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

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Front Page Africa

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.

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.

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

"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.

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

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

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.

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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