Firestone defends contract amendment

The management of Firestone Liberia expresses deep concern about reports in the media here regarding recall of the pending Amendment to the Amended and Restated 2008 Concession Agreement from the Legislature where it had been submitted for ratification.

President George Manneh Weah wrote plenary of the Liberian Senate recently, revoking five financial bills submitted to that body by his predecessor, former President Ellen Johnson Sirleaf during her tenure.

The bills include Dangote Cement Liberia Ltd, TIDFORE (LICEMCO), Nimba Rubber Incorporated, Liberia Traffic Management and the Amendment to the Amended Firestone Agreement.

The agreements were recently reviewed by a Special Presidential Concession Review Committee to ascertain whether they are in compliance with procedural and substantive requirements of Liberian law, and to evaluate their justifications, including benefits to the Liberian people and the nation for tax and other incentives grant.

A presidential communication dated May 7, 2018, which was read in plenary last week Thursday, 10 May under the signature of President Weah’s details that following the review process, several legal requirements in these agreements were not fully adhered, citing that several provisions of the amended Public Procurement and Concession Act of 2010 were violated.

It notes that all categories of tax relief including; import, GST, turnover, presumptive fuel and gasoline, withholding on interest, dividends and third parties services, among others, were either partially or granted to the concession without any showing of measureable benefits to the country and its citizens.

According to President Weah, most of the agreements seem not to have been meticulously prepared, as there are a number of avoidable types and misinformation, while exhibits referenced in the agreements were not attached.

“In consideration of the foregoing, I hereby recall these agreements from the Liberian Legislature for reassessments by the National Investment Commission to enable them meet fully the procedural and substantives, as well as value for money for the benefit of the Liberian people before possible resubmission to the legislature,” the letter concludes.

But Firestone Liberia, Inc. in a statement dated 16 May issued in Monrovia excerpts that while it is quite understandable that the new Administration of President Weah feels the need to examine an Amendment that it did not negotiate before submitting it for ratification, it is most unfortunate that this already lengthy process will be further delayed.

“Moreover, while we are not aware of any legal or other defects in the Amendment, we look forward to discussing with the Government any concerns it may have. We believe it is in the best interest of the Government and Firestone Liberia to resolve any issues relating to the Amendment and to move the Amendment forward as soon as possible”, the company expresses.

The statement recalls that Firestone began negotiating the amendment in good faith with the Government of Liberia approximately three years ago. It notes that throughout this process, Firestone has worked closely, openly, and in keeping with proper concession procedures with the Government, including the Office of the President, the National Investment Commission, the Ministry of Agriculture, the Ministry of Finance and Development Planning, the Liberian Revenue Authority, various Liberian and foreign legal advisors to Government, the Inter-Ministerial Concessions Committee (“IMCC”) and others, to arrive at an amendment that would provide critical support for the survival of its Liberia-based operation despite continued and unsustainable major financial losses.

“These losses”, it explains, “were brought about because of the drastic fall in the price of natural rubber, high costs associated with Firestone Liberia’s concession operations, as well as low rubber production due to the ongoing rehabilitation and replanting of the entire farm made necessary by the years of civil conflict in Liberia.”

Firestone further maintains that the reasons for the amendment were clearly communicated to the Government during the protracted negotiation process, and as a result, the Government and Firestone came to an agreement on the terms of the amendment.

“Former President Sirleaf sent the duly signed Amendment to the Liberian Legislature for ratification 13 months ago in April 2017. Unfortunately, the Legislature was unable to act during the period between April 2017, when it received the Amendment, and the January 2018 inauguration of President Weah.”

However, Firestone Liberia Management assures that it will continue working together with the Government and people of Liberia to support thousands of jobs for Liberians, to enhance opportunities for Liberian rubber farmers and other business people, and to preserve the long-term viability of the largest private employer in Liberia, saying, “Firestone Liberia stands ready to meet with the Government regarding the Concession Agreement amendment, and we look forward to moving this process forward in a transparent and mutually beneficial way.”

-Story by Jonathan Browne