Africa

Liberia: Counselor Seward Cooper Reacts to Special Presidential Committee Report on Liberian Oil Block # 13

Thursday, July 12, 2018 Monrovia, Liberia

Political Map of Liberia

Political Map of Liberia

Having returned from extensive overseas travels, to preserve the facts records for the records, I take this opportunity to formally respond to the Special Presidential Committee Report (SPC or the Report) on the Global Witness Report about the Liberian Oil Block # 13 Production Sharing Contract (PSC) between the National Oil Company of Liberia (NOCAL) and ExxonMobil.

The Report contains several false and sweeping statements.  The Report is neither fair nor balanced in its examination of facts. It appears hastily put together, without the due diligence merited for such an undertaking.

As a result, the President and the public have been presented a document replete with errors, innuendos, and aspersions that impugn the reputations of honest and dedicated public servants. It does a disservice to the presidency, to the country, and to those looking for accountability in governance.

Here are some examples.

Negotiating an unprecedented signing bonus for Block 13

I was not a member of the NOCAL Board in April 2013, as reported, when the Board deliberated, approved, and caused to be paid bonuses in recognition of “the unprecedented international success and gain Liberia realized out of the intense and very lengthy negotiations with ExxonMobil.” At that time, I was a member of the Hydrocarbon Technical Committee (HTC) and participated as a lead negotiator in the transaction. My appointment to the NOCAL Board was much later in 2014.

As we prepared for the negotiations, the team was instructed to seek no less than US$27 million from ExxonMobil and its partner for LB-13.  We negotiated an unprecedented US$50 million bonus for the country. The amount was an extraordinarily large signature fee for a block in a non-oil producing country.

Oil Block LB-13

Oil Block LB-13

In addition to the US$50 million, some other benefits accrued included:

  1. State (Liberian Government) participation which would have begun at commercial production.  This meant the government would not have had to pay costs for exploration, which sometimes could run as high as US$100 million or, when commercially viable oil is discovered, the costs for development which could cost over a billion of dollars.
  2. Citizen participation also at commercial production only.
  3. Free carry of costs by ExxonMobil and its partners during the exploration and development period.
  4. In the event of breach of contract by the Liberian Government, limitations on the assets of the country that could be targeted and levied against.

Predicated on these achievements, and we understood with the assent of Liberia’s President, the NOCAL Board of Directors decided to authorize and pay bonuses.  Lead members of the HTC negotiating team were given bonuses of thirty-five thousand US dollars each. As a lead negotiator, I too got such a bonus.  No member of the negotiating team, to my knowledge, worked anticipating these bonuses; nor did anyone demand money from GoL, Nocal, or any other party.

The bonuses were paid not by ExxonMobil or its partner, nor were they paid by a strange third party. They were paid directly by NOCAL, an instrument of the Liberian State, out of its own account.  The bonuses were authorized by NOCAL’s Board, which was expressly clothed with legal authority given to it under the NOCAL Act and the Liberian corporation laws by the Liberian Legislature.

The SPC Failures of omission and commission:

The SPC Report disregarded the ordinary meaning of the word ‘bonus’.  And in an attempt to support its conclusion, the Committee limited the term ‘bonus’ exclusively to employer- employee relationships by extracting a definition from an inapplicable Liberian Supreme Court labor case, and by forced reasoning tried to apply it.

Exxon Mobil Logo

Exxon Mobil Logo

Exxon

Exxon

The SPC mistook laws applicable to unlawful payments made by third parties to public servants for bonuses lawfully paid by public institutions to public servants. It is a rule of construction that laws are to be read and interpreted as a whole, not in isolation of other related provisions.

The SPC read Article 90 of the Constitution selectively not holistically. Otherwise, it would have understood that the HTC work was not an activity against public policy nor did it present a conflict of interest and was not constitutionally proscribed.  It was in furtherance of public policy and the public interest.  Public policy allows incentives by public agencies to public servants.  The rationale is to optimize service to the State. Several statutes support this.  Even the Act of Legislature that established the Liberia Revenue Authority supports the payment of incentives for collecting revenue according to targets.  Good governance encourages performance-based incentives.

The SPC read a section of the penal code and wrongfully concluded that a misdemeanor was committed. As a result, it also wrongfully recommended that board members who served during April 2013, should be forever barred from sitting on boards of public corporations. This is in excess of the punishment prescribed by the very statute for such a charge.

Cllr Seward Cooper

Cllr Seward Cooper

Moreover, the recommendation violates the Fundamental Rights provisions of Liberia’s Constitution. It contravenes established law as stated in the landmark Liberian Supreme Court decision in a similar matter that arose out of a similarly broad recommendation by the Truth and Reconciliation Commission (TRC).

Conclusion

Significantly, the SPC stated it found no evidence to support the Global Witness insinuation of bribery.  The SPC recognized that Global Witness’ main target was ExxonMobil.  But the wide publicity given the Global Witness report that implicates Liberia could negatively affect Liberia’s exploration efforts to find oil of commercial value.   

Moving forward, therefore, Liberians must objectively examine statements about our government, our fellow citizens, and our country.  Where we have defects, let us strive to correct them.  When we are on the right path, let us stay on course.  Let us not seek to diminish each other.  Above all, let us entertain a common dream and muster the will to make our collective dreams realities.

West African Journal Magazine