9 July 2014

Liberia: What Is Liberia Not Tackling Between Investors & Locals?

Monrovia — Resource rich African countries are facing the ire from local residents and in some countries, the situation has resulted in violent actions from locals who are demanding just benefit from their natural inherited resources being chased by mainly western companies. This has become the newest challenge for most African countries as in Nigeria, the crisis has reached an alarming proportion, in the Central African Republic, there is a full scale war, for Angola decades of civil war ended a few years back and in Equatorial Guinea, its people are amongst some of the poorest in the world despite vast natural resources.

Africa is now recorded amongst countries experiencing the resource curse theory and in recent reports by international organizations Liberia has been listed amongst these countries that are experiencing the resource curse and it seems ongoing trends of events in Liberia is proving these international reports factual as numerous protest from locals against the operations of concessionaires continue unabated.

"No region has provided more abundant evidence in support of the resource curse theory than Africa. Countries such as Angola, the Central African Republic, Equatorial Guinea, Liberia and Nigeria have been widely used as case studies to explore the links between resource exports, conflict and poor governance. There are some exceptions, such as Botswana, but they are few. The question at the heart of the debate over the resource curse in Africa is: "How can countries be so rich in mineral wealth and yet so poor?" stated a recent African Progress Panel report.

Liberia has a long history of big companies operating in the country which still remains one of the least developed in the West African sub region while these companies make millions in profit, enjoying tax waivers and other exemptions.

1926 Firestone 99 years' agreement

Selling the resources of Liberia for cheap to concessionaires and foreign companies is aged old as in 1926; the Government of Liberia signed an agreement with the Firestone Company including two additional agreements. Firestone Rubber Plantations Company, one the world largest rubber companies in the world is based in Margibi County with only the production of raw rubber taking place while the processing is done abroad.

Firestone was the winner on these agreements as the company obtained a one million acre concession for a 99-year period, and was granted the exclusive rights (!) upon the lands selected, and became - with only few, small, exceptions - exempted of all present and future taxes.

Thus, Firestone acquired virtually unlimited rights over an area equal to 4 percent of Liberia's territory and nearly 10 per cent of what was considered the arable land in the country. Moreover, Firestone lent $ 5 million to the Liberian Government through a wholly-owned and especially for this purpose created a subsidiary, the Finance Corporation of Liberia.

Firestone's obligations were very limited and the Liberian Government, on the other hand, accepted several conditions besides the waivers on taxes and the long 99 year agreement which turned Liberia de facto into an American protectorate. In the 1926 Firestone agreement, the Liberian Government also promised that it would encourage, support or assist the efforts of the Firestone Company to maintain an adequate labor supply. Firestone had foreseen complications in recruiting laborers and cleverly introduced this commitment.

After years of criticism of the 1926 Firestone agreement, In 2005 Liberian government signed a renegotiated agreement with Firestone which provides for extensive post-civil war capital investment, immediate replanting of rubber trees and extension of the company's lease until 2041 to ensure it has the opportunity to harvest rubber from newly planted trees. Firestone committed to a long-term major replanting program and the rebuilding of schools, hospitals, housing and other infrastructure damaged or destroyed during the civil war. The company also committed to providing assistance to Liberian rubber farmers.

What Did LAMCO Leave In Nimba?

Liberian-American-Swedish Minerals Company (LAMCO) was one of the companies that operated in Liberia mining for iron ore in the Nimba range. Founded in 1955 by American and Swedish investors, the company established the first large-scale mining operation in Liberia following the discovery of the Nimba ore body by geologist Sandy Clarke in the 1950s.

The Nimba project was managed by LAMCO, Bethlehem Steel and the Liberian government. LAMCO operated in Nimba for several years, but upon their departure as a result of the civil war, the company left behind nothing as the road between Ganta and the Yekepa mining town was not built and there was no major development that could remain in existence for years to serve as proof of operations of such company in the community.

In Liberia, beginning 2005, the country witnessed a huge influx of investors who were rushing for operations in a country that experienced years of civil war where there were not many companies operating and couple with a United Nations sanctions on major resources such as diamond and logging and no means of mining iron ore, the country turned a virgin land for investment.

The 52nd National Legislature hastily ratified several mega million dollars worth of concession agreements, many without due diligence as evidenced by the short spell some of the companies had in Liberia and shortly parked off after failing to live up the terms of the agreements signed with the Government of Liberia.

By 2009 some of the companies could not continue to operate as Broadway Consolidated PLC departed the country, followed by Buchanan Renewable which had promised to provide cheap electricity to several communities through the use of dead rubber woods but could not even start the project promised. There are still others that are still operational in the country, but with their operations come the tension of the persistent protest from local residents who continue to complain that many of these concessionaires are using their ancestral land for cultivation without giving back in return just benefit for the land owners.

GoL ignoring glaring signs of chaos?

At least four of the current concessionaires in Liberia are constantly plagued by citizens' action against their operations, citing the failure of these companies to fulfill their social responsibility as enshrined in the agreements signed by providing basic services to the communities in which they operate, prompting the lingering question of what is going wrong between these concessionaires and the locals.

The problem cuts across the entire Liberia so that is difficult to ascribe motive to the actions of these locals, perhaps the only difference could be the severity of the recent action in Yekepa, Nimba County where Arcelor Mittal was hardly hit by angry protestors.

From the Equatorial Palm Oil Company operating in Grand Bassa County to the Sime Darby in Grand Cape Mount and Bomi counties; Golden Veroleum in Sinoe and now Mittal Steel in Nimba County, the problems are the same as the locals are not happy over the operations of these companies, especially not adhering to the concerns of the people, and the government of Liberia role in finding a lasting solution to these problems.

The people of Grand Bassa County have been protesting against the expansion exercise of the Equatorial Palm oil where at one point officers from the Emergency response Unit (ERU) were deployed to prevent what seems a major demonstration by residents. Residents mainly of District #4 have been opposed to Equatorial Palm Oil's bid to acquire further 20,000 hectares, citing negative impacts on affected communities

President Sirleaf later calmed the situation when she ordered the company to stop the expansion exercise, but that is yet to completely settle the impasse as it is still likely that the company could continue its expansion exercise which will meet further resistance from the locals.

In Grand Cape Mount and Bomi counties, the crisis between the locals and Malaysian company Sime Darby is still hanging in the air as in time past some locals have set ablaze rubber seedlings belonging to the company in protest against the expansion of the company planting exercise. In Sinoe County, the operation of Golden Veroleum is still a sticky issue as the company continues to come under allegations of forceful expansion from residents.

Through the Green Advocate, a team of environmental lawyers Sinoe citizens have been protesting the company failure to live up to some of its social responsibilities, although on many occasions the company has claimed that it is performing in line with the agreement signed with the Government of Liberia. In Nimba County, which is still nurturing the memory of the operations of LAMCO that left behind no tangible development, the writings have been clear on the wall that conflict was imminent.

According to one citizen from Nimba who begged not to be named for fear of not being perceived as supporting the recent violent action of some citizens of the county to vandalize properties belonging to Mittal Steel, the citizens have been complaining about the failure of Mittal to do a couple of things. The citizen said local residents used all means to get the attention of the government and other stakeholders in addressing their concerns but with no action.

"We wrote the legislative caucus, we wrote the Superintendent, the County Attorney and many other parties complaining that we do not want what happened to the county during LAMCO time telling them some of the things we want Mittal to do. For months our representatives ran after these communications for redress, but nobody cares to listen, all they do is to protect Mittal", said the Nimba citizen.

The citizens amongst others have been calling for the pavement of the Ganta -Yekepa Road, the construction of a bridge linking Nimba to Bong County, amongst others, but accordingly Mittal has been assuring the citizens that it will address these concerns until the recent violent action. One local county official claimed that Mittal has paid up to US$4.2 million to the locals, but how will such huge sum of United States dollars be infused in a small community without visible evidence remains a doubt.

For some, the Government of Liberia continues to play deaf hears on concerns raised by locals against these concessionaires a situation that led many companies to operate in Liberia in the past without benefit to the people. Whether the locals are putting undue pressure on concessionaires or concessionaires are failing to live up to the expectation of the people, the Government of Liberia has a responsibility to protect both the concessionaires and the locals.

The World Bank cited in a recent report that concessionaires giving back to communities is important for growth in African countries. The Bank mentioned infrastructure projects such as good roads, hospitals, schools and others as benefits that concessionaires should try to provide for locals in concessionaires areas.

With the help of Government officials, concessionaires have reaped billions from across Africa from their operations, leaving no tangible development in these African countries where they operate. Africa has now turned the fishing ground for raw materials to develop the west as the continent continues to go backward in infrastructural and human development.


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