Summary of contract

• Negotiation, representation, and other relevant context

  Agreement between the Chiefdom Council of Sorogbema represented by the Paramount Chief and notable men, as the lessors (Chiefdom Council), and Aristeus Palm Oil, a limited liability company as the lessee. Aristeus Palm Oil’s objective is to develop sustainable agriculture and related projects in the Chiefdom for the mutual benefit of the local population and its shareholders, which includes a commitment to creating jobs for the Chiefdom’s people, support the social and economic wellbeing of the community, and take action to ensure the environmental integrity of its activities (Preamble). The Chiefdom Council confirms that they are legally entitled to enter into this agreement (Art. 3.2). The Chiefdom Council agrees to lease 47,567.7 hectares of land to Aristeus Palm Oil for 50 years (Art. 1.1, 6). The agreement is renewable for 21 years with a further option to renew it for another 21 years and seven years, respectively, provided that the rent for these periods shall be negotiated and agreed subject to standard commercial terms (Art.3.9). Aristeus Palm Oil agrees to pay the Chiefdom Council’s solicitor’s fees and all costs incurred by the Chiefdom Council in the preparation of the agreement (Art. 2.15).

• Governance, implementation, dispute resolution

  Aristeus Palm Oil will permit the Chiefdom Council of Sorogbema to inspect the leased land once a year during the day provided two weeks prior notice is given (Art. 2.13). The agreement cannot be assigned without the prior written consent of the Chiefdom Council, and written approval of the Provincial Secretary provided that such consent shall not unreasonably be withheld (Art. 2.14). If Aristeus Palm Oil is in arrears for 21 days or more, the Chiefdom Council may re-enter the leased land provided that Aristeus Palm Oil has had a reasonable period to remedy or rectify the breach (Art. 4.1). Any dispute in connection with this agreement may be referred to arbitration, which is subject to the Arbitration Act of Sierra Leone (Art. 4.7).

• Fiscal obligations: content

  Aristeus Palm Oil will pay US$ 2.00 per hectare per year for the first seven years of the agreement. Rent for the remaining period will be reviewed every seven years (Art. 1.1). Chiefdom Council shall distribute the rent paid by Aristeus Palm Oil to all landowners relative to the size of land contributed by them (Art. 3.3). Aristeus Palm Oil will pay into a community development fund for the benefit of the local community at the end of every year, a royalty of 5% of its net profit provided that the annual rent payable shall not at any time exceed 5% of Aristeus Palm Oil’s net profit (Art. 2.6). This royalty will be deposited into a communal account managed by the paramount chief, members of parliament, local district councilors, and three other chiefdom councilors. Aristeus Palm Oil shall appoint two representatives to the community fund (Art. 2.7).

• Community development obligations: Local content

  Aristeus Palm Oil will use all reasonable endeavors to employ local personnel in preference to expatriates applying for the same vacancy provided that any such local person holds the required qualifications, experience, and know-how (Art. 5.1). Aristeus Palm Oil will train employees in a range of skills related to agricultural work, supporting the pursuit of academic qualifications where relevant (Art 5.3).

• Community development obligations: Infrastructure and social services

  Aristeus Palm Oil will reasonably assist in providing and supporting the primary and secondary education of all school-going infants, pupils, and students residing in the locality under commercial development within the leased land (Art. 5.4). Aristeus Palm Oil will use its best endeavors to provide health care, housing, sanitation, and water for the benefit of all persons residing in the locality under commercial development within the leased land (Art. 5.5).

• Community development obligations: Other

  Aristeus Palm Oil will set aside to sell into the local market for local consumption a quantity of the palm oil and other products produced or harvested from the leased land to help support domestic food security and act as import substitution (Art.5.7).

• Environmental and social protection

  If it is necessary to move small settlements for the project, Aristeus Palm Oil will consult with the Chiefdom Council and will assist in re-housing any displaced family in appropriate facilities within the locality (Art. 2.10). Aristeus Palm Oil will, in consultation with the Chiefdom Council, identify and demarcate traditional reserves and sacred grounds (Art. 2.11). Aristeus Palm Oil will fairly compensate all landowners for all economic trees and crops removed from the leased land (Art. 2.12). Aristeus Palm Oil will be responsible for the rehabilitation of the existing oil palm plantation on the leased land and the preparation of the land for planting and the maintenance of new plantations of crops, including but not limited to oil palm (Arts. 2.8, 5.2). Aristeus Palm Oil will adhere to all relevant international —including the guidance offered by the Roundtable on Sustainable Palm Oil—, national and local regulations relating to environmental protection, using environmentally friendly practices consistent with Aristeus Palm Oil’s published social and environmental policies (Art. 5.6).