Liberia Extractive Industries Transparency Initiative (LEITI) Act

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The Liberian legislature passed the LEITI Act in June 2009, creating the first mandatory disaggregated reporting process for extractive company payments to the government of Liberia.[1] The act was signed into law by President Ellen Johnson-Sirleaf in July of that year.[2] The LEITI Act establishes LEITI as an autonomous government agency which publishes reports and commissions investigations with a view to the transparency and accountability of Liberia's extractive industries.[3]

Overview

The law stems from the Extractive Industries Transparency Initiative (EITI), a global association of governments, the private sector and civil society groups which works for the public disclosure of revenue payments to governments by oil, gas and mining companies. In most countries that implement the EITI, this process is voluntary. Advocacy group Global Witness wrote that the signing of the LEITI Act into law sets a benchmark for global efforts to fight the natural resource curse and should be emulated by other countries.[4] Liberia is the second EITI country after Nigeria to have dedicated EITI legislation[5] and became the first African country to be designated 'EITI Compliant' in October 2009.[6]

Global Witness noted that Liberia's civil war, which ended in 2003, was partly funded by the embezzlement of timber revenues by former president Charles Taylor,[7] who in September 2013 was found guilty of aiding and abetting war crimes during the Sierra Leone civil war by a UN-backed special court in The Hague.[8] The group wrote the law was particularly important given allegations of corruption surrounding recent natural resource contracts in Liberia, and concerns about the track records of some of the companies competing to win new logging deals.[9]

Coverage and implementation

The law covers oil and mining as well as forests and rubber, and aims to ensure that the benefits due to the government and people of Liberia from the exploitation of natural resources are "verifiably paid or provided... duly accounted for and prudently used for the benefits of all Liberians." It aims to ensure that all payments to the state by natural resource companies are fully disclosed on a company-by-company basis, and also promotes the disclosure of the contracts and licences held by natural resource companies and ensures regular reviews to verify that such contracts have been awarded in accordance with the law.[10]

LEITI publishes on its website annual reports disclosing all payments and revenues connected with the operations of mining, oil, logging, and rubber companies in Liberia.[11] It also maintains a registry of signed contracts from the oil, mining, forestry and agriculture sectors.[12]

Organization and governing board

The LEITI is led by a governing board called the LEITI multi-stakeholders steering group. Membership in the group includes:[13]

  • the government of Liberia, represented by the ministers of Finance; Lands, Mines, and Energy; Internal Affairs, and other agencies
  • civil society groups represented by the Publish What You Pay coalition, the Liberia National Bar Association, and the National Council of Chiefs and Traditional leaders
  • the private sector represented by Arcelor Mittal Liberia, Amlib, Liberia Timbers Association, and the Miners and Brokers Association

The group is chaired by the Minister of Finance[14] - in October 2013, Amara Konneh[15] - and co-chaired by the Minister of Lands, Mines and Energy. The LEITI also has a secretariat headed by T. Negbalee Warner.[16]

Audit reports and investigations

LEITI commissioned an audit by accounting firm Moore Stephens in early 2013 which alleged that nearly all the US $8 billion worth of resource contracts signed by Liberia since 2009 have violated national law.[17] Global Witness has written that the report portrays Liberia as a country "ignoring its own laws in a rush to hand out natural resources to all comers", and that non-compliance with laws governing how natural resources are allocated is widespread and a problem across all natural resources sectors, including oil, mining, large agricultural concessions and forestry.[18]

Liberian law sets rules for foreign investment projects including on competitive tendering, tax rates and equity stakes to be held by the government; but the report showed the government granted large areas of land to firms including Golden Agri's Golden Veroleum and Sime Darby without competitive bidding, and otherwise skipped contract steps meant to ensure a fair deal for Liberians. The report also found contracts held by Chevron Petroleum and mining company BHP to be flawed, and alleged that Liberian authorities tried to delay the audit process since late 2012 by failing to hand over information promptly. Reuters reported that the office of the president declined comment on the report until its final version was completed (the final report was published in May 2013), while the finance ministry denied any deliberate attempt to derail the audit.[19]

External links

An Act Adopting the Liberia Extractive Industries Transparency Initiative (LEITI)

LEITI website

References

  1. Liberian legislature passes the Liberian Extractive Industry Transparency Initiative Act Publish What You Pay, 11 June 2009.
  2. President Johnson Sirleaf signs into law ‘An Act establishing the Liberia Extractive Industries Transparency Initiative (LEITI).' LEITI website, 14 July 2009.
  3. An Act Adopting the Liberia Extractive Industries Transparency Initiative (LEITI) LEITI website, retrieved 10 July 2009 2009.
  4. Global Witness welcomes new Liberian Transparency law, urges other countries to follow suit Global Witness, 13 July 2009.
  5. President Johnson Sirleaf signs into law ‘An Act establishing the Liberia Extractive Industries Transparency Initiative (LEITI).' LEITI website, 14 July 2009.
  6. Liberia designated EITI Compliant by the EITI Board EITI website, 15 October 2009.
  7. Global Witness welcomes new Liberian Transparency law, urges other countries to follow suit Global Witness, 13 July 2009.
  8. Charles Taylor war crimes convictions upheld BBC News, 26 September 2013.
  9. Global Witness welcomes new Liberian Transparency law, urges other countries to follow suit Global Witness, 13 July 2009.
  10. Global Witness welcomes new Liberian Transparency law, urges other countries to follow suit Global Witness, 13 July 2009.
  11. LEITI reports LEITI website, retrieved 23 October 2013.
  12. Contracts and concessions LEITI website, retrieved 23 October 2013.
  13. Governance of EITI Implementation in Liberia LEITI website, retrieved 23 October 2013.
  14. Governance of EITI Implementation in Liberia LEITI website, retrieved 23 October 2013.
  15. Profile: Minister Amara Konneh - Liberia's Finance Minister Ministry of Finance website, retrieved 23 October 2013.
  16. Mr T. Negbalee WARNER EITI website, retrieved 23 October 2013.
  17. Exclusive - Resource deals audit overshadows Liberia anti-graft push Reuters, 1 May 2013.
  18. Liberia systematically breaking its own laws in oil, mineral, forest and land deals worth billions of dollars, new audit reveals. Global Witness, 3 May 2013.
  19. Exclusive - Resource deals audit overshadows Liberia anti-graft push Reuters, 1 May 2013.