By Ibrahim S. KOROMA
By July these years, news broke that the Audit Service Sierra Leone was having challenges to publish its mandatory annual audit report due to government’s insistence on clarifying certain claims in the draft report and reconciling their records.In a letter dated 20th October 2020 which I read today, the Ministry of Finance wrote to the Auditor-General of Audit Service Sierra Leone attempting to interpret section 25 of the Forestry Act 1988 as amended by the Finance Act of 2008 and its further amendment in the Finance (Amendment) Act 2018 by section 3 thereof (in defense of a supposedly private company).
That letter was written as a result of a direction for the Permanent Secretary to respond to an audit query drawn to the ministry’s attention “of an apparent discrepancy between the units of valuation used by Leadway Trading Company (SL) Limited in collecting timber levies and section 3 of the Finance Amendment Act, 2018” which amended the said Forestry Act. In doing so, the Ministry of Finance sought to provide the meaning of words in the statute and the intent of parliament during the enactment process but also, to inform the Auditor-General that, government has taken steps to further amend the said amendment in 2021 to meet the equivalent of the interpretation provided in the letter and supposed intention of parliament.
The final audit report for the financial year 2019 was published on December 18th 2020 and it contains a statement in reference to Leadway Trading which reads in part as follows: “…The method of valuation for timber products prior to exportation was not in accordance with section 3 of the Finance (Amendment) Act of 2018. Instead of using cubic metres as required by law, 20-feet shipping containers were used as units of measurement. Based on the ASYCUDA data from the Customs Department, a total of 2, 201,024,88 cubic metres valued at US$5.5billion was exported. Revenue of US$25.7million was recorded in the GPFS, thereby leaving a balance of US$5.48billion…”
In a release issued by State House on 9th of April 2018, just five days after he took office, President Julius Maada Bio banned timber logging and its exportation throughout Sierra Leone. This was well received by conservators and environmental activists both within and outside Sierra Leone. Immediately after the ban, government constituted a Committee on the export of timber inter alia to review existing practices and procedures and to make recommendations. The Committee subsequently recommended the setting up of a statutory agency to “manage the industry” and to supervise the exports, verify the payments to NRA and the Ministry of Agriculture and Forestry, to export containers etc. In the meantime, the ministries of Finance, Trade and agriculture were tasked to put together the details for cabinet’s consideration.
But in a another release dated 27th June 2018, the President appointed Mr. Babadi Kamara of Leadway Company (SL) Limited as government agent for the export of “existing stock at the port and various depots.” In a subsequent release on February 20, 2020, government noted that Mr. Kamara was appointed “as Government Agent for the management and export of timber” and reappointed him with the ministries of Agriculture and Finance now having the responsibility to work on a reforestation program. It became clear from then that government was now in the business of managing and exporting timber and that Babadi Kamara was acting for the President/government.
Public reporting had long stated that the treatment of Leadway Trading Company by the government, violated certain regulations and some have even implicated the President as majority owner of the company or having a direct beneficial interest in its dealings. Much more has been written lately. Assuming the company is private without official interests, this letter by the Ministry of Finance has almost certainly confirmed and implicated government in the company’s affairs and alleged wrongdoing in greater measure than small and the facts speak for themselves.
The questions that come to mind include, when did it become government business to create a timber industry for the President to run? How did Mr. Kamara become the government/President’s agent? Who is he reporting to and whose timber is he managing and why? Is Kamara a civil servant? At least for once, Kamara provided the answer to one question in his August 18th 2020 letter to the General Manager of Freetown Terminal Limited; he works for the President.
It also became clearer that in the mix of affairs, the Ministry of Finance has been integral since inception of the scheme. Was it therefore the reason why the government agency was not set up as recommended? Did Kamara take over the job of the National Revenue Authority(NRA) under section 25A of the Forestry Act as amended? Why is he collecting revenue on behalf of the government of Sierra Leone in Sierra Leone? Is it not the duty of the NRA to collect taxes, royalties and other payments to the state? Why is the Ministry of Finance so vehemently and extraordinarily in defense of a supposedly private company accused by a state institution of depriving the state of an astronomical amount of US$5.48billion? These, among others are legitimate questions from citizens pushing the buttons of political accountability.
The finance ministry seems not to have the answers so they jumped the gun and tried to muddy the waters by some extraneous political theory of legislative incompetence. They argue without regard for parliament that legislators do not know what they were doing and in this case, they were grossly negligent and/or moron to follow what the draftsmen did as developed from the drafting instructions.
This sly and preposterous argument needs only a cursory look to see an attempt to coverup. To suggest that the law and the levies have an apparent discrepancy for good reason seeks to deceive the Auditor-General and the public and cements the position that the Ministry of Finance have admittedly implicated the President and government in graft. For clarity, let me reproduce section 25 of the Forestry Act 1988-
Grading: 25.
(a) Subject to any law on standards and metrication in force in Sierra Leone, the Chief Conservator shall, in consultation with forest users, wood processors and consumers, devise rules for the grading of timber and sawn wood and provide for the dissemination among producers and consumer and for training in the application of such rules.
(b) The Minister may by regulation require that any wood or wood product sold or exported from Sierra Leone be graded according to such rules as the Minister may prescribe.
This law is “an Act to make New Provision in the law relating to Forestry in Sierra Leone and for connected purposes.” In actual fact, it was section 5 of the Finance Act 2008 (an Act to make provision for the imposition and alteration of taxation for the year 2008 and for other related matters) which amended the Forestry Act by the introduction immediately after the said section 25, of a section 25A which reads as follows;
“Export levy on timber: 25A
a) An exporter of any timber or timber product SHALL, before the exportation, pay to the National Revenue Authority as export levy on every twenty cubic metres of such timber or part thereof, the Leone equivalent of $1500.”
This was the law since 1st of January 2008. On July 27th 2018, a Finance (Amendment) Act 2018 was enacted, being “an Act to amend the provisions of the Finance Acts 2008, 2017 and 2018 and for other related matters. Section 3 of this law reads as follow:
“Amendment of Act No. 7 of 1988: 3.
“The Forestry Act 1988 is amended by repealing and replacing section 25A with the following new section:
“Section 25A. Any exporter of any timber or timber product shall prior to exportation pay to the National Revenue Authority a timber royalty of $2,500 on every cubic metres of such timber or part thereof.””
What I have set out to do is not to criticize the Ministry of Finance for the barrage of confusing expressions and their miscalculated attempt at statutory interpretation in their letter.
Their explanations and excuses confuse the constructive account of legislative intent in my view. So, this piece is intended to defend with the literal conception (reflecting the views of ordinary legislators and a draftsman myself) to express a repudiation.
Whatever lack of knowledge there was should have been pinned down in explicit language but the attempt by the Ministry of Finance to justify theft by seeking to undermine legislative competence is against the basic norm of legislative supremacy and intent. This has compelled me to make a further policy analysis to uncover political intent to criminal coverup because of the following:
As stated earlier, the 1988 Act is the principal legislation guiding the regulation of forests and forestry products in Sierra Leone. What the 2008 Act did in respect of the forests was to impose taxation and alter the authority to conduct taxes upon the creation of the NRA. Consequently, the 2018 legislation advisedly enacted by the present parliament was to discourage rampant logging which was affecting forests and food production. The intent was therefore to increase the levy from forests logs not to look like tax on traded commodity but the state collect royalty on commercialized logging instead. The idea was in consonance with Sierra Leone’s commitment to the United Nations Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests (VGGT) in the context of national food security; to promote secure tenure rights and equitable access to land, fisheries and forests as a means of eradicating hunger and poverty, supporting sustainable development and enhancing the environment. This trajectory was substantially altered by the Bio administration by a single press release.
Despite the statutory amendments, the tax regime remained with the NRA while the Forestry regulations also imposed a fee for logging. When the Executive Order granting sole exporter of timber status to Kamara and Leadway Trading the title of government agent; now seen as an entity with a questionable character reported to maintaining direct links with Statehouse, the President abused state authority and undermined the institution of NRA. This is why the letter from the Ministry of Finance is implicating. The attempt by them to say that the 2018 Finance (Amendment) Act intends “…to only replace the export levy amount of “US$1500” and the words “cubic metres” by “US$2500” and “20-feet container” respectively” potentially makes the ministry an accessory to the theft. There is nowhere in the original statute or the amendments thereto where “20-feet container” was conceived. All the statutes referred to have noted a metrification of timber as a process of converting the system of measurement for levy, traditionally used in the country as have been universally adopted.
Except as maybe denied and proven by government, now that the finance ministry has made it clear, the appointment of Mr. Kamara as “sole government agent” for the management and export of timber can only be described as representing an ulterior intent to invest in a man and a ‘private company,’ the functions of a statutory body-the NRA and against the advice of the timber committee.
The NRA has statutory responsibility, proven competence to strengthen the assessment and collection of national revenue and the administration and enforcement of the laws relating to the national revenue. Mr. Babadi Kamara has no proven competence to handle national revenue, was not appointed pursuant to any law and was not accountable to any authority other than the president who appointed him.
As an individual supposedly appointed to collect revenue for government, his appointment breached all regulations, statues and rules of nation revenue mobilizations, administration and enforcement. It serves only one purpose; to collect money on behalf of the president with advise from the Ministry of Finance. A breach of law by Babadi Kamara means that the ministry was complicit in what he did and it serves no good for the Ministry of Finance to attempt to discredit legislators who merely enacted a law to address a compelling circumstance. Government cannot deny liability for the US$5.48billion dollars.
USA 12/20/2020. I.S. Koroma was a team member of the United Nation’s Food and Agriculture Organization’s (FAO) team of experts to develop Sierra Leone’s strategy on VGGT and law review as support to the Government of Sierra Leone. He was also one of FAO’s panel of experts on developing frameworks for Sierra Leone’s fight against hunger and food security. He is a fellow of the State Academy of Forestry Administration, University of Beijing, China, a senior Environmental Law consultant and holds a Masters degree in Natural Resources Law, Management and Policy.
Email: ibrahimsko@yahoo.com
