18 January 2013

Liberia: Mistaken Victim -Investigation Shows Atlantic Resources Inculpable

Hell broke loose a couple of days ago when PUP tsunami, as comical folks called it, swept the forest sector and drowned nearly all loggers into submission over land grab, evasion of government taxes, amongst other alleged fraudulent acts. The indictment, characterization as well as the punitive action unleashed by the Government of Liberia on logging companies operating in the country came without separating the goats from the sheep in a significant way. But as the dust settles, independent probes have begun to find that some of the findings of the special committee on the Private Use Permit scam missed targets at a huge disincentive for some who had strived to keep their reputation in tight. As The Analyst investigation shows, Atlantic Resource based in the Southeast is a prime victim.

A weeklong investigation by The Analyst has shown that some logging companies, specifically Atlantic Resources, are toting undeserved burden in the aftermath of both the moratorium imposed on logging activities and misdirected claims of wrongdoing contained in the report by a special committed ordered by Government to investigate alleged perversion of Private Use Permits in the country.

A Special Independent Investigative Body (SIIB) recently presented to President Ellen Johnson Sirleaf report on the handling of the PUP and professedly discovered that most of PUP documents it reviewed during its investigation showed errors in date, signatures, deeds and others.

The Committee also reported that field verification memorandum written by FDA to justify issuance of PUP was falsified in many cases and did not support the grant of PUP in others. Field verifications supported completed in 2011 were actually completed between 2009 and 2010, in many instances prior to the request for the permit.

Amid public disquiet, coupled with outrage in the forest sector, The Analyst carried out an investigation of a few affected companies and found that there are some that are victims of collective quilt or mistaken identity.

For instance, documents obtained sharply by The Analyst contradict claims in the SIIB report that Atlantic Resources was indebted to the government in taxes and hence "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."

The Analyst was also privy to a tax clearance issued by the Ministry of Finance on December 11, 2012, which shows that the company was not in arrears to the government of Liberia.  A knowledgeable fiscal agent said in an interview that his agency reviewed over 200 copies of flag receipts that further indicate that taxes were paid in excess of over US$6 million dollars in government revenue.

"I wonder why the SIIB report made the allegation especially in light of the documentary proof available in this regard," the audit staff who asked for anonymity, said.

Besides its credible tax records, Atlantic Resources is found to scrupulously observe is social responsibility commitment, and is widely hailed particularly in the southeast where it has built roads and provided social service to communities.

The Analyst also bumped into a horde of evidential documents indicating that Atlantic Resources has already spent close to US$8m on a coastal road construction project linking Sinoe, Rivergee and Grand Kru.

The coastal road has been a national road project under consideration by the Ministry of Public Works which Atlantic Resources is undertaking in Sinoe, Rivergee and Grand Kru for the first time.  Many villages and towns which had not had access to road today has, according to our investigation.

Investigation has found that between Greenville and Karquekpo the company upgraded to primary road over a 50km stretch hailed as the best laterite road in Sinoe County. The rehabilitation process included construction or reconstruction of key bridges and culverts in these areas.

This paper has reliably learnt that the Ministry of Public Works has agreed to rebate 40% of the company cost for rehabilitating the road.

An internal memo from the Ministry of Public Works in the possession of the paper addressed to William Slour, Acting Deputy Minister, the Ministry's assessment found that the company had rehabilitated 50.2 kilometers of road between Greenville and Karquekpo; constructed 54.9 kilometers of new road between Karquekpo, Sinoe County, and Doeswan and beyond in Grand Kru County.

In another development, Atlantic Resources has also begun constructing a 20-kilometer road up to Nyankunkpo on the bank of the Dorbor River. When completed, according to Sinoe County local officials, this road will link up with the Kanweaken-Barclayville Road at Norkwia but would require the construction of a bridge.

Atlantic Resources is a Malaysian company having over 200,000 hectares on its Forest Management Contracts in Liberia and roughly 200,000 hectares in PUP holdings but the company has yet to harvest 5% of its forest holding contrary to speculative reports in several quarters.

The Analyst has gathered that as part of the company's investment efforts, a shipment of equipment valued at over 56 million distained for Liberia could potentially be diverted to Ghana in the face of the current moratorium and court action arising from the PUP investigation.

Credible records in the possession of this paper shows that the equipment on board the vessel include a state-of-art Landing Craft and two Tug Boats.

Liberia currently does not have a Landing Craft and Tug Boats and these have had significant implication for commercial freight activities.

Other equipment on board the vessel that could be diverted to another country include a 2-deck cargo barges, 58 Cat Tractors, 10 wheel loaders, four tankers, eight Excavator machines, three cranes and several trucks and road equipment.

Speaking on condition of anonymity, an official of government says the authorities are alarmed that the vessel could be diverted given the pressing need for the port equipment and the lack of resources to acquire these by the government.

Authorities at Atlantic Resources refused to comment on these issues but instead reminded the Analysts that the case was before the courts and they could not comment further. Sources close to the current PUP debacle, has informed the Analysts the Liberian government could face huge legal consequences should it pursue the SIIB recommendation on barring dully registered companies doing business in the forestry sector.

The Ministry of Finance could not be reached to verify findings that suggest that Atlantic Resources has unquestionable tax records. However, investigation continues.

Both Government officials and independent sources have alarmed that government will lose up to US$15m in revenues during the 2012/13 fiscal year.

Between US$12m to 15m was appropriated to forest sector-related revenues, according to the sources who contend that with no other alternative Government could reduce line ministries and agencies allotments if additional revenue sources were not identify in time.

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