Foreign companies mainly carry out harvesting and processing activities in the Liberian forestry sector. Currently, there are 27 registered companies and 22 primary sawmills in Liberia (see Annex 1). Charges on roundwood production are based on the volume harvested (in cubic meters) and are levied on all species in all types of land ownership. In addition, there are a number of other charges on roundwood production.
Volume-based charges are levied on the whole length of every tree felled for commercial purpose, irrespective of species, grade and intended use. They comprise the following four types of charge:
Severance Charge: USD 1.50/m3;
Reforestation Charge: USD 5.00/m3 - revenue generated from this charge is intended to be used solely for funding reforestation (artificial plantation) projects and programs;
Conservation Charge: USD 4.00/m3 for Class A species and USD 2.50/m3 for Class B species (see ) - revenue collected is for implementation of conservation activities; and
Forest Research Charge: USD 1.00/m3 - revenue generated from this charge is for research and development activities.
Table 8 Species allocated to each species class for the purpose of charge assessment
|
Class A species |
Class B species |
||
|
Sipo/Utile |
Abura/Bahia |
Bete/Mansonia |
Oboto/Memea |
|
Makore |
Wawa/Obeche |
Amazakoue |
Ceiba/Fromagar/Cottonwood |
|
Sapele |
Tetra/Sikon |
Tali |
Avodire |
|
Kossipo |
Naga |
Danta/Kotibe |
Koto |
|
Tiama/Edinam |
Didelootia |
Illomba |
Antiaris |
|
Khaya/Acajou |
Ekki/Azobe/Ironwood |
Afzelia.Doussie |
All other species |
|
Lovoa/Dibetou |
Iroko |
Movingui |
|
|
Niangon/Whismore |
Frake |
Bombax/Kondroti |
|
|
Guarea/Bosse |
Aiele |
Dahoma/Dabema |
|
|
Framire |
Limbali |
Sacloglottis/Ozouga |
|
|
Aningre |
Kusia |
Faro/Daniella |
|
In addition to the volume-based charges, a Land Rental Fee (USD 0.50 per acre per month) is charged in each Agreement area (the granting of non-concession or salvage permits as been abolished). For harvesting in private forests, producers pay all production charges except the Land Rental Fee. This is because such land is not owned by the Government. There are also special levies (called administrative fees) and they are shown in Table 9.
Table 9 Administrative fees on roundwood production
|
Type of fee |
Amount |
Units |
|
Annual Registration Fee |
500.00 |
USD per year |
|
Survey Permit Fee |
2,000.00 |
USD per permit |
|
Hammer Fee |
600.00 |
USD as and when required |
|
Forest map fee |
300.00 |
USD as and when required |
|
Waybill (local and export) fee |
150.00 |
USD as and when required |
|
Annual coupe/block cutting fee |
25/coupe |
USD as and when required |
|
Performance Bond |
150,000.00 |
USD per agreement |
|
Forest Resource Utilization Contract Fee |
5,000.00 |
USD per contract |
|
Port charges |
|
|
|
1) Using port equipment (delivered products at port yard) |
10.00 |
USD per m3 |
|
2) Delivery to ship hook |
10.00 |
USD per m3 |
|
3) Using shippers’ equipment |
5.00 |
USD per m3 |
|
4) Custom inspection fee |
7.50 |
Percent of FOB value |
|
5) Storage fee (per export parcel) |
6.00 |
USD per m3 |
|
6) Marking and grading fees |
1.25 |
Percent of FOB value |
Note: the Performance Bond is paid prior to operation by the concessionaire is and refundable upon satisfactory performance. The amount of the Performance Bond was set in the Act creating the FDA on 20 December 1976. Marking and grading fees are charged for the inspection and grading of exports and are collected by BIVAC, a subsidiary of a foreign inspection company.
The GOL does not impose road and bridge fees, as logging companies finance the construction of their own logging roads and bridges. These roads and bridges also serve the local communities, by providing rural infrastructure that helps to increase agricultural production and bring about improvements in the livelihood of rural people. However, although it is the responsibility of the GOL to construct and maintain major highways, when the government does not have funds for this, a logging company will often be requested to carry out this work (under a Memorandum of Understanding). When this occurs, the cost of the road works is deducted from the charges that should be paid by the company.
Liberia is a unitary state, so there is no regional variation in the forest charges. All forest harvesting rights are covered under the Forest Products Utilization Agreements and charges are the same from publicly an d privately owned forest land irrespective of location. However, charges are varied (by species and wood type or quality) for roundwood (i.e. the Conservation Charge) and processed forest products designated for export. For wood traded on the domestic market, wood is graded only for pricing purposes. No charges are levied on processed forest products designated for domestic consumption. This strategy is designed to encourage domestic processing.
The production of non-wood forest products (NWFPs) and services is mostly for subsistence. There is no organised establishment (e.g. co-operative) for management and development of NWFPs and information about the sector is scarce. Hence, the contribution of this sector to local incomes, GDP and foreign exchange earnings is unknown. However, the livelihood of the bulk of the population (maybe 70-80 percent) is dependent on these products.
Extraction or harvesting of NWFPs occurs in both publicly and privately owned forests and is controlled by regulations promulgated and enforced by the FDA. Currently, charges for the production and sale of NWFPs and services are not based on the amounts extracted and sold, but are levied as annual permit fees (see Table 10). These fees are the same for harvesting in publicly and privately owned forests.
Table 10 Annual permit fees for production and sale of NWFPs and services
|
Commodity and type of permit |
Permit fee per year |
|
|
(in L$) |
(in USD) |
|
|
Rattan |
8,000.00 |
|
|
Charcoal (producers) |
4,000.00 |
|
|
Charcoal (sellers) |
4,000.00 |
|
|
Round poles |
4,000.00 |
|
|
Fuelwood |
1,000.00 |
|
|
Bamboo |
200.00 |
|
|
Palm wine |
200.00 |
|
|
Pine wine (Raphia) |
200.00 |
|
|
Hunting permit |
|
|
|
(a) Local hunter |
2,500.00 |
|
|
(b) Local sellers (of bushmeat) |
4,000.00 |
|
|
(c) Tourist |
|
750.00 |
Note: the above fees were introduced in 1998 (Regulation No. 23).
Annual fees are collected for radio masts located in the forest, but there are not any payments for other forest services (e.g. pipelines through the forest, carbon storage, ecotourism development, etc.).
There are no charges on the production of processed forest products except corporate income tax, which is levied on the net profit of every company at a rate of four percent.
Exports of forest products account for about 60 percent of annual production (see Table 16). Charges are based on the volume of production designated as export production rather than actual trade volumes. The charges levied on roundwood and processed forest products comprise two fees: the Industrialization Incentive Fee and the Forest Products Fee.
The Industrialization Incentive Fee (IIF) is levied on the volume of roundwood designated for export and varies according to species. In this context, the designated export volume means the volume that the producer declares they will export. The IIF may or may not be paid before the volume actually goes through the port and the total amount of assessed charges may not be paid in full before shipment.
The IIF currently varies from USD 1.44/m3 to USD 58.56/m3, with the rate varying according to the market value of the species (the historical trend in the IIF from 1979 to 1988 is shown in Table 11). This charging strategy is intended to support sustainable forest management and conservation by reducing the incentive to cut only the most valuable species (“creaming” the crop). It also aims to promote the harvesting of less well known species, in order to increase the total production volume per ha (i.e. increase the harvesting intensity in the forest). Furthermore, the imposition of the IIF discourages the export of roundwood altogether.
Table 11 Changes to the Industrialization Incentive Fee in 1979 to 1988
|
Botanical name |
Trade name |
Fee set in each year (USD per m3) |
|||
|
1979 |
1982 |
1984 |
1988 |
||
|
Entandrophragma utile |
Sipo/Utile |
75.00 |
75.00 |
48.80 |
58.56 |
|
Tieghemelia heckelii |
Makore |
40.00 |
40.00 |
20.80 |
24.96 |
|
Entandrophragma Cylindricum |
Sapele |
35.00 |
35.00 |
18.20 |
21.84 |
|
Entandrophragma candollei |
Kosipo |
35.00 |
28.00 |
13.10 |
15.72 |
|
Entandrophragma angolense |
Tiama/Edinam |
35.00 |
28.00 |
13.10 |
15.72 |
|
Khaya ivorensis/anthotheca |
Acajou/Khaya |
35.00 |
28.00 |
13.10 |
15.72 |
|
Lovoa trichiliodes |
Dibetou/Lovoa |
35.00 |
28.00 |
13.10 |
15.72 |
|
Heritiera utilis |
Niangon |
35.00 |
28.00 |
13.10 |
15.71 |
|
Guarea cedrata |
Bosse/Guarea |
17.00 |
13.00 |
6.40 |
7.68 |
|
Chlorophora spp. |
Iroko |
17.00 |
13.00 |
6.40 |
7.68 |
|
Mansonia altissima |
Bete/Mansonia |
17.00 |
13.00 |
6.40 |
7.68 |
|
Guibourtia ehie< o:p> |
Amazakoue |
15.00 |
12.00 |
5.60 |
6.72 |
|
Triplochiton scleroxylon |
Wawa/Obeche |
15.00 |
12.00 |
5.60 |
6.72 |
|
Terminalia ivorensis |
Framire |
15.00 |
12.00 |
5.60 |
6.72 |
|
Aningeria robusta |
Aningre |
15.00 |
12.00 |
5.60 |
6.72 |
|
Terminalia surperba |
Frake |
5.00 |
4.00 |
2.30 |
2.76 |
|
Erythrophleum spp. |
Tali |
5.00 |
4.00 |
2.30 |
2.76 |
|
Nesogordonia papaverifera |
Danta/Kotibe |
5.00 |
4.00 |
2.30 |
2.76 |
|
Brachystegia leonensis |
Naga |
3.00 |
3.00 |
1.80 |
2.16 |
|
Pyonathus angolensis |
Illomba |
3.00 |
3.00 |
1.80 |
2.16 |
|
Afzelia spp. |
Doussie |
3.00 |
3.00 |
1.80 |
2.16 |
|
Tetraberlinia tubmaniana |
Sikon |
3.00 |
3.00 |
1.80 |
2.16 |
|
Distemonanthus benthemianus |
Movingue |
3.00 |
3.00 |
1.80 |
2.16 |
|
Pterrygota macrocarpa |
Koto |
3.00 |
3.00 |
1.80 |
2.16 |
|
Nauclea spp. |
Kusia/Bilinga |
3.00 |
3.00 |
1.80 |
2.16 |
|
Canarium schweinfurthii |
Aiele |
3.00 |
3.00 |
1.20 |
1.44 |
|
Lophira alata |
Azobe/Ekki |
2.00 |
2.00 |
1.20 |
1.44 |
|
All other species |
n.a. |
2.00 |
2.00 |
1.20 |
1.44 |
Note that the charges by species were affected by the 10 percent Special Trade Depression Allowance (STDA) and later increases in charges. The IIF set in 1988 is still applied at the time this report was written.
This charge is levied on processed forest products designated for export. The charge decreases according to degree or level of processing (of the sawnwood, veneer, plywood, etc.). The aim of this charge structure is to promote domestic processing and industrialisation of the forestry sector in Liberia. The historical trend in the Forest Products Fee is shown in Table 12.
Table 12 Changes to the Forest Products Fee in 1979 to 1984
|
Trade Name |
Fee set in each year by amount of processing (USD per m3) |
||||||||
|
1979 |
1982 |
1984 |
|||||||
|
STT |
SEU |
SED |
STT |
SEU |
SED |
STT |
SEU |
SED |
|
|
Sipo/Utile |
60.00 |
15.00 |
2.00 |
51.00 |
15.00 |
2.00 |
30.60 |
9.00 |
1.20 |
|
Makore |
34.00 |
10.00 |
2.00 |
22.95 |
10.00 |
2.00 |
13.80 |
6.00 |
1.20 |
|
Sapele |
30.00 |
10.00 |
2.00 |
20.40 |
10.00 |
2.00 |
12.20 |
6.00 |
1.20 |
|
Kosipo |
30.00 |
10.00 |
2.00 |
18.70 |
10.00 |
2.00 |
7.50 |
4.00 |
0.80 |
|
Tiama/Edinnam |
30.00 |
10.00 |
2.00 |
18.70 |
10.00 |
2.00 |
7.50 |
4.00 |
0.80 |
|
Acajou/Khaya |
30.00 |
10.00 |
2.00 |
18.70 |
10.00 |
2.00 |
7.50 |
4.00 |
0.80 |
|
Dibetou/Lovoa |
30.00 |
10.00 |
2.00 |
18.70 |
10.00 |
2.00 |
7.50 |
4.00 |
0.80 |
|
Niangon |
30.00 |
10.00 |
2.00 |
18.70 |
10.00 |
2.00 |
7.50 |
4.00 |
0.80 |
|
Bosse/Guarea |
15.00 |
5.00 |
1.00 |
8.50 |
5.00 |
1.00 |
3.40 |
2.00 |
0.40 |
|
Iroko |
15.00 |
5.00 |
1.00 |
8.50 |
5.00 |
1.00 |
3.40 |
2.00 |
0.40 |
|
Bete/Mansonia |
15.00 |
5.00 |
1.00 |
8.50 |
5.00 |
1.00 |
3.40 |
2.00 |
0.40 |
|
Amazakoue |
13.00 |
5.00 |
1.00 |
7.75 |
5.00 |
1.00 |
3.10 |
2.00 |
0.40 |
|
Wawa/Obeche |
13.00 |
5.00 |
1.00 |
7.65 |
5.00 |
1.00 |
3.10 |
2.00 |
0.40 |
|
Framire |
13.00 |
5.00 |
1.00 |
7.65 |
5.00 |
1.00 |
3.10 |
2.00 |
0.40 |
|
Aningre |
4.00 |
2.50 |
1.00 |
3.00 |
2.50 |
1.00 |
3.10 |
2.00 |
0.40 |
|
Frake |
4.00 |
2.50 |
1.00 |
3.00 |
2.50 |
1.00 |
nil |
nil |
nil |
|
Tali |
4.00 |
2.50 |
1.00 |
3.00 |
2.50 |
1.00 |
|||
|
Danta/Kotibe |
4.00 |
2.50 |
1.00 |
3.00 |
2.50 |
1.00 |
|||
|
Naga |
2.00 |
1.50 |
1.00 |
2.00 |
1.50 |
1.00 |
|||
|
Illomba |
2.00 |
1.50 |
1.00 |
2.00 |
1.50 |
1.00 |
|||
|
Doussie |
2.00 |
1.50 |
1.00 |
2.00 |
1.50 |
1.00 |
|||
|
Sikon |
2.00 |
1.50 |
1.00 |
2.00 |
1.50 |
1.00 |
|||
|
Movingui |
2.00 |
1.50 |
1.00 |
2.00 |
1.50 |
1.00 |
|||
|
Koto |
2.00 |
1.50 |
1.00 |
2.00 |
1.50 |
1.00 |
|||
|
Kusia/Bilinga |
2.00 |
1.50 |
1.00 |
2.00 |
1.50 |
1.00 |
|||
|
Aiele |
2.00 |
1.50 |
1.00 |
1.50 |
1.25 |
1.00 |
|||
|
Azoke/Ekki |
2.00 |
1.50 |
1.00 |
1.50 |
1.25 |
1.00 |
|||
|
All other species |
1.50 |
1.50 |
1.00 |
||||||
Note: the amount of processing is defined as follows: STT = sawn through and through; SEU = square edged four sides (undressed in the rough); and SED = square edged dressed four sides. The Forest Products Fee set in 1984 is still applied at the time this report was written.
The Model Concession Agreement (contract) makes provisions for other requirements, which are not regarded as charges are similar in nature. Every logging company is required to contribute to national development by, for example, building and operating elementary or junior high schools or a clinic in its area of operation. The logging companies also voluntarily contribute to local community development programs and projects. Such contributions help to cement the social interaction of forest operators with rural people and local communities.
The logging companies enjoy the bulk of the revenue generated from the forestry sector. A comparison of assessed forest charge revenue (excluding Land Rental Fees) from roundwood exports and the export revenue for companies clearly indicates that the majority of the financial benefits from production accrue to producers (see Table 13). From 1998 to 2000, the assessed revenue accounts for about 5 percent of export revenue, while the remaining 95 percent goes to the logging companies. This situation is even more discouraging when the actual revenue collected is compared with export revenue for the same period (see Table 17), because actual revenue collection is only about 30 percent of the total (on average) and arrears amount to 70 percent.
Table 13 Comparison of forest charges to roundwood export revenues in 1998 to 2000
|
Year |
Roundwood export volume |
Assessed forest charge revenue for GOL |
Export revenue for companies |
Proportion of export revenue captured by charges (in percent) |
|
1998 |
80,646 |
809,036 |
12,288,133 |
7 |
|
1999 |
189,940 |
1,319,441 |
21,370,491 |
6 |
|
2000 |
619,056 |
1,319,228 |
65,503,249 |
2 |
Note: more secondary species assessed at the lowest tax rate (e.g. Ekki, Tali, etc.) were exported in 2000 compared to 1999.
There are numerous fines and penalties for breaking forestry laws, rules and regulations. A list of some of the current fines and penalties for breaking the law is given in Table 14.
Table 14 Examples of some of the current fines and penalties for breaking forest laws
|
Violation(s) |
Fines and/or penalties |
|
1. Abandoned logs |
|
|
a) Logs at landing site or deport after 60 days |
Reduce annual coupe, suspend export or withdraw export permit, revoke business registration. |
|
b) Logs in shipping port after 6 months |
Pay amount equivalent to the IIF in addition to fees paid and due. |
|
2. Waybills |
|
|
a) Timber (log) truck load without waybill |
5 times respective fees for log/sawn timber |
|
b) Other charges |
|
|
- Unnumbered or non-hammer marked logs |
4 times the respective fees for the log/sawn timber |
|
- Logs/ bundle not listed in tally sheet |
3 times the respective fees for log/bundle |
|
- Log or bundle not on waybill |
3 times the respective fees for log/bundle |
|
3. Operation without valid permit; felling of trees without valid permit |
Suspension of operation; payment of 3 times applicable forest fees and taxes on products |
|
4. Refusal to honour obligation and/or contravene forestry laws, policies, rules, and regulations |
Withdrawal of permits and or agreement |
|
5. Export quota/export permit and acquisition of processing equipments not fulfilled (non-compliance) |
Producer and exporter pay 4 times amount equivalent to IIF of products exported |
|
6. Felling Niangon logs under 60-cm diameter |
1) confiscation and public auction, or 2) Pay 100% FOB value if product already exported |
|
7. Declassification of logs/processed wood |
Pay 4 times respective fees for products. |
|
8. Encroachment between concessions |
Payment of FOB equivalent of harvested volumes |
|
9. Harvesting in reforestation (artificial) plantation without authorization |
Confiscation and auction of product; if exported, 100% FOB value. |
|
10. Illegal felling of palm and raphlia tree |
L$ 5,000.00 per tree |
|
11. Illicit activities in parks and hunting threatened animals in national Forests |
|
|
a. Possession of weapons |
USD 25-100 or 30 days to 6 months imprisonment |
|
b. Hunting in national park or nature reserves |
USD 500- 1,000 or 6 months imprisonment |
|
i. If leopard or elephant |
USD 500-1,000 or 6 months imprisonment |
|
ii. If animal not leopard |
USD 250-500 or 4-6 months imprisonment, |
|
In case of a and b |
Confiscate animals (a) deposit proceeds into Revenue and (b) confiscate weapon etc. used offence for 6 months |
|
c. Disturbance in an established Park i.e. cutting down trees, farming etc. |
USD 50-500 or 3 months to 1 year imprisonment |
|
d. Fishing without permission |
USD 100-150 or 60-100 days imprisonment |
|
e. Hunting in game reserves |
USD 25-200 or 30 days to 6 months imprisonment |
|
f. No hunting permit/license |
USD 25-500 or 30 days to 1 year imprisonment |
|
g. Hunting of protected animal |
|
|
i) Leopard or elephant |
USD 150-250 or 7-12 days imprisonment |
|
ii) Any other animal |
USD 50-100 or 4-7 days imprisonment |
