Town of Lolobli

21/07/10

Grand Bassa County, FDA Districts 1 and 2. Between Latitudes 6 16'12''- 6 20'24'' N and between Longitudes 10 6'-0'' - 10 12'0''

Akewa Group of Companies

Area A3

The contract is not renewable. Limited extensions are available for force majeure under section B.9 of the contract.

Timber (Wood)

5,000 hectares

Forestry Development Authority

2010

Akewa Group of Companies shall conduct operations in a manner that promotes the sustainable development of forest resources and environmental protection for the common good of the people of Liberia

Akewa Group of Companies shall comply with the requirements contain in the Liberian code of forest harvesting practices for protection of plants, animals and cultural resources.

Protection of environment and contract area: Akewa Group of Companies shall conduct all operations and activities using only environmentally sound forest harvesting practices that conform to: i) the forest management guidelines; ii) the Liberia code of forest harvesting practices; and iii) internationally accepted, scientific principles and practices applicable to forest operations and timber processing. Akewa Group of Companies shall conduct all operations and activities so as to avoid waste and loss of natural resources and to protect natural resources from damage, as well as to prevent pollution and contamination of the environment. Akewa Group of Companies shall conduct all operations and activities so as to prevent polluting the surrounding environment. Watercourse protection: Akewa Group of Companies shall comply with all requirements for watercourse protection contained in the Liberia code of forest harvesting practices. Prevention of Pollution: Akewa Group of Companies shall provide for the proper disposal of sawdust, mill, and other wastes so as to prevent pollution or contamination to the environment or to rivers, streams, and other waterways, and to prevent such wastes from becoming a nuisance or injurious to persons or property. Akewa Group of Companies shall take all reasonable precautions to prevent pollution of air, soil, and water by its operations. Akewa Group of Companies shall not service tractors, trucks, or other equipment where servicing is likely to result in pollution to soil or water. Akewa Group of Companies shall furnish oil-absorbing mats under all stationary equipment or equipment being serviced to prevent leaking of petroleum-based products from contaminating soil and water resources. Akewa Group of Companies shall remove and dispose of all contaminated soil, vegetation, debris, vehicle oil filters drained of free-flowing oil, batteries, oily rags, and waste oil resulting from use, servicing, repair, or abandonment of equipment. If Akewa Group of Companies' operations result in pollution to soil or water, Akewa Group of Companies shall conduct a cleanup and restoration of the polluted site to the satisfaction of the Forestry Development Authority. If Akewa Group of Companies maintains storage facilities for oil or oil products in the contract area, it shall take appropriate preventive measures to ensure that any spill of oil or oil products does not enter any stream or other waters. If the total oil or oil products storage exceeds 5,000 liters, Akewa Group of Companies shall prepare a spill prevention control and counter measures plan. Akewa Group of Companies must notify the Forestry Development Authority and appropriate agencies of all spills of oil, oil products, or hazardous substances on or in the vicinity of the contract area. Akewa Group of Companies shall take whatever action may be safely accomplished to contain all spills.

With written governmental approval and subject to conditions imposed by the government or the social agreement, Akewa may use free of charge any water found within the contract area and any water within the public domain within 5 kilometers of the contract area for purposes of its operations under the contract, provided that Akewa does not deprive any lands, tribes, villages, towns, houses, or watering places for animals of a reasonable supply of water in so far as such water has, through custom, been used. Nor shall Akewa interfere with the rights of water enjoyed by any persons under the Land and Native Right Ordinance. Akewa shall ensure that its use of water in no way results in environmental damage or creates other hazards.

The Forestry Development Authority shall convene an ad hoc contract audit committee to promptly complete an annual contract audit. The Government  reserves the right to allow unscheduled third party and civil society monitoring of Akewa Group of Companies' contract operations, with access to all financial records, management plans, and annual operational plans to facilitate monitoring activities, though any civil society monitoring organization cannot publish confidential business information protected by law without written consent from Akewa Group of Companies.

Stumpage fees: Akewa Group of Companies shall pay log stumpage fees to the Government in the amounts and at the times established by Part II of Forestry Development Authority Regulation 107-07. The parties will use the methods set out in sections 26 and 27 of Forestry Development Authority Regulation 108-07, establishing a chain of custody system, to determine volumes and grades. Akewa Group of Companies shall prevent logs from being processed or exported before it has paid the log stumpage fees. Akewa Group of Companies must pay forest product fees to the Government in the amounts and at the times established by part IV of Forestry Development Authority Regulation 107-07.

Akewa Group of Companies shall make annual land rental bid payments and pay annual land rental fees to the Government. Land rental bid payments are annual payments based on the bid provided in the bid opening ceremony multiplied by the surface area in hectares of the contract area. The Forestry Development Authority shall increase the payment if required due to negotiations under section B4.12 of the contract. Land rental fees include an annual contract administration fee, an annual area fee, and an annual coupe inspection fee as required under sections 32, 33, 34 of Forestry Development Authority Regulation 107-07.

Before the first annual operating season, Akewa Group of Companies shall execute the social agreements required by Forestry Development Authority Regulation 105-07. The Forestry Development Authority shall promptly review and either attest to or reject the social agreements, in conformity with Forestry Development Authority Regulation 105-07, section 36.

Akewa Group of Companies shall give preference to competent and qualified individuals living in and near the contract area, and particularly to individuals from communities benefitting from Akewa Group of Companies' social agreements. Akewa Group of Companies shall not import unskilled labor from outside Liberia and shall comply with all training and employment obligations required by law or regulation.

Akewa Group of Companies shall allow the Government and public to use any roads constructed and/or maintained by Akewa Group of Companies, to have access over the contract area, and to use communication lines developed by Akewa Group of Companies, provided it does not amount to encroachment or unduly prejudice or interfere with Akewa Group of Companies' operations. In addition, Akewa Group of Companies shall allow the Government to construct roads, highways, railways, telegraph and telephone lines, and other facilities within the contract area, so long as they do not unreasonably interfere with Akewa Group of Companies' activities and the government provides fair compensation for damage caused, including property damage and economic losses.

Akewa Group of Companies shall identify in its annual operational plan areas requiring special measures for the protection of plants, animals and cultural resources, and the special protection measures needed to protect them. Akewa Group of Companies shall protect these areas from damage or removal during its operations. If additional areas, resources, or species are identified before or during the term of the contract, either party shall promptly notify the other party in writing and Akewa Group of Companies shall cease operations in the affected area if it is determined there is a risk of damage to such areas, resources, or species from continued operations. Akewa Group of Companies may not fell trees or operate wheeled or track-laying equipment in any special protection area, except on approved roads, landings, tractor roads, or skid trails. Akewa Group of Companies shall immediately notify the Forestry Development Authority of a disturbance in any special protection area and shall immediately halt operations in the vicinity of the disturbance until it is authorized to continue. Akewa Group of Companies shall not facilitate the harvest of bush meat. Akewa Group of Companies shall, within the contract area, close and block all roads and skid trails so that they are no longer passable by vehicle when no longer necessary for its operations. It shall also not let any vehicle be used in connection to hunt or transport hunters or bushmeat.

Akewa Group of Companies shall adhere with all training and employment regulations required by Liberian law.

Akewa Group of Companies shall  ensure that all infrastructure installed complies with the Liberia code of forest harvesting practices and other applicable laws, and is designed, constructed and maintained to avoid unreasonable risk to safety, health, welfare, and the environment. The Forestry Development Authority will perform an inspection of a completed installation within 15 days of Akewa Group of Companies’ request. Akewa Group of Companies shall request approval for any significant land-disturbing activity like construction or major maintenance. All infrastructures revert to the Government upon termination of the contract. Akewa Group of Companies shall leave such facilities in a maintained and safe running order.

Use of public lands outside contract area: Akewa Group of Companies shall not use public land otuside the contract area, unless Akewa Group of Companies has express, written permission from the Forestry Development Authority. Before requesting permission, Akewa Group of Companies shall consult with all potentially affected communities that are party to social agreements with Akewa Group of Companies. Akewa Group of Companies shall make a written record of the time, place, and general content of these consultations. Akewa Group of Companies' requests to the Forestry Development Authority to use such public lands must be in writing. For convenience, Akewa Group of Companies may make such requests in its annual operational plan. If made in this manner, these requests may be expressly and clearly identified as requests to use public land outside the contract area. The Forestry Development Authority shall approve or deny such requests as part of its review of the annual operational plan. It may deny the request while approving the remainder of the plan. The Forestry Development Authority shall not unreasonably deny permission to use such land. The Forestry Development Authority and Akewa Group of Companies shall negotiate the terms and conditions under which an easement or other use rights may be exercised. If Akewa Group of Companies occupies lands, the terms shall include payment of area fees and an amount for land rental at the land rental bid rate. The right to use such land does not extend to the right to harvest timber, unless the timber is taken to clear land for a right-of-way or yarding area. Use of private lands: Akewa Group of Companies may use private land with the express, written permission of the land owner. If Akewa Group of Companies is unable to obtain the permission of the land owner for such use, then use is limited to rights of way, and any compensation is governed by chapter 11 of the National Forestry Reform Law of 2006 and Forestry Development Authority Regulation 110-07. With or without permission of the land owner: i) Akewa Group of Companies shall not seek a use, lease, right-of-way, or easement that substantially interferes with the operations of another previously issued forest management contract or timber sale contract; and ii) Akewa Group of Companies shall not interfere with any good faith exercise of third-party rights to timber or forest products, including customary rights, without permission of the third party. For the avoidance of doubt, section B3.46 (Indemnificaton and Liability) of the contract applies to any claims against the Government for Akewa Group of Companies' damage to or use of private lands. In acting under the contract, even if done with Forestry Development Authority's knowledge and consent, Akewa Group of Companies does not act as Forestry Development Authority's agent.

As part of its forest management plan, Akewa Group of Companies must include an up-to-date business plan demonstrating, to Forestry Development Authority's satisfaction, that Akewa Group of Companies has the technical and financial capacity to manage the contract area sustainably. The business plan must conform to Forestry Development Authority's guidelines for forest management planning.

Akewa Group of Companies shall use all reasonable means to prevent encroachment by unauthorized persons, but shall not employ or in any way use armed security guards

Failure by Akewa Group of Companies to submit a claim for resolution within 60 days of a disputed action by the Forestry Development Authority shall relinquish the Forest Development Authority from any and all obligations whatsoever related to the dispute. Any claim arising under the contract shall be decided by a contracting officer within 60 days of receipt of the claim (or a longer time as agreed by parties), whose decision shall be consistent with law and shall be based on strict interpretation of contract requirements and the established facts concerning the claim. The contracting officer shall prepare a written decision and furnish a copy to Akewa Group of Companies. The decision will be final and conclusive if, within 45 days from receipt, Akewa Group of Companies fails to appeal the decision to an appropriate Liberian court.

Akewa shall not assign or transfer the contract or any interests, rights, privileges, or obligations under the contract, without prior written approval from the Government by and through the Ministry of Justice, Ministry of Finance, and the Forestry Development Authority. The Forest Development Authority shall not consent to any assignment or transfer of the contract, except in compliance with the requirements of Authority Regulation 104-07, section 71.

The contract is governed by Liberian law

Operations may be delayed or interrupted for reasons of force majeure. Failure to fulfill any terms or conditions of the contract due to force majeure (aside from Akewa’s obligations to make payments of money that accrued before the force majeure commenced) shall not be deemed to be a breach of the contract.  After the force majeure cause has stopped, any party who failed to perform its obligations because of force majeure will take all reasonable steps within its power to make good and resume, with the least possible delay, compliance with obligations.

In the event of any damage, loss, or injury caused by acts or omissions of Akewa Group of Companies' agents, Akewa Group of Companies is liable for that damage, loss or injury according to Liberian law. Subject to the written approval of the Government, the terms of the social agreement, and such conditions as the Government may impose, Akewa Group of Companies may use, free of charge, gravel, sand, clay, and stone found within the public land on the contract area for purposes necessary or useful to Akewa Group of Companies' operations and activities under this contract. Such material may not be sold. Upon completion of use or termination of the contract, any excavation shall be restored by Akewa Group of Companies, as far as may be reasonably practical, to its original condition and, if required by the Government, fenced or otherwise safe-guarded.

Annual Reports: a) Akewa Group of Companies shall, within 90 days of completing operations under each annual operational plan, provide to the Forestry Development Authority and the Ministry of Finance a written activity report that describes the previous year's operations, including the following: i) identification of each harvesting block in which Akewa Group of Companies carried out operations during the prior year; ii) for each harvesting block identified, a full description of the timber produced, including a description of the number, volume, and quality of trees per species felled; and iii) any other information reasonably requested by the Forestry Development Authority. Other Reporting Requirements: Akewa Group of Companies shall keep the contracting officer fully and regularly informed as to Akewa Group of Companies' operations and any other activities related to the contract. Akewa Group of Companies shall comply with the Revenue and Finance Law concerning reporting related to taxes and fees. Upon written request by the Forestry Development Authority, Akewa Group of Companies shall provide to the Forestry Development Authority all documents required by it to determine Akewa Group of Companies' compliance with its monetary obligations. Upon written request by the Forestry Development Authority, Akewa Group of Companies shall provide to it all other information of whatever kind that the Government or its agents may request to fully evaluate Akewa Group of Companies' compliance with the contract and all legal requirements related to Akewa Group of Companies' operations.