CIRCULATING COPY RETURN tO Report No. 426a-L3R TO BE RETURNED TO REPORTS D EPORTS DESK Liberia WITHIN Growth with Development ONE WEEK A Basic Economic Report (In Seven Volumes) Volume IV: Forestry and Forest Industries F GUry March 1, 1975 Western Africa Region Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association E=:- --- This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. CURRENCY BY2UIVALENT The official monetary unit is the Liberian dollar, with a par value equal to that of the U.S. dollar. Apart from the Liberian dollar, the U.S. dollar is a legal tender in liberia. LIBERIA: GROWTH WITH DEVELOPMENT: A BASIC ECONOMIC REPORT Volume IV: Forestry and Forest Industries Table of Contents Page I. The Role of Forestry and Forest Industries in the Liberian Economy 1 II. Recent Developments 8 III. Development of Forestry Policy 16 IV. Timber Concession Policy 21 V. Some Policy Issues, Proposals and Recommendations 28 VI. Projected Export Earnings and Government Revenue 15 Map APPENDICES I-I I. The Role of Forestry and Forest Industries in the Liberian Economy 1. Despite the phenomenal expansion of timber production in recent years, the role played by the forestry sector in the Liberian economy is still relatively small if compared with the importance of iron-mining and rubber production. However, under a proper set of government policies, forestry and forest industries could play a vital role in the development of the Liberian economy in the future. In the face of the expected leveling- off in the production of iron ore and rubber, at least, in the medium-term, a continued rapid expansion of timber exploitation over the next few years and the immediate establishment of a sizeable timber processing industry could play a key role in mitigating the likely slowdown of the economy's overall growth. In the longer term, in view of the bright demand prospects for forest products, forest resources, which are renewable, could form a permanent resource basis for the development of an increasingly sophisticated timber processing industry in Liberia with the possible benefits of "linkages" for the rest of the economy. 2. Forestry's contribution to GDP at current factor cost is estimated to have been about 8.1 million dollars in 1972, accounting for 2.2 percent of the total estimated GDP in money economy in that year. 3. Export earnings from forest products were 8.2 million dollars in 1972, accounting for 3.3 percent of total merchandise exports in that year. Export earnings from forestry have increased very sharply in the last five years, rising from less than 1 million dollars in 1967 to over 8 million dollars in 1972 and quite probably to about 15 million dollars in 1973. h. "Direct" contribution of the forestry sector to government revenue -has also been increasing sharply in recent years. -The sum o the sur ace rents charged on forest concession areas and the stumpage fees collected on the timber felled increased from less than 300 thousand 4ollars iJi 1968 to about one million dollars in 1972; the latter is to be compared with the 1.9 million dollar revenue from rubber concessions during the same year. ' In 1972, the "direct revenue" from forestry accounted for only 1.5 percent of the overall government revenue and 5.5 percent of the total revenue from iron ore, rubber and forestry concessions. 5. There are no official estimates of total mp2loment engBged in forestry and sawmilling. However, based on a very limited nimber of intel- views with large timber companies, it is estimated that, as of March 1973# 2,500-3,000 workers were engaged in forest utilization and sawmilling activities including transportation of logs and sawnwood by timber companies' trucks. Estimated total employment in the money economy sector as of the final quarter of 1972 was around 45 thousand. Contribution of forestry to employment thus appears to be roughly 6 percent as of early 1973. 1/ No significant amount of corporate income tax has been collected by the Government from the forestry concessions, either because of tjpx holidqys or because of lack of reported profits. 6. The resource base: Liberia has a total area of 11.1 million hectares (ha)l/ of whichi about 2.5 million ha, or 6.2 million acres, are covered by areas of closed tropical rain forests (Table 1). Two-thirds of the closed rain forests are located in the southeast of Liberia.2/, nearly one-third in the northwest, and only 2 percent in the north around Nimba. 7. A complete inventory work covering all National Forests was carried out from 1960 to 1967 by a German-Liberian team under the bilateral technical aid program of the Federal Republic of Germany, and the report has been published in 12 volumes subsequently. 8. For the purpose of national planning the great variety of structures of Liberian closed forests has been classified into seven timber areas, on the basis of the major marketable timber 3pecies. The most important criteria used were distribution of Tetraberlinia,3 mixed "saw timber" and "export" species. The seven areas thus classified are identified as Areas WI, W2, N3, El, E2 and E3 in Map 1. 9. In Table 2, the closed forest in the seven timber areas mentioned above is broken down into: a. e rl itable arsas inside and outside national fores4s, and b. unexploitable areas. In the opinion of the inventory team, of the 25,000 sq. km. (2.5 million ha) available, about half is exploitable, while the other half is eithftr too poor in marketable timber or inaccessible due to rough terrain. Irn the southeastern region of Liberia, the major portion of the closed fovest is exploitable; i.e., 10,800 sq. km. (1.1 million ha) with 40 percent being accounted for by territory outside the national forests. As for t1e north- west region, the major portion of forests is inaccessible (W2 and W3) and only the southern forests are exploitable; 1,000 sq. km. in Wl and a minor part of W2. Furthermore, the exploitable forests in the northwest are expected to be depleted within a few years, due not so much to logging operations as to shifting cultivation. 10. The most important timber areas, thus, are located in the south- east of Liberia with more than 80 percent of the exploitable forest of the country. Thie exploitavle timber in this area in terms of the Minimum Timber 1/ 1 sq. km. - 100 ha - 247 acres. 2/ Roughly speaking, the area east of the LAMCO railroad connecting Nimba and Buchanan. 3/ Tetraberlinia tubmania. Traded under the trade names of Tet, Sekon and Rose wood. A uniquely Liberian species quite suitable for veneers, ply- wood and sawnwood. Cf. German Forestry Mission Report No. 10, Monograph on Tetraberlinia tubmania, 1970. - 3 - Table 1: Closed Forest Areas in Liberia Northwest-Liberia sq.km. appr. acres National Forests 5,400 1,330,000 National Park 280 70,000 unprotected For. 2,700 670,000 total 8,380 2,070,000 North-Liberia National Forests 415 100,000 unprotected For. 200 50,000 total 615 150,000 Southeast-Liberia National Forests (mostly unpopulated) 9,600 2,400,000 National Park 130 30,000 unprotected For. 6,000 1,500,000 total 15,730 3,930,000 Overall Total for Liberia: appr. 25,000 sq.km. or appr. 6 million Acres out of this: National Forests and Parks 16,000 sq.km. 4 million acres Unprotected Forest 9,000 sq.km. 2 million acres Source: German Forestry Mission to Liberia, General Report on National Forest Inventory in Liberia Technical Report No. 1, 1968, Table 4. -14- Potential (MTP) has been estimated by the inventory team and is shown in Table 3; with a breakdown into three timber areas, El-3, and by marketable species groups and in terms of the MT? of Tetraberlinia. 11. Total volume of exoloitable, marketable timber of above-cut-limit sizes in the southeast has been estimated at 31.9 million ml as shown in Table 3. The same timber areas are believed to contain at least an equal volume of the same species in the below-cut-limit sizes. Although annial mean increments of various species involved are not known in any degree of accuracy, the maximum annual exoloitation of all Liberian timber areas on a sustained-yield basis may be presumed to be around half a million m-) assuming that it takes an average of 6 years for the major marketable species to grow to above-cut-liMit sizes. 12. However, since the exoloitable timber area includes "unprotected forestsrt which could be exoloited more rapidly than assumed under a sustained-yield logging nrogram, total volume of logs to be removed annually could easily exceed half a million m3 during the next several years, depending on market conditions and gcvernment policies.l/ 13. Species prevalent in Liberian forests are broadly similar to those in Ivory Coast. They were classified by the inventory team into seven groups, with Groups 1-5 containing the "marketable" soecies and Grouos 6 and 7 covering all those species which were judged to be "not marketable.'' 14. The "marketable speciest2/ have been classified as follows: Group 1: Export timber. Subdivided into la (more valuable Epecies) and lb (less valuable species). Species included hav^ been Iroko, Makore, Tiama, Kosipo, Sapelli, Sipo, 2 Acajc-s, Dibeto, Niangon, Framire, ObecheWawa or Samb-a_.=oussie, 'himba and Bosse. Group 2: Lesser-known export timber. Relatively low prices. Includes 6 species - Aiele, Abura, Bilinga, Illornba, Avod.ire and Ako. Groups 30 species useful for sawn timber and "?at least suitable for 3 and 4: the home market.", Group 5: Eight species generally heavy and "suitfable for heavy construction work of all types (e.g., for railway sleepers, ?arquet flooring, harbor construction, etc.); two reoresentative soecies are Azobe and Tali. 1/ For projected production and export levels du.ing the 197^$-1978 period, see relevant sections below. 2/ "All timber species whose technological prooerties make them suitable for industrial use." .1/ B ER/A o&erA.'o<, fim er 177b 6 O- '?,-eCS ,-/ _ g .t,_, > - °ecA ScA c-7,' A ! to.leOn f , GU/#~6411EA O../ Z~~~~~~~~~~~ LEONE / - 'f A INTIC/ ~2- >(OS \ + q wo~~~~~~ / 61@ < + ~ ~ ~~~ / - 6.j/' 6- OCEAN N ' Sk __S =' ''''''eXL ,: 'eN*,'*7, r= - 6 - Table 2: The Timber Areas in Liberia (Areas of closed Forest in sq.km.) Timber Exploitable Forests unexpl. Total Area 1/ Nation. unpro- Forests closed Forest tected total Forest Southeast El 3.000 800 3.800 2.300 6.100 E2 1.800 - 1.800 1.400 3.200 E3 1.700 3.500 5.200 1.200 6.400 total El-3 6.500 4.300 10.800 4.900 15.700 Northwest W1 150 350 500 - 500 W2 - 500 500 2.900 3.400 W3 - - - 4.500 4.500 total Wl-3 150 850 1.000 7.400 8.400 North N3 150 100 250 350 600 Grand Total 6.800 5.250 12.050 12.650 24.700 1/ For demarcation of each timber area as designated by the forest inventory team, see Map 1. Source: German Forestry Mission to Liberia, General Report on National Forest Inventory in Liberia Technical Report No. 1, 1968, Table 8. Table 3: The Exploitable Timber in Southeast Liberia Minimum Timber Potential of the exploitable Forests of Timber Areas E 1-3 in Million cubic metres under bark above cutlimit Timber Exploitable Export Volume of Species Groups Area area Sawtimber Tetra- Heavy CVT Total sq.km. berlinia constr. El 3.800 1.6 3.6 4.2 3.2 0.8 13.4 E2 1.800 1.0 1.5 0.3 1.4 0.4 4.6 E3 5.200 3.0 3.6 - 5.3 2.0 13.9 total 10.800 5.6 8.7 4.5 9.9 3.2 31.9 Remarks: Export-timber for El and E2 included Tarrietia down to 50 cm. DBH, for E3 only 65-cm. DBH Sawtimber: does not include Gilbertiodendron, Calpocalyx Loesenera or Tetraberlinia Tetraberlinia: additionally available for pulp production Source: German Forestry Mission to Liberia, General Report on National Forest Inventory in Liberia Technical Report No. 1, 1968, Table 9. - 8 - 15. Table 4 gives the estimated volume of wood standing in selected timber areas of the National Forests, shown on a per-sq-km basis by species groups. It appears that the average "merchantableIl/ volume of marketable species ranges from 55 to 95 cubic meters per hectare (over bark)W' in the National Forests. II. Recent DeveloDments 16. The forest utilization activities of Liberia are geared to the exportation of logs. Only a small portion of the logs processed in local sawmills is exoorted. There is no nroduction (hence no exports) of wood- based panels in Liberia today. 17. The prodletion of logs has been increasing sharply in the last five years as the exports of logs have exoanded rapidly (Table 5). The Production of logs (roundwood intended to be used for industrial purposes; excluding fuelwood) increased Pightfold, from 48 thousand m- tc 1406 thousand mi, in the 1967-1972 period. According to the Ministry of A--;^-ture, the production of "export logs"i2/ increased from 18 to 115 thousand m in the same period (Table 5), while the exports of logs as reported bv the customs authorities increased from 32 thousand ml to 222 thousand mw in the 1968-1972 period (Table 6).b/ 18. Practically all of the logs exported are destined for Europe (Table 7). 19. Most of the logs not exported as logs are processed into sawnwood and onsuned, in Liberia although some sawnwood thus produced is exnorted (Table 6).-' Main consumotion centers of sawnwood in Liberia are the City of Monrovia and the iron mining and rubber comnanies. 1/ Diameter sizes above 40 cm DBH (Diameter at Breast Height). Species GJroups 1-5. 2/ The under-bark volume is roughly 10% less than the over-bark volume. German Forestry Mission, Technical Report No. 1, p. 87. 3/ "Export logs" are defined as logs which are intended for export without further processing and on which export stumDage fees are paid by the producers. 4/ Part of the discrepancy between the data relating to export log production as reported by the Ministry of Agriculture, on the one hand and the exoort of logs as reported by the Ministry of Planning based on the cusfoms data, on the other, can be exnlained by the time lag between production and customs clearance. The difference between the two sources, however, appears too large to be attributed to the time lag only. _/ Some "local logs" are abandoned at logging sites and never uCed; they are included in the reported statistics only because local stumnape fFes have been collected on them. At times, because of commitments for exnort deliveries, logging operators have to mobilize all their resouirces (equin- ment and manpower) in meeting exoort requirements and indeed have no time to be concerned with the logs felled but found not good enough to be exported. Under such circumstances, they would pay the required local stumpage fees (which are very small conmared with export stumnace fees) and abandon those logs. Table 4: The National Forests of the Different Timber-Areas Number of Trees above 40 cm. DBH per sq.km. by Species Groups Timber Species Group Area Forest Code la lb 2 3/4 5 6/7 Total El Sapo 091 310 30 140 1,720 370 1,430 4,000 El Krahn-B. 069 450 - 60 2,950 280 1,030 4,770 Wdi School F. o0c 430 10 270 1,350 210 1,650 3,920 E2 Krahn-B. 062 330 10 70 1,390 210 1,690 3,700 E2 Gbi 040 320 30 140 1,290 270 1,700 3,750 W2 S-Kpelle 101 640 20 80 1,720 590 1,800 4,850 E3 Grebo 052 280 50 210 530 520 1,370 2,960 E3 Gio 030 280 90 220 480 340 1,330 2,7440 W3 North-Lorma 081 400 100 120 520 410 1,650 3,200 N3 Nimba 011 650 110 160 730 540 1,710 3,900 DBH = Diameter at breast height. Source: German Forestry Mission in Liberia, General Report on National Forest Inventory in Liberia, Technical Report No. 1, 1968, Table 6b. - 10 - Table 5: Liberia: PRODUCTION OF LOGS, 1967-1972 Unit: Thousand Cubic Meters- Year Export Logs /2 Local Logs /3 Total 1967 18.0 29.8 h7.8 1968 56.3 33.5 89.8 1969 160.9 50.0 210.9 1970 153.h 67.1 220.5 1971 218.3 100.9 319.2 1972 315.2 87.2 402.4 1973 A 111.1 11.2 122.3 /1 Conversion factor - 288 board feet = 1 m3. /2 Logs on which export stumpage rates were assessed. The figures presented do not necessarily match with the data provided by the Foreign Trade Statistics Section of the Ministry of Planning & Economic Affairs. /3 Logs on which local log stumpage fees were assessed. In- clude some logs which were processed locally and then ex- ported. / First 3 months. Source: Liberia, Ministry of Agriculture. Table 6. Liberia: EXPORTS OF FOREST PRODUCTS, 1968-1972 Logs (242) Sawnwood (243) Total Volume Value Unit Value Volume Value Wood Exports L,0ooo m3(r) 1,000 $ $/jm(r) 1,0 ) 1,000 $ ,000 i965 n.a. 3i6 n.a. n.a. 71 387 1966 n.a. 559 n.;. - 9 568 1967 n.a. 550 n.a. _ - 550 1968 31.8 1,425 44.9 - 1 1,425 1969 1h9.2 6,940 46.5 0.1 13 6,953 1970 143.9 5,745 39.9 1.0 62 5,807 1971 204.9 7,243 35.3 0.7 142 7,385 197p2 222.0 8,156 36.7 0.4 27 8,180 Source: Liberia, Ministry of Planning and Economic Affairs Ta.'le 7. Liberiai EXPORTS OF LOGS-, BY DESTINATION 1971 Volume Value Destination 1,000 m (r) 11000 $ Netflerlands 32.5 1,120 Belf;ium/Lux. 0,3 15 Fed. Rep. Germany 36.7 1,231 Frartee 78.2 2,739 ItaI7 10.3 334 U.K , 8.7 361 Spain 28.7 953 Other Euirope 0.7 33 U.S.A. 6.5 263 Brazil 0.6 24 other 0.8 28 Total 204.1 7,101 1/ SITC 242. 100% broadleaved logs. Source: Ministry of Planning and Economic Affairs. - 12 - 20. The sudden explosion of exports (hence production) of logs since 1968 can be attributed to the following circumstances. First, by 1967, merchantable timber resources in the most accessible areas of the tradi- tional exoorting countries in the region - Ivory Coast, Nigeria, Ghana, Gabon, Cameroon, etc. - had been largely depleted as a result of the intensive exploitation in the preceding decades. In the face of rising costs of exploiting the tropical hardwood resources in the less and less accessible areas of these countries, the timber companies (mostly European companies) operating in these countries were looking for alternative forest areas to exploit. Second, the work of the German-Liberian forest inventory team was comoleted in 1967 and it became clear that a large part of Liberian forests could be exploited very profitably. These factors, coupled with the well- recognized "open door" policy of the Liberian government resulted in a large number of forest utilization concession agreements around 1967-1968. As a result of the explosive increases in log exports, Liberia now ranks as the fifth largest exporter of tropical hardwood in West Africa - after Ivory Coast, Gabon, Nigeria and Ghana. 21. - Species exported from Liberia are similar to those exported by Ivory Coast. The nine most important species accounted for 89 percent (in volume) of the export logs produced in Liberia in 1972 (Table 8); the species are Sipo (Utile), Niangon, Wawa (Obeche, Samba), Dibetou (I.ovoa), Makore (Douka), Kosipo (Omu), Sapelli, Khaya (Acajou) and Tiama. These same nine species ranked among the 13 most important species exported by Ivory Coast in 1971 and accounted for 78 percent (in volume) of total lo*, exports of Ivory Coast.l/ 22. Imports of wood and wood products in Liberia amounted to 2.7 million dollars in 1971, with three quarters accounted for by paper- and paper products (Table 9). Imports of paper and paper products have been increasing steadily during the last decade, while imports of other types of wood products (logs, sawnwood, panel products, wood manufactures) have not been increasing. 23. Both the number of concessionaires and the total area assigned to concessionaires have been growing since early sixties, especially after mid- sixties. Concessions were granted to two timber companies in 1960, and the first export shipment of logs began in 1961. As of December 1963, there were nine companies which had forest products utilization contracts and the area under the contracts totalled about one and a quarter million acres (half a million hectares).2/ Also, 905 thousand acres (367,000 hectares) were under forest survey permits. By the end of 1972, the number of timber companies operating had grown to 17 and the area under concessions totalled around 4.18 million acres, or 1.7 million hectares (Table 10). Of the 17 concessionaires, two companies (Bolado and Tropical Trading) were producing for local, markets only and another one (FYNHOUT) has since been abqorbed by another timber company (MIM). 1/ Bois et Forgts des Tropiques, No. 142, March-April 1972, p. 77. 2/ FAO, Technical Assistance Report No. 2051, Forest Land Use Policy and the College of Forestry in Liberia, Rome 1965, p. 14. - 13 - Table 8: LIBERIA - PRODUCTION OF LOGS BY SPECIES, 1972 A Unitt Thousand cubic meters- Export Local Logs logs Total Class I Species SIPO (UTILE) 61.4 6.8 68.2 TIAMA 10.1 2.6 12.7 KOSIPO (CMU) 13.2 4.3 17.5 SAPELE 11.3 2.7 14.0 ACAJOU (KHAYA) 11.8 1.7 13.5 DIBETOU (LOVQA) 30.9 3.5 34.4 MAKORE (DOUKA) 21.8 4.0 25.8 NIANGON 43.9 7.7 51.6 IROKO 1.0 1.5 2.5 AFZELIA (APA) 0.1 0.1 0.2 BOSSE 2.7 0.5 2.2 AMAZAKOUE 0.3 0 0.3 BETE (MANSONIA) 0.3 _ 0.3 TETRABERLINIA 0.6 15.1 15.7 Sub-total: Class I 208.9 50.4 259.3 Class II Species WAWA (OBECHE) 40.3 4.8 45.1 KUSIA (OPEPE) 1.2 7.1 8.3 ABURA 9.3 1.3 10.6 ILOMBA 5.4 0.1 5.5 LIMBA 0.0 0.1 0.1 AIELE o.6 1.2 1.8 FRAMIRE (IDIGGO) 2.9 0.8 3.7 RED OAK 0.3 4.4 4.7 Sub-total Class II 60.2 19.8 80.0 Class III Species TALI 2.1 0.8 2.9 AZOBE (EKKI) 2.6 1.2 3.8 NAGA 1.1 2.9 4.0 DAHCMA 0.1 1.3 1.4 SACOGLOTTIS 0.3 0.1 0.4 DANTA _ _ CEIBA 0.2 - 0.2 MAMKY-APPLE - 0.1 0.1 DIDELOTIA - 0.1 0.1 Sub-total Class III 6.4 6.5 12.9 Other Species 0.4 0.4 0.8 GRAND TOTAL 275.2 77.1 352.3 A In Liberia, one cubic meter is equivalent to 288 board feet. Source: Liberia, Bureau of Forest Conservation. Table 9: Liberia - Imports of Wood and Wood Products, 1965-1975 Unit: Thousand Dollars x Commodty Pae rdcsTOTA1: Furniture \ SITC Wood- Pae rdcsWood & Furniture of which No. Logs & based WOOD Paper and Articles Sub-Total Wood & wood \ ~~~Sawnwood Panels Manufactures Paperboard of Paper Products Fixtures furniture Year \ 242_&T5 243 61- 632 641 642 641 + 642 821 821.01 1963 771 428 331 295 559 854 2,384 2,178 658 1964 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1965 506 338 204 334 805 1,139 2,187 1,4i8 n.a. 1966 147 348 116 346 879 1,225 1,836 1,407 n.a. 1967 150 413 303 368 894 1,262 2,128 1,253 n.a. 1968 237 349 182 330 954 1,284 2,052 1,184 25 1969 165 381 169 359 996 1,355 2,o68 9.93 65 1970 157 437 129 510 1,155 1,665 2,388 1,437 72 1971 127 413 136 586 1,318 1,904 2,580 1,637 70 1972 130 605 65 704 1,667 2,372 3,172 1,012 n.a. 1973 122 64o 191 709 1,922 2,631 3,584 1,182 115 Source: Ministry of Planning and Economic Affairs. Table 10: LIBERIA9: T1IM0ER CONCESSIONS IN OPESA: fOb, 1972 1/ Dat of of of Prad-tian 1972 (1,000 a)Totl Procesing tav If Casps-y Laretton- & Area of Cancees-to Original ugreee- AgreB n Ooel Opertion Export Local oto-1 Mnetto ilitio R-ksr I. Belada NaSdlls2 Co. 50,000 acre of 1969 20 Year Ao individual -e-nhip of 1968 - - 3.1 a' 3.1 0a.Seall circula sa Salvage araI Pse fores salvage are In N.og coe-y. L-n-e Nad. Sp5i-ad Cap. 1,274 e5/year- detsagd by shittiag esll- 2. CaIPe Ialc- C-ntrt-ioe Co. 70.000 acres Le Graed Gadeh. Iiaraalsgre....e.t itt 20 yeari SId Caida, aI Laavse 1971 9.2 03 1.2 0 9 .5 2 Clclrsa;ae sa sillsil e orCape faLas togging Co. l97t, peediog Earal Libeianprte-.cpacity 385 03/yearxsrriax 3 3 3 3. Ca-- Nltahe Carp. 341,000 acres Ie Niaba. 0900 20 year i-erln cod Frecr. 1971 i7.7 tn 3.0 0 21.4 a Sna1I inta- -os A ee nill pentl a 3 3 3 Cap. -ett-o Tsapaid. 4. East Asiatic Co..(iera 345,300 gIre ac- Zandre I. 1960 25 pe-ns goat Asiatic Co~.Copsebagen 19680 13.1 2 2 .0 e 5. _ $76,iNB (fixed a- Ne_e Lral lg Gr-d tedeb. Isn_Icbar txd byUeieed nets sI coa as of are lefi ix bush. Baltir Corp.? 0 -oexh- 1971). 5. Liberia Ea-tter Tiber CarP. 5i9 010 arre Greed rdelh 1967/00; ixcopar-te 20 year -arege -eter tIi1lr-a gar- 1968 21.6 e3 1.2 a 22.7 n3 $510,500 (ntaI Cooed Sono 39,100 aere Sixo Ix tbxxasaage_eatexor Spesber Ritbard Henrios aIasa cs,a c (pss30,000 aff-tine Asg-s,1973) of 1900.2) 6. Macare Tiaber Carp. 272,400 gore Es Grsad Gedeh. oarh 1973 20 pear l00%l Libertix osd; Ar-h-r 190 2 7 .5 a3 0.3 a3 0. a 2 x.. 3 3 3 7. Liberia Irds-tial Foretr'Y CP Cape .xa Eeay; 10707 20 pearl SpanEh cad Lib-riax -axd; 1967 or 0.6 a 16.5 a~17.1 a .3lcsc a Corp. 425. 000arsfsavg ae. Lihela prao and Pr-id-a bxfxre Cap. 1218510 Pir. Ge.r. Pad-xr (Ab ....ad-r 9. Libei Ltggiag 6 Woad Prc- 92,000Iacre ix -ylarid, Si.. 0aaed hr Or. ROsfirchased 1071 28.5 a .1 a 30.6 0N.x. A sa d Ill ndee rotsx Cap.ad Nead GedebCstish Lebanese ; tha Lbi-eia part- Ier is par-tdly Preideat 0. Lofa Leggi.g Ca. 295,O00creel, Ie NirA C-sty Liheriax aed Spaeixh -,oce; 1070 ll.g 1.1 e3 13.3 aI 0064,000 (total oaatn Oboe Ca..rae Eecrgt rxdv,ene, the Peesidexi cE exd~~~~~~~~~~~~~~- cIf 19311. with COPE lar 10. Lo.la ib-e Corp. 232,000 acres 10 lasso C-xOt 1968/1969 20 yar Fre-ch -xd Libeeiax 196 21.3 a3 1.7 a3 23.0 Rl lsn A a ill aader D. llslici Prrsid-st- Lite- cotaia W. C oper cod Is co hix flonily. 3 3 11. Sige Lanha C-ep. Se igiacIly 40,000 nrree II TIPPita 60 prars. Six_ 31.1 e' 9.6 a 40.0 a13 $2;.24I li.i- (tixa.d Saab, ee; Willi- Gilier DisertIn cad graNd lasso. Co-ty, 1960 aIeta at catn of CcP. 4,000 aA. adancd as 0960; ciih sbaeqae.e taa.... baai , Dc-cehe, 1970). 2.7,120 arre Is at the proa 12. TIM Lctch- Ce. Origixa.oo..eestans 70,000 acres1 1966 25 years Ox-ed hr Sa-e B. Cop-r 1921 10.1 n 3.4 a3 15.5 aA -1ol i-ccla Merged iatt NltrA L.ag cistr _ood Irre.r En TaPpx st OF- (CFO-s; Cap. 1,000a giag ECrp. ie 1068; District axd 01,800 acres inithe iaa tnte-c ORa..tbiishd as Taik Eia and North Cix Naciaxa.l F-rac.tcnna TrAte E. agaic Is 1031 Ne,s tntol of 486,605 acre. 13. Maryland Loggixi Carp. 504.0 acaxi ErsedIGedoh; of 1960 45 poar ocigi-aIly M.-eir, a etnx %90 23.0 31 .0 a3 09.0 a3 Mightp Mie ecTA iaerte aad= ix- Notiacal For-t. and Atlas Ccrp; nec .V. Co_ year. Willie Txhb- ralatd cc the Icte Proid-a 14. 010 T-b-o ct Libt-is Orilica acan, 13.208- acron Ner left 20 er PanI-rntr5i kChar-on 45%; MIM0 19621 19.1 a 10.2 20.1 c3 $94f,oG0 (ficed ssex -ad ace cilia, Is TciaD tit 162;-a-ond M10 190,000 nCres (Cht) 57, ohich ix c-od by acn.axoSceirCap. 8,0 3/ c_co..ci.a, 90,200 acr_,In C_1a1i ~FF00010 321 0600 the Cha.-an foxily; E... 10603. year nr- Its 1970. sehicht oaa -ssg-d to Tn-a: 511,600 Gnodoidgr, ST. P5YNHOUT West A',ci,a; ..rre..IyM1 &aiced the c_p lete n--chip of FYNHO00Tx ePeraxi-n and toc-nsio.- 15. PYN90U0 icn. Alrioc. .riix ...xr .ic. 7201,000 acrlx Ix See ahano 20 yr-r Esaxd hy MOO M n 1969 24.0 5.0 29 .7 a Mighty Misst ow 1060 adlsel- 00309 rxcxig ;Cp ,0 a,3 ned In FY5Oi5IT by M10 `v 1970 roce.... t- i7 xaId ac c--ythiag to iMM 16. VANPLY ci Lxheri 904,007 acrll in Krb-ho-ttao-d 1921; Vaxply 00901. 30 Yoor cOolIly Oil Co. (TulI- OMI..) 1969 15.6 Bs . a 24.3 3 Mrd-r baxd sa; a -irgrard pipsexnd/ 539,0100 acre cri-ol sill 1976. areas of irelsopsilo Ian Tielce ad Nei 17. Trtic-l Toadieg C-, 41,50srcC oisix ttrrtdA -cheidrar ot Lsbr-na Mining - I.1 a1 5.1 3orcbx e 6.:00'0 are Tribal coxeso oat coiag Is 1074-197 Co soi Ilo raa o Ic Cap. 3,00oa Boos Oh..io Mrxaerdo C-nny LMi. I/ As oC A.!nnt 1973 07 c..,_c. 7i-r_ x-ppllsd hy the MIosic- of Aglonlnnre Is Angne 1973. The ri gnr- oc no -i-tidecith th.,, Presen.ted 1-ne...r itt chIeot C- ib-eto. K-tiatrf t1 Ageiontn ;Mn`cr iF eno andI nrnoc.- cith thc `71-anr B-sd prirorily ox data oollctn ahl 5hI vitso a 1' ido rind in srb 1973. Sn.pyoxttni--d by I -t-d itfor-aiov p-o.i-. x-baeq-ojy by l iNn tiaIrp of Agr iccico_. - 16 - 24. As of March 1973, there were 15 companiesl/ aoplying for new concessions totalling 3.5 million acres (1.h million ha) in area (Table 11). This, if approved, would bring the total forest area under concessions to 7.7 million acres or 3.1 million ha and exhaust virtually all of the closed forest areas in Liberia.2 25. Of the 17 logging companies operating at the end of 1972, only 13 had sawmills of any kind in operation and only three of these could be considered as efficient units. These three companies exported sawmnwood in significant quantities during 1972. 26. The Government of Liberia has been attempting to imorove the concessions policy and administration since 1965. Generally, the efforts have been directed toward two areas: (a) the imoroved administration of existing concession agreement; and (b) the negotiation of new agreements in more favorable terms and in more comprehensive and unambi.uous terms. The latter has included renegotiation of already existing agreements as well as drawing-up of model concession agreements._/ 27. A model concession agreement for forest utilization contract was completed in March 1973. The recent concession agreement with Macars Timber Corp. is the first agreement based on such a model agreemenit. All fuature agreements are expected to be made on the same basis.4/ The model. concession agreement will be discussed in a following section in the context of forestry policy. III. Development of Forestry Policy 28. The destruction of forest resources by shifting ciultivation has always been a central concern of the forestry policy in Liberia. When the forestry team of the U.S. Economuic Mission surveyed the forest, resources in Liberia between 1947 and 19h9,0' it was estimated that, out of the total land area of 23.8 million acres in the country, about 485 million arres (20%) were "broken forests" while 8.95 million acres (384) were "high forests." 1/ Including two which were already in operation - Talk and Macars. 2/ After the draft report had been written, the Bank received information relating to the status of concessions as of Aumlst 1, 1973 in an informal communication from the Liberian Ministry of Agriculture. According to this, as of that date, there were 42 forestry concessions covering a total forest area of 7.87 million acres excluding ontion areas. The list of timber concessions as of August 1, 197? is included in the Aooendix. 3/ A general discussion of concessions oolicy is provided elsewhere. 4/ The model concession agreement for forest utilization is reoroduced in an appendix to this report. 5/ In 1944 the Liberian Government requested the U.S. Government to sen(i an economic mission to survey the resources of Liberia. The forestry team was headed by Karl R. Mayer. Cf. Mayer, Karl R., Forest Resources of Liberia (U.S. Departmen-t of Agriculture Information Bulletin No. 67, 1951). Table 11: Liberia - Timber Conoesaions on Application as of March 1973 Name of Company Size of Area Location Person to Contact 1. River-Cess Iumber Corp. 1,138,000 Acres Lofa & Bass Counties Hon. Ernest Liberty 2. Wanta Enterprises,-Inc. 65,o000 Lofa County Mr. Keikura B. Kpoto 3. Dunber Logging Company 218,000 " Lofa County Mr. Edwin Dunber 4. Yakura Enterprise 171,000 " Bong County Mr. James Y. Gberbea 5. Talk Lumber Gorp. 486,695 " Nimba County Mr. Samuel B. Cooper Sr. 6. Yah River Logging'Co. 51 ,000 " Nimba County Mr. Samuel T. Voker 7. Tripple Enterprise 75,000 n Bong County Mr. Diagne Brahim F 8. Togba Timber Corp. 20,000 n Grand Gedeh County Mr. Stephen S. Togba 9. Macars Timber Corp. -241,200 " Grand Gedeh County Mr. Arthur Sherman 10. NACA 158,000 "if It i Mr. Christian Baker 11. Jlao Enterprise 400,000 " Sinoe County Mr. Joseph N. Togba 12. Liberia & Overseas Ventures Corp. -273,9O0 " Grand Gedeh County Mr. Toye Bernard 13. National Logging County 98,000 u Maryland County Mr. John G. Rency 14. Matro LoZging Company 130,000 " Sinoe County Hon. Harrison Grisby 15. Vanjah Logging Corp. Lofa County Mr. Marbu Dennis Sources Liberia, Ministry of Agriculture, Bureau of Forest Conservation. Following the mission's recommendations, Liberia's first modern forestry law, "An Act for the Conservation of the Forests of the Republic of Liberia," was enacted in 1953. One of the primary objectives of the law was the protection of forest resources.l/ Soon after the enactment of this law, a forestry office was established in the Department of Agriculture and Commerce. 29. A supplementary act to the Forest Conservation Act of 1953 was passed in 195g- this law formulated the rules and regulations to implement the 1953 Act _/ The forestry office was then elevated to a Bureau of Forest Conservation. Mr. Anthony T. Sayeh has been the chief of the Bureau since its creation.3/ 30. The basic objectives of the Liberian forestry polley to be pursued by the Bureau of Forest Conservation as enunciated in the Forest Conservation Act (Sec.tion Iv) were: a. Establish a permanent forest estate, made up of reserved areas, upon which scientific forestry will be practised. b. Devote all publicly owned lands to their most productive use for the permanent good of the whole people considering both direct and indirect forest values. c. Stop needless waste and destruction of forest and asoociated natural resources, and bring about the profitable harvesting of all forest products while assuring that supplies of these products are perpetuated. d. Correlate forestry to all other land qse anc adjust the forests economy to the overall national ecorkomy. e. Conduct essential research in conservation of forests and pattern acticn programs upon the results of such research. f. Give training in the practices of forestry;-offer teu;hnical assistance to all those engaged in forestry aotiviti43s; and spread knowledge and acceptace of forestry and the c(pneerva- tion of natural resources throughout the country. l/ The complete text of the law is found in the following two documenta: a. U.S. International Cooperation Administration, Third Re ort on Forestry Plrogress in Liberia 1_951-1959 (Wasi). b. FAO, Forest Land Use Policy and the College of Forestry in Liberia, Technical iAssistance Report 2051 (Rome, 1965). 2/ The supplementary law is also reproduced in full in the sources cited in the preceding footnote, 3/ Mr. Sayeh's official title now is Assistant Minister of Agriculture in Charge of Forestry. - 19 - g. Conserve recreational, fish and wildlife resources of the country concurrently with the development of a forestry program. 31. The main function of the Bureau of Forest Conservation during the years immediately after the passage of the forest conservation laws was the establishment of National Forests. This was virtually completed by early 1960's. Culrrently there are 15 National Forests already established and one National Forest proposed. The total area of the 15 established ones is approximately 17,000 sq km or 4.2 million acres (see Table 12). These are mostly concentrated in northwest and southwest Liberia. In addition to these, there was the Vai National Forest in Cape Mount County but it has since been abandoned. 32. From 1960 to 1967, the Bureau of Forest Conservation made an inventory of all National Forests in cooperation with the German Forestry Mission as discussed in a preceding section. More than 235 species of trees were classified and at least 60 were found to exist in marketable quantities. However, only a dozen or so of the latter are well-known on the wor'ld market. Another dozen or so are being exported but only in limited quantities due to the market's unfamiliarity with the species. 33. Wgith the completion of the inventory work, the number of timber concessions increased; the area covered by concessions increased; and the total volume of timber annually exploited surged. 34. Having achieved the initial objectives of (a) the establishment of National Forests thereby controlling the destruction of rich forests due to shifting cultivation, (b) the completion of the forest inventory work covering all the National Forests, and (c) the growth of timber exploitation, main emphasis of forestry policy is now on the following two objectives: a. Maximum utilization of the existing timber resources; and b. Perpetual conservation of the timber potential. 35. Under the general objective of maximum utilization of the existing timber resources, recent efforts have been directed toward the following points: a. To increase government revenues from forestry concession operations; b. To increase the value added in timber exports by encouraging local timber processing for export; and c. To extend the possibilities of timber utilization for species which are not readily marketable in the world market. 36. Under the objective of perpetual conservation of forest resources, recent concern has been with the reforestation of the forest land that has been either damaged by shifting cultivation or "logged out" by concessionaires. - 20 - Table 12: The Liberian National Forests Northwest-Liveria sq. km. acres Northwest-Liberia Gola 2,070 511,485 Yoma-District 148 36,665 Kpelle 1,7L8 432,000 Lorma 435 107,500 North-Lorma 1,000 247,100 Mt. i.utivi Park 288 71,000 Belle 665 164,000 Vai (abandoned) (483) (119,335) North-Liberia West-Nimba 130 32,000 East-Nimba 290 71,650 Southeast-Liberia Grebo 2,510 620,000 Gio 330 81,370 North-Gio 44 10,976 Gbi 61C 150,656 Krahn-Bassa 5,1l0 1,270,000 Sapo 1,530 378,000 Tienpo-Park (proposed) (130) (32,000) Total size of established National Forests in Liberia: 16,940 sq. km. or 4.2 million acres. Source: Based on German Forestry Mission in Liberia, Technical Report No. 1, 1968; Minor adjustments made by the Bank mission in the light of subsequent changes. _ 21 - IV. Timber Concession Policy 37. In accordance with the tradition of the Open Door Policy, timber exploitation in Liberia has been and probably will be carried out entirely by private timber companies - in many cases, foreign-owned'- on the basis of concession agreements with the Government of Liberia. Therefore, the terms of the timber concession agreements are of vital importance to the Government in the pursuit of its policy in the forestry sector. ATe terms of concession agreements also affect other aspects of the national economy. -18. As discussed elsewhere, the Government of Liberia has long been seeking improvements in concession agreements and, with the initial assistance of the Harvard Development Advisory Group, has made significant progress since the mid-sixties. A model timber concession agreement was completed at the beginning of 1973 by the Concessions Secrgtariat. The model concession agreement for forest utilization consists of 10 articlein and defines the obligations and rights of the concessionaire in detail and precise terms.l/ It is a great improvement over most of the agreevients concluded earlier. The agreement concluded with Macars Timber Corp. at the beginning of 1973 was based on an earlier draft of the model agreement and contains virtually all the provisions included in the model agreement as coripleted in March 1973. Future negotiations of timber concessions will be based on thq model agreement. Furthermore, the Government intends to renegotiaie the earlier agreements with the timber companies before long in order iWo standardize all timber concession agreements. The Concessions Sec)retariat is currently recruiting through FAQ a forestry economist who will advise and assist the Government in the negotiation or renegotiation and odministra- tion of forest concession agreements. )9. The two basic objectives of the forestry policy - i.e., (i) the maximum utilization of the existing timber resources from the viewpoint of national economy and (ii) the conservation of the timber potential on a perpetual basis - are reflected in the obligations of the concessionaire as stipulated in the model agreement. They relate to (a) fiscal obligations (payment of surface rents, stumpage fees, income and other taxes), (b) par- ticipation of Liberians in ownership and management, (c) processing of timber in Liberia, (d) preference for Liberian State and private shipping companies in shipping the products, (e) minimum standards of employment conditions with respect to health, safety, education, labor training, etc., (f) "good forestry practices," (g) reforestation and prevention of damage to forests, (h) proper disposal of wastes and (i) periodic reportiipg on operations. These obligations are briefly discussed below. hO.' The fiscal obligations of the concessionaire as defined 4n the model agreement (Art. V, Sects. 1-h) show. cearly a substantial tightening in this area. In the earlier agreements,./ an income'tax holiday of five 1/ The full text of the model concession agreement for forest utilization is reproduced as an Appendix. 2/ In this context, "the earlier agreements" exclude the Macars agreement unless otherwise noted. - 22 - to 10 years was granted. 'The model agreement provides that income tax, which is not to exceed 50 percent of net income, would be exempted, for the first five years of operations only up to 50 percent of the net income and only if the money is reinvested for expansion of its operations in Liberia; and that, after the first five years, income tax would be exempted up to 20 percent of the net income of each year, if reinvested. At the same time, the definition of net income has been clarified and tightened in terms of general accounting principles, etc. Similarly, in the earlier agreements, the concessionaires were exempted from import duties on all the goods necessary for their company operations for the initial period ranging from five to 10 years, but under the model agreement the duty free import privilege would last only for the first five years and the privilege would apply only to the importation of capital equipment and limited replacement parts necessary directly for timber operations and only if items comparable in prices are not available in Liberia. 41. The concessionaire is required to pay an annual surface rent of so many cents per acre on "all land held by the concessionaire."17 Despite the varying stipulations in the earlier agreements the concessionaires have in fact been paying 10 cents per acre in recent years. In the most recent agreement (with Macars), surface rent was set also at 10 cents per acre. So, in any agreement to be signed in the near future, the surface rent is most likely to be specified at 10 cents per acre until the first opportunity to review the agreement comes (five years after the signing). 42. Under the model agreement, the concessionaire is required to pay a stumpage fee "in keeping with existing rules and regulations governing the harvesting of timber for the local market or for export as specified under the Forest Law." Stumpage fees are the moSt important source of government revenue in the forestry sector. In view of the fact that the income tax revenue to beccollected from timber concessions is not likely to amount to much, the stumpage fee policy is the most important policy in the forestry area. The Minister of Agriculture is authorized by law2 to determine the levels of stumpage fees, which usually differ whether the logs cut are to be exported as logs or to be processed locally and, in case of export logs, depending on species. 1/ The tree-marking fee of 10 cents per tree is being co lected in the case of any concession operation in a "salvage area." It is collected in lieu of surface rental. The new model agreement does not mention the tree- marking fee. 2/ "An Act to Amend the Revenue and Finance Law with Respect to the Stumpage Tax, Section 682 - Rate of Tax," which reads: "Any Timber Product cut for commercial use and sold whether locally or for export shall be assessed at a Stumpage Price established by the Minister of Agriculture based primarily on current market value of lumber and logs as related to total cost of production with due allowance for reasonable margin of profit and risk to the individual timber sale operator except that the minimum stumpage tax shall be $3/mbf for lumber, planks, timber or other partly manufactured products and $5/mbf logs intended for export." - 23 - 43. Stumpage fees for export logs are more important than those for "local logs" and the levels of the former (and, in principle, those of the latter as well, for that matter) are changed from time to time in the light of changing market conditions. Recently the Ministry of Agriculture announced a scale, shown in Table 13, to be used in the future for determining the export stumpage fees; this scale relates the levels of stumpage fees to the prevailing market prices (FOB Liberia, L & M quality). It implies that the level of stumpage fee to be applied to each species is equivalent to roughly 6-10 per- cent of the FOB price of "loyal et marchand" quality logs in that species. In view of the prevailing high market prices for export logs, the Ministry of Agriculture recently announced a revised schedule (based on the scale mentioned above) of stumpage fees to be applied to all export logs, effective June 1, 1973.1/ 44. With the June 1, 1973, increases in the export stumpage fees, the average level of stumpage fees on export logs increased by 150 percent. Table 14 compares the new stumpage fees with the previous ones which had been in effect for about a year and a half. Stumpage fees on 20 significant species now average 6.90 dollars per cubic meter ($/m3) as opposed to the previous average level of 2.79 $/m3.1/ 45. The stumpage fee on "local logs" (logs to be processed in Liberia whether to be exported or to be used locally after processing) was announced to remain at 3.00 $/MBF or 0.86 $/m3; this rate applies to all local logs regardless of species. 46. While announcing that, unlike the export stumpage fees, the local log stumpage fee should remain at the previous level, the Ministry announced totally new levies on processed timber: (a) a levy of 3 percent on the sale value of all forest products, other than round logs, being exported from Liberia, and (b) a levy of 1 percent on the sale value of all forest products, other than round logs, sawdust, bark and sawmill waste, being sold within the country. These are in the nature of excise taxes. These are bad taxes from the viewooint of the nation's vital interest in encouraging the establishment of a large timber processing industry. However, in view qf (a) the likely difficulty involved in collecting corporate income tax in the mechanical timber orocessing industry and (b) the need to ensure a reasonably good recording of statistics in this sector, levies of minimal magnitudes (perhaps 1 percent on both export and domestic sales) on processed timber may be justified. 47. Liberian citizens' participation in the ownership and management of the company: The model agreement has formalized the requirement that 25 percent of equity shares "be reserved for offer to Liberi4n citizens," and also the requirement that "25 percent or not less than two of the directors" of the company's board be Liberian citizens (Article VI, Section 1). 1/ Weighted average. The export quantities by species during 1972 as shown in Table 8 were used in calculating the average. The 20 species covered accounted for 98 percent of total production of export logs in 1972. Table 13: LIBIUTA: SCALE TO BE USED FOR DErEMINING ERRT STUMPAGE F!ES, EFnCTIVE JUNE 1, 1973 Price of Logs Level of Stwupage FOB Liberia, L & M ruait3-/ /3 F'ee -- Dollars per m- $/5bf- 3 - 1 $10.00 - $24.99 - $ 5200/mb or $ 1.044/m3 25.00 - 39.99 = 7,00/mbf " 2 302/r3 40.00 - 54.99 = 10,00/mbf t 2.88/m3 55a00 - 69.99 = 15.00/mb! " 4.32/m3 70.00 - 84.99 20.500/mpf " 5.76/mr3 85.00 - 99.-99 = 25.00 7.20/m3 100.00 - 114.99 = 30.00/mbf " 8e64/m3 115 .00 - 129.99 = 35.00/mbf " 10.08/m3 130.00 - 144.99 40.00/mbf " 15 e 3 145.00 - 159.99 _ 45. 00/mbf n 12.96/m 3 160.00 - 174.99 = 50.00/mbf " 14. 40/m3 175.00 - 189.99 5 55.00/mbf " 15284/M3 190.00 - 204.99 - 60,00/mbf "u 17,28/m3 205.00 - 219.99 65.00/mbf " 18.72/m3 220.00 - 234.99 =70.00/mb! 9 20,16/m3 235.00 - 249.99 - 75.00/mbf " 21,60/m3 A Loyal at marchand. /2 mbf - MBF - thousand board feet - 3.472 103 Sources Liberia, KInistry of Agriculture, Ministerial Ciroular No. BFC/VAL/I/73 Table 114 LIBERIA: STUMPAIE FEES ON EXPORT LOGS AL Unit-: $/ABF and $/M3 I II_ Put into effect Effective since as of June 19 Species December 1971 1973 $/MBF- $7m $/MBF s/zmn- 1. Sipo 10 2.88 45 12.96 2. Sapele 10 2.88 25 7.20 3. Lovoa, Dibetou 10. 2.88 25 7.20 h. Makore, Douka 10 2.88 25 7.20 5. Niangon 10 2.88 20 5.76 6. Acajou, %haya 10 ?.88 20 5.76 7. Kosipo 10 2.88 15 4.32 8. Tiama 10 2.88 15 14.32 9. Amazakoue 3 0.86 15 4.32 10. Abura 7 -2.02 10 2.88 11. Obeche, Wawa 10 2.88 10 2.88 12. Iroko 10 2.88 10 2.88 13. Framire 7 2.02 10 2.88 14. Sikon 7 2.02 10 2.88 15. Bosse 10 2.88 10 2.88 16. Frake, Liaba 7 ;7.02 10 2.88 17. Movinqui 3 6.86 10 2.88 18. Naga 6 1.73 10 2.88 19. Mansonia 3 0.86 10 2.88 20. Koto 7 2.02 10 2.88 21. Kusia 10 2.88 7 2.02 22. Aiele 7 2.02 7 2.02 23. Afzelia 10 2.88 5! 1.44 21. Ilasba 7 2.02 7 2.02 25. Danta 7 2.02 7 2.02 h In Liberia$ for loge, one thousand board feet (MBF) are equal to 3.472 z3 Sources Liberia, Bureau of Foreat Conservation. - 26 - 48. It has recently been the general policy of the Government to urge the concessionaires to establish timber processing facilities, and, in fact, to require them to do so in the most recent cases. The model agreement stipulates that "the concessionaire shall comply with the requirements of the Minister of Agriculture regarding the percentage of total production to be sawn or otherwise processed in Liberia and shall ensure that by the end of the year ]975 not less than 60 percent of the total production shall be so processed and that by the end of 1976 not less than 80 percent shall be so processed and that by the end of 1977 the entire production of logs shall be so processed in Liberia" (Article I, Section 9). Correspondingly, the Minister of Agriculture has recently notified all the concessionaires already in operation that they must also comply with the requirements and that, as a first step, they should process 20 percent of their production during 1973 either at their owni sawmills or at some other local sawmills. E'enalty for non-compliance has been announced to be a restriction on the volume of logs to be exported by the offender. It remains to be seen, however, whether the above-mentioned measures alone could bring about the firm establishment and rapid growth of timber processing in Liberia. 49. Shipping preferences: In an effort to ensure some benefit of "linkage effects,?, the model agreement requires the concessionaire, in engaging any ship for the transportation of logs, timber or processed products, to give preference to ships owned by (in order of preference): (i) the Liberian Government; (ii) citizens of Liberia; (iii) shipping companies owned by Liberian citizens and (iv) ships registered i,n Liberia (Article VIII, Section 6). 50. Employment conditions: As an expression of the Government's concern with the non-wage benefits of employees engaged in timber concession opera- tions, the model agreement requires the concessionaire to take "internationally recognized modern" safety precautions and health measures (Article VII, Section 1). The latter should include an adequate dispensary, or, if the concessionaire employs more than 150 laborers in one region, a hospital headed by a doctor. The concessionaire is also required to provide free of charge primary and secondary education for the children of all employees (Act VII, Section 2). 51. Under the same article of the agreement, the concessionaire is restricted in hiring foreign unskilled labor to give preference to competent Liberian citizens (Section 1). The concessionaire is also required to provide for the training of Liberians in order to qualify them for technical or administrative posts, and for supervisory and senior managerial posts (Section ). The agreement stipulates the minimum "goals" (in terms of percentage propor- tions) to be achieved within the specified numbers of years after the start of operations. 52. The standards of timbering and processing practices: In the interest of best utilization and conservation of forestry resources, the model concession agreement requires the concessionaire to follow good timbering, processing and silvicultural practices (Articles II and VIII). The concessionaire is required to operate in accordance with the management - 27 - plan which forms part of the agreement. At the time of the mission (March-April 1973), the standard management plan to accompany the model concession agreement was not yet prepared. However, even an earlier version of the management plan which was obtained by the mission appears to be a carefully prepared document stipulating the rules and principles to be followed in carrying out forestry operations.l/ 53. Furthermore, the model agreement requires the concessionaire not to fell for commercial use any growing trees the sizes of which are below the cut-limits. The cut-limits are stipulated in terms of the diameter at breast height and vary according to species groups2/ (Article II, Section 2). "Creaming" of forests is prohibited (Article VIII, Section 5). 54. Reforestation and prevention of forest damage: The model agreement, as most of earlier agreements, required the concessionaire to "carry out or cause to be carried out such reforestation practices and measures as will ensure the perpetual use of the forest within the Concession" (Article VIII, Section 2); and to use all reasonable efforts to prevent damage to forest resources by unauthorized persons (Article VIII, Section 3). Despite similar requirements stipulated in earlier agreements, concessionaires in most cases had failed to carry out any reforestation until recently, and, in some cases, have failed to prevent damage to forest resources inflicted by shifting cultivation practices of peasants. Even in the last two or three years when there has been some reforestation by concessionaires it has been far from sufficient. This matter will be discussed in the following section in connection with policy issues and recommendations. 55. The model agreement requires the concessionaire to avoid pollution due to improper disposal of wastes from its operations (Article VIII, Section 1). 56. Records and reports: l'he model agreement stipulates the obligations of the concessionaire to maintain records, and report to the Government, on its operations in detail far more clearly and specifically than earlier agreements (Article IV). One of the major problems that the mission encountered in studying the forestry sector in Liberia was the problem of incomplete and inaccurate data relating to the operations of timber concessionaires. It is difficult for the Government to draw up sound policies for the development of forestry and forest industries unless there is adequate information available. This point can never be overemphasized. 1/ An earlier version of the standard management plan is reproduced in an Appendix. 2/ The Liberian Code of Laws of 1956, Sub-Chapter C (Restrictions on Use of National Forest Products of Chapter I of Title 24 Natural Resources Law). - 28 - V. Some Policy Issues, Proposals and Recommendations 57. There are four key issues in the forestry sector of the Liberian economy at this time: a. Increasing the government revenue from timber concessions; b. Encouraging the development of mechanical wood processing industry in Liberia; c. Carrying out an adequate program of reforestation; and d. Establishment of pulp and paper industry. 58. These issues relate to policy objectives involving somewhat different time dimensions, although all of them except for the last one are equally urgent. First, the issue of government revenue from timber concessions apparently involves the immediate future most importantly. This does not mean, however, that one could ignore the long-term implications of whatever actions taken today in an attempt to increase the government revenue in the immediate future; for the government revenue over the longer term and other policy objectives such as the development of mechanical timber processing, the conservation of forest resources, employment, etc. A short-sighted approach must be avoided. Nonetheless, *bhe issue of the government revenue is concerned usually with the immediate few years. Second, the development of timber processing industry]/ is a policy objelCtive involving longer-run consequences. Third, the issue of reforestation obviously involves long-run considerations even though it is primarily concerned with plantations of fast-growing species. Fourth, the establishment of pulp and paper industry is not of immediate importance in Liberia but it should become relevant in the 1980's. It involves considerations of very long-run nature. 59. The development of mechanical wood processing industry in Liberia at this time is desirable: (a) it will contribute to the industrialization of the economy, (b) increase the value added, (c) increase the export earnings, (d) increase the opportunities to utilize "'secondary species" very little of which is currently being exported, and (e) have favorable employment effects in some parts of the country.- Mechanical wood processing is an ideal vehicle to help industrialize the economy because:i/ 1/ Hereafter, "timber processinlg" may be used for brevity instea'd of "mecha- nical wood processing" which mainly refers to production of sawnwood, veneer sheets and plywood. The production of other panel products such as particleboard and the pulp and paper industry are excluded unless noted otherwise. 2/ As to the possible benefits of establishing wood processing industry in the developing countries with abundant resources of tropical hardwoods, see Kenji Takeuchi, Tropical Hardwood Trade in the Asia-Pacific Region, W+orld Bank staff occasional paper No. 17 (forthcoming, the Johns Hopkins University Press). 3./ roid, pp 5-6 - 29 - a. it requires relatively simple technology and easy- to-learn skills; b. it requires relatively small capital in setting up an economic unit in comparison with many other lines of industrial activities such as the production of fertilizers, petro-chemical industry and automobile industry; c. it is a typically weight-losing (hence freight-cost- saving) activity and provides a good opportunity to industrialize "'remote areas" on the basis of locally available resources. In view of the difficult experience of other major timber-exporting countries in West Africa (and elsewhere), utmost efforts should be concentrated on the development of timber processing industry now. This is urgent because, in a few years, it will become quite difficult due to a rapid depletion of the preferred species. 60. The recent increases in stumpage fees on export logs are a step in the right direction both because it would increase the government revenue and because it would discourage the exports of wood in the form of logs and thus indirectly encourage the timber companies to go into proceasing for export sales. 61. The present policy of the Government for ensuring the rapid establishment of timber processing industry is to require each timber company to process locally: a. 20% of its timber harvest in 1973; b. 40% of its timber harvest in 197h; c. 60% of its timber harvest in 1975; d. 80% of its timber harvest in 1976; and e. 100% of its, timber harvest in 1977. If any company fails to comply with thle regulations, the Government will deny the issuance of export permits for the sale of round logs to the company until the company will have complied with the policy and regulations. 62. Whether this policy works 6r not will be seen in the next year or so. Some problems are anticipated. Timber processing is not a very attractive business at the moment in Liberia, while log exporting is. The above-mentioned policy, therefore, goes against the principle of private profit motive. So long as the exporting of round logs remains highly lucrative, timber companies will concentrate on log exporting and do the least on local timber processing. - 30 - The new levies on processed timber sales - 3 percent on exports and 1 percent on local sales - would not help the situation either. A substantial export levy based on value of sales is likely to encourage the practice of under- invoicing export sales for customs clearance. 6i. Annual sawmilling capacity in Liberia as at the time of the mission's field work (March 1973) is estimated to have been about 80,000 m3 of roundwood. There is no factory producing wood-based panel products. The only company which has a serious plan to establish a substantial capacity to produce wood-based panel products in the foreseeable future is Vanply of Liberia. According to the company plan: a. An integrated mechanical wood processing factory is to be built on a site located within a few miles from Greenville. b. The annual production capacity is planned to be 85 million sq. ft. or, 7.9 million m2, of plywood and 33 million board feet, or lh,000 m3(s), of sawnwood. c. Estimated total investment required is $19 million. d. The intended market is primarily the U.S. 64. Despite the recent sharp increases in the export stumpage fees inl Liberia, the average burden of payments to the Government per cubic meter of export logs is still too low compared with the prevailing very high prices of major species (Tables 15 and 16). In fact, under the new system, the levels of export stumpage fees are geared to the levels of FOB prices (see Table 13). This means that the levels of stumpage fees will be lowered if FOB prices decline. In other words, the ratios of stumpage fees to FOB prices do not change very much whether the prices are high or low. According to the scale (Table 13), the ratio of stumpage fees to FOB priceo (L&M quality) ranges around 6-9 percent except for extreme price ranges ! Of course, the Government also collects surface rents on the basis of the number of acres involved in concessions; but these are minor at the momenm (lO˘ per acre per year). At present, income tax payments do not amount too much either, because: (a) many companies are new and still on tax holidays; and (b) even the old ones which are no longer on tax holidays tend to underreport profits. Thus, the average burden of the payments to government (the sum of export stumpage fees, surface rents and income taxes) per cubic meter of export logs do not exceed 15 percent of FOB prices at the most if FOB prices are not underreported deliberately at the customs. In Ivory Coast, which exports species similar to those exported by Liberia, the ratio of total taxes paid per cubic meter of export logs to the average prices of export logs is Table 15: PRICES OF LOGS QUOrED BY A MAJOR TIMBER CCoPANY IN LIBERIA, FOB LIBERIA, MARCH 1973 Minim um M minum Qual1ty Specificatloffs Species Diameter Length in cm. in m LK A AB B B SIPO 80+ 4m+ 135.00 161.00 141.00 121.00 100.00 SIPO 60+ 4m+ 85.00 NIANGON 60+ 4m+ 68.00 NIANGCN 50+ 3.50m+ 50.00 ACAJOU 80+ 4.50m+ 68.00 81.50 71.50 61.00 51.00 ACAJOU 60+ 4.50m+ 58.00 69.50 61.00 52.00 43.00 BOSSE 70+ 4.50m+ 50.00 60.00 52,50 45.00 37.50 DIPETOU 60+ 4.50n+ 70.00 84.00 73.50 63.00 52.50 MAKORE FIL 100+ 4m+ 80.00 96.00 84.00 72.00 60.00 WOXRE ]˝ F. 90+ 4m. 72.00 86.00 75.00 64.oo 54.00 MAKORE NFIL 80+ 4m+ 62.00 74.50 65.00 55.00 46.50 MAKORE 70+ 4m+ 50.00 60.00 52.50 45.00 37.50 SAPELLI 80+ 4.50.+ 80.00 96.00 84.00 72.00 60.00 SAPELLI 60+ 4.50o+ 60.00 72.00 63.00 54.00 45.00 OBECHE 70+ 4.50m+ 42.00 TIAMA 70+ 4.50m+ 54.00 65.00 56.00 48.50 40.50 KOSSIPO 80+ 4.50m+ 54.00 65.00 56.00 48.50 40.50 KOSSIPO 120+ Tr/ 80.00 pRkMIRE 70t 4.50.+ 40.00 ABURA 60+ 4.50.+ 40.00 IROKO 80+ 4.50a+ 40.00 BETE 60+ 4.50m+ 64.oo BITE 50+ 4.50m+ 54.00 - 32 - estimated to have been about 20 percent in 1972.1/ The Government of Ivory Coast has not increased the taxes on export logs since January 1972 despite the phenomenal increases in prices which occurred in the latter half of 1972 and the first half of 1973 (Table 16). It is susoected that the Government of Ivory Coast did not attempt to increase the taxes precisely because Liberia, the neighboring competitor in timber exporting was charging extremely low taxes (including stumpage) on export logs. As a result of the latest increases of tiirmnage fees in Liberia, the unbalanced situation has been partially corrected. In any case, the important fact here is the relatively low taxes on export logs in Liberia as compared with those in Ivory Coast even after the recent increases in Liberia. It is the recom- mendation of this mission that the stumpage fees on export logs in. Liberia be raised to the levels equivalent to at least 20 percent of average FOB prices.2/ This action by Liberia will be good for Ivory Coast as well as for Liberia herself. 65. It may be argued that the above recommendation is still too conservative because it primarily aims at increasing the government revenue. In order to discourage log exoorts and to encourage processed timber exports, the export stumpage fees should be raised even higher. They should be raised to the point where the profits from log exporting become so modest that timber companies will have to decide either to go out of business or to consider local timber processing very seriously. Of course, this is not a sufficient condition but this is an essential, necessary condition for promoting a rapid growth of processed timber exports in Liberia. 66. Turning to the issue of reforestation program, it should be stressed that reforestation is as urgent a problem as the issues of government revenue and timber processing in Liberia. Despite the obligations of reforestation stipulated in most concession agreements, there had been no reforestation carried out by the concessionaires until 1971. The Government of Liberia started its own reforestation program in 1972. The acreage planted in the recent years is as follows: 1/ Based on data reported in Franz Schmithusen, Rapport sur la Politique Forestiere en Cote D'Ivoire, 20 avril 1972, Tableau 22. Weights for averaging were found in Table 9 in the same report. The prices of export logs increased by roughly 20 percent from 1970 to 1972 in Ivory Coast. The weighted average of taxes per unit was related to the estimated 1972.average price of export logs. In Ivory Coast, as of January 1912, the unweighted average of taxes on "Groups IP' species (excluding Asamela which is exceptionally valuable) was 2,820 CFA Francs/rn or 11 $/m3; the average on "Groupe II" species was 2,162 CFA Francs/m3 or 8.50 $/m3. 2/ Average FOB prices of various export grades rather than just the 1&M quality. Table 16: Prices of Tropical Hardwood Logs,L- Selected Species, FOB Ivory Coast, 1956-1973 Unit: CFA Francs per cubic meter SAMBA Average Exchange ACAJOU MAKORE NIANGON (Wama SIPO TIAMA SAPELLI Price of Rate (KYAYA) /2 obeche) (UTILE) /3 Species CFA /4 Francs/US$ 1956 6,475 6,919 7,019 4,125 6,863 4,531 6,306 6,034 n.a. 1957 6,156 6,938 6,625 4,000 6,250 4,375 6,113 5,780 n.a. 1958 7,000 7,881 7,638 4,375 7,313 5,406 6,950 6,652 246.85 1959 7,575 8,500 8,500 4,600 7,519 5,138 7,281 7,016 246.85 1960 9,750 9,250 8,625 5,650 8,125 5,781 8,594 7,968 246.85 1961 9,500 9,550 8,875 6,356 8,656 6,438 9,688 8,430 246.85 1962 9,000 9,375 9,125 6,375 8,625 6,625 9,250 8,339 246.85 1963 9,438 9,656 9,188 6,719 9,469 7,063 9,656 8,741 246.85 1964 1(,188 10,250 9,750 6,625 10,875 7,375 9,750 9,259 246.85 1965 9,875 11,250 9,625 6,063 10,75C 7,375 9,750 9,241 246.85 1966 9,625 11,763 8,938 5,938 10,750 7,094 9,375 9,069 246.85 1967 10,125 10,938 9,000 6,031 11,375 7,563 9,250 9,183 246.85 1968 1C,219 11,313 9,188 6,25C 13,500 8,313 10,375 9,880 246.85 1969 11,000 12,813 10,500 7,250 16,688 8,719 12,875 11,406 277.71 1970 9,781 14,250 10,250 6,969 14,656 8,438 12,938 10,897 277.71 1971 9,813 14,063 10,656 7,281 15,813 9,000 12,313 11,277 255.79 1972 12,063 14,000 12,313 7,825 20,375 11,125 13,25f0 12,993 255.79 1973 15 22,500 22,500 20,750 12,500 38,250 18,500 23,75C 22,679 234.51 /1 The average of the mid-month quotations for "loyal et marchand" grade for March, June, September and/or nearby months. /2 Diameter 100 cm. and over. 73 FOB Caineroon. 7 Simple arithmetic average. 7' The first half of the year. Surce: Marches Tropicaux et Mediterraneans, various issues; IMF, Lnternational Financial Statistics, various issues. - 3L - Porestry Plantations Established By By Government and Concessions World Food Proaram (acres) (acres) 1971 838 _ 197? 1,210 105 1973 (estimates) 1,320 5_0 Total, 1971-1973 3268 25 Source: The Ministry of Agriculture. The scale of reforestation has thus been quite modest. 67. The principal exotic species being planted are c3melina (3melina Arborea) and Teak (Tectona Grandis). 5melina is a fast-arowine broad- leaved species which has been oroven to be suited to the soil and climate of Liberia.i/ 68. In an attempt to ensure that the obligations of the concessionaires to carry out adequate reforestation, the Bureau of Forest Conservation, in cooperation with foreign experts soonsored by the German Covernment, FAO and CARE, has oroposed a project. The project is to create an indeDendent organization to carry out the required reforestation orogram on behalf of the concessionaires in exchange for the payment of fees by the Cnrcessionairec.2/ Fees are to cover the expenses. CARE is to be given the administrative responsibility. 69. This project is quite ingenious and well-conceived. It is feasible as the concessionaires have already shown interest in naying the cost although the amount of the "feel' that the concessionaires will have to pay to the envisaged independent organization has not yet been agreed upon. The Govern- ment is well-advised to support this project in princ`.le. 1/ Scientific and technical details relating to the sPecies in question are given in A.F.A. Lamb, ,melina Arborea, Fast Growing Timher Trees of thn Lowland Tropics Reoort No. 1, Commonwealth Forestry Institute of the University of Oxford, January 1968. 2/ The project is described in detail in a paner presented at the Thirl National Conference on Development Ohjectives and Strategy, March 12-16, 1973, Monrovia, Liberia: W. Schel]stede, "Development of Forest Resources." 70. The establishment of pulp and paner industry in Liberia is not urgent at this stage, but such a possibility deserves a serious study at this juncture. One of the issues in this connection is what should be used as the main raw material; should it be the residues of mixed tropical. hard- woods which may be made available abundantly as a result of the anticipated rapid growth of mechanical wood orocessing activities, or should it be the rather uniform material which is to be made available from the man-made forests to be established by reforestation? Technical evidence available at this time tends to favor a pulp and paper industry based on man-made forests. 71. Another aspect of this issue that deserves attention is the market aspect. It is granted that the market for the world as a whole is exoected to grow fairly raoidly. However, the question is whether a pulo and paper industry in Liberia could become truly competitive in the world market. A more realistic question to ask seems to be: which of the -!est African countries with abundant forest land area should establish a pul-p and n?ner industry if there were to be a Wqest African "common market?" Since the economies of scale are an important factor in a successful ooeration of D1puo and paper industry, it is imnortant to have an assurance of a fairly large market. If West African countries arp to become markets to one another in various lines of manufacturing, which country should have the nubn and paper industry is the question to be asked. Does Liberia have a comnarative advantage in pulp and paper over other nations in the region? VI. Projected Export Earnings and Government Revenuel'/ 72. Export earnings from forest oroduicts will expand rapidly (22.0 percent per annum) from 7.2 million dollars in 1971 to 38.8 million do lar- in 1978 (Table 17). The volume of log exoorts will continue to rise sharoly in 1972-1975, from 222 thousand m3 to 400 thousand m3, and then will increase only slowly up to 425 thousand ml by 1978. 73. Average prices of export logs skyrocketed in the last half of 1972 and the first half of 1973. Prices are expected to decline somewhat in 1974 buit are to gradually rise up to 1978.2/ 74. Processed timber exports have so far been negligible. These exports, however, can be expected to rise rapidly in the next few years as a result of continuing efforts on the part of the Government to encourage local timber processing. The total value of processed timber exports is projected to increase from 30,000 dollars in 1972 to 8 million dollars in 1978. 1/ Projections prepared in September 1973. 2/ The price projections take into account the assumption that the index of "(international prices of goods," which is the inflation index beine used by the Bank staff for all commodity work, would rise by 44 oercent between 1972 and 1980, or at an average rate of h.7 percent per annum. Table 17: Liberia - Exports of Forest Products, Volume, Unit Value and Total Value, 1967-1972 (Actual) And 1973-1978 (Projected) Actual Projected 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 197T Logs Unit Value ($/m3) 44.9 46.5 39.9 35.3 36.7 65.0 60.0 60.0 62.0 65.0 70.0 Export Volume (000 m3) 31.8 1-49.2 143.9 204.9 222.0 300.0 350.0 400.0 410.0 420.0 425.0 Export Earnings (million $) 1.43 6.94 5.75 7.10 8.16 19.5 21.0 24.0 25.4 27.3 29.8 Processed Timber Export Volume 1,000 m3 1.0 5.0 10.0 20.0 40.0 50.0 60.0 Unit Value $/m3 (r) 110.0 120.0 125.0 130.0 140.0 150.0 Export Value (million $) 0.01 0.06 0.14 0.03 o.6 1.2 2.5 5.2 7.0 9.0 Total Export Earnings 1.43 6.95 5.81 7.24 8.20 20.1 22.2 26.5 30.6 34.3 38.8 (million $) Source: Liberia, Ministry of Planning & Econonic Affairs; and Mission Estimates. 75. Government revenue from forestry, based on stumpage fees on log production, surface rentals and sales levies, is expected to increase from 1.2 million dollars in 1972 to, at least, 4' million dollars in 1978 (Table 18). In addition to the items listed above, the government revenue based on corporate and personal income taxes is also expected to increase. Revenue from corporate income tax in forestry should increase in the next few years as many of the existing companies go off their tax holidays. - 38 - Table 18: PROJECTED GOVERNMENT REVENUE FRCM FCRESTRY, 1973-1978 (Units Million dollars) Actual Projected 1972 1973 1974 1975 1976 1977 1978 1. Export log stumpage 0.82 1.44 2.43 2.78 2.85 2.92 2.95 2. Local log stumpage 0.07 0.07 0.09 0.10 0.13 0.14 0.15 3. Surface rentals 0.32 0.50 o.60 0.70 0.80 o.80 o.80 4. Export & local sales - 0.01 0.04 0.08 0.15 0.20 0.25 levies Total 1.21 2.02 3.16 3.66 3.93 4.06 4.15 Source: Mission estimates. ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ IBRD 10832R - NDOE&MREE 197A 9o00' a-oo0 . 600' 7°' , _I _ X b' LIBERIA GUINEA * ~~~~~~~CONCESSIONS, G U I N E A f!'; CNESQ ;. -_/*< * \ } q} \ t N @ _: A IRON ORE CONCESSIONS iPAVED ROADS ; / 7 L 9n y q * 1 t .;4z -śMCO MhE A POTENTIAL IRON ORE DEVELOPMENT . ALL WEATHER ROADS r VOINJA-IA < .> *RUBBER CONCESSIONS : - |RAILWAYS x/ / )pSANNIQUEbL: IE TLC i F NATIONAL FORESTS I REGIONAL BOUNDARIES N.N / -V ll |FORESTRY CONCESSIOS COUNTY BOUNDARIES *( FOYA/RICE PROJECT / ;; " \4 *|GBEDIN RICE PROJEC T S / 1 .L, > * JSAW MILLS - INTERNATIONAL BOUNDARIES FOYA AMARA ZORZOR RIVERS A ~~~~~~~~~~~~~~~~~~~~~~~~~~~~NA5100' tUG. ./ooLsOR FOREST -OReSN I / EGI N R . etc REFEROTDTTEXTO°T10A20 30 40 1 50 60 70 EO At/ent /| FRA L&i~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~L < At/ontic Ocean MILES Oceen \ j (f~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ATWNspledottotonooetoo y h o' /0' 'I 10a0\y'00' 11, g i~~~~~~~~~~~~~~~~~~~R I ui BONG COUNTY :0DECO~~~~~~~~~~~~~~YAFIC ATAC ~ ~ ~ ~ ~~~Hi A /n T/c A Oca EER1ET MIES10' Ncan ___ __ __ ___ __ __ ___ __ __ ___ __ __ ___ __ __ ___ __ __ ___ __ __ ___ __ __ Ł __ __ ___ __ __ ___ __ __ ___ __ __ ___ __ __ ___ __ __ __T___LO__ ICO____MT_ __ LIBERIA - FORESTRY AND FOREST IMDUSTRIES APPENDICES I. Export of Logs in 1972, by Species and by Company. II. Total Local Consumption of Logs in 1972, by Species. III. A Schedule of Export Stumpage Fees for Major Species Effective July 1, 1973. IV. Prices of Sawn Timber for Local Sales, Quoted by Two Major Timber Companies in Liberia, 1972. V. Price List of Local Grade Timber VI. List of Timber Concessions - August 1, 1973. VII. A Model Timber Concession Agreement, Prepared in March 1973. VIII. A Standard Model Management Plan IX. Obligatory Species EXPORTS OP LOGS~_ lB 1972, BY SPECIES ANDS BY COMPANY Unit: Thousan.d Board Peet-2 Liberia Karyland Siga Vaepiy Lofa Lofe Talk Liberia tyabout Coota- mm Tropical Liberia Logging East Cope Ma.-r Bolado Total Total LOBBEi.g Lumber at Timber LoogiuB Tiebor EauterB Went Nimba Timber at Trading Irdoutria1 & Wood Auintioa P.lu_a Timber Satei Il All ell Corp. Carp. Liberia Corp. Co. Timber Africa Corp. Liberia Cb. Par-try Pro..euciuB Liboria Cu-t-tr ioe Carp. Cotp-nies Cempauie (MLCS (SLC) (VANlPLY) (1 ICO) (LOFAI (TLC) (LETCO (FWA) (CNC) (Mn) (TTC) (LIFC) (LLWPC) (EACL) (CPICI (MACARS) (BSCI 1,000 a CLASS I SPECtIES SIPO (pTOLE) 1,357 1,792 lb 1,379 094 1.410 341 2,605 t,707 2,093 -4 1,604 t,64b 298 100 17,677 61.4 TIARA 373 164 _69 78 113 126 430 383 225 2208 5 205 376 55 7B8 2,909 10.1 KOSIPO (OMU) 69 2B0 8 6 1B2 100 323 477 941 241 -322 519 768 105 . 3,804 13.2 SAPELE 100 311 - 156 173 297 332 Ii6 706 317 - 150 391 9 57 3,24B 11.3 ACAJ00U (KHAYA) 757 105 - 51 3B4 269 175 314 319 ili51 544 132 115 - 3,391 11.0 DIBETOUS (LOVOQA) 1.425 509 440 531 527 136 2,106 517 200 230 5 4 966 698 244 123 8 ,891 30.9 MAKZSBE (WOUKA.l i62 519 40 624 225 52 1,436 337 222 50 31 666 1,001 375 387 - 6,266 21.8 NIANG00N 402 906 1,259 3,054 057 443 403 1,300 426 731 - 162 662 998 750 203 - 12,646 43.9 ROBOO 9 - 2 - 43 146 4 5 66 20 2 - - - - -295 1.0 AFZELIA (APA) - - - - . - 19 - .-- - - 10 0.57 BOSSE 67 52 26 50 12 16 40 46 60 63 -4 89 107 iS 102 -772 2.7 AKAZAKOIIE- - - - 43 9 - 5 30 - -. - - 03 063 BET! (9161100516) - ~ ~ ~~~~2 - - - - - .- - .-- - 72 0.3 T. NBELIIA (A.RICAN PINES 142 - - . - 25 -2 9 1 2 -- -6 3 O.6 gUB-TOTAL.: CLASS I 4,770 4,956 2,002 6,019 3,353 3,003 5,596 6,209 5,134 4,110 - 262 5,301 5,959 1,900 1,323 60,176 200.9 CLASS TI SPECIES: WAWA (OBECHIE SAMBSA) 965 4,016 - - - 290 497 410 1 i167 - 2,265 1,790 93 014 11,615 40.3 KUSOIA(OPEPE) - - 49 - 4 - 273 - 25 - 7 - -- - 350 1.2 ABRUA 340 2 1,217 36 - . 101 65 - -570 240 1 1 94 - 2,605 9.3 ILOMBLA 1,366 - - - - . - - - -- .--- 1,566 1.4 LID BA.3 - - - - - - ---.----3 AIELE 57 .6 - - - - . - --- 14 - 177 0.6 FRAIIIRE (IDIGBO) 4 30 4 301 93 22 6 41 13 54 -- 29 109 15 31 8 30 2.9 ROED OAK 3 - I - __:_ - - - . 25 - - -608 97 0.3 S1UB-TOTAL: CLASS T0 2,94,4 4,056 1,281 410 83 324 604 709 '13 1,272 -- 2,071 2,320 119 2308 17,331 60.2 ClASS III SPECIES: TALL it - 3800 - 11 2 - 2 --28 140 15 9 -605 2.1 AZOBE (EKIKI) 308 673 - - 37 ----5 - - -754 2.6 NAGA - 85 - - - - - - ----.241 326 1.1 mBAo.OeA - .6 - - - ----26 . 32 0.1 SACOGLOTTIS 3 . 22 -_ - - - 67 - ---- -92 0.3 DANTA - - - - - --.-. --- CEIBA - - 44 - - . - - . -- -- - 44 0.2 HAMMY0-APPLE --- - . - .------ --- DIDEI.OPTIA . . - - - - - - . - ------ SOB-TOTAL: CLASS III 52 - ,212 - - - 11 39 - 69 - 20 -179 256 9 - 1,053 6.4 OTHER5 SPECIES 1 - 10 - - -_-- 11 0.4 GRAND TOTAL 7,760 9,012 4,504 6,437 3,435 3,406 6,211 7,117 5,147 5,491 -2k2 8,200 0,458 2,355 1,570 - 79,262 275.2 Bate: Figorou may oa add due to raunding. 1Rf .the volum of tbe loge am ahtob 'eupart log' utumpago tLeu cor . nuo..od. 0 L2 Iu Liberia, the prod-ction volum to reported in r-bic motors nd -ouvrted ilet boad to.a eo t at the rate of 258 board f-t -o cb ic etr bore: Liberia, Minlotry of Agrio-1tore, Boreno at Foreut Conuer-tiou TOTAL LOCAL. CONSUMP1TION /I OF LOGS 1N 1972. By SPECIES Unit: Tho..sand Board Feet / Ce-to- HIM Troptoa Liberia Lioo-o Maryland Sigo To-ply Loa. LoBe. Talk Liberia Fybect Sibs Tinker of Tradiog Ind-strial Lggiog East Capo Pl--r Bl.de Teesl Tote1 Logging Lonbe of Tiober Logging Ttobe Easern Beet Corp. Liberia Co. F--otry & Wd Asiatic of Pol.as Timber aS,tills All All CorP. Cor_ Lbei Corp. Corp. Co. Plobor Africa Preteen tog Liberia Co-erorio- Corp Ceop-oie Companies (M5C) (SLC) (PANPLS) (LOTICO) (LOFA) (TLC) (LETCe) (FWAl (CNC) (MEL) (TTC) (LIFT) (LIWPC) (EACL) (CPLC( (MACARlS lS) (BSCS90LOM) CLASS I SPECIES SIPS (OUTIL) 100 457 1 79 155 140 89 276 265 236 - 115 65 32 5 1.967 6.8 TIAMaA 47 182 70 - 1 30 19 113 62 127 - 15 25 34 21 10 -719 2.6 KOISSE (SOIL) II 224 1 10 17 105 II 214 2b3 234 - - 32 50 At 3 -1,239 4.3 lAPELS 26 l3B - b 22 83 35 142 138 131 It l 28 4 A4 799 2.7 ACAJOU (KIIATA) 30 89 - - 33 BA 3 41 66 j2 - -40 - 34 - -4981 1.7 DISET01 (LOVOA) 90 167 223 26 52 60 31 47 25 33 - 1 45 73 22 26 - 995 3.5 RE301 (DOUKrA) 31 252 21 157 20 17 92 109 75 23 71 i9 121 4B 22 107 1153 4.0 NIANBONS 92 245 Al 174 160 130 6 57 45 226 229 SOil 7 6 713 IC4i 2,116 7.4 tE1 0 $ 2 14 - 5 139 3 11 20 606 19 499 1.3 AFCELIA (AEA)- - - - - - - 15 - i4 - -- --- 33 01 BOSSE 13 17 19 6 14 2 1 14. 3 13 1 -6 16 13 7 - 39 055 ALOAZAKOULE - - -- - - - - -- - ------- BIE =I9A ONIA) TETAILSA AOCI PN) - - 540 - 98 2,711 3- 397 4,339 13.1 BOB-TOTAL: CLASS I 4W 1,95' 1,399 457 431 798 159 1,034 912 1,109 926 3 f)99 420 490 290 79 326 14,534 50.4 CLASS !I SPECIES: B AW (OBCETE 159 629 - - 5 15 1 - 417 - 3 154 -5 9 - t387 4.9 KUiWSIA (OEPEPE) 1 20 91 - - 2i - 2319E 19 ,1 10 14 3 ---3 2.035 7.1 A50RA 16 5 267 1 - - 3 1 7 - - a 35 24 6 -- 392 1.2 ULOMBA 39 - - 39 0.1 LMIMBA 3 - 10 1 3 0.1 A ELE 3 - 333 - - - - - --2 --6 --3 347 1.2 FRAMIERE (IDIGOB) 4 14 2 29 4 6 lt #1 27 - - 6 20 3- 31 227 2.9 RED0 OAK 1I - - - - - - - - 404 642---- 146 1,_203 4.4 SOB-TOTAL: IILASS.II 0 5 703 30 -4 7-T 19 285 91 1.756 4952 77 ~ 186 26 14 9 183 5,699 19.9 CI.ASS III SFPECIES: TAS. I 3 - 2 12 - - - - I i -- - - 16 3 - 243 0.9 ATOBl (EKKIO) 17 - 242 - - - - 2 -5 7 26 1 . ,~ .2 NAGA' - - - 00 - 638-- 39 59 939 2.9 DAH OMA 6 4 14 41 - - - 31 Ii 204 ----- 365 1.3 SACOGLOTTIS I - o - - - -I 7 24 0.1 BANITA 2 - - - - - - B -10 - - ----13 - C11BA - - - - MAMMBY-APPLE - - - - - - - - - 12 3 ----- II St DCOELOTIA- - -6 4 - - 1 -----4F3 o.k SUB-TOTAL: CLASS III 23 64 1'74 - 5 4 1 B'L~2 4 876 56 7 ,9 . BOIlER SP6CEIS ~ ~ ~ ~ ~~~~8 - 33 - - - - - - - 0 -- - 54 191 9.4 GRAND0 TOTAL 55 2,773 2,557 486 485 972' 333 1,422 1,026 2,976 1,435 ,7 57 606 5BI 370 906 899 22,202 77.1 /1 Befor to tAo -oa- of logs "prod-ed boo no -oportd; enhes stonpago foe. wr asosd ta "leeci leg ra-e.' Pr is -ot aronteed tbet all of rite lag actually wet to 1-ra n-tilIo and wee --nond looIly asa ignifi-on olen- of ocoh legn was reg-etdly ak-d-nd 00 rhe loggiog oten /2 In Liberia, the prod-tcioc -co is r-partod in -obi -meO- boo --nerrd Into bead foor maresta L he -ori-o rare 1f 299 boad fre=L cnbl ete Soare- Liberia, L~iotety of Agefo-1t-r, Bor..o. of For-tCeeraio APPENDIX III Page 1 A SCHEDULE OF 'XPORT STUMPAGE FEES FOR MAJOR SPECIES EFFECTIVE JULY 1, 1973 Effective June 1, 1973, the following schedule of stumpage fees shall apply to all logs intended for export: - 1. Entandrophragma utile Utile, Sipo 45/.00/mbf 12.96/m3 2. Entandrophragma cylindricum Sapele 25.00/ " 7.20/" 3. Lovoa trichilioides Lovoa, Dibetou 25.00/ " 7.20/" L. Tieghemella heckelii Makore, Douka 25.00/ " 7.20/" 5. Heritiera utilis Wishmore, Niangon 20.00/ " 5.76/" 6. Khaya spp. Khaya, Acajou 20.00/ " 5.76/" 7. Entandrophragma candollii Kosipo 15.00/ " 1132/" 8. Entandrophragma angolense Tiama 15.00/ " h.32/" 9. Guibourtia ehie Amazakoue, Bubinga 15.00/ " 4.32/" 10. Mitragyna spp. Abura 10.00/ " 2.88/" 11. Triplechiton scleroxylon Obeche, Wawa 10.00/ " 2.88/" 12. Chlorophora excelsa Iroko, Odoum 10.00/ " 2.88/" 13. Terminalia ivorensis Framire 10.00/ " 2.88/" 14. Tetraberlinia tubmaniana Sikon 10.00/ " 2.88/" 15. Guarea spp. Guarea, Bosse 10.00/ " 2.88/" 16. Terminalia superba Frake 10.00/ " 2.88/" 17. Distemonanthus benthamianus Movingui 10.00/ " 2.88/" 18. Brachystegia leonensis Okwen, Naga 10.00/ " 2.88/" 19. Mansonia altissima Mansonia, Bete 10.00/ " 2.88/" 20. Pterygota macrocarpa Koto, Kyere, Ake 10.00/ " 2.88/" 21. Nauclea spp. Opepe, Kusia 7.00/ " 2.02/" 22. Canarium Schweimfurthii, Aiele 7.00/ " 2.02/" white mahogany 23. Pycnanthus angolensis Pycnanthus, Ilomba, 7.00/ " 2.02/" White Cedar, Walele 24. Nesogondonia poepauerifera Danta 7.00/ " 2.02/" APPENIDIX III ,Page 2 The following listed species shall remain in the idnimum stumpage fee category of $5.00/mbf or 41.44/m until further notice. 25. Gilbertiodendron preussi African or red oak 26. Piptadeniastrum africanum Dahoma, Dabema, African Greenheart 27. Daniella spp. Ogea, Faro, Gum Copal 28. Erythrophleum spp. Tali, Sasswood, Alui, Lanola 29. Lophira alata Agobe, Ekki, Iron Wood 30. Sacoglottis gabonensis Osauga, Cherry APPENDIX IV PRICES OF SAWN TMIBER FOR LQAL SALES QUOTED BY TWO MAJOR TIMBER COMPANIES IN LDIERIA 1972 1" x 2" = ˘ 20 p. Bd.Ft. 2" x 2" = ˘ 20 p. Bd.Ft. 1" x 3" = 21 p. Bd.Ft. 2" x 2" = ˘ 20 p. Bd.Ft. 1" x 4" = ˘21 p. Bd.Ft. 2" x 4" = ˘ 21 p. Bd.Ft. 1" x 6" = ˘22 p. Bd.Ft. 2" x 6" = ˘ 21 p. Bd.Ft. 1" x 8" = 22 p. Bd.Ft. 2" x 8" = ˘21 p. Bd.Ft. 1" xl O" = ˘ 22 p. Bd.Ft. 2" xlO" = ˘ 21 p. Bd.Ft. 1" x12" = ˘ 23 p0 Bd.Ft. 2" x12" = ˘ 22 p. Bd.Ft. 1" xil4" = ˘ 24 p. Bd.Ft. 2" xil4" = ˘ 24 p. Bd.Ft. 1" x16" = ˘ 27 p. Bd.Ft. 2" x16" = ˘ 27 p. Bd.Ft. 1" x18" = ˘ 28 p. Bd.Ft. 3/4" x 4" = ˘ 21 p. Bd.Ft. 1˝" x 4" = 21 p. Bd.Ft. 3/4" x 6" = ˘ 22 p. Bd.Ft. 1˝!' x 6" = ˘ 22 p. Bd.Ft. 3/h" x 8"1 = ˘ 22 p. Bd.Ft. 1˝" x 8" = ˘ 22 po Bd.Ft. 3/4" xi O" = ˘ 22 p. Bd.Ft. 1˝" xlO" = ˘ 22 p. Bd.Ft. 3/4" x12" = ˘ 23 p. Bd.Ft. 1I" x12" = ˘ 23 p. Bd.Ft. 311 x 3" = ˘ 21 p. Bd.Ft. 3"1 x12" = 22 po Bd.Ft. 3" x 4" = ˘ 21 p. Bd.Ft. 4" x 41" = ˘ 23 p. Bd.Ft. 3" x 6" = ˘ 21 p. Bd.Ft. 4" x 6" = ˘ 23 p. Bd.Ft. 3" x 8" = ˘ 21 p. Bd.Ft. 41" x 8" = ˘ 24 p. Bd.Ft. 3" x10" = ˘ 22 p. Bd.Ft. 6" x 6" = ˘ 26 p. Bd.Ft. SOFTWOOD (WAWA) for formwork, above prices less ˘ 3 p. Bd.Ft. These prices are net ex Monrovia yard. ,APPENDIX V PRICE LIST OF LOCAL GRADE TIMBER 1. LIGHT CONSTRUCTION Species ist Grade 2nd Grade Sapele .200 .16˘ Makore .20 .16 Niangon .16 .14 Abura .15 .13 Olon .16 .14 Canarium .15 .13 Edinam .18 .15 Lovoa .20 .16 Khaya o18 .15 Tet. .16 .14 Olnwen .16 .14 Fromager .14 .12 Framire .16 .14 Didelotia .15 .13 2. HEAVY CONSTRUCTION | Species 1st Grade 2nd Grade Kusia .16˘ .14˘ Azobe .15 .13 Iroko .16 .14 Sacoglottis .15 .13 Dahoma .15 .13 Bodica .15 .13 Tali .16 .14 Ayan .16 .14 3. SPECIAL RATES: Reject Grade . . . . . . . . . . . . . $5.00 per load. APPENDIX VI Page 1 LIST OF TIMBER CONCESSIONS AUGUST 1, 1973 Acreage Associated Logging Co. 219,400 Bell Timber Co. 3/13/73 130,000 101,000 Bolado Lumber Co. 50,000 Bondi Timber 112,000 Brasilian-Afro Logging Co. 1/9/73 50,000 68,000 Cape Palmas Logging Co. 70,000 Cestos Nimba Corp. 341,000 Dunbar Lumber Co. 204,000 East Asiatic Co. Liberia 345,320 Jlao Enterprises Inc. 9/19/72 200,000 (200,000 Agriculture option of which - 100,000 Liberia Indus. Forestry Corp. 45,000 400,000 Liberia & Overseas Venture Corp. 200,000 Liberia Mining Co./Tropical Trading Co. 1,300 (Tribal = S) 6,000 Liberia Eastern Timber Co. 558,400 Liberian Ivorian Logging Co. 28,4oo Liberia Logging & Wood Processing 92,000 Lofa Logging Co. 295,000 Lofa Timber Co. 292,000 MACARS Timber Corp. 272,400 Maryland Logging Corp. 503,826 Matro Logging Co. 173,000 MIM Timber of Liberia 191,000 MIMi (Cavalla-Fynhout) 321,688 APPENDIX VI Page 2 Acreage NACA Enterprises Inc. 158,000 National Logging Co. 3h,800 Nimba Corp. 4/2/73 86,500 River Cess Lumber Corp. 800,000 339,990 Salayea Lumber Corp. 7/73 234,000 SIGA Lumber Corp. 287,120 Talk Lumber Co. 486,695 Togba Timoer Corp. 20,000 Tripple Enterprises 7/73 75,000 130,000 Tropical Farms Corp. 200,000 United Logging Co. 100,000 (S= Tribal) 5,000 Vanply of Liberia 98h,228 L yr. option from April '72 539,000 Varjan Logging Corp. 190,°000 Wanta Enterprises Inc. 65,000 West African Logging & Timber Processing Co. L.T.D. 32,000 Western Lumber & Sawmill Co. 80,000 Yah River Logging Co. 51 ,000 1 4o,000 Yakura Enterprises Inc. 171,000 Deangla 9,000 6,000 Romanian Area, Kpelle National Forest 121,000 APPENDIX VI Page 3 Total under contract 0. . . . 7,873,867 acres August 1, 1973 option areas . .2,h23,900 acres Salvage or other areas in use . . 418,400 acres Estimated timber lands under agricul- tural development contract etc. 1,500,000 acres TOTAL 12,216,067 acres - indicates contracts awaiting approval - Bolado land presently classified as salvage but contract will be up for renewal or renegotiation. APPENDIX VII A MODEL TIMBER CONCESSION AGREEMENT PREPARED IN MARCH 1973 PREAMBLE ARTICLE I: THE TERMS OF THE CONCESSION 1. Definitions 2. The Grant of Concession 3. Concession Area 4. Term of the Agreement; periodic review; renewal of the Concession 5. Effective Date 6. Assignment of Concession 7. Surrender of All or Part of the Concession by the Concessionaire 8. Performance Bond and Required Minimum Expenditure 9. Processing of Timber and other Forest Products 10. Government Inspection ARTICLE II: OPERATIONS OF THE CONCESSIONAIRE 1. Management Plan 2. Trees under Minimum Diameter not to be cut for Commercial Use 3. Selection and Exploitaion of Timber Harvesting Tracts; Timing; Relinquishment 4. Measurement and Marking of Trees and Logs ARTICLE III: OTHER RIGHTS OF THE CONCESSIONAIRE 1. Occupation of Surface and Easements 2. Accessory Works and Installations 3. Right to take and use Water 4. Right to take and use Gravel, Sand, Clay and Stone 5. Agents or Independent Contractors ARTICLE IV: REPORTS, RECORDS, NOTICES AND COMMUNICATIONS 1. Reports concerning Surveys, Exploitation and Development 2. Other Reports to Government and Records to be Maintained 3. Local Resident Managers: Notices 4. Reports to be Confidential; Cost of Reports ARTICLE V: FISCAL OBLIGATIONS 1. Government Tax on Net Income; Accounting Principles 2. Surface Rent 3. Stumpage Fees 4. Duties and Excises ARTICLE VI: CAPITALIZATION; STOCK PURCHASES: DIRECTORS; FINANCE 1. Capitalization 2. Finance; Approved Indebtedness; Debt to Equity Ratio ARTICLE VII: EMPLOYMENT CONDITIONS 1. Health and Safety of Employees 2. Education 3. Personnel; Use of Local Labour; Applicability of Labour Law 4. Training of Liberian Citizens -2- ARTICLE VIII: OTHER OBLIGATIONS OF THE CONCESSIONAIRE 1. Disposal of Wastes; Avoidance of pollution 2. Reforestation by Concessionaire 3. Prevention of Damage to Concession Area 4. Government's and Third Parties' Rights to use Concessionaire's Facilities 5. Scientific Exploitation; Protection against Waste and Negligence 6. Shipping preferences 7. Savings of Rights to Government and Others ARTICLE IX: LAWS AND PENALTIES 1. Governing Law 2. Laws of General Application 3. Compliance with Forestry Law; Penalties for Offences 4. Penalty for Breach of Aggrement 5. Prohibited Transactions 6. Indemnification ARTICLE X: FORCE MAJEURE: CONCILIATION AND ARBITRATION: GOVERNMENT'S POWER OF REVOCATION FOR CAUSE; TERMINATION 1. Force Majeure 2. Conciliation and Arbitration 3. Government's power of Revocation for Cause; Procedure of Termination 4. Non-Waiver 5. Approval and Consent to be Reasonable 6. Removal of Property at Termination 3 - TIMBER CONCESSION AGREEMENT PREAMBLE FORESTS PRODUCTS UTILIZATION CONTRACT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF LIBERIA AND This Concession Agreement is made and entered into in the City of Monrovia, County of Montserrado, Republic of Liberia this day of , 197 under the General Business Law, Title 15 of the Liberian Code of Laws of 1955 Between The Government of the Republic of Liberia, represented by the Chairman of the Concession Commission and the Minister of Agriculture and and a company incorporated under thelaws of Liberia, represented by who is legally authorized to act on behalf of the Company. Approved by the President of Liberia .................19- (Date of Approval) Ratified by the Legislature (Effecte ...Da) 19 (Effective Date) _ 4 e ARTICLE I 1. DIFIUITIQNS: Unless the context shall otherwise clearly indicate, the following terms used in this Agreement shall have the respective meanings set forth below. Li, Affiliate A person shall be considered as an affiliate of another person if the first persons directly or through any third party or parties controls, is controlled by or is under comrmon control with the second person. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities or by contract or otherwise. In all events, "control" shall be deemed to include ownership, directly or indirectly, of an aggregate of lo9 or morc of either the voting power or the equity interests. (2) Concessionaire. The-term "Concessionaire" shall mean the .......... ...Company, its assigns, tr.nsferees and succesors in title. Provided, however, that assignments, transfers and rights of succession shall be governed by Article 1- Section 4. of this Agroomcnt. (3) Date of Approval. The term "Date of Approval:' means the date on which this agreement was signed by the President of Liberia. (4) Effective Date. The term "Effective Date" means the date on which this Agreement was ratified by the Legislature but after such ratification the Effective Date is retroactively held to be the Date of Approval. (5) Timbering Area. The term "Timbering Area" means the initial area as described in Article I Section 3 of this Agreement. (6) Liberian Currency. The term "Liberian Currency" shall mean the currency from time to time offici;lly recognized by the Liberian Government. (7) Government. The term '"Government" includes all branbhos, divisions instrumentalities and agencies of the Govornment. - 5 ARTICLE I. SECTION I (8) Merchantable Timber. Thu term "Merchantable Timber' shall mean tiiober cut for commercial usc as that term is defined in Section 20 of the Natural Resources Act. (9) Timber and Forest Products. The terms "Timber and Forest Products" sh.all havc the same meaning as attributeZ to then, in Chapter 1, Section 1 of Title 24 (Natural Resources Law) of the Liberian Code of Laws. (10) Infrastructure. The term "Infrastructure" mcans non-movable assets of the following types: (a) Transportation and comnunication fcilities (including roads, bridges, railroads, airports, larnding strips and landing pads for aircraft, garagcs, canals, aeria-.l tramways, pipc-lines and radio, telophone and telegraph facilitics.) (b) Port facilities (including docks, harbors, picrs, jetties, breakwaters terminal fa-cilities and warehouses, and loading and unloading cquipment.) (c) Electrical power, water an.d sewerage facilities (including electrical gencrating plants and transmission lines, da.ms, water dralins water supply sustems and systems for the dis- posal of plant wastcs aznd sewerage); (d) Public welfare facilitier.s (including schools, hospitals and public halls) and (0) Miscellaneous facilitics in conncction vwith the operation of the foregoing (including offices, machine shops, foundries, repa.ir shops mnd warchouses.) (11) Plant and Equipmcnt. The term 'Plant and Equipment" means the following assets (other thcan Infrastructure asrsots) necessrry or dcsirablc for operattions hereunder: (a) Timber felling and extraction equipment; (b) Facilitics and equipment to swv, cut and otherwise process timber; (c) Facilities and equipment in connection with the opuration of the foregoing (including offices, machine shops, foundries, repair shops and wa.rehouscs); (d) FaEcilities and equipment for themcintenance cf personnel (including dwellings, stores, messhalls and recreational facilities) and _ 6 - ARTICLE I. SECTION I. (e) Movable equipment, including motor vehicles and railroad rolling stock necessary or desirable for us in connection with the Infrastructure. (12) Person or persons. The term "Person or persons" includes corporations, partnerships, unincorporated partnerships, firms andcompanies. ARTICLE I 2. THE GRANT OF CONCESSION (1) In consideration of the undertaking by the Concessionaire to pay all surface rents, stumpage fees and other fees and taxes hereinafter prescribed and to perform and observe the terms and conditions of this Agreement, the GOVERNMENT hereby grants to the CONCESSIONAIRE subject to the Concession Laws of Liberia and the conditions set forth in this Agreement, the exclusive right to harvest, process, transport and market timber and other forest products and to conduct related operations within the Concession Area hereinafter defined and for the term hereinafter specified. (2) The GOVERNMENT reserves the right of access to the Concession Area for the purpose of any sub-soil investiga- tion (or other reason.ble investigation) it wishes to make, provided that its damage results to the CONCESSIONAIRE'S property from such investigation. The GOVERNIiENT agrees to provide fair and reasona;ble compensation to the CONCESSIONAIRE for such damage. 3. CONCESSION AREA (1) The CONCESSIONAIRE shall have the right to survey and harvest timber and other forest products in an area con- sisting of that portion of land lying and being within the metes and bounds below . ..... *.........*.. ................ * ....... 4 0 .......***.*.. ** ... eO* .... ......... .,...... 0....O.. ......... . ... .... .............. ... 0................ **. . ...... s* .**....~.............*................ . . ............ ................. -*v ........... 6 ...*.......... .. ..***...*.... ...a.................. .-**** **ss**a******A*--*9*e-.** ---***.-----*** ......*........ ..... 0 .,. ............. ........* . ...0...................... ARTICLE I, CONCESSION AREA CONT'D. (2) The Concession Area which comprises approximately acres of land is depicted on a matp to be annexed hereto and made a part hereof as Exhibit A. Provided, however, that when the CONCESSIONAIRE shall have complied with thast porticn of Section III of the Forest Management Plan (See Article Section of this Agreement) requiring aerial photogra.phs and planimetric maps such: Jhdtographs and maps shall be deemed determinative insofar as this Concession Area is concerned and shall be substituted for said Exihibit IIA'I' 4, TERM OF TH3E AGREEMENT; PERIODIC REVIE'.˝; RENEWAL OF THE CONCESSION (1) This Agreement shall be for a term of __years cs from the Effective Date as defined herein, provided, hovwever, that not lecs oftern than 5 years, the parties hereto shal. consult together in Liberia for the purpose of considering such changes in clarifications or modifications to this Agreement as either party deems to be appropriate. (a) If the CONCELSSIONAIRE, not more than two (2) years and not less than three (3) months before the expiration of this Agreement applies in writing to the Minister of Agriculture for a renewal of the Concession the subject of this Agreement and if it shall have paid all taxes, fees and rents due (except for such taxes, foes atnd rents-if any-which are the subject of a good faith controversy between GOVERNMENT and CONCESSIONAIRE) and shall have satisfcactorily performed all its obligaktions under this Agreement up to the date of such application, it shall be entitled to a renewal of this Agreement for a further period of_ years on terms and conditions than to be agreed upon, provided, however, that such of those terms and conditions as rulate to taxes, royalties, fees (including stumpage fees) duties cand rents then offered by GOVERNMENT to the CONCESSIONAI2E shall not be less fa.vourable than those offered to other timbelter concession- aires within three (3) years immediately prior to the date of the CONCESSIONAIRE's application. ARTICLE I THE AGREEMENTS 5. EFFECTIVE DATE Following the execution hereof, this Agreement shall be sibmitted to the President of Liberia for his approval and shall subsequently be submitted to the Legislature for ratification. After such ratification, this Agreement shall become effuctive retroaictively as from the date of of Approval by the President of Liberia. 6. ASSIGNMENT 01' CONCESSION (1) The CONCESSIONAIRE shall at all times maintain a majority interest in the Concession and shall not, except in keeping with sub-section (2) of this Article, assign the Concession nor any part thereof granted under this Agreement nor any rights, privileges, liabilities or obligations gr&nted or imposed by this Agreement, nor any interest in the Concession without the previous consent in writing of the GOVERNMENT, except that the consent of the GOVERNMENT shall not be required where the assignment is to another company in which the CONCESSIONAIRE holds one hundred percent of of the equity, provided that the GOVERNMENT shall be in- formed of any such assigment within thirty (30) days of the assignment. (2) The GOVERNMENT shall nct give its consent to an assignment unless it is satisfied: (a) that the proposed assignee is itsclf of good reput.tion or is a member of a group or group of companies of good reputation or is owned by a company or companies of good reputation: (b) that there is likely to be available to the proposed assignee either from its own resources or through other companies in the group of which it is a member, or otherwise, sufficient technical knowledge, experience and knowhow and sufficient financial resources to enable it effectively to carry out a program satisfactory to the Minister of Agriculture for the operations hereunder; and (c) that the proposed assignee is in all other respects acceptable to the GOVERNMENT; and provided that the Minister of Agriculture is satisfied as aforesaid he shall no,t unreasonably withold his c0nsent to the assigmont. _ 10 - ARTICLE I, ASSIGNMENT OF CONCESSION CONT'D. (3) The assignee shall have all the rights and privileges and shall assume all the liabilities and obligati,ns of the assignor with rospect to what is assigned without relieving the Concession of such liabilities and obligations unless the GOVERNMENT expressly consents to such a release. (4) For the purposes of this Section, the term "1assign" shall include the admission into partnership of any third party in the activities and operations of the CONCESSIONAIRE under this Agreement and shall include the mortgaging of any rights, privileges, liabilities or obligations granted or imposed by this Agreement. 7. SURRENDER OF ALL OR PART OF THE CONCESSION BY THE CONCESSIONAIRE The CONCESSIONAIRE may at any time during the term of this Agreement or any renewal thereof surrender the rights granted by this Agreement in respect of the whole cf part of the Concession Area by giving to the Minister of Agriculture twelve (12) months notice in writing. Such surrender shall be without prejudice to any obligation or liability imposed by or incurred under this Agreement. 8. .PERFORMANCE BOND AlND REQUIRED MINIMUM EXPENDITURE (1) It is convenanted and mutually agreed that the CONCESSIONAIRE shall within thirty (30) days after the signing of this Agreement deposit with the Concession Commission and Irrevocable and Clean Letter of Credit from an acceptable bank operating in Liberia amounting to $_ ( dollars) in favour of the Liberian Government warranting that the CONCESSIONAIRE shall faith- fully and promptly commence survey and other operations and the performance of all the terms and conditions of this Agreement within six (6) months from the Effective Date of this Agreement and should the CONCESSIONAIRE fail to perform in accordance with the provisioins of this Section then this Agreement shall become null and avoid with the Irrevocable Letter of Credit forfeited to the GOVERNMENT of Liberia. The Concession Commission shall release said Irrevocable Letter of Credit within two (2) years after the Effective Date provided that the CONCESSIONAIRE shE.ll have fulfilled all the requirements and obligati.-ns of this Agreement. - 11 - (2) The CONCEThSIONAIRE shall, within a period of two (2) years after the Effective Date, spend a sum not less than $ (_ dollars) on the survey development, production and other operations required snder this Agreement and shall and at the request of GOVERN- MENT produce all pay-rollB, receipts, invoices and other documents necessary to demonstrate the spending of the said sum. 9. M OCESSING OF, TIMBE AgND O-fDP 1REST PRODUCTS The CONCESSIONATRE shall comply with the requirements of the Minister of Agriculture regarding the percentage of total production to be sawn or other`ise processed in Liberia and shall ensure that by the end of tne ye3r 1975 not less than sixty peroent (60%) of the total production shall be so.procesb.d and that by the end of 1976 not less than eighty percent(80%)shall bo so processed and that by the end of 1977 the entire production of logs shall be so processed in Liberia. 10. GOVERNINTENT INSPECTION Any person or persons authorized by the Minister of Agriculture or by any other competent GOVT.'RNMWNT authority shall be entitled at all reasonable times to enter into and upon any part of the premises of the CONCRSSIONAIRE and to inspect: (i) the CONCESSIONAIRE's activities and operations under this Agreement for the purpose of ensuring full complianoe with the provisions of this Agreement; (ii) in the offices of the CONCESSIONAIRE the records of the CONCESSIONAIRE's relating to its activities and operations under this Agreement in order to determine the accuraoy of reports rendered by the CONCESSIONAIRE; (iii) the boundaries and delineations of the Concession Area (iv) the quantity, quality and type (inoluding species and variety) of timber and timber products being harvestedy transported,processed and marketed under this Agreement, 12 ARTICLE II: OPERATIONS OF THE CONCESSIONAIRE 1. Management Plan The CONCESSIONAIRE shall operate in accordance with the Management Plan approved by the Minister of Agriculture, which plan shall form part of this Agreement. 2. Trees under Minimum Diameter not to be Cut for Commercial Use (1) The CONCESSIONAIRE shall not cut nor fell for commercial use any growing tree the diameter of which at breast height is smaller than the dimensions set forth for respective species in Section 30 of Sub-Chapter C (Restrictions on use of National Forest Products ofChapter 1 of Title 24 Natur.-.l Resources Law) of the Liberian Code of Laws of 1956. (2) The CONCESSIONAIRE shall be subject to the penalties set forth in Section 30 of the Sub-Chapter C of Ch.pter 1 of Title 24 for any violations fo that Section 30. (3) After consulation and approval by a Forest Office (as defined in Title 24) the CONCE6SIONAIRE may cut any tree irrespccti'v: of girth limits if such tree is to be used for construction purposes necessary to the CONCESSIONAIRE'S opera.tions and activities under this agreement. The CONCE';SION.'.IRE shall comply with Section 30 (f) of Sub-Ch!pter C of Ch:.pter 1 of Title 24. 3. Selection and Exploration of Timber Harvesting Tracts; Relinquishment of Tracts (1) Selection of timber harvesting tracts shall be in accordance with the following provisions: (a) The CONCESSIONAIRE shall within the Concession Area select contigous harvesting tracts having a total area not exceeding that authorized in the Management Plan provided for in Article II Section 1 hereof. (b) Six (6) months after the commencement of exploitation, the CONCESSIONAIRE may select further timber harvesting tracts which shall be consistent with the Managem,.nt Plan provided for in Article 2 Section 1 of this Agreement. (c) Additional timber harvesting tracts may be selected at the end of each further period of six (6) months provided that the area of selected unexploited timber harvesting tracts shall not exceed the area provided for in the Management Plan. _ 13 - (d) The CONCESSIONAIIRE sh.all not, with .ut first obt^.ining the consent of the Minister of Agriculture, fell and extract murchantable timber fr.m -.nother timber har- vesting tract until it has completely felled and extracted nll merchantable timber frc)m the timber h.rvesting tract where it was 1last operating. (e) The CONCESSIONiITE shall give at lc.st one m-)nth's notice in vwriting of its intention to terminate its felling oper:;tions in a timber harvesting tract and to commence felling opcrations in -another tract. (f) TheCONCESSIONAIRE shall, on the ccnclusion of the exploitation of any timber harvestinL,; tract, cle.r the boundaries of that tr-act of all debri(.s resulting from the CONCESSIONJAIRE's operntions within that tract. (2) A timber harvesting tract in which the CONCESGIONaIRB has, to the satisfaction of the Chief, Bureau of Forest Conserva- tion, completed exploitation shall revert to GOVERNM.NT on completion of such timber ha-rvesting activities within that tract provided also, however, that the QONCE3SIONAIIRE, in the opinion of the Chief, Bureau of Forest Conservation has fulfilled or is fulfilling in a satisfactury manner the requirements for beforestation as defined in Article VIII Section 2 hereofb (3) The selection of timber harvestinig tracts shall be m .de by filing with the Ministry of Agriculture descriptive state- ments in triplicate of the tracts selected setting ferth their b-undaries and are.as by appr,priato overlays to maps zand aerial mosaic photographs acceptible to the GOVERNMEJNT. (4) The CONCESSIONAIRE's rights to exploit timber an(d other forest prodiicts within the sel]ctod. timber halrvesting tracts shall be established upon the filing of the above-mentioned maps and descriptive statements and the approva.l of such maps and descriptive statements by the Minister of Agriculture. Such aparoval shall not be unreasonably denied ngr unreason- ably delayed. (5) The CONCESSIONATIRE shall, within thirty (30) days from the date of approval by the Minister of Agriculture of the tracts to be harvested, provided the Minister of Agriculture with a planimetric map or maps covcring the selected tracts. - 14 - (6) After filing the above-me:ntioned maps and descriptive state- ments, the CONCESIONAIRE shall place durable boundary marks not less than three (3) feet high and- which can be easily recognized, at the vertices of the anglers of respective tracts, unless those vertices be in lands covered by water or of difficult access. In such c;ases reference monum-nts may be established at favourablc points indicating the location of such vertices by arrows giving the bearings and the distances. The above-mentioned rmap shall also show the geographical marks such aso rivers, mountains, towns, counties status or other known boundaries. Should there be any permanently marked government survey station located within six (6) miles of the respuctive tracts such Government survey station shall be connected with the points shown on said map and its direction and distance from said points Dn the map shall be shown. (7) Thu tracts may be located anywhere within the exploration area. (8) The GOVERNMENT and the CONCESSIONAIRE recognize that certain tracts lying within the Concession iArea of the Land described in this Algreement may not contain timber of either quantity or quality to permit economic timber and forest products ex- traction operations comtemt)lated inthis 2ection 3. Such tracts shall upon their determination be relinquished to the GOVETRNMEIT and in the event that GOV2RNRMENT sho;uld. offer the said tracts out on concession as salvage areas, the CONCESSIONAIRE shall be granted a right of first refusal in respect of them. .. Measureme>nt and Marking of Trees and Logs (1) The CCNCESSIONrVIRm shall- not Mcye or cazuse to be moved any log from the place at which such log was cut until Rn& unless the same shall have been measured and the lag and the stump of the tree from which the log wa.s cut have been hammer- market with a hammer of the GOVERNNR-.NT by a duly authorized agent of the GOVERNMI.NT. (2) The propurty mark or marks to be used for the Concession Area the subject of this Agreement shall be: - 15 - ARTICLE III: OTHER RIGHTS OF THE CONCESSIONAIRE 1. a. Occupation of Surface and Basements (1) Subject to the provisions of this Agreement, the CONCESSIONAIRE shall have the right to unter and occupy any land within the Concession Area for the purpose of undertaking operations and activities under this Agreement. Provided, however, that with regard to land within the Concession Area which is private- ly owned, the CONCESSIONAIRE shall comply with the provisions of Sub-Section (4) below. (2) Subject to the provisions Of Bub-Sections (3) and (4) beCow, the CONCESSIONAIRE shall have the right to occupy and utilize for the duration of this Agreement or for a lesser period, the sur- face of such suitable areas outside the Concession-Area as may be necessary for the construction and operation of roads, ports, railways and pipeline6 necessary for its activities and opera- tiens under this Agreement. (3) wiith regard to public lands lying outside the Concession Area, the CONCESSIONAIRE shall apply to the GOVERNMENT for the right to use such land. The right to use such land shall not be un- reasonably denied by GOVERNMENT. The CONCESSIONAIRE shall apply to use such public lands by making application to the Minister of Agriculture who shall conclude with the CONCESSIONAIRE the terms and conditions under which the easement or other rights may be exercised, including the annual land rental to be charged. (4) With regard to private lands lying either within or without the Concession Area, the CONCESSIONA,IRE may, in the event that it is unable to reach satisfactory agreement with the private owner or owners as to the terms on- which it may enter and occupy the land in question, bring the matter to the attention of the Minister of Agrioulture by filing a petition. Such petition shrll set forth the facts of the case and shall specify as exactly as pos- sible: (i) the land which it requires (ii) the name or names of the ownerc and/or occupants of the land if this can reasonably be ascertained; (iii) the type of occupancy lease, right-or-way, or easement which the CONCESSIONALIRE seeks. The Minister of Agriculture shall issue a notice to the owners and occupants of the land to present themselves on a day and at a time to be specified therein. - 16 - Such day shall not be more than sixty (60) days or le6a than (3) thirty days from the date of said notice. On the appointed day the Ilinister of lAgriculture or his representative shall hear the CONCESSION/.II2E and thc owners and occupants of thu land and, after considering proofs and arguments on both sides, shall deter- mineu and assess the amount to be paid to the owners and/or occupants of the land for loss of the right to use thu land for the perii;d of the lease right-of-way or easement and for damages arising out of the loss or destruction of goods and property be- cause of rights granted to the CONCESSIONA'IRE. In the event of any dispute as the nature and extent of the interests in or owner- ship of the land or the amount of compensation payable by the CONCESSIONIAIIRE or if the decision of the Minister of Agriculture or of his representative is unacceptable to any of the parties concerned, the case may be brought before court of competent jurisdiction in Liberia. In such case, the CONCESSIONiIRE may file an indemnity bond, in an amount designated by the Minister of agriculture and may enter upon the land immediately subject to later determination by the court of competent jurisdicti.,n of the exact amount payable. (5) Provided, however, that no lease, right-of-way or easement shall be granted if it substantially interfers with operations of another previolusly grainted conccs;-icn and provided further than nothing in this Agreement shall be construed to permit inter- feronrf* with any tribe, village, pers:n or group of persnns or of any rights to timber or forest produce held by any tribe, village, person or persons through law or oustom. (6) No blasting or other dangerous operations may be conducted within half (1,2) a mile of any public works or permanent building with- out the previous consent of the GOVERNMENT and subject to~ such c,nditi:lns as it may impose. 2. i.ccessory Jorks and Installati_ns (1) Subject to the provisiens of iarticle III Section 1(4) and the prompt payment of adequate compensation to any per- son whose rights are thereby affected and to the approval of the appropriate authority, the CONCESSIONAIR?E shall have the right to construct, maintain, alter and operate: (a) industrial buildings and installations including pro- cessing facilities, mills, loading and pumping stations, warehouses, storage places and storage tanks; - 17 - (b) (Subject to the prior approval in writing from the Mini- ster of Agriculture) wharves, shipping terminals, ports or port sites; (c) means of communications, including telephone lines and wireless stations; (d) faciU2ities for shipping and aircraft; (e) living accommodations and amenities, including hospitals, schools and recreational facilities, for the CONCESSION- AIRE'S employees and workmen; (f) other buildings, installations and works necessary or useful for the effective carrying out cf the CONCESSION- AIRE'S operations and activities under this hgreement. (2) The construction of any railroad or electric power generat- ing facilities shall require the prior approval of the Mini- ster of Agriculture and/or other appropriate Pgency of Government, which approval shall not be unreasonably denicd. The CONCESSIONAIRE shall submit the proposed plans for such railroad or electric generating facility to the Minister of Agriculture or other appropriate Agency of Governmcnt. (3) In the case if lands required for sidings, stations, yards and other rail transportations installatiens, the right-of- way of the CONCESSIONAIRE'S railroads shall be in accerdcance with rules laid down by the Minister of Agriculture oir othet appropriate Agency of Government. 3. Right to Take and Use 'Jater Subject to the approval of the Minister of jAgriculture pre- viously obtained in writing and to such conditijns (other than conditions imposing a charge for the use c,f the water) as he may impose, the CONCESSIONAIRE may appropriate and use free of of charge, any water found within the Concession Area and any water within the public domain within (3) miles of the Con- cession Area for purposes necessary or useful to the CONCESSION- AIRE'S operations and activities under this Agreement. Provided, however, that the CONCESSIONAIRE shall not deprive any lands, villages, houses or watering places for animals of a reasonable supply of water in so far as such water has,through customs, been utilized for such lands, villages, houses cr animals. Nor shall CONCESSION1,IRE interfere with any rights of water enjoyed by any persons under the Land and Native RiE:hts Ordinance. - 18 - 4. Right to Th:ke and Use Gravel, Sand, Clay Or Stone. Subject to the approval of the Minister of Agriculture pre- viously obtained in writing and to such conditions as he may im- pose, the CONCESSIONAIRE may appropriate and use, free of charge, gravel, sand, clay or stone found within the Concossinn i.rea for purposes necessary or useful to the CONCESSIONAIRE'S operaticns and activities under this Agreement. Provided, however, that such gravel, sand, clay or stone shall be sold only with the prior approval of the Minister of Agriculture and subject to such conditions as he may impose (including conditions relating to fees to be paid to the GOVERNMENT and provided further that upon termination of this Agreement any excavation shall be filled in or leveled and left by the CONCESSIONAIRE as far as may be rea- sonably practical in its original condition and if so required by the Minister of agriculture, fenced or otherwise safeguarded as circumstances may require. 5. Lgents or Independent Contractors. The CONCESSIONAIRE may exercise any of the rights and powers conferred by this Aigreement (save where the context otherwise requires) through agents or independent contractors. Provided, however, that the CONCESSIONAIRE may not, through the employment of agents or independent contractors, avoid any of its obligations or liabilities under this Agreement as provided in Article Section, hereof. - 19 - ARTICLE IV REPORTS, RECORDS, NOTICES iAND COMMUNICATIONS 1. Reports concerning surveys, Exploitation and Development (1) The CONCESSIONAIRE shall keep the Minister of Agriculture fully informed, through quarterly reports beginning with the first quar- ter following the Effective Date of this Agreement, as to the pro- gress and results of the CONCESSIONAIRE'S survey and development operations and activities under this Agreement. Such report shall include: (a) the reBsults of any general reconnaissance of the various sitesof proposed operations and activities under this Agreement; (b) information concerning the selection of routes fer roads or railways from the harvesting area to a suitable harbor for the export of timber or other forest products; (c) information conoerning the planning of suitable sawmills and/or woodworking installations and townsites, including information of suitable water supplies for the townsites and other faci- litics; (d) such other plans and inf.rmation as to the progress of opera- tions in the Concessirn Area as the Minister of Agriculture may from time to time reasonably require. (2) The CONCESSIONIAIRE shall furnish to the Minister of Agriculture a monthly statistical report beginning with the first month fol- lowing the commencement of the exploitation period which shall set forth the number and location of the timber harvesting tracts on which work was begun during the preceding month, the number of workmen employed thereon at the end of the month, a list of the equipment at the working site at the end of the m.,nth and a brief description of the work in progress at the end of the month and of the work contemplated during the following month. (3) The CONCESSIONAIRE shall furnish to the Minister of Agriculture monthly reports beginning with the first month following the com- mencement of the exploitation period concerning the progress of its harvesting operations under this Agreement. This report shall specify in full the work accomplished during the month in question, including the total volume of timber lumber and other forest pro- ducts produced species by species, broken down between: (a) volumes harvesting, expressed in board-feet; (b) volumes transported from the Concession Area and their corres- ponding destination; - 20 - (c) volumes stockpiled at the Concession Area or elsewhere in Libe- ria; (d) volumes sold or committed for export (whether actually shipped from Liberia or not); (e) volumes actually shipped from Liberia (with full details as to purchaser, destination and terms of sale); (f) volumes processed and/or manufactured within Liberia with full specifications as to the intermediate products, by-products, or final products, outrurned within Liberia (with full showing as to the disposition of such intermediate products, by-products or final products and of the terms on which they were disposed of. (4) The CONCESSIONAIRE shall furnish to the Minister of Agriculture an annual report beginning with the first complete year following the commencement of the exploitation period which shall include: the number and description of timber harvesting tracts which were exploited at the end of the year proceding the year in question (with a showing as to which are in commercial production); the number and description of tracts on which work was begun during the year and which were placed in commercial production during the year; the number and description of tracts-abandoned during the year; the production of such of the tracts, regardless Of whether in commercial production or not, with a full description of the kind quality and analysis. (5) The CONCESSIONAIRE shall also furnish the GOVERNMENT all other in- formation of whatever kind which the latter may request in order that the GOVERNMENT may be fully apprised of the CONCESSIONAIRE'S timber harvesting and other activities. (6) M.,nthly and quarterly reports shall be submitted in quadruplicate within thirty (30) days of the end of the month or quarter in ques- tion, as the case may be. Annual reports shall be submitted in quadruplicate within ninety (90) days of the end of the year in question. (7) Other reports to the GOVERNMENT shall be submitted in accordance with Article IV Section 2 hereunder. 2. Other Reports to GOVERNMENT and Records to be Maintained (1) Ilith respect to the CONCESSIONAIRE'S obligation to pay a tax on net income or to furnish full information during a tax wx- emption period, the CONCESSIONAIRE shall submit to the Mini- stry of Finance such information and documents as are required by the Revenue and Finance Law. - 21 - (2) With respect to the CONCESSIONAIRE'S obligation to pay a sur- face rent and stumpage fee, the CONCESSIONhIRE shall submit such information and documents as are required in Article V *2 anid 3 Section/hereof to the Minister of Agriculture. (3) With respect t.-, the CONCESSIONAIRE'S survey and exploitation operations, the CONCESSIONAIl.E shall submit such information and documents as are required in Article Iv Section 1 hereof to the Ministry of Agriculture. (4) In addition, the following shall be delivered to the Ministry of Planning and Economic Affairs: (a) True copies of all sales, management, commercial and finan- cial agreements concluded with Affiliates and independent parties and all other agreements concluded with Affiliates, to be submitted within one month after conclusion. (b) Copies of the monthly reports detailed in Article IV Section 1 Sub-Section (3) hereof. (5) All information furnished to the GOVERNMENT shall be in English. All financial data shall be recorded in Liberian surrency. (6) The CONCESSIONAIRE shall maintain all original records and re- ports relating to its activities and operations under this Agreement including all documents relating to financial and com- mercial transactions with non-Affiliates and Affiliates in its principal offices in Liberia. These records and reports shall be opened to inspection by GOVZRNMENT through an authorized re- presentative during normal working hours. Such records and reports shall maintained in the English Language and all finan- cial data shall be recorded in Liberian currency. (7) Copies of all reports submitted to Ministries of GOVERNMENT shall be forwarded to the Concession Secretariat. Local Resident Managers: Notices8 (1) The CONCESSIONAIRE shall, before commencing operations under this Agreement, furnish to the Minister of Agriculture the name and address of the local resident manager under whose supervi- sion the CONCESSIONAIRE intends to carry on the operations under this Agreement; Ahy.changes in the name or address of the manager or other supervising person shall likewise be given to the Minister of Agriculture within fourteen (14) days of such change. - 22 - (2) If there are co-participants in this Concession, the name and address of the manager or person under whose supervision the co-participants intend to carry on the operations under this Agreement shall be furnished to the Minister of Aigriculture as set forth in Sub-Section (1) above. Such manager or supervis- ing person shall be considered the representative of all such co-participants for any purpose concerning this Agreement. (3) Notices for the purpose of this Jigreement shall be sufficient- ly served if delivered or sent by registered pose. (a) in the case of GOVERNMENT, to the Minister of Agriculture, (b) in the case of the CONCESSION'IRE, to the manager or other person whose name shall have been given by the CONCESSION- AIRE under Sub-Sectiorn (1) and Sub-Section (2) of this Section. (4) Provided, however, that all notices, requests or other communi- cations required by, provided in for, or relative to, this Agreement shall be in writing. Cables and telegrams shall be considered as written communications but they shall be con- firmed by. registered setter and shall be considered effec- tige only when saLid registered letter has been actually re- ceived. (5) And provided also that the CONCESSIONAIRE may not through the employment of agents or independent contractors, avoid any of its obligations or liabilities under this Agreement and pro- vided furthermore that the records of the agent or independent contractor shall be available to GOVERNMENT inspection as provided for in Article IV Section 2 Sub-Section (6) and Article 1 and Section 10 hereof. Reports to be confidential: Cost of Reports. (1) Any information supplied by the CONCESSIONkIRE shall (except with the consent in writing of the CONCESSIONAIRE, (which shall not unreasonably be withheld) be treated by all persons in the service of the Government of Liberia as confidential, but GOVERNMENT shall nevertheless be entitled at any time to make use of any information received from the CONCESSIONAIRE for the purpose of preparing and publishing aggregated returns and general reports on the extent of timber and forestry operations in Liberia and for the purpose of -ny arbitration or litiga- tion between GOVERNMENT and the CONCESSIONAIRE. - 23 - (2) All records, reports, surveys, plans, maps, charts, accounts and information which thu CONCESSIONAIRE is or may be from time to time required to supply under the provisicns of this Argree- ment shall supplied at the expense of the CONCESSIONAIRE. ARTICLE V: FISCAL OBLIGATIONS 1. Government Tax on Net Income; Accounting Principles (1) The CONCESSIONAIRE shall pay a tax on its net inc.ome deriving from its operations and activities under this Agreement in accordance with the income tax laws of general application on, provided, how- ever, that the tax payable shall not exceed fifty percent (50%) of the said net inc.me in any one year and provided also that for a period of five (5) years commencing on the date of first market- able production as determined by GOVERNMENT, no tax shall be paid on any incrme, earnings or profits retained by the CONCESSIONAIRE for expansion of its operations or for investment or re-invest- ment in Liberia and not distributed in any way to shareholders, employees, affiliates or others as dividends, bonuses, gratuities or in any other form except with the written approval of GOVERN- ment obtained before any such distribution takes place. And pro- vided, furtherfore, that after the expiry of the above-menticned five-year period the CONCESSIONAIRE may retain up to twenty (20%) of any net profits in each yenr for investment or re-investment within Liberia and this amount shall be exempted from income tax provided that GOVERNMENT approves in writing the intended in- vestment or re-investment before the CONCESSIONAIitE so invests or re-invests it. (2) In detcrmining the net inci.mc of CONCESSIONAIRE, generally accepted accounting principles shall be employed and all payments, deduc- tions, charges for expenses and other items will be reasonable and consistent with general practices being followed in prcjects of similar nature. P'rovided, however, that where more than one ac- counting practice is found by GOVERNMENT to be applicable with re- gard to any _,ne item, GOVERNMENT shall determine which practice is to be applied with regard to that particular item. (3) In no event shall GOVERNMLNT be bound by the CONCESSIONA'IRE'S charac- terization of any transaction with an Affiliate for accounting pur- poses. In the event that GOVERNMENT finds that any payment deduc- tion, charge for expenses or other transaction with an affiliate is not fair, reasonable and consistent with the general practice that would have been followed by independent parties in connection with a transaction of a similar naturc, GOVERNMENT may, for the propose of determining the CONCESSIONA:.IREtS inc,me tax liability, - 24 - substitute the payment, deduction,charge for expenses or other transaction which would have prevailed had the transaction oc- curred between independent parties. (4) During the five-year period of exemption from income tax provided for in Sub-Section (1) hereof, the CONCESSIONAIRE shall file with GOVERNMENT full information returns on earnings, income and pro- fits, and thereafter, the CONCESSIONAIRE shall file complete in- come tax returns. The CONCESSIONAIRE shall comply with the pro- visions set forth in Sub-Chapter C of Chapter 3 of the Revenue and Finance Law, Title 35 of the Liberian Code of Laws of 1956 as now written or, if amended or replaced, with the law in effect in the taxable year, in the form and content of such returns, the submission to GOVERNMENT for review, the payment of income taxes as assessed, the inspection of records, the keeping of accounts, the payment of penalties and interest, and other matters relat- ing to the administration of the CONCESSIONAIRE'S income tax obli- gations to GOVERNMENT. 2. Surface Rient (1) The CONCESSIONAIRE shall, in respect of the Concession granted hereunder, pay to GOVERNMENT an annual surface rent of cents per acre or prorata for part thereof for all land held by the CONCESSIONAIRE during the term of this Agreement. No rental shall be paid for land relinquished in accordance with the relevant provisions of Article II, Section III, hereof after the effective date of relinquishment. (2) The rental imposed by Sub-Section (1) of this Section shall be paid to the Ministry of Finance of the Government, through the Ministry of Agriculture. (3) The CONCESSIONAIRE shall pay the rental imposed by Sub-Section (1) of this Section annually in advance. The first payment for the period extending from the effective date of this Agreement shall be made within one month of the effective date. Subsequent pay- ments shall be made annually in advance on the first day of Jan- uary of each year. 3. Stumpage Fees (1) In addition to the surface rental referred to in Section (2) of this Article V the CONCESSIONAIRE shall pay to GOVERNMENT a fee in keeping with existing rules and regulations governing the harvest- ing of timber for the local market or for export as specified ......... .under - 25 - under the Forest Law and in accordance wit'- , vrer:onts car;^_ud ou' as provided for in the official scaling regula.ti.,ns of the Bureau of Forest Conservation (except on unusable timber removed to permit road building). (2) The CONCESSIONAIRE shall pay to GOVERMlLENT fees in accordance with sub- Section (1) of this Section 3 in respect of merchantable timber which, in the opinion of the Minister of Agriculture, should have been extracted from a timber harvesting tract in which the CONCESSIONAIRE has ceased to work (after due notice has been given as provided in Article II Section 3 hereof) but which timber has been left standing or felled. but not removed witl'in the said timber harvesting tract. (3) Payment of such stumpage feeb shall be monthly and not late-r than thirty (30) days after the end of the month in question. P-ayment shall also be in accordance with the rules and regulations promulgated by the Minister of Finance pursuant to Section 683 ol' the Revenue & Fi3ance Law and Section 36 of the Executive Law. (4) Notwithstanding sub-sections (1) and (2) above, the CONTLSSIONAIRE may fell and use, without payment, any tree for the purpose of constructing such roads, bridges, wharfs, railways, builc.-ngs, mills and other structures as are necessary for the CONCESSIONAIREts operationz and activities under this Agreement. Provided, however, that such roads, bridges, wharfs, railways; mills and other structures shall remain in site and shall become the property of the GOV.RI MENT on the termination of this Agreement,in accordance with Section (6) (1) ARTICLE X OF THIS AGREEfitT. (5) With regard to any forest product other than timber which the CONCETSSIONAIRE may wish to harvest, the CONCESSIONAIRE shall pay such fee as mutually agreed upon by the parties to this Agreement in advance, 4. Duties and Excises (1) (a) Import Duties The CONC˘SsIONAIRE shall be subject to the customs regulations in force, to any consular foeo of general application for use of ports, harbours, wharfage or other services or facilities made available by the GOVERNTUNT, subject to the following examptions: (i) The importation into Liberia during the first five (5) years after the Effective Date by the CONCESSIONAiIRE of any equip-- ment, machinery or similar items of a capital nature having a useful life of five (5) years or more for use in the harvest- ing, processing, transportation and marketing of timber and timber products under this Agreement; - 26 - (ii) Tires and replacement parts for sach trucks, trail_rs and heavy equipment as the CONCJ3SIONAIRE shall have detailed in a list filed with and approved by the Minister of Agri- culture; sufficient office equipment as approved by the Minister of Agrioulture as being adequate for the initial setting-up of the CONCESSIONAIRE's officel drugs, equip- ment and fuxnishingo for the installation of a hospital, dispensaries or clinics which the CONCESSIONAIRE needs for the exercises of its righ.ts and obligations under this Agreement and any other items which GOVERNMENT may from time to time approve. (b) Provided, however, that all such items to be exempt from duties shall be exempted only if items reasonably comparable in price are not obtainable in Liberia. In comparing the prices of the items sought to be imported with like items obtainable in Liberia, there should be added to the price of the items sought to be imported duty-free the consular fees, freight and insurance and other costs (other then import duties) normally incurred throughout the time imported items have been shipped to and landed in Liberia, and cleared through Liberian Customs. If the differenoe in price does not exceed the amount of import dutiee and if within (30) days after notioe by the Conceasionaire the GOVERNMENT has agreed to pay to the CONCESSIONAIRE such difference then the items available in Liberia shall be oonsidered competitively prices. All items imported duty-free shall, as far as possible, be marked with the name or marks of the CONCESJIONAIRE in a manner difficult to delete. If the CONCESSIONAIRE imports any items duty-free and thereafter determines to sell or transfer such item to another person not entitled to the same exemption, or to apply the item to a non-exempt purpose, a customs declaration shall be made before such sale, transfer or use in accordance with the Liberian laws of general application. Any disagreement as to whether items qualify for exemption from import duties, or as to whether items have been sold,transferred, used or applied so as to become subject to import duties shall be resolved under the generally applicable Liberian Laws, regulations and procedures. (o) With regard to industrial fuel oils and fuel for industrial vehicles, the CONCESSIONAIIIE shall be entitled to a rebate of the excise tax imposed on the sale of such fuel oils upon submission of a statement prepared in accordanoe with the regulations established by the Ministry of Finanoe, - 27 - (2) Excise Taxes (a) The CONCESSIONAIRE may export logs free of all customs and other duties for the period of five (5) years (subject to the provisions of Section 9 of Article I hereof) commencing from the date of first shipment whether local or general. The exportation of such logs shall be subject to customs regulations, except as herein provided, then in force and subject to GOVERNMENT'S right of supervision and inspection of such exportation. ARTICLE VI CAPITALIZATION, STOCK PURCHASES, DIRECTORS, FINANCE. 1. CAPITALIZATION (1) The CONCESSIONAIRE shall provide all capital at such times and in such amounts as may be required for the economic and profitable de- velopment of the Concession and for all the operations and activi- ties under this Agreement. Such capital may be in the form of paid- in capital funds and/or borrowings from non-Affiliates. For th2' pur- poses of this Sub-Section, the term "Affiliates" shall have the meaning attributed to in Article I Section 1. (2) Stock Purchases (a) Commencing with the first issue of any voting shares of the CONCESSIONAIRE and continuing thereafter with respect to all subsequent issues of shares, twenty-five percent (25%) of each issue of such shares issued for sale or proposed to be issued by the CONCESSIONAIRE shall be reserved for offer to Liberian citi- zens. Such initial offering and each successive offering to Liberians shall be made on terms no less favourable than the most favourable terms to other subscribers and held available for subscription by and purchase by said Liberian citizens for a period of six (6) months from the date of offering of such particular issues. (b) The obligation to keep available twenty-five percent (25%) of each successive issue of common shares for subscription and/or purchase by Liberian citizens shall not at any time be minimized or affected by the fact that at the date of any particular issue of shares there already exist shareholders of the CONCESSIONAIRE who are Liberian citizens. 28 -- The CONCESSIONAIRE shall submit reports to the Ministry of Planning and Economic Affairs of the number of chares of cach offer which in- itially were made available to Liberian citizens, the number of shares remaining unsubscribed or paid at the end of the correspond- ing six-month period and the number of -uch shares subsequently dis- posed of to the existing shareholders in favour of existing Liberian shareholders. These shares shall retain with them the proportinate preemptive rights in favour of Liberian holders thereof who from time to time subscribe to and purchase additional shares when and if offered by the CONCESSIONAIRE. (c) The holdings by Liberians of shares of the CONCESSIONAIRE shall in no event be treated less favourably than those of other holders. be Liberian citizens shall/permitted to exercise their right to hold shares in any and every offering made by CONCESSIONAIRE. The CON- CESSIONAIRE shtll give the widest possible news media advertisement in Liberia to the public offer to Liberian citizens herein required and shall do nothing to diminish the relative vuting strength of the Liberian shareholders. (3) Directors, Twenty-Five percent (25%) or not less than two (2) ofthe directors of the CONCESSIONAIRE shall be Liberian citizens. Action taken by and votes of these Directors shall not have the effect of altering the obligations of the,CONCESSIONAIRE or the rights of GOVERNMENT under this Agreement. 2. FINANCE. APPROVED INDEBTEDNESS. DEBT TO EQUITY RATIO... (1) Approved Indebtedness An Indebtedness shall be considered an Appro- ved Indebtedness if it fulfils the conditions of (1) (a) and either (1) (b) or (1) (c) hereof and interest payable on such indebtedness shall be allowable as a deduction from profits before the calcula- tion of income tax or of not profits before distribution. (a) An Approved Indebtedness shall not: (i) be directly or indirectly junior to any other indebtedness or part of any oth r indebtedness of the CONCESSIONAIRE nor: (ii)be guaranteed by any Affiliate of the CONCESSIONAIRE nor by any other person nor: (iii) be incurred for the purpose of re-financing at then exist- ing indebtedness. (b) An Approved Indebtedness is that indebtedness incurred by the CONCESSIONAIRE to a public bank or other public financial in- stitution accoptable to GOVERNMENT and which does not bring the total of such Approved Indebtedness to a debt to equity ratio exceeding 2:1. - 29 - (c) Bn .,pproved Indebtedness is that indebtedness incurred by the CONCESSIONAIRE to a public bank or other public financial in- stitution acceptable to the GOVERNMENT which brings the total of such Approved Indebtedness of the CONCESSIONAIRE to a debt to equity ratio exceeding 2:1 but which has been approved by GOVERNMENT in writing before it was incurred and such an A.ppro- ved Indebtedness shall be incurred by the CONCESSIONAIRE solely in connection with the acquisition or construction .,f the plant and equipment or the infrastructure unless otherwise approved in writing by the GOVERNMENT. (2) For the purposes of this Section, the equity of the CONCESSIONAIRE shall be that amount of capital actually paid in to the CONCESSION- AIRE for capital stock, plus the principal amount of any outstand- ing indebtedness which is not A.pproved Indebtedness, less any ac- cumulated deficit of the CONCESSIONAIRE. There shall be added to the equity :f the CONCESSIONAII.IE 7.nd contributed surplus and any re- tained earnings but only to the extent that such surplus or earningc have been restricted so that they are not legally available for dis- tribution to the shareholders. If property .thcr th:.n cash has bcn c:mntributcd t- the CONCESSIONAIRE for capital stock, the amount thereof to bc taken into account shall not exceed the cost of such property to the transferor. (3) .1 non-approved indebtedness is an indebtedness the interrst on which shall not be allowable as a deduction from profits before the cal- culatic,n of income tax. An indebtedness shall be deemed to be a non-approved indebtedness if it: (a) is incurred by the CONCESSIGNAIRE to a public bank or other public financial institution acceptable to the GOVERNMENT but has not becn approved by GOVERNMENT as an Aipproved Indebtedness or; (b) is incurred by the CONCESSIONlIRE to an organization or person or persons other than a public bank or public financial in- stitution acceptable to the GOVERNMENT NOT.IITHSTANDING THAT: (c) (i) the CONCESSIONAiIRE IS required by the GOVERNMENT to indenti- fy clearly the sources of any money loaned to thc CONCESSION- AIREor otherwise transferred or made available to him by such organizations or person or pers)ns and to obtain the written authorization of GOVERNMENT for such loan or transfer before completing the transaction involved. - 30 - ARTICLE VII: EMPLOYMENT CONDITIONS 1. Health and Safety of Employces (1) The CONCESSIONAIRE shall install and utilize such internatio)na-lly re- cognized modern safety precautions as are provided ..nd observed elso where under conditions Rnd operations comparable to those undertaken by the CONCESSIONAIRE under this Agreement. (2) The CONCESSIONiJRE shall likewise observe internati nally rccognized modern measures for the protection nf the general health and safety of its employees and all other persons having legal access to the area covered by this `Agreement. The CONCESSIONAiIRE shall comply with such instructi-ns as may from time tc; time be given in writing by the Bureau -,f Forest Conservation. (3) The CONCESSIONAIRE shall furnish such free medical care and atten- tion to all its employees and to all Government officials working in connection with the operations of the CONCESSIONhIRE in the area covered by this Agreement as is reasonable and shall establish, staff and maintain a dispensary which shall be reasonably adequate in the circumsta:nces. Providod, however, that whenever the CONCESSIONAIRE employs more than ane hundred fifty (150) labourers in any one region it shall maintain a hospital headed by a medic-l doctor. (4) The Workmen's Compensation Law if the Republic .f Liberia shall ap- ply to accidents occurring to employees of the CONCESSION1.IREb 2. EDUCATION The CONCESSIONAIRE shall provide free of charge primary and secondary school facilities and education f-,r the children of ll employees *.nd of all Government officials working in connection with the CONCESLION- AIRE'S operations in the Concessi an .rea; rules, regulations and stand- ards established by the Ministry of Education shall be fullowed. 3. PERSONNELi USE OF LOCAL LABOUR: APPLICABILITY OF LABOUR L.-W. (1) The CONCESSIONAIRE shall ncot import unskilled labcur for carrying out any operati ns or activities under this Agreement except in the event that the local labour supply becomes inadequate to the CONCESSION- AIRE'S needs. In such latter event, the CONCESSIONAIRE shall undertake to import only such foreign unskilled labour as shall be neceptable to the Ministry of Labour and Youth. (2) Subject to the foregoing restrictions and to any applicati.-ns of the Liberiain Immigration Law, all persons deemed by the CONCESSIONIAIRE to be required for the prosecution o,f its operations and activities under this grement shall have right to enter and reside in the Republic of Liberica and to depart therefron. - 31 m (3) In selecting any employees to carry cut its operations under this A'greement the CONCESSIONAIRE shall give preference to competent and qualified Liberian citizens. (4) No officer or employee of the CONCESSIONiAIRE who is not a native of Liberia (even though he may for the time being be a resident of Libe- ria) shall be subject to the payment of any direct tax not levied or imposed upon permanent residents of Liberia. Subject to the fore- going, the payment of income tax to the GOVERNMENT by any such offices or employee of the CONCESSIONJIRE shall be governed by the income t x laws of Liberia in force in the tax;able yea-r ^nd tn the provisions of any trea:ty or agreement in respect of double tax-tio-n as may be concluded between GOVERNMENT and thu Government o,f any country of which such officer or empl;yee is suhject or citizen. (5) The CONCESSIONA,IRE shall conform with the provisi,.ns of the Labour Law in effect during the term of this ALgreement or of any extensien or renewal thereof. 4. Training of Liberian Citizens (1) The CONCESSIONAIRE shall provide fo,r the training of Liberians in order to qualify them for technical or administrative posts in the CONCESSIONA,IRE's operati-;ns and activities in Liberia. The minimum number of Liberi.ns employed in technical and administrative posi- tions shall, within five (5) years of the commencement of operations under this A,greement, reach at least seventy five percent (75%) cf the to,tal number of persons empjlyed in such positions shall within ten (10) years frcom the dite of commencemcnt of operaXti'ns under this A,greement, reach at least ninety-five percent (95%) of the total number cf persons employed in such positi.ons by the CONCESSIONAIRE in Liberia. (2) The CONCESSIONA>.IRE shall provide for the training of Liberians in order to qualify them for supervisory and senior managerial posts. The minimum number of such Liberians emploayed in supervisory and m-nagcrial posts shall reach ninety percent (90%) within ten (10) ye.rs from thu da.te of commencement o)f operations under this Agreement. - 32 - ARTICLE VIII: OTHER OBLIGATIONS OF THE CONCESSIONAIRE 1. Disposal of Wastes; Avoidance of Plollution The CONCESSIONAIRE shall provide for the proper disposition of saw- dust, mill and other waste so as to avoid the pollution of rivers, streams and other waterways and to prevent such vwastes from becoming a nuisance or injurious to persons and property. 2. Reforestation by CONCESSIONAIRE (1) The CONCESSIONAIRE shall carry out or cause to be carried out such reforestation practices and measures as will ensure the per- petual use of the forest within the Concession Area. Such refore- station practices shall be in accordance with generally accepted silviculture methods and practices and shall be in accordance with the rules and regulations from time to time made by the Bureau of Forest Conservation. (2) The CONCESSIONAIRE shall make such technical studies and research in co-operation with and as required by the Bureau of Forest Con- servation and will contribute as required to the development of optimum technical standards of reforestation practices. 3. Prevention of Damage to Concession Area. The CONCESSIONAIRE shall use all reasonable efforts to prevent en- croachment by unauthorized persons into the Concession Area and to prevent damage to trees and other forest products except trees and other forest products which the CONCESSIONAIRE may fell or extract under the terms of this Agreement. 4. GOVERNMENT'S and Third Parties' Rights to use CONCESSIONAIRE'S Facili- ties. (1) The CONCESSIONAIRE shall: (a) transport the passengers and carry the freight of the GOVERN- ment and all mail of the public and GOVERNMENT on its rail- roads to the extent that such transport and carriage does not unduly prejudice not interfere with the CONCESSIONAIRE'S opera- tions hereunder: (b) transport the passengers and carry the freight of third par- ties on its railroads to the extent that such transport and carriage does not unduly prejudice nor interfere with the CON- CESSIONAIRE'S operations hereunder. Provided, however, that the transportation and carriage of such third party passengers and friight shall be on such reasonable terms and at such rea- sonable charges as the CONCESSIONAIRE may impose; - 33 - (c) allow the public and GOVERNMENT to use free of charge any roads constructed and/or maintained by the CONCESSIONAIRE, provided, however, that such use shall not unduly prejudice nor inter- fere with the CONCESSIONAIRE'S operations hereunder; (d) allow the public and the GOVERNMENT to use the CONCESSIONAIRE'S wharf and harbour facilities on such reasonable terms and rea- sonable charges as the CONCESSIONAIRE shall impose. Provided, however, that such use shall not unduly prejudice the CONCES- SIONAIRE'S operations hereunder. (e) allow the GOVERNMENT and third parties to have access over the Concession Area provided that such access does not amount to encroachment as provided for in Section 3 hereof and does not unduly prejudice nor interfere with the CONCESSIONAIIE'S opera- tions hereunder; (f) allow the GOVERNMENT to place, free of charge at its own expense, telegraph and/or telephone wires on the poles of the lines of the CONCESSIONAIRE, provided that such installation do not un- duly interfere with the CONCESSIONAIRE'S efficient use of such poles and lines; (g) allow the GOVERNMENT and third parties to explore for and ex- ploit minerals and other substances within the Concession Area, as provided for in Section 2 Article 1 hereof. Scientific Exploitation; Protection against Waste and Negligence (1) The CONCESSIONAIRE shall carry on all its operations and activi- ties under this Agreement in accordance with good timbering prac- tices and in accordance with modern and accepted scientific tech- nical principles applicable to timber and forestry operations and processing. All operations and activities under this AXgreement shall be conducted so as to avoid waste and loss of natural re- sources, to protect natural resources against damage and to pre- vent pollution and contamination of the environment. Production shall not be restricted to the exploitation of particular species of trees except to the extent explicitly provided in this Agree- ment. (2) The CONCESSIONAIRE shall take all necessary measures to prevent or control fires and shall notify immediately the proper govern- mental authorities of any fires that may occur. - 34 - (3) The CONCESSIONAIRE shall take the necessary measures to prevent damage to the rights and property of GOVERNMENT and third panties. In the event of negligence or carelessness on the part of the CON- CESSIONAIRE or its agents or of any contractor carrying on opera- tions or activities for the CONCESSIONAIRE under this Agreement, they shall be liable for such injuries in accordance with the laws of the Republic of Liberia generally applicable. 6. Shipping Preference In engaging any ship for the transportation of lcgs, timber or process- ed products under this Agreement, the CONCESSIONAIRE shall give preference to ships in the following order: (i) ships owned by the Liberian Government; (ii) ships owned by citizens of Liberia; (iii) ships owned by shipping companies owned by Liberian citizens; (iv) ships registered in Liberia. Provided, however, that such preference shall be given only if the rates of such are competitive with prevailing market rates. For the pur- pose of this Section, the term "ship" shall include any vessel suitable for the shipping of logs, timber or processed products under this Agree- ment. 7. Savings of Rights of GOVERNMENT and Others. (1) Nothing in this Agreement shall be deemed to limit the right of GOVERNMENT or of authorized parties to explore for and exploit minerals or other substances in the Concession Area or generally to limit the rights of GOVERNMENT or any other authority of per- son in the Concession Area except as expressly provided herein. Provided, however, that the CONCESSIONAIRE'S operations and acti- vities under this Agreement shall not be unduly interfered with nor its rights prejudiced. (2) The GOVERNMENT reserves the right to take from the Concession Area such timber and forest products as may be required for public pur- poses and issue casual felling permits to natives to take forest product for their own use or for use in connection with any native art or craft. 35 -- ARTICLE IX: LA.'WS AND PENALTIES 1. Governing Law This ligreement sh.^.ll be governed, c,nstrued and interpreted only in accordFance with the laws of the Republic (f Liberi-a. 2. Laws of Gen.ral Application Unless specifically pr.,vided herein to the c.-ntrary, the CONCESSIONAIRE, its sharehoclder: and .mployees and all pers-.na der.ling with :any .f them shrill be subjedt to all Liberi-.n Laws o,f gencral application. lN; porsn:n sh.ll be deened or 1s intended to b0 a third pa.rty bcneficiary under this Agreement unless specific provisi. n t. th-.t affect is c .nt-ined herein. 3. Compliance with Forestry Law. Penalties fcr Offences (1) The CONCEISSION.IRE shall comply with the provisi ns cf the genBral Forestry Liw (Liberia Code :,,r Laws of 1956, Title 24, Chapter I and II) as from tim._ t- timr in effect. (2) The CONCES6IOTAIIRE shall be subject to penalties fr orffences against Title 24 of the Liberinn Code of Laws 1956 a-s prcvided in said Law. 4. Penalty for Breach of Agreement Unless otherwise specifically provided and notvlithstanding-;the GOVERNMENT's right (if revoc-ati.n under section3j- Article X hereof,the penalty f.r any breach cf this i,gre,ment shall be dF.m.g,s uhich shaill be fixed by agreeneart o.r if agreement canoot bo rcached, then damages r specific perfcrma;nce .as fix;.d by the: arbitral tribunr.l. 5. Prohibited Transactions The CONCESSIONAIRE shall not, directly or indirectly eng.age in: (a) any transaction with respect to timber products produced with any State which the GCVZN1'INENT h.s by law or by officia:l pronouncement declared t,- be h.;stilu or unfriendly or (b) any trarns.ction prohibited by law. 6. Indemnification The CONCESMIONIRE shall a:t all timus indemnify a-.nd hold the GOVERNMIMNT and its officors r.nd agents h.rmless from all claims and liabilities for dluth or injury to pers;ns or d.-m.,-;e t- property from ..ny cause whatsoever arising out of the CONCESSIONAIRE's operations or e.ctivities hereunder or as a result of the COUCETSSIONAIRE's fa.ilur tc coml!ly with any la;w or r.gulatio-n. - 36 - ARTICLE X: FORCE MAJEURE, CONCILIATION AND AIU3BITRATION GOVERNMENT' S POVCEI OF ]YZVOCZ.TION FOIl CAUSE TERtIN iLTION 1.Force MNa,eurr (1) Failure on the pc,rt of the CONCESSIONAIRE or of the GOVERNMENT to fulfill :ny or the terms and conditions of this Agreement ether than CONCES6IONAIRE's obligati rns to make p.ymtents :.f money, sh.ll not give eithQr pa,rty to thi-s Agreemenit any claim against the other party or be deemed to be a breach of the A.greement insofar as such failure arises fr;,m Force liajeure. (2) If, through Force Majeure, the fulfillment by the CONCEL3ION,IRE of any terms and conditi,-)ns on this Agreement be delayed, the period of such delay shaxll be added to the periods fixed by this Agreement. (3) The party failing to fulfill the terms and conditions of this Agreeument because of Force Mjoiure shall give notice in writing of such Force Majoure as sr,on as possiblo nfter the cccurrence to the other party. (4) For the purposes of this Sucti;,n, the term "Force Mrjeure' sh,ll be interpreted according to the definition givun the term under internationa.l lw. Provided, h ,wever, th.::t only such loss, damnago or injury ,.s c,uld no-t h:ove been a;voided by the ta.kinig of pr per precautions, due care or such reasonable alternaitive me'as@es ans a.foreasaid shell>;be regarded as the cr,nsequence o.f any failure causcd by Force Ma,jeure. (5) Any party who fiils bk.causc of Force Ma joure to perform its c:bliga- tions hereundcr sh-ll, upon the- cessatiun of the Force Mlajeure, take all reasonabl, steps within its powers ttP make C nd and rcsume, with the least possible delay, compliance with those obligai-ticns. 2. Concilia.tio:;n and Arbitration (1) If at any tinelduring the c,ntinu-.nce of this A,greemcent or there- after there shall be- any question or dispute with respect to the constructi>n1, meaning or effect of this Agreerment or arising :.ut of this ALgreement or concerning the rights or obligations hereunder, the parties shall have the right to require the dispute t., b, settled by conciliation and arbitra.ti(.n na hereiina.;ftor prment or any part thereof and of any extensions or removals thereof, the CON- CESSIONAIRE shall leave in good and safe running order, all fixed assets such as buildings, roads, railroads, airstrips, harbours and docks constructed by the CONCESSIONAIRE under this Agreement and the same shall revert to GOVERNMB1T. (2) All plants and equipment necessary to the continued operation under this Agreement shall be offered by the CONCESSIONAIRE for sale to the GOVERNMENT at the book values shown in the CONCESSIONAIRE'S accounts, after depreciatien. In the event that GOVERNMENT fails to exercise such right of purchase within ninety (90) days of the termination of the Ccncessi-.n, the CONCESSIONAIRE may roa,:ovo all such plants and equipment. (3) Subject to any claims which the GOVERNMENT may have against the CONCESSIONAIRE, arising under this A,greement or otherwise, all normal stockpiles and othur liquid assets used by the CONCESSION- AIRE in connection with its operatinns mnd activities under this Agreement shall remain the property of the CONCESSIONAIRE .:nd may be freely withdrawn, exported, sold or otherwise disposed of, sub- ject to the controlling Liberian Revenues and Finance Law, pro- vided, however, that the GOVERNMENT shall have the right of first refusal to purchnse at a fair price to be determined between the parties any such stockpiles or other liquid assets. In the event that Government fails to exercise such right of purchase-within ninety (90) days after the termination of the Concession, the CON- CESSIONAIRE may remove such astockpile and other liquid assots. _ 40 - IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and signatures on the day and year firat above written. IN THE PRESENCE OF: FOR THE GOVERNMENT OF THE REPUBLIC OF LIBERIA: MINISTER OF AGRICULTURE MINISTER OF FINANCE FOR THE CONCESSIONAIRE A P P R 0 V E D: WILLIAM R. TOLBERT, JR. D A T E PRESIDENT OF LIBERIA APPENDIXvIII Page 1 A STANDARD MODEL MANAGEMENT PIAN Introduction 1. This Management Plan is designed to ensure farming of the forest estate on sound silvicultural lines and to ensure sustained yield of the timber therein for perpetuity. 2. It takes into account the need for Government to obtain maximum revenue from the fullest utilization of the raw material at the same time recognizing the need for the concessionaire to be allowed to operate under viable and acceptable conditions. General Plan Section 1: Objectives of Management 3. a. To maintain the protective function of the forest, particularly bearing in mind the maintenance of suitable climatic conditions for the agricultural crop in the neighborhood. b. To satisfy the reasonable demands of local population for forest produce. c. To take into account the need for government to obtain maximum revenue from the fullest utilization of the raw material at the same time recognizing the need for the concessionaire to be allowed to operate under viable and reasonable conditions. d. In the course of this development to convert the timber resource from a low yielding natural state to a high yielding managed forest. e. To undertake research into improved methods of regenera- tion and silviculture of all economic species. Section 2: General Method of Treatment 4. a. The area will be worked under the selection system with improved forestry practices. b. In the absence of satisfactory enumeration data covering the whole concession area, the yield for this plan will be calculated from data of the area to be nominated for felling by the concessionaire as the annual coupe. It will therefore be necessary during the period of this plan to complete the enumeration of merchantable timber APPENDIX VIII Page 2 species of the whole area, as defined in the standard "Permit for Forest Survey" of the Bureau to enable the yield to be recalculated and put upon a satisfactory basis when this plan is revised. Section 3: Area Under Management 5. The company has generally selected areas within the County, the metes and bounds of which form Appendix "A" to this plan. The company is responsible for keeping open the boundaries of the area under license until such time as he relinquishes his claim to all or any part of same, when the area so relinquished reverts to Government. 6. There will be two working circles in the concession area research and selection working circles. These will be indicated on the map to be prepared after the enumeration of the forest area. Section 4: Period of the Work Plan 7. The period of the plan is from . The demarcation of research and selection working circles will be done during this period in cooperation with the Bureau. Revision of the plan should take place between or earlier on the mutual con- sent of both parties. Section 5: Annual Cut 8. The concessionaire shall declare, in writing within 60 days before entry, the area to be nominated as annual coupe, together with a stock map on which is set out the metes and bounds of such area. The felling area so nominated shall be cut into blocks of 1 sq mile (640 acres), or part thereof, each block to be numbered and so marked on the map. 9. To facilitate inspection and control of the annual felling area, a boundary line of not less than four feet in width shall be cut by the concessionaire around the area nominated. In the absence of a satisfactory and reliable enumeration data on the nominated felling area, there shall be no restriction on the size of the annual coupe for the first three years of the plan such being dependent upon the requirements of the concessionaire and the density of merchantable timber in the selected area. Section 6 A. Designating, Marking and Measurement of Trees and Logs 10. Live trees shall be marked or designated for felling as follows: no trees shall be cut that have diameters less than the following measured at a point one feet above the convegence of the buttress, if any, or at a point four and one-half foot above average ground level where there are no such roots. APPENDIX viii Page 3 11. The concessionaire shall not move or cause to be moved any log from the place at which such log is to be loaded for final destination, until and unless the same shall have been measured and the log and the stump of the tree from which the log was cut have been hammer-marked with a hammer of the Government by a duly authorized agent of the Government. Nevertheless, the concessionaire may on rare occasions remove unstamped logs from the stump to the landing for sealing and marking. B. Within a National Forest Reserve 12. In the case of all obligatory (class 1) species, the diameter limit shall be 30 inches. 13. Trees below these diameter limits may be cut only if marked for felling by the forest officer in charge of the operation. C. Outside National Forest Reserves 14. In the case of obligatory (class 1) species, the diameter shall be 30 inches. 15. In the case of all other species the diameter limit shall be 24 inches. 16. Trees below these diameter limits may be cut only if the forest officer in charge of the operation declared the area salvage operation. 17. All tree species felled shall be scribed with an identification number on the buttress and this number transferred to the bole length before skidding to landing. Section 7: Obligatory Species 18. The species listed in Appendix "B" shall be considered as obligatory and must be felled to minimum diameter as defined in Section 6 in this plan. Notwithstanding the above the Assistant Secretary of Agriculture for Forestry, may, at his discretion, postpone the felling of those tree species for which he is satisfied there is no current sales outlet, or for one reason or another, cannot be utilized by the concessionaire. During the time of post- ponement these trees will not be considered merchantable. 19. Apart from species for which felling postponement has been granted, the concessionaire shall be required to pay stumpage fees on all merchantable timber left standing in any area relinquished by the concessionaire. The forest officer in charge shal., in the presence of a representative of the concessionaire, assess the volume of the merchantable timber in a standing tree in the same manner as for an obligatory species. However, if the topo- graphic situation (very steep hills, mountains or deep swamps) is of such that an economic extraction is impossible no stumpage shall be levied. APPENDIX VIII Page 4 20. Any non-obligatory species felled by the concessionaire shall be scaled and assessed in the same manner as far an obligatory species. Section 8: Merchantability 21. Any tree which in the judgment of the forest officer contains one or more logs having a total net scale of 50' or more of the total volume of the tree, merchantable as hereinafter defined, may be marked or designated for felling as a merchantable tree. 22. All marketable species of logs are merchantable which are not less than 8 feet long, at least 20 inches in diameter inside bark at the small end, and after deductions for visible indications of defect scale 33-1/2% of their gross scale: provided, that no log of these species scaling less than 30 cubic feet shall be considered merchantable. Section 9: Defects Defined 23. The following conditions determine defects in a tree: a. Major Defects: heartshake, ringshake, splits, shatter, heartrot, dryrot, decay and hole, calcification. b. Other Defects: sapwood, branch knots, branch heart, double heart, bends, decay burrs. 24. Ringshake, splits and shatter may be caused through faulty felling, and when this can be proved to be so, they shall not be considered as defects. Section 10: Volume Determination 25. All logs shall be piled or skidded for scaling at a landing, prior to evacuation to the mill or port of export by the forest officer in charge. A representative of the concessionaire shall be required to countersign the forest officer's report of merchantable timber, on which assessment the concessionaire shall be charged at the rate in force at the time, whether or not the timber is removed from the felling area or the landing. 26. Saw logs, veneer logs, piling and similar round timber shall be scaled by the International 1/4 inch log rule, at the small end on the average diameter inside bark taken down to the nearest inch. 27. The concessionaire shall submit a report to the Bureau of Forest Conservation at the end of each month showing the amount of timber cut during the month. This report may be accepted as the basis for payment of stumpage in the absence of log scale records. 28. The maximum scaling length of saw logs shall be 20 feet; greater lengths will be scaled as two or more logs. Upon all logs 6 inches shall be allowed for trimming. Logs over-running the specified trimming allowance shall be sealed not to exceed the next feet in length. Page Section 11: Damage 29. No unnecessary damage shall be done to young growth or to trees left standing. Unmarked or undersignated trees which are badly damaged during logging within National Forest Reserves shall be cut, scaled and paid for at three times the stumpage rate in force at the time. Section 12: Stump Heights 30. Stumps shall be cut so as to cause the least practicable waste, and not higher than 16 inches on the side adjacent to the highest ground, or at a point 1 foot above the junction of buttress roots with the trunk, except that when this requirement is impractical in the judgment of the forest officer, he may authorized and accept higher stumps. Section 13: Construction Timber 31. All merchantable Khaya Spp., Entandrophragma Spp., Dumora (Tieg Lomella Spp.), Lovoa Spp., Canarium Spp., Guarea Spp., and Chlorophora Spp., used in the construction of buildings, roads and other structures, necessary in connection with the felling and removal of timber covered by this plan, shall be paid for at the current rate in force for such material. Other species, cull material, and unmerchantable tops of any species may be used for such purpose without charge and shall be left in place unless otherwise specified by the forest officers. Section 14: 100% Enumeration of Annual Coupe 32. The concessionaire shall be required to carry out a 100% enumera- tion of the area nominated as annual coupe for felling quarterly, counting all obligatory species down to 17 inches diameter breast high (DBH). Copies must be forwarded to the Bureau of Forest Conservation, through the forest officer in charge. Section 15: Logging Plan 33. The concessionaire shall be required to submit to the Bureau of Forest Conservation, a broad outline of logging plan giving internal road net work, sequence of operation, access roads, and forest products processing facilities of the entire concession area with map for approval. Section 16: Roads 34. In the construction of logging and skid roads, it is agreed that maximum gradients will be 20% except where impossible to do so and that adequate cross drinage and water spreading facilities will be constructed to prevent excessive soil crosion. 35. Main roads shall at all times be kept free of logs, brush, and debris resulting from the concessionaire operations hereunder, and any APPENDIX VIII Page 6 road or trail used by the concessionaire in connection with this develop- ment that is damaged or injured beyond ordinary wear and tear through such use shall promptly be restored by him to its original condition. Section 17: Silvicultural System and Prescriptions 36. Silvicultural practices to be followed will be the selection cutting system, whereby reserving enough small, thrifty timber of desirable cut in from 40 to 60 years. Restocking of cut-over areas by planting or seeding will be undertaken only when adequate natural reproduction of desirable species cannot otherwise be expected. In this event, provision shall be made to cut down or kill by poisoning inferior or undesirable species which will prevent desirable and valuable species from restocking the land together with, when- ever necessary, enrichment plantings of the desirable species. And in some cases establish taungya plantations of economic species. It shall be the responsibility of the concessionaire with the supervision of the Bureau of Forestry, to ensure that the forest areas under his agreement are protected from destruction and maintained for forest production. He shall be responsible to provide for the regeneration of tree species removed during operations so that provision is made for the future maintenance of stand composition exist- ing at the beginning of the operations covered by the plan. All major silvi- cultural activities such as planting, killing by poisoning of inferior or undesirable species, etc. will be supervised by the forest officer in charge. Section 18: Utilization 37. All reasonable efforts must be made to secure a complete utiliza- tion of forest timber in logging and conversion operations as is practicable. The minimum merchantable length of a tree is considered to be the first major branching or 20 inches diameter inside bark, whichever is closest to ground level. Trees will be cut as close to the ground as practicable. Log lengths will be 16.3 feet to give recovery in 16-foot logs plus 0.3 foot of trim allowance. 38. The basis of volume measurement will be the board foot which is defined as the unit of measure represented by a board 1 foot wide, 1 inch thick and 1 foot long. Scaling and volume measurement will be by Inter- national 1/4 inch long rule and the standard volume table developed by the Bureau. 39. All species of known commercial value (those designated as class I) in the Bureau of Forest Conservation "Standard List of Liberia Species" must be utilized to the diameter breast high limit as established by the Bureau. In addition, a reasonable number of species of potential commercial value (class II) and species of potential commercial interest (class III) will be made obligatory following mutual agreement between the Bureau and concessionaire but provided that upon failure to reach an agreement, the decision of the Bureau, as the agency with the administration and protection of public forest land, shall prevail. Constant effort must also be made by the concessionaire in cooperation with the Bureau to increase the number of species in class I so as to decrease the number in the lower classes. APPENDIX VIII Page 7 Section 19: Relinquishment of Felling Coupe 40. The concessionaire shall normally relinquish at any time he wishes, a nominated felling coupe, where timber extraction operation and forest product utilization have been completed by the concessionaire to the satis- faction of the Assistant Secretary of Agriculture for Forestry. But such relinquishment shall not relieve the concessionaire of his responsibility as contained in Section 17 of this plan. Section 20: Re-Eitry of Logged-Over Areas 41. As the relinquishment of any granted forest areas automatically relieves the concessionaire from payment of ground rental, provision shall be made to permit re-entry into a logged over area, provided that rental on an agreed basis is paid in advance for the required period. Section 21: Sanitation 42. The concessionaire shill keep all logging camps, landings, mills and other structures used in connection with this operation, and the ground in their vicinity, in a clean, sanitary condition, and rubblish shall be removed and burned or buried. When camps, landings or other establishments are moved from location to another or abandoned, the concessionaire shall burn or otherwise effectively dispose of all debris and abandoned structures. 43. All camp buildings and structures used in connection with this development shall be located and operated as may be approved by the forest officer in charge to prevent the pollution of the water in any stream. All houses toilets and garbage pits shall be constructed and maintained so as to prevent,so far as possible, the breeding of flies or the development of unsanitary conditions. 44. Sawdust and all other mill refuse shall be so disposed of so that none will enter the waters of any stream or tidewater. Section 22: Timber Brands or Marks 45. The following property marks are reserved for the exclusive use of the Liberian Government and shall not be used by the concessionaire - RL, RLNP, RLGR, RLNA and RLCF. 46. Concessionaire Property Marks. The property mark or marks to be used for theconcession area, the subject of this Agreement shall be registered with the Department of Agriculture. 47. Logs and other forest products may be stamped or branded to show ownership by the concessionaire. The following property marks are hereby reserved for the exclusive use of the concessionaire in accordance with Part IV, Sections 1-5 of the ttSupplemental Act", approved February 28, 1957: APPENDIX VIII Page 8 Section 23: Forest Officer in-Charge 48. The term "Forest Officer in-Charge" wherever used in this manage- ment plan signifies the officer of the Bureau who shall be designated by the Assistant Secretary of Agriculture for Forestry to supervise the timber operations. Section 24: Modifications 49. The conditions of the development are completely set forth in this plan, and none of its term can be varied or modified except in writing by the Assistant Secretary of Agriculture for Forestry and approved by the Secretary of Agriculture. Signed in triplicate this day of , 19-. W I T N E S S E S: Assistant Secretary of Agriculture for Forestry Approved at Monrovia, Liberia under the above condition , 19 Secretary of Agriculture APPENDIX IX Page 1 OBLIGATORY SPECIES Species required to be cut and lower diameter limits at a point on trunk of tree four and one-half feet above the average ground level or at a point one foot above the convergence of the buttress. Group I: Thirty-Inch Low Diameter Limit Botanical Name Trade Name Chlorophora excelsa Iroko Tieghemella heckelii Makore Entandrophragma angolense Tiama or Edinam cylindricum Saple utile Sipo candollei C-sipo Khaya anthotheca Khaya " ivorensis Khaya Lovoa trichilioides Walnut Triplochiton scleroxylon Obeche Guarea cedrata Guarea Group II: Twenty Four-Inch Lower Diameter Limit Cararium Schweinfurthii 'White Mahogany Mitragyna Stipulosa (Ciliata) Abura Tarrietia Utilis Niangon, Whismore Nauclea Trillesii (Diderrichii) Bilinga Afzelia Bella Apa Pycanthus Angolensis Ilomba Terminalia Superba Limba it Ivorensis Framira Antiaris Africana Ako Nesogordonia Papaverifera Kotibe Branchystegia Leonensis Naga, Tebako Daniellia Ogea Dideletia Unifoliolata Tetraberlinia Tubmaniana African Pine, Sikon Gilbertiodendron Preussii n Red Oak Lophira Alata (Procers) Azobe, Ironwood, Bongossi Erythrophleum Ivorensis Tali (Locally: Sasswood) Piptadeniastrum Africanum Dahoma Ceiba Pentandra Fromager, Fuma Kota Mansonia Altissema