Home Economy On Its US$2.6 Billon MDA Pact: China Union’s Woes Deepened… Probe Outcomes Unravel Loopholes, Dangers of Concession Operations

On Its US$2.6 Billon MDA Pact: China Union’s Woes Deepened… Probe Outcomes Unravel Loopholes, Dangers of Concession Operations

by News Manager

MONROVIA: The House of Representatives Committee on Lands, Mines, Natural Resources and Environment, headed by Maryland County District-#1 Representative, P. Mark Jurry, has released findings of the investigation of China Union Investment (Liberia) in the former Bong Mining Company Concession, LTD Mineral Development Agreement (MDA).

Representative Jurry said, during a facts-finding mission to China Union in Fuamah District in Bong Mines, lower Bong County, they toured the company’s facilities including Bong Mines Hospital, factory construction site, storage facility, where Liberians and the company’s employees are living.

According to the China Union MDA, the company is not complying with Sections 5.4 and 5.6 including 5.5 of the Mineral Development Agreement which have to do with the production of the Social Action Plan.

He said Section 6.6 states that no later than two years after the effective date of signing the MDA, the concessionaire shall complete renovation of all existing roads in the Nongoma area. However, the company failed to do the road.

Representative Jurry told the public that China Union is not in compliance with the followings; Section 6.11 insurance; Section 8.1 consultation with government and the communities around the concession area; Section 9.1 public health and safety; Section 10 healthcare; Section 11.1 employment training and production; Section 11.2- training of Liberians; Section 12, use of Liberians goods and services; Section 13.1, environmental protection and management; Section 13.2, annual environmental audit has not been conducted; Section 13.3, government environmental inspections; Section 15.4, surface rental fees have not been paid; Section 15.5, other support specifically for scientific research, fund has not been paid; Section 19. 3, electricity generation and transmission within the concession area.

“More to that, we discovered new developments which are not in the MDA. These new issues have to do with the construction of the factory. In our opinion, China Union will give us a redress to this finding. We think the factory that has been constructed is full time more than the existing factory that is there or should have been there. We also found out there is a company called ‘CGGS’. It is in the premises of China Union but they told us that they don’t have anything to do with the company. This company imports chemicals that are used to blast rocks and other things. But other information that we have verified from the citizens, China Union is denying. It is good to state it for the record that this company is selling the chemicals to other companies in and outside of Liberia,” he disclosed.

Representative Jurry continued: “We also saw another company out there called ‘TST’, we don’t know the meaning but China Union will let us know. TST is presently harvesting iron ore from a swamp that was being used by the former Bong Mining Company (BMC) and in that swamp, there are quality iron ores which China Union, through TST, is now harvesting. According to information and discovery, they have made two shipment outside of Liberia”.

Meanwhile, the Committee proffers several recommendations out of the findings and categorized them into three segments which are the immediate, medium- and long-term remedies.

It also informed Plenary of the House of Representatives that the Chinese mining company must comply within six months.

Accordingly, the Lawmaker mentioned the following as immediate recommendations to the company; the immediate commencement of all social security remittances to fulfill section 6.11 which states Insurance and Proof of Payment shall be presented to Plenary or the House of Representatives within a timeframe of one month and the rehabilitation of roads within the Concession areas should be done within the first six months.

“To fulfill Section 8.2 which states community funding obligations with immediate effect, China Union must provide the annual social contribution of US$3.5 million which shall be managed and disbursed for the benefit of Liberians for the past years they operated without payment, they must pay. Within two weeks, they must also provide Personnel Protective Gears (PPEs) like gloves, jackets and boots for the workers.

During the facts-finding mission, “we were given only helmets. We received no boots or jackets. The safety of lawmakers was jeopardized and we realized that PPEs are not given to the employees. So, in two weeks, we are asking them to provide safety protective gears to all the people who are working up the mine. In fact, in the concession areas up the mines, there are other areas that should be marked ‘dangerous’ but no danger and safety signs are there. We were there and we asked them to do that in two weeks,” he stated.

“China Union in three months should renovate the hospital at Bong Mines in fulfillment of Section 10 which has to do with medical care, which also states that medical services should be provided free of charge for the employees and their residents’ spouses and dependents. They should support the hospital. There are no x-ray or ultra sound machines. We are not just asking you to go and renovate, we are saying make it functional and let it be to the point where Chinese can also go to the hospital with satisfaction like Liberians because it’s good for the concessionaires, employees, their spouses and families who are around there,” he further recommended.

Moreover, according to Representative Jurry, the Committee recommended that immediately within the period of three months, China Union must employ Liberians within senior management positions to satisfy Section 11.1 which states employment training and production.

“What is in the MDA quotes that the parties shall agree on progressive implementation of employment schedule so as to call citizens of Liberia to hold at least 30% of all management positions including 30% of its most senior position within five years or the effective date of commencing the MDA and at least 70% of all management positions including 70% of the ten most senior position at company within 10 years. It is after ten years, we didn’t see perhaps somebody is there but we requested and they have given us list of employees and we studied it and found out that there is no Liberian within the senior management of the company. So, we asked of that within three months. China Union should take over support and manage the high school because it is in the MDA as well as manage the district vocational school,” Representative Jurry said.

“Within a month China Union must comply with the payment of all monies owe to the communities in line with Section 15.4 surface rent of the MDA, the Lawmaker added.

The payment shall be per year US$100,000.00 for the first ten years and after effective date US$250,000.00 for the next 15 years. Within a month, they must also comply with the payment according to Section 16.5 order support which refers to scientific Research Fund and they shall make an annual contribution of US$100,000.00, according to the MDA. We did not see any document or reference to this term and must pay that money to the government. Within two weeks they shall similarly provide safe drinking water to all Liberians working in the mines likewise they are providing safe drinking water for Chinese working in the mine. This is totally unacceptable that Liberians working in the mine are drinking from creeks while Chinese are receiving safe drinking water in bottles. The same treatment should be given to Liberians because they are all the same”.

He noted “China Union be May to produce the subcontract that they have given to all of the companies operating out there including TST and CGGS”.

Representative Jurry mentioned that the Ministry of Mines and Energy and China Union, in fulfillment of Sections 5.5, 5.4, 5.5, 5.6 will conduct a Social Impact Assessment that will lead to the production of the Social Action Plan, INDICATING WHAT THEY are going to do in subsequent years with the communities, emphasizing that they will ensure that China Union, Bureau of Concessions, and the National Investment Commission (NIC) as well as the House of Representatives work together to deliver the plan which will be comprehensive.

“In according to section 8.1, the government, China Union and the local communities affected by concession operation shall mutually establish another plan and program for implementation and in good faith, China Union shall cooperate with the government with regards to its efforts concerning the realization of such plan. We are not leaving it to China Union. The government will be involved and we will walk side-by-side in describing and working towards the achievement of these plans.

China Union MDA shall be reviewed. This Committee is saying it is time to review the MDA and that will be done after the six-month short term where we will sit around the table at a working session to give them a chance because they have been here, couples of years and there are things they want to see. We will sit around the table to review their MDA because that has not been done since the establishment,” he said.

For the long-term remedy, he stated that “Section 11.2 states training of Liberians subject to the operational needs and the economic conditions of China Union scholarship for qualified employees who are citizens of Liberia to pursue relevant advance study abroad must be put in place.

There must be a program that qualified Liberians if they have started it, perhaps by now, Liberians would have been in senior management positions or engineering but this has not been done and we are suggesting that a transparent scholarship scheme be publicized to avoid being bias.”

It can be recalled that Bong County District-#7 Representative Foday Fahnbulleh complained China Union to the Speaker and members of the House of Representatives over the gross failure to fully implement the Mineral Development Agreement at the disadvantage of citizens.

Representative Fahnbulleh’s communication to the 55th House of Representatives, dated February 13, 2024, stated that the Company is also in violation of the US$2.6 billion MDA that was signed with the Government of Liberia in 2009.

Representative Fahnbulleh told Lawmakers that China Union entered into an MDA on January 19, 2009, as a result of a general solicitation for bid proposal for the exploration and mining of iron ore deposits in the Bong Mines Community, issued by the Government of Liberia on January 23, 2008 in a document called the “Bong Range Tender”.

He informed the body that the MDA among other things provides for concessionaire to conduct Social Impact Assessment, develop a Social Action Plan, implement a Skills and Technology Development Plan, and renovate all existing roads in the concession areas including renovating, extending and building the Kakata to Handi Road.

He also stated that the Concessionaire, in keeping with the MDA is also responsible for providing an annual social contribution of US$3.5 million to communities within the Concession area as well as providing a general education funding of US$250,000.00 annually for scholarships, and operation of a Mining and Geology Institute at the University of Liberia.

However, based on Representative Fahnbulleh’s complaints, the company was cited to a hearing by the House Committee on Lands, Mines, Natural Resources and Environment, headed by Maryland County Lawmaker P. Mark Jurry.

The Committee instructed the Deputy Manager of the Company, Shen Yi Hong, to aid the committee with all necessary documents about the operations of the company as requested. Contributed by: Linda Gbartie.

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