Summary of contract

• Negotiation, representation, and other relevant context

  The agreement is between Alpha Logging & Wood Processing and the communities of Bokomo and Gou-Nwolaila (“the communities”). The Forestry Development Authority of Liberia is a witness to the agreement (page 1). The Forest Management Contract Area A was awarded to Alpha Logging & Wood Processing. In preparing Forest Management Contract Area A, notice was given and surveys conducted in a portion of the communities to validate whether the area was suitable for commercial forest practices based on ecological, economic and social considerations. As part of this survey, the communities were informed of the potential Forest Management Contract and that a social agreement was required. The government secured a statement, using FPIC (free, prior and informed consent), on behalf of the affect communities that they would negotiate a social agreement in good faith with the winner of the competitive bid (page 5). Community members shall elect their representatives to the Community Forestry Development Committee (“CFDC”) which is responsible for representing the communities and negotiating the agreement on their behalf (Art. IV). The CFDC consists of between 5 to 10 members who must be permanent residents of the community which they represent, be a representative of clusters within the community and must not be employee of the government, a civil society organization or a non-governmental organization (Art. IV(a)). The CFDC must hold monthly meetings with community members for briefings, updates and grievances (Art. IV(h)). Members must be freely and fairly elected and should reflect gender balance and provide a means for all residents that it represents including women, youths and elders, to have their views heard and considered (Art. IV(a)-(c)). The agreement is “legitimate” for 25 years and “valid” for 5 years, and is renegotiated after every 5 years (Code of conduct, page 12). The CFDC terminates 5 years following the execution of the agreement and if logging continues beyond this date, the communities will elect a new CFDC to negotiate a new social agreement (Code of conduct, page 12).

• Governance, implementation, dispute resolution

  Alpha Logging & Wood Processing and the communities will maintain lines of communication regarding operating and implementing the agreement and will provide periodic updates (which should include information as to volume of logs removed to date) to the chairperson of the CFDC regarding issues in implementing the agreement (Art. VI(C)). Alpha Logging & Wood Processing will provide all necessary information that will be provided to the public to help monitor the agreement (Code of conduct, page 13). The CFDC is to be supported from the Community Fund to conduct participatory compliance monitoring of the delivery of benefits by Alpha Logging & Wood Processing to the community (Art. VI(K)). The parties will hold annual meetings with representatives of the CFDC, the government and Alpha Logging & Wood Processing to discuss the upcoming annual operating plan as well as to attempt to resolve any issues identified from the previous operating season (Art. VI.(D)). Representatives of Alpha Logging & Wood Processing (with decision making authority) must meet with the CFDC and, if the communities choose, additional community members, as important issues arise (Art. III, page 10). If Alpha Logging & Wood Processing fails to perform any of its obligations under the agreement, one or both of the following shall occur: (a) Alpha Logging & Wood Processing shall halt all logging activities and shall not restart logging until its obligations have been met; and/or (b) the communities may terminate the agreement for material breach and Alpha Logging & Wood processing will be prohibited from conducting logging activities (Art. VI(G)). If there is any controversy under the agreement, 2 members of the CFDC and 2 persons from Alpha Logging & Wood Processing and 1 additional person that both parties agree will seek to resolve the matter with the assistance of those named in Annex 2a (Art. VI(I)). If there are still differences, local government officials (District Commissioner, Paramount Chiefs, Clan Chief, and Town Chief) will be neutral parties in a third-party mediation process, provided that their neutrality is proven. If not resolved by these steps, any claim relating to the agreement shall be exclusively settled by binding arbitration in accordance with the Commerce Arbitration Rules (Art. VI(I)). The governing law is the law of Liberia (Art. VI(I)). The parties may modify the agreement by mutual agreement and the government needs to attest to its completeness prior to any modifications going into effect (Art. VI(B)).

• Fiscal obligations: content

  Alpha Logging & Wood Processing must pay to the communities land rental fees and cubic meter fees (Art. IV(k), page 12). Alpha Logging & Wood Processing will pay US$ 1.50 for each cubic meter of timber cut to the communities for Class “A”, “B” and “C” species of timber. Alpha Logging & Wood Processing will deposit the funds due to the communities once every 3 months into an account established by the CFDC (Art. III). The CFDC shall receive 10% of the annual revenue to the communities (area and production base fees) as compensation (Art. IV(e)). 10% of the area-base fee will be paid directly by the National Benefit Sharing Trust Board every month but the 10% of the production based fee compensation shall be received at the end of the year (Art. IV(f)). Independent monitoring by CFDC Expert Advisor will occur under an MOU and with a fee from the Community Fund of 5% of the annual benefit delivery (area and product base fees) (Art. VI(K)).

• Community development obligations: Local content

  Alpha Logging & Wood Processing will provide in-kind benefits, such as jobs, to the communities (Art III, page 8). Alpha Logging & Wood Processing agrees to provide first preference for skilled and unskilled employment for citizens of the communities and on the job training for local employees. Alpha Logging & Wood Processing agrees to establish a scholarship program for students from the affect communities so that local students may attend universities and technical programs for the period of their operation (Art. III, pages 7-8).

• Community development obligations: Infrastructure and social services

  Alpha Logging & Wood Processing will provide in-kind benefits to the communities, such as buildings, roads, etc. Alpha Logging & Wood Processing will maintain major roads, construct certain roads and bridges. The construction of the first road and bridge will begin simultaneously during Alpha Logging & Wood Processing’s first year of operation in Gborpolu County, and should be built according to the Ministry of Public Works standard. Bridges will be built out of steel and concrete—not logs. Alpha Logging & Wood Processing will not levy a charge for use of any roads it constructs or maintains. Alpha Logging & Wood Processing will build new or modernize existing healthcare clinics, build and modernize a junior high school and build camps for employee housing including constructing latrines and hand pumps (Art. III, pages 8, 9 and 13).

• Community development obligations: Other

  Alpha Logging & Wood Processing will (a) participate in any major community development programs and (b) will provide transportation during emergency situations and major development activities (Art. III, page 7). Upon the request of the community, Alpha Logging & Wood Processing agrees to provide logs and timber products to the communities for local projects (Art. III, page 10).

• Environmental and social protection

  Alpha Logging & Wood Processing and its operations will not cause (a) any physical damage to, or trespass upon, or interfere with the communities’ traditional society bush, traditional society practices, or traditional matters or affect the communities choice of traditional sites (if relocated), (b) damage to and will protect the communities’ sources of water and the water collection points, and (c) physical damage to, or interfere with, existing farms or crops. However, Alpha Logging & Wood Processing may cause damage if undertaking projects in the communities’ interest, but the community determines what projects are in their interest (Art. III, pages 6 and 7). Alpha Logging & Wood Processing will not harvest timber at water sources, soil the drinking water or dump chemicals or other logging products in the water (Art. III, page 6). If Alpha Logging & Wood Processing complies with the communities customary laws regarding traditional practices described in the agreement, the communities will not interfere with Alpha Logging & Wood Processing’s logging activities and the communities must inform Alpha Logging & Wood Processing in advance about traditional activities that may affect Alpha Logging & Wood Processing’s operation (Art. IV, page 13).

• Reference to investor-state contract

  The communities were informed of the potential Forest Management Contract (between the government and Alpha Logging & Wood Processing) and that a social agreement was required (page 5). The social agreement itself is also described as a forest management contract.
  The government will ensure that the operations of Alpha Logging & Wood Processing are in compliance with the Forestry Management Agreement (Art. V(B)).

• Other noteworthy clauses

  If Alpha Logging & Wood Processing considers it necessary for its operations to cause any physical damage to, or otherwise interfere with, any existing farm or crops it must request permission from the owner of the farm or crops. If the owner does not give permission then Alpha Logging & Wood Processing cannot cause such damage. If the owner does give permission then Alpha Logging & Wood Processing must negotiate with and compensate the owner (Art. III, page 7). This agreement shall serve as a binding contract (Art. III, page 9). Benefits not included in this agreement but owed to the communities under the laws, such as land rental payments or environmental protected etc, shall continue to be the rights of the communities (Art. III, page 9). The CFDC and local authorities shall ensure that no chain sawing and farming are allowed in contract areas (Art. IV(g)). The communities will encourage low land agriculture development to avoid the expansion of subsistent agriculture activities within the contract area and agree to avoid establishing new farms within the high forest or causing fires in the high forest (Art. IV(h)-(i), page 12). The communities agree to prohibit pit sawing for commercial uses but they may cut trees occasionally for community development purposes in collaboration with Alpha Logging & Wood Processing. The community agrees not to force anybody to join their traditional society unless that person violates that society law (Art. IV, page 13).