No Free Ride for Concessions Deals

A high-ranking official of the House of Representatives has disclosed that stricter scrutiny of the US$800 million ArcelorMittal Liberia mineral development agreement (MDA) can be expected, as is already vigilantly anticipated by the public. 

The House’s pending action, according to Deputy Speaker Fonati Koffa, is intended to exercise the requisite due diligence to the agreement – looking at the impact of the deal on the lives of communities in the concession areas.

The AML deal signed on September 10, 2021, which is an amended version of the 2010 mineral development agreement, seeks to expand the company’s project, which encompasses processing or ore as well as the use of the rail and port facilities — thus making Liberia a major iron ore producer. 

“More than 2,000 jobs are expected when expansion works kick-off, with Liberians in the majority and an additional 1,000 new jobs later on,” AML said in a press release announcing the revised deal.

Rep. Koffa added that the public need not worry as they will have access to the MDA, saying: “For the fact that it will come to us, everybody will have the opportunity to know what is in that revised mineral development agreement.”

“When the Executive looks at agreements, they do so looking at the holistic national interest but, when it comes to us, we do a little more scrutiny. We look at the local and parochial interests too,” Rep. Koffa told the Daily Observer during an interview. 

“Ours is to make sure the national interest is in line with the interest of the local community, where the mining is taking place,” he said. “Therefore, we will read the document when the Executive submits it and, in one or two weeks, we will have enough time to decide.”

Rep. Koffa added that the House of Representatives, upon receiving the ArcelorMittal MDA, intends to focus on three fundamental issues – the company’s accomplishment of all corporate social responsibilities in the 2010 mineral development agreement, labor issues, and sovereign assets.

When asked about the need for concessionaires to add value to raw materials before export, the Deputy Speaker said, “That is always, in my mind, the end-goal. I don’t know if the revised MDA achieves that. That’s one of the things I will be looking at as to what value-added incentives or value-added avenues have been created by this MDA so that we take advantage of those plants that are located here.” 

Pressed further on whether the Government of Liberia supports exclusivity for ArcelorMittal’s use of the railroad from Yekepa to Buchanan, Rep. Koffa reiterated that he had not yet read the revised agreement. “The legislature will want to make sure that the sovereign assets of Liberia -- the rail and port -- are substantially within the control of the Government of Liberia and not the concessionaire. "

"So when [the MDA] comes, that is the language I will be looking for. Various people who have seen the document have various interpretations of what it is," he said. "I haven’t read it; so I cannot officially comment on what I think it says. But we will be looking to make sure that the ownership of the public resource, the public asset, is within the domain of the public.” 

He noted that the house is concerned about labor issues at the company, and how Liberians are being treated before attention is given to the newly revised AML deal, and critical observation of all concession agreements will be carried out before making any attempt to pass or to revise it.

“While they are doing their mining, we do not want them to set aside their corporate social responsibilities,” the deputy speaker explained. “And we are concerned about the allocation and use of sovereign assets, such as the rails and the port of Buchanan. They might be speculations, but we will care to know about how the company is using the two assets.”

The rejection

Speaking of corporate social responsibilities, the revised MDA has been rejected by those who live within the confines of the company’s concession areas, citing past abandonment and negligence of the previous MDA.

They claimed that AML’s presence in their communities has led to little or no improvement for the past 16 years, with untold sufferings and hardship as they are continually sidelined for job opportunities, among other benefits.

These concerns, although AML has denied them, have led to an unprecedented response from the highly influential Poro Society in Liberia, who shut down the company’s operation for 48 hours at Mount Tokadeh and Mount Gangra, a week ago.

AML rejected the allegations made by the communities and noted that while the criticisms might be genuine, they are not the representation of the truth and the company’s contribution to improving the lives of citizens in the concession areas.

Meanwhile, the US Government, through its Ambassador to Liberia, has hailed the deal as one that will bring in hundreds of millions more in government revenue, and significant expansion of mining sector jobs, temporary and long-term.

However, the Ambassador, in the same breath underscored the added benefits for Liberia if the rail and port assets were open to other concessionaires, not just ArcelorMittal Liberia. 

A consortium of Liberian news media companies filed a Freedom of Information request a week ago, calling on the Ministry of Mines and other relevant government entities to make public the revised MDA. The government, by law, has 30 days to respond. 

But the fact that the details of the revised MDA remain undisclosed has begun to raise a concern about the future impact on the country and on generations to come; as the government of Liberia is noted for conceding too much to investors who leave a little impact in project-affected counties. 

For example, Concessions companies like Sime Darby and China Union have all faded from the scene, despite getting long-term deals with the government, but leaving with lots of unfulfilled commitments to project-affected communities and their failure to implement their legally binding social responsibilities. 

Later, the Liberian government complained when the adverse effects of the deals started to affect the country.

‘Hailed’ 

Rep. Koffa however hailed the AML agreement as a direct foreign investment that will lead to the creation of jobs but expressed concern about what happens further down the line.

He added that royalties and taxes on sales are good for the government, especially as short-term revenue-generating models. 

‘No 4G’

When questioned, Rep. Koffa boasted that the House has ample time to properly scrutinize proposed legislation, as well as to conduct public hearings, despite having less than two months remaining for their special session.

The Grand Kru District #2 Representative added that the public needs to stop believing that lawmakers are in the habit of passing bills or ratifying deals swiftly, without adequate scrutiny.

According to him, much of the consultations around proposed legislation are being held in virtual chat rooms before they get to the decision-making part in the House chamber.

“We do not pass on concessions on ‘4G’ as perceived by the public. We have public hearings and due diligence is done. The truth is, we are working almost 24/7. Sometimes before some issues appear on the floor, we have consulted about them enough. It no longer takes a difficult time to decide. We familiarize ourselves with the issues enough before acting,” Rep. Koffa goes on the defense. 

Meanwhile, Rep. Koffa added that the Nimba County Legislative Caucus has done an assessment report in anticipation of the AML agreement as a means of getting a clear picture of what is unfolding in the county operations areas.

“Comparing what the Caucus has and what is in the revised MDA, we will determine whether or not to pass on the revised MDA. We will call a hearing in a week or two upon receiving the revised MDA,” he said.