Audit: Contracts awarded in Liberia violate law

[May 04, 2013]  MONROVIA, Liberia (AP) -- The Liberian government awarded about $8 billion in contracts to multinational companies without following its own laws, according to a draft of a new audit that reviewed dozens of deals.

Critics say the way the government granted concessions for timber, mining and oil exploration has allowed the companies to benefit at the expense of the West African nation still recovering from civil war a decade later. It was not immediately clear how those contracts the audit found to be improper might be affected.

Alfred Brownell, who serves on the board of the national resource transparency watchdog that ordered the audit, said late Thursday that only two of the 68 contracts reviewed were found to be in compliance with Liberian law.

"In Liberia we have a history of how resources have fueled conflicts," he said. "If you don't put in place the appropriate governance mechanisms to ensure that our resources will be awarded transparently and accountably and the benefits will flow and accrue to ordinary Liberians we will continue to have these same kind of issues."

Liberian Information Minister Lewis Brown said Friday that the audit report being circulated was only a draft, and that the auditing firm had yet to issue its final evaluation.

"The report proceeds to confirm a lot of things we already are aware of and have begun to take some steps," he told The Associated Press. "That's why I need to emphasize it is a draft because it makes additional inquiries of the government and the relevant agencies of the government are responding to those inquiries."

Oliver Courtney, a campaigner with Global Witness, said the fact an audit was being conducted was a welcome step, but he urged the government to take further action.

"If the Liberian government is serious about turning the page on the past and using natural resources to improve the lives of its citizens rather than enrich the corrupt, following laws and prosecuting government officials and companies who violate them is the first and most basic step," he said.

"The establishment of rule of law and accountability should be Liberia's No. 1 priority; this could make or break the country's future."

Brownell, an environmentalist and board member for the Liberia Extractive Industry Transparency Initiative, known as LEITI, estimates that the hasty and inappropriate awarding of concessions to multinationals covers $8 billion. That's about half of the direct foreign investment Liberia has attracted since 2009 under the government of President Ellen Johnson Sirleaf.

The Nobel Peace Prize winner has been credited with expanding Liberia's economy, which is still recovering from 14 years of civil war that ended in 2003.

"We realize the capacity shortfall -- it grows out of our conflicts. It is not going to disappear overnight," said Brown, the information minister. "We admit to the capacity gap we feel."

Despite its poverty, Liberia is rich in timber and companies are also conducting oil exploration projects. Activists have raised questions, though, about how the growth is impacting the country.

Last year, Global Witness documented how so-called "private use permits" have enabled logging companies to claim over 40 percent of Liberia's forests in just two years. The permits were intended to allow private land owners to take advantage of their forest resources.

The three-month audit was conducted by the UK-based accounting and auditing firm, Moore Stephens. It was hired by the Liberian government through LEITI, which is jointly run by the government and non-governmental organizations.

[Associated Press; By JONATHAN PAYE-LAYLEH]

Associated Press writer Krista Larson in Dakar, Senegal contributed to this report.

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