Deal #3464

Location #1

Spatial accuracy level
Administrative region
Location
Maryland, Liberia

Target country
Liberia
Comment on location
Getetabo

Location #2

Spatial accuracy level
Administrative region
Location
River Gee, Liberia

Target country
Liberia

Land area

Intended size (in ha)
35000
Size under contract (leased or purchased area, in ha)
[2011] 35000
Size in operation (production, in ha)
[2012] 4500
Comment on land area
Contract states: 27,000 hectares in size from which an area of 22,000 hectares will be mutually selected to be part of the concession area and an area equal to 5,000 hectares of land will be mutually selected for the outgrowers' program. Thus total size is 35000ha (contract states existing land size is 8000ha not 8800ha). Another data source states of the total 35,000 ha: 4,500 hectares are currently planted with rubber trees, which are to be progressively replanted, 25,500 hectares will be available to extend the CRC plantations, 5,000 hectares will be devoted to the cultivation of rubber by peasant farmers. Another data source states size is 27316.305 ha.

Intention of investment

Intention of the investment
Non-food agricultural commodities, Agriculture unspecified

Nature of the deal

Nature of the deal
Lease
Comment on nature of the deal
Contract is renewable. Cavalla Rubber Corporation and the Government shall meet not later than 10 years before the expiration of the contract to discuss the extension of the contract. Contract states duration of lease is 50 years including 7 years for rehabilitation. Another data source states 25 years.

Negotiation status

Negotiation status
[2011] Concluded (Contract signed)
Comment on negotiation status
In 2008 the current owner obtained a 60% share in the company. This was extended to 100%. Contract signed in 2011- 06/06/2011 (date of ratification).

Implementation status

Implementation status
In operation (production)

Leasing fees

Annual leasing fee
10000
Annual leasing fee currency
US Dollar ($)
Annual leasing fee type
for specified area
Comment on leasing fees
The company paid a total of US$10,000 for surface rental for the period 1 July 2010-30 June 2011. Contract states the company shall pay annually a surface rental fee of US $2.00 per acre within the developed area and US $1.00 per acre of undeveloped land within the concession. This amount shall be subject to inflationary adjustment.

Contract farming

Contract farming
Yes
On leased / purchased area
Yes
On leased / purchased area (in ha)
5000
Comment on contract farming
Contract states: Cavalla Rubber Corporation shall establish an outgrower's program within 3 years of the effective date.Cavalla Rubber Corporation shall exclusively develop and manage the land designated for such program on a cost recovery basis for the benefit of the outgrowers as shareholders in organized cooperatives. Cavalla Rubber Corporation shall have the exclusive right to, and commits to, purchase produce harvested from this program.

Contract #1

Contract date
2011-08-17
Duration of the agreement (in years)
50

Number of total jobs created

Jobs created (total)
Yes
Comment on jobs created (total)
Contract states: Cavalla Rubber Corporation may not employ non-Liberian nationals for unskilled labor positions. Cavalla Rubber Corporation shall give preference to qualified Liberian nationals for employment at all levels of skilled positions (financial, accounting, technical, administrative, supervisory, and senior management positions).

Operating company

Comment on investment chain
Since January 2012 wholly-owned subsidiary of SIPH, SIFCA's rubber division. SIPH is in turn owned 55.6% by SIFCA, 20% Michelin, 24.4% by other shareholders through the Paris stock exchange.

 

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Data source #1

Data source type
Government sources
File
Comment on data source
Leiti Ernst & Young report

Data source #2

Data source type
Research Paper / Policy Report
File
Date
2014-11-03
Comment on data source
Commercial Farms in Africa- received from Ward

Data source #3

Data source type
Contract
File
Date
2011-01-21
Open Contracting ID
ocds-591adf-6994803993
Comment on data source
Concession agreement

Data source #4

Data source type
Research Paper / Policy Report
File
Comment on data source
Grain- The global farmland grab in 2016: how big, how bad?

Data source #5

Data source type
Other (Please specify in comment field)
File
Comment on data source
LEITI Companies Database

Promised benefits for local communities

Promised benefits for local communities
Other
Comment on promised benefits for local communities
Cavalla Rubber Corporation shall annually contribute US$ 5.00 per hectare in the developed area to a community development fund. The fund shall be administered by a committee consisting of not more than 10 members nominated and selected by the surrounding community, the Government and Cavalla Rubber Corporation, of which half shall be nominated by Cavalla Rubber Corporation. The committee shall develop an annual budget in consultation with the Government, Cavalla Rubber Corporation, or as otherwise required by law. Cavalla Rubber Corporation shall also contribute 1% of each of its annual gross sales of Rubber Products and Oil Palm Products, Processed-Oil Palm and Oil Palm By-products, or such amounts as are required by law, to the Rubber Development Fund and the Oil Palm Development Fund.

Former land owner (not by constitution)

Former land owner
State
Comment on former land owner
Company started operating before 1985 as state-owned enterprise. Privatised in 1985.

Former land use

Former land use
Commercial (large-scale) agriculture

Former land cover

Former land cover
Cropland

Detailed crop, animal and mineral information

Crops area
Oil Palm, Rubber tree

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
Rubber production

Water extraction envisaged

Water extraction envisaged
Yes
Comment on water extraction envisaged
Cavalla Rubber Corporation has the exclusive right to take and use, free of charge, but not to sell or distribute without written permission from the Government, water within the concession area. However, such use must not interfere with the rights of third parties or with use by the Government, and must not deprive any lands, tribes, villages, towns, houses or watering places for animals of a reasonable supply of water where such water has customarily been used.

How much do investors pay for water and the use of water infrastructure?

Comment on how much do investors pay for water
Water within the concession area is free of charge.

Overall comment

Overall comment
Started as state-owned enterprise. Carvalla Rubber acquired 60% of the project in 2008 and full ownership in 2011 which was rectified with a new 50-year contract.

March 19, 2019, 2 p.m.

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July 23, 2013, 1:41 p.m.

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March 25, 2013, 12:33 p.m.

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