MONROVIA, Liberia – Two global environmental watchdogs have condemned a new law in Liberia that they say rewards logging companies at the expense of one of the world's poorest nations, and they called on donors to halt support until the law is overturned.
"The Liberian government has secretly given the country's loggers a $13 million tax break," Global Witness and Tropenbos International said in a new report this week, adding that the law "has undone 15 years of reform" in the lucrative timber sector.
Liberia's timber industry was in the international spotlight in the early 2000s when its products were said to be used to fuel conflict. Sanctions were placed on the West African nation until a post-war government took office in 2006.
The new law signed by outgoing President Ellen Johnson Sirleaf "knocks a massive hole through Liberia's budget," the watchdog groups say. "It also undermines the country's efforts to mitigate climate change through preserving its forests."
The law was passed in October but was made public only last week, as Liberians prepare for a Dec. 26 runoff election to choose a successor to Sirleaf, Africa's first female president and a Nobel Peace Prize winner.
The watchdog groups say the law effectively writes off $13 million in taxes owed to the government and accrued over 10 years by logging companies.
"There is no logical explanation for why Liberia should be subsidizing loggers who have persistently broken the law and now are failing even to pay the taxes they owe," said David Young, campaign leader at Global Witness.
Sirleaf's principal economic adviser, Augustine Jarrett, told The Associated Press that the law allows companies to suspend paying taxes and use the money to invest in activities including the building of sawmills and wood dryers to increase exports.
He said the law is meant encourage the logging industry as others, such as mining, are struggling. Prices of main export earners such as rubber and iron have dropped on the world market in recent years.
"In order for us to get this economy going ... Liberia has to earn its own way," Jarrett said. He said calling for donors to halt support to the country is counterproductive.