Monrovia – President Ellen Johnson Sirleaf has submitted a bill seeking to amend for the second time the concession agreement between Firestone Liberia Inc. and the Republic of Liberia.
Report by Henry Karmo – [email protected]
With the slump in the price in rubber globally, Firestone – one of Liberia’s oldest concession companies – is looking forward to expanding its scope of operations in the country with rubber processing and other forms of agriculture being key considerations.
Plenary of the House of Representatives received the communication from the office of the President Thursday and forwarded same to the Committees are Agriculture, Ways, Means, Finance and Development Planning, Investment and Concession and Contract and Monopolies for deliberation.
The Amendment seeks to amend certain provisions of the 2008 Firestone Concession Agreement.
The Bill titled “Amendment to the Amended and Restated Concession Agreement between the Republic of Liberia and Firestone Liberia Inc.”, when ratified will enable the rubber company to consider and begin the process of engaging into other agricultural productions.
The company has suffered some setbacks since 2013 when the price of rubber on the world market began to decline – forcing the company to redundant several employees.
The amendment as sought by the executive is to enable the company steadily scale up its fallen production.
The President wrote: “Honorable Speaker, in view of the foregoing, I ask your timely ratification of the Bill which supports Government’s goal to rehabilitate and develop the rubber industry of our beloved country, thus providing jobs for the Liberian people.”
The Joint Committee is expected to report to Plenary within two weeks.
The 99-year controversial agreement which was originally signed in 1926, much to the disadvantage of the country and subjecting the country’s finances and labor force to the company – making it very difficult for good labor practices to be discussed.
The deal gave Firestone one million acres of Liberia’s rich tropical forest for 99 years, at the annual rate of $0.06 per acre a year. In addition, any gold, diamonds, or other minerals discovered on the land would belong to Firestone.
Upon taking office in 2006, President Ellen
Johnson Sirleaf acted on her promise to review all contracts and concession agreements signed by previous governments, including the transitional government led by Charles Gyude Bryant. The intent was to ensure that they meet the interest of the country.
Among the agreements renegotiated was that of Firestone.
The 2008 amended and restated agreement, according to Dr. J. Chris Toe, the then Minister of Agriculture and the government’s lead negotiator, was “an embodiment of Government’s goals to ensure that all existing agreements equitably protect Liberians’ interests and are consistent with principles that attract and sustain foreign investment in Liberia.”
The Amended Agreement also subjected the multi-million dollar company to applicable Liberian laws.
Under the Amended Agreement, which runs through 2041, Firestone committed to continuing its replanting efforts, to complete a rubber wood factory that will directly add a minimum of 500 new jobs, to grow its support to small Liberian rubber farmers and to undertake additional social and educational projects.
The 2008 Agreement permits an increase in the income tax rate payable by Firestone from 25 percent to 30 percent, establishes new transfer pricing provisions for dry rubber and latex based on international indices, and makes a number of other changes that allow the Government to exercise more flexibility in applying its revenue laws.
The 2008 agreement, however, did not include the processing of rubber in Liberia which could create jobs for thousands of Liberians and boost the country’s economy.
FrontPageAfrica has not been able to establish to what extent and kind of rubber processing Firestone will be carrying out as per the agreement. It is also not yet clear as to what kind of Agriculture production the company is seeking to get involved with.