“Bad Labor Practices”, “Concession Reviews” and the Investment Climate: Where is President Weah headed?

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By Abdoulaye W. Dukulé

A few weeks ago, President George Weah made a significant foray into the private sector when he signed two concession agreements valued at almost a billion dollars, the first of such in the history of the nation. Notwithstanding the controversies surrounding the deals – loans against sovereign guarantees – they marked a departure from the past.

Their successful implementation will have an impact on future interaction between Liberia and investors. However, while the President was celebrating the new deals, the House of Representatives was “grilling” the General Manager of Firestone regarding accusations of “bad labor practices,” the new catchphrase that blankets every misunderstanding between workers and management in many concessions, most especially the agro-industry.

A few weeks earlier, the House brought in the General Manager of Sime Darby to answer questions. Mittal Steel was also “invited” to explain why they have not fulfilled major aspects of their agreements. The two actions well describe the inconsistencies the new Administration may slowly be trapping itself into.

On one hand, the Executive – from the Office of the President to the National Investment Commission – is sparing no efforts to attract investors and to showcase the nation’s potentials. On the other hand, there is a tendency of the Legislature to police the execution of concession agreements. “Bad labor practices” as they are called can amount to anything, from housing issues to unpaid leaves.

These two positions are contradictory and do not help in showing an image of Liberia as an investment friendly country. This country has had a bad history with large concessions, be it in the mining or agricultural sector. For decades, Liberians have toiled in farms and mines just to be left as destitute as the day they began work.

Generations have endured harsh labor with little reward. The government “of the few” of the past entered agreements with investors and after pocketing their share, political leaders just turned workers into submissive laborers. This continued until the 1970s, when the Tolbert administration started to force concessionaires to make changes.

The consequences of the long era of bad governance were deep-seated anger and resentment in much of the society and the corollary culture of advocacy embraced by the political class which came to maturity in 1970s-80s and now runs the country. The transformation of the political landscape in the last twenty years has brought to power the children and descendants of rubber tappers, miners and porters, all eager to reverse the past.

But they say, “hurry hurry bust trousers…” The Legislature plays the double role of making laws and overseeing their execution by the Executive branch. One must rightly question the effectiveness of the entire House of Representatives in session to “grill” the manager of a company and “shame” him/her into admitting wrongs and promising to take the corrective measures.

While there is no guarantee that the investor would ever totally comply, there is no doubt that the negative repercussions of such political interferences travel fast and can dampen the enthusiasm of new investors. The Legislature must ensure that investment laws are good for both the country and the investors.

If there are issues with their applicability, it is the role of the Legislature to review them and come up with new formulation that would benefit everyone. A concession agreement is a law, signed by the Legislature and the President. One of the first acts of President Weah, just as did his predecessor, was to call for a review of concession agreements. For a new administration, it may mean “making wrong right and redressing mistakes of past government…”

For investors, it means harassment. For the rest of the world, it means “uncertainty and volatility.” Every concession agreement contains a timeline for review and the government can catalog what worked and what didn’t and adjust in the next negotiations. The Executive is well armed to deal with deficiencies in execution of contracts.

Liberia is still recovering from the devastation of the civil war. The post-2006 economic upswing was brought down by Ebola. There is yet to be any study or evaluation of the impact of the withdrawal of UNMIL, which took away thousands of jobs and millions of dollars injected in the market every month.

The economy is in deep trouble, one that goes beyond inflation and budget shortfalls. The government can grow no more while colleges and high schools are pouring thousands of young people in the streets every year with degrees that would lead nowhere. The private sector through local or international investments, needs space to expand to absorb this growing idle manpower and create wealth.

Concessionaires – especially in the agro-industry- are the largest employers in the country and they can be the first development partners of the government. One cannot expect investors to pour more money in the country if they must worry about being harassed a few years down the line and subjected to the whims of a new administration.

Continuity is essential in democracy. If lucky, President Weah could attract new investors, but they will come in nervous, wondering what would happen after the Weah administration. If this scenario continues, the next leader after President Weah will also call for review of all concession agreements and Liberia will find itself in a vicious cycle.

Should Eton and EBOMAF worry about how the post-Weah legislature will deal with them, since their agreements go beyond President Weah’s tenure? What guarantee do they have that their investments will be safe from the wrap of the next administration? Liberia has not exactly been the poster-child of stability in the last four decades.

A smooth governance relies on a division of labor that clearly demarcates the roles of institutions. Issues related to “labor practices” can and must be handled by technicians in the Ministry of Labor, not in the chambers of the parliament. The National Investment Commission, the National Bureau of Concessions, the ministries of Justice, Agriculture, Commerce and Internal Affairs all work with concessions and investors.

It is their job to deal with these problems. Government has an obligation to advocate for the well-being of its citizens, but here is the issue. If the Legislature decides to take on the job of trade unions, civil society organizations and institutions of the Executive, it will unintentionally create a state of confusion and an unfriendly business climate.

If that continues, there will be no investors – local or foreign – and there will be no workers to advocate for. On many accounts, the Weah administration is only 6 months old but, it carries the weight of every law that has ever been passed since the coming into force of the Constitution and has the responsibility to uphold each one.

Concession reviews and staging legislative hearings to deal with issues of “bad labor practices” can be misconstrued as intimidation and harassment. That is the last thing this country needs now, as it pushes to develop the private sector and create jobs.

Just as every concession agreement contains clauses regarding the rights of workers, it also contains responsibilities of the government towards the concessionaires, in terms of protection of investments and safety from harassment and intimidation.

The Executive and the Legislature must have a conversation with investors and workers and adopt a path that benefits everyone and put an end to the shadow boxing that is making investors nervous.

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