Laying the Ghosts of Oil Block 13 to Rest

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Since the Special Presidential Committee set up to probe the veracity of Global Witness bribery allegations, submitted its report to President Weah, nothing much has been heard from the President, although the Committee had recommended that the accused former officials make restitution of bonuses paid to them by NOCAL.

All the accused save none have rejected accusations that the bonus payments they received from NOCAL constituted a bribe and have instead insisted that such bonuses were rewards for having done an “excellent” job. This view, however, was certainly not that of the Special Presidential Committee whose recommendations called for restitution of the funds by the recipients.

The Daily Observer’s reportage on this issue has apparently riled some individuals with questions being asked about the motivation of the writer of the story carried in the Friday, July 13, 2018 edition of this newspaper captioned “Oil Block #13: Did NOCAL Circumvent 2002 Petroleum Law?” and whether the writer had personal axes to grind.

But far from it, the Daily Observer had simply taken a hard look at the issues and accordingly posed questions to which none of those writing rejoinders to the Global Witness report has been able to answer so far. The foremost question to members of the Hydrocarbon Technical Committee (HTC) as well as the Oil Block 13 negotiating team is within which legal framework were the negotiations done for the awarding of the concession agreement to ExxonMobil.

To the best of available information and evidence, the sole operable existing legal framework within which such negotiations should have been done in 2013-2014 was the 2002 New Petroleum Law passed into legal existence during the tenure of former Liberian President Charles Taylor. The Daily Observer has not been able to find any evidence anywhere that the New 2002 New Petroleum Law had been amended or rescinded either during or within the period of the negotiations with ExxonMobil.

Informed sources tell the Daily Observer that according to the 2002 New Petroleum Law, Liberia stood to benefit more than 100 million US dollars from the ExxonMobil concession agreement. Selfish and greedy officials however placed personal interest above country and negotiated arrangements with ExxonMobil that violated the spirit and intent of the 2002 New Petroleum Law.

The law explicitly states the rights of the state(Liberia) in Hydrocarbon deposits and it reads as follows: Section 3.J. -State’s Rights in Hydrocarbon Deposits~ “All Hydrocarbon deposits belong to and are the properties of the Republic of Liberia, which are held in trust by NOCAL. Whether such deposits are found on the surface of the ground or in the soil or subsoil, under the surface of rivers, ocean, streams, watercourses, territorial waters and Continental Shelf of Liberia, they remain the property of the State as stated above”.

In other words, the National Oil Company of Liberia (NOCAL) is a fiduciary(agent) of the state, holds in trust all hydrocarbon deposits in Liberia and it should at all times act to protect and defend the interests of the state as provided for in the 2002 New Petroleum Law. From our examination of the facts, NOCAL failed to uphold its fiduciary responsibilities by signing on to an agreement that violated the law.

The New Petroleum Law clearly defines who an agent is: In Section: 1.3.1 “Agent” -“means an employee of NOCAL or any entity, who is directly responsible for the negotiation of Hydrocarbon contracts as fiduciary of the National Oil Company of Liberia, the Liberia Petroleum Refining Company, the Government of the Republic of Liberia or such similarly situated persons”.

Given the above, how then can NOCAL justifiably pay bonuses to itself for overseeing the preparation of a concession agreement? For all what accused former officials may claim about NOCAL being a legitimate state entity that paid out bonuses, the incontrovertible fact remains that they were in fact agents of NOCAL acting in and on behalf of that state entity and as Section 3.J, of the New Petroleum provides “All Hydrocarbon deposits belong to and are the properties of the Republic of Liberia, which are held in trust by NOCAL.

Further, there is not a shred of evidence anywhere that the negotiating team including members of the Hydrocarbon Technical Committee(HTC) during their negotiations upheld for example Section 3.3 of the 2002 New Petroleum Law under the heading “The National Oil Company’s Participation in Ownership”:

It reads: “The National Oil Company, in addition to other rights, interests and benefits it is entitled to receive under any and all Production Sharing Agreements, it shall also receive, free of charge, equity interest in all production operations and exploitation of hydrocarbon deposits! in the Republic of Liberia. The value of such equity interest shall be twenty (20%) percent of the authorized, issued and outstanding capital shares existing at any time, without dilution”.

Where in the ExxonMobil Concession agreement is this provision upheld? From all available evidence the New Petroleum Law was not amended until 2016 well after the much proclaimed ExxonMobil agreement had been signed. A member of the negotiating team former Justice Minister Christiana Hammond Tah in an interview with radio talk show host Henry Costa, made a veiled reference to the 2002 New Petroleum Law saying, she raised issues with former President Sirleaf on issues related to the 20 percent state equity as well as 10 percent for Liberian participation but was told instead “Madame Minister you have your marching orders”, whatever that meant.

As regards, Liberian participation, the 2002 New Petroleum Law states in Section 3.4. under the heading “Stock Purchase”: The holder of the rights to hydrocarbon deposits shall notify the National Oil Company of Liberia, that shares equivalent to ten percent (10%) of its stock are available for purchase by Liberians and/or any such interested citizens.

Again, the Daily Observer’s examination of the facts shows that this provision was also not upheld. The Daily Observer however notes that in the 2016 amended version of the 2002 New Petroleum Law all the above mentioned provisions were scrapped for reasons that appear difficult to understand.

Moreover, if it indeed the Government of Liberia saw it fit to amend the 2002 law why it did not do so in 2013 but rather did so in 2016? It does suggest that the 2016 amended law was applied retroactively. The nation now awaits President Weah’s response to the Special Committee’s report.

The report has recommended restitution arguing that the bonus payments made to the negotiating team were unlawful. The report however stopped short of mentioning whether the 2013 ExxonMobil concession agreement itself was indeed legal and binding notwithstanding the fact that it was done outside the law controlling.

This newspaper seizes the opportunity once again to remind President Weah of his inaugural pledge to fight corruption no matter who is involved. He must lay the ghosts of Oil Block 13 to rest by acting on the Special Presidential Committee report as a first step to be followed by a review of the ExxonMobil agreement.

Further he should cause to be scrapped, the amended New Petroleum Law of 2016 and revert to the 2002 New Petroleum Law. Only then can he lay the Ghosts of Oil Block 13 to Rest.

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4 COMMENTS

  1. I’m not confident that President Weah will do anything but I stand to give him the benefit of the doubt. But he should know that his credibility is on the line if he doesn’t act. I don’t believe he wants to end up like EJS who the people didn’t trust.

  2. Thank you Daily Observer. This is what is needed to move our country forward. However, if inventory is not taken of the past administration closing how can we correct the wrongs?

  3. Based on the articles on this case and the various comments I have read concerning the findings of the Presidential Task Force, I am more confused on what exactly the Presidential Task Force was tasked to ascertain. Is this a case of alleged illegal payment of bonuses to employees of a public corporation or is this about entering into an illegal contract? It appears, from what I can discern, that bonuses paid to members of the negotiating teams from the government agency (NOCAL) were illegal. What I haven’t read is how was the determination made to declare the payment illegal? If the bonus payment illegality is the prima facie case of the Task Force findings, then all the other issues that are included in the various articles and comments are not relevant to resolving the legal issue of the bonus. No wonder, I am confused. If I accept my understanding it is about the bonuses paid, then I am inclined to ask the following questions for readers to ponder and respond to (hopefully to include lawyers schooled in the laws of Liberia): 1) Are there laws prohibiting the payment of performance incentives to employees of government owned agencies (e.g., NOCAL)? 2) If not, are the Boards of government owned agencies restricted in how they determine compensations and incentives to hire, retain and compensate employees? 3) If the Boards are empowered in making decisions to provide continuity to the corporation and appoint and retain qualified staffs for the corporation, what is illegal in this act of NOCAL’s Board when they made the determination in their capacity as Board to make performance payments to employees who participated in and negotiated a transaction that accrued benefit to the corporation interest (e.g., the national coffer? 4) Was the Board required by the Agency (NOCAL) articles of incorporation to seek presidential or other executive officer signatory in order to authorize the payment of the bonus, and if so, did it fail to obtain such? If the authorization was not required, it shouldn’t matter then whether Ellen Johnson approved it, hinted to the Justice Minister or verbally approved it; the Board made a determination to pay employees performance bonuses, and unless there are laws against that, the individuals receiving such payments shouldn’t be held liable for paying back the amount, and certainly can’t be legally held liable absent any evident of breach of law (note: one can also apply a fiduciary test to see if they deliberately breached their fiduciary duty, but would have to answer the questions I raised above, and also provide supporting facts, not hearsay, innuendos, and personal dislike of the beneficiaries of the payout). If the President was to pursue this, he should go to Court through his Justice Ministry, and not some authoritarian pronouncement that undermine the rights of due process of law, but my thought is there is not a legal case against the individuals. There might be a legal case against the Board, if proven to have violated their fiduciary function or if the case may be, Agency’s laws.

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