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China Union’s Broken Promises: Unpacking the Discontents and Neglects by the So-Called 2.6B “Single Largest Investment”

Currently, the old Bong Mines Housing units remain in ruin. Forest has completely taken over the once cherished dwelling places, and some of the units are used for open defecation due to lack of repair. Unlike what the steel giant, ArcelorMittal, has done with renovation of housing units left behind by LAMCO in Nimba County, China Union has not mustered the will to renovate the dilapidated housing units at the old Bong Mines facility.
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By: Wremongar Joe & Joseph Tumbay

Bong Mines, Liberia: – Amid Liberia’s rich resources, over half (51%) of its population live in poverty (on less than USD1.90), with many struggling to afford meal a day for meals, that according to the World Bank.

Among the various natural resource deals that have left the country underdeveloped, the Chinese multi-million-dollar iron ore mining company, China Union, continues to create sour relationships with locals in its operational sites in Bong County, Central Liberia.

Villagers are angry that the Mineral Development Agreement (MDA) signed between the company and the Government of Liberia is being grossly violated by the Chinese Mining Conglomerate.

They say section 6b and c of the Mineral Development Agreement, which focuses on the renovation of all existing roads in the Non-Goma Deposits Area (that is, the “non-Goma Roads”), has not materialized.

This section of the agreement was agreed upon by the company to be implemented no later than two or five years after the effective date of the signing of the agreement. The China Union MDA with Liberia took effect in November 2009

Provisions of the Modified Bid Material in the China Union MDA states that the “Concessionaire shall, during the Term, keep the Infrastructure, the Mining Plant, the Goma Mines, the Non-Goma Mines, the Additional Concession Area Mines, the Contiguous Area Mines, and Movables in good repair and condition, except to the extent of wear and use in the ordinary course of the Concessionaire’s business respectively.”

These provisions, the host communities of China Union’s big money concession area contend, are yet to be actualized.

Currently, the old Bong Mines Housing units remain in ruin.

Forest has completely taken over the once cherished dwelling places, and some of the units are used for open defecation due to lack of repair. Unlike what the steel giant, ArcelorMittal, has done with renovation of housing units left behind by LAMCO in Nimba  County, China Union has not mustered the will to renovate the dilapidated housing units at the old Bong Mines facility.

The action by China Union is in stark contrast to the MDA, which mandates the company to renovate, extend, and build the Kakata to Handii Road in accordance with their Modified Bid Materials.

China Union has Neglected MDA Stipulations for Years, Villager in Anger

China Union Mining Company signed a 25-year mineral development agreement with the government of Liberia on 19th January 2009. The Company has a Class A mining exploitation license, which provides that it must operate in compliance with the terms of the agreement and observe the procedures established by the Government (based upon Liberia’s Mining Code) for the granting of mining licenses.

73-year-old Ma Fatu Tamba, who has lived in the Bong Mines German Camp, even before the coming of China Union, is hugely disappointed, like other residents.

Tamba: “the people came and told us to move from the camp. They said they were going to recondition the housing units and would provide jobs for us and our children to transform our lives. But since 2009 to present, they have left us all alone; no job as they promised. And even the housing units we were living in, they failed to recondition them, and everything has turned to dump sites.”

She added: “the hospital and the school that were constructed by the then Bong Mines were turned over to them [China Union] for full sponsorship, but they refused to take responsibility. We are just here but China Union is not doing anything to help us, we are just here.”

Our investigation shows that the Chinese firm only built the one stretch of road from Kakata City to Bong Mines; thereby, abandoning the Haindii and non- Goma stretch, which run through the concession and other villages

Since the construction of the Kakata-Bong Mines stretch in 2013, nearly 10 years ago, no road maintenance work has been undertaken, despite the continuing shipments of hundreds of tons of valuable ore out of Liberia as part of the so-called 2.6 billion investment.

In the MDA, China Union agreed to construct the road from Kakata to Haindii within two to five years of operation, but this is far from being actualized; thereby, causing discontents among the citizens, who feel being exploited by China Union and the Government of Liberia.

In Haindii we spoke with several leaders of the community including the Chief Elder of Fuama Statutory District, Joseph Gotolo, of Yarbayoung Clan, the Paramount Chief of Fuama District, Joseph K. Tartee, and Omasco D. Killer, an Elder, of the host community.

They all live in host communities where China Union has been operating for about 15 years.

The elders boast of being owners of the land but yet are disappointed and feel insulted by the way China Union has flagrantly violated and failed to live up to  “what they say they would have done.”

In their discontentment, they spoke of insufficient education among the citizens regarding the terms and conditions of the China Union MDA with the government of Liberia. They asserted that China Union has

“China Union has no impact on we the citizens. You can see our Haindii road, they say they were going to fix the road, they say they are going to give us jobs but nothing they are doing for us.”

“We do not even understand the agreement between them and the government,” said Paramount Chief Joseph K. Tartee, who was visibly frustrated while explaining in a sorrowful tone.

The Chief Elder of Yarbayoung Clan, where China Union’s mining site is situated, Joseph Gotolo, threatened acts of resistance against the company if meaningful discussion is not advanced and held to consider and ensure the actualization of social benefits for the affected communities of China Union operations – similar to the golden old days of Bong Mines which was operated by mainly the Germans.

“When the Germans Bong Mines Company was here, we had a hospital and a school to attend to our people. We even had special vehicles to transport us to the mine. But this is no longer the case. If China Union does ensure social benefits for the host communities and people, we will resist their mining operations here very soon. This is a warning to them,” Gotola narrated.

Aside from failing to live up to MDA, China Union also stands accused of ordering her privately operated securities to arrest any citizen who passes by way of the main road from the mine to their community as early as 7 in the morning when work is said to be underway.

Said Gotola: “Now, China Union has a law forbidding people’s movement after 7am. Any time after this hour, they do order their security to arrest anyone who attempts to make their way home through the company, and the company road is the only road we have to connect us home.”

The commissioner of Fuama District, Aaron Mulbah, out rightly slammed China Union for failure to fully implement all of its obligations as stipulated in the agreement. He expresses frustration that nothing is being done to hold the Company in check and ensure accountability.

He mentioned the company’s decision to have abandoned the construction of the Kakata Haindii road and the renovation of housing units is regrettable adding the company has even refused to take full responsibility to run the school and hospital left behind by Bong Mines. But rather, it has turned the facilities over to the government of Liberia.

“How can a 2.6 billion investment not be able to run a small hospital and school that could benefit the owners of the land? When China Union is gone, what will we remember them for? What will be left behind?” he asked.

China Union Declines Comment

On April 14 this year (2023), China Union’s management in Bong Mines was presented with the damaging claims and frustrations of the host communities at its mining site. Though the intent was to get the company’s perspective about the citizens’ concerns, the Human Resource Manager, Lewis Kollie, referred us to the communications Director, Morris Tate.

Tate was contacted. He too referred us to meet a Chinese National, who also refused to disclose his name and actual position but claimed to be the Security Director of the Company.  We met the director of security in Caldwell on the outskirts of Monrovia. He did not give us his full details but instead requested that we send him an email outlining the concerns of the citizens.

With a promise to transfer our questions to China Union’s headquarters for response, we did oblige. But, despite supplying him with the set of questions and making several follow-ups, we are yet to get any redress from the company – a behavior that amounts to evading accountability and transparency in the operations of China Union in Bong Mines while disregarding the concerns of the citizens.

                                  Email sent Chine Union for response to our findings

Representative-elect vows to Hold China Union Accountable

Politically, the citizens are seeking out for a voice to elevate their concerns to bring China Union to check. They seem to have one in a newly elected Member of the House of Representatives. He is Foday Fahnbulleh, the Representative-elect of Fuamah/Sannoyea District (District 7) in Bong County. Fahnbulleh, a longtime youth advocate, has vowed to hold China Union accountable “for neglecting its responsibilities under Liberian law.”

He believes he has the authority to do so as a newly elected Member of Lower House of the Legislature. Said Fahnbulleh: “Our people have given us the mandate to correct all the wrongs in this China Union Concession, from employees’ housing to road maintenance, sanitation, and clean water supply.  China Union has refused to honor all its obligations.”

Under “General Education Funding” in the MDA, China Union is required to provide US$200,000 annually in scholarships through a “Concessionaire administered program.”

According to the MDA, one quarter of this amount is to be reserved for students who are “permanent residents” of Bong County or counties in which the Concessionaire’s Production Areas are located.

Additionally, China Union must contribute US$50,000 annually towards the establishment and operation of a Mining and Geology Institute at the University of Liberia.

This contribution is intended for students majoring in mining engineering and geology. The company is also tasked with promoting graduate training programs in Geology and Mining Engineering, or other related disciplines, at the University of Liberia. Furthermore, China Union is responsible for facilitating graduate training and sponsoring exchange programs for students in universities outside of Liberia. These efforts should align with providing reasonable incentives for such employees to return to Liberia upon completing their training.

Under section 9 of the MDA, the company must offer housing that meets International Standards, standards required by the law, or those approved by the Ministry of Public Works.

For sanitation, the concessionaire is instructed to build bathroom facilities with at least a shower and toilet for each housing unit they provide and must ensure clean and accessible toilet facilities at their workplaces.

Regarding water supply, the agreement obligates China Union to provide a clean and safe piped-water system in all housing units they offer and set up hand pumps or other water sources at their workplaces to guarantee a convenient and continuous supply of clean and safe drinking water.

But Representative-elect Foday Fahnbulleh and the people of Fuama Snaoyea say these obligations have not been met and that despite engagements with many stakeholders, the company is still failing to do any of the obligations

No Account for China Union Concession Implementation?

We put the concerns of the locals to the National Bureau of Concessions (NBC), the Liberian government arm responsible for negotiating and administering concession agreements.  B Surprisingly, Edwin Dennis, the Director of Concessions at the NBC, seems to have little or no knowledge about the implementation of the once heralded “1.2 billion Single Largest Investment in Liberia,” however.

“Actually, I wouldn’t be able to speak to it. Because when I took over it was reported that the China Union is inactive. But I will call you tomorrow and instruct my Monitoring and Evaluation (M&E) officer who knows more about the agreement to speak to you”, said Mr. Dennis.

Senator Numene T.H Bartekwa of Grand Kru chairs the Senate Committee on Investment. Like the NBC Director of Concessions, he also has no knowledge about the implementation of the China Union Agreement.

When asked why the company has refused to implement community terms and conditions in its agreement, the Senate Committee Chair on Concessions stated: “Since I came to the senate 2021, I have not been given the China Union mineral agreement document”. He would later decline making further comments on the subject based on our inquiries. Representative Clarence Massaquio, the Chairman of the House Committee on Investment and Concessions did not respond to our request for response on the implementation of the China Union MDA as ctizens continue to express concerns and frustrations.

Allegation of Corruption & Bribery

When the China Union MDA was negotiated and sealed in in 2009, the Liberian government under Mrs. Ellen Johnson-Sirleaf [at the time] promised poor villagers that the deal would generate between 3,000-4,000 jobs with 15, 000 more indirect jobs.

Former government spokesman, Lawrence Bropleh, told the VOA the investment deal with the Chinese company was part of President Ellen Johnson Sirleaf’s economic revitalization program that would “go to the heart and soul of creating more jobs for our people and a stronger spur for the economy.”

Fourteen years after Bropleh’s big announcement, everything seems to have gone to the contrary. A promise of prosperity is down the drain, and there unfolds today at China Union, a wave of frustrations underpinned by broken promises which have turned the hopes of the impoverished host communities into despair and desperation.

A Chine Union locomotive that transports staff to and from work

Behind the discontents with the China Union’s concession implementation lie   many different stories, ranging from sour relationship with the affected communities of Fuamah District in Bong County to allegations of workers’ abuse, to misuse of the social development funds – as documented by the Sustainable Development Initiative (SDI), a respected environmental group of national and international repute.

As reported by the SDI, China Union workers have made series of serious allegations, such as “less pay than initially agreed, hired and fired in a cycle” so the company could avoid the obligations that come when workers hold the status of full-time employees, and even “physically abused by China Union supervisors.”

In line with such NGO reports, we found that China Union has employed no Liberian managers, despite being mandated to hire Liberians for senior positions as per its MDA.

There has been a wave of evictions from the company housing with just 500.00 USD paid to workers coupled with what the SDI calls “strong-arm tactics” that forces poor workers to accept such settlement.

Many youths and elders in Fuamah Sanoyea District are of the consideration that China Union has allegedly been paying bribes to dozens of Liberian officials to cover up its shoddy deeds in Liberia including Businessman Christopher Hayes Onanuga, Chief Executive Officer (CEO) of the CT Com Liberia

CT Com Liberia reportedly said to be the company that negotiated the controversial payment terms for debts China Union owed government and local communities.

In September 2019, former Solicitor General Sayma Syrenius Cephus issued an order of arrest for Onanuga, who the government claimed was involved in acts of money laundering, theft of property, criminal facilitation, and criminal solicitation.

The writ of arrest came as a result of a complaint filed against Onanuga and CT Com Liberia by J2 Empower Liberia for allegedly using the name of the President Weah to siphon US$1.9 million from China Union, an amount he deposited into a UBA bank while rendering services for J2 Empower Liberia

Christopher Hayes Onanuga, owner of CT Com Liberia, denies wrongdoing in the China Union payment saga. He accuses former Minister Nathaniel McGill and NSA deputy Chief Sam Sayon of orchestrating the plan that allegedly deprived him of his “dully earned commission” from China Union.

The disputed amount is US$1.9m out of US$4m, leading the CDC government to freeze Onanuga’s GT Bank account in Monrovia for alleged money laundering.

The China Union concession has a history of controversies dating back to the Ellen Johnson Sirleaf administration. Recent concerns about favoritism in a concession agreement with Tata Steel and Delta Mining Consolidated Company have surfaced, but the Ministry of Lands, Mines and Energy denies these allegations. Former Information Minister Bropleh defends the China Union deal, claiming it was competitive and transparent.

Criticism Surrounding Chinese Investment in Africa

Chinese investment in Africa has provoked a spectrum of responses, both positive and negative, reflecting diverse opinions on its economic, social, and political impacts. While proponents laud China’s role in Africa’s development, critics raise several concerns, prompting scrutiny and skepticism.

A prominent critique centers on the notion of “debt diplomacy.” Accusations assert that China extends loans to African countries with conditions that risk plunging them into unsustainable debt. Some argue that this financial dependence on China may compromise the sovereignty of these nations.

Chinese investments in resource extraction industries across Africa face many disapprovals, particularly due to their environmental impact. Issues such as deforestation, pollution, and unsustainable practices pose threats to local ecosystems, potentially jeopardizing the livelihoods of communities in these areas.

Concerns also revolve around employment practices linked to Chinese investments. In many instances, Chinese firms bring in their own labor force, limiting job opportunities for local residents. Reports of poor working conditions, human rights abuse low wages, and a lack of adherence to labor standards as often reported from China Union in Liberia further contribute to the criticism.

Transparency and accountability issues have marred Chinese investments as well, with allegations of deals being negotiated behind closed doors. This opacity raises concerns about corruption, accountability, and the potential for agreements that may not serve the best interests of African nations. Liberia, like other African countries, has not been exempt from such challenges given the situation at China Union.

While Chinese investment has undeniably spurred economic growth in Africa, its controversies and criticisms must be acknowledged as achieving a delicate balance between fostering economic development and safeguarding the interests and well-being of African nations and their citizens is imperative. Addressing these concerns requires a commitment to transparency, upholding legal agreements, responsible environmental practices, and fair labor standards to ensure a more equitable and sustainable partnership between China and Africa.

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