Grand Gedeh Bar Calls for Review of Putu Iron Ore MDA

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-As company owes three Southeastern counties over US$21M in social benefits

Legal luminaries of Grand Gedeh County are calling on the government to revisit the September 2, 2010, Mineral Development Agreement (MDA) signed with Putu Iron Ore Mining, Inc., and Mano River Iron Ore Ltd.

The legal minds, through the Grand Gedeh Bar Association (GGBA), said that their request for the review of the Agreement that goes into its 10th anniversary next month is meant to determine whether or not the MDA is still practically and legally effective; whether or not the company still holds a valid Class “A” Mining license and exploration rights over the designated production area in Grand Gedeh County, and whether the company is prepared to resume operations.

The request for the review was contained in a petition that GGBA submitted to the government through the Grand Gedeh County Legislative Caucus. The petition was signed by GGBA president, Atty. P. Alphonsus Zeon and addressed to the Chairman of the caucus, Representative Alex Chersia Grant.

The Bar said its petition for a review is based on “Sections 31, Periodic Review” and “31.1, Profound Change in Circumstances” of the Agreement which mandates the government and the company to meet once every five (5) years, if one party reasonably considers a “Profound Change in Circumstances” to have occurred and entered into “good faith discussions to consider such modifications to this agreement.”

“But it’s running up to seven (7) years since the Company ceased operations in 2014 during the Ebola epidemic in Liberia, three years short of a decade,” the petition noted.

And according to the GGBA, this is a substantial period of a 25-year contract to be left in suspense, with the state of clearly outlined social development projects and contributions to project-affected counties and mandated environmental audits uncertain.

“Since the company ceased operations in 2014, the people of Grand Gedeh, River Gee and Sinoe counties have not been paid their social development contributions now up to US$21 million and nearly a quarter of a million in education and scientific research funding stipulated in the agreement to be paid annually,” the group said.

Also in limbo is the construction of a two-lane paved all-weather road between Greenville and Zwedru, a railroad for both private and commercial operations, and a general port with a capacity of 1 million metric tons of traffic per year.

The MDA also obligates the Company to construct a hospital facility that would provide a wide range of curative and preventive services supported by a small laboratory.

Additionally, the Agreement provides for the employment of Liberians, holding that within the first five years of the Agreement having come into effect, the Company shall hire at least 30 percent of Liberians in all management positions, including 30 percent of its ten most senior positions—all of these, the Bar said, are yet to come to fruition.

Aside from just the failure of the company to pay agreed community funding and undertake the outlined projects as stipulated in the Agreement, the County’s legal minds are concerned about the potential of an environmental impact on the lives of the people of the region and their livelihood.

In Section 13.2, Environmental Reports and Audits, the Agreement mandates the Company to submit an environmental audit and assessment of the Production Areas under such license, plus all areas outside of the Production Areas in which the Company conducts Operations.

The Bar is worried that three environmental assessments and audits have not been carried out since 2014, on the assumption that Putu had submitted environmental assessment reports for the five years it operated before closure.

“We are concerned that in the absence of money and roads, our people are entitled to an environment that supports productive life, free of environmental threat,” the petition said.

Bar Calls for MDA Termination if…

GGBA said during the review of the 166-page agreement, it found several other provisions that constitute a transfer of control, relinquishment, and default.

“Notwithstanding, the findings in the Agreement are sufficient basis for the Government of Liberia to pursue a course of termination for default, it is the view of the Grand Gedeh Bar Association that a meeting with the parties should be the first step to review the agreement,” it said.

This is intended to reach a consensus in the best interest of the project-affected communities, government, and the Company and its shareholders, GGBA noted.

Unless where an amicable resolution is not found, the Bar urged that the government should terminate the Agreement for default.

This, the petition noted, relieves the government of any other obligations under the MDA and allows it to freely scout other potential investors to take over the mining operations in the county to support the development of the project-affected regions and mitigate any potential environmental impact in the production areas and outside the production areas.

The Bar’s request for review and pursuit of other actions, as may be necessary, is enforced by several provisions in the Agreement as well as laws of Liberia.

Some of these provisions include Section 3,1 which talks about a periodic review.  31.1 of this section, which talks about a profound change in circumstances; Section 6.4 of the MDA that speaks of recovery shortfall;  Section 5.8 (C) which says: “At any time following the issuance of the Mining License, the company may file a request with the Government to relinquish the Mining License as of the date specified therein.”

Others are Section 23.4, General Change of Control Rule; Section 25.2—Company Events of Default and Section 13.2—Environmental Report and Audits

GGBA hopes that the Caucus would push the George Weah administration to review the MDA to ensure that the company complies with the terms in the best interest of the people of the affected counties.

“These counties need improved road network, provision of quality education, and healthcare as priorities in their County Development Agendas. These priorities are exactly the same development priorities of the current administration,” the petition said.

2 COMMENTS

  1. These greedy leaders in Liberia don’t care about the environmental damage or the natural beauty of the country. Destroying these mountains for a few million dollars is like cutting off your legs for a few millions but the money will so run out but you can’t use your legs anymore. Leave the mountain alone and find other ways to raise revenue. Use the mountain for tourism and it will earn billions over a generation. Please stop destroying the country.

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