the issuance of new PUPs and halted activities under all existing PUPs with the exception of the four already operating at that time: Lofa Development Corporation/Mary Kpoto (PUP 2), People of Zaye Town/Sarah Miller (PUP 3), People of Teemor Section (PUP 10), and Tartweh-Drapoh DMC PUP 26). Since the issuance of the Moratorium, PUP operations and shipment of timber has continued unabated. On August 5, 2012, President Sirleaf reaffirmed the FDA's Board of Directors Moratorium.

On August 12, 2012, several PUP operators petitioned the Supreme Court for the issuance of a Writ of Prohibition, arguing that the moratorium was arbitrary and a violation of the due process clause of the Constitution. On September 4, 2012 the Justice in Chambers of the Supreme Court Liberia issued an Alternative Writ of Prohibition returning the operators to status quo ante pending the outcome of a full hearing. Following the full hearing by the Justice in Chambers Supreme Court, Justice Banks issued a ruling on October 22, 2012 dismissing the petition as procedurally defective. In his ruling, Justice Banks quashed the Writ, dismissed the petition, and reinstated the Moratorium. Due to the Supreme Court case, the Moratorium was briefly lifted from September 4, 2012 to October 22, 2012, although it is clear that operators never ceased logging activities.

Findings

It is impossible to know how many PUPs have operated in contravention of the Moratorium. However, interviews conducted by SIIB at various PUP sites indicate operators have never stopped their operations.

Between the period of February 2012 and November 15, 2012, records provided by Societe Generale de Surveillance (SGS), the contractor implementing Liberia's timber chain-of-custody system confirmed that twenty-eight (28) PUPs are registered under the SGS/Liberfor program: eleven (11) active PUPs, twelve (12) PUPs beginning operations, and five (5) inactive PUPs. According to SGS records (in addition to the active PUPs), timber has been exported by Forest Venture (PUP 8), Atlantic Resources (PUP 18, 20, and UL Forest) and Global Logging (PUP 9). The Atlantic Resources shipment from UL Forest on June 5, 2012 is alarming since the land was granted to the University of Liberia for research purposes, not for operation as commercial forest.

During the SIIB field visit to Grand Bassa County during the week of December 3, 2012, logging activities were being conducted and a ship was in the process of being loaded at Jo River PUP 23 (Forest Venture) and Doedian District PUP 10 (Tropical Timber Incorporated) although the Supreme Court's decision reinstated the Moratorium on October 22, 2012. During a telephone conversation with the Chair of the SIIB, Acting Managing Director Karnwea stated that permission had been granted to ship logs harvested prior to the final Supreme Court ruling. However, these PUPs are accountable under the February moratorium, making their operation possibly illegal since only the 4 PUPs identified in the FDA Board's resolution were active.

There has been widespread confusion regarding the period in which the Moratorium became effective.

There are conflicting accounts on what steps FDA took to ensure compliance with the Moratorium. Legal Counsel for FDA, Cllr. Benedict Sagbeh has stated that written notices were sent to operators and other stakeholders informing them of the Moratorium. However, Sagbeh has not provided copies of these written notifications. Moses Wogbeh informed the SIIB that he does not believe any written communication was sent, but he did "call" stakeholders and informed them of the Moratorium. All operators interviewed by the SIIB have stated they never received notification from FDA and were unaware that the February 2012 Moratorium was issued. Operators insist that they only became aware of the Moratorium during the August 7, 2012 PUP Regulations Stakeholders Meeting held in Monrovia. However, even if operators were not informed of the moratorium by FDA, they were still bound by it and the failure of FDA to inform them is no justification for the violation.

SGS received a letter dated June 15, 2012 from Moses Wogbeh informing him that the FDA Board had instructed all inactive PUPs be suspended. In an internal email, Sebastian Schrader of SGS stated he sought clarification from Jangar Karama as to which PUPs were considered inactive. Jangar Kamara sent an email response to SGS on June 22, 2012 stating "...consider copy of the letter sent you as partial information or listing of Non-active PUPs with the exception of Bolloh and Jloh that had already been certificated after the completion of the pre-felling requirements prior to the decision of the Board" (emphasis added). Jangar Kamara singularly changed the mandate of the FDA Board without authority or information that his decision was supported by the Board. The letter referenced in Kamara's email was not provided by SGS.

In a second email sent by Jangar Kamara on August 14, 2012 (after the President had reaffirmed the Moratorium), he wrote SGS that "by directive of the Managing Director, SGS/LiberFor is hereby informed that though there is a suspension of activities of PUPs, the issue of shipment from the Port of Buchanan must be allowed as long as all requisite financial obligations are settled." Again, on August 15, 2012, following an email request from Sebastian Schrader of SGS regarding two shipments of 40,000m3 expected from Atlantic Resources, Jangar Kamara states "Regarding the issue of Atlantic, pls be assured that we will consider this in our letter." Although SGS official received notification from FDA on June 15, 2012, its activities also did not cease following that notification. In an email sent to Moses Wogbeh by Ivan Muir, Manager for SGS/LiberFor on August 16, 2012, he stated that SGS had cleared a shipment on August 3, 2012.

As mentioned previous, although the SIIB made a request to FDA, copies of written notifications to PUP Holders, operators, and SGS were never provided. However, as part of its submission to the SIIB, SGS provided copies of correspondences from FDA to operators dated June 2, 2012 informing them that the FDA Board of Directors had put a moratorium on all "INACTIVE" PUPs. The letter never specifically identify which PUPs were considered active. The June 2, 2012 letters are signed by Mr. Wogbeh, but are not on FDA letterhead.

SGS has informed the SIIB that prior to its approval of any shipments of timber by operators, approval is obtained from FDA. Atlantic Resources and Forest Ventures have also stated during interviews that FDA was aware that logging activities were continuing from February 2012 onward. The June 2, 2012 letters purportedly sent by FDA, while signed by Mr. Wogbeh, are not on FDA letterhead.

Any official communication from FDA should have been on FDA letterhead and the SIIB can find no justification why FDA would send such notices on plain paper.

Additionally, FDA has field officers in each county that should have had knowledge of the Moratorium and made FDA aware of logging activities occurring at the PUP sites. However, during SIIB field visit to Sinoe, the FDA Regional Forester for Region 4 - Phillip Joekolo, stated that he was unaware of the Moratorium. Due to the approval requirements of the contract with SGS, FDA would have been aware of all violations occurring within the chain-of-custody system.

Conclusion

From the time of the issuance of the Moratorium, logging activities under PUP contracts did not cease and operators continued to conduct felling activities and shipment of logs. The SIIB finds that PUP Holders, operators, and SGS had reason to know that the February 2012 Moratorium was in effect and should have acted in compliance with the Moratorium. Operators were also aware of the October 22, 2012 Supreme Court Decision and yet continued to conduct logging activities in violation of the final Supreme Court ruling.

FDA was fully aware of and facilitated the violation of the Moratorium. FDA Management's failure to investigate possible violations and take preventative measures constitutes insubordination to the FDA Board of Directors.

3.2 PROMULGATION OF REGULATIONS FOR PRIVATE USE PERMITS

The NFRL, Ten Core Regulations, CRL, and the Forest Management Strategy set the foundation for efficient use of forest resources and sustainable forest management. The NFRL establishes PUPs and sets forth broad standards and requirements for issuing a PUP. Section 5.2(a) requires that "The Authority shall establish standard qualification for Persons wishing to obtain permission to conduct commercial forestry Operations" (emphasis added). 5.2(a)(iii) specifically extends the requirement to PUPs: "(iii) For Private Use Permits under Section 5.6 of this Law, the Authority shall specify the standard qualifications by Regulation" (emphasis added).

Findings

It is a fundamental principle of administrative law that executive agencies issue regulations containing procedures and standards to implement legal provisions as envisioned by the Legislature. This provides for clarity, consistency, and due process. To ensure proper implementation of the laws, additional regulations, guidelines and procedures were necessary and specifically required by both the NFRL and the CRL. The NFRL requires FDA to promulgate regulations on specific matters and in other cases when they are needed.

During the FDA interview, Cllr. Sagbeh justified FDA's failure to develop regulations by stating that because the 10 Core Regulations existed, promulgating new regulations for PUPs would have been repetitive. The SIIB found it curious that later during the same FDA Interview, Mr. Janga Kamara stated FDA had not issued licenses under the CRL because there were no regulations. Per Kamara, "..if that [CRL] regulation was not there, ...what would guide the process of even allocating the community forest activity to the people?" The SIIB finds this justification apt and equally applicable to the need for regulations for implementing PUPs.

During the Interview with former Managing Director Woods, he stated his hesitancy to issue the first PUP, but stated that he tried to stay within the intent of the Law and under the narrow circumstances that the land would be converted to other uses. Nonetheless, the SIIB has determined even the issuance of these PUPs required regulations, instead of the ad hoc manner in which they were issued. The Monica Cooper PUP appears to have undergone a different application process than the Mary Kpoto PUP. Additionally, it is the Field Validation Report completed for the Monica Cooper PUP that first proposes to "re-survey" the land and change the metes and bounds on the Deed purportedly because the area on the ground is larger than what is contained in the Deed.

FDA's conscious decision to grant PUPs in the absence of regulations jeopardizes the sector and raises questions about the utility of a PUP license. A review of the current situation points to the necessity of regulations, which would have provided guidance and resulted in consistent application of the law. Standard qualification regulations specifically for PUPs were required by the law and the conscious decision by FDA not to promulgate such regulations prior to the issuance of PUPs constitutes an abuse of power. FDA's stated reluctance to issue any forestry permits under the CRL until regulations were developed also indicates that FDA was aware of the necessity of regulations for the PUP.

Conclusion

Contrary to the stated position of the FDA management, the SIIB determined that regulations were necessary: 1) generally because the law does not provide sufficient standards and detailed procedures for administrative implementation; and 2) because the NFRL explicitly requires that the FDA promulgates regulations on standards for holders of PUPs. The SIIB finds that it was a violation of law for FDA to grant PUPs in the absence of regulations specifying qualification standards for PUPs.

3.3 MLME ROLE IN VALIDATION OF LAND DEEDS

A core issue that underpins the validity of the documents relied upon by FDA in the issuance of PUPs are the land deeds. During the course of the investigation, three questions arose related to FDA reliance on the MLME verification: (1) the scope of MLME's mandate as it relates to verification of land deeds, (2) under what legal authority MLME is allowed to issue a "Certificate of Correction", and (3) validity of MLME deed verification letter.

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