Liberia: Min. Kruah Denies Violating Mining, Forestry laws… But

The Minister of Posts and Telecommunications, Cllr. Cooper Kruah has denied being a current shared holder of Universal Forestry Corporation (UFC) but his denial does not in any way vindicate him of being in violation of laws governing the mining and forestry sectors as well as a breach of the Code of Conduct for Public Officials.

Kruah, in a rebuttal release to a story written by the Daily Observer media partner, The DayLight, noted that assuming but not admitting he was involved in the company’s operation — he is working as Minister of Posts and Telecommunications and is not involved with mining or foster operation, so it is a “conflict of interest”.

The Minister added that the company document was amended on July 12, 2019, with the Board of Directors removing him as a shareholder.

But Kruah's action to relinquish and turn it over to his son is still a violation of the country's mining and forestry laws, which prohibit a public official from owning shares in a company with involvement in the sector.

“I want to use this medium to set the record straight that there has been an amended article of incorporation to the Universal Forestry Corporation and I relinquished my share to my son who is also a counselor-at-law,” Kruah said in a release issued by his official officer Caesar Slapeh. 

“[My] son's name is on the amended record and even having a share of 15% three times of what [I] owned back in the late 80’s up to the time of his appointment to serve as Minister of Postal Affairs.”

Kruah was appointed by President George Weah in 2018 and was confirmed by the Senate that same year. But he only relinquished his shares in UFC more than one year after his appointment, which saw the company that had acquired a flurry of mining licenses after he became the Postmaster General.

His equity in Universal Forestry Corporation in 2018, while serving as minister, was in violation of the Minerals and Mining Law of 2000.

Section 4.2 of the law, says that “the President of Liberia, the Vice President of Liberia, any member of the National Legislature, Justices of the Supreme Court and Judges of subordinate courts of record, Cabinet Ministers, Managing Directors of Public Corporation during their tenure in office … in the event that any of the foregoing Persons was already a Holder of a Mineral Right prior to assuming the functions of the office, then such Person may either dispose of such Mineral Right or place such Mineral Right in a Blind Trust.”

But Kruah did not put his disposed shareholding in the UFC, or in blind trust immediately as requested by the law. Rather, he waited for more than a year to do so on July 12, 2019, despite taking office as postmaster in February of 2028.

Also, he is in violation of the law by resigning his shares to his son. Section 1:3 of the Mineral law under Definitions defines Blind Trust as a Trust in which the creator of the trust places his investment under the control of another independent trustee in  order to avoid a conflict of interest.”

Yet, Kruah's share is not under the control of an independent trustee but his son, over whom he has influence.  His action of holding a stake in the company, which is also interested in forestry, is also in violation of the National Forestry Reform Law.

The forest law, Section 5.2, Basic Qualifications state, among other things, a public official who holds business interest in such sector but becomes prohibited from doing after ascending to public position “shall promptly arrange an assignment of the  permission (or in the case of permission held through a business entity, a transfer of  ownership) to an entity outside the Person’s influence and control, such as an unrelated individual or a Blind Trust, and the Authority shall cooperate in granting necessary approvals for a reasonable assignment or transfer.” 

Again, Kruah did not promptly transfer his share in a blind trust but waited to do so after more than a year. He also did not transfer ownership to a person of outside influence but rather to his son --- thus violating the law.

The law also states that “The President of Liberia, the Vice President of Liberia, any member of the National Legislature, Justices of the Supreme Court and Judges of subordinate  courts of record, Cabinet Ministers, Managing Directors of Public Corporations and Agencies, and Superintendents or Persons holding equivalent positions in foreign countries.”

Kruah’s stakes in the company before the transfer were also in breach of the National Code of Conduct, which defines conflict of interest as “when a public official, contrary to official obligations and duties to act for the benefit of the public, exploits a relationship for personal benefit.” Under this law, he faces a fine, suspension, and dismissal, among other penalties.

The Code of Conduct has its roots in the Liberian Constitution, which says, “No person, whether elected or appointed to any public office, shall engage in any other activity which shall be against public policy, or constitute [a] conflict of interest.”

According to The DayLight, the company has violated forestry legal frameworks as it was involved in the notorious  Private Use Permit (PUP) Scandal, in which an estimated 2.5 million hectares of forests — or 23 percent of the country’s landmass — was illegally awarded to logging companies. 

A government-backed inquest found the company broke the law in different instances while logging in Geetroh, Butaw District of Sinoe County between 2010 and 2012. That investigation found that UFC did not have an environmental permit or a certificate to harvest trees and that it paid community benefits into a personal account. UFC’s PUP and 62 others were canceled and a moratorium remains in place on the permit. 

Jin Kyung, UFC’s General Manager,  had previously denied Kruah is a shareholder in the company. However, Kruah is now admitted to being a shareholder but later transfers his shares to a blind trust.

Kruah had established UFC in 1986 with an initial 25 percent shares, which reduced to five percent when the company amended its article of incorporation in 2007, the document shows. Its other shareholders include Edward Slangar, former advisor to the late President Samuel Doe, and B.J. Kim and Jin Kyung, are two foreign nationals. Kruah has also served as the secretary of the company’s directors and has been cited in official communications, seen by The DayLight, as its lawyer.

UFC has had 11 mining licenses since his appointment in February 2018, records of the Ministry of Mines and Energy show. The company had held a few logging concessions prior to Kruah becoming a cabinet minister. However, it began to acquire a flurry of mining licenses after he became the Postmaster General. The company currently has a logging agreement.

Of the nearly one dozen UFC mining licenses, 10 are for semi-industrial-scale gold mining, prospecting,  and dealer licenses, and the other is a diamond broker license. Four of these permits are still active. The company operates mines and dealerships in Montserrado, Grand Bassa a, and Nimba. One of its gold mines in Nimba had been the setting of a 2019 mine accident, which killed at least five people, according to the BBC.