The Liberia 2017-2018 report reconciled payments made by the extractive companies and revenues received by the government of Liberia in 2016 -2017 and 2017 - 2018 fiscal years. The report covers the mining, oil and gas, forestry and agriculture sectors in Liberia as well as registers of licenses; exploration, production and exports; beneficial ownership; contract transparency; state participation in the extractive sector; revenue collection and allocation; and social and economic spending
All of Liberia’s extractive sectors suffered dramatically during the civil war that ended in 2003. The country acted as a major trader in Sierra Leonian blood diamonds and an exporter of timber which was believed to be funding Sierra Leonean rebels. UN sanctions against timber and diamonds were lifted in 2006 and 2007 respectively. Following the inauguration of the Sirleaf administration in 2006, Liberia signed several multibillion-dollar concession agreements in the iron ore and palm oil industries with numerous multinational corporations, including BHP Billiton and ArcelorMittal.
Liberia’s EITI covers the mining and timber sector as well as agriculture and the nascent oil and gas sectors. Since the first EITI report in 2009, total government revenue reported from the extractives has been increasing from USD 29.5 million (2007-2008) to over USD 100 million. Liberia latest EITI Report covering the fiscal year 2015 - 2016 highlights total government revenue from the extractive sector at USD 56 million of which mining contributed 49%, oil and gas (exploration) contributed 5%, agriculture 26% and forestry 20%.
Progress on implementing beneficial ownership disclosure
Liberia took part in the beneficial ownership pilot and attempted to obtain beneficial ownership information for active concessions as well changes in ownership in the period 2009-2011. Although several companies responded, declaring both shareholders as well as natural persons as their owners, the beneficial ownership report (annexes) does not confirm whether the natural persons disclosed were also the beneficial owners. The report includes several recommendations for improving beneficial ownership disclosure in the future.
Liberia's evaluation report from the beneficial ownership pilot explained that access to funding and obtaining information from companies were the major challenges. Liberia had agreed to include sub-contractors in its definition of beneficial owners, which proved difficult to obtain. Prior to commencing the work on beneficial ownership, LEITI also prepared an inception report outlining the agreed definition of beneficial ownership and scope of companies covered.
In 2018, Liberia EITI plans to, among other things, organize consultation meetings to consider the optimal institutional framework for beneficial ownership disclosure. Read Liberia's beneficial ownership roadmap below for more information.
Since 2010 Liberia has made significant progress in reviving the mining sector, which before 1990 had contributed more than 65% of the country’s export earnings and represented about 25% of the country’s GDP.
According to the 2017 - 2018 LEITI Report, iron ore was the main commodity produced in 2017/18, with a production volume of about 3.8 million Mt with the most prodcution increased of 172% from about 1.44 million Mt in 2016/2017. Gold production increased by 48% from 125,251Oz in 2016/17 to 185,688 Oz in 2017/18. Other production include logs with 298,622 m3 and rubber with 27.3 thousand Mt.
During the 2016/17 and 2017/18 financial years, there were two operators (Chevron and Exxon Mobil) in the country working through petroleum agreements with NOCAL. These companies are carrying out exploration activities and until now there has been no production of Oil & Gas in the Liberian Basin.
Liberia is rich in natural resources, notably iron ore, diamonds, gold, timber and rubber. Liberia’s undeveloped mineral resources included base metals, such as cobalt, lead, manganese, nickel, and tin, and industrial minerals, such as dolorite, granite, ilmenite, kyanite, phosphate rock, rutile, silica sand, and sulfur.
|Oil||Surveys have established the presence of essential petroleum factors in the Liberian Basin. However, until now, there has been no production of oil in the Liberian Basin.|
|Gold||9.5 (grade 2.1 g/t) at Ndablama and Weaju||metric tons||Commercial gold reserves have also been established at the New Liberty gold mine.|
|Iron Ore||996||metric tonnes||A Joint Ore Reserves Committee (JORC) compliant study completed in 2012 confirmed the noted reserves of iron ore.|
Direct Government Revenues from the extractive sector increased from USD 47.74 million for the FY16/17 to USD 61.44 million for the FY17/18 . Total revenue generated from the extractive industries after reconciliation work totaled USD 53.6 million. Extractive revenues represent 6.6% of Liberia Real GDP in 2017/18 FY. The analysis of Government revenues by sector contribution indicates that the Mining sector contributed 41.3% of the total Government revenues from the extractives sector during the 2017/18 financial year.
There is much public information about existing contracts and concessions in Liberia, although there are less available details on the licensing processes and procedures for allocating these contracts and licenses. A Post Award Process Audit conducted by LEITI in 2013 found that only 10% of the contracts awarded in the period between July 2009 and December 2011 were in compliance with the applicable rules. In light of these findings, LEITI's report covering the fiscal year 2012/13 found that more information on licensing processes could help to ensure that these are made in accordance with the legal frameworks. In December 2016, a Post Award Process Audit II for the period 2 January 2012 to 30 June 2015 was published.
The 2017 - 2018 report highlights a number of reforms that the Liberian Government has advanced in order to improve public financial management.Prominent amongst the institutional reforms undertaken are:
- Enactment of the Liberia Revenue Authority (LRA) and Ministry of Finance and Development Planning (MFDP) Acts
- A rollout of Integrated Financial Management Information System (IFMIS) to 19 government Ministries and Agencies
- Development and implementation of the Human Resources (HR) management module at the Civil Service Agency for personnel management and payroll processing
- Completion, approval and subsequent implementation of the Medium Term Debt Strategy (MTDS) for prudent debt management
- Establishment of effective internal audit functions in 37 Ministries and Agencies
- Completion of the review of the backlog of audit reports by the Public Account Committee
- Deployment of Standard Integrated Government Tax Administration System (SIGTAS) in the small, medium and large tax units to strengthen tax compliance.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
- EITI-specific law: LEITI Act of 2009.
Coverage of forestry and agriculture sectors.
Contracts for concessions in the sector are published on LEITI's website.
According to the LEITI Act, the procedure for awarding extractive sector contracts should be audited. A “Post Award Process audit”, which looked at 68 contracts that had been awarded, was completed in 2013. In December 2016, a new post-award audit II of 160 contracts was published.
- An evaluation report published in August 2015 and a Beneficial Ownership Report from December 2015 present the initial outcome of the implementation of the beneficial ownership pilot in Liberia.
Liberia has an impressive record of EITI implementation and has been using the process innovatively to investigate such key areas of concern – particularly whether contracts were allocated correctly, but also whether companies paid what they owed and whether earmarked funding went where it should. However, these efforts were only marginally successful in answering those broad questions since other data collection systems are weak.
The EITI Board decided on 4 September 2018 that Liberia was suspended due to lack of publishing its 2015/16 report in accordance with provision 8.2 of the Standard. The EITI further on 3 June 2019 reaffirmed Liberia’s temporary suspension as a result of a review carried out by the International Secretariat which identified significant breaches related to multi-stakeholder group oversight (Requirement 1).
The Board agreed to lift Liberia’s temporary suspension effective 6 March 2020 as a result of improvement in implementation related to multi-stakeholder group (MSG) oversight (Requirement 1) and the publication of outstanding EITI Reports. Liberia has demonstrated considerable progress in addressing gaps identified in the review of Requirement 1. Also, within a short timeframe, the Government of Liberia has demonstrated its full commitment to the EITI process, which has led to the restoration of the credibility of Liberia EITI.
Liberia’s EITI is governed by the 2009 LEITI Act and its regulations. See MSG policy manual, five-year strategic plan for FY2017/18 to FY2019/20, communications strategy, and LEITI operations manual for more information.
Liberia's second validation is scheduled for 24 November 2018. On 28 June 2018, Liberia submitted a request for an extension of the commencement of the second Validation. The Board decided on 4 September 2018 that Liberia is ineligible for a Validation deadline extension. Liberia's progress by requirement can be found in the scorecard below.
Liberia's next Validation is schedule to commence on 1 July 2020.
LEITI's 2019 - 2020 Workplan in accordance with requirement 1.5 of the EITI Standard
Liberia Annual Progress Report for 2017 and 2018 period
Liberia published its EITI report on 7 January 2019. The Report covers Liberia's Extractive Sector from June 2015 to July 2016.
Liberia's Validation commenced on 1 July 2016. On 24 May 2017, the EITI Board found that Liberia has made meaningful progress in implementing the 2016 EITI Standard.
The following documentation laid the basis for the Board's decision, attached below: