12 February 2014

Liberia: Progressing or Stalled

Monrovia — Even though critics of the Sirleaf Administration had no doubts that the Board of Directors of the National Oil Company of Liberian (NOCAL), under the chairmanship of Mr. Robert Sirleaf, pumped lifeblood into the oil company and created for it an enforced bargaining platform complete with legal bulwarks, they did not shy from politicizing the chairmanship position. Some argued that the Sirleaf chairmanship undermined the company's viability and progress while others feared the chairmanship represented the Sirleaf's takeover of Liberia's oil industry. When Sirleaf finally resigned at the end of his presidential mandate, many had thought that that opened a new progressive chapter in the company's activities; but it appears they have misjudged. The Analyst has been looking at the status of NOCAL's reform process since Sirleaf's departure.

Observers say hopes for the early passage of the new petroleum reform law of the National Oil Company of Liberia (NOCAL) appeared dashed since the company's pathfinding board chairman, Robert Sirleaf, tendered in his resignation in September last year at the end his presidential mandate.

The observers, some of whom spoke to our reporter last week, said more than anything else did, the apparent lack of progress in the passage of the new oil bill into law has vindicated the former board chair. Critics had wrongly blamed - it now seems certain - the former NOCAL Board chair for most of the problems the company encountered in negotiating and apportioning offshore oil blocks to potential investors.

“The stalled status of the NOCAL oil bill on Capitol indicated that the former board chair was unnecessarily pushed to the center of controversy and scandal by individuals either out of ignorance or out of political machination designed to undermine the oil sector,” said one observer.

His view resonated among several Liberians who fear that the current delay in passing the oil law, which recent reports say is in a legislative gridlock in the Lower House, was likely to strangulate the already offshore cash-starved Liberian economy.

At the time of runaway inflation occasioned by ever-rising foreign exchange rate, they told our reporter, the least that they say should be happening within the economic circles were legislative bottlenecks that have the potential to stifle revenue generation.

During his detractor-made controversial but productive tenure at NOCAL, Mr. Sirleaf fought against all odds to seek out the best international expertise to help Liberia negotiate with exploration companies and to craft legislation to regulate the oil and gas sector.

The stated aim was to ensure that Liberia's oil - should commercial reserves be found - would be used to benefit the country's people, now and in the future.

That the former NOCAL Board chair achieved the presidential mandate with enviable distinction, observers say it is difficult to contradict.

But they say all his achievements were about to be wasted if the apparent impasse on Capitol Hill remained unresolved for an additional month.

“Revenue from the oil sector will bring great relief to the economy, but with the slow pace of the legislative process, there is need for concern. The people need to tell us what is happening,” said another observer.

Said yet another observer, “When Robert was at NOCAL the process for the passage was on course. All eyes were set for the passage of the bill. Now, the bill seems tucked away like other bills such as the Code of National Conduct bill, which is necessary for the combat of corruption in officialdom.”

“But why do they think so?” is the question many are asking.

Progress under Robert Sirleaf

Shortly after his mandate expired at NOCAL, then NOCAL Board chair Robert Sirleaf told the AllAfrica.com online magazine in an interview in New York that NOCAL under his administration had submitted a petroleum bill to the Liberian Senate. He was upbeat about progressive legal reforms within the oil company.

Mr. Sirleaf at the time told the online magazine that the bill was under consideration by the House of Representatives. The submission, he said, has completed his job at NOCAL and that he welcomed the chance to step out of the limelight where critics chose to soiled his reputation rather than assessed the quality of his performance.

“We decided we wanted to do it the right way. We decided, look, don't sit on the board and sit behind [the scenes] and make decisions.

Actually sit in the seat, let everybody see you, let everybody know it's you. And it wasn't a Robert Sirleaf show. It was a board with some vocal directors - the minister of finance of Liberia sits on the board. The minister of Lands, Mines and Energy sits on the board.

“So it was a decision about what relationships, what needed to be done, how aggressively we were trying to get the right partners - you know, to get the right partners on Liberian exploration activity. It was more managing the right partners, not managing oil or managing a discovery. Previously, Liberia, for a host of reasons, didn't have what we felt was the right partners and the right relationships with international companies,” Sirleaf reportedly told AllAfrica.com.

He said the aim of his mandate was to get the type of companies that actually represent world class in accountability, in practices, in transparency. The aim, also, he said was to make NOCAL extremely transparent, noting that that began with him in the board chairperson seat.

“We were extremely successful to bring Chevron into our acreage, and we were extremely successful to bring Exxon. You've got to remember, Chevron and Exxon are number one and number three on the Fortune 500 list. There are a lot of other good ones, but these two are, by far, in the best class of companies, technically, financially, in the oil exploration business. If you brought in the American companies and what they stood for - transparency, accountability, great social-corporate responsibility - and that we were able to do successfully,” he said.

Moreover, he noted at the time, the bringing on board of Exxon and Chevron necessitated the need for the reform of the whole sector by rewriting the petroleum law.

“It's been quite interesting - people saying that I wrote the law. I don't have the intellectual capacity to write petroleum law! So actually, the World Bank hired a consultant. It was the World Bank's consultant that drafted the law,” he told the online magazine.

He said the bill, which he submitted to the Legislature embodied “a far-reaching, best international practices, highest accountability and transparency, highest level of bringing in local content beside being in advance of where the country and the hydrocarbon business are today.

“So that new petroleum law is actually four years in advance of where Liberia is. And according to [the Bank], it is the most far-reaching, it is the most advanced law, in the region. The Senate passed ours. We look forward to the House doing good public consultations and passing it,” Mr. Sirleaf hoped. “Regardless of political change, regardless of the political landscape, that business is protected for the next generation.

The type of companies [allowed to bid for Liberia's business] is one of the things -financial capabilities, technical capabilities are extremely strong. The local content laws are extremely strong. The environmental protection of the waters is extremely strong in the law. But the bottom line is, once you get the right partners, all the other subsets fall in.”

In a statement of appreciation of legislative progress on Capitol Hill, Mr. Sirleafcommended the Liberian Senate for the passage on Tuesday, September 11, 2013 of the New Petroleum Law and NOCAL Act, which according to him, “is important to the safeguarding of a potential national resource.”

Mr. Sirleaf pointed out that the legislation passed by the Senators “provides a strong framework for managing the petroleum sector for the benefit of all Liberians.”

Progress stalled?

It has been nearly five months now since NOCAL Board under Sirleaf submitted the new petroleum bill and the NOCAL act bill and roughly four months since the Liberian Senate passed it, but observers say it was to be a short while of exaggerated mock show of people's interest before the bill goes to sleep.

The House of Representatives announced in early October 2013 that it held an emergency session to discuss the possible passage of the National Petroleum bill, previously passed by the Liberian Senate and forwarded for concurrence prior to the Constituents Break.

Representatives came out of the 4-hour closed doors discussion, reports said, with faces that held no expressions, refusing to speak to the press. However, information leaked from the Capitol said the Lower House met to discuss President Sirleaf's communication pressing for the early passage of the bill.

Whether the Lower House acted, wary of calls by some foreign and local experts for thorough scrutiny to avoid future conflicts, it is difficult to say.

But the House reported later that given the volume of the bill, was in no rush to pass it, and that therefore it would take at least two legislative sessions before the final vote is taken.

House Lands, Mines and Energy Committee Chair Adolphus Lawrence [Ind., Mont, D# 15] told the press at the time that after a brief review of the bill by his committee, it resolved that lawmakers should to take it to their various constituencies, who will directly be affected after its enactment, for their inputs.

The passage of the bill was running against the interdict of the National Legislature, which holds that there would be no future sale of offshore and onshore oil blocks unless it passed the new petroleum bill into law.

Good to its word, the Lower House announced a week later that it was taking advantage of its annual Agriculture Break to take a nationwide tour of the country to hold oil reform consultations with the rural communities.

The consultation was scheduled to commence in Gbarnga City in Bong County and end last month at the National Conference Center in Montserrado County. Whether the consultation proceeded as planned, it is difficult to say, but observers say it has been more than a full week now since the consultation was supposed to end but that yet there is no indication that anything is on course.

The only other thing that represents a semblance of progress since the departure of Mr. Sirleaf from NOCAL, reports say, is President Sirleaf's appointment (pending Senate confirmation), on January 21, 2014, of her legal advisor, Cllr. Seward Montgomery Cooper, to accede the NOCAL Board chairmanship.

Whether the apparently stalled legal reform process proceeds as set into motion by the former chair, observers say, will depend largely upon the thrust Mr. Cooper brings to the position.

“That is the challenge. Being a counselor-at-law, Mr. Cooper will have to hit the ground running to ensure that the hard work of his predecessor is not wasted on the platform of procrastination, complacency, and unwarranted technicality based on unfounded suspicion,” said former NOCAL employee Nathaniel Crawford of Old Road in Monrovia.

The new board chair himself appeared not taking the challenges lying down, even though many say it is not the sheer expression of progress that matters but the quality of efforts exerted to move the lawmakers into action.

The new board chair told a local daily that he was grateful to the President for her preferment of him to serve in ‘such an important, yet challenging, capacity'. What exactly about the job that is challenging, he did not say; but with the oil bill apparently stuck in the Lower House, observers say his first challenge is how juggle NOCAL management and the Capitol Building to get results.

Cllr. Cooper brings to the NOCAL Board leadership expertise from international corporate exposure and from his role as member of both the administration's Inter-Ministerial Concessions and Hydrocarbon Technical Committee, which negotiate concession contracts for Liberia.

How prepared he is to confront the Lower House head-on over the delay, many say, will embody his stamp of authority over the oil sector and bring to fruition NOCAL's goals as articulated by its former pathfinder board chair, Mr. Robert Sirleaf.

The only indicator so far of Cllr. Cooper's concern for the early passage of the bill is his recent prayer that the Low House passes the bill into law for NOCAL to put into place a legal framework for business. Whether by that prayer, he intends to sit on his hands and wait for things to happen on Capitol Hill, many say is something to watch for in coming days and weeks.

What is holding up the passage of the law weeks after the Lower House returned from its Agriculture Break, no one on Capitol Hill is prepared to say, prompting majority Liberians to wonder how long they will have to wait before the oil bill morphed into the Petroleum Law of Liberia.

Worse, no one seems sure even more about what it would take to move action in the Lower House.

Many fear there appears a long, tedious way to go in preparing NOCAL to take control of the nation's oil industry. After the Legislature, it would be a completely different ballgame of waiting and hoping before anyone in NOCAL has any idea when the next block or exploration deal is negotiated and signed in keeping with the new law and when revenue begins to flow in.

Observers say what all this means is that the resignation of Mr.

Sirleaf has done more harm than good to the industry, which many say has a slim chance of getting off its haunches, given the uncertainty surrounding the availability of offshore oil reserves in Liberia territorial waters.

“It means that the whole process has essentially stalled. It is not progressing,” analysts say.

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