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capacity of 55,000 tyres, requiring an investment of $ 6.2 million.
The conditions, however,.were such that one doubted the
seriousness of the proposal. Besides demanding the acquisition
of the site of the plant by the Republic of Liberia and the
subsequent leasing of the lands to the new company at a nominal
rent for 60 years with a renewal option for an additional 60
years at a reasonable rent, the U.S. parent company also wanted
the tyre plant to be incorporated as a division of the U.S.T.C.
(United States Trading Company), a subsidiary of the Firestone
Tire & Rubber Company (73).
This would cause the U.S.T.C. to be the sole distributor of the
production of the new plant, and grant it tax loss carry forward
privileges. The company also demanded a monopoly for U.S.T.C. as
the sole importer of tyres in Liberia for twenty years. Further,
it demanded that the Liberian Treasury should absorb fifty percent
of the (expected) annual net loss of the new company until
such time as the company would show a profit for two consecutive
years. It must also credit U.S.T.C's miscellaneous and all other
taxes due for the balance fifty percent of the new company's annual
loss (!); absorb all payments, deductions, license fees,
and abnormally high interest expenses of the new company during
the computation of net income; grant the new company a ten year
income tax holiday, unrestricted export licenses and export duty
exemption, duty free privileges for at least ten years, and
grant sole manufacturing and exclusive importation rights, respectively,
to the new company and U.S.T.C. for ten and twenty
years, for the manufacture and import of tyres and related products.
With respect to any dispute arising out of its Investment
in Liberia,Firestone demanded that the Republic of Liberia would
explicitly give up its sovereign rights and submit the dispute
to the International Centre for Settlement of Investment Disputes
(74).
If the Government were to grant Firestone all the privileges
and incentives it demanded, the new company would commence to
produce tyres, still using less than one percent of Liberia's
natural rubber output because of the high quality of the
Liberian grown rubber.
As the conditions of this draft agreement were unacceptable to
the Government of Liberia, the tyre factory never materialised.
FIRESTONE'S RUBBER PRICING SYSTEM (75)
The Firestone Plantations Company is the principal producer of
rubber in Liberia, accounting for about half of the total output.
Approximately 25 percent is produced by four foreign concessionaires
and the remaining 25 percent by between 5,000 and 6,000
Liberian rubber growers, including one formerly foreign rubber
plantation (the African Fruit Company, see Chapter 4), Before
the creation of a Government owned rubber processing plant in
1977 virtually all Liberian planters sold their produce to the
Firestone Plantations Company, to one of the other foreign rubber
companies, or the Alan Grant Company, a foreign owned rubber
processing plant, established in the country in 1962. As no
processing of any significance takes place in Liberia (see above