LEITI Lauded For Extractive Education

Citizens of Nimba County have lauded the Liberia Extractive Industry Transparency Initiative (LEITI), for its nationwide dissemination exercise of its 5th report on the extractive sector of Liberia.

Speaking at the LEITI outreach event in Nimba County, the citizens thanked LEITI for initiating the process of educating them on the resource governance process of the country. They expressed delight about the education being provided by LEITI, adding that it will give them a clearer understanding of the process.

The first phase of LEITI outreach event is intended to facilitate public education on the finding of the EITI report which allows citizens to debate and make input aimed at improving the resource governance process.

The exercises are conducted in partnership with civil society, the media and the community people to help them understand the process of reporting in the extractive sector in Nimba, Grand Gedeh and Sinoe Counties.

“We are glad that LEITI has come to explain to our understanding on how funding from our natural resources are being paid by companies operating in the extractive sector and how those resources are being received by our government,” one of the participants, Saye Kogar said.

Explaining the finding of the 5th Report to citizens and residents of Nimba County, the Communications and Outreach Officer of LEITI, Samson Wonnah, said “the report revealed that the total amount received by government from oil, mining, forestry and agriculture sectors for the period under review amounts to US$110,146,657.00 representing 7% increase in the total receipts from the extractive companies compared to what was recorded in the 4th report.”

According to Wonnah, the report also captured development undertaken by concession companies including Arcelormittal, China Union, Western Cluster and BHP Billiton amongst others as corporate social benefits to citizens of their respective concession areas.

Wonnah told the gathering that payments from the agriculture, forestry and mining sectors increased by 53%, 98% and 29% respectively, While those from the oil sector dropped about 72%, adding that the significant reduction in contributions from the oil sector can be attributed to payments made in the prior year for the acquisition of Oranto and Chevron as well as withholding taxes recorded for Chevron in that year,” he noted.

The report covers the fiscal year July 1, 2011 to June 30, 2012 and Summarizes key findings, recommendations and observations of the extractive sector’s contribution to the overall Liberian economy; fixed component of amounts due; amount paid and revenue tracking processes between the Government of Liberia and all mining, oil, agriculture and forestry companies engaged in the exploration and exploitation of the country’s extractive and other natural resources. It further provides information on in kind contributions made by the companies to communities, organizations and institutions out of their contractual obligations.

Some of the Main Finding

According to the main finding of the report, only fourteen (14) out of a total of 184 registered companies submitted data on employment, export and revenue to the Reconciler, while  the total number of companies registered with the LEITI, increased from 111 in the 4th Report to 148 in the 5thReport, translating to a 33% increment.

The LEITI finding also revealed that payments templates for from individual Small Scale Miners and Pit Sawyers below the reconciliation threshold were not obtained directly from them. However, the total of US$756,950 for small scale miners and US$68,179 for pit sawyers (mainly from chainsaw lumber fees and export collections) were consolidated and presented by the Ministry of Finance and FDA respectively.

These amounts were therefore not reconciled.

Apart from the mining sector which saw an increase in the submission rate to 50% from 43% in the 4thReport and 44% in the 3rdReport, the forestry and agriculture sectors experienced a drop in their submission rates. The oil sector has over the last three reporting periods maintained a 100% submission rate.

The forestry sector has seen a consistent drop in submission rate from 90%in the 3rdReport to 80% and 50% in the 4th and 5th Reports respectively.

The decreasing rate of submission is due to the increased number of participating companies and a number of companies that are below the sector threshold which are not required to submit templates.

The finding further revealed that the agriculture sector has been unstable with submission rate from 86% in the 3rdReport to 100% in the 4thReport and subsequently 77% in the 5thReport. It should however be noted that the three (3) companies that did not submit templates in the agriculture sector were considered as registered extractive companies that are yet to engage in direct extractive activities. Template submission is therefore not a mandatory requirement for them.”

Recommendation

“A production audit across all sectors is required to help determine the amounts that ought to be paid so as improve the data collection process. This will be enhanced when the Government of Liberia monitoring ministries and agencies put in place mechanisms to facilitate comprehensive documentation of amount due from the companies in any given fiscal year.

Sanctions must be brought against companies that did not submit templates and those that submitted without the required attestations and sign-offs. Companies participating in the exercise should always adhere to the instructions and guidance provided by the reconciler at the workshop that precedes the submission of information. Common reporting software should be developed and made accessible to all agencies and LEITI so that information can be assessed at all times by all authorized stakeholder,” the recommendation concluded.