Gross Conflict of Interest in Hummingbird Concession Deal

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Is Senator Albert Chie a Shareholder in Hummingbird Resources?

Much has been said and written about the ExxonMobil oil block alleged bribery scheme which, according to international transparency watchdog, Global Witness, involved a number of high profiled Liberian government officials. The reports all border on gross conflict of interest by government officials.

The officials were accused of receiving bribes paid to them by US oil giant ExxonMobil, through the National Oil Company of Liberia (NOCAL). The officials have all since denied culpability as charged, the latest among them being former Justice Minister, Christiana H. Tah.

Former Minister Tah’s statement to the Observer published in its June 12, 2018 edition dismissed the charges of bribery against her as a cheap shot designed by Global Witness to create the impression that she was “part of the corrupt organization that milked, plundered, and mismanaged the resources of Liberia”.

Other accused officials including former Finance Minister Amara Konneh and former NOCAL Board Chairman, Robert Sirleaf, have also denied the allegations by Global Witness.

Lost in all this debate, however, is the recently passed mining concession agreement granted the Hummingbird Resources Inc., placing it as the holder of the largest area of mineral exploration in the highly prospective area of southeastern Liberia.

Grand Kru Senator and President Pro Tempore of the Liberian Senate, Albert Tugbe Chie, is said to be a 10 percent shareholder in the Hummingbird Resources, which he has refused to confirm or deny. But hardly had the ruckus over the Global Witness simmered when news broke of the proposed Eton and EBOMAF loans for road construction.

The agreements  were speedily passed into law by both houses of the National Legislature leaving mouths agape as to whether brown envelopes had indeed been passed to secure their passage into law as mulled by an ever suspicious public.

But this is not the first time that our legislators have been suspected of receiving bribes to pass certain bills and concession agreements. It can be recalled that Senator Prince Johnson once accused his colleagues of being very susceptible to accepting bribes from former President Sirleaf to ensure passage into law of certain bills and concession arrangements.

When asked by the Daily Observer about his alleged 10 percent stake in Hummingbird Resources, the Senate President Pro Tempore declared, “It would have been a very good thing. As a matter of fact I am planning to open re-open my geological consultancy and practice as a professional geologist like lawyers and doctors who are also in the Legislature”.

The President Pro Tempore continued, “Hummingbird is a publicly traded company on the London Stock Exchange. You can easily get the names of shareholders, the quantity of shares and when they were acquired. There is no need to speculate”, he said.

Meanwhile, according to information sourced from the company’s documents, “the Group currently holds 14 exploration licences for all minerals except iron ore, covering over 7,000 square kilometres in total, which constitutes a significant proportion of eastern Liberia containing the Birimian sequence”.

“In addition, the Group holds one iron ore exploration licence covering 155 square kilometres which is located in northern Liberia close to BHP Billiton’s Mount Kitoma iron ore exploration project, as well as Arcelor-Mittal’s Yekepa project containing the Mount Nimba iron ore mine.”

But it remains unclear how much Liberia stands to benefit from this arrangement that places so much control of the country’s resources into the hands of what is described as fortune seekers. For the record, Hummingbird Resources plc is a mineral exploration company which was founded in late 2005 and incorporated in England and Wales.

It was initially and wholly a gold exploration company and developer, headquartered in London. It initially began operation in Mali, a country torn apart by fratricidal strife involving separatists, jihadists and affiliates of Al Qaeda in the Mahgreb.

Sources say that natural resource governance in crisis-hit Mali is extremely weak especially given its precarious security situation with large swathes of the country under the control or influence of armed non-state actors and that such a situation could have lent easily to bribery to secure sweetheart deals.

Further according to reports, the Hummingbird resources are expected to mine about 14 trillion ounces of gold over the 20-yr life span of the project. The World Bank affiliate, International Finance Corporation (IFC), is said to have invested US$8m in the project. The World Bank has similar investment in the Kinjor mines of Aureus Mining Company in Grand Cape Mount County.

But just how much Liberia stands to benefit from such a concession agreement, remains under undisclosed.

What is however known is that a US$ 1.5 million signature fee was to be paid to the Liberian Government upon passage of the concession agreement into law and another US$1.5 million to be paid upon signing of the agreement into law by the then President who was at the time Ellen Johnson Sirleaf.

The Hummingbird concession was one of those proposed agreements which was submitted for approval by President Sirleaf on the very cusp of her departure from office, but which was shelved. Whether those fees were paid to Government at the time or whether the fees were paid since the Weah Administration assumed office, remains unclear.

But what is of particular interest to the Public is not just the extraordinary speed with which the agreement was passed into law. Of particular interest to the public are reports that Senate President Pro Tempore, Albert Tugbeh Chie is said to be a 10 percent shareholder in this company which constitutes gross conflict of interest.

According to sources, Senator Chie’s links to this company can be traced as far back as 2005 when he along with the late Deputy Minister of Lands and Mines, Mulbah Z. Willie founded the Earthcons Inc, a local mineral consultancy company.

Chie was at the time employed with the Ministry of Lands and Mines as a geologist. In 2013, the Liberia Extractive Industries Transparency Initiative(LEITI) listed Earthcons Inc, among several companies as being non-complaint with its tax obligations to government. At the time of the report Chie was then a serving senator of Grand Kru County but there was no available information disclosing he had severed links with Earthcons Inc since he became senator.

It can however be recalled that in July 2015, a US$100 million gold mining Agreement with Hummingbird Resources (HUM) for mining operations in Sinoe County was signed between the Company and the Government of Liberia.

But with the modification of the Bill to include Maryland, Grand Kru and River Gee counties, there is yet to be known whether the worth of the signature of the Agreement, signed and granted as well as the mining license remain the same.

Things have not been made any clearer now that the agreement has been passed and signed into law. In the previous agreement, as of July 2015 and 2016 respectively, when submitted to the Senate, the company was to pay the government a US$1.5 million signature fee once the Agreement was ratified by the Legislature, and another US$1.5 million on the granting of the mining license.

Hummingbird, on annual basis commencing on the first anniversary of the effective date of the Agreement, will contribute an amount to the Social Development Fund (SDF) for the affected communities, which means those areas in which the company will do its mining. The SDF during years one and two will be US$100,000; years three and four, US$150,000; years five to 10, US$200,000; and years 11 onward, US$250,000 throughout the 25-year Agreement.

According to experts in the field, this is a paltry sum far under-weighing  what the company will be getting in return, though the company will also pay all other taxes and duties.

As per the  Government of Liberia’s Economic Recovery Plan, Hummingbird will give first priority to qualified Liberians for employment, help improve workers and community education and health and give preference to Liberian suppliers in terms of procurement.

But, it can be recalled that in November 2016, the Senate Joint Committee on Lands, Mines, Energy, Natural Resources and Environment, Judiciary, Claims, Human Rights and Petitions, Investment and Concessions, recommended to the plenary of the Senate to postpone the ratification process of the proposed MDA between the government and Hummingbird Resources (Liberia) Incorporated, pending some explanations from the Executive.

According to the joint committee’s report, principally the lumping of four exploration licenses into a single MDA, instead of four separate MDAs and the lack of a plan towards the development and mining of the over four million ounces of inferred gold resources discovered in Sinoe County, were concerns that need explanations from the Executive.

The committee in its concluding report to plenary, noted that the lumping together of the four exploration licensed areas into a single MDA instead of four in line with the New Minerals and Mining Law approved on April 3, 2000, will lead to revenue loss to the government in the tune of millions of United States dollars, “and significant reduction in social development funds and other benefits to the affected communities in Sinoe, Grand Kru, River Gee and Maryland counties.”

Besides the loss of revenue and benefits, the committee maintained that the areas could be susceptible to limited and impetuous exploration work, which could result into some of the areas prematurely and unjustifiably been declared uneconomical and making them relatively unattractive for future investment.

As per the findings of the committee, during the formulation of the MDA, there should have been a provision setting aside a production lot (s) over the areas in Sinoe where the gold has been discovered or the company given a maximum of one year to declare production areas.“

Allotting the company five (5) additional years for exploration over these areas containing a gold resource after exploring for 10 years is excessive and the legal, technical and economic bases are debatable, ” the report concluded.

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