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Grand Gedeh Bar wants review of Putu Mines agreement

The Grand Gedeh Bar Association (GGBA) on Thursday, petitioned members of the county’s legislators to push for the review of the Putu Iron Ore Mineral Development Agreement, which was signed some 10-years ago.

The Bar`s petition for a review is based on “Sections 31 Periodic Review” and “31.1 Profound Change in Circumstances” of the Agreement which state, “the Government on the one hand and the company on the other hand, shall meet once every five (5) years after the date hereof or earlier, if one party reasonably considers a Profound Change in Circumstances to have occurred, to establish whether or not a Profound Change in Circumstances has occurred.

To the extent that a Profound Change in Circumstances has occurred, the parties shall enter into good faith discussions to consider such modifications to this agreement as they may in good faith agree are necessary. The parties shall effect such modifications to this agreement that the parties agree are necessary.”

After seven years since Putu ceased operations, it is important to determine (1) whether the Agreement is still practically and legally effective; (a) that the company still holds a valid Class “A” Mining license and exploration rights over the designated production area in Grand Gedeh County and is (2) prepared to resume operations.

“Seven years is a substantial period of a 25-year contract to be left in suspense with the state of clearly outlined social development projects and contributions to project affected counties and mandated environmental assessments uncertain,” said Bar President P. Alphonsus Zeon, in a letter addressed to the Grand Gedeh County Legislative Caucus Chairman, Representative Alex Chersia Grant on August 31, 2020.

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Under the Agreement, Putu obligates to pay US$3,000,000 (three million United States dollars) to the people of Grand Gedeh, River Gee and Sinoe counties each year as social development contributions. The company now owes US$21 million since 2014 and nearly a quarter of a million in education and scientific research funding stipulated in the agreement to be paid annually (Section 8.2 a, b &c: Community funding Obligation).

Putu Iron Ore also contracted to build a two-lane paved all-weather road between Greenville and Zwedru, (6.6 Concerning Road Renovation) a railroad for both private and commercial operations and a general port with a capacity of 1 million metric tons of traffic per year (6.7 a, f Concerning Railroad and Port Construction and Operations).

The Agreement obligates the Company to construct a hospital facility, providing a wide range of curative and preventive services supported by a small laboratory (Section 10 Medical Care).

The Agreement additionally provides for the employment of Liberians, holding that within the first five years as of the Agreement coming into effect, the Company shall hire at least 30 percent of Liberians in all management positions, including 30 percent of its ten most senior positions (Section 11a, b, c, d Employment, Training and Education).

Atty. Zeon said aside just the failure of the company to pay agreed community funding and undertake the outlined projects as stipulated in the Agreement, the Bar is concerned about the potential of an environment impact on the lives of the people of the region and their livelihoods.

In Section “13.2 Environmental Reports and Audits”, the Agreement mandates the company to submit an environmental audit and assessment of the production areas under such license plus all areas outside of the production areas in which the Company conducts Operations.

The Agreement provides that the audit and assessment are for the purpose of determining whether operations since the beginning of the relevant period the subject of the audit are being conducted in conformity with the applicable environmental law and the other requirements of this agreement and the companys approved EMP (Environmental Management Plan). Such audit and assessment will also include an assessment of the state of the Companys provision for the restoration or remediation of the production areas and such other areas in which the company conducts or has conducted Operations and its conformity with the requirements of the approved EMP.

Consistent with the provision on environmental assessment, three environmental assessments and audits have not been carried out since 2014, assuming that Putu submitted environmental assessment reports for the five years it operated before closure.

The Grand Gedeh lawyers are concerned that in the absence of money and roads, the people of Grand Gedeh, mainly those in the immediate vicinity of the production areas and outside of the production areas are entitled to an environment that supports productive life, free of environmental threats.

The Bar in its review of the 166-paged Mineral Development Agreement, found several other provisions constituting transfer of control, relinquishment and events of company default.

Notwithstanding, the findings in the Agreement of sufficient basis for the Government of Liberia to pursue a course of termination for default, it’s the view of the Grand Gedeh Bar Association that a meeting of the parties is still essential to review the agreement and reach a consensus in the best interest of the project affected communities, Government of Liberia and the Company and its shareholders.

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