“Bad Deal”; Senators Describe Fouani’s Investment Agreement
The Senate Committees on Concessions and Judiciary have begun hearing the Fouani Brothers Corporation Investment Incentive Agreement, with the objective of understanding the advantages and disadvantages of the agreement and properly advising the Senate plenary on its course of action.
On Monday, October 30, 2023, on behalf of the Executive branch, the Deputy Minister of Finance for Fiscal Affairs, Samora P.Z. Wolokollie, and the Chairman of the National Investment Commission, Molewuleh B. Gray, appeared in committee room to explain to the Senators the sections of the bill and provide clarity where necessary.
According to NIC Commissioner Gray, the investment is valued at US$30 million, with a duration of fifteen years. according to him, the agreement is for Fouani Brothers Corporation to build a crude palm oil (CPO) refinery in Liberia, which in turn will provide 150 direct jobs and several indirect jobs. And that because the venture is agriculture-related, the corporation will provide for the Ministry of Agriculture US$75,000 annually to facilitate trainings and other related activities.
The location of the refinery was not definitely specified in the agreement, as the document mentioned an area within the port to be leased by the National Port Authority (NPA) and available land areas within the Monrovia Industrial Park vicinity.
However, after the deliberation of the guests, the senators raised several concerns about clauses in the agreement, ranging from the amount to be given the Ministry of Agriculture, the marginalization of local farmers, the tax-free luxury for the investor, the environmental social impact assessment, the loophole in Section 11.1 of the investment agreement, etc.
Specifically, Senator Abraham Darious Dillion of Montserrado County argued that the loophole created in Section 11.1 could put Liberian farmers out of job. Section 11.1 reads, “Importation of Crude Palm Oil (CPO): In any event or under any circumstance reasonably unforeseeable to the investor, verified and validated by the Minister of Agriculture, that the volume of crude palm oil available in Liberia during the term of this agreement is of insufficient supply to meet the requirements of investor’s refinery, the investor may, with prior approval by the Minister of Agriculture, for a cumulative period not exceeding thirty-six calendar months for the six-year period commencing from the commercial production date, import into Liberia crude palm oil as is needed and required for investor’s operation free from import duties, provided that the thirty-six calendar months shall be used by the investor to invest in palm farming or the growing of palm in Liberia…”
Senator Dillon emphasized that if the company is given the leverage to import oil, they may not buy from the local farmers but use the loophole in the law to import oil, which could be cheaper, and put Liberian farmers out of business. He warned that the Senate needs to thoroughly look into that clause and do the needful.
Senator Emmanuel Nuquay of Margibi County argued that passing the investment incentive could mean putting Fouani Brothers Corporation in direct competition with Liberian farmers. He said he is of the belief that the importation of crude palm oil will be cheaper than buying from local farmers; as such, the investor may choose to maximize profit. He also expressed concern about the pricing of the palm oil, wondering whether the government will be involved in making price for locally produced oil.
Bomi County Senator, Edwin Melvin Snowe, described the Fouani Brothers Corporation Investment Incentive Agreement as a bad deal, and urged the Executive branch of government to withdraw the agreement to save the agriculture sector and the Liberian economy.
“The Executive should withdraw this agreement because it is bad for our economy, bad for local farmers and all companies who have invested millions of dollars in the palm oil sector, like Golden Veroleum, Mano Palm,” Senator Snowe stated.
Senator Snowe, who himself is a palm farmer, said it is impossible to produce 13,000 metric tons of crude palm oil a month in Liberia, and that is why Fouani is smartly asking for a plant for 13,000 metric tons—because it is impossible to get that amount.
Meanwhile, it is expected that the Senate Committees on Concessions and Judiciary will finalize its observation and findings and report to the Senate plenary.