Provisions in the Fouani Brothers Corporation’s Investment Agreement with the Government of Liberia (GOL) accessed by the Hot Pepper has revealed what appears to be a deceptive bargaining than real-time investment in the country, with dangerous clauses inserted in many sections of the document that gives the “investor”, Fouani, unimaginable considerations and leverages without any form of condition or limitation.
Inquisitive about what the investment package entails, the Hot Pepper investigation captured Section 10.1 (c) of the agreement, which allows for Fouani Brothers Corporation to import vegetable oil as raw material and pay only general service tax (GST) and not duties.
This clause is complemented by the government allowing for the “investor” to be exempted from import taxes and duties on capital equipment, spare parts, raw materials, consumables and packaging and related materials for seven years, as indicated in Section 10.1 (b).
These and many other dangerous clauses in the GOL-Fouani Brothers Corporation agreement, without any form of scrutiny, have been signed by the Executive, forwarded to the National Legislature, approved by the House of Representatives and is now before the Liberian Senate for concurrence.
However, it is being reported that there is serious contention among members of the House of Representatives regarding the passage of the bill on September 6, 2023 when the House had retired for recess, after it was recalled by President George M. Weah from August 22 to September 5, 2023.
The Fouani Brothers’ bill, which was prepared on October 22, 2021, was signed by President Weah on September 5, 2023, approved by the House of Representative on September 6, 2023 and subsequently sent to the Liberian Senate for concurrence, but was tabled until actual work resumes at the Capitol.
Nevertheless, several representatives who were members of the 54th National Legislature are expressing descending views about the passage of the bill, claiming they know nothing about it. According to a Capitol Building source, while the House was on recess, a handful of lawmakers (names withheld) gathered at Royal Hotel and shared hundreds of thousands of United States dollars (amount withheld) to slink the bill without due diligence.
The source told the paper that the Senate are becoming skeptical and may not concur with the House, as several lawmakers are requesting that the bill be returned to the lower House for proper scrutiny, as the bill is not in the interest of the country and the citizenry.
Interestingly, there is rumor that emissaries of Fouani Brothers Corporation are on their heels to ensure that the Senate concurs with the House of Representatives, intending to distribute additional hundreds of thousands of United States dollars to have their interest passed without hindrance.
The Liberian people have just elected a new batch of individuals to represent them at the 55th National Legislature, with the anticipation that they will make decisions in the interest of the state or be booted out in subsequent elections.
Meanwhile, stakeholders of the business sector have informed the Hot Pepper that the Fouani Brothers’ investment incentive severely undermines local farmers’ initiatives and undercuts existing investments in the palm oil sector that have been moving the country’s agricultural sector forward.
The business tycoons disclosed that there are large agricultural concessions that have invested in the palm sector, including Sime Darby, which has now been taken over by Mano Palm Oil Plantation (MPOP), Golden Veroleum Liberia (GVL), Equatorial Palm, etc., in addition to numerous other smaller palm farms owned by Liberians across the country. They say that all these agricultural projects have built or are planning to build refineries in Liberia in order to process crude palm oil from their farms.
According to them, by granting incentives to a large company to import CPO into Liberia duty free the government will be undercutting all of the investments in the palm oil sector in Liberia. “Fouani plans to import CPO from outside of Liberia where production costs are much cheaper. The CPO will then be refined in Liberia and offered for sale locally and abroad at much lower costs than the local plantations can produce. This will force local producers of CPO to sell to Fouani,” they forewarned.
Also, they say, this proposed investment incentive will create a monopoly that will force smaller producers out of the crude palm oil business and cause loss of investments already made in plantations and refineries and cause the workforce to be laid off, thereby increasing unemployment.
They strongly warned against the passage of the proposal in a lame duck session of the National Legislature, where at least fifty percent of the members have been replaced. “This session should be focused on the transition of leadership and members, instead of taking actions that will have long-term effects on the national economy and the livelihood of the people at large,” they emphasized.
“The proper option available to Fouani is not to try to undercut the palm oil market by getting duty free privilege on imports; instead, they should import CPO just as they do now, and refine it for local sale or export. Fouani should not be given duty free privilege to import CPO and thereby be able to produce refined oil cheaper than what the local producers can do,” they maintained.