— Initiates Senate Probe of Firestone A Major U.S. Investment
IPNEWS: The United States is both the world’s largest foreign direct investor and the largest beneficiary of foreign direct investment (FDI). But like every sovereign country, it has sought to temper its embrace of open markets with the protection of its national security interests. Achieving this balance, which has shifted over time, has meant placing certain limitations on overseas investment in strategically sensitive sectors of the U.S. economy.
Established in 1975, the Committee on Foreign Investment in the United States (CFIUS) is a powerful interagency panel that screens foreign transactions with U.S. firms for potential security risks. Lawmakers expanded the committee’s powers in 2018 amid a rising tide of Chinese investment, and in 2022, President Joe Biden issued the first set of specific criteria for the committee to identify national security threats. Meanwhile, other Western countries, from Australia to the United Kingdom, are tightening their own scrutiny of foreign investments.
This week, the Liberian Senate instructed its Committee on Labor and Judiciary to probe the conditions of workers at Firestone.
The Senate’s investigation was triggered by Margibi County Senator Nathaniel F. McGill’s communication, drawing Senators’ attention to a growing complaint by workers at the Firestone rubber plantation.
According to Senator McGill’s communication also stated that many workers are under contract because Firestone outsourced most of its farms to contractual management agreements.
According to him, aggrieved workers have consistently complained about unjust labor, odd hours without pay, and no benefits such as school and medicals for workers and their families, including complains of unsafe working conditions, and dehumanizing labor practices by their contractual managements.
“I request the indulgence of the Liberian Senate to invite the Firestone management to bring before this Senate the management of all contractual service providers under whose management these employees are working,” McGill requested.
Senator Nathaniel McGill, is among four other Senators including Senators Emmanuel Nuquay of Margibi county, Nimba County Senator Prince Y. Johnson, Rivercess Senator Bill Twehway, and Grand Kru county Senator Albert Chie.
Details of the U.S. Government sanction against Senator McGill accuses him of ‘receiving unjustified stipend from various Liberian government institutions and using his position to prevent his misappropriation from being discovered. McGill regularly distributes thousands of dollars in undocumented cash to other government officials for government and non-government activities.
Senator McGill further wants the company to provide an explanation and context on Liberian citizens’ complaints.
He added that when Firestone first came to the country, the Liberian people were employed and they had benefits.
Later, McGill noted, Firestone couldn’t manage the farm, so it turned it over to contractors, who made Firestone workers contractors.
Sen. McGill said that most of those contractors do not have guarantee contracts. He lamented that some of the Liberian contractors who are now managing those farms employed citizens and deprived them of their benefits.
“They worked so hard, and some said when their return comes at tokens, they walked away with about US$5 per month,” McGill explained.
“Their children do not attend school because the Firestone school cannot accommodate those contractors’ children.”
“I guess situations like these are happening in other plantations, and it’s good that the Senate has seized the matter. I hope the committees work fast to have it under control.”
He noted that if the Senate does not act fast, there will be some disturbances in the county.
This week also, the lower House summoned the management of Firestone Liberia along with the Minister of Labor and Director General of the Bureau of Concessions.
The Firestone management was invited to plenary to respond to allegations by Rep. Ivar K. Jones (District 2, Margibi County) regarding Firestone Liberia’s alleged violation of certain provisions of the 2008 Amended and Restated Concession Agreement, as amended in 2019, while the Minister of Labor, Cllr. Cooper Kruah, and Director General of the National Bureau of Concessions, Atty. Edwin N. Dennis, were also summoned for “grossly failing to fully implement” the agreement.
Specifically, Firestone management was asked to address alleged violations of Sections 9, 10.1, and 11 of the Concession Agreement, and the issue of contract tapping within the concession area. Sections 9, 10.1, and 11 concern the provision of medical care, education, and housing for employees of Firestone Liberia and their dependents, respectively.
Rep. Jones had alleged that Firestone Liberia laid off many of its employees and outsourced the tapping aspect to private firms, signing agreements with these firms to prioritize the redundant workers when hiring. This practice, he said, left many redundant workers unemployed. Additionally, he claimed that those hired by the contractors and their dependents were denied basic benefits like housing, education, health, and retirement.
Taking the witness stand, Firestone Liberia General Manager Seamus Gunton said the company has always complied fully with its obligations under the Concession Agreement. He explained that Firestone Liberia introduced contract tapping within the concession pursuant to Section 7.1 of the Concession Agreement, which permits Firestone Liberia to “engage in the production and operate its business in the manner that, in its sole discretion, it deems best suitable.”
It also states that Firestone Liberia shall “produce rubber products in such quantities as in [its] sole discretion deems appropriate taking into account world market conditions of rubber products, economic conditions in Liberia and abroad…” Further, it states: “Firestone Liberia shall provide timely information to the Government regarding any business decision that [it] reasonably determines may have a substantial social or economic impact in Liberia, so as to permit appropriate planning and response by Government.”
Gunton stated that the outsourcing of tapping to contractors in 2019 was therefore within the spirit and intent of the concession agreement. He explained that Firestone Liberia’s management team made this “difficult but necessary” decision because, at the time, the price of rubber was severely depressed on the international market, rubber theft within the concession area was uncontrollably high, and the company was operating at a significant and unsustainable net loss, while also rehabilitating the farm with steep overhead and operational obligations under the Concession Agreement. “We were at a very critical juncture,” he noted.
He stated that the company’s goal in 2019 was to continue operations while mitigating the risk of closure by working with the Government of Liberia, employees, and stakeholders to find creative solutions to remain a viable entity. Consequently, the Government of Liberia and Firestone Liberia formed a high-level Working Group to discuss and find meaningful and practical solutions to address the severe economic conditions impacting the company’s operations and the rubber industry in general.
Concluding his testimony, Gunton read an excerpt from a statement by his immediate predecessor, Mr. Don F. Darden, when he (Darden) appeared before the Plenary in 2020 on this very issue:
“Mr. Speaker, Sections 9, 10.1, and 11 of the Concession Agreement mandate Firestone Liberia to provide schooling, medical care, and housing for its employees and their dependents. Firestone Liberia has fully complied and will continue to comply fully with its obligation under the Concession Agreement. The employees of the Tapping Contractors are not Firestone Liberia employees and therefore not covered under Sections 9, 10.1, and 11 of the Concession Agreement. However, in an effort to support local Liberian businesses, since tapping contracts are reserved exclusively for Liberian citizens and businesses, and as part of our corporate social initiatives, Firestone Liberia is working with the tapping contractors to ensure that their employees and dependents receive education and medical care commensurate with what is being provided within the Firestone School System and at Duside Hospital. More importantly, Firestone Liberia is committed to ensuring that all students within the Concession, including those divisions under contract tapping, attend school from elementary to senior high school, and that the employees and dependents of the tapping contractors receive medical care.”
To further allay Rep. Jones’ concern regarding education within the contract tapping divisions and the concession area generally, he said the company welcomes discussions with this august body, the Margibi Legislative Caucus, and the Ministry of Education on how to strengthen the school system across the concession area.
Following Gunton’s testimony, the lawmakers were furious and called for outsourcing rights to be reviewed and abolished.
“That particular law that was signed in the labor law, giving rights to concessionaires to outsource, I believe that law should be thrashed and we should revisit it to give rights to our people,” said Rep. Alfred Flomo (District #4, Rivercess County).
“If our people are denied employment opportunities, you deny their children basic education, medical care, housing, and retirement benefits. When you are old, you must get a retirement benefit so that you can live on that.”
Rep. Jones, the proponent of the communication, was backed by Montserrado County District #3 Lawmaker, Sumo Mulbah, who also called for the clause to be reviewed. A motion was adopted to forward the investigation to the Committee on Labor, Concessions, Investment, and Judiciary for further investigation.
