Global Witness and the Save My Future Foundation just released a new analysis of the 2008 concession agreement between Firestone and the government of Liberia.  The press release is below and you can read the full analysis here.

Liberia needs to learn lessons from Firestone contract renegotiation

Press Release – 14/11/2008

The Liberian government needs to learn hard lessons from the renegotiation of the world’s largest rubber plantation concession with the world’s largest tyre and rubber company in the world [1].  Global Witness [2] and the Save My Future Foundation (SAMFU) [3] today release an analysis of a renegotiated contact [4] between Firestone and the Liberian government [5].  The analysis suggests recommended actions for the Liberian government in future contract negotiations.

The contract was first signed by the transitional government of Liberia in 2005, made up of former warring parties, despite the fact that there were still 20 years left on the previous agreement.  It was then cancelled by the present government of Liberia in 2006, reviewed and finally ratified in 2008 after only two days of public consultation by both houses of the legislature.

Areas of concern in the new contract include:

• Firestone’s US-based parent company is no longer party to the contract. This means that if the contract is breached it will be more difficult for the Liberian government to pursue a remedy against the parent company.
• The new contract contains a confidentiality clause that gives both the company and the government considerable scope to keep information confidential, including payments to government. This runs contrary to best practises established by international initiatives such as the Extractive Industry Transparency Initiative, of which Liberia is a signatory. “Payments made by natural resource companies to governments should be transparent in order to ensure that the revenues generated are used as a basis for sustainable development in Liberia. This is a major victory to Firestone,” said Seema Joshi of Global Witness.
• The government’s ability to regulate in the public interest has been greatly restricted: the government cannot alter the corporate tax rate or the rent charged. “It is impossible to imagine governments with stronger bargaining powers agreeing to this,” said Joshi.
• Third party rights are not recognised in the contract, so affected local people such as employees and their dependants do not have any rights to challenge the company on its contractual obligations such as issues around water supply, medical care and free education.

“The Liberian government needs to learn lessons from the weaknesses in this contract in order to ensure that greatest benefit for its citizens in future contract negotiations,” said Robert Nyahn of SAMFU.

For further information:

Seema Joshi of Global Witness, currently based in Liberia: +231 (0) 77 353 104 (or subsequently: UK +44 207 561 6395); sjoshi[at]globalwitness.org

Natalie Ashworth of Global Witness: UK: +44 (0) 7968 160 377; nashworth[at]globalwitness.org

Robert Nyahn of SAMFU, who grew up on the Firestone rubber plantation: Liberia: +231 (0) 6 561 955; samfu1[at]yahoo.com

Note to Editors:

[1] Firestone is part of the largest tyre and rubber company in the world and its concession in Liberia is the world’s largest rubber plantation.  Firestone Liberia Inc, the company that is party to the new agreement, is a subsidiary of Firestone Natural Rubber Company LLC, itself a subsidiary of the Japanese company Bridgestone Americas Holding, Inc.  Bridgestone/Firestone make up the world’s largest tyre and rubber companies.

[2] Global Witness is an investigative non-governmental organisation that focuses on the links between natural resource exploitation and conflict and was co-nominated for the 2003 Nobel Peace Prize. For more information on Liberia, see Global Witness reports and briefing documents, available at www.globalwitness.org/pages/en/liberia.html.

[3]The Save My Future Foundation (SAMFU) is a Liberian non-profit, non-governmental organisation.

The mission of the Save My Future Foundation (SAMFU) is to facilitate and promote participatory community-based sustainable natural and human resource management and development in Liberia.

[4]The renegotiated contract was signed on the 22 February 2008.  A copy of the Amended Agreement is available at www.globalwitness.org.

[5] The parties to the agreement are Firestone Liberia Inc and the Government of Liberia.