Death Quarries: Has the Day of Reckoning Arrived?

2023-11-08    |   

Death Quarries: Has the Day of Reckoning Arrived?


Decades elapsed before the Lebanese state made any breakthrough on the issue of the dues owed by the quarries and crushers sector to the public treasury. These decades not only witnessed health and environmental massacres, pollution of the groundwater and springs, and the displacement of the inhabitants of the surrounding regions but also resulted in a gigantic public bill of at least USD2.3 billion still unpaid by the quarry owners. This figure represents the compensation owed to the state for the volumes extracted by the sector from 2007 to 2018, according to a study issued by the Ministry of Environment and the United Nations Development Programme.


It is a tragic irony that this study came amidst a suffocating financial and economic crisis in which the government is soliciting foreign sources to fund the treasury, resorting sometimes to the International Monetary Fund for a few billion and sometimes to certain countries to cover certain expenses. Recently, it has been discussing the draft budgets for 2023 and 2024, which significantly increase public burdens on citizens, while it refrains from introducing any improvement to the base salaries and benefits of public sector employees and retirees.


With the announcement by the Ministry of Environment that it intends to collect these sums, all eyes are on the mechanism for collection, the issues and obstacles it may face, and the future of this sector and the dynamics of its relationship with the state. This issue constitutes one of the greatest cases of corruption as it involves many wrongdoings that include not only tax evasion, unpaid fees, and unlicensed operation, but also broader environmental and financial crimes, not the least of which is illicit enrichment and money laundering. The issue also involves administrative and political liabilities that the study, though it did not mention them, provides facts to help prove.


Before detailing the most important content of the study – which is akin to a forensic audit of the quarries sector – and the methodology adopted for pursuing its recommendations, we must note its similarity to and concurrence with the report resulting from the forensic audit of the accounts of Banque du Liban.


The History of the Corruption: A Cross-Country Problem


The quarries and crushers sector is truly one that exists entirely outside the law as the legislation enacted to regulate it remains ink on paper. The corruption in this sector spans across Lebanese territory, with no area escaping its lethal fangs. This is due to the vast influence of the crusher and quarry owners and the web of relationships and interests linking them to decision-makers in the political authority, as well as misadministration – marred by ill intentions – by the Lebanese state.


More than 20 years have elapsed since the promulgation of Environmental Protection Law no. 444 of 2002, which established the general legal framework for implementing a national environmental protection policy. The same time has elapsed since issuing the subsequent decree regulating quarries and crushers (Decree no. 8803 of 2002), which established the National Council for Quarries and Crushers, created a new mechanism for granting operating licenses, and restricted them primarily to Lebanon’s eastern mountain range. But the excavation, quarrying, and crushing continued all across Lebanon’s geography, the vast majority of it unlicensed (or licensed by an incompetent authority) and in violation of the legal conditions. Successive governments attempted to legitimize the sector by granting quarry owners administrative grace periods, ignoring the decrees regulating it. Several such decisions were nullified by multiple decisions recently issued by the State Council.


The biggest turning point in this issue during the last few years was the 2019 Budget Law. Article 61 of the law charged the military with conducting a comprehensive field survey of the quarries and crushers across Lebanese territory and paused the prescription period for violations committed by their owners. The article stipulated that those who have operated without a legal license or violated their licenses must be prosecuted until they pay all taxes and fees for all years of operation from 2004 onwards and fulfill all their obligations to repair the environmental damage they caused. Decree no. 6569 of 2020 then defined the scope governing the application of this article and its mechanisms. The army ultimately submitted six batches comprising 661 files for 1,235 quarries for the purpose of calculating the dues that the sector owes to the treasury.


Note that the Legal Agenda previously presented the history of quota-sharing in this sector and tracked the ongoing movement by the inhabitants of quarry-affected regions. We cast light on the environmental damage to the water, ground, and air, as well as the effects on citizens’ health, especially in the Koura region in the Legal Agenda’s issue no. 58. The issue titled “Koura in the Dragon’s Mouth: Who Licensed Murder?” We followed the cases that environmental associations filed, in cooperation with us, with the State Council and that concluded in the nullification of the decisions granting administrative grace periods, as previously explained.


According to the study, 15.15 million m2 are exploited by quarries and crushers, and 196.9 million m3 have been extracted. The survey also showed that 126 quarries (10.2% of all quarries) encroach on state property, 201 (16.3%) encroach on private property, and 149 (12%) are on unsurveyed or unregistered lands. Notably, the authors merely stated that these lands are of unknown ownership and made no effort to identify who owns them, be it the state or individuals. The report mentions that it was the army that undertook the task of surveying the lands and identifying their owners. The report also recommends immediate efforts to clarify the facts in cases of unknown ownership, especially in Kesrouane (Mayrouba and Hrajel), and refute disinformation in order to “sort out these issues and stop the severe hardscape degradation”.


According to the data published in the study, Mount Lebanon Governorate is the location most targeted by quarry operators. There, the exploited – nay, destroyed – areas totaled 4.27 million m2, the largest number being in Kesrouane’s barren hinterlands. Next came Baalbek-Hermel with 3.28 million m2. Then came North Lebanon with 2.28 million m2, the largest number being in the Batroun District in the Chekka area, where the study singled out the quarries operated by the companies Holcim and Cimenterie Nationale. Akkar had the highest rate of encroaching quarries (47% of quarries in the governorate), followed by North Lebanon (37%), Bekaa (35%), and Baalbek-Hermel (29%). The area of the encroachments reached 378,192 m2, or 2.5% of the total area of the quarries (without considering the lands of unknown ownership).


Here Lies the Stolen Wealth


The data covers the period from 2007 to 2018. Hence, an exchange rate of LL1,507.5 to USD1 was adopted to calculate damages. The dues were calculated per quarry, not per operator, and were divided into three categories: financial damages, nonfinancial damages (pain and suffering), and punitive damages.


The financial damages include fines, late fees, and regulatory and tax charges, in addition to the cost of environmental degradation and rehabilitation. These damages are the only ones that the study estimates. In other words, the USD2.394 billion figure represents only the financial damages. According to the study itself, the figure is also very conservative for several reasons. Firstly, the extracted volumes upon which the study was based pertain only to the 2007-2018 period even though Article 61 of the 2019 budget stipulated that the dues be calculated from 2004 onwards. Secondly, the radiuses used to calculate the damage from air pollution and sight pollution are only 1,000 m and 500 m respectively, whereas scientific sources indicate that larger radiuses could be considered in some cases. Thirdly, the damages for pain and suffering and punitive damages were not calculated.


The methodology used to calculate the financial damages, specifically the diversity of the taxes and fees considered (the most prominent being company income tax and VAT), shows the extent of the tax and fee evasion committed by quarry operators. To this can be added the costs of the air, sight, and water pollution, rehabilitating the landscape and hardscape and green cover, and addressing landslide risks.


An issue may emerge concerning the collection of the fees and taxes, which total USD943 million at the exchange rate of LL1,507.5 to USD1. Because these fees and taxes were set in Lebanese lira and the exchange rate has now reached approximately LL90,000 to USD1, they would lose approximately 98% of their value if paid in that currency. However, this issue does not appear to exist for the collection of the other dues, namely the cost of environmental degradation and rehabilitation of the affected sites, which is calculated based on actual value. In this regard, we must consider using legal instruments to avoid these issues. For example, leveling charges of money laundering (Law no. 44 of 2015) based on tax evasion or corruption, including bribery, influence peddling, embezzlement, abuse of position or authority, and illicit enrichment, would allow perpetrators to be fined double the amount that was laundered.


Nonfinancial damages (pain and suffering) were not included in the study as they would be determined via personal cases filed by the victims, be they natural persons, such as the residents of adjacent areas, or legal persons, such as municipalities, municipality federations, and associations. Such cases could have positive outcomes for the victims if there is evidence of the causative link between the harm they incurred and quarry operators’ violations, such as flagrant environmental damage, collapsed land prices, and homes cracking due to illegitimate activities. However, proving the causative relationship is not always possible, especially in the case of lung diseases and similar ailments.


A criticism of this approach is that it addresses the issue only from the angle of the misdemeanors stipulated in the Penal Code, the decree governing quarries and crushers, and the Environmental Protection Law, whereas the issue should be addressed from a broader criminal angle. The acts perpetrated by the quarry operators constitute more serious crimes that fall within the scope of money laundering and illicit enrichment. There is no more glaring example of what is commonly referred to as “stolen wealth” than the quarries and crushers issue. Hence, criminal fines as high as double the amount that was laundered (under Combating Money Laundering and Financing Terrorism Law no. 44 of 2015) and three times the value of the material benefit expected or reaped (under Combatting Public Sector Corruption and Establishing a National Anti-Corruption Authority Law no. 175 of 2020) could be imposed.


A Roadmap for Recovering the Funds


The study addresses two fundamental issues: the means for collecting the estimated sums, and the options for distributing them. The Ministry of Environment asked the Legislation and Consultation Committee a series of questions based on the questions that the study’s authors raised in this regard. The opinion that the committee issued on 20 March 2023 (Opinion no. 175 of 2023) deemed it preferable for each party concerned to collect the funds earmarked for it via its own procedures and without a unified collection authority. In other words, the Ministry of Finance would collect the fees and taxes via the procedures for collecting direct taxes and similar fees (Law no. 147 of 1959 and Decree no. 22832 of 1959), while the Ministry of Defense would collect the cost of surveying work. As for the environmental dues covering the cost of degradation and rehabilitation, they would be paid through the procedures stipulated in the Environmental Protection Law and Decree no. 6569 of 2020, which allows the Ministry of Environment to issue seizure orders. The cost of rehabilitation and degradation could also be collected from the security deposit set by the National Council for Quarries and Crushers.


The committee also deemed that nongovernmental parties cannot be employed to carry out the operation, whether for notification or collection. However, there is no legal barrier to cooperating with such parties for logistical, technical, and administrative assistance or accepting their donations in accordance with the procedures stipulated in the Public Accounting Law.


As for the legal means of collection, regarding the regulatory and monetary dues the committee mentioned the procedures stipulated in Article 45 of Public Accounting Law no. 14969 of 1963 for liquidating and collecting state debts and their revenue, whereby the head of the relevant department of the Ministry of Finance issues collection orders. It also mentioned the procedures stipulated in articles 5, 11, and 12 of Direct Tax Collection Procedure Law no. 147 of 1959, which governs the issue of fee defaults, the procedure for issuing warnings, and the means whereby movable and immovable assets are seized and auctioned in the case of refusal to pay.


Regarding the punitive dues, the committee deemed that the criminal justice route must be taken for fines to be imposed. Regarding the account in which the funds should be deposited, the committee recommended that the operating fees and fines mentioned in Decree no. 6569 of 2020 go to the municipality in which the crusher is located or to the treasury fund if it is located outside municipal limits, in accordance with Article 23 of Decree no. 8803 of 2002.


As for the damages resulting from environmental damage and degradation, the cost of rehabilitation, and the criminal and administrative fines, the committee suggested that these sums be deposited in a joint USD account opened in Banque du Liban under the Lebanese state’s name and earmarked for environmental projects. It also mentioned that once the National Environment Fund is established, the funds must be transferred there and the yield earmarked for environmental projects. Note here that Article 54 of the 2023 budget bill stipulates that amounts owed in USD should be collected in a special USD account in the Banque du Liban.


The committee also mentioned that the state could make reconciliation deals with quarry owners to expropriate the properties concerned, using the concept of urgent expropriation stipulated in Article 58 bis of Expropriation Law no. 58 of 1991, and turn them into sites of public utility such as landfills. Similarly, it said that the minister of environment can make settlements on fines, provided that the settlement does not excuse more than half the fine, based on Article 66 of the Environmental Protection Law. It also encouraged the publication of information and studies on the subject pursuant to the principle of citizen participation found in Article 18 of the same law. The article stipulates that the state should ensure citizen participation in the management and protection of the environment by providing free access to environmental information in accordance with the laws and regulations in effect and establishing consultative mechanisms on the national and local levels that include citizens and associations concerned with environmental matters.


Ensuring Full Accountability and Justice


If the extent of the destruction and ruin that this sector has inflicted on the environment and people can be measured, then restricting liability to individual quarry or crusher owners who failed to pay fees, operated without a permit, or dodged taxes would be a betrayal of the rights of nature and the environment, and the rights of an entire society and nation with its past, present, and future generations.


Those who failed to pay fees or taxes, operated unlicensed, or encroached on public or private property could not have done so without the protection of government and administrative officials and, in practice, without committing numerous crimes of abusing power. For liability to be complete, none of these people should be spared from it. The study did not address this issue’s most prominent element, namely the administrative liability of those figures who were entrusted with protecting the environment, nature, and people’s health, and applying the law but colluded, ignored, or exploited their positions to allow the massacre to continue all these years. The most important figures whose liabilities should be examined are the successive ministers of interior, environment, and finance, and governors over the past decades, at least from 2002 onward.


The liability of figures in the public prosecution offices is also important. Specifically, we should examine the Environmental Public Prosecution, which is supposed to prosecute violations of the laws and regulations pertaining to quarries, sand pits, and crushers under Article 11 bis of Code of Criminal Procedure no. 2328 of 2011, and the Financial Public Prosecution, which is supposed to prosecute violations of tax and fee laws under Article 19 of the same law. These figures shelved the complaints and sat idly by.


Apart from the criminal liabilities of ministers and administrative officials, the political forces that have participated in government over the past decades bear a political liability because of the government’s decisions to grant administrative grace periods to operate quarries in violation of the law. The State Council described this policy as abetting a crime.


Ensuring That the First Phase of the Battle Is Not Lost


The crushers and quarries issue is undoubtedly thorny and extremely complex. The people who benefit from them are surrounded by all kinds of illegal and illegitimate de facto immunities because the companies operating them have influence inside the corridors of the political and judicial authority and recruit self-interested lobby groups in the media and the departments of the various ministries, particularly the Ministry of Environment itself. Their counterattack has begun to take shape, as evidenced by the tweet by MP Michel Daher, who represents Zahle district (the same Zahle where the area of the quarries has, according to the study, reached 923,458 m2). In it, Daher protests the “injustice” against crusher owners in the area and argues that “it is wrong to issue them massive USD fines on the pretext of environmental damage based on the environment minister’s text”.


The abusive methods now used to dilute, prolong, and bury judicial investigations have become clear to everyone. Such methods include maljudging and judge disqualification cases, which have become a loophole allowing any perpetrator to shed responsibility for their actions, obstruct the course of justice, and escape punishment, as has occurred in the port blast case, financial crime cases, and other cases that have at best been handled with severe carelessness and disregard.


Corruption has transcended its traditional meaning – namely the transfer of wealth from the public to the private or the wrongful enrichment of one group at the expense of another – to include inflicting mortal damage in a direct manner. Treating these cases lightly could lead to dire catastrophes, as most recently shown by the warning about seismic fault movement caused by the crushers, which continue to operate in defiance of us all.


This article is an edited translation from Arabic

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