Not surprisingly, ArcelorMittal Liberia (Mittal Steel) has come back fighting after a series of media reports highlighting concerns by local communities in Grand Bassa and Nimba Counties accusing Mittal Steel of reneging on its contractual obligations contained in the 2010 Amended Agreement.
The company maintains that contrary to claims by the affected communities, Mittal Steel has undertaken a major renovation of the existing infrastructure and has upgraded health facilities within and without its concession area at a cost of US$18 million.
ArcelorMittal further claims that in keeping with the Mineral Development Agreement, it has rehabilitated two (2) hospitals in Yekepa and Buchanan respectively, with over thirty-thousand (30,000) people receiving medical care from those facilities. It further added that US$1.7 million has been spent on advanced foreign scholarships amongst other notable achievements the company boasts of.
But if indeed ArcelorMittal has or is scoring such impressive gains, as it would like the public to believe, then why are the people of Grand Bassa and Nimba Counties objecting to the extension of its amended agreement as well as the ratification of newly proposed amendments?
In fact, the amended agreement is shrouded in secrecy and, according to informed sources, the proposed amendments also include the provision of a binding non-disclosure clause. Just what is ArcelorMittal trying to hide from the government or the public and vice versa? What is the government hiding from the Liberian people by agreeing to accept or include a binding non-disclosure clause in the agreement?
For the benefit of the public, ArcelorMittal, as well as those government officials responsible for negotiating amendments to the Agreement, should make public disclosure of what is being proposed to be kept secret and away from the prying eyes of the public. This is in keeping with transparency and best practices worldwide.
Moreover, ArcelorMittal, in its robust response to public concerns about its failure to honor its contractual obligations and commitments, has failed to comment on reports that it paid very little in revenue to the government of Liberia. As a matter of fact, there is evidence that export tax was waived for 2017 and 2018. Over the same period, Mittal Steel produced 1,306,052 and 3,186,254 tons of iron ore, while prices stood at US$46 and US$86 per ton respectively.
Had the 10% export tax rate not been rescinded to zero percent by the Sirleaf administration, Liberia in 2017 and 2018 would have received US$5,469,457.00 and US$27,366,735 respectively, vis a vis the US$54,697,457.00 and US$273,667,356.00 respectively, over the same period.
Additionally, going by the Liberia Extractive Industry Transparency Initiative (LEITI) 2016/17 report, ArcelorMittal paid the amount of US$220,000 in taxes to the Liberian government. In 2017/2018 it paid US$131,930 in taxes.
By contrast, over the same period, Liberians, in general, paid US$53 million in taxes to the government of Liberia. That being the case, just why ArcelorMittal reneged on its contractual obligations and commitments (the payment of US$3 million annually to Grand Bassa, Bong, and Nimba Counties), given it enjoyed very low or zero export tax rates, is the question begging for answers.
But it would be unfair to blame ArcelorMittal alone for this state of affairs. The government of Liberia also bears a fair share of the blame. For example, May 20, 2019, Liberia Domestic Policy Review Notes states that Liberia does not collect adequate revenue from her natural resources, despite its rich natural resource base.
It points out the following flaws noting that Liberia:
- Does not devote enough attention to enforcement of the applicable tax legislation.
- Grants tax exemptions in a discretionary and non-transparent way; and
- Does not apply fiscal transparency rules related to natural resources
Now enter ArcelorMittal with a proposal to increase its investment in Liberia by an additional US$800 million. The Yekepa-Buchanan railway and the Port of Buchanan is ceded to the ownership and possession of ArcelorMittal in the proposed amended agreement, awaiting ratification by the Legislature when it returns from break.
Further, in the proposed new amendments, ArcelorMittal is to significantly reduce the annual payment of US$3 million in Corporate Social Responsibility fees to Nimba, Grand Bassa, and Bong Counties.
Given ArcelorMittal’s robust response to claims about its corporate behavior, it remains to be seen to what extent such a media blitz can do to counter adverse public opinion heightened recently by negative impression and reports emanating from visits paid by Nimba legislators to the Mittal Steel Concession area in Yekepa and Buchanan.
If Mittal Steel does mean well, it would have no reason to renege on its contractual obligations and commitments. Further, it should seek to become more transparent and should give strong consideration to the scrapping of the non-disclosure clause in the Mineral Development Agreement.
Additionally, it should seek to become more attuned to the needs and aspirations of local communities rather than pander to greedy officials in return for favorable concessionary terms that militate against the interests of the country and its people. Now that the matter has drawn much public attention, the Liberian people should not expect anything less than a rigorous examination of the proposed amended agreement in all its details, leaving nothing to chance.
It can be recalled that according to the Moore-Stephens report, under the watch of former President Sirleaf, out of a total of 66 concession agreements signed into law, 64 did not meet the test of transparency and were considered fraudulent.
Such predatory agreements like the APM Terminals agreement etc., made possible through outright bribery of legislators, have come to haunt us today. This crop of Legislators should not let down the hopes of the Liberian people this time around. WE HOPE NOT, not this time for heaven’s sake!