The contract is not renewable. Limited extensions are possible under Art. B8.5 (force majeure). Failure by Liberia Tree & Trading Company to perform its obligations on time will be considered a breach of contract (except where it obtains written permission to delay performance).
Managing Director, Forestry Development Authority; Minister of Finance, Government of Liberia; Minister of Justice, Government of Liberia; Approved by President Ellen Johnson Sirleaf
25 years from the contract signing date (06/10/2008) until the termination date (05/10/2033) unless extended or shortened pursuant to the terms of the contract
Environmental impact assessment and management plan
Liberia Tree & Trading Company must ensure that the Five-Year Forest Management Plan provides for sustainable use and development of "forest resources" (i.e., anything that may be of potential use to a human in the forest environment). Liberia Tree & Trading Company must ensure that the Five-Year Forest Management Plan also conforms with Forestry Development Authority’s Guidelines for Forest Management Planning, the Liberia Code of Forest Harvesting Practices, and Liberia Tree & Trading Company’s Strategic Forest Management Plan.
Liberia Tree & Trading Company shall conduct all operations using only environmentally sound practices that conform to the Forest Management Guidelines, the Liberia Code of Forest Harvesting Practices, and internationally accepted applicable scientific principles and practices. Liberia Tree & Trading Company shall avoid waste and loss of natural resources, protect those resources from damage, and prevent pollution and contamination of the environment. Liberia Tree & Trading Company shall identify in the annual operational plan areas requiring special measures for the protection of plants and animals. If any additional areas, resources or species are identified by a party to the contract, they must notify the other party and all operations in the affected area must cease if the relevant Forestry Development Authority officer decides there is a risk of damage. Liberia Tree & Trading Company shall comply with all requirements for watercourse protection contained in the Liberia Code of Forest Harvesting Practices, and shall conduct all operations so as to reasonably minimize soil erosion. Liberia Tree & Trading Company shall properly wastes to prevent pollution or contamination to the environment or waterways, and to prevent such wastes from becoming a nuisance or injurious to individuals, organizations, entities, authorities, or property. Liberia Tree & Trading Company shall take all reasonable precautions to prevent pollution of air, soil and water by its operations.
Liberia Tree & Trading Company may use free of charge any water found in the contract area and in the public domain within 5 km of the contract area for purposes necessary or useful to its operations, subject to the written approval of the government, any negotiated social agreement (as required by Forestry Development Authority Regulation 105-07), and any conditions imposed by the Government or the social agreement. Liberia Tree & Trading Company shall not deprive any lands, tribes, villages, towns, houses, or watering places for animals of a reasonable supply of water where this water has customarily been used for such purposes. Liberia Tree & Trading Company must not interfere with the rights of water enjoyed by any individuals, organizations, entities, and authorities under the Land and Native Right Ordinance and must ensure that its use of water in no way results in environmental damage or other hazards.
The Forestry Development Authority shall convene an ad hoc contract audit committee to complete an annual audit of contractual provisions in the first quarter of each fiscal year. The Forestry Development Authority will name up to 5 individuals to the ad hoc contract audit committee, including at least 1 representative from each of the following: the Forestry Development Authority, the Ministry of Finance, the Ministry of Justice, and a civil society organization not connected to Liberia Tree & Trading Company. Liberia Tree & Trading Company must appear before the ad hoc contract audit committee at its request and demonstrate that it is in full compliance with the contract. In particular, Liberia Tree & Trading Company must present: (i) a certificate issued by the chain of custody system manager showing all forest taxation and forest charges have been paid, (ii) a certificate from Forestry Development Authority on the status of breaches of the Contract and violations of laws and regulations, (iii) a certificate from the Ministry of Finance showing all tax obligations have been met, (iv) a current business certificate, (v) a copy of Liberia Tree & Trading Company’s audited accounts, and (vi) a copy of Liberia Tree & Trading Company’s forest certification. The Government can allow unscheduled third party and civil society monitoring of Liberia Tree & Trading Company’s operations under the contract. Such monitoring organizations shall have access to all relevant records and plans referred to in Art. B8.84. If Liberia Tree & Trading Company fails to demonstrate compliance with the contract, then Liberia Tree & Trading Company will be liable to the Forestry Development Authority for the cost of conducting additional field audits to measure compliance.
Before any logs are processed or exported, Liberia Tree & Trading Company must pay stumpage fees to the Government in accordance with Authority Regulation 107-07
The land rental bid is $9.60 per hectare payable annually for the full duration of the contract to the Government. The Forestry Development Authority shall calculate the annual land rental bid payment based on the bid provided in the opening ceremony, multiplied by the surface area of the contract area in hectares (i.e. 59,374 hectares). The Forestry Development Authority shall increase the amount to take into account the use of public lands outside the contract area. Liberia Tree & Trading Company shall pay an annual area fee to the Government under Section 33 of Authority Regulation 107-07. The fee will be calculated based on the adjusted area determined under Art. B7.11(a).
Before requesting Forestry Development Authority’s permission to use public lands outside the contract area, Liberia Tree & Trading Company must consult with all potentially affected communities with which it has made social agreements (as required by Forestry Development Authority Regulation 105-07) and keep a written record of the time, place and general content of these consultations.
Before the first annual operating season, Liberia Tree & Trading Company shall carry out the social agreements required by Forestry Development Authority Regulation 105-07, and the Forestry Development Authority shall review and either attest to or reject the agreements. Liberia Tree & Trading Company shall negotiate new social agreements, with a duration of 5 years, for the benefit of communities affected by its operations, as required by Part 3 of Authority Regulation 105-07. The Forestry Development Authority shall review and either attest to or reject the new agreements. Liberia Tree & Trading Company must not fell trees unless a social agreement for communities affected by its operations is in force for the relevant area. An ad hoc Social Responsibility Committee will, every 5 or more years, review and report in writing on Liberia Tree & Trading Company’s relations with local communities and compliance with the social agreements. Liberia Tree & Trading Company must cooperate with such reviews.
In employing individuals for its operations, Liberia Tree & Trading Company must give preference to competent and qualified individuals living in or near the contract area, especially those benefiting from its social agreements (as required by Forestry Development Authority Regulation 105-07). Liberia Tree & Trading Company must not import unskilled labor from outside Liberia, and must comply with all training and employment regulations required by law.
Protections or benefits for employees, dependents, or others
Liberia Tree & Trading Company shall follow internationally recognized modern safety precautions, in all activities. Liberia Tree & Trading Company shall also employ internationally recognized, modern measures for the protection of general health and safety of its employees and all other persons with legal access to the contract area. It shall comply with such safety and such public health instructions given by the Government.
Right to access concession area (non-contracting parties)
The Government reserves the right to allow others to access the contract area for the purpose of exploring for or exploiting minerals or other substances, or for any subsoil investigation or other reasonable investigation, provided Liberia Tree & Trading Company's operations and activities shall not be unduly interfered with, nor its rights prejudiced, and that if damages result to its property as a result of such access, the Government agrees to provide fair compensation for such damages. Liberia Tree & Trading Company must allow the public to have access to the contract area, provided this does not unduly prejudice or interfere with Liberia Tree & Trading Company’s operations.
Liberia Tree & Trading Company must describe in the Annual Operational Plan any areas requiring special measures for the protection of plants, animals and cultural resources and must implement these measures.
Liberia Tree & Trading Company must make a written request for approval from the Forestry Development Authority for construction or maintenance of roads, building construction, erosion control projects and other significant land-disturbing activity undertaken by Liberia Tree & Trading Company in relation to the contract. Acceptance by the Forestry Development Authority of relieves Liberia Tree & Trading Company of further contractual obligations relating to that work, with the exception of roads and erosion control devices. Until Liberia Tree & Trading Company obtains Forestry Development Authority’s acceptance, Liberia Tree & Trading Company remains liable for repair and completion of the work.
All infrastructure and non-movable assets revert to the Government when the contract terminates. Liberia Tree & Trading Company shall leave these facilities in maintained and safe running order.
Liberia Tree & Trading Company shall allow the Government and public to use, free of charge, any roads constructed and/or maintained by Liberia Tree & Trading Company, provided that such use does not unduly prejudice or interfere with its operations. Liberia Tree & Trading Company shall also allow the Government and public to use communication lines developed by Liberia Tree & Trading Company, subject to fair compensation and provided that such use does not unduly prejudice or interfere with Liberia Tree & Trading Company’s operations.
Liberia Tree & Trading Company shall not use public land outside the contract area without written permission from the Forestry Development Authority. The Forestry Development Authority shall not unreasonably deny this permission. The parties shall negotiate the terms and conditions under which an easement or other use rights may be exercised. If Liberia Tree & Trading Company occupies lands, the terms must include payment of area fees and an amount for land rental at the land rental bid rate (see Art. B7.11). The right to use such land does not extend to the right to harvest timber, unless this is taken to clear a right-of-way or yarding area. Liberia Tree & Trading Company may use private lands with the express, written permission of the land owner. If Liberia Tree & Trading Company is unable to obtain permission, then its use of the land is limited to rights of way. Liberia Tree & Trading Company shall disclose in its annual operational plan all anticipated uses of land outside the contract area. Forestry Development Authority will not approve these activities unless they are necessary to operations under the contract.
At least 90 days before the first annual operating season, Liberia Tree & Trading Company shall submit a Forest Management Plan covering the entire contract term that is sufficient to demonstrate that its operations will be sustainable. The Forest Management Plan shall include: a Strategic Forest Management Plan, a Five-Year Forest Management Plan (as described in Art. B6.15), a copy of any environmental impact study required by law, and the Business Plan required by Art. B3.13 of the Contract. The Forestry Development Authority will then either approve or deny the Plan in accordance with Section 52 of the Forestry Development Authority Regulation 105-07. As part of its Forest Management Plan, Liberia Tree & Trading Company must include an up-to-date Business Plan demonstrating to the Forestry Development Authority’s satisfaction that Liberia Tree & Trading Company has the technical and financial capacity to manage the contract area sustainably.
Liberia Tree & Trading Company shall include a security plan in its Five-Year Forest Management Plan, which must describe the measures it will take to prevent, detect, control, and respond to trespass and timber theft, and how it will measure, review and improve its security efforts. Liberia Tree & Trading Company shall use reasonable means to prevent encroachment by unauthorized individuals, organizations, entities, and authorities into the contract area and to prevent damage to the rights and property of the Government and third parties. In no case shall Liberia Tree & Trading Company use private security guards armed with firearms, machetes or other life-threatening weapons. Liberia Tree & Trading Company shall not use or threaten force except in self-defense or defense of another.
Liberia Tree & Trading Company must invest a minimum of $2,000,000.00 in primary and secondary processing facilities (sawmill, plymill, etc.), which must be installed within the first 5 years.
Liberia Tree & Trading Company’s failure to submit a claim for resolution within 60 days of the disputed action will relieve the Forestry Development Authority of any obligations related to the dispute. Any claim arising under the contract will be decided by the contracting officer (the officer to whom the Forestry Development Authority has delegated the power and duty to administer the contract), whose decision will be final and conclusive, unless Liberia Tree & Trading Company appeals the decision to the appropriate authority within 45 days of receipt.
Liberia Tree & Trading Company shall not assign or transfer the contract or any interests, rights, privileges, or obligations under the contract, without prior written approval of the Ministry of Justice, the Ministry of Finance and the Forestry Development Authority. The Forestry Development Authority must not allow any assignment or transfer unless in compliance with section 71 of Forestry Development Authority Regulation 104-07.
The contracting officer (the officer to whom the Forestry Development Authority has delegated the power and duty to administer the contract) may terminate it entirely if Liberia Tree & Trading Company fails to submit an initial performance bond before the deadline set in the Forestry Development Authority Regulation 104-07, Section 61(b). The contracting officer may, with agreement of the Forestry Development Authority’s board of directors, terminate the contract in its entirety in the event that Liberia Tree & Trading Company commits any of the breaches contained in Art. B8.72 and fails to satisfactorily remedy them; these breaches include, amongst others: (b) felling trees not covered by an annual harvesting certificate, (d) abandoning operations for a period of 1 year or more, (h) failing to comply with a final decision of a Liberian court regarding a controversy between Liberia Tree & Trading Company and the Government, (i) failure to pay any amounts due under the Contract, and (r) failing to comply with a social agreement (required by Forestry Development Authority Regulation 105-07).
Liberia Tree & Trading Company understands that Section 18.15 of the National Forestry Reform Law guarantees free access for the public to all documents and information relating to the contract and its administration. The Government can allow unscheduled third party and civil society monitoring of Liberia Tree & Trading Company’s operations under the contract. Such monitoring organizations shall have access to all relevant records and plans referred to in Art. B5.55, B8.84
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Governing law
The laws of the Republic of Liberia govern the contract
"Force majeure" means any cause beyond the reasonable control of the parties, which they could not foresee and/or reasonably provide against, and that prevents the parties from wholly or partially performing any duties under the contract for 15 consecutive days or more (excluding the rainy season). Failure by either Liberia Tree & Trading Company or the Government to fulfill any obligations under the contract will not be considered a breach if this failure arose by force majeure, with the exception of Liberia Tree & Trading Company’s obligations to pay money owed that accumulated before the commencement of the force majeure. If fulfillment of obligations is delayed by force majeure, the period of such a delay will be added to the periods fixed in the contract. The party failing in its obligations due to force majeure shall give written notice of the obligations affected and reasons for failure within 30 days of occurrence. Any party failing in its obligations due to force majeure shall, when the force majeure ends, take all reasonable and timely steps to make good and resume compliance with those obligations.
Liberia Tree & Trading Company shall indemnify and hold the Government, its officers and agents harmless for all claims and liabilities for the death of or injury to individuals, organizations, entities, and authorities and for damage to property from any cause arising out of Liberia Tree & Trading Company’s operations or activities under the contract, or as a result of Liberia Tree & Trading Company’s failure to comply with any law or regulation. Liberia Tree & Trading Company is also liable for damage, injury or loss caused by the acts or omissions of its employees and independent contractors.
Within 90 days of completing operations under each annual operational plan, Liberia Tree & Trading Company must provide to the Forestry Development Authority and Ministry of Finance a written activity report describing the previous year’s operations, including a description of activities listed in B5.52(a). Liberia Tree & Trading Company must also provide a written security report listing the number and type of illegal trespasses and timber thefts and strategies for improving security. Liberia Tree & Trading Company must keep the contracting officer (the officer to whom the Forestry Development Authority has delegated the power and duty to administer the contract) fully and regularly informed of its operations, and must provide (upon written request by the Forestry Development Authority) all documents required by it to confirm Liberia Tree & Trading Company’s compliance with the contract and other legal requirements.