Identifier
Created
Classification
Origin
09MONROVIA70
2009-01-21 10:03:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Monrovia
Cable title:  

LIBERIA: A NEW, ASSERTIVE BUREAU OF MARITIME AFFAIRS

Tags:  ECON EWWT EFIS PHSA SENV LI 
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RUCNDT/USMISSION USUN NEW YORK 1593
RULSJGA/COMDT COGARD WASHINGTON DC
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RUENAAA/SECNAV WASHDC
RUEATRA/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHAAA/NSC WASHDC
RUEHFN/USDAO FREETOWN SL
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RUEHAR/USDAO ACCRA GH
UNCLAS SECTION 01 OF 04 MONROVIA 000070 

COGARD FOR IPSLO ACTIVITIES EUROPE ADAM SHAW

SENSITIVE
SIPDIS

E.O.12958: N/A
TAGS: ECON EWWT EFIS PHSA SENV LI
SUBJECT: LIBERIA: A NEW, ASSERTIVE BUREAU OF MARITIME AFFAIRS

REF: A) 07 MONROVIA 1293, B) 08 MONROVIA 751

UNCLAS SECTION 01 OF 04 MONROVIA 000070

COGARD FOR IPSLO ACTIVITIES EUROPE ADAM SHAW

SENSITIVE
SIPDIS

E.O.12958: N/A
TAGS: ECON EWWT EFIS PHSA SENV LI
SUBJECT: LIBERIA: A NEW, ASSERTIVE BUREAU OF MARITIME AFFAIRS

REF: A) 07 MONROVIA 1293, B) 08 MONROVIA 751


1. (SBU) Summary: Recently appointed Liberian Bureau of Maritime
Affairs (BMA) Commissioner Binyah Kesselly is seeking to assert
tighter control over the country's outsourced shipping registry and
has embarked on an ambitious program to transform Liberia into a
"maritime nation" by expanding BMA authority beyond the ship
registry into other maritime services. Kesselly told the Ambassador
January 9 that negotiations with the current registry agent,
Virginia-based LISCR, LLC, would restart this month, but he also
hinted that the GOL may have other alternatives to renewing with
LISCR if an agreement proves elusive or recent corruption
allegations prove too serious to overcome. Kesselly outlined his
priorities for the BMA, including leadership of Liberia's efforts to
meet International Ship and Port Facility Security (ISPS) Code
requirements at the Port of Monrovia, the creation of a Regional
Coordinating Center for Maritime Search and Rescue, the
re-establishment of a Liberian Maritime Training Institute (LMTI),
coordination with the Ministry of Defense for the formation of a
Liberian Coast Guard, and ratification of a backlog of International
Maritime Organization (IMO) Conventions. End Summary.

--------------
A NEW DAY FOR BMA
--------------


2. (U) The Liberian Bureau of Maritime Affairs (BMA) is an
autonomous agency within the Executive Branch charged with enforcing
maritime law and other international conventions and administering
the world's second-largest international ship registry which
generates significant revenues for government. Apart from handling
some national elements of the maritime regime - such as small craft
registry and local regulations - the BMA has historically been
primarily a political organization that represents the GOL in the
international maritime sector, primarily the International Maritime
Organization (IMO).


3. (SBU) Commissioner Kesselly was appointed in April 2008 and has
embarked on an ambitious program to transform the ship registry into
a "Best in Class" service and transform Liberia into a "maritime
nation" by expanding BMA authority beyond the ship registry and into

ecotourism, fisheries, marine services, merchant marine training,
and even shipbuilding. Kesselly told the Ambassador January 9 that
his initial focus is on increasing revenues from the registry,
engaging private management for the renovation and administration of
the Liberia Maritime Training Institute (LMTI) and catching up on
the ratification of IMO conventions (see paragraph 17 for a list of
conventions). As an illustration of the BMA's new assertiveness,
Liberia also co-sponsored UN Resolution 1851 on piracy last December
and is drafting domestic laws that would allow for the prosecution
of pirates according to Liberian law.

--------------
SHIP REGISTRY MANAGEMENT UNCERTAIN
--------------


4. (SBU) Liberia's ship registry, with over 2,978 Liberian-flagged
vessels as of December 2008, is the second-largest in the world. In
1999, the GOL appointed the Liberia International Ship and Corporate
Registry, LLC (LISCR) to manage the registry, including the
collection of taxes, fees, charges and other amounts due to the GOL.
LISCR is a purpose-made limited liability company registered in
Delaware and based in Virginia. The legal basis for LISCR's
appointment is an Act of the Liberian Legislature, an unusual
measure intended to provide security to the LISCR investors who are,
as per the statute, exclusively U.S. nationals. The Act expires
December 31, 2009. (Note: Discussions of the ship registry
negotiations are business-proprietary and are for USG use only. End
note.)


5. (SBU) After LISCR's appointment, the BMA largely lost touch with
the management and affairs of the ship registry. Moreover, weak
professional capacity at the BMA and poor overall governance during
the initial years of the appointment encouraged LISCR to take
increasing authority for other BMA responsibilities in order to
reduce the risks to the registry. By 2006, LISCR, LLC played a
primary role in dealing with ship-owners worldwide and, apart from
involvement of an accredited diplomat to the IMO in London, was seen
as the face of Liberia in the international maritime community.

MONROVIA 00000070 002 OF 004


Commissioner Kesselly has already moved to re-exert direct BMA
control over non-registry related maritime matters and to more
tightly control registry oversight.


6. (SBU) While the GOL ultimately would like to manage the registry
directly in order to cut out the agent, the President reportedly
decided in 2008 to renew LISCR's contract in order to avoid any
potential defections by ship owners. Negotiations were set to begin
last July but were sidelined over a corruption scandal involving
LISCR CEO Yoram Cohen and members of the President's internal circle
(ref. B). Kesselly told the Ambassador June 9 that negotiations
with LISCR would restart this month, but he has also hinted that the
GOL may have other alternatives to renewing with LISCR if an
agreement cannot be reached. Kesselly added that the new agreement
would be a management contract rather than a law.


7. (U) (Note: The GOL-commissioned report of the corruption scandal
recommended January 12 that the GOL not reappoint LISCR as Agent for
the registry, saying, "the Government of Liberia's resolve to renew
the LISCR contract though understandable, seems not to have been the
best procedure to adopt in light of scandals involving certain LISCR
executives including the allegations of gunrunning in Liberia and
other parts and the possible concealment of revenues that should
have accrued to Liberia from the maritime program." End note.)


8. (U) The BMA's operating budget of approximately $900,000 is
funded directly from registry revenues, and the salaries and
benefits of all the BMA personnel, including those working outside
Liberia, are not constrained by Civil Service regulations (and are
not subject to scrutiny in the same way as other GOL expenditures
and decisions made in the context of GOL finances as a whole).
Gross revenues to LISCR were $36 million in 2004 (the last year
financial statements were audited),from which management and agent
fees ($11 million),administrative costs ($10 million) and IMO
dues/fees ($3 million) were extracted to leave a roughly $13 million
contribution to the GOL budget. GOL revenues fell to $10.8 million
in (calendar year) 2006, but have risen back to $13.1 million in
2007 and $14.6 million in 2008, according to Kesselly. In 2007,
LISCR revenues account for approximately 6% of the total GOL budget.



9. (U) In addition to the shipping registry, LISCR also manages a
Liberia offshore Corporate Registry for non-resident corporations
and other non-resident entities/associations. While the principal
use of this service is for ship owners to create dummy corporations
in order to flag the vessels, other entities, such as international
investment companies and traders, incorporate in Liberia to take
advantage of the beneficial tax environment in effect for
non-resident corporations. Responsibility for the Corporate
Registry is vested in the portfolio of the Minister of Foreign
Affairs.

--------------
BMA TAKES LEAD ON PORT SECURITY
--------------


10. (SBU) The U.S. Coast Guard International Port Security Team
conducted a review March 2007 of port security measures relating to
the International Ship and Port Facility Security (ISPS) Code in
place in Liberia and found that the Port of Monrovia did not meet
ISPS Code requirements. (Note: Firestone Liberia maintains a
self-contained ship-to-port interface at the Port of Monrovia that
is ISPS compliant and the USCG has granted Firestone a waiver for
its vessels traveling between Monrovia and the United States. End
note). Follow-up visits in March and August 2008 found only minimal
progress on implementing the ISPS Code, with notable problems in the
areas of access control, monitoring the facility, anchorage and
berthing areas, monitoring restricted areas, supervising the
handling of cargo and ship's stores, and, communication of security
information. The USCG also confirmed the GOL still had not
established a Designated Authority (DA) for ISPS compliance.


11. (SBU) Since August 2008, the GOL has established a multi-agency
Port Security Technical Team, led by the BMA, to pursue ISPS
compliance. Kesselly told the Ambassador January 9 that the
President had issued an appointment letter (though not an Executive
Order) naming the BMA as the Designated Authority for ISPS. He also
said the BMA has drafted an initial Port Facility Security
Assessment (PFSA) and developed a Port Facility Security Plan

MONROVIA 00000070 003 OF 004


(PFSP),though implementation remains uncertain and unproven ahead
of the next formal USCG visit in March 2009 to assess compliance
with the ISPS Code.


12. (U) The BMA, through LISCR, also monitors ISPS compliance aboard
Liberian-flagged vessels, requiring all ships subject to the ISPS
Code to complete Ship Security Assessments (SSAs) and Ship Security
Plan (SSPs) and submit them to an approved Recognized Security
Organization (RSO) for review and approval. The BMA/LISCR also
conducts flag-state inspections aboard all Liberian-flagged ships to
verify ISPS Code compliance.

--------------
MARITIME TRAINING
--------------


13. (U) The BMA has initiated plans to re-establish the Liberian
Maritime Training Institute (LMTI) near Marshall, just south of
Roberts International Airport. The BMA hopes to develop a national
maritime workforce with the goal of providing qualified and
competent Liberian seafarers to the international shipping industry.
LMTI's facilities and infrastructure were destroyed during the war
and there are currently few qualified instructors. The BMA has
engaged the IMO as well as the domestic seafarers union(s) as
potential cooperative partners for the LMTI, and is considering a
contract to outsource the rehabilitation and management of the
institute.

--------------
MARITIME SEARCH AND RESCUE
--------------


14. (U) The IMO selected Liberia in 2007 to serve as the Regional
Coordinating Center for Maritime Search and Rescue in West Africa
Region, comprised of Ghana, Cote d'Ivoire, Guinea and Sierra Leone.
The Liberian Legislature passed two bills for the creation of a
Maritime Search and Rescue Center and for the ratification of the
International Search and Rescue Convention of 1979. In 2008, the
BMA signed a Memorandum of Understanding (MOU) with Firestone for
maritime capacity building and with the Ministry of Defense for the
establishment of a Search and Rescue Communications Center (SRCC).
Construction of the SRCC started in August 2008 and is expected to
be completed in April 2009. The facility, which is located on the
north side of the Port of Monrovia, will also house the Liberian
Coast Guard.

--------------
MARITIME SURVEILLANCE AND CONTROL
--------------


15. (U) According to a recent USCG survey and a 2005-2006 regional
study, it is estimated that 250-300 illegal fishing boats regularly
operate in Liberian waters. Liberia's coastline measures
approximately 360 miles (579 kms) and the country claims both a
territorial sea and an exclusive economic zone of 200 nautical miles
(370 kms). Exercising control over the country's entire territorial
sea and exclusive economic zone, an area encompassing 1,900 sq
miles, is a task beyond the near-term economic resources of the
country.


16. (SBU) Kesselly explained that the BMA has begun to train a
31-member Maritime Security Team that will eventually become a
land-based "Maritime Police" force to enforce BMA regulations.
Meanwhile, the USG (through the USCG and the Office of Security
Cooperation) is assisting the GOL with the establishment of a
Liberian Coast Guard. To date 44 Armed Forces of Liberia personnel
have been selected to start up the Coast Guard; training will start
in early 2009. The OSC also helped revamp Liberia's Automatic
Identification System (now called Maritime Safety and Security
Information System - MSSIS) for monitoring ship traffic in Liberia's
EEZ in 2008. The system is controlled out of the Ministry of
Defense, but Kesselly is seeking to base the system at BMA.


17. (SBU) Comment: Despite Kessely's hope that the government can
take over the ship registry directly, this is likely to be a long
way off. Since LISCR has a firm grip and ultimate control over the
current direction of the registry, and possession of the registry
records, it would be very difficult to wrest control from LISCR
while at the same time continuing to operate the registry

MONROVIA 00000070 004 OF 004


satisfactorily. Further, despite the allegations of impropriety by
LISCR to maintain its contract, the firm has enhanced the reputation
of the Liberian registry and increased the number of flagged ships.
As a result, the ship registry has become an important part of
Liberia's revenues; revenues that now flow directly and
transparently into the government budget. In contrast, one of
Kessely's predecessors, Benoni Urey, was so effective in siphoning
off funds for Charles Taylor and himself that he now is on the UN
Travel Ban and Assets Freeze lists. The GOL should ensure that
transparency and accountability are reinforced as part of any new
agreement in order to prevent future temptations for abuse. End
comment.

--------------
GOL RATIFIES SEVERAL IMO CONVENTIONS
--------------


18. (U) Following is a list of Maritime Conventions ratified by the
Liberian Legislature in 2008:

-- The International Convention on Civil Liability for Bunker Oil
Pollution Damage, 2001

-- The International Convention on Control of Harmful Anti-Fouling
System on Ships (AFS),2001

-- International Convention for the Control and Management of Ships
Ballast Water and Sediments, 2004

-- Convention on Limitation of Liability for Maritime Claims (LLMC),
1976 as amended by the 1996 protocol

-- The Oil Labor Convention, 2006

-- International Convention on Liability and Compensation for Damage
in Connection with the Carriage of Hazardous and Noxious Substances
by Sea (HNS),1996

-- Protocol on Preparedness Response and Cooperation to Pollution
incidents by Hazardous and Noxious Substances (OPRC/HNC),2000

-- International Convention on Salvage, 1989

-- 1994 Amendments to the Convention on International Maritime
Satellite Organization, 1976

-- Torremolinos Convention for the Safety of Fishing Vessels, 1997
and 1993 protocol

-- United Nations Convention on the Law of the Sea (UNCLOS),1982

--------------
BIOGRAPHIC INFORMATION
--------------


19. (U) BMA Commissioner Binyah C. Kesselly is the son of Edward
Binyah Kesselly, a former Minister of Defense after whom Liberia's
primary military base is named. Prior to joining the BMA, Kesselly
was a Director of Enterprise Improvement at McNeil Consumer
Healthcare in New Brunswick, New Jersey. He has held various other
strategic management positions in pharmaceutical and biotechnology
industries as well as management consulting firms.

THOMAS-GREENFIELD