Financial Crime World

Liberia’s Shady Past: The Carbon Harvesting Corporation Scandal that Could Have Cost the Country US$2.2 Billion

Monrovia – The ongoing negotiations between the Liberian government and Blue Carbon of the United Arab Emirates for a carbon credit deal might seem like Liberia’s first foray into this area. However, this is not the case. Liberia’s history is marked by a significant carbon trading scandal that occurred over a decade ago with the Carbon Harvesting Corporation (CHC), based in the United Kingdom. This scandal, worth US$2.2 billion, was one of the most significant scandals during the presidency of Ellen Johnson Sirleaf.

Background

  • A Ghanaian named George Antwi approached River Cess Senator Jonathan Banney about a potential carbon trading investment in Liberia in 2007.
  • He represented Michael Foster, the owner of Carbon Harvesting Corporation (CHC), a Liverpool-based firm.
  • The deal seemed simple - CHC wanted to capture carbon on 400,000 hectares of forestland in River Cess, obtain carbon credits, and sell them on global markets.

Collusion and Violations

  • Senator Banney was quick to take up the proposal, arranging a meeting between President Sirleaf and CHC’s representatives.
  • Within months, CHC submitted a proposal to sell carbon credits to the Liberian government at a rate far below international estimates.
  • An analysis of the costs and benefits of the investment concluded that Liberia would benefit more from carbon credits than from commercial logging.
  • The Forestry Development Authority (FDA) had granted CHC permission to sell carbon credits on the unregulated and unverified carbon market by February 2009.
  • Questions were raised about the legality of the arrangement, and the National Investment Commission questioned the FDA’s right to negotiate the deal.

The Unraveling Scandal

  • Foster faced extradition from the United Kingdom to Liberia on allegations of bribery, fraud, and criminal conspiracy related to the carbon credit deal.
  • The scandal came to light when it was discovered that Liberia risked losing over US$2 billion if the CHC deal had gone through.
  • Expert opinions warned against the deal, stating the carbon credit figures were “unreasonably high” and held “no commercial value” for Liberia.

Investigation and Consequences

  • President Sirleaf established an official inquest into the matter, led by Cllr. Negbalee Warner, with Rose Stryker and William Massaquoi completing the team.
  • The committee’s four-month investigation unveiled grave violations, including plagiarism of an American study and fraud.
  • The recommendations from the committee resulted in the impeachment of Senator Banney, prosecution of Minister of Internal Affairs Ambulai Johnson, and dismissal of officials from the Forestry Development Authority and Public Procurement and Concession Commission.

The Aftermath

  • Despite the damning findings, President Sirleaf initially acted on the committee’s recommendations.
  • The case remained unresolved until 2015 when police dropped all charges against Foster.

Liberia’s carbon trading history is a cautionary tale of potential corruption and financial loss, serving as a reminder for governments and international organizations to maintain transparency and adhere to due process in carbon trading deals.