The_Open_Door_deel1

The improvements
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Besides the four alterations of the agreement already mentioned
(the conversion of subordinated debentures into preferred stock
and the Government's taxing of the dividend paid on this
Preferred Stock, the introduction of royalty payments effective
retro-actively as of January 1, 1974, and the increase of the
Management Fee as well as the fee paid to the Financial Advisor)
the 1974 Supplementary Agreement introduced some innovations and
changes among which feature the elimination of loan repayments
as deductible items, the reduction of the concession area to
300 square miles (192,000 acres), the limitation of exclusive
rights to iron ore and iron containing minerals, and the increase
of the rental to 50 cents per acre per year effective retroactively
as of January 1, 1973. Provisions with respect to the
health and safety as well as the education and training of
employees and their families, lacking in the i960 Mining
Concession Agreement, were also introduced. Further, the
Liberianization of staff personnel, the preferment of Liberian
produced goods and services, including the shipping of the ore,
the depositing of funds such as sales revenue in Liberian banks,
the sales of a specified portion of the ore to the Liberian
Government in case of processing in Liberia of iron ore into
finished (steel) products, and a vague obligation to participate
in the creation of steel manufacturing facilities in Liberia;
in short, increased Liberian participation in the production,
processing, sales and export of the ore and the financial
affairs related to it. Also added were anti-pollution clauses
and a stricter definition of the concessionaire's transportation
rights. A Technical Committee was created though the function of
this committee will merely be that of acting as a forum for the
discussion of certain issues. The Government's (and the
concessionaire's) rights to ask for a review of the agreement
were explicitly included this time. Also included for the first
time was a provision giving the Government the right to inspect
and audit the Company's books and records, the audit being
carried out by an independent auditor. Against the background of
the Government's 50? ownership of the Company this may seem a
strange construction. It, however, confirms the previous
statement that the Government's 50? interest in LAMCO is just a
token ownership, which does not entitle it to more than 50? of
what the (private) investors have agreed to consider as Net
Profits. Finally, the Supplementary Agreement included the
recognition of the basic principles that the entire enterprise
must be subject to the laws of general application of Liberia
with only those exceptions allowed which are explicitly
mentioned in the Concession Agreement.
Traditionally, the legal position of foreign enterprises
operating under concessions agreements in Liberia was one of
being excluded from the country's laws of general application.
This resulted in a strengthening of the enclave character of
these economic entities.
LAMCO was no exception to this "rule".