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concluded with other foreign investors in the past. The
explanation of this lies In the fact that the recruitment
practices stemming from this obligation which had been accepted by
the Government had been outlawed a few years earlier. However,
this concession agreement with LIBINC unfortunately also included
some of the negative aspects of previous arrangements, e.g. the
land rental which was still low, the generous tax-exemption
privileges granted (notably the exemption from export taxes or
any charge on the company's produce for an unspecified period),
the liberal attitude which allowed the company to use lands
outside the concession area for construction purposes, and the
violation of the rights of the tribal people, who could be forced
to leave their lands while - theoretically - receiving
compensation for the Improvements of the lands they had introduced
or compensation for the crop growing on it. The last mentioned,
apparently just measure grossly overlooked the practical use
tribal Liberians could and indeed did make of their legal rights.
This use lagged far behind the legal possibilities for several
reasons, in particular the ignorance of these possibilities as
well as what methods to use and which channels to follow. In
addition there were communication problems with Government
officials or business managers, whilst the lack of co-operation
which public servants and company employees often showed in many
cases hardly disguised their deliberate exploitation of the weak
position of the (subsistence-) farmers. Furthermore, the fact that
most of these farmers still participated in a subsistence-economy,
a situation which is not changed when they are chased from their
lands and given compensation for the forced loss of these lands
and their crops, explains the absence of a peaceful transition
and was partly responsible for the land disputes between different
tribes or clans of the same tribe which (still) occurred in
the 1960's (and even in the 1970's).
The rights granted to LIBINC also proved to be too many or, at
any rate, not to be consistent with previous commitments the
Government had made. In 1973 a conflict arose between LAMCO J.V.,
the country's major iron ore mine, and LIBIEC over the use of the
port of Buchanan, The Government had given the right of using this
port to the iron ore company - which had constructed the port -
and when in 1973 LIBINC claimed its contractual right to use the
facilities on the port of Buchanan it was denied these by LAMCO
J.V. (53). The question was not solved until 1975 when LAMCO J.V.
turned over the management of this port to the National Port
Authority, a Government agency.
A final shortcoming of the concession agreement with LIBINC which
should be mentioned is the absence of a prescribed debt/equity
ratio which will seriously affect the company's income tax
liability after the expiration of its income tax holiday on April
14, 1981 as the company has resorted to large loans to finance its
operations under the agreement.
Before its 8-year import duty exemption expired the company in
September 1973 applied for an extension of this exemption period,
on the grounds of a planned investment of about $ 2 million.
The Government granted two additional years of duty free