A Guest Article By Joseph Gonkarnue
Liberia has become one of the countries of destination for the world’s mining investment. The high international prices of metals are leading to renewed interest in our deposits. The increasing mining investments in Liberia have a very important potential for the country and properly managed concessions would be great opportunities to promote sustainable development among the poorest local communities of their operations. The government has also taken an interest as evidenced by the inking of concession agreements awarding of exploration licenses. As the saying goes, ‘it is all good” because the business presence of rich multinational corporations leads to the creation of desperately needed jobs, the generation of profits for the country, which all have the potential of leading the economy to turn the corner.
This kind of activity that ArcelorMittal Liberia has announced is captured in its Third Amendment which is poised to go into effect soon. Nevertheless, in later years a series of conflicts between the local population and the extractive industries have become more visible, several confrontations have taken place, confrontations that do not benefit either party and much less the local communities.
I would argue that in order for this to be achieved, it is required to have a State that is present, with clear redistribution policies that benefit all the population and that rule the extractive activities, as well as an organized and responsible civil society. Nowadays there are several issues pending for debate, especially those related to the improvement of local communities where concessions are operating, public policies, citizenship participation and consultations, the role of the Environmental Protection Agency, the development of links between the mining sector and the local and regional economies, corporate social responsibility, among others.
With this in mind and being skeptical of multinational corporations that their bag of promises, I have taken a keen interest in the ArcelorMittal deal. I have also followed the ups and down of the debate on either side, always asking myself…how does this benefits us that are affected by the mining operations.
Over a two day period, I recently read the proposed third amendment of AML’s 2007 MDA, and my conclusions are based on the facts of the document and observations of some stakeholders.
My conclusion is simple. The third Amendment to AML’s MDA marks a great achievement for all stakeholders to celebrate. That’s because the Third Amendment is all about Corporate Social Responsibility (CSR).
To begin with, the Minister of Finance, Samuel Tweah, under oath before the Liberian Senate, affirmed that ArcelorMittal and the Government of Liberia have extensively debated and negotiated over a 12-month period to reach the current Agreement, which largely covers multi-user access to the rail and port infrastructure and the long-term viability of its expanded operations in Liberia.
This Third Amendment to the MDA, establishes a very comprehensive non-discriminatory multi-user access regime for the rail and port, with the Government of Liberia as the approving authority and no monetary benefit to ArcelorMittal from other users. ArcelorMittal has invested over US$500 million – and will invest an additional US$200 million – in rehabilitating the rail and port, which will continue to remain owned by the Government of Liberia.
ArcelorMittal has been present in Liberia since 2005 and made the first iron ore shipment in 2011 since the civil war disrupted an industry that accounted for a significant chunk of the Liberian economy. ArcelorMittal reopened the shuttered iron ore sector, thereby signaling to foreign investors that Liberia is safe and open for business.
AML’s project will create approximately 2,000 new jobs, which will be attractive to the country’s youthful potential workforce. And AML will train and develop Liberian talents for its operations and the mining industry. And AML commits to the training of Liberians to occupy professional, administrative, technical, Management, and Senior Management positions. The potential AML expansion and operations will also create spillover jobs and support linkages for the growth of local SMEs.
ArcelorMittal prides itself on being a good corporate citizen in the communities of its operations in Liberia. Over the years, the concession invested in housing, education, healthcare delivery, and other projects in Nimba, Grand Bassa, and Bong Counties.
The MDA ratification process has proved helpful in highlighting areas for improvement and cooperation. According to AML CEO, “everyone at ArcelorMittal Liberia will be working hard to deliver on all of its commitment under the Third Amendment to its MDA.”
Given that many of the causes of poverty are of national character, AML trust that it can cause a bigger impact through collective efforts. So, AML seeking to improve the public understanding and recognition that social and economic justice is crucial to building sustainable development. AML will work with GoL and local stakeholders to prove that it desires to be a national corporate citizen and a force that promotes the values of global citizenship.
At the same time, it will continually seek to mobilize public opinion to make persons equality in project affected communities have the same priority as the nations’ economic growth. That is why AML has increased payments into the County Social Development Fund (CSDF) for the three project affected counties (Nimba, Grand Bassa, and Bong) to the tune of US$3.5 million a year. This is in addition to the US$ 40-million (non-MDA requirement), that ArcelorMittal has committed and continues to spend for paving the Ganta-Yekepa Highway. AML is also contributing to Government’s revenues through various taxes and royalty payments to approximately US$75 million per annum.
AML will ensure that the CSDF is not a necessary evil, but a positive force for good as opposed to conflict. It will ensure that funds contributed to CSDF will be used for grassroots-led initiatives aimed at achieving vibrant community development and transformation. The long-term goal of these initiatives is to further deepen a commitment to shared partnership and to make everyone a stakeholder in the continued presence of AML in the Liberian economy.
AML hopes and trusts that the Liberian Government would continue to play a fundamental role to ensure institutional rules to help the gains from the Third Amendment to its MDA come true. And this is also true for Civil societies/local community leaders to play a fundamental vigilance role. AML has affirmed a commitment to stick to the agreement and not to bypass it, as this would damage those who do not have economic power or access to the media to make their voices heard.
AML’s position is that this would require the Government of Liberia to guarantee citizens’ rights establishing clear rules and sanctions for those concessions and citizens that break them.
AML affirms that the institutionalization of ongoing dialogue is fundamental if not enough while there are no clear regulations and a state agency capable of enforcing them with citizens and concessions.
That is why AML is reiterating a commitment to the Third Amendment and will continue to promote dialogue about the most sensitive issues related to its operational activities with all actors and taking into account all points of view, with the purpose of contributing to the formulation of better public policies, securing a sustainable social license to operate in the local communities, and to adopt socially responsible corporate practices and to acknowledge the citizens’ responsible and peaceful exercise of their rights.
AML has a lot more to do when it comes to housing and improving the living conditions of its workforce. However, from the perspective of this mines-affected community dweller, the AML third amendment is a good deal for Liberia!