KEY LEGISLATION AFFECTING BUSINESSES
Sierra Leone’s Income Tax Act 2000 and the multiple Finance Acts enacted since 2010 contain various incentives to encourage private sector investment and promote the inflow of foreign capital and technology into Sierra Leone.
These include income tax exemptions, deductions for income tax purposes, import duty exemptions and goods and services tax exemptions. Such incentives are contingent on the satisfaction of relevant criteria including the need to improve local content, which is explored in further detail below.
General incentives include income tax relief on plant, machinery and equipment; a three year grace period on import duties for new and existing businesses importing plants, machinery or equipment; lower import duty rates for raw materials; and 100% tax deductions for expenditure on research and development, training, and the development of social services (such as the building of schools and hospitals).
Sector-specific incentives have also been implemented for investments in agriculture, energy, infrastructure and pharmaceuticals. These are outlined in the Key sectors section. Tax relief for investors in relation to construction of hotels was repealed by the Finance Act 2018 and the current status of tax relief in the tourism sector is unclear. A Public-Private Partnership has been established within the Ministry of Tourism to engage private stakeholders in the sector. Fiscal incentives in two phases – general and sector-specific.
Several duty and tax waivers to organisations, companies and contractors in many sectors have been suspended by President Maada Bio pending new finance legislation being enacted. The GoSL has established a Special Committee to review the current exemption process and develop a revised policy for granting duty and tax waivers, which is likely to be put in place in due course. A bill implementing the revised duty and tax waiver policy limits the discretionary powers of Government in this area.
The Finance Amendment Act 2018 amended import duties on tobacco and alcohol, as well as fisheries tariffs and duties on timber exports. Duties on alcoholic beverages have been reduced to encourage increased local production and reduce the risk of illicit imports.
Additional incentives are provided to SEZs, including three-year corporate tax holidays and expedited government services including customs, immigration and registration.
The non-profit international development agency World Hope International has established an SEZ near Sierra Leone’s principal seaport in Freetown. The GoSL is considering the establishment of further SEZs in other parts of the country, including two new industrial Free Trade Zones – one alongside Freetown’s Lungi International Airport and the other located in a proposed new sea port at Nitti in the Bonthe district. These Free Trade Zones would allow investors and exporters to operate the domestic tariffs and charges which would otherwise apply to them, and it is envisaged that they would be serviced by surrounding infrastructure improvements.
Current regulation requires investors to obtain separate operating permits and licences from various government agencies. The GoSL is seeking to simplify this process by introducing a “single application point” within the country’s investment agency (SLIEPA) and thereby provide a one-stop shop for investors and exporters seeking approvals. This may include the creation of a long-term “Investor Permit”, set to combine the business visa, and work and residency permits, which are currently required in order to work in the country for more than 30 days.
The Companies Act provides for the registration and incorporation of companies in Sierra Leone. The Act is extensive and includes provisions governing a company’s formation, share capital, meetings and directors’ powers and duties. The Act created the Corporate Affairs Commission, which regulates the establishment of new companies, enforces compliance with procedural requirements, and handles the incorporation and registration of companies in Sierra Leone.
The Companies Act was amended in 2014 to remove administrative barriers in the process of incorporating companies in Sierra Leone, reduce the number of offences created by the Companies Act and bolster provisions on the extent of directors’ liabilities and duties of disclosure.
Compliance with the Companies Act 2009 is considered a priority in order to ensure a more detailed, comprehensive and transparent companies register. The Corporate Affairs Commission has therefore been given a mandate to de-register any company that violates the Companies Act. In early 2019, the National Corporate Governance Code (now national policy) was launched to promote gender equality, further protect investors and improve transparency and accountability. The Code was developed by reference to other codes across the continent and the UK Corporate Governance Code. The Code will apply to organizations registered with the Corporate Affairs Commission, as well as State-owned Enterprises, and domestic and international NGOs.
The Business Registration Act 2007 sets out the four steps that need to be taken to register a business in Sierra Leone. The World Bank has reported significant improvements in the procedure for registering companies, with the time taken for incorporation falling from seven days to two or three days. Sierra Leone ranks 60th in the world for the time it takes to start a business, according to the Global Competitiveness Index 2017-2018, and 53rd for the number of procedures required to establish a company.
The Bankruptcy Act 2009 provides the legal framework for declarations of bankruptcy. Under the Act, an individual who cannot pay debts of a specified amount may declare themselves bankrupt. The individual will then be disqualified from holding certain elective and public offices and from practising any regulated profession. The Bankruptcy Act also includes provisions to encourage and assist ailing businesses to reorganise instead of going straight into liquidation.
The Companies Act sets out the procedure for winding up a company. This can be done voluntarily, by the court or subject to the supervision of the court. The Bankruptcy Act sets out the circumstances in which a firm may be liable to have a “bankruptcy petition” presented to it or a receiving order or “adjudication of bankruptcy” made against it. The FTCC was established to streamline the process of resolving commercial disputes, and ensuring it is adequately resourced is one of the GoSL’s priorities for de-risking investment into Sierra Leone.
The Small and Medium Enterprises Development Agency Act 2015 established a new agency (the SMESL) to promote SMEs and work towards creating a business environment in which such businesses can thrive. The aims of the SMESL are to enhance monetary and banking policy, technology, marketing infrastructure and institutional bodies. In April 2016, the SMESL announced that it will provide loans to SMEs at interest rates below 10% per year without any requirement to provide collateral. In addition, the GoSL intends to establish additional funds to provide medium and long-term capital for SMEs which focus on female and youth empowerment: in this regard, the GoSL has allocated Le 2 billion to the 2019 capital budget for the Women’s Development Fund for female entrepreneurs, with the aim of assisting with starting small businesses.
A number of other suggested economic improvements have been developed in conjunction with the Bank of Sierra Leone. A Borrowers and Lenders Bill will widen the scope of available collateral to include the registration of immovable assets (one stop shop) and also enable individuals who are not licensed and supervised by the Bank of Sierra Leone to be able to register their security interests. This was submitted to Parliament in Q1 of 2019 and is awaiting enactment. A Securities and Exchange Commission Bill will enable regulation of the stock exchange to pass from the Bank of Sierra Leone to the Securities and Exchange Commission, and empower the Securities and Exchange Commission to regulate the sale and registration of securities, exchanges, brokers, dealers and salesmen and promote private sector growth. The Securities and Exchange Commission Bill was submitted to Parliament in 2017 and the current Ministry of Finance is pushing for its progression. A Collective Investment Bill aimed at establishing and regulating collective investment schemes is intended to allow companies to facilitate the flow of investments and broaden investor participation. The Collective Investment Bill is being considered and redrafted by the Law Officers Department (its enactment is dependent on the passage of the Securities and Exchange Commission Bill). A Banking Bill to ensure banking is conducted in line with international best practice and a revised Bank of Sierra Leone Bill to ensure the Bank of Sierra Leone operates in line with international best practice, have been reviewed and redrafted by the Law Officers Department for redrafting and, at time of writing, it is anticipated that they will be passed by Parliament in the next month. A revised Other Financial Services Bill to ensure microfinance Institutions, community banks and other financial institutions operate in line with international best practice has been drafted by a consultant from the US Treasury and is being reviewed by the Bank of Sierra Leone. Banking reform remains a government priority and the review of current banking legislation is expected to ensure commercial banking regulation follows international best practice.
Legislation dealing with data protection and privacy issues has been developed and is expected to be brought before Parliament for approval. In addition, the GoSL has developed a National Electronic Transaction Bill, which is designed to enhance the use of electronic means of doing business and further the admissibility of electronic documents in legal proceedings. This new Bill is currently at the publication stage, and is due to be submitted to Parliament for enactment. Legislative amendments to deal with cyber-security concerns are also planned, although the timeframe for these reforms are not yet known.
As part of the New Direction, the GoSL has stated its intent to lower the tax burden on foreign investors in Sierra Leone by reducing the number and scope of charges, fees and taxes on businesses. In the MTNDP, the GoSL identifies that instability of the tax policy environment caused by yearly review of tax laws as creating uncertainty for businesses affecting investment decisions. It also indicates an intention to harmonise the tax regimes.
The main taxes affecting businesses in Sierra Leone are: taxes on corporate profits and dividends; sales taxes; and import and excise duties. Corporate income tax provisions are set out in the Income Tax Act 2000 (as amended). The Goods and Services Act 2009 (as amended) provides for a tax on the consumption of goods and services within Sierra Leone. This tax replaced a number of existing indirect taxes. The rates of tax for the current year are set out in the annual Finance Act and the 2018 rates are summarised in the Sierra Leone at a Glance section.
FDI incentives include the ability for companies to carry forward tax losses in any given year and tax credits for 100% of expenses relating to research, development and training activities. There are no specific rules relating to the taxation of group companies. The Finance Act 2016 increased the taxable personal allowance to Le 400,000 per annum, but also raised the top income tax rate to 35% with the aim of furthering the Free Health Care Initiative. However, the top marginal personal income tax rate has since been reduced to 30% by the Finance Act 2019 – a measure designed to increase disposable income.
The NLP envisages the introduction of further taxes specifically related to land and development, including Improvement Value Taxation in urban areas and a development levy on undeveloped land. The Extractive Industries Revenue Act 2018 imposes additional tariffs on holders of mineral resources.
Tax collection has now been consolidated in the National Revenue Authority with the establishment of a Treasury Single Account (TSA) to provide for better oversight of tax revenue. A number of sector agencies are now required by the Fiscal Management and Control Act 2017 to pay their tax revenues into a consolidated revenue fund. This is one of the focus points for the Public Financial Management Regulations 2018, which govern the oversight of public finances. The GoSL has stated that the total revenue collected by all TSA agencies and remitted to the consolidated revenue fund between April 2018 to April 2019 is estimated to be Le 337.8 billion (US$37.6 million), which represents 7% of total revenue collected in the period.
The Ministry of Finance has announced an intention to overhaul the taxpayer registration system, with one of the focal points being Goods and Services Tax (GST) registration for businesses. Additional electronic payment and filing mechanisms are to be introduced. There are plans to harmonize the Tax Identification Numbers database and GST database to improve compliance with business registration and tax payments.
The Ministry of Labour and Social Security is responsible for the regulation of the country’s labour market, but in reality most employment in Sierra Leone is informal and unregulated. Employment law is out-dated and in urgent need of reform.
General employment law concepts such as salary, holidays, redundancy and disputes are governed by the Regulations of Wages and Industrial Relations Act 1971 and the Employers and Employed Act 1960. However, these statutes do not reflect modern employment rights standards and as a result are often not applied. The laws on hiring and dismissal are particularly unclear. The 2015 Budget included an allocation of Le 5.3 billion (US$1.2 million) for the enforcement of labour regulations and a review of obsolete laws with a view to reforming the legislative regime, though this was not repeated in the 2016 Budget, with the focus turning to more practical measures as detailed below. A likely timescale for further legislative change is unclear at present, but the GoSL intends to ensure ILO core labour standards are fully reflected in domestic law.
A national minimum wage of Le 500,000 (US$70) per month was introduced in 2015, and, at the time of publication, remains at this level. A number of additional employee protections exist under domestic legislation, although their enforcement is questionable. The GoSL has announced an intention to harmonise the public sector wage structure following a number of significant public sector pay increases, to strengthen the Ministry of Labour and Social Security’s enforcement powers and to establish later this year a cross-sectoral Wages and Salaries Commission to oversee the regular review of minimum wage levels. A review of social security legislation to ensure employers have sufficient healthcare and insurance policies to cover their employees is also planned. Along with the changes to the national minimum wage in 2015, a review of pensions legislation has recently taken place, and the GoSL has increased the minimum pension to Le 250,000 per month – in order to be consistent with the National Social Security Insurance Trust (NASSIT) Act 2002, which requires pensions to be 50% of the minimum wage.
Sierra Leone’s NASSIT administers the country’s national pension scheme. This is a defined benefit scheme and is compulsory for all public and private sector employees (but is voluntary for the self-employed). A valid NASSIT Social Security Clearance Certificate shows that all contributions due from the employer have been made. This certificate is required before any employer can import, export or clear goods at a port, obtain a permit for the construction of any building, tender or be considered for any contract with a public institution, register any document conferring title to land, leave the country (if they are a non-citizen), and obtain a work permit for foreign employees. The GoSL is taking concrete steps and reforms to increase the efficiency and efficacy of NASSIT, and a full audit on NASSIT has been completed – with the Ministry of Labour and the Ministry of Finance together working with NASSIT to implement the recommendations of the audit report.
In addition, the law requires foreign investors to apply for a self-employment permit and foreign employees for a work permit. The process of obtaining these permits is governed by multiple statutes and involves several GoSL ministries, though this process may be simplified if future applications are centralised, as planned. To avoid any issues, work permit applications should be submitted six months in advance, and the permits are granted by the Minister for Labour, taking into account various statutory criteria which allow a margin of discretion. Once permits are issued they last for three years and must then be renewed annually.
The Local Content Agency Act 2016 (LCA) has imposed restrictions on expatriate employment in the mining, petroleum, service industries agriculture and agri-business, transportation, maritime, aviation, hotel and tourism, public works and construction, fisheries and marine resources, manufacturing, health and energy sectors. Expatriates may fill up to 50% of management and intermediate level positions during the first five years of a company’s establishment in Sierra Leone, after which this level drops to 40%.
In 2014, Statistics Sierra Leone conducted the first Labour Force Survey (LFS) in over 30 years to collect information on Sierra Leone’s labour market. The LFS largely focused on primary occupation in three main sectors: wage employment, agricultural self-employment, and non-agricultural household enterprises, with the aim of providing statistics to assist the GoSL in policy-making and development planning. The LFS indicated that around 65% of the working-age population were in employment. Participation in the labour market is higher in rural areas, at around 69% compared to 54% in urban areas. The final LFS report was published in September 2015.
In February 2016, the National Youth Service Act was enacted, thereby establishing the National Youth Service Scheme, a graduate training project aimed at combating youth unemployment and equipping young graduates to serve the country more effectively. In addition, the GoSL allocated Le 8.6 billion in the 2016 Budget towards the development of job centres and district Ministry of Labour and Social Security offices, and a further Le 113.7 billion has been allocated to subsidise university tuition fees in order to raise educational standards. The GoSL has removed the application fees for forms for applicants to university and tertiary institutions in 2018/2019. Following review of the Universities Act of 2005, a draft Act is due to be presented to Parliament.
The Sierra Leone Skills Development Fund has been allocated additional funds of Le 3 billion to promote professional internship opportunities and further specialised skills development. The GoSL has recently secured a US$20 million loan from the World Bank to support skills development, in the informal and formal sectors. The GoSL intends to develop additional technical and vocational training opportunities with increased public-private partnerships and a national apprenticeship scheme in priority sectors including agriculture, together with a Youth Empowerment Fund to encourage young entrepreneurs. Adult literacy programmes are also planned.
Although focused on the land context, the NLP envisages that the GoSL will enact constitutional amendments to prohibit discrimination in business on the basis of gender or marital status, and to provide women with the right to full and equal protection under the law. Any discriminatory practices against women, including in work, business and public affairs, are expected to be outlawed. Businesses should take care to ensure that their policies are compliant with non-discrimination rights or amend them as necessary.
There is an on-going and much-needed land reform process underway in Sierra Leone, supported by the World Bank. Sierra Leone welcomes foreign investment in land, and the National Agriculture Transformation Programme (NATP) 2019-2023 has been designed by the Ministry of Agriculture and Forestry to attract foreign investment. The total cost of the NATP 2019-2023 is US$922 million or Le 8 trillion over the next 5 years. As part of the MTNDP, the GoSL is considering options for commercial land reform to modernise land tenure in the country’s rural heartlands.
The current regulatory framework for land investments is underdeveloped. A lack of transparency surrounding land deals has, on occasion, led to protests and violence and agribusiness ventures have occasionally become mired in land tenure disputes or attracted accusations of “land-grabbing”. Already, the Government of Sierra Leone, through SLIEPA and MAF, with support from DfID and FAO, are developing a new Agribusiness Investment Approval Process (AIAP). The AIAP will provide step by step guide to actualize investments in agribusinesses, as well as post establishment monitoring mechanisms.
Sierra Leone was ranked 109th in the world for protection of property rights in the World Economic Forum Global Competitiveness Report 2018, an improvement on previous years. The NLP includes a planned complete restructuring of the land rights administration system to provide greater transparency and strengthen security of title, including harmonising the current centralised system and local community traditions. The NLP envisages that an amendment will be made to enshrine universal land rights in the Constitution.
In addition, the NLP aims to build on the constitutional right to compensation for expropriation by enacting a statutory compulsory purchase scheme for public purposes, including a transparent planning process, a guarantee of compensation and a right to non-discrimination in the exercise of compulsory purchase powers. A new system for land registration is also to be introduced, and amendments made to land surveying requirements. A National Land Commission is to be established by 2023 to oversee the new land governance regime, including the operation of electronic title registers and an adjudication system for title disputes. The GoSL has committed to implementing the NLP and indicated an intention to focus on developing Sierra Leone’s property registration system, with the aim of reducing the cost and risk of doing business in Sierra Leone. A further area of focus will be the enforcement of planning and building regulations in consultation with relevant professional bodies.
There are significant historical differences between the land tenure system operating in Freetown and the Western Areas and the customary system in place in the Provinces and Sierra Leone’s Law Reform Commission has been working on draft legislation to further harmonise the two distinct systems. A freehold system operates in Freetown and the Western Area. A leasehold system is in operation outside of those areas. In order to help investors navigate the complexities of the customary system and so as to mitigate any perceived risks of privity between customary land owners and foreign investors, the GoSL may take a head lease on provincial land and sub-lease it to foreign investors. Foreign nationals may hold a lease of up to 50 years, extendable for a maximum of 21 years (or 99 years in relation to mining purposes). Under the customary system, in the absence of a GoSL head lease, investors can lease land by entering into a joint venture with the local chief. The sale of freehold interests in public land is prohibited under both systems pending the reform of land tenure laws.
It is possible to take out a mortgage in Sierra Leone, although it is not common. Securities are registered with the OARG in Freetown. Registration involves the payment of stamp duty, the rate of which ranges from 1% to 12.5% of the loan amount depending on the value of the loan. A small registration fee must be paid to the OARG. Where funds for repayment are to be repatriated, the relevant agreement should be registered with the Bank of Sierra Leone. Filing and registration takes between 48 hours and one week. Enforcement is through the normal court process.
The Ministry of Trade and Industry oversees the regulation of anti-competitive practices. A “Competition Policy” and a “Consumer Protection Policy” were prepared but not enacted into law prior to the parliamentary elections; the GoSL is working on both Bills with enactment planned before the end of the current year. The 2010 UNCTAD Investment Policy Review identified areas deserving priority consideration, including access for operators in the mining sector to facilities such as roads and railways that may be privately owned, and the competitive determination of prices in the operation of port services.
Although policies in these areas have yet to be finalised, a Committee under the Ministry of Trade and Industry was mandated to oversee the implementation of the ETLS, which aims to ensure that goods can be circulated freely within the ECOWAS Free Trade Area. Sierra Leone’s signature of the African Continental Free Trade Agreement also signifies a general willingness to progress the promotion of free trade at a regional level.
State-owned enterprises still exist in the energy, water, transport, financial and construction sectors, but they are subject to largely the same terms and conditions for market access and business operations as private enterprises.
As part of its privatisation programme, in 2002 the NCP was established to act as a shareholder on the GoSL’s behalf and serve as a policy and decision-making body with respect to the privatisation of state-owned enterprises. Among other things, the NCP is mandated to increase the participation of the private sector in state-owned enterprises. The NCP has expressed a commitment to attracting private sector investment, in particular with regard to infrastructure development projects at the SLPA, whose reform programme has been supported by the World Bank.
The Public Procurement Act was enacted in 2016 with the aim of furthering the decentralisation of domestic procurement processes. The NPPA is responsible for promoting improved procurement processes and capacity building in local organisations to run their own procurement processes. The NPPA maintains a register of current bid opportunities at various government agencies, and has produced a set of standard bidding documents to be used for all procurement processes. Limiting participation in procurement processes on the grounds of nationality is permitted if in line with relevant sectoral legislation.
The GoSL has determined that all public procurement transactions above the threshold of Le 200 million (approximately US$14,000) for goods and services, and Le400million (US$21,000) for works, must be awarded through an open competitive bidding process.
The GoSL does not regulate prices aside from in the petroleum sector. Prices in this sector are regulated by the Petroleum Regulatory Agency established by the Petroleum Act in 2013. The current royalty rates for crude oil and natural gas are set by the Extractive Industries Revenue Act 2018.
The Sierra Leone Intellectual Property Organization currently deals with IP issues but there are plans to establish a specialised IP division within the High Court.
Sierra Leone is a member of the WIPO and the ARIPO, the common IP organisation for the English-speaking parts of Africa. As a member of WIPO, Sierra Leone must implement the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
The IP regime in place in Sierra Leone is basic and issues have been reported concerning the enforcement of IP rights. Despite recent reforms to domestic IP legislation, the enforcement of IP rights is still difficult due to public sector capacity constraints and the fact that IP rights are generally not well-understood.
The Patents and Industrial Designs Act 2012 allows for the direct national filing of PCT applications. An international application under the PCT is treated as a domestic one. The Copyright Act 2011 provides copyright protection for authors and enshrines in statute rules concerning copyright eligibility, use, duration and vesting rights. Civil and criminal sanctions are imposed for breaches. Sierra Leone has not passed national legislation implementing international agreements in respect of trade marks, but the Trade Marks Act 2014 provides that trademarks can be protected at the OARG.
The GoSL has indicated that anti-corruption measures are a priority for its governance structure. The ACC has the power to investigate and indict companies for corruption offences.
The Anti-Corruption Act 2000, as amended in 2008, applies in respect of both domestic and foreign companies. Facilitation payments are a criminal offence for which the ACC can bring a prosecution but such payments remain a problem particularly in relation to public procurement, tax and dispute settlement. Issues also remain at local levels as the Local Government Act 2004 does not provide sufficient clarity on the relationship between tribal authorities and local councils. GoSL officials and private sector stakeholders have suggested that the Local Government Act should be reviewed, but this has not yet been concluded. However, improvements have been made in the public sector with the enactment of the Public Financial Management Act 2016, which contains provisions to control extra-budgetary expenditures and establishes a Single Treasury Account to ensure greater transparency in the management of public funds.
In the 2015 Budget, Le 4.2 billion (close to US$1 million) was allocated to the National Anti-Corruption Strategy with the aim of advancing the measures implemented in the Anti-Corruption Act. In its MTNDP, the GoSL indicated its intention to review the legislation governing the ACC including to strengthen the ACC’s investigative and prosecutorial mandate; establish a special division of the High Court to deal expeditiously with corruption cases; and adopt a new framework to ensure accountability and transparency in the public sector in the form of National Public Sector Transparency and Accountability Initiative (NAPSTAI) to subject the public sector to more scrutiny by civil society and development partners. The amendments to the Anti-Corruption Act are currently in Parliament.
As noted in the Sierra Leone at a Glance section, Sierra Leone has made progress on the Transparency International’s Corruption Perception Index, climbing 39 places in the rankings since the second Anti Corruption Act was passed in 2008. It is hoped that this trend will continue, although it is important to note that irrespective of the number of new rules adopted to combat corruption, it will be the degree to which those rules are applied and enforced which will determine success in this area. As noted above, the reinforcement of anti-corruption measures is a stated priority for the new government including in the MTNDP.
An overhaul of environmental laws is underway. The EPA was established by the EPA Act in 2008. The EPA is undertaking a complete review of Sierra Leone’s environmental laws under the auspices of the EU-funded Environmental Governance and Mainstreaming project.
Projects require environmental, social, and health impact assessments. These requirements are based on EU law and may therefore be familiar to international investors. The EPA is responsible for the administering and enforcing these assessments, which are non-binding. Enforcement action is rare and some projects have attracted controversy, with the bureaucratic process of adhering to enforcement requirements causing project delays in the past.
The Mines Act introduces measures to reduce the harmful effects of mining activities on the environment. Further details of these measures can be found in the Natural Resources section. Sierra Leone has long had in place the WCA, which prohibits construction, quarrying, farming and forest clearance in any designated national park in Sierra Leone. More recently, Sierra Leone has renewed its efforts to adopt international standards in forest conservation, renewable energy and climate change. In November 2014, the NPAA and the Conservation Trust Fund were launched to support the enforcement of the WCA.
Sierra Leone partakes in the Reducing Emission from Deforestation and Forest Degradation initiative, which aims to generate institutional, technical and social capacity necessary for sound forest governance, recognise the importance of forests in relation to climate change, and promote the use of renewable energy. At the time of publication, the export of timber from Sierra Leone is currently suspended. A Parliamentary committee is considering the further export of timber and Le 2.4m has reportedly been put aside for reforestation. In June 2018, Leadway Trading Company was appointed as the GoSL’s sole agent in respect of the export of timber harvested prior to the ban. It was reported in September 2018 that Leadway paid over US3.3 million to the GoSL in respect of the export of timber harvested prior to the ban.
In December 2015, the NPAA, UNDP, civil society actors and the Parliamentary committee on Agriculture, Forestry and Food Safety agreed the text of draft bills aimed at strengthening governance of wildlife conservation, forestry and wetlands, as well as proposed amendments to the NPAA Act to bolster the Authority’s powers to protect the environment.
In November 2017, a Biodiversity Strategy and Action Plan for the period 2018-2026 was introduced. Key priorities of the strategy include increasing awareness of biodiversity and conservation, greater monitoring of the EPA and NPAA, and enhanced reforestation and marine protection activities. The Action Plan also identifies a number of legislative priorities for consideration between 2017 and 2026. The National Water Resources Management Agency Act 2017 established the National Water Resources Management Agency, which has a wide mandate to protect water resources, promote water conservation and efficient usage, reduce water pollution and ensure compliance with international obligations regarding water resources. The Agency has the power to grant water rights and impose and collect water charges. A proportion of such charges may be allocated to the recently established National Water Resources Management Fund, which has been set up to fund the Agency’s activities. The Agency has the power to delegate its management functions to local Water Basin Management Boards, and to establish protected Water Catchment Areas, overseen by local management committees.
Water may not be extracted from raw sources without a permit from the Agency. This applies to water extraction for all commercial, industrial, agricultural and domestic purposes. The Agency has up to four months to make its decision on applications for water permits. There are stringent penalties for water misuse and failure to comply with any conditions attached to water permits.
The operation and maintenance of public water infrastructure is the responsibility of the Sierra Leone Water Company, whose functions were continued and revised by the Sierra Leone Water Company Act 2017. In part of the west of the country, this function instead lies with the Guma Valley Water Company, which has similar powers pursuant to the Guma Valley Water Company Act 2017.
The GoSL has developed a 5-year strategic plan intended to address problems with the Ministry of Water Resources, as well as considering the policy and legal changes to be made to clarify the Ministry’s role. The GoSL has published a National Agriculture Transformation Programme which addresses the environment in the context of agricultural development. In particular, in considers the need to protect biodiversity, the unsustainable nature of deforestation and the need for forestry management.
The Local Content Policy, which was approved in 2012, was codified in the LCA Act. The Local Content Policy requires a certain percentage of jobs in each sector to be held by nationals and the use of local suppliers where possible, and a Local Content Agency was been set up to assist with implementing this.
The LCA provides specified guidance on the percentages of local employees that a company must employ, and prescribes percentages of specific goods that must be sourced locally for various production processes. It is also aimed at strengthening cooperation between foreign and domestic enterprises and setting certain operational targets, including developing worker skills and improving technology. The LCA defines a Sierra Leonean company as one where 50% of the share capital is owned by Sierra Leonean citizens, and establishes the Local Content Agency to oversee the implementation of, amongst other initiatives, an annual Local Content Plan, a certification system for goods and services and a local content scorecard system to rank companies’ compliance with local content development policies.
Among the initiatives introduced by the LCA is the requirement for all contracts, sub-contracts and purchase orders exceeding US$250,000 to be declared to the Local Content Agency in a Quarterly Procurement Report at the start of the quarter in which they are to be put out to tender, and the tender packages submitted to the Agency for advance approval. There are also certain local content requirements relating to specific sectors as set out in the Key Sectors section.
The GoSL has announced an intention to review the LCA to ensure it effectively promotes local entrepreneurship. In addition, in April 2018, the President issued an executive order enforcing the provision of the Bank of Sierra Leone Act 2011 which requires prices for all contracts to be quoted and payable only in Leones, and mandates that all existing contracts are to be paid in Leones going forward regardless of the currency of the contract. This commitment was repeated by the President in his Presidential Address on 2 May 2019.
There is significant encouragement from the GoSL, civil society and NGOs for inward investors to undertake CSR projects in Sierra Leone, and greater participation from local enterprises is also evident. Both private and State-owned enterprises are increasingly running CSR programmes, and CSR is built into government department and agency performance contracts to ensure that they provide support for the communities in which they operate. Common activities include the sponsorship of education programmes, community resource management and environmental sustainability initiatives.