Lessons from foreign investments in Liberia

Improvement of the concession policy

  1. A uniform policy should be adopted for identical operations, based on Model Concession Agreements.

This, in fact, is not a completely new view since during the early 1970s a Model Mining Concession Agreement and in the second half of the 1970s a Model Timber Concession Agreement had been formulated. Moreover, the Firestone Concession Agreement (1976) was to serve as a Model Concession Agreement, which was meant to be applied to the entire sector (rubber plantations). However, the Model Concession Agreement with respect to the iron ore mining and the timber sectors was not always respected when negotiating with individual potential investors. Favoritism may be an explanation. In some cases it even aroused the suspicion of corruption.

The 1976 Firestone Concession Agreement never served as a Model Agreement for the other foreign rubber producers as a result of the opposition of the other major rubber concessionaires. This, though, created an ambiguous situation which is difficult to explain from the point of view of the origin of all foreign investments in Liberia: The Open Door Policy. This policy stands for equal opportunities for all foreign investors and traders. If Liberia wants to maintain its Open Door Policy, it must respect the ‘most favored nation’ principle. According to this principle, the most advantageous conditions offered to one investor must also apply to all other foreign investors with a valid concession agreement. Hence, it is logical to formulate and use a Model Concession Agreement.
  1. The Government of Liberia should assume complete control over the nation’s natural resources.






Improvement of
concession policy



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