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Liberia’s Forest Agency Hides Over 50 Potentially Bogus Concessions & Ghost Operators From Auditors

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By: Festus Poquie

Phase two of the Liberia forest concession review has concluded with damaging findings that show the country still deeply seated in bad forest governance that is profiting to a powerful few.

The country stands to miss out on whooping $150 million United States dollars on account of repeated failure to manage its forest in line with established laws and regulations.

In 2014, the Government of Norway signed a Letter of Intent with the Government of Liberia (GoL) promising US$150 million to support sustainable development that reduces deforestation and forest degradation.

As part of the agreement, the GoL is required to complete an independent investigation that examines the legality of existing logging contracts.

Conducted by Forest Trends, a US based nonprofit organization, widespread violations of laws governing the sector was found again as it was noted in three previous reviews.

Officials at the Forestry Development Authorities, the agency regulating the country’s forest concealed vital information regarding granted concessions and contracts.

Loggers are other actors within the forest industry are using a new scheme – the Community Use Contracts (CUC) to obtain concessions via third party agreement to beat established legal requirements.

“FDA did not provide a full list of active Licenses, much less those that have been awarded. Despite this, the LFCRII was able to identify more than 70 Licenses that are potentially active, In response to this list of possible Licenses, the FDA confirmed that 14 are active,” the report said.

When 11 Operations were put to an in-depth compliance test, the resulting outcome shows all were not in full compliance with the laws, the review found.

“All 11 Operators were in arrears—in excess of US$31.5 million to the GoL; this does not include unpaid obligations (fi nancial and in-kind) under the Social Agreements (SAs) signed with the Communities most affected by the logging.

“In the interest of fairness, and in recognition of the widespread non-compliance, the LFCRII recommends that all the other existing Licenses should be subject to similar in-depth compliance review. “

Implications for FDA nondisclosure as indicated in the report

The lack of cooperation prevented the independent verifi cation of the FDA’s data that a standard audit would have allowed. Despite this, the LFCRII was nevertheless able to triangulate other sources of data, including the Liberia Revenue Authority (LRA) and SGS, to make clear fi ndings of fact, which allowed the review to draw robust conclusions about the status of the forestry sector.

Given the lack of response from the Operators and the FDA, and despite it being in their interest to provide such evidence if exculpatory, the LFCRII concludes that the lack of documentation is indicative of a real lack of compliance.

The consequences of inadequate archiving systems can be profound: a. Licenses: Previous Presidents used the forestry sector for patronage, giving and taking away the privilege to log. The 2005 Forest Concession Review found that ignoring pre-existing licenses meant that the 72 Operators held overlapping claims that were 2.5 times the total area of forests in Liberia. b. Business licenses/declaration of ownership: i. When the GoL and Communities do not know the identity behind the logging Operations, it makes it diffi cult to recover arrears, especially when the loggers abandon their operations, as may have happened in six of the cases reviewed by the LFCRII. ii. When the FDA is not evaluating the qualifications of those obtaining Licenses, as is required by law, there is no guarantee that they will be bona fi de logging Operators instead of speculators hoping to flip their License or, worse, illicit loggers overharvesting high-value species for a quick profi t. iii. When there is no pre-qualifi cation evaluation.

Phase two of the Liberia forest concession review has concluded with damaging findings that show the country still deeply seated in bad forest governance that is profiting to a powerful few.

The country stands to miss out on whooping $150 million United States dollars on account of repeated failure to manage its forest in line with established laws and regulations.

In 2014, the Government of Norway signed a Letter of Intent with the Government of Liberia (GoL) promising US$150 million to support sustainable development that reduces deforestation and forest degradation.

As part of the agreement, the GoL is required to complete an independent investigation that examines the legality of existing logging contracts.

Conducted by Forest Trends, a US based nonprofit organization, widespread violations of laws governing the sector was found again as it was noted in three previous reviews.

Officials at the Forestry Development Authorities, the agency regulating the country’s forest concealed vital information regarding granted concessions and contracts.

Loggers are other actors within the forest industry are using a new scheme – the Community Use Contracts (CUC) to obtain concessions via third party agreement to beat established legal requirements.

“FDA did not provide a full list of active Licenses, much less those that have been awarded. Despite this, the LFCRII was able to identify more than 70 Licenses that are potentially active, In response to this list of possible Licenses, the FDA confirmed that 14 are active,” the report said.

When 11 Operations were put to an in-depth compliance test, the resulting outcome shows all were not in full compliance with the laws, the review found.

“All 11 Operators were in arrears—in excess of US$31.5 million to the GoL; this does not include unpaid obligations (fi nancial and in-kind) under the Social Agreements (SAs) signed with the Communities most affected by the logging.

“In the interest of fairness, and in recognition of the widespread non-compliance, the LFCRII recommends that all the other existing Licenses should be subject to similar in-depth compliance review. “

Implications for FDA nondisclosure as indicated in the report

The lack of cooperation prevented the independent verifi cation of the FDA’s data that a standard audit would have allowed. Despite this, the LFCRII was nevertheless able to triangulate other sources of data, including the Liberia Revenue Authority (LRA) and SGS, to make clear fi ndings of fact, which allowed the review to draw robust conclusions about the status of the forestry sector.

Given the lack of response from the Operators and the FDA, and despite it being in their interest to provide such evidence if exculpatory, the LFCRII concludes that the lack of documentation is indicative of a real lack of compliance.

The consequences of inadequate archiving systems can be profound: a. Licenses: Previous Presidents used the forestry sector for patronage, giving and taking away the privilege to log. The 2005 Forest Concession Review found that ignoring pre-existing licenses meant that the 72 Operators held overlapping claims that were 2.5 times the total area of forests in Liberia. b. Business licenses/declaration of ownership: i.

When the GoL and Communities do not know the identity behind the logging Operations, it makes it diffi cult to recover arrears, especially when the loggers abandon their operations, as may have happened in six of the cases reviewed by the LFCRII. ii.

When the FDA is not evaluating the qualifications of those obtaining Licenses, as is required by law, there is no guarantee that they will be bona fi de logging Operators instead of speculators hoping to flip their License or, worse, illicit loggers overharvesting high-value species for a quick profi t. iii. When there is no pre-qualifi cation evaluation.

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