The_Open_Door_deel1

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II. The Government of Liberia should assume total
control over the nation's natural resources
The foreign investors should operate within a framework which the
Government of Liberia defines or indicates and which is based on
the principle of national souvereignty. Actually, this right over
the country's natural resources has been given away to foreigners
as in the case of the LAMCO J.V. and the-Bong Mining Company. In
other cases the Government tacitly allows the illegal infringement
upon this souvereign right by foreign capitalists.
In the first case, involving the LAMCO J.V1 and B.MiC., the Liberian
Government's participation of 50$ has become a token afr
fair since the power to decide has been ceded to management companies
which are exclusively controlled by foreign (Swedish and
German respectively) inverests. In the second case, foreign owned
gold and diamond mining companies as well as logging firms
loot the interior of the Republic.
III. The Treasury's intake from the concession
sector should be increased
In spite of the some time 50 - 50 ownership structure, one cannot
speak of equal sharing between the concessionaires and the
Government of the benefits of the enterprises undertaken. For
various reasons, the Liberian Treasury does not receive 50% of
the net proceeds of the venture in those cases where it should.
The following example may illustrate this conclusion: Since the
start of the very profitable iron ore mining operations in the
Nimba Mountains in 1963, LAMCO has never paid one cent in corporate
income taxes. Gross profits in the 1963 - 1977 period
amounted to $ 237.8 million of which the Government of Liberia,
the owner of 50$ of the capital stock of this company, only received
| 53.8 million. Another $21.0 million was received as
royalties, most of which was after the 1974 revision of the
concession agreement. Thus, Government income from LAMCO totaled
$ 74.8 million. The share of the foreign partners holding
the other 50$ of the capital stock amounted to $ 163.0 million
in the same period.
The U.S. partner in the Joint Venture, Libeth, also earned more
from the mining operations than the Government of Liberia. It
reported $ 102.1 million as gross profits in this period, $ 36.5
million of which was paid to the Liberian Treasury as corporate
income taxes, the remaining $ 65.5 million (rounded figures) being
the share of the Bethlehem Steel Company, the parent company
of Libeth. Besides, the U.S. steel manufacturer is interested,
above all, in a guaranteed supply of iron ore for its steel
plants in the U.S.A.
For these reasons, it is first recommended that all double counting
in tax deductable items, even if approved by the National
Legislature or the President of the country, should be immediately
revoked. Secondly, that long term income tax exemptions as
well as duty free privileges should be eliminated. Thirdly, that
all concession agreements should include a pricing arrangement
since the fixing of the selling price forms the basis of profit