MONROVIA – A performance audit conducted by the General Audit Commission (GAC) on the Generation of Revenue from Artisanal Mining Activities in Liberia show that there has been a downward trend in revenue from registration fees and renewal of licenses from artisanal mining due to increased illicit mining activities, excessive bureaucratic delays in the renewal of artisanal mining licenses, and the inability of the Ministry to adequately monitor and supervise the artisanal mining sector. This is mainly due to acute manpower shortage, budgetary and logistical constraints facing the Ministry.
According to the data reviewed by the GAC in 2017, the Bureau of Mines generated revenue of US$135,512.50 from artisanal and small-scale mining registration and license renewals activities around the country and in 2018 generated revenue of US$178,240.00 or a 32% increase over the previous year. However, in 2019, the Bureau of Mines generated revenue of US$118,050.00 or a 34% decrease as compared to the previous year. The Ministry officials confirmed to GAC that the decrease was due to the increase in illicit mining activities.
From interviews held with officials at the central office and on the field, it was noted that, 69% of field staff (Patrolmen, inspectors and Mining agents) conducting inspection, and monitoring mining sites and miners are not employed by the Ministry. The interviews also indicated that the high rate of unemployment of field staff was due to lack of funds /low budgetary allotment from government to the ministry.
Number of Employed and Unemployed Patrolmen, Inspectors and Mining Agents at MME
Interviews conducted with officials of the Ministry of Mines during the audit field visit by the GAC, revealed that the miners were operating without mining licenses due to the following reasons: (a) Too much bureaucracy/ Lack of decentralization in processing registration and issuing mining licenses, (b) inadequate monitoring and inspection at mining sites by the Ministry of Mines and Energy. The listed reasons encourage miners to carryout mining activities without mining licenses, which leads to loss of revenue by the Government from mining activities.
Interviews conducted with the Ministry’s officials revealed that that the Ministry does not have mining offices to carry out the registration and issuance of mining licenses for miners, dealers and brokers who are required to regularly or yearly obtain mining licenses in the mining regions. In addition, during the field visit; the GAC noted that the lack of registration offices in the f mining regions caused delays in the issuance of mining licenses, thus leading to increase miners, brokers and dealers in the counties to operate illegally.
The GAC established during the audit that the standard time set for processing mining licenses should be two weeks/ ten working days. However, interview conducted with miners during the field visit found that the processing of licenses often takes six to twelve months. It was also indicated that, sometimes when miners apply for licenses, they do not get them until the time expires, due to the delay in processing the license at the central office. The GAC noted that the slow process discourages some miners from going to the head office (Monrovia) to apply for licenses; but, they continue to carryout mining activities, thereby depriving government of needed revenue.
It was noted from interviews conducted that the Bureau of Mines and its field agents have not been carrying out monitoring and inspection adequately in the field due to lack of logistics, such as vehicles and motorbikes. A situation that resulted to the increase in illicit mining activities and loss of revenue. Ninety percent (90%) of the staff interviewed stated that there was not regular monitoring of miners to ensure compliance with the law, the report found.
For example, Patrolmen, Mining Agents and Inspectors interviewed at the mining sites by the GAC showed that 65% of field staff has had some training while 35% have no training to improve their skills in carrying out their work effectively.
Given the findings, the GAC therefore recommended the following to improve efficiency at the Ministry::
The Ministry of Mines and Energy should ensure full implementation of the mining laws by establishing functional regional offices to register miners and monitor their activities.
The Ministry should also ensure that Mining Licenses are issue in two weeks/ten working days from the day of application as per its standards, to help reduce illicit mining within the country and enable government receive lawful revenue from miners;
The Ministry of Mines and Energy should ensure periodic monitoring/ inspection of mines/mining sites, mining licenses and mining agreements across the country as required by the Ministry’s mining regulations;
The Ministry should provide quarterly trainings in areas of mining procedures, environmental management, mining health and safety, map reading, soil profiling and stratigraphy, etc. for its personnel both in house and on the field;
The Ministry of Mines should ensure all MME individuals working under its supervision as Mining agents, Patrolmen and Mining Inspectors are employed to avoid being compromised when carrying out their duties;
The Ministry of Mines and Energy should decentralize its activities by ensuring that there are functional offices in the mining regions to reduce the bureaucracy, enhance the issuance of mining licenses and reduce illicit mining in the country;
The Ministry of Mines and Energy should establish an interface/automated system between Cadastre and LRA to capture revenue when generated at MME and confirmed when payment is made at LRA. This system will assist in determining the completeness of revenue and facilitate the future reconciliation between bills raised at Cadastre and payments made at LRA;
The Ministry should establish a central database for artisanal and small-scale miners with connectivity to regional offices where applicable. By so doing, miners’ application can be processed without coming to Monrovia. The system should be properly tailored so that miners are notified and ask to pay renewal licenses automatically;
The Ministry of Mines and Energy should require written monthly/quarterly reports from field staff; Mining agents, Patrolmen and Mining Inspectors, relative to their activities and assigned areas. The government of Liberia should consider providing the needed logistics to MME to enable her fully capacitate the Inspectorate Division to carry out her functions as indicated in the law.
The audit conducted for the fiscal years July 1, 2016 to June 30, 2019 was motivated by among others, FrontPage Africa Newspaper dated May 28, 2019 quoted a Representative of River Gee County, accusing authorities of Ministry of Mines and Energy of being responsible for the illicit mining across Liberia. According to the paper, the Representative alleged that the Ministry decision to place a ban on the granting of permits to local miners to use heavy equipment such as dredges, has opened the floodgate for illicit mining activities in Liberia which is depriving the government of needed revenues; thereby causing the government to lose a lot of money and Daily Observer Newspaper edition of May 22, 2019 under the caption “Illicit Mining Costs Liberia Millions” highlighted the “unprecedented inflow of mining dissidents and proliferation of illegal alluvial and small-scale mining activities in the country”.
Also, an article in Growth to Development captioned “Priorities for Sustainably Reducing Poverty and Achieving Middle-Income Status by 2030” which says the mining sector is a key contributing factor to the Liberian economy. Liberia’s economy grew by an estimated 2.5 percent in 2017, as the mining sector compensated for the anemic performance of other sectors”