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ADNews-Monorovia,Liberia:Concerns have emerged over the third amendment to the Arcelor-Mittal Steel Agreement, as two international research institutions have been requested to determine Mittal’s fate in line with Liberia’s sustainable development goals.
The Liberia Bi-Partisan Legislative Caucus on Illicit Financial Flows and Taxation commissioned the Columbia Center on Sustainable Investment (CCSI) and the International Institute for Environment and Development (IIED) to prepare a memo analyzing the amendment ahead of its ratification by the National Legislature.
According to the document obtained by Afric Daily Newspaper, the memo provides a high-level analysis highlighting critical issues that warrant deeper scrutiny from a public policy and sustainable development perspective.
Fiscal Concerns
The memo warns that duty and fuel import exemptions could harm domestic industries while incentivizing fossil fuel dependence. It further argues that open-ended tax breaks would reduce transparency and deprive the state of long-term revenues.
Recommendation: Replace fuel import exemptions with obligations to assess and develop renewable energy solutions. Tax incentives should be time-bound, transparent, and balanced against long-term public benefits.
Local Content
The analysis notes that employment and procurement targets lack evidence-based foundations and enforceable mechanisms, creating opportunities for corruption and “fronting.” It also highlights the absence of safeguards to ensure that Liberian goods and services are prioritized.
Recommendation: Make training and skills transfer central to the agreement, aligned with Liberia’s national economic transformation goals. Base procurement targets on actual company needs versus local capacity, shift the burden of proof to the company when bypassing local suppliers, and include anti-fronting clauses.
Environmental and Social Impact Assessment (ESIA)
The memo observes that the amendment does not require an ESIA or management plan for expansion activities, despite their potential to create significant new impacts.
Recommendation: Mandate a comprehensive ESIA and management plan for all expansion activities and major operational changes.
Climate Resilience
Critics point out that the agreement ignores climate change risks, creating room for ArcelorMittal Liberia (AML) to misuse the force majeure clause to escape obligations during foreseeable climate-related events.
Recommendation: Require climate risk assessments and adaptation measures. Climate resilience should be incorporated into mine design, operations, and closure plans. Foreseeable climate-related events should not qualify as force majeure.
Community Development Fund
The report highlights that affected communities have been excluded from decision-making on the use of the Community Development Fund. Control of the fund is largely held by the company and the government, with little accountability. Additionally, the fixed contribution model does not adjust to company profits.
Recommendation: Guarantee community participation through multi-stakeholder committees—including women, youth, and vulnerable groups. Tie contributions to production levels or profits to ensure fair benefit-sharing.
Compensation for Affected Communities
The third amendment remains silent on compensation for land loss and other project impacts. The original contract limited compensation to landowners, excluding communities with customary or usage rights. This, the memo stresses, falls short of international best practices.
Recommendation: Expand compensation provisions to cover all forms of tenure, including customary rights. Adopt international standards to avoid forced evictions, provide replacement land, and ensure full, fair compensation through transparent, community-inclusive processes.
The memo concludes that while the third amendment seeks to advance Liberia’s economic interests, its current provisions pose serious risks to fiscal sustainability, environmental protection, community rights, and long-term development.
The Bi-Partisan Caucus is expected to present the findings to the National Legislature before the agreement is put to a vote.
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