Liberia: Senate Seeks Court Interpretation of Article 34d (i) Following House of Reps’ Accusation of Usurping Function
MONROVIA – The Liberian Senate has opted to seek interpretation from the Supreme Court on Article 34 d(i) which addresses the issues of revenue bills.
The Senate’s decision is based on the House of Representatives’ refusal to not only concur with the Senate on the BAO CHICO concession, but also accused them of violating Article 34 d (i) of the Constitution.
In the Senate’s response, they described the House of Representatives’ communication to them as demeaning and one that borders on the integrity of members of the Liberian Senate.
Article 34 d (i) of the Constitution states, “All revenue bills, whether subsidies, charges, imposts, duties or taxes, and other financial bills, shall originate in the House of Representatives, but the Senate may propose or concur with amendments as on other bills. No other financial charge shall be established, fixed, laid or levied on any individual, community or locality under any pretext whatsoever except by the expressed consent of the individual, community or locality. In all such cases, a true and correct account of funds collected shall be made to the community or locality.”
The House of Representatives on Tuesday declined to act on a bill submitted to it by the Liberian Senate on grounds that the Senate was usurping its functions.
Tuesday’s Sitting, which began on a serene note soon turned acrimonious when a communication from the Secretary of the Senate, Nanborlor F. Singbeh, Sr., urging the House of Representatives to concur with the Senate in ratifying the Mineral Development Agreement between the Liberian Government and BAO CHICO Resources Liberia LTD. was read in Plenary by Chief Clerk Mildred Sayon.
The Senate Engrossed Bill #5 entitled, “An Act to Ratify the Mineral Development Agreement Between the Government of the Republic of Liberia and BAO CHICO Resources Liberia Limited”, according to Singbeh, was passed by the Liberian Senate on Tuesday, November 2, 2021.
However, in a rare move, the Plenary of the House voted in favor of a motion filed by Rep. Clarence Massaquoi (District #3, Lofa County), calling on the House to ignore the bill and inform the Senate that it was in breach of the Constitution.
Said Rep. Massaquoi: “I move if I can be seconded that this House decline to work on the submission made by the Honorable Senate; and that the hearings that have started, in a constitutional origin of such a bill, be continued and decisions that will be made out of those hearings, be transmitted to the Liberian Senate for action.”
The Mineral Development Agreement between the Government of Liberia and BAO CHICO Resources Liberia Ltd is for the extraction of iron ore, to be operated under a Class ‘A’ Mining License for an initial term of 25 years from the effective date.
BAO CHICO Resources Liberia Ltd. is a corporation duly registered under the laws of Liberia, TIN Number 500118730 for mineral exploration and mining in Liberia and on the 12th of August 2008, the company was granted an Exploration License MEL 12005 in accordance with Section 1.2 of the Exploration Regulations for the exploration of Mineral Products within the area specified on the license which covered a total area of 87.4km2 within Gbarpolu County.
The company’s license, which was renewed on the 15th of August 2013, is expected to provide direct benefits in the form of employments and revenue generation.
In terms of financial benefits, the company shall pay all taxes and duties and conform to all procedures pursuant to applicable law; the company shall be taxed on its net taxable income at a rate not to exceed 25 percent; pay the Government’s royalties on all its mineral product sales and transfers for iron ore, a royalty of 4.5 percent determined in accordance with Section 703 of the Revenue Code and for other minerals, as provided for in the Revenue Code and pay into the Government’s general revenue account a signature fee of US$3 million, payable according to the following schedule: that US$1.5 million within 30 business days of the effective date; (ii) US$1 million on the first anniversary of the effective date; and (iii) US$0.5 million on second anniversary of the effective date.
For the period of 10 years following the effective date, the company shall pay an annual lump sum amount of US$60,000 to be paid in two instalments of US$30,000 each on January 15 and July 15 of each calendar year.
Pursuant to Section 18.4 of the Mining Law, the company shall make one-time contribution of US$10,000 to the Mineral Development Fund, payable on the Effective Date. Pay an annual surface rental fee for all land within the production area of US$50,000 from the effective date up to the fifth anniversary of the effective date; from the sixth anniversary through the term, the company shall pay an annual surface rental fee for all land within the production area of US$30,000.
In terms of social and economic benefits, as part of its social contribution, BAO CHICO Resources Liberia Ltd. is expected to provide the followings, an annual social contribution of US$300,000 commencing on the effective date until the fifth anniversary of the effective date, and an annual social contribution of US$500,000 from the sixth anniversary of the effective date until the end of the term.