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From Law to Action: The Local Content Agency Act 2016

From Law to Action: The Local Content Agency Act 2016

Idrissa was disappointed. His village was promised jobs if they leased their land to the palm oil company. “The company told us that every family that gave land to them would have a member employed” he said. The government-fixed annual rent of $5 per acre wasn’t much for Idrissa’s family land. He had to share the $110 among his extended family members. This did not leave Idrissa with much which is why having a job with the company was so exciting to him. “The company was going to ‘take us out of poverty’. That was what officials told us at a community meeting”. The mood in the village was buoyant, spirits were high.  (Photo: Sonkita Conteh, Director, Namati Sierra Leone)

Three years on, hope has almost disappeared for Idrissa and his village. The jobs they’d been promised came slowly, in drips here and there and they were not even permanent. He worked for 3 months, brushing acres of land to prepare for the planting season. Then he was laid off. To make things worse, scores of unemployed youth from outside their area descended on their community also looking for work. A stead job became impossible to find with so much competition.  With all of his family land under lease, Idrissa now struggles to take care of his home. To farm todays, he has to “borrow” land in another village, some 10 kilometres away.

For rural communities, the attraction to largescale land investments has largely been the promise of jobs and infrastructure. In 2012, a prospective rubber deal between the Government of Sierra Leone and China’s Hainan Natural Rubber Industry Group promised massive employment– 30,000 full time and 150,000 part time jobs. Many were hopeful across the areas marked for the investment, though the deal has not materialised.

Rural communities, it should be clear, are not averse to investment. They are often willing to negotiate if companies, engage them in a good faith process.

Unfortunately, while government officials and companies readily talk up the huge job-creation and infrastructure potentials of large land investments, it is often more rhetoric than reality. While it is true that some companies have employed hundreds or even thousands, more often, their highfalutin promises of jobs are not kept. These broken promises breed frustration and resentment and ultimately affect community/investor relations as a whole. Adding to community suspicion, corporations are often reluctant to be legally required to fulfil their job-creation and infrastructure promises. Companies would rather not include such promises in binding agreements and when they are compelled to, they resort to vague language which imposes no real obligation on them. Communities are right to be suspicious of this sort of behaviour.

This unbalanced state of affairs, however, looks set to change with the enactment of the Local Content Agency Act (LCAA) last year. The new law could rekindle hope in many communities hosting large scale land investments which feel let down by unfulfilled promises of employment. The LCAA has turned a largely unenforced policy by the same name into a binding set of obligations. It requires companies to provide much more specific detail about potential employment than they currently do.

Companies in the sectors covered by the act, which include mining, agriculture and petroleum are obliged to file an employment and training plan with the country’s Local Content Agency, setting out the number and type of labour required for their investments. They must also provide information about anticipated skills shortages, training requirements, actual and likely expenditure for skills training and a timeline for employment. Furthermore, companies cannot employ non-Sierra Leoneans in junior cadre jobs and may only have a maximum of 20% non-citizen employees at intermediate and 50% at management levels (this provision is in response to complaints by some that even manual labour was being brought in from other countries).

The act also makes important changes to the mining and agriculture sectors, two areas covered by Namati’s work on land protection. In mining, Sierra Leonean companies, defined as companies incorporated in the country with at least 50% citizen ownership– would have priority in the award of mining rights, permits and licences. Those who are concerned about the negative impacts of mining on the environment believe that local ownership could lead to greater care in resource exploitation and more responsible corporate behaviour. Only time will tell.

Under the act, agriculture companies would also be required to establish and support out-growers schemes for smallholder farmers and to transfer knowledge and technology to help build the revenue base of small and medium farmers in rural areas. The law also makes it compulsory for local products to be used in manufacturing and processing. This means that sorghum, which many small farmers now grow, would be used by the beer industry and locally produced oil palm used in industrial soap production. Small scale farmers like Idrissa will no longer have to lease out all their land to corporations. They now have a choice. This law provides an opportunity for Idrissa to become an entrepreneur instead of just an employee.

At about the same time last year, parliament also enacted the Small and Medium Enterprises Development Agency Act (SMEDAA) which aims to create an environment within which out-growers and other small and medium businesses could thrive. The aim is to provide market access, credit facilities, access to technologies and improved commercial practices among others for these businesses. These types of assistance would be crucial for small and medium vegetable, fruit and livestock enterprises, for example, to become viable, alternative business models.

Arguably the LCAA and the SMEDAA constitute a noticeable shift in the government’s investment policy which before now placed heavy premium on large scale land investments. Both legislation lay the foundation for real economic empowerment of the rural population which has borne the brunt of the consequences of big land investments, but seen few positive returns. The challenge now remains how to convert these legal changes into practical economic reality for rural folks.

Companies will likely balk at these new rules. For many, the attraction to Sierra Leone as an investment oasis has in part been the absence of “regulations”. But it is unrealistic to expect a “wild west” scenario to continue in an era where communities are becoming empowered and demanding accountability from the companies which exploit their natural resources.

It will require a combination of efforts to ensure that these laws come to life. Paralegal organisations like Namati can help provide legal education to rural communities and help them craft agreements that reflect these new provisions in the law. Where necessary we will also need to support communities in enforcing compliance by corporations.  But it is additionally important that the responsible government agencies are adequately resourced, accessible to all citizens and able to carry out their mandates effectively. After all laws in books are mere words; they require action to make them work. Otherwise as villagers like Idrissa know all too well, promises are only promises.

By Sonkita Conteh, Director, Namati Sierra Leone

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