Liberian legislature passes the Liberian Extractive Industry Transparency Initiative Act

Source: PWYP Liberia
Date: 11 Jun 2022

The Publish What You Pay Liberia Coalition commends the Liberian Senate for concurring and passing the Liberian Extractive Industry Transparency Initiative Act, on June 11, 2022 creating the first mandatory disaggregated reporting process for extractive company payments to the Government of Liberia. The passage of the LEITI Act helps ensure that the LEITI process will continue to bring transparency to payments made by extractive companies to the Government.

The Senate’s passage of the LEITI Act follows the Lower House’s passage of the Act on April 23, 2022 and clears the Act to be transmitted to the President.

Philip Sandi, Secretary General of the Press Union of Liberia, which holds the Chairmanship of the Publish What You Pay Coalition of Liberia, stated that “with the passage of this bill Liberia has reached a milestone” and “encourages the president of Liberia to sign the bill into Law and to provide the appropriate support to sustain the LEITI process in the future.”

The President has previously proclaimed that “implementation of the EITI Criteria and Principles is an integral part of the Government’s policy of accountable and transparent resource governance, which is also a key element of the Poverty Reduction Strategy of the Republic of Liberia.”

The general objective of the LEITI Act is to ensure that the benefits from the exploitation of Liberia’s minerals are properly determined, verifiably paid, duly accounted for and prudently utilized for the benefit of all Liberians. The Act covers all material payments and revenues due from extractive companies to all levels of the Government for the award of concessions, licenses, permits and any other rights concerning the exploitation of agriculture, diamond, gold, oil, timber or any other forest and mineral resources in Liberia.

The passage of this act makes Liberia the first country in the world to include agriculture in the EITI process. Liberia is also the first to pilot forestry, recently published it first EITI report and has submitted it draft validation report to the EITI international Secretariat for consideration as an EITI Compliant Country.

Along with ensuring transparency, the Act is also meant to promote the public’s understanding of the non-renewable nature of most extractive resources, the causes of resource-based conflicts, and the overall benefits of transparent and prudent resource governance.

The LEITI process is overseen by a multi-stakeholder group made up of the Government of Liberia, civil society groups, and relevant private companies who collectively implement the criteria and principles of the EITI. The LEITI Act ensures that representatives from each of these three groups will be represented in governing the LEITI process into the future.

The multi-stakeholder group will update reporting templates submitted by the companies and government agencies to ensure that all payments and revenues are reported on a disaggregated basis, and oversee an independent accounting or auditing firm that will reconcile all payment data received from the government and private groups. Once a year the Group will also conduct any financial or process audits it finds appropriate to determine if a company is in compliance with its financial obligations to the Government of Liberia or any community, county, group or institution.

Importantly, the bill amends the revenue code of Liberia to remove from its scope of confidentiality tax and other financial information pertaining to every company operating or seeking to operate in the forestry, mining, oil and related natural resource sectors of Liberia and makes the LEITI responsible for providing public access to all concessions, contracts, licenses and similar agreements, as well as the findings of all reports publicly available. This gives the Liberian people access to information about a sector of the economy that had previously been difficult or completely unavailable.

According to Alfred L. Brownell, Senior Campaigner with Publish What You Pay Liberia, the “passage of this act will probably ensure that Liberia becomes the first EITI country to require mandatory disaggregated reporting”. The Act also confronts head-on and has obliterated one of the biggest hurdles to the EITI process, confidentiality clauses of extractive industry contracts. He notes that “so called confidentiality clauses that have plagued extractive industry contracts in Liberia and ensured for the last 162 years that natural resources decision making was left to the caprices of an elitist club is now a matter of history.”

Signed: Philip Sandi
Secretary General/Press Union of Liberia
NB: The Press Union of Liberia chairs the Publish What You Pay Coalition of Liberia

Media contact:
Alfred Brownell
[email protected]