Monrovia – Just before December 31, 2019, Liberia was in peril. Not due to the political uncertainties created by a looming mass anti-government protest but the risks of losing its place as a member of the International Extractive Industries Transparency Initiative (IEITI).
The global body of the EITI had warned the secretariat of Liberia’s EITI that “significant corrective measures” were critically needed to be implemented in a timely manner to ensure the country’s two outstanding delayed reports were published.
The international group cautioned that the country would be delisted as a member of the world’s extractive industry watchdog if it did not publish the reports by December 31, 2019. And the ramifications would have been quite egregious.
“It will send a very negative signal to investors, partners and many others about Liberia’s commitments when it comes to fighting corruption,” warned M. Bady Balde, Africa Director of the EITI, in September 2019.
Being delisted from the IEITI comes with several disadvantages including having troubles with attracting investors to its extractive sector since many renowned multinational firms are obligated to complying with basic EITI standards.
The EITI presents indicators to investors and international financial institutions about a country’s commitment to transparency; and at the same time, mitigates “political and reputational risks” and “creates a level playing field” for investors in countries where they operate.
The 11th Hour Reports
“The reports reveal that the total revenue received by the government from the oil, mining, forestry and agriculture sectors for the period July 1, 2016 to June 30, 2017 amounted to USD53.84m, whilst the total amount received for the period July 1, 2017 to June 30, 2018 amounted to USD68.9m. This represents a 28% increase in revenues collected from the sectors covered under Liberia’s EITI scope.”
Racing against time, the government of Liberia opted to reshuffle the EITI Secretariat, removing Gabriel Nyenkan, who many asserted that his position as head of the EITI violated the law and plunged the agency into massive trust issues with local and international partners.
Nyankan’s remover will later see the publication of the 2016/2017 and the 2018/2019 reports within a three month period. The reports are the 10th and 11th Liberia has released since being a member of the IEITI in more than a decade.
The two reports have already been endorsed by the Multi-stakeholder Steering Group (MSG) of EITI. The MSG plays the supervisory role of the EITI and it comprises of various stakeholders from the civil society, the community, the media, private companies and the government.
According to the LEITI, the MSG in October 2019 commissioned BDO-UK in collaboration with Parker & Associates Liberia to compile the two reports.
“The reports reveal that the total revenue received by the government from the oil, mining, forestry and agriculture sectors for the period July 1, 2016 to June 30, 2017 amounted to USD53.84m, whilst the total amount received for the period July 1, 2017 to June 30, 2018 amounted to USD68.9m. This represents a 28% increase in revenues collected from the sectors covered under Liberia’s EITI scope,” the LEITI said in a release following the launch of the reports.
What’s Next?
So far, the IEITI has not commented on the two reports; however, with Liberia meeting the deadline successfully, experts of the sector say, the country can now take a respite and reconsolidate to regain its international status.
“Liberia needs to ensure it regain its relevance within the IEITI community by making sure it reports on time,” said a former staff of the LEITI, who prefers anonymity.
“Releasing these two reports on the last day of the year was very important and I think it will avert the risk and danger of being delisted, but I can’t say it will make us relevant like we were. We need to work harder to regain our position.”
The IEITI is expected to respond following the conduct of its annual board meeting slated for February 2020 at which time they will review the progress of Liberia.
Before the publication of the two reports, Liberia was already suspended by the IEITI and was racing against time to be delisted.
Now, the suspension remains active until the international body evaluates the two reports and makes determination if Liberia followed all the 14 standards required of a country in the composition of its reports.
C. Mike Doryen, Managing Director of the Forestry Development Authority who is also the current chair of the MSG, said at the launch of the report that the next step is to “disseminate the reports and hold number of meetings with various stakeholders including the communities to ensure their views are captured and documented to ensure the sector is transparent and responsive to the needs beneficiary communities and all other stakeholders.”
These activities are crucial and will require the backing of the Government by ensuring financial support is timely allotted and disbursed to the LEITI.
The conduct of these outreach activities are fundamental to the reporting process, which is part of the publication of the report, allows the public to know what was accumulated from the extractive sector and puts Liberians in an informed-position to query their government about the management of the country’s natural resources.
Missing this step is a violation of the process; on the other hand, completing this dissemination process before February 2020 gives Liberia an added advantage, said one insider of the LEITI.
This means it will renew the country’s commitment showing that it is following all the standard of the IEITI.
Why the Discrepancies?
Meanwhile, there are concerns about some “minor discrepancies” in the reports. Mr, Doryen, who is opting to relinquish his role in the coming months as chair of the MSG, says the inconsistencies will require investigation. He, however, did not sound worried when asked about the impact of these discrepancies in the report.
“Sometimes there are some discrepancy as to with the information provided, so this time government is even reporting more on what they received than what the private companies have reported.
He said investigations are done to determine the discrepancies and to know “whether it was “human error, underreporting or over reporting” to validate the accuracy of details in the report.
The 2017/18 report shows a difference of $490,521 government receipts over what was reportedly paid by companies. The report also reveals challenges in sectorial oversights, data collection and licensing processes, among others. LEITI will begin to work with relevant government ministries and agencies to address these concerns, the agency said in a release.
Will Liberia Regain Relevance?
LEITI is a part of the global Standard – the Extractive Industries Transparency Initiative (EITI) – which promotes revenue transparency in the extractive sectors in resource rich countries.
It strives to ensure transparency over payments made to and revenues received by the Government from companies in the concerned sectors.
Following more than a year of uncertainties at the LEITI, causing the anti-graft body’s reputation to dwindle both in Liberia and amongst its international partners, it will now require further consistency to regain the confidence of the international partners.
Liberia’s had enjoyed an impeccable record as being a member of the EITI framework and was regarded as a pacesetter for several other African nations. The country was one of the first to implement the EITI and its progress achieved was instrumental in the development of the EITI Standard in 2013.
Based on its compliance with the standards, Liberia increased its revenue as the number grew from US$29.5 million in 2007 to over US$100 million in 2009. In 2017, the country made “meaningful progress in implementing the EITI Standard” as part of its first validations in Africa.
But all the progress would later crumble after President George Weah’s controversial appointment of Mr. Nyenkan back in March 2018. Since then, the agency and Liberia have struggled to comply with the international standards set by EITI International.
Now that the two outstanding reports are published, LEITI is under pressure to continue implementing other standards in order to pass the validation and prepare for the publication of the 2019/2019 report. However, the IEITI February 2020 summit will decide the fate of Liberia after undergoing the validation and the possible lifting of the suspension. Beyond that is the daunting task of salvaging its lost reputation which will require operating in accordance with the basic IEITI standards.