It was a shocking disappointment for me when I heard that the House of Representatives, through a “majority vote,” passed the Mineral Development Agreement between Liberia and ArcelorMittal Liberia (AML). How did it happen? Why does the House of Representatives do that without considering the complex variables involved?
We are aware that the three cardinal responsibilities of the Legislature are lawmaking, oversight, and representation. However, the issues of these cardinal responsibilities have been lacking fundamental truth, especially in the attempts by that body to enslave our citizens into abject poverty.
First and foremost, most lawmakers have no understanding of the clauses designed by the concessionaire. Many of them have no professions, making it difficult to read, understand , and carefully analyze what they are signing. Thirdly, most of those members at the House of Representatives are uneducated; some have not been to school. In contrast, others possess faked credentials, and others are high school or college dropouts with no functional and technical understating of policy prescriptions related to concession agreements. Nevertheless, it does not mean they cannot perform.
However, their refusal to have conducted public hearings in areas where the Mineral Development Agreement between Liberia and ArcelorMittal Liberia (AML) directly affects the lives of our people speaks of the need to reform the National Legislature.
I would have expected that members of the House of Representatives to have proceeded with public hearings that involve the invitations of experts in mineral development, student leaders, heads of trade unions, women organizations fighting injustices, and children organizations, whose lives are going to be impacted, and the gurus in the media to appear and provide testimonies into the actuality of this agreement. Without carefully moving in this direction, they proceeded to sign the deal, which will jeopardize our country's safety and economic gains.
It’s a known fact that the mining deal between Mittal Steel, the world’s largest steel company, and the Government of Liberia is against the interests of our people.
This company enjoyed five years of tax breaks when it was first signed on August 17, 2005. From that time to 2010, there were no substantial improvements in our people's lives, especially in Buchanan and Yekepa, where they have their physical and operational structures. Today, the LAMCO Loop in Buchanan and Yekepa look like a ghost town. Those Indian boys are only interested in taking our resources and do not care about improving the lives of our people. Here are a few policy gaps that needed to have been considered before signing.
The House of Representatives failed to understand that Mittal Steel has control over the number of royalties paid to the government because the MDA does not specify the mechanism to set the price of ore. It left it open for intra-company pricing, creating a strong incentive for Mittal to sell the ore below the market value to an affiliate, which would reduce the actual royalties paid to the GOL. Companies like Mittal will use bad business strategies and techniques to gain more while our citizens languish in poverty and desperation.
Also, Mittal Steel enjoyed a five-year extendable tax holiday in Liberia including an international tax regime that encourages repatriation of profits to low tax regimes in Cyprus and Switzerland, which potentially denies Liberia significant tax revenues. Did they consider this before signing this deal?
It is clear that the structure (MDA Agreement) created by Mittal protects the parent company from guaranteeing or bearing the risk of the activities and liabilities of its subsidiary. This means when Mittal leaves today, and another company takes over, the Government of Liberian cannot compare that company to clean the mess created by Mittal, and that Mittal cannot also be held liable. This is complete nonsense. Who does that?
One of the significant things the House of Representatives ignored is the “stabilization clause,” which freezes the laws in the concessionaire area like Yekepa and Buchanan. It has the potential to undermine Liberia’s right to regulate important “public policy areas” such as human rights, the environment, and taxation and could severely limit Liberia’s ability to fulfill its current and future obligations under the Liberian Constitution as well as its commitments under international law or statutes. That means our leaders did not care if the rights of our people were violated; all they wanted was the "mokoflee" (money”) to chop and get prepared for the 2023 general and presidential elections where they will be dishing out millions to the poor people to get re-elected.
They also failed to protect the rights to public and private ownership of land with adequate compensation, which is a violation of the rights of our people. Also, the Concessionaire's provisions for the maintenance of security forces fail to adequately establish the “ terms and limits” of the company’s authority, which could be very harmful to Liberia. There’s evidence of the human rights abuses most private and company securities have caused our people.
Mittal is very crafty in luring our leaders to get what it wants. The timing of their deals often come before geneal and presidential elections. They submitted their first deal in 2005 when Liberians were gearing up for elections, and those guys within the National Transitional Legislative Assembly (NTLA) regime proceeded to sign the deal. In 2010, the same Mittal Steel brought this deal before those guys at the legislature, who were going for re-election, and it was signed without hesitation.
The 2023 general and presidential elections are coming, and Mittal knew the guys will be up for grabs. As such, the company brought the agreement, and it has passed. Well, I am calling on all Liberians not to re-elect those guys who ignored our rights and proceeded to sign the concession agreement.
The CPP Lawmakers, the biggest opposition party at the National Legislature, are terrible. Why was there a unanimous vote and not a split? I would have expected members of the opposition bloc claiming to be in our interests to vote against this deal. Interestingly, they were the first to raise their tiny small fingers to approve the deadly and dubious deal. Sad!
About the author: Vandalark Patricks is a graduate of the Harvard Kennedy School of Governance.