The_Open_Door_deel1

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The Government's effort to change the enclave character of
Firestone's position in the national economy resulted in a vague
obligation of the company to use Liberian products and services.
Definite improvements, however, were the'Government's rights to
terminate the agreement (virtually absent in the 1926 Planting
Agreement) though there is still room here for further improvements,
such as the provision for a periodic review, and the
creation of a Technical Committee (89). The latter, if properly
used by both parties, may become of great importance during the
term of the Agreement, as it provides an opportunity of regular
communication between the Government and the company. Each party
appoints an equal number of persons on this committee, three being
the minimum. However, being only authorized to meet and to
recommend, the real power of the Technical Committee is limited.
This contractual limitation will act as_a constraint on the
further development and importance of this committee. Another
constraint on its optimum functioning might be the recommendations
to Firestone-Liberia, a company in which the Liberian Government
is not represented. (The Model Iron Ore Agreement stood model for
several of the new items of the 1976 Firestone Concession
Agreement, notably this creation of a Technical Committee, but
contrary to the LAMCO Joint Venture's and Bong_.Mining Company's
Boards of Directors, on which the Government is represented
(see Chapter 8), the latter is absent from the Board of Directors
of the Firestone Plantations Company). In December 1978
the Technical Committee was not yet functioning.
The Agreement, which with respect to its financial aspects became
retro-actively effective on November 1, 1975 has, grossly speaking,
twomajor weaknesses which are the result of Firestone's refusal to
accept the Government's demands, and two other deficiencies which
can be explained from the interest which Liberia's ruling class,
in general, has in rubber plantations.
The lack of an obligation to produce semi-manufactured and/or
final goods (whose main component is rubber) and the absence of a
debt/equity ratio continue Firestone's "enclave economy" and the
"primary commodity characteristic" of Liberia's rubber exports,
and create a loophole which eventually may be used by Firestone.
A pricing system which is too vague and leaves too much room for
arbitrarily calculated and derived deductions is the price the
Liberian Government has to pay for its failure to compel Firestone
to buy rubber from Liberian growers (originally included in the
renegotiations). The interest which Liberian politicians have in
the rubber sector of the economy and in a continued purchasing of
the rubber by the Firestone Plantations Company (or by any. other
company, since the price continues to be determined by Firestone)
will be discussed in Chapter 13- The same business interest is
responsible for the refusal of the Government of Liberia to
insist on provisions which would improve labour conditions on the
plantations. Significantly, however, two noticeable changes had
been recommended as early as 1931. In that year the Brunot
Commission of the League of Nations recommended that
"7hz total area mentioned in the concession contract