Desperation or Calculated Violation? How Lawmakers Illegally Waived US$6.5 Million of Social Development Funds

KAKATA, Margibi – Citizens in Margibi have raised eyebrows over waiver of over US$1.6 million of County Social Development Funds or CSDF owed the county by China Union.

China Union, through a 25-year Mineral Development Agreement to extract iron ore from Bong, agreed to pay through the central government US$3.5 million annually to be remitted to the affected counties, including Margibi.

Bong, which hosts the largest portion of the concession, receives US$1.75 million or 50 percent of the amount. Margibi and Montserrado share the remaining 50 percent portion in equal parts, with US$875,000, respectively. The two counties host the company’s operations headquarters and railways through which the minerals are transported out of the country through the seaport of Monrovia.

Between 2015 to 2018, the company did not live up to its commitment. Hence, China Union accrued a total of US$10.5 million in debt to the three counties. Recently, the company requested members of the legislative caucuses of the affected counties to waive US$6.5 million to compensate for the slowdown in its operations, which coincided with a global decrease in the price of commodities.

In a joint resolution in March 2019, members of the legislative caucuses of Montserrado, Margibi, and Bong accepted to write-off the amount to allow the company to pay only US$4 million to the counties. The cancellation took effect as follows:

Margibi and Montserrado gave up US$1,625,000 each and Bong forfeited US$5,250,000 – a whopping US$6.5 million was surrendered with the stroke of a pen.

But the decision has backfired. In Margibi, there are now heightened tensions. One of the county’s senators, Oscar Cooper, has disassociated himself from the decision and is now contemplating legal action.

“If my lawyer tells me that their decision was not in line with the laws, I will file a legal action,” Cooper told The Bush Chicken in an interview.

Cooper has already taken legal action in connection with the funds received by the county following the waiver. Cooper has fled to the Supreme Court on grounds that his fellow lawmakers and local county officials illegally allocated the US$1 million remitted to the county. The amount is Margibi’s portion of the US$4 million paid by China Union. Cooper complained to the court that his colleagues and members of the local county administration acted in violation of the budget law in allocating the fund.

Except for Cooper, no lawmaker in Margibi has agreed to speak with The Bush Chicken on the matter.

Bong’s seventh district representative, Joseph Papa Kolleh, in whose constituency China Union operates, insists that there was no waiver of China Union’s obligations. He earlier told Public Trust News that there is no provision for a debt waiver under the mineral development agreement.

“There is nothing like debt waiver to China Union. Upon resumption of normal operations in Liberia, the company will be made to pay the remaining US$6 million debt and cater to all of its legal responsibilities to the communities affected by its operations,” Kolleh was quoted as saying.

But the culture of secrecy on Capitol Hill means the public has little idea on what actually occurred. For now, citizens remain stunned at the decision.

Margibi Citizens Alliance for Accountability and Transparency, a local advocacy group in the county, questioned the decision of the lawmakers. The chair of the group, Joseph Orlando Beyan, said it is disappointing that lawmakers reached the decision to waive such a huge amount without any consultation with those they represent.

Beyan also accused the lawmakers of violating the mineral development agreement which explicitly obligates China Union to pay the amount to the county.

Festus Tarpah, youth, and political activist in Margibi, called the lawmakers’ action a “complete mockery” of good representation.

A prominent government lawyer who spoke to The Bush Chicken only on conditions of anonymity said the action of members of the three legislative caucuses contradicts the laws, including the agreement with China Union.

“The purported resolution of the legislative caucuses of the Bong, Margibi, and Montserrado Counties is void ab initio and it is of no legal effect because the Mineral Development Agreement entered into by the government of Liberia and China Union Liberia was passed by both chambers of the legislature and signed into law by the then president of the Republic of Liberia, Her Excellency Madam Ellen Johnson-Sirleaf,” the lawyer said. “In other words, a decision or resolution of fractional membership of the legislature cannot override the decision of majority members of both chambers of the legislature and the approval power of the president of the Republic of Liberia.”

Section 33.2 of the agreement expressly provides that “any modification or amendment of any terms of this agreement shall be by the mutual written agreement of the parties and, except as otherwise specifically provided in this agreement, shall not become effective until approved by the president of the republic.”

The lawyer further said since the president did not approve the resolution signed by the three caucuses, the waiver is unlawful and in flagrant violation of the agreement between China Union and the government.

“The resolution should have served as an effective vehicle to enhance the proposed amendment to the mineral development agreement to be scrutinized by the public, passed by both the House of Representatives and Senate, and subsequently approved by the president of the Republic of Liberia,” the lawyer noted.

“Generally, resolutions do not have the force of law and as such, do not require affirmative approval of the president. To become law, joint resolutions must be passed in exactly the same manner as bills by both chambers of the legislature, and signed by the president of the republic.”

According to the lawyer, it is a well-established principle of law in Liberia that legislative actions, whether by committee, resolution of one house, or by joint resolution of the whole legislature, cannot amend, modify, rescind, or supplant any rule promulgated by an agency, unless the legislature follows the bill passage requirement prescribed by the constitution.

The lawyer maintained that the agreement entered into by the government and the Chinese company still remains intact and that citizens of either of the counties can sue for a declaration of their rights for the benefits purportedly waived by their lawmakers.

Another lawyer also contacted to provide expert opinion on the matter is the dean of the Louis Arthur Grimes School of Law at the University of Liberia, Cllr. Negbalee Warner.

Warner said he could not comment on this specific instance, but said no person or group may waive what is provided in a mineral development agreement or any legislation unless through an amendment of the agreement or a forbearance duly exercised by the Executive Branch in terms of timing of collection, and not a waiver, under the laws of Liberia. But the joint resolution passed by the caucuses of the affected counties clearly did not comply with the lawmaking process.

In a county where the only public referral hospital lacks basic supplies, including essential drugs for patients who can barely afford the cost of treatment at commercial facilities, US$1.6 million is not an insignificant amount.

There have been several reports of power outages at the C.H. Rennie Hospital in Kakata because of lack of fuel to run the power generator. The situation limits access to medical services at the facility, while health workers complain of not receiving incentives.

Additionally, for more than five years, county authorities have failed to resume a scholarship program that benefitted hundreds of high school and university students residing in the county. The scheme, which was initiated by lawmakers from the 52nd legislature in the county, was sponsored through social development funds remitted to the county, such as the Firestone land rental fees.

A local civil society leader in Harbel, Foeday Zinnah, said Margibi cannot afford to waive any development fund, as its challenges are overwhelming.

“With the poor health facilities [and] only one refined hospital, our people die in remote parts of the county because they lack access to medication, safe drinking water, roads connectivity, etc.,” Zinnah said.

“Margibi needs all of its benefits to improve the lives of her citizens.”

Featured photo by Zeze Ballah


Gbatemah Senah

Senah is a graduate of the University of Liberia and a recipient of the Jonathan P. Hicks Scholarship for Mass Communications. Between 2017 and 2019, he won six excellent reporting awards from the Press Union of Liberia. They include a three-time Land Rights Reporter of the Year, one time Women's Rights Reporter of the Year, Legislative Reporter of the Year, and Human Rights Reporter of the Year.

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