Liberia comes in from the cold

Following Liberia’s admision to the Kimberley Process (IM, June 2007, p52), it has now become the 14th African country to join the Extractive Industries Transparency Initiative (EITI), a global coalition of governments, companies, civil society groups and investors devoted to ensuring that proceeds from extractive industries are used to develop countries in which the minerals are found and improve the living conditions of the people.

The Liberia Extractive Industries Transparency Initiative (LEITI) was launched at Monrovia City Hall on July 10 by President Ellen Johnson-Sirleaf, in the presence of the country’s international development partners, including the AfDB, the private sector and civil society organisations. The Liberian endorsement is unique in that it goes beyond oil, gas and minerals to include forestry resources in the implementation of the Initiative. Liberia is therefore taking the lead in this area and will serve as a pilot case for future extension of the Initiative to other sectors.

“Today we face a historic opportunity to turn this natural resource ‘curse’ into a blessing.  The United Nations has recently lifted its ban on the export of Liberia’s diamonds, which followed the removal of the ban against timber last year. The opening of these crucial sectors will provide a boost to our economy. Thousands of our people will gain employment opportunities and have the chance to learn valuable skills. Many millions of dollars of greatly needed investments will flow into the country. It does take some time but this is on the way; this will happen,” President Johnson-Sirleaf said at the launch.

Liberia, she said, faced a paradox in the sense that in spite of its abundant wealth, the people remained poor. All Liberians should benefit from these natural resources, she stressed. Mining and forestry resources alone will generate millions in earnings and foreign exchange in the coming years, she said, adding that if managed properly, the earnings should translate into large increases in government revenue to be used in building schools and health centres, roads and other social services that are lacking in the country.

“.far from fighting poverty, the wealth from Liberia’s natural resources has been plundered. The corruption of the past has meant that just a few pockets have grown full, while the vast majority of Liberians have been deprived of the fruits of the country’s resources,” Mrs. Sirleaf said, noting that instead of moving our countries forward, the exploitation of our natural resources has set us back even further.

President Johnson-Sirleaf said that LEITI was part of the government’s determination to put en end to endemic corruption of the past, emphasizing that in the last 18 months, the government had taken a number of measures to ensure  public accountability and improved governance..

“Today”, she said, “the Government of Liberia declares its full support for the implementation of the Extractive Industries Transparency Initiative,” emphasizing that the country’s participation in the initiative builds on the government’s additional effort to bring about transparency in the mining and forestry sectors including the government’s ongoing involvement in the Kimberly process toward certification as well as the chain of custody under its new forestry law.

Peter Eigen, Chairman of EITI International Board, sent a letter read at the launch by finance Minister Antoinette Sayeh, describing the launch of LEITI as a “fitting illustration of the positive dawn for Liberia” that shows the government’s commitment to good governance and transparency practices as well as a demonstration of its willingness to work together with the civil society.

LEITI will work to ensure that Liberia’s natural resources – mines, forests, and potentially oil – are used in the interests of the people rather than to enrich individuals. This will be done through the publication of all payments made by mining, petroleum and forestry companies to government and government personnel. Payment and revenue information will be reconciled by an independent administrator and will undergo external audits.

The initiative will be overseen by a steering committee composed of members of the government, civil society, the private sector and international development partners.  A Bank-wide Taskforce has prepared a document on ways in which the Bank can assist its member countries in maximizing the development impacts of revenue generated from Extractive Industries (EI) in an accountable and transparent manner following the Bank’s endorsement of the initiative in October 2006. The Taskforce specifically recommended that the Bank should support EITI implementation in its Regional Member Countries by providing technical and financial assistance to countries that lack institutional capacity to implement the Initiative.

The EITI was announced by former UK Prime Minister Tony Blair in 2002 at the World Summit on Sustainable Development in Johannesburg. It aims at ensuring that revenues from natural resources contribute to transform national economies and reduce poverty in resource-rich countries. Countries implementing EITI principles make an undertaking to strengthen transparency of their natural resources revenue, and citizens commit themselves to hold governments to account for the use of such revenues.

Liberia’s endorsement of the initiative brings to 22 countries (including 14 African countries) of the world’s 53 natural resource-rich countries that have endorsed ETI.