President of Sierra Leone, Julius Maada Bio: Address at the beneficial ownership conference

Held on the occasion of the EITI Africa beneficial ownership conference at the King Fahd convention centre, Dakar, Senegal, 31 October 2018.

Your Excellency, President Macky Sall,
Your Excellency, Prime Minister Reinfeldt,
Your Excellencies, Members of the Diplomatic and Consular Corps,
Ministers of the Governments,
Honourable Members of the National Assembly,
Distinguished Heads and Representatives of International Development Partners,
Representatives of Companies,
Members of Civil Society Organizations,
Distinguished Ladies and Gentlemen:

I bring you greetings from my Government and the People of the Republic of Sierra Leone. I would like to thank the President and People of the Republic of Senegal for the warm welcome accorded me and my delegation. 

I am pleased to join my colleague and brother, HE President Macky Sall, and indeed every one of you, at this beneficial ownership conference. Sierra Leone, like Senegal, and many other African countries, is endowed with tremendous natural resource wealth, which, if managed properly, should transform the development narrative of our continent. 

But the history of governance and management of the extractive industries in Africa has produced mixed results. In one way, revenues from the extractive industries have financed transformational development projects and infrastructure to provide social services for our citizens. In a more gruesome and tragic way, the exploitation of extractive resources has regrettably financed some of Africa’s most brutal armed conflicts.  More worryingly, rogue actors and rogue beneficiaries have squandered away wealth from extractives through opaque ownership arrangements and illicit international financial flows. There is no gainsaying why a transparent management regimen for the extractives sector is a necessity. 

We are aware of privacy arguments with regard to disposing or investing in private wealth. But we also believe as a government that the right to privacy of investors must be considered and balanced against the residual rights and interests of our citizens to benefit from the extractives sector. Shell companies, tax evasions, illicit money laundering, are all threats to not only revenue collection but they come with human and security costs. Schools and hospitals that should be built are not built. Children are left uneducated; mothers and children die needlessly in childbirth; unemployed and unskilled young persons resort to criminality and lawlessness to eke out a living. Clean potable water, good roads, and jobs are not provided. Societies are unstable. Illegal migration and human trafficking are sustained by poverty and limited opportunity in home countries. There are also real threats in illicit international financial flows and money laundering with the financing of terror and insecurity in states. So there is a huge cost to doing nothing about beneficial ownership.

For my government in Sierra Leone, promoting transparency and accountability in the extractives industries is not only about promoting good governance, it is about doing good business. It attracts credible and identifiable investors into the sector and it enhances transparency and accountability for the proceeds from the extractives sector. My country will, therefore, continue to consistently use EITI tools to continually improve management of the overall extractives sector for the benefit of citizens of Sierra Leone. Permit me, therefore, your Excellencies and distinguished ladies and gentlemen, to make a full and unconditional commitment of my government and my country to all robust policies and initiatives to ensure transparency in the extractives sector. We welcome the EITI’s requirement that information on beneficial ownership be made public by 2020 and we are fully engaged (government, the business community, and civil society) in working assiduously to meet this deadline. We have initiated the validation process and we will make meaningful progress in quick time. We are confident that beneficial ownership transparency is another useful tool that will ensure that the extractives sector in our country delivers on its promise.

Your Excellencies, distinguished ladies and gentlemen, allow me to restate that Sierra Leone supports beneficial ownership transparency in the extractive industries.A multi-stakeholder group that is coordinated by Sierra Leone EITI (SLEITI) and comprising government (through the National Minerals Agency and the Ministry of Mines and Mineral Resources ), the Corporate Affairs Commission, and civil society, is actively engaged in identifying possible gaps in existing management frameworks especially as it relates to the full disclosure of beneficial ownership. As a consequence of those engagements, my government is fast-tracking legal and regulatory initiatives to ensure that beneficial ownership is codified into our mining laws. The Sierra Leone Minerals Policy that is in the final stages of review includes provisions to ensure that companies that own licenses, bid for licenses, or operate licenses in the extractive industries declare their beneficial owners and interests. We are also reviewing the Corporate Affairs Governance Code and developing a more detailed activity and monitoring plan. Additionally, we plan extensive public information and civic engagement on the core points of reform while building our capacity (in terms of personnel) to manage the extractives sector. 

As a government, our commitment to transparency and accountability to our citizens is mission-critical. We believe that illicit financial flows from the extractives sector cost African governments hundreds of millions of dollars every year. Those are revenues that should be going to funding human capital development priorities such as expanding access to free quality education and building hospitals and training healthcare professionals. Our commitment to beneficial Ownership is not just a perfunctory gesture to check boxes and satisfy curious international partners; we firmly believe that it is in our country’s best interests. Indulge me for a few minutes to share why we believe so given the issue of beneficial ownership and why we are working continually to improve our management of the extractives sector:

Improved management of the extractives sector, for us, enhances our domestic resource mobilisation. My government inherited a bankrupt economy burdened with massive foreign and domestic debt. Those who followed news in the previous ten years would be au fait with the state of the extractive industry in our country. There was a drastic drop in commodity prices, alright. But there is also anecdotal evidence of serial shenanigans involving opaque beneficial ownership deals, politically exposed persons, and other dubious transfers of beneficial ownership of extractive companies. Revenue from the extractives industry had shrunken to unacceptable single digit figures.  Even though my government has been shutting down revenue leakages, closing loopholes, streamlining revenue collection, reforming public finance management reporting (so that revenues are fully and transparently declared), we have yet to sufficiently and significantly leverage revenue from extractives and grow the national pie. We, therefore, have a very strong interest in carrying out a substantial review of extractor sector policies and the regulatory environment in order to maximise revenues from the extractive industries. 

My government also believes that investment and trade should define our new relationship with our friends and partners. For that reason, we believe in the maxim of right investor and right place – Sierra Leone is the right place for your investment if you are the right investor. The right investor is a credible investor whose presence will encourage and attract additional right investor types to our country. Beneficial ownership transparency can help us encourage the right investment and the right investor types in our extractive industries. We believe that full disclosures of beneficial ownership boosts investor confidence in investing in our extractives sector because it lowers the risk of companies going up against so-called PEPs (politically exposed persons) or other undeclared state or irregular non-state entities that may gain an undue advantage in licensing process and revenue declaration processes.

This segues into my government’s fight against corruption as a pillar of my government’s reform agenda. This fight extends to the extractives industry. We have been using various tools and different approaches to fight corruption. But we believe corruption fights back. Beneficial ownership is a useful and welcome addition to our toolbox to fight corruption in the management of extractives especially as it helps us address corruption by politically exposed persons who have been, for far too long, deeply affiliated with or served as undeclared proxy owners of various businesses in the extractives sector. It also helps us fight against illicit international money laundering and other illicit financial flows that are facilitated through complicity with government and other officials.

We recognize that there are even more benefits to beneficial ownership transparency and we are committed to translating our commitment into action. Sierra Leone EITI not only ensures transparency of revenues and payments, it is fully involved in coordinating multi-sector work in significantly overhauling the management of the extractives sector. My government welcomes that Sierra Leone has begun its first Validation under the EITI Standard. A delegation from the EITI International Secretariat will be visiting Sierra Leone next week on a fact-finding mission, and we look forward to the opportunity to show our citizens and the international community our progress in bringing transparency and good governance to Sierra Leone’s extractive industries. We will continue to need support from the EITI and the international community to make progress on beneficial ownership. 

My delegation and I will listen keenly to the presentations at this conference in order to document and critically engage with all the debates, ideas, and conversations about best practices so that we can continue to do the very best to attract the right investor types to our extractives sector in Sierra Leone. 

I am told I ask too many questions. Indulge me, your Excellencies and distinguished ladies and gentlemen to burden you with a few:

1. While our initial focus will be on large-scale operations, do we plan to address opacity in the beneficial ownership in the small-scale and artisanal mining sectors?
    
2. Once codified in the laws of the country, should we place a steep price on non-disclosure and non-compliance with beneficial ownership provisions? Should these include the revocation of licenses and blacklisting?
    
3. How often should beneficial ownership registers be reviewed, monitored, and verified or validated? Will there be a central repository of information for undertaking such periodic validation?
    
4. Beyond 2020, do we plan to take a critical look back at beneficial ownership implementation and re-tool the instrument for further gainfully managing our extractives sectors so that we continue to attract the right investor types?

Not to bother you unduly with my numerous questions, your Excellencies, distinguished ladies and gentlemen, let me again, on behalf of my government and the people of Sierra Leone, thank you for the opportunity to share some of my thoughts about the importance of beneficial ownership transparency in the extractives sector. I wish everyone the best of every best wish throughout the deliberations over the next few days. Let us engage frankly and openly because our conversations and decisions will touch lives, save lives, and improve on the lives of millions of our ordinary compatriots. I thank you all.