Exploring model Laws and Policy on Responsible Investment in Agriculture The Case of the Liberian Extractive Industry Tr

1. Exploring model Laws and Policy on Responsible Investment in AgricultureThe Case of the Liberian Extractive Industry Transparency Initiative act of 2009 Alfred Lahai Gbabai Brownell sr. Lead Campaigner Green Advocates Liberia Member of Liberia EITI Multi-Stakeholder Steering Group Co-author LEITI ACT 2009 Friday 26 April 2013

2. The policy environment enabling the LEITI ACT of 2009 • Preamble LEITI ACT 2009: • Liberia is endowed with vast quantities of natural resources • The exploitation of these …. resources for many decades have not had adequate or meaningful beneficial impact on the national economy or the livelihood of Liberians, • but has led to deprivations and conflict due largely to the lack of transparency and accountability ….. the persistence of opportunism in the award and performance of concessions/licenses for exploitation of these resources; • Nevertheless, the Government and People of Liberia recognize the potential positive contribution (natural resources emphasis mine) can make to economic and social development of the Country, • Have agreed to realize these potentials through improved resource governance that (will ensure full implementationemphasis mine) of the Principles and Criteria of the Extractive Industries Transparency Initiative (EITI)

3. The basic contents of the act • Preamble • Preliminaries • Establishment of the LEITI • Objectives of LEITI • Functions/Mandate of the LEITI • Scope/Focus of the LEITI • Management • Reporting • Financial Matters • Effective Date

4. Content and Features of the LEITI Act • PREAMBLE- set the policy environment • Naturally endowed, • but no adequate or meaningful beneficial impact on the national economy or the livelihood of Liberians • leading to deprivations and conflict due largely to the lack of transparency and accountability!

5. Content and Features of the LEITI Act • Preliminaries- which include such items such as short title and the definition section for example: • Independent Firm” means an accounting or auditing firm that has no existing relationship with either the Government or any of the companies that are part of the LEITI. • Establishment of the LEITI • an autonomous agency of the Government but shall comprise a broad coalition of stakeholders, managed as a multi-stakeholders body and shall include but not be limited to officials of government; members of Parliament, members of extractive companies; and civil society organizations , • shall have the power to sue and be sued;

6. Content and Features of the LEITI Act • Objectives of LEITI • to assist in ensuring that all benefits due the Government and people of Liberia ……are • (1) verifiably paid or provided; • (2) duly accounted for; • and (3) prudently utilized for the benefits of all Liberians …on the basis of equity and sustainability

7. Content and Features of the LEITI Act • Functions/Mandate of the LEITI • develop and update reporting templates and ensure the regular disclosure and reporting, on a disaggregated basis, of all taxes…fees paid to all agencies and levels of the Government and the revenues received by the Government from the Companies; • To conduct, through independent firms, a reconciliation of all payment data disclosed by extractive companies and all revenues data disclosed by all agencies and levels of Government • Conduct appropriate audits and/or investigations of the process by which each material concession, contract, license, and other right is awarded by the Government • To conduct, as frequently as may be necessary and through independent Firms appropriate audits and/or investigations of the payments and revenues data submitted to determine that the payments made and revenues received correspond with what ought to have been paid and/or received • To serve as one of the national depositories of all concessions, contracts,

8. Content and Features of the LEITI Act • Scope/Focus of the LEITI • Promote and ensure Revenues transparency and Contract transparency in the natural resource sectors • The Mining Sector; (2) the Oil and Natural Gas Sector; (3) the Agriculture and Forestry Sectors; and (4) such other sectors as the MSG may subsequently determine with the consent of the Government • Management • The Governing body of the LEITI shall be the Multi-stakeholders Steering Group (“MSG”).

9. Content and Features of the LEITI Act • The MSG shall establish a Secretariat to be responsible to carry out and/or coordinate the day-to-day operations of the LEITI • Adopt measures and take actions necessary for achieving the mandate and objectives of the LEITI, • Determine the sanctions to be applied against any company and/or agency government failing to submit a report required by the EITI, • Members of the MSG shall be appointed by the President . In the appointment of members of the MSG to represent civil society and the private sector the President shall hold appropriate consultations with members of the groups.

10. Content and Features of the LEITI Act • Reporting • The EITI Report of payments and revenues it shall comprise of the audited and/or reconciled data of all payments made by covered extractive companies and the revenues received from the companies by all relevant agencies and levels of Government, • The Report of Audit/Review of Concessions and Contracts shall contain the findings and opinion of the Auditor or Investigator regarding the legal compliance of the processes and procedures applied in respect of concessions and contracts awarded during the audited period. • Financial Matters • LEITI shall be financed by legislative appropriations made through the national budget. • LEITI may, directly and indirectly, request and receive technical assistance, donations or grants from Partners.

11. The role of the LEITI in establishing the act • Creating the Legal Platform • There was a sense among the stakeholders from an early stage that a strong legal basis was necessary to make the EITI process enforceable and sustainable in Liberia. • However, the MSG also recognized the need for an interim legal framework so that the reporting process could take place as legislation was drafted and approved • The Policy Note issued by the Government and the Resolution signed by the government, civil society and the private sector on May 7th, 2007 were the first steps in this framework and provided the base from which the MSSG started operations.

12. The role of the LEITI in establishing the act • Multi-Stakeholders’ Memorandum of Understanding: • The members of the MSSG signed a LEITI Memorandum of Understanding to guide the group’s implementation of the EITI process on April 4, 2008, approximately eight months after the first MSSG meeting. • The MOU was drafted by the Secretariat and approved by the MSG based on a comparative review of MOUs used by other countries, including Nigeria and Azerbaijan. • It was signed by all the relevant stakeholders and attested to by foreign donor partners • The Liberian MOU included sections on the responsibilities of the parties, the functions and powers of the steering group, the format of the revenue report, and the sustainability of the process.

13. The role of the LEITI in establishing the act • Presidential Proclamation: • The Presidential Proclamation was a stop-gap measure to ensure the reporting parties participated in the process before the passage of EITI legislation • the Proclamation required every relevant government agency and extractive company to disclose “fully, timely, and in the manner required by the EITI Criteria” all revenues received from extractive industry companies. • The proclamation also announced that the acceptance of the EITI Criteria and Principles would be a necessary element of all concessions and licenses granted in these sectors in Liberia. • However, MSSG members were acutely aware that the Proclamation may not have been legally enforceable

14. The role of the LEITI in establishing the act • Legal Review: • EITI implementing countries must remove all obstacles to EITI implementation, including legal barriers. • To explore the legal obstacles to the EITI, the MSSG engaged a local law firm to review the laws and regulations that could hinder the EITI process. • The report called for reforms which would allow for the release of confidential tax information as well as the creation of a legal requirement that companies and government agencies participate.

15. The role of the LEITI in establishing the act • Liberian Extractive Industries Transparency Initiative Act • The LEITI Act is significant because it incorporated new sectors for EITI reporting, forestry and agriculture, • It also expanded the powers of the MSSG to include the imposing sanctions and fines for non compliance, auditing of the relevant parties and the government’s granting of concessions. • The Secretariat and a civil society representative worked together to create the first draft of the LEITI Act, • The drafters were careful to consider the sustainability and ability to expand the LEITI process.

16. The role of the LEITI in establishing the act • The drafting and passage of the legislation was facilitated by the fact that Liberia’s MSSG included representatives from a broad stakeholder group • the Executive Branch, including Ministers and a Presidential Advisor, • members of the National Legislature/parliament. • The private sector • Civil society • Development partners • All of these stakeholders lobbied or served as champions of the bill. • Even with this broad support, there was still the need for civil society to lobby legislators to guarantee its timely passage.

17. The role of the LEITI in establishing the act • Civil society played a key role in creating momentum for legislation by framing the discussions of the LEITI within the light of the “maximum feasible participation” clause of the Liberian Constitution to encourage stakeholders and the public to think of revenue transparency as a right rather than a privilege. • While this interpretation of the Constitutional Clause did not receive any official endorsement, it provided civil society with a legal rallying point to build its argument. • Following the passage of the LEITI Act, the MSSG established a sub-committee to consider issues and designing a road map related to the implementation of the Act, including issues related to reconstituting the MSSG in accordance with the new law.

18. The role of the parliament • Liberia has a bicameral ( two chambers) legislative process • The Parliament played a key role in creating the LEITI legal framework. • Two parliamentarians served as members of the MSSG. • One law maker closely work with the drafter and provided comments and suggestions on the initial draft. • After the LEITI draft was submitted to the MSSG, a sub committee was establish to review the draft and report back to the MSSG.

19. The role of the parliament, • A law maker served on that sub committee and provided key feed back from his colleague law makers • After the committee presented the report to the MSSG, the two lawmakers serving on the MSSG took copies of the draft LEITI Act and conducted preliminary vetting with their colleague lawmakers. • These lawmakers also provided copies of the draft to several standing legislative committees as a way of creating awareness about the draft LEITI Act.

20. The role of the parliament, • The draft was extensively debated and discussed at the MSSG where the law makers actively participated. • After the MSSG members approved the draft LEITI Draft Act, it was then submitted to the office of the President for consideration and endorsement by the full cabinet. of ministers • Ministers who served on the MSSG made the presentation before the cabinet and served as champions. • The LEITI Draft Act received cabinet endorsement and was then submitted to the Liberian legislature for enactment into law.

21. The role of the parliament, • Law makers who served on the MSSG became champion of the LEITI draft Act before their colleagues. • These Law makers who served on the MSSG had a firm and full knowledge and understanding of the LEITI ACT and serve as peer expert to their colleague law makers. • The law makers organized open public debates and dialogues around the LEITI Draft ACT and subsequently passed it into law.

22. challenges and opportunities and key Lessons • Translating a voluntary international requirements and standards into a national mandatory requirements and standards. • What elements should be incorporated in the draft legislation including content, structure and substance • Precedent setting -How do you transform a multi-stakeholder dialogue process into a quasi regulatory body involving non state actors as decision makers imposing sanctions and fines! • Precedent setting by broadening and deepening the scope and focus of the Liberian EITI beyond the International EITI scope and materiality threshold. For example how should you include forestry and agriculture? How do you include contract transparency?

23. challenges and opportunities and key Lessons • How would the MSSG consider and impose a fine or sanction on a non compliance Government Agency? What would be the mechanism for enforcement? • Building both national and international consensus that that broadening, expanding and deepening the LEITI scope is an acceptable practice. • Building trust and confidence among the national EITI tri-partite constituencies that this is a shared national goal. • Absence of an adequate model legislation or legal framework • Concerns about national capacity to implement and enforce the LEITI Act

24. challenges and opportunities and key Lessons • Liberia’s use of interim measures to provide a legal basis for initial EITI implementation was a best practice. It provided the framework for LEITI to move forward quickly and effectively. • The MOU setting out the roles and responsibilities of the MSSG clarified the Government of Liberia’s expectations in advance of legislation and prevented misunderstandings among MSSG members • LEITI legislation gave the MSSG the legal powers to sanction non-compliance and this should be seen as an EITI best practice. • The LEITI Act moves well beyond the minimum EITI requirements and provides an enabling context for “EITI ++” activities. It demonstrates that it is possible for Governments to support contract transparency and to empower national EITI MSSGs to assess the appropriate use of resource revenues.

25. challenges and opportunities and key Lessons • Members of the multi-stakeholders’ group may need to pressure leaders to create a legal platform. • Politicians may not be interested in using their political capital on EITI legislation, especially if the EITI process is not well known and not an issue for voters. • In this process, it is beneficial if the EITI government representatives have influence with the Executive and their parliamentarian colleagues. • Framing national dialogues around natural resource governance to encourage stakeholders, policy makers and the public to think of revenue transparency as a right rather than a privilege could be pivotal in strengthening natural resources management and governance.

26. Thanks! T