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What's
new in Liberia's finite Natural Resource Management?
Thursday,
January 25 2007
By
Wollor E. Topor
It
is common today to think of the past as irreverent.
This school of thought would say, today’s life is a
whole new ball game.
I am very far from being alone among those who
deemed it appropriate to look back in order to guide
the future. Without a real background on issues,
hardly will we vision the future.
For
example, reading history backward (projecting into the
past happenings and patterns of life) tells us that
today’s problems are in fact more complex (e.g.
environmental issues, post-war reconstruction, etc.)
than those faced by past governments. Bluntly put,
Liberia is at the crossroad between the 20th
century and of the 21st century.
Unfortunately,
the country cannot ignore the fact that in our present
state, there is so much unsolved baggage of
underdevelopment of the 20th that is still
with us. Therefore,
there is urgency for us not to simply think of the
past, over which we could do little about, but
forecast and plan the kind of future that we want for
our society. This article looks at the trends of natural resources
management, specifically iron ore and forestry
industries in Liberia.
Usually,
governments and multinational firms often face the
dilemmas in deciding how much to tell the public and
how much to hide in order not to cause alarm.
Moreover, in any society, there are some business
concerns that engage in unethical practices but who
could be sensitive to public approval or disapproval.
The resolution of these problems demands public debate
to eliminate any logical fallacy of laying the blame
of any poor stewardship of our natural resources on
foreign investors. Perhaps, besides foreign investors
being the source of hard currency, they could help
resolve the 80% unemployment crisis.
Foreign investors could also provide training
for local workforce in the country. However, the
concern here is to guide and "balance” between
sustainable development and the physical environment.
Liberians
should be positive about the future. Underdevelopment
is not a permanent condition; it can be eradicated
once the main culprits which are social injustice,
discrimination and rampant corruption that obstruct
economic development are removed. Singapore, South
Korea, Malaysia, Taiwan and Hong Kong and China are
living examples that poverty is not an everlasting
state. Therefore, our apprehension is to make certain
that a complete resource conservation system for
sustainable development is put in place. In other
words, to remind Liberians of the past to guide them
on how they do future business when it comes to
sustainable utilization of natural resources.
Iron Ore Mining in Liberia
In
recent times, much has been said about iron ore
exploration in Liberia. The case in point is the
proposed mining operations between Liberia and Mittal
Steel U.K which the BBC newscaster referred to as
‘David versus Goliath’ - meaning a small nation
(Liberia) is to play host to one of the world’s
biggest iron ore mining company -
Mittal Steel. However, ore mining is not new in
Liberia. Since the 1950s, during the Tubman
administration, Liberia has been the home to a number
of ore mining companies (e.g. Liberia Mining Company
or LMC, Liberia-American-Swedish Minerals Company or
LAMCO-JV, Bong Mining Company or BMC, Liberia Iron Ore
Steel Corporation or LISCO and the National Iron Ore
Company or NIOC), who relatively scraped the
country’s non-renewable resource to enrich few local
cohorts and themselves.
Liberia
is said to have one of the world’s ‘high quality
ore.’ But all mining companies (except the BMC
upgraded its ore into pallets) exported this ‘high
quality ore’ in its raw stage to the world market
with no value-added in Liberia. Also, the mining
sector was not only controlled by foreign companies,
but was dominated by skilled overseas workers to help
meet skill shortage in Liberia.
On
the other hand, the government of Liberia gained
relatively from royalties and taxes from iron ore
companies. During this time the country experienced
higher economic growth than most of its neighbors in
the West African region. Liberia was using the
“green bar” (the United States dollar) as its
national currency. This attracted not only foreign
companies in need of US dollar, but traders from
neighboring countries within the region such as
Guinea, Sierra Leone, Nigeria, and Ghana.
Liberia’s
economic ills in the past were said to be, along with
other causes from excessive reliance on one commodity,
iron ore. For example, according to the Ministry of
Planning and Economic Affairs (MPEA) 1981-report
receipts from iron ore exports represented 74% of
total export earnings in 1974, the figure dropped to
54% in 1979. At that time, President Ellen Johnson-Sirleaf
was than Minister of Finance under the late President
William Richard Tolbert, which means she should be
aware of some of the answerable questions. Is Liberia
to at least produce metal sheets from its ‘quality
ore’ this time rather than exporting raw ore? Or is
it to still be like the case of exporting natural
rubber which is produced in large quality and quality
and yet Liberian children go bare footed without
rubber slipper? Are we prepared for Mittal Steel to
leave Liberia with other “Bomi Holes” as the
renowned Liberian economist Dr. Togba Nah Tipoteh
summed up this environmental neglect many years ago?
Bearing
in mind the huge expenditure involved in setting up
mining operations, and the consequent burden on
ensuring profitability, these companies totally
abandoned their mining contracts during the early
eighties at the time of a downturn in the world
economy. Their closure can also be explained by the
1973 Middle East conflict which caught the world
flat-footed by the surge of the import price of a
single commodity – crude oil. Imported oil cost had
risen, while recession in the industrialized countries
had a weak demand for iron ore and steel products.
These
conditions forced iron ore companies out of Liberia.
And as they fled, bilateral and multilateral
aids/grants provided by their governments as one of
the main sources of funding to maintain political
stability by past exploitative Liberian regimes were
cut-off. This,
to a certain extent, contributed to the Liberian civic
unrest which fueled the civil war that brought the
nation to the brink of a ‘failed state.’ Is mining
feasible in Liberia today?
Previous
mining companies were certified to mine in days when
the sustainable management of natural resources and
global warming were not as clearly stipulated into
policy as the case is today. So, has there been any
Environment Impact Assessment (EIA) to investigate
anticipated changes in the environment as the result
of the Mittal Steel mining project? Has the government
taken into account the environmental impact to human,
wildlife sanctuary, agricultural productivity, forest
and rivers, including the past environmental
compliance record of the Mittal Steel Company? How
well was Liberia represented in terms of a
multidisciplinary team (lawyers, ecologists,
geologists, sociologists, economists and the civil
society) in the planning and negotiating of the deal
with Mittal Steel?
Like
in the past, Liberian economy has been heavily
depended on foreign capital and skilled labor.
Realistically, looking at present barriers like poor
public infrastructure (roads, harbors, airports,
etc.), evolving socio-political institutions, how
could this foreign mining investment bring about
economic development?
According
to the 2006 National Human Development Report of
Liberia, the deteriorating educational structures of
Liberia were further disrupted by the civil war,
implying low attendance and school dropouts such as
the former child soldiers. There is a serious brain
drain of qualified Liberians in the Diaspora. With the
above scenario, how could Liberia effectively play
host to the world’s biggest steel giant for genuine
modernization? Is Mittal Steel willing to train
Liberians or bring in foreign expertise?
Iron
ore mining is one of the polluted industrial
activities: its operations release dusts, gases and
the use of heavy metals into environment. In other
words, there is no doubt past mining operations left
Liberia with huge environmental problems that the
country has to solve with taxpayers’ money.
Taking
the landslide in Bomi County for example in 1980s,
where millions of tons of hazardous wastes dumped
ruptured in the middle of the night
and buried hundreds if not thousands of poor
Liberians in the ‘No Way Camp.’ This certainly was
a mining tragedy in Liberian history. Additionally, mining goes along side with using heavy metals,
some of which cannot be diluted, and were directly
discharged or washed down into rivers like Cavalla,
Farmington, St. John, St. Paul, etc. and contaminated
(making them unfit
for drinking) a wide range of aquatic-life like fish
with detrimental effect on the health of poor
Liberians.
Regrettably,
past governments did nothing regarding the serious
environmental issues discussed. Indisputably, because
of the lack of attention to the country’s
environmental problems, Liberians now faced numerous
health risks today.
An
NGO, Liberia Environmental Watch (LEW), cited the
Liberian Ministry of Health’s record that there is
decline of life expectancy from ‘85 years in 1970,
to 47 years in 2006, while the infant mortality rose
from 134 to 235 per 1,000 during the last decade’ (LEW
Newsletter July, 2006). This decline in life
expectancy has also been degenerated by 14-year civil
war. More
recent evidence suggests that the widespread diseases
of the country are waterborne and air pollution
related – perhaps a collateral damage from military
operations.
Forestry and Logging
Forest
regulates the flow of water from highlands of Nimba,
Wologisi Range, etc. to the croplands of Bong and Lofa
Counties and into the cities of Monrovia, Harper,
Zwedru, etc. Forest
controls soil erosion, reduce flooding and the amount
of sediment wasting into rivers and streams. Watershed
performs as massive sponges, slows runoffs and absorbs
water, which recharges springs, streams, and
groundwater.
Meanwhile,
over the years, the rate at which Liberian forestry is
destroyed is indeed threatening. Deforestation rates
have increased by 17% and primary forest cover in the
country has fallen to just over 1.3 percent of the
total land area (or 4.1 percent of the forest cover).
This rate probably surpassed by few other countries in
the region.
Just
in 2005 the Country Representative of FAO of the
United Nations in Liberia added his voice by saying
that biodiversity is at a very "high risk of
facing depletion" from extrajudicial logging and
gold mining. In similar manner, the International
Timber Organization (ITTO) warned that the subsistence
system of ‘slash-burn’ being practiced as the core
farming practices, along with fuel wood and charcoal
as the chief energy source for about 98% of the
country’s population has an adverse effect on the
physical environment
(http://news.mongabay.com/2006/0716-liberia.html).
Forest
also provides habitat for a wide range of wild-life
which, in return, has been a source of protein (meat)
for rural people. Preliminary report by the
Conservation International (CI) suggests that Liberia
is not only losing some of its valuable tree species (Tiama,
Kosipo, Sapell, Sipo, Bosse, etc.) but there is also
experiencing a decline in the stock of wildlife. The
CI stated that ‘At last count, the country was home
to 2,200 species of plants, 193 mammals, and 576 bird
species’ (http://news.mongabay.com/2006/0716-liberia.html).
Logging,
unlike mining, does not involve huge expenses for
commercial exploitation; neither does it absorb large
number of workers when company is only exporting round
logs without sawmill. This could be some of the
reasons for which logging or "conflict timber”
served as a principal source of funding for warring
factions in the past war. The illicit exploitation of
the forest and other minerals by warlords did fuel the
brutal civil war which spilled-over into Sierra Leone.
To
halt and help improve regional security, the United
Nations Security adopted resolution 1343 on March 7,
2001 placing sanctions on Liberia. With the holding of
democratic elections, the UN Security Council reached
a decision in June 2006 to permit Liberia again to
start exporting timber. The UN projection is that
‘as much as $80 million in timber sales a year, of
which $15 million would go to the Liberian
government’ (http://news.mongabay.com/2006/0716-liberia.html).
Is Liberia to export forest products like saw timber
and furniture or is it still to be the round log
export?
Forest
being a renewable resource could indeed form an
everlasting resource base in the Liberian economy. In
addition, and with domestic manufacture of timber
products, Liberia should be able to get its hands on a
greater share of the economic benefits from this
industry. This assumption is based on the revamping
and strengthening of the Forestry Development
Authority (FDA). The FDA was instituted in 1976, as a
self-directed public agency, with an extensive range
of duties including the management, control and
development of the forestry sector. Specifically, its
mandates include evaluating forestry investment
biddings, awarding concession licenses, assessing
forestry production for proceeds collection,
conducting training and research, monitoring private
sector logging and sawmills operations, etc. But from
documentary facts, the FDA has had difficulties in
realizing these objectives.
The
challenges that would be facing the forestry sector
include but not limited to:
1.
Better procedures along with qualified and
honest manpower in assessing tree species, and scaling
of logs so that the actual stumpage fees are collected
by the appropriate authority.
2.
Reforestation program that will not only focus
on industrial plantation program but should
concentrate on social forestry or community
agro-forestry program. This along with genuine
agrarian reform will help in replacing the shifting
cultivation or sedentary agriculture.
3.
Promote the development of local processing
(sawmills) and wood-using industries (handicrafts,
furniture, wood for repairing buildings, etc.) to
secure a great share of the potential economic
benefits from the industry.
Conclusion
In
a post-war situation where everybody is hoping for
rapid return to normality, the elected government is
under ‘fire’ literally to meet up with its
mandates to repair damages, (e.g. schools, hospitals,
bridges, roads, etc.) resume development and job
creation. It is against this backdrop that the
government of “Africa’s Iron Lady” tries to get
hold of the available natural resources like iron ore
and forest to earn valuable hard currency for post-war
reconstruction.
Having
said that, let us remember that due to the shortage of
qualified Liberian manpower, previous governments had
their eyes closed to the inflow of expatriates in the
mining of timber and mineral exploitations, while
retail and import trade preponderantly was in the
hands of Lebanese and Indian merchants. The informal
sector was largely controlled by Guineans and other
West Africans. This resulted in most of the money
going out of the country; a situation that has not yet
changed. For instance, most of the donors’ funds
into Liberia, because of “Tied
Aid Syndrome,” are used for personnel and the purchase of materials
from the donor’s countries.
We
draw from the Malaysia experience, because it was a
single-crop exporter like the case of Liberia. But
Malaysia made significant dent in eliminating
life-threatening elements like poor health and
sanitation, inadequate shelter, poor education, to
improving life quality through equal opportunities.
Malaysia had a single-crop economy. Rubber accounted
for half of it exports earnings, but was hampered by
the availability of cheap synthetic rubber causing the
drop in price of natural rubber. Its second largest
export was tin. As for the tin market, the production
of tin exceeded the demand. Both rubber and tin had no
bright future in the world market. The secret of most
south Asian countries is the fact that they invest in
human capita. Through the support of research and
development, Malaysian planners used comparative
advantage and were able to diversify into other
primary agriculture crops like palm oil plantations.
The country later went into manufacturing for export.
In spite of the export-oriented economics,
Malaysia maintains its agriculture as the base and
importantly produces what they consume. Today,
Malaysia is among the Newly Industrialized Countries
and a member of the “Dragons of Asia.”
The
14-year civil war is an added scar of the poor
stewardship of our natural resources, while
misappropriation, corruption and poor governance
continues to hinder growth and development. In truth,
Liberia should have accelerated in economic
development holding to the royalties and taxes these
multinationals paid to earlier governments. Therefore,
let us start with a shared vision of honesty, social
justice, and discipline in building a strong and
vibrant Republic.
Wollor E. Topor lives in the Philippines
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