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LIBERIA: Corrupt Local Officials Complicity - 2011 Threatens Mittal Social Development Fund

by Samwar S. FallahFront Page Africa
June 10th, 2010

There are growing fears ahead of the pending 2011 general and presidential elections that funds provided by world leading steel giant Arcelor Mittal as Social Development Fund could be used to finance the campaign of politicians in three counties-Bong, Nimba and Grand Bassa Counties.

Already in Nimba, the county has over US$3 million stock up at the bank while bickering continues over how to use the money and there are indications that politicians are using tactics to delay the use of the money to enable them utilize it for political campaign in 2011.

Three civil society organizations Sustainable Development Institute from Liberia,  Friends of the Earth Europe and Global Action on ArcelorMittal (GAAM, a coalition of civil society groups tracking ArcelorMittal operations worldwide have raised fears that funds provided by the company are making no impact in the counties.

According to the Mineral Development Agreement, ArcelorMittal is obliged to provide approximately US$73 million over the 25 year span of the agreement to support socio-economic development in Liberia via CSDF – US$3 million on an annual basis to three counties most affected by company operations.

In a report, the conglomerate of local and international civil society organizations raised issues about the complicity of the company in the usage of funds it is providing to the three counties.

The report raises critical questions about the company’s complicity in the misuse of the first tranche of approximately US$4.7 million County Social Development Fund in Liberia and warns that the Fund could be stolen and misused by politicians in charge to support their upcoming election campaigns in 2011.

“Instead of the Fund contributing to the government’s efforts to meet the objectives of the Poverty Reduction Strategy, it is apparent that the Fund has been turned into a cash cow for corrupt local officials and their agents. ArcelorMittal and the government of Liberia must investigate the misuse of the funds and hold those responsible to account”, Silas Siakor from the Sustainable Development Institute in Liberia said.

Both the government of Liberia and ArcelorMittal share equal oversight responsibility for the Fund and the government cannot release any money from the Fund without ArcelorMittal’s approval, the agreement reached between the Government and Mittal provides.

Paul de Clerck, Economic Justice Coordinator for Friends of the Earth International, speaking on behalf of Global Action on ArcelorMittal said “GAAM demands that the Liberian government and ArcelorMittal commission a forensic audit of the Fund’s operation, make public last year’s assessment of the fund, halt further release or appropriation of funds until the above audit and assessment have been completed and the recommendations implemented.”

The report also questioned the donation of 100 pickups by Mittal to the National Legislature sometimes ago.

“By donating 100 pick-up trucks to the government of Liberia the company has also breached the OECD Guidelines for Multinational Enterprises. ArcelorMittal donated the vehicles in a response to direct request made by the President of Liberia that the company provides pick-up trucks for agricultural purposes. The trucks ended up in the hands of Liberia’s politicians”, the report stated.

“Despite all of ArcelorMittal CSR rhetoric in Liberia the company gave in to the demands of public officials and donated vehicles that are not even used according to their initial purpose. This donation and the subsequent inaction to solve the issue prove that ArcelorMittal is still far from adhering to the CSR practices it claims to follow”, Darek Urbaniak, extractives campaigner for Friends of the Earth Europe noted.

The full report is expected to be release soon, the three groups stated.

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