United Nations Security Council resolution 1343 (2001) adopted on 7 March 2001 proposed sanctions on Liberia unless it could show, by 7 May 2001, that it is not supporting the Revolutionary United Front (RUF) rebels in Sierra Leone. Concern that Liberia's President Charles Taylor has not ceased to support the group is reflected in the First Report of the Secretary General pursuant to the Security Council resolution 1343 (2001) regarding Liberia and some believe that the country will face restrictions as outlined in the resolution.
Global Witness received, in late April, a document from an anonymous source outlining how Liberia is currently active in the diamond and arms trade. The document provides names of those involved as well as the dates, nature and route of transactions. Because Global Witness has not had time to verify the information provided in the document, the information is not detailed in this update. Instead, the transcript has been forwarded to His Excellency Mr Kishore Mahbubani, Chairman of the Security Council Committee, established pursuant to resolution 985 (1995) concerning Liberia.
Liberia's timber industry is actively involved in this illicit trade. Paragraph 49 of the Report of the Panel of Experts appointed Pursuant to UN Security Council Resolution 1306 (2000), Paragraph 19 in Relation to Sierra Leone highlights the active role of the forestry industry in regional insecurity and thus the importance of considering an embargo on Liberian timber exports . However, Resolution 1343 (2001) excludes restrictions on Liberian timber exports. Global Witness maintains that, for a real and effective solution to escalating regional insecurity, an embargo on the exportation and transport of Liberian timber, and its importation into other countries as well as an investigation into the Liberian timber industry must be imposed.
Left as it is, the strong link between the timber industry, President Charles Taylor and regional conflict will remain intact. Global Witness believes that this will undermine UN efforts to bring peace and security to the region.
Several players in the timber industry have been directly implicated in illicit transports to and from Sierra Leone . Furthermore, some of these individuals are also members on the board of the Liberian Forestry Development Authority (FDA), the government body assigned to monitor and document forest practices and exports. This relationship between the timber industry, the Liberian government and support of the RUF reflects the fact that the RUF will continue to receive support unless relevant sanctions are introduced.
Gus Kouwenhoven, Chairman of the Oriental Timber Company (OTC) and Managing Director of the Royal Timber Corporation (RTC), who the Sierra Leone Expert Panel Report stated as "responsible for the logistical aspects of may of the arms deals involved in arms trafficking between Liberia and Sierra Leone", is on the board of the FDA .
Talal El-Dine, a Lebanese businessman, is also on the Board of Directors of the FDA. The following was said of him in the Sierra Leone Expert Panel Report: Liberians fighting in Sierra Leone alongside the RUF, and those bringing diamonds out of Sierra Leone are paid by him personally. The pilots and crew of the aircraft used for clandestine shipments into or out of Liberia are also paid by El-Ndine.
Also, President Charles Taylor's brother, D. Robert Taylor is managing director of the FDA.
The Strategic Commodities Act - which gives President Charles Taylor official stranglehold on Liberia's resources – was passed into law in mid-2000 without proper legislative procedure . This law provides President Charles Taylor with "the sole power to execute, negotiate and conclude all commercial contracts or agreements with any foreign or domestic investor for the exploitation of the strategic commodities of the Republic of Liberia" (see ANNEX I: Strategic Commodities Act - page 6 ).
These factors reflect both the importance of the forestry industry to President Charles Taylor and a tightening stranglehold facing Liberia's natural resources and revenue derived thereof. Liberia's President will not give up this important source of revenue voluntarily just as companies such as OTC and RTC will not voluntarily give up economically lucrative operations in Liberia.
Gus Kouwenhoven, chairman of the OTC, is also affiliated with other concession companies such as the Royal Timber Corporation (RTC), where he acts as Managing Director. It is probable that timber logged by RTC has several â€˜aliases' in order to obscure actual origin, production and export.
The illicit trade that Gus Kouwenhoven is involved in through the OTC is referred to in the Sierra Leone Expert Panel Report . His involvement means that it is highly likely that RTC is involved in regional insecurity, financing President Charles Taylor and aiding in the shipment of arms to the RUF in the same way as OTC. A Global Witness investigation to France in late March found an abundance of RTC logs. However, given the possibility of RTC assumed names, the likelihood is that French imports of timber logged by RTC is greater that it appeared. One importer admitted to doing business with RTC while another importer, with several RTC logs in his holding area denied knowledge of both RTC and Gus Kouwenhoven.
RTC's concessions in Lofa County are in areas close to and indeed directly affected by the Guinea conflict. Any logging operations in this area require significant armed protection and, by default, this means only those companies closely connected to Gus Kouwenhoven and allied to Taylor can operate here.
There remains limited available data on the Liberian timber industry because of its financial importance to President Charles Taylor and its direct role in transporting arms to the RUF rebels in Sierra Leone. The only comprehensive data available is contained in the FDA reports, but the FDA does not have access to all areas and receives little government funding. The numbers presented by the FDA should be treated with caution, although there are grounds to accept some of the statistics as good indications of the real situation.
The FDA figures identify that China and France are the main importers of Liberian timber, which almost certainly reflects why they were the main objectors to the imposition of timber sanctions. Furthermore, Global Witness' observations at French ports in April 2001 suggest that Liberian imports make up a significant percentage of total French imports of tropical timber.
The FDA semi-annual report covering the period from January to June 2000, reported that in those six months, production, estimated at 679,352.76m3, was more than that of the previous four years put together. The report states that just less than half of this was exported. However, Liberia is unequipped to cope with processing timber locally and 99% of production is likely to have been exported .
As the number of saw-mills is minimal in Liberia, export is mainly of round logs and was estimated at 342,523.107m3 for the same 6 month period. The five principle direct importers of Liberian timber (for the full list see ANNEX II: Actual Export by Destination – page 9) were:
- China at 46.4% of total export
- France at 17.9% of total export
- Italy at 9.3% of total export
- Korea at 3.8% of total export
- Turkey at 3.7% of total export
FDA figures show that exported Liberian sawn timber went to:
- France at 51.4% of total export
- Spain at 34.7% of total export
- Italy at 13.9% of total export
FDA figures show that OTC produced the most round logs at 57% and also exported the most at 54% of total export of round logs (see ANNEX III: Actual Export per Company - page 10). OTC has now almost completely stopped cutting undersized logs indicating that their exports are likely shifting from going to Asia, where demands on quality are low, and moving to accommodate an increasing European import market .
Furthermore, the following infringements by the OTC have been reported:
- There is no indication that OTC is paying either the FDA or the National Treasury required fees or taxes.
- There are no indications that the OTC is fulfilling reporting requirements.
- OTC is yet to build a plywood factory as required.
- OTC has become involved in importing and shipping goods within Liberia and is now the importing agent for government contracts, including ones financed by the international community.
- OTC has bulldozed through villages with little or no warning and without compensation to the displaced people.
- Reforestation efforts are few and haphazard.
- An OTC contractor and a Fulani businessman were executed and put on display in OTC's main base camp after being suspected of stealing diesel. This reflects OTC's disregard for human rights, its neglect of laws as well as the implausibility that OTC would follow forestry management regulations.
It is evident that the forestry industry, particularly companies affiliated with Gus Kouwenhoven, is helping arm and prolong conflict in the region and will continue to do so unless it faces restrictions. Similarly, as long as President Charles Taylor has access to revenue generated from this industry, it is unlikely that regional stability will be a reality. Human rights abuses, loss of income to the Treasury as well as a rapidly dwindling forest is what Liberians face with the industry as it is today.
Global Witness stresses that it is imperative for the UN Security Council to not only impose the proposed sanctions of 7 March 2001, but also to impose an embargo on the export, import and transport of Liberian timber. In order to ensure that the industry does not continue to play an active role in the continuation of the conflict, it would be essential for such measures to remain in place until it could be demonstrated to the UN that the industry neither fuels the conflict nor supports President Charles Taylor and that it is carried out in a transparent manner.
AN ACT TO DESIGNATE CERTAIN NATURAL RESOURCES, MINERALS, CULTURAL AND HISTORICAL ITEMS AS STRATEGIC COMMODITIES
WHEREAS, consistent with Article7 of the Constitution of the Republic of Liberia, the Government is obliged to manage the economic and natural resources of Liberia in such manner as shall ensure the maximum feasible participation of Liberian citizens under conditions of equality so as to advance the general welfare of the Liberian people and the economic development of Liberia; and
WHEREAS, Article22 of the Constitution guarantees the individual the right to own real property and limits said right only to that which is above the surface and therefore the Constitution provides that private property rights however shall not extend to any mineral resources on or beneath any land or to any lands under the seas and waterways shall belong to the Republic and used by and for the entire Republic; and
WHEREAS, Certain unscrupulous individuals and entity persistently and consistently, extracts, mine, exploited, sell and exports the strategic Commodities, Natural Resources and Minerals of Liberia without just compensations or benefit to the Republic of Liberia by evading custom, taxes and revenue collectors to the Economic, Political and social detriment of the nation.
Wherefore and in view of the above:
IT IS ENACTED BY THE SENATE AND THE HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF LIBERIA, IN LEGISLATURE ASSEMBLY
Section 1. Title. This Act may be cited as the strategic Commodities Act.
Section 2. Definition: Immediately upon passage of this Act, strategic Commodities as used herein this Act, hereby defined and referred to as Natural Resources, Minerals, Cultural and Historical items which are of vital importance to the Nations' Economic, Social, Political and Cultural values and well-being of Liberia. Accordingly, the Strategic Commodities of Liberia include among others, the following:
(a) All mineral resources particularly, GOLD, DIAMOND, HYDROCARBON and any other finite Natural Resources Deposit such as, Natural Gas, precious mineral, metals and stones, now discovered or to be discovered in the future, which have economic and commercial value; and may be marketable domestically and internationally.
(b) All Natural Forest Resources particularly forest products such as Logs and Timbers and other unique and rare species of vegetation and tree common and indigenous to Liberia.
(c) All unique and rare sculpture, Arts and Artifact, Handiwork and Hand Crafts of historical, cultural, social, spiritual and economic value to the Republic of Liberia.
(d) All food and agriculture products, such as rice, coffee, cocoa, rubber and sugar, marine life as well as rare and unique species of wildlife and fishery such as fish, animal and birds indigenous to Liberia.
(e) The appropriate and applicable statutes, regulations, special agreements or guidelines now in effect or which may hereafter be promulgated shall govern the exploitation, sale or export of any strategic commodity. In all instances, whether by special agreements, statutes, regulations or guidelines, the exploitation, sale or export of any strategic Commodity must confirm to Section 4 of this Act.
Section 3 Empowerment: The president of Liberia is hereby empowered to declare and designate from time to time, when deemed fit and necessary, any Natural Resources of Liberia, in addition to the forestalled resources herein declared, by this Act, as Strategic Commodities. When a commodity is declared by the president as Strategic Commodity, such declaration shall conform to and be consistent with, domestic laws and regulations; and shall not otherwise impair or adversely affect existing agreements or rights granted by an Act of the Legislature up to the date of expiration of said rights or agreement.
The president of the Republic of Liberia is hereby granted the sole power to execute, negotiate and conclude all commercial contracts or agreements with any Foreign or Domestic Investor for the exploitation of any of the Strategic Commodities of the Republic of Liberia. Such commercial agreement shall become effectively binding upon the Republic as would any treaty to which the Republic is a party, upon the sole signature and approval of the president of the Republic of Liberia.
Section 4 Declaration: Immediately upon passage of this bill, strategic commodities as defined and referred to above, such as Gold, Diamond, Forest Products and other Natural Resources which provide substantive Economic, Social, Political, Spiritual and Historical benefits to the Nation and people of Liberia, are hereby declared, Strategic Commodities and property of the Nation and people of Liberia and are protected as such by this Act and other applicable statutes.
Section 5 Classification: Strategic commodities are hereby divided and classified into four categories:
(i) Natural mineral Resources: (Metal, Stones, Gas and Hydrocarbon)
(ii) Forest Products (Logs, Timbers, Scientific plants and Wildlife)
(iii) Agriculture and fishery products(Coffee, Cocoa Rice, Rubber ,Palm oil, Shrimps, fish and piassawa)
(iv) Arts and craft including scruptures, paintings and traditional handcrafts
Section 6 Exploitation, Scale or Export of Strategic Commodities handcraft: The appropriate applicable statutes, regulations, agreements or other guidelines now in effect or which may hereafter be promulgated shall govern the exploitation, sale or export of any strategic commodity.
Anything to the contrary not withstanding, in order to meet and encourage domestic industrialization and industrial and personal demands for raw material, development and growth, as the case made be, export and or exploitation shall be allowed only after the domestic demands and or quota have been met or fulfill.
In any and all instance, permit to export and or exploit any and all strategic commodities shall be granted only if the industrial requirement for manufacturing, refinement and processing the raw products into finish or value added products and personal domestic consumption are met or fulfill. In the instance there is domestic industrial demand and or domestic consumption demand, all domestic demands shall have first preference and the right of first refusal or choice to buy at competitive world or domestic market price, whichever is lower; prior to export or the granting of any export or exploitation permit. The Republic of Liberia shall have the right to require all persons or companies engaged in the exploitation of the Natural Resources of Liberia hereto declare declared and called strategic commodities, to construct such factory or industry to process the raw material of the strategic commodities, into finish or semi- finish or value added products.
Section 7 Penalty: A person or entity who violates any provisions of this Act, or violate any of the applicable rules and regulations governing or appertaining to said commodity has committed Economic Sabotage, a first degree felony, if he/she or it illegally conduct any business dealing in any of the Natural Resources designated and declare as Strategic commodities of the Republic of Liberia. A Violation of this act or any applicable rules or regulations governing the strategic commodities of the Republic of Liberia is punishable under Chapter 15, Sub-Chapter F Economic Sabotage, as provided in the Panel Law of Liberia.
For the purpose of prosecution under this Act or the panel Code of Liberia, illegal business dealing in any of the strategic Commodity shall mean and include among other:
(a) The prospecting, Mining, Exploitation, Selling and buying Natural Mineral such as Gold, Diamond, Copper, Petroleum and Stones or Hydrocarbon without proper license and clearance from the authorized agency of government.
(b) The unauthorized Cutting, Sawing, and Selling of Timbers, Logs and other forest products; as well as Buying, Hunting Exporting and selling protected birds and wildlife of Liberia.
(c) The marketing including the Exportation and importation of Agriculture commodities such as Coffee, Cocoa, Rice, Rubber and vegetable oil without proper license and permit from the authorizing agency of government;
(d) Trading and exporting out of Liberia, the Historical Arts and Handicrafts of Liberia.
Section 8 Effective Date: This act shall come immediately into effect upon passage by the Legislature and subsequent publication into Handbills.
|Destination||Export Volume (m3)||FOB (USD)||%|
|Cross Border Trade|
|CROSS BORDER TRADE|
(1) This document is an update to the report submitted
by Global Witness to the United Nations Security Council in January 2001
(2) This document will be referred to throughout as "Resolution 1343 (2001)"
(3) Panafrican News Agency; Liberia May Not Escape UN Sanctions; April 22, 2001
(4) This document will be referred to throughout as "The Sierra Leone Expert Panel Report"
(5) Paragraph 49. The principals in Liberia's timber industry are involved in a variety of illicit activities, and large amounts of the proceeds are used to pay for extra-budgetary activities, including the acquisition of weapons.
(6) Consideration should be given to placing a temporary embargo on Liberian timber exports, until Liberia demonstrates convincingly that it is no longer involved in the trafficking of arms to, or diamonds from, Sierra Leone.
(7) The Sierra Leone Expert Panel Report FDA Semi Annual Report; January - June 2001
(8) Anonymous source, April 2001
(9)Anonymous source, April 2001.
(10) "Gus Van Kouwenhoven is responsible for the logistic aspects of many of the arms deals. Through his interests in a Malaysian timber project in Liberia, he organises the transfer of weaponry from Monrovia into Sierra Leone. Roads built and maintained for timber extraction are also conveniently used for weapons movement within Liberia, and for the onward shipment of weapons in Sierra Leone"
(11) Anonymous source, April 2001
(12) Anonymous source, April 2001
(13) Anonymous source, April 2001
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