Senate Gives Firestone Liberia Exclusive Right for Production
Monrovia – Plenary of the Senate has amended the 2008 Concession Agreement between the Government of Liberia and Firestone Liberia Inc. The decision to amend the Firestone Agreement was triggered by a report submitted on Thursday, May 23, by the Senate Standing Committee on Concessions and Investment during the 33rd day sitting of the Liberian Senate.
The Government of Liberia and Firestone Rubber Plantation entered into the amended and restated Concession Agreement on February 22nd, 2008 and it became effective pursuant to law and its terms on March 31, 2008.
The committee, in its report to plenary, indicated that certain international decisions have affected the price of rubber thus leading to substantial and unanticipated decline in rubber prices.
Further, the Committee said, this has threatened the continued viability of rubber production in Liberia and causing production to remain less than 30 percent of pre-1990 production levels due to inability to replant during the civil war in Liberia, which damaged substantial quality of rubber trees.
Against this backdrop, the Senate Concession and Investment Committee, said the company requested that certain amendments be made to the 2008 Concession Agreement in the light of these constrains/ factors and that parties have agreed accordingly to amend the 2008 Concession Agreement.
The committee further noted that prior to its submission, met in committee room three times owing to the nature of the amendment to review and thoroughly scrutinize the document for three days beginning May 13, 15 and 17 respectively.
Major considerations in the amendment also indicate that Firestone Liberia shall not be exempted from but subject to pay the real property tax provided for by section 20.10 of the 2008 Concession Agreement during the Extended Rehabilitation Term.
Additionally, under production and other basic rights, the Government of Liberia has granted Firestone Liberia the exclusive right, permit and license to engage in production in the production area (subject to other terms in Liberia) and utilization in Liberia of rubber and rubber products and the exportation of rubber product from Liberia.
Also, except as otherwise provided in the amendment, Firestone Liberia is not to engage in any business other than the production and utilization in Liberia of rubber and rubber products and the export from Liberia of Rubber products, adding that in the event Firestone Liberia wishes to engage in the production in Liberia and the export from Liberia of Agriculture products other than Rubber product, the company should first notify the Government of Liberia of her intention to do so.
As captured under Sale Price of Rubber products, the agreement at the same time states that Firestone Liberia shall have the right to sell rubber products to unrelated persons of her choice, on an arm’s length basis, at price she might deem appropriate taking into account good, modern, competitive business practice, except both parties so agree in accordance with section 4.1(a) and that Firestone Liberia informs the Government of Liberia not less than six month of the terms and conditions of all such sales made pursuant to section 7.4.
Under Purchase of Rubber and Rubber Products, the agreement states that Firestone Liberia shall have nonexclusive right at all times to purchase, without limit, rubber and rubber products from Liberia rubber farmers and other persons in Liberia, subject to the terms of sections 4.1(a) and 7.4, thereof to the process, market, sell, deal in export all such rubber and rubber products.
Moreover, the Committee pointed out that Firestone Liberia is to provide one house for each Firestone Liberia employee entitled to housing by December 31, 2023. In conclusion, the committee captured in its report, that prior to January 2042 Firestone Liberia shall not be subject to import duties on goods and materials to meet its social obligations including approved medical and educational materials.
“Based on the findings indicated, the Senate Committee on Concessions and Investment recommends to the Plenary of the Senate to approve the enactment into Law”. With such recommendation from the Committee, plenary through a motion from Grand Kru County Senator Peter Coleman, voted to endorse the recommendation, and subsequently forwarded same to the House of Representatives for concurrence.
The Senate Committee on Concession and Investment is chaired by Bomi County Senator Sando Johnson.