The_Open_Door_deel1

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only 2? of net sales proceeds.
This alteration in the original agreement was, from the point of
view of the Liberian Government, a decided improvement. However,
at the same time it was agreed that after the royalty was paid,
LAMCO would pay L.1.0. a so-called "Special Dividend" equal to
the amount of royalty paid. Thus, L.1.0. was paid $ 4,216,000.00,
$ 4,530,000.00, $ 4,677,000.00 and $ 4,226,000.00 by LAMCO in
the 1974 - 1977 period. As these expenses of the Company reduced
the net profits the Government's share of LAMCO's profits went
down accordingly. The arrangement thus cost the Liberian Treasury
about $ 8,824,000,00. Its worst effeet.however, was that it
completely nullified the Government's gain of revenues which
resulted from this royalty payment.
Furthermore, it was agreed that royalty payments would be
subordinated to LAMCO's outstanding debt. Though this has not
affected the Government's income from LAMCO in the period under
review, it means theoretically that if in a certain year LAMCO
were to make no profit, no royalty payments would be made to the
Government regardless of the level of production or the exports
of ore by the Company (55). These two aspects of the arrangement
form curious deviations from the generally accepted view of
"royalty" being a compensation for the owner of the sub-soil and
its contents for the extraction or production of a certain
product. The curious thing, however, was that it had been the
Liberian Government's own proposal. The dividends to L,1.0.
equalizing the royalties had been an integral part of the
Government's royalty proposal during the renegotiation of the
original concession agreement whereas the subordination of the
royalty to the Company's debt had been offered by the Government
in recognition of the position of LAMCO's lenders after the
introduction of a royalty payment (56).
THE 1974 REVISION OF THE 1960 MINING CONCESSION AGREEMENT.
Political changes since 1971
Though the i960 Mining Concession Agreement with LAMCO and
Bethlehem Steel lacked a provision which made a periodic review
of the agreement possible or obligatory the Government of Liberia
in 1972 requested the concessionaires to participate in a review
of the agreement. It should be pointed out here that until that
year the prevailing Liberian philosophy had been that if a
concession agreement did not provide for a (periodic) review of
the contract, such a review or revision was not legal and
therefore impossible. This explains why not one concession
agreement was reviewed during the 27 years of President Tubman's
Administration though in this period numerous Amendments and
Supplementary Agreements to Concession Agreements came into
being. During the Tolbert Administration, however, a review or
renegotiation of existing agreements was justified. This was on
the grounds that if the contracts did not contain any clause