Liberia: ArcelorMittal Deal Must Have the Tenets of Fair-Play
...... Lawmakers decline to ratify, creating new grounds for improvement
George D. Watkins
In 2006, following an acquisition deal, ArcelorMittal obtained a license for mining in Florange, a traditional steel town in north-eastern France, and ran mining activities for 6 years until 2012, when the company could not live up to what she penned in her agreement.
The then Minister of Industrial Recovery, Messr. Arnaud Montebourg made a statement. ‘ArcelorMittal is no longer welcome in France, he said, accusing the steelmaker of “lying” and “disrespecting” the country’ (France).
Sooner than later, the company (ArcelorMittal) was brought back to the table in a new negotiation with the French government, premised on fair play and equity, for the smooth operations of the steel giant.
On September 9, 2021, actors within the executive branch of the Liberian government, concluded and signed a Mineral Development Agreement (MDA) for another phase of ArcelorMittal’s mining operations in Liberia, which brought about plans to invest additional Eight Hundred Million United States Dollars (US$800,000,000) in its iron ore mining operations in the country.
Given the analogy thereof, the Liberian Legislature could not agree to reach a settlement or conclusion during their recent sitting on attempts to pass or ratify the amendment to the Mineral Development Agreement (MDA) with ArcelorMittal, the world’s leading steel company for its operations in Liberia.
Global Witness had once said that ArcelorMittal operations in Liberia are a case study of a well-established pattern of behavior by transnational corporations around the world, to maximize profit by taking advantage of a regulatory void that allows capital flight, aggressive tax avoidance, and tax reduction strategies.
At Current, the Liberian Legislature is reviewing all developments surrounding the ArcelorMittal new deal and seems poised to inform President George M. Weah in a communication detailing why they (the Legislature) could not ratify the deal for reasons they noted in their writings to the President.
Few excerpts, as contained in the leaked communication to the President, pointed out that the House of Representatives expressed some critical misgivings about the agreement, particularly the impact of the treaty between Liberia and Guinea on the ownership, operatorship, and users’ rights of the Yekepa to Buchanan railroad as enshrined in Article 3 of the treaty with Guinea, including the idea of beneficiation, which is best practice.
“Mr. President, the Honorable House of Representatives conveys the following recommendations: That the government retains ownership of the railroads, port of Buchanan, and other related infrastructures; that the government initiates a recruitment process aimed at hiring an independent operator of the railroad to ensure non-discriminatory management of the Railroads and other related infrastructure,” the letter from the House said.
“And any future renegotiation of this concession, other existing concessions, and new concessions considers the full application of all relevant laws including the Act creating the WASH Commission and the Land Rights Law,” the letter continues. “And that future amendments of the AML MDA, other existing concessions and/or new concessions consider a role for the National Housing Authority to ensure standard and improved housing facilities for employees and their dependents.”
Based on mounting concerns from the public, the House of Representatives has decided to decline any further action on the new ArcelorMittal deal following the Senate proposed conference committee, comprising the Senate and the House of Representatives, to sort out and harmonize recommendations stemming from the House for subsequent Legislative action.
The Government of Liberia and ArcelorMittal Holdings A.G. made and entered into MDA on August 18, 2005, which was ratified by the Legislature. The agreement has gone through two different amendments, on December 28, 2006, and January 23, 2013, respectively.
About the author: George D. Watkins heads the Political Affairs and Communication Unit in the Office of the Speaker of the 54th Legislature, Monrovia, Liberia.