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Liberia: House Approves BAO CHICO Concession Agreement After Quashing Senate’s Version

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Capitol Hill, Monrovia – The House of Representatives has voted unanimously to approve its own version of the BAO CHICO Mineral Development Agreement it signed with the Government of Liberia for the extraction of iron ore in Gbarpolu County.

The same agreement had earlier been passed by the Liberian Senate and sent to the House for concurrence last November, but the House rejected to act on grounds that the Senate was in violation of Article 34d(i) of the Constitution of Liberia in approving the US$500 million agreement.

Article 34d(i) states that, “All revenue bills, whether subsidies, charges, imports, duties or taxes, and other financial bills, shall originate in the House of Representatives, but the Senate may propose or concur with amendments as on other bill. No other financial charge shall be established, fixed, laid or levied on any individual, community or locality under any pretext whatsoever except by the expressed consent of the individual, community or locality. In all such cases, a true and correct account of funds collected shall be made to the community or locality.”

During the debate, majority of the lawmakers argued that, with this constitutional provision, the bill should have originated from the House.

Rep. Acarous Gray (CDC, District #8, Montserrado County) who serves as the Chairman of the Committee on Executive, in a harsh tone, accused the Senate of usurping the Lower House’s function and urged plenary to write the Executive to forward all revenues bills including concession agreements and the National Fiscal Budget to only the House of Representatives, and not the Senate.

“The Liberian Senate, with all due respect, has no authority by the Liberian Constitution to act on a revenue bill and send it to the House as if to say this was a conveyor belt. In as much as we will not usurp their functions, we also don’t expect them to usurp our functions.” Rep. Gray said.

“It is about time that we also officially communicate to the Executive Branch of Government to submit these revenue bills directly and exclusively to the House of Representatives, and not the Liberian Senate. And subsequently when we shall have passed these revenue bills, the Senate may concur if it wishes to.”

Rep. Gray further noted that the decision of the Senate was unacceptable; given that it has two former Speakers (Senators Edwin Snowe and James Emmanuel Nuquay), a deputy speaker (Senator Prince Moye) and scores of former members of the House of Representatives, as well as veteran lawmakers who should advised it when they are proceeding wrongfully.       

The Senate described described the House’s action as demeaning and voted to seek the intervention of the Supreme Court to interpret the law. However, it is unclear whether the Senate has acted on the threats, as there is no suit record at the Supreme Court of such and whether they will back it with non-concurrence.

What’s in the Agreement

The Class A mining agreement is for an initial term of 25-years of investment of US$500 million, aimed at improving the country’s economy, creating job opportunities, and scholarships for citizens as part of its support to the Government’s Pro-Poor Agenda for Prosperity and Development (PAPD). 

However, the Chinese company and the government are yet to state the total number of jobs the concession is expected to create. It is expected to bring in an annual social contribution of US$300,000 and, after five years, escalate to US$500,000 until the end of the term; and an additional US$10,000 for Gbarpolu County as General Education Funding, while US$50,000 will be provided annually as Scientific Reserves Fund.

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