Policies Towards Foreign Direct Investment

Government officials describe Liberia as “open for business” and the government supports a Business Climate Working Group (BCWG) to improve the investment climate. A March 2019 BCWG-led forum resulted in an executive order which cancelled Import Permit Declaration requirements and extended residency visas and work permits from one to five years. These improvements have since been renewed. Charged with facilitating foreign investment in Liberia, the National Investment Commission (NIC) develops investment strategies, policies, and programs to attract foreign investment and negotiate investment contracts or concessions. The NIC, the BCWG and other private sector groups, such as the Liberia Chamber of Commerce (LCC), facilitate dialogues through formal business roundtables on investment climate issues. They also meet with investors and government officials to discuss and suggest solutions to critical policy issues.

However, some business leaders report difficulties in obtaining meetings with government representatives to discuss new policies perceived to damage the business climate. In 2020, the BCWG was not actively engaged except that it convened infrequent meetings to discuss and resolve critical regulatory issues affecting the business climate. A weak legal and regulatory framework, lack of transparency in contract award processes, and corruption continue to inhibit foreign direct investment. The 2010 Investment Act prohibits and restricts market access for foreign investors, including U.S. investors, in certain economic sectors or industries. See “Limits on Foreign Control and Right to Foreign Ownership and Establishment” below for more detail.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities may own and establish business enterprises in many sectors. The Liberian constitution restricts land ownership to citizens, but non-Liberians may hold long-term leases. See Real Property, below for further detail. Liberia does not maintain an investment screening mechanism for inbound foreign investment. Per the Investment Act (“The Act”) and Revenue Code, only Liberian citizens may operate businesses in the following sectors and industries:

1. Supply of sand
2. Block making
3. Peddling
4. Travel agencies
5. Retail sale of rice and cement
6. Ice making and sale of ice
7. Tire repair shops
8. Auto repair shops with an investment of less than USD 550,000
9. Shoe repair shops
10. Retail sale of timber and planks
11. Operation of gas stations
12. Video clubs
13. Operation of taxis
14. Importation or sale of second-hand or used clothing
15. Distribution in Liberia of locally manufactured products
16. Importation and sale of used cars (except authorized dealerships, which may deal in certified used vehicles of their make)

The Act also sets minimum capital investment thresholds for foreign investors in certain other business activities, industries, and enterprises. (See Section 16 of the Act: http://www.moci.gov.lr/doc/TheInvestmentActof2010(1).pdf .) For enterprises owned exclusively by non-Liberians, the Act requires no less than USD 500,000 in investment capital. For foreign investors partnering with Liberians, the Act requires no less than USD 300,000 in total capital investment and at least 25 percent aggregate Liberian ownership.

Other Investment Policy Reviews

The government appears not to have undergone a third-party investment policy review to date.

Business Facilitation

All businesses must register with and obtain authorization from the  Liberia Business Registry (LBR)  to conduct business or provide services in Liberia.  LBR services are available to local and foreign companies at its head office in Monrovia. See  http://lbr.gov.lr/ .

Most of Liberia’s commercial laws and regulations are not publicly available online. The NIC chairs an ad hoc cabinet-level Inter-Ministerial Concessions Committee (IMCC) that convenes often lengthy bidding and negotiation processes for long term investment contracts such as concessions.  The establishment of a concession requires ratification by the national legislature, approval by the President, and printing of handbills. The Liberia Revenue Authority (LRA) handles tax payment processes and administration. The National Social Security and Welfare Corporation (NASSCORP) handles related social security processes.

According to the World Bank, establishing a business requires five procedures and 18 days. Foreign companies must obtain investment approval from the NIC if they seek investment incentives. Foreign companies must use local counsel when establishing a subsidiary. If the subsidiary will engage in manufacturing and international trade, it must obtain a trade license from the LBR. For more information about investment laws, bilateral investment treaties, and other treaties with investment provisions, please see  https://investmentpolicy.unctad.org/country-navigator/121/liberia .

Outward Investment

The government neither promotes nor incentivizes outward investment but neither does it restrict Liberian citizens from investing abroad.

Liberia has bilateral investment treaties (BITs) with France, Germany, and Switzerland. It also has a BIT with the European Union under the Economic Community of West African States (ECOWAS) Economic Partnership Agreement. See: https://investmentpolicy.unctad.org/international-investment-agreements/countries/118/liberia . Liberia is a party to the Trade and Investment Framework Agreement (TIFA) with ECOWAS, the ECOWAS Supplementary Act on Investment, the Liberia-U.S. Trade and Investment Framework Agreement, the ECOWAS Energy Protocol, the Cotonou Agreement, the Revised ECOWAS Treaty, the African Union (AU) Treaty, and the ECOWAS Protocol on Movement of Persons, Right of Residence, and Establishment. See: https://investmentpolicy.unctad.org/country-navigator/121/liberia .

Liberia is a signatory to the following investment-related instruments (IRIs): the Multilateral Investment Guarantee Agency (MIGA) Convention, the International Centre for Settlement of Investment Disputes (ICSID Convention), the New York Convention, the UN Code of Conduct on Transnational Corporations, the UN Guiding Principles on Business and Human Rights, ILO Tripartite Declarations on Multinational Enterprises, the World Bank Investment Guidelines, the New International Economic Order UN Resolution, the Voluntary Partnership Agreement with the EU, the Economic Partnership Agreement with the EU, the Charter of Economic Rights and Duties of States, and the Permanent Sovereignty UN Resolution.

Liberia enjoys preferential access to the U.S. market under the Generalized System of Preference (GSP) and the African Growth and Opportunity Act (AGOA). Liberia and the United States do not have a bilateral taxation treaty.  See https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z .

Transparency of the Regulatory System

Companies are required to adhere to the International Financial Reporting Standards (IFRS) consistent with international norms. In many instances, however, authorities do not consistently enforce or apply national laws and international standards. Further, no systemic oversight or enforcement mechanisms exist to ensure that government authorities follow administrative processes. Some government ministries and agencies often have overlapping responsibilities, resulting in inconsistent application of the laws. Although ministries and agencies usually publish finalized regulations, no prior public comment period is required.  No central clearinghouse exists to access proposed regulations. Government revenues and debts, while partially captured in national budgets, are not fully transparent.  Some budget documents are accessible online. For more information on regulatory transparency. See: https://rulemaking.worldbank.org/en/data/explorecountries/liberia .

International Regulatory Considerations

Liberia is a member of the Economic Community of West African States (ECOWAS)  regional economic block, as well as the Mano River Union (MRU) .  The Liberia Revenue Authority (LRA)  continues to standardize and harmonize the country’s customs and tariff systems to incorporate Liberia’s tax regime into the ECOWAS External Tariff. Liberia currently uses a goods and services tax (GST) system but is required under ECOWAS standards to adopt a value-added tax (VAT). The adoption of VAT is a topic of ongoing political discussions, but it has not yet occurred. Under its tax system modernization program, the LRA has undertaken new efficiency measures including adopting a Mobile Tax Payment option for citizens to pay taxes and fees via their mobile phones. The Government of Liberia has acceded to WTO terms and conditions including on technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures.

Legal System and Judicial Independence

Liberia’s legal system uses common and regulatory law as well as local customary law.  The common law-based court system operates in parallel with local customary law, which incorporates unwritten, indigenous practices, culture, and traditions. The 2001 Revised Rules and Regulation Governing the Hinterland of Liberia govern the traditional court system. See  https://www.documents.clientearth.org/library/download-info/regulation-2001-revised-rules-and-regulations-governing-the-hinterland-of-liberia/ . Adjudication of law under these two systems often results in conflicting decisions between Monrovia-based entities, local communities outside of Monrovia, and within individual communities.

The Commercial Court hears commercial and contractual issues, including debt disputes of USD 15,000 and above. A commission under the Ministry of Labor hears claims of unfair labor practices. In theory, the Commercial Court presides over all financial, contractual, and commercial disputes, serving as an additional avenue to expedite commercial and contractual cases. The Supreme Court is the final arbiter of all cases and it hears all appeals, which places a significant burden on its panel of five judges. The judicial branch remains officially independent of the executive, but there have been reports of executive branch interference in judicial matters. Cases can be subject to extensive delays and procedural and other errors, and investors report doubts of the fairness and reliability of judicial decisions. Regulations or enforcement actions are appealable, and appeals are adjudicated in the Supreme Court.

Laws and Regulations on Foreign Direct Investment

No major laws or judicial decisions pertaining to foreign direct investment have come out in the past year. The government does not maintain a “one-stop-shop” website for investment laws, rules, procedures, or reporting requirements.  The NIC provides sector-specific investment counseling and/or advisory services upon request. The LCC explains relevant information on the regulatory processes and procedures relating to exports, and assists importers in processing documents to comply with Liberian customs regulations.

Competition and Antitrust Laws

There were no significant competition cases during the review period. Liberia does not have anti-trust laws.

Expropriation and Compensation

The 2010 Investment Act protects and guarantees foreign enterprises against expropriation or nationalization. The act clearly specifies that the government shall not engage in any expropriation of an enterprise “unless the expropriation is in the national interest for a public purpose, is the least burdensome available means to satisfy that overriding public purpose and is made on a non-discriminatory basis in accordance with due process of law.”  Liberia is a signatory to the Multilateral Investment Guarantee Agency (MIGA) Convention.

Dispute Settlement

Liberia is a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) – also known as the Washington Convention – and the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards – also known as the New York Arbitration Convention.  The Commercial Code provides for enforcement of awards under either convention. The Investment Act provides that “the courts of Liberia shall have jurisdiction over the resolution of business disputes, parties to an investment disputes may however specify any arbitration or other dispute resolution procedure upon which they may agree.” The Commercial Code is the specific domestic legislation that provides for the enforcement of awards under the 1958 New York Convention and/or under the ICSID Convention.

Investor-State Dispute Settlement

Liberia is a member of the ICSID Convention and a signatory to the Multilateral Investment Guarantee Agency (MIGA) Convention that guarantee the protection of foreign investment.  The Civil Procedure Law governs both domestic and international arbitrations, but there is not a stand-alone arbitration law.  Enforcing foreign or domestic arbitration awards may require several years, from filing an application with the court of first instance to obtaining a writ of execution, with provision for an appeal. Under the ICSID and the New York Arbitration Conventions, Liberian courts are bound to recognize and enforce foreign arbitral awards issued against the government. Liberia is also a signatory to the ECOWAS Treaty, which contains investor-state dispute settlement (ISDS) provisions. There have been no recent extrajudicial actions against foreign investors.

International Commercial Arbitration and Foreign Courts

The Investment Act provides for trade dispute settlement between two private parties through either the judicial system or alternative dispute resolution (ADR). Other codes, statutes, and legislative provisions, including the Liberian Civil Procedure Law, govern commercial arbitration and recognize arbitration as a means of resolution between private parties in commercial transactions, based on the model of the United Nations Commission on International Trade Law (UNCITRAL model law).

Investment contracts between private entities and the government frequently include arbitration clauses specifying dispute settlement outside of Liberia. Given the limited capacity of the judiciary, investors often prefer not to rely on domestic judicial processes.

Bankruptcy Regulations

Liberia does not have a bankruptcy law. The Commercial Court has limited experience protecting the rights of creditors, equity holders, and holders of other financial contracts.

Investment Incentives

The government provides tax deductions for equipment, machinery, cost of buildings and fixtures used in manufacturing. It also provides exemptions on import duties and goods and services taxes as investment incentives for the following sectors:

• Tourism
• Manufacturing
• Energy
• Hospitals and Medical
• Housing
• Transportation
• Information Technology
• Banking
• Agriculture and Agro-processing (fisheries, poultry, aquaculture, food processing)

A government-owned investment promotion website, www.visitliberia.net , lists the following specific tax regime and investment incentives (investors should verify these claims with government officials before relying on them):

• Liberia’s profit tax rate is 25 percent or 2 percent turnover.

• Thirty (30) percent tax deduction on up to 100 percent cost of equipment and machinery for investments above USD 1 million.

• Investments exceeding USD 10 million automatically qualif

Investments in economically-deprived regions also qualify for additional incentives of up to 12.5 percent. Additional investment incentives are available if an investment creates more than 100 direct jobs, or if an investment uses at least 60 percent local materials to manufacture finished products.

The government does not issue guarantees or jointly finance foreign direct investment projects.

Foreign Trade Zones/Free Ports/Trade Facilitation

In 2019, the government established a Special Economic Zone (SEZ) Steering Committee, “to create, drive, guide, enhance, coordinate, and manage single, multiple and mixed-use [SEZs] in Liberia.” The government identified the port city of Buchanan in Grand Bassa County for the first special economic zone (Buchanan Special Economic Zone). In September 2020, in response to the government’s request, USAID prepared a Feasibility Study for the Special Economic Zone  which concluded that an SEZ located at the Buchanan port site represents the most economically feasible option for an SEZ in Liberia. The report assessed, analyzed, and identified the conditions and arrangements that will best ensure the zone’s viability.

Performance and Data Localization Requirements

The Decent Work Act gives preference to employing Liberians; the act states that the Ministry of Labor “shall not issue a permit to work in Liberia unless it is satisfied that no suitably qualified Liberian is available to carry out the work required by the employer and the applicant satisfies the requirements for foreign residence in Liberia.” However, these requirements are not always strictly enforced. Visa, residence, and work permit procedures do not generally inhibit mobility of foreign investors and their employees.

Liberia has no data localization requirements.

Real Property

Liberian law protects property rights and interests, but with weak enforcement mechanisms. “Long term” mortgages or construction loans of up to 10 years are only available through the  Liberia Bank for Development and Investment .  Only Liberians may own land, with the limited exception provided in Article 22(c) of the Constitution that non-citizen missionary, educational, and other benevolent institutions shall have the right to own property, if that property is used for the purposes for which acquired; property no longer so used shall revert to the Government of Liberia. Other foreigners and non-resident investors may acquire land on leases, which ordinarily run for 25-50 years.  Liberian law provides for no official waiver mechanisms to limitations on foreign land ownership.

The Liberia Land Authority (LLA) , a one-stop-shop for all land related matters, is working with international partners including USAID, to implement strategic and targeted programs aimed at resolving critical land issues. Although the LLA encourages property owners to identify and register land titles, it does not have systemic enforcement programs.  The LLA estimates that less than 20 percent of the country’s total land is formally registered. Conflicting land ownership records are common. Investors sometimes experience costly and complex land dispute issues, even after concluding agreements with the government.

The Land Rights Act, enacted in 2018, was designed to resolve historical land disputes that have caused conflict and communal strife in the past. The Act defines four categories of land ownership as follows:

• Public land, which is owned, but currently not used by the government
• Government land, which is used by government agencies (for office buildings or other purposes)
• Customary land, on which the livelihoods of most rural communities depend
• Private land owned by private citizens.

Public awareness of the Land Rights Act is growing, but still limited. In February 2021, the LLA rolled out nationwide sensitization and education programs to raise public awareness on the Land Rights Act and the 2016 Liberia Land Authority Act, which consolidated all GOL land governance functions under the LLA.

See Limits on Foreign Control and Right to Private Ownership and Establishment, above, for further information, including implementation of the Land Rights Act. See also, https://www.doingbusiness.org/en/data/exploreeconomies/liberia#DB_rp     .

Foreign companies seeking to lease land may lease privately- or publicly-held land. Frequently, foreign companies seeking to acquire land leases do so through direct negotiations with the relevant landlords/owners.

Intellectual Property Rights

Liberia has a weak legal structure, regulatory environment, and enforcement mechanism for Intellectual Property Rights (IPR). The Liberia Intellectual Property Act covers domain names, traditional knowledge, transfer of technology, patents and copyrights.  The Liberia Intellectual Property Office (LIPO) operates as a semi-autonomous agency functioning under the administrative oversight of MOCI. LIPO lacks both technical and financial capacity to address IPR infringements.  The Copyright Society of Liberia (COSOL) is collaborating with the MOCI and LIPO to develop legal and international frameworks agreements to guide the collection and distribution of royalties. In February 2021, LIPO and COSOL rolled out nationwide public awareness and inspection campaigns to remove pirated copyright materials and illegal contents from the Liberian market. In 2019, the government also committed to fast-tracking the ratification of outstanding international IP treaties and legal instruments in line with WTO standards, but ratification remains pending.

There is no system to track and report on seizures of counterfeit goods. The government does not prosecute IPR violations.  Many Liberians are unfamiliar with IPR, and IP infringement is prevalent, including unauthorized duplication of movies, music, and books. Counterfeit drugs, apparel, cosmetics, mobile phones, computer software, and hardware are sold openly.

Liberia is not listed in USTR’s Special 301 Report or the notorious market report (see the 2019 Report:  https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/april/ustr-releases-annual-special-301 ).

For additional information about national laws and local IPR points of contact, see WIPO’s country profiles at  http://www.wipo.int/directory/en/  .  

Capital Markets and Portfolio Investment

The Liberian government welcomes foreign investment, although Liberia’s domestic capital market is not well developed. Private sector investors have limited credit and investment options. The government does not hold foreign portfolio investments abroad. Liberia offers no domestic capital market or portfolio investment option, such as a stock market, in the country. In 2019, the Central Bank of Liberia (CBL) began issuing CBL bills, but in 2020, the CBL reported a declining trend in the issuance of its bills, partly due to sluggish commercial activities occasioned by COVID-19 and low demand from the commercial banks. The CBL respects IMF Article VIII and does not implement restrictions on payments and transfers for current international transactions. Many foreign investors prefer to obtain credit from, and retain profits, in foreign banking institutions.

Money and Banking System

Nine commercial banks, branch outlets including payment windows/annexes, a development finance company, and a deposit taking microfinance institution provide banking services within Liberia.  Eight of the commercial banks are foreign banks. Numerous licensed foreign exchange bureaus, microfinance institutions, credit unions, rural community finance institutions, and village savings and loan associations (“susus”) also provide financial services.  Foreign banks or branches can establish operations in Liberia, subject to regulations set out by the Central Bank of Liberia (CBL).  There are no restrictions on foreigner’s ability to establish a bank account with any of the commercial banks.

The commercial banking system in Liberia is small, and although generally stable, chronic shortages of Liberian dollar currency in the past several years have undermined confidence in the banking sector. The CBL describes the banking industry as “generally safe, sound and viable” based on its published indicators of financial health. At the end of calendar year 2020, the capital adequacy ratio was approximately three times higher than the regulatory minimum, and the liquidity ratio was 2.5 times higher.

According to a 2019 report by the Central Bank of Liberia (CBL), a significant number of commercial bank assets were held in Liberian government bonds which cannot easily be converted into liquid assets (cash), due to cash availability issues. As of December 2020, the CBL reported L$6 billion (approx. USD 35 million) in outstanding treasury bills. Starting in 2018, commercial banks and businesses have reported considerable difficulty in accessing Liberian dollars.  In addition, since 2019, commercial banks, businesses, and private individuals have had difficulties accessing U.S. dollars. Beginning June 2020, it became increasing difficult for businesses and private individuals to access Liberian dollars through commercial banks due to continued shortage in currency in the banking system. Also in 2020, banks reported shortages in both Liberian and the U.S. dollars liquidity and attributed the shortage to hoarding of large amounts of currency by large businesses and individuals. In addition, some commercial bank representatives have expressed concern about the CBL’s capability to manage the banking sector effectively.

The CBL has engaged several short- and long-term measures, including printing of a small amount of Liberian dollar banknotes and promoting the usage of electronic payment platforms (mobile money, electronic fund transfers, etc.), in its attempt to restore public confidence in the banking system and mitigate the liquidity pressure in the economy. Liberia’s constitution requires that the legislature authorize the printing of currency, which the CBL officially proposed on February 4. The country awaits the Legislature’s authorization to print new banknotes followed by a procurement and printing process to partially relieve its currency issues.

Commercial banks face persistent challenges in profit generation and loan repayment. The issue of non-performing loans (NPLs) remains a major challenge in the banking sector and continues to negatively affect profitability.  Although NPLs are down from their peak in the summer of 2020, they remain more than double the CBL’s threshold.

The CBL reported a NPL ratio of 15% in December 2020, down from the previous high of over 20% earlier in the year. These are still more than double the CBL’s threshold.

Foreign banks or branches can establish operations in Liberia, subject to regulations set out by the CBL. There are no restrictions on foreigner’s ability to establish a bank account with any of the commercial banks, beyond standard know your customer rules.

Foreign Exchange and Remittances

Foreign Exchange

Foreign investors may convert, transfer, and repatriate funds associated with an investment (e.g., remittances of investment capital, earnings, loans, lease payments, and royalties).  Liberian law allows for the transfer of dividends and net profits after tax to investors’ home countries.

Liberia has a floating exchange rate system. Both the Liberian Dollar (LD) and U.S. Dollar (USD) are legal tender. Market supply and demand dictates the exchange rate. The CBL sets and displays official, indicative exchange rates (thresholds) on daily basis. It requires commercial banks and licensed money exchange bureaus to display their daily LD to USD market exchange rates which generally are close to CBL threshold rates.  In addition to commercial banks, licensed foreign exchange bureaus, petrol stations, supermarkets, and other stores provide exchange services. Many unregistered or unlicensed money exchangers exchange money throughout the country.

Remittance Policies

Liberia permits 100 percent repatriation of funds and does not have currency exchange restrictions. Remittances may be sent to Liberia through Western Union, MoneyGram, RIA Money Transfer, and wire transfer.

Sovereign Wealth Funds

The Government of Liberia does not maintain a Sovereign Wealth Fund (SWF) or similar entity.

The country has approximately 20 state-owned enterprises (SOEs) which are governed by boards of directors with oversight provided by sector ministries. The President of Liberia appoints members of the boards to govern wholly-government-owned and semi-autonomous state-owned enterprises (SOEs).  The Public Financial Management (PFM) Act SOE requirements, but few SOE statements are made public.

SOEs employ more than 10,000 people in sea and airport services, electricity supply, oil and gas, water and sewage, agriculture, forestry, maritime, petroleum importation and storage, and information and communication technology services. Not all SOEs are profitable. Some SOEs maintain their own websites. Liberia does not have a clearly defined corporate code for its SOEs. Reportedly, high level officials, including some who sit on SOE boards, influence those enterprises to conduct their business and revenue disbursements in ways not consistent with standard corporate governance.

Privatization Program

The Government of Liberia does not have a privatization program or policy.

Liberian authorities have not clearly defined responsible business conduct (RBC) nor established policies or a national action plan to promote or encourage them.  The government does not factor RBC concepts into its procurement decisions, nor does it effectively and fairly enforce domestic laws regarding human rights, labor rights, consumer protection, or environmental protections intended to protect individuals from adverse business impacts.  Foreign companies are encouraged, but not required, to publicly disclose their policies, procedures, and practices to highlight their RBC practices.  Some non-governmental organizations (NGOs), civil society organizations (CSOs), and workers organizations/unions promote or monitor foreign company RBC policies and practices. However, NGOs and CSOs monitoring or advocating for RBC do not conduct their activities in a structured and coordinated manner, nor do they tend to monitor locally-owned companies.

Most Liberians are generally unaware of RBC standards.  Generally, the government expects foreign investors to offer social services to local communities and contribute to a government-controlled social development fund for the area in which the enterprise conducts its business. Some communities complain that these contributions to social development funds do not reach them.  The government frequently includes clauses in concession agreements that oblige investors to provide social services such as educational facilities, health care, and other services which other governments frequently provide. Foreign investors have reported that local communities expect benefits in addition to those outlined in formal concession agreements.

Liberia is a member of the Extractive Industries Transparency Initiative (EITI). The  National Bureau of Concessions  monitors and evaluates concession company compliance with concession agreements, but it does not design policies to promote and encourage RBC. Some NGOs report that several concessions have violated human or labor rights, including child labor and environmental pollution. Liberia has several private security companies, but the country is not a signatory to the Montreux Document on Private and Security Companies. Private security companies are regulated by the Ministry of Justice and they perform a range of tasks such as providing security or surveillance to large businesses, international organizations, diplomatic missions, and some private homes.

Additional Resources 

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities and;
• North Korea Sanctions & Enforcement Actions Advisory

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor.
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Liberia has laws against economic sabotage, mismanagement of funds, bribery, and other corruption-related acts, including conflicts of interest. However, Liberia suffers from corruption in both the public and private sectors. The government does not implement its laws effectively and consistently, and there have been numerous reports of corruption by public officials, including some who engage in corrupt practices with impunity. On December 9, 2020, the U.S. Department of the Treasury sanctioned prominent Liberian lawyer, senator, and Chair of the Liberian Senate Judiciary Committee Varney Sherman for offering bribes to multiple judges, including in a case against him regarding a 2010 bribery scheme. He continues to serve in those same official capacities. In 2020, Liberia ranked 137 out of 180 countries on Transparency International’s Corruption Perception Index – a decline from its already low 120th ranking. See http://www.transparency.org/research/cpi/overview.

The  Liberia Anti-Corruption Commission     (LACC) currently cannot directly prosecute corruption cases without first referring cases to the  Ministry of Justice     (MOJ) for prosecution. If the MOJ does not prosecute within 90 days, the LACC may then take those cases to court, although it has not exercised this right to date. The LACC continues to seek public support for the establishment of a specialized court to exclusively try corruption cases. In September 2020, integrity institutions including the LACC developed an anti-corruption roadmap that requires significant amendments in the LACC Act. The draft amendments to the law would empower LACC to directly prosecute cases without awaiting MOJ investigations and recommends the passage into law of the Whistleblowers and Witness Protection Bill. It also would mandate the LACC to administer the Asset Declaration requirement for appointed officials and ensure compliance across the three branches of government, and not just the executive branch.

Foreign investors generally report that corruption is most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems.  Multinational firms often report paying fees not stipulated in investment agreements. Private companies do not have generally agreed and structured internal controls, ethics, and compliance programs to detect and prevent bribery of public officials. No laws explicitly protect NGOs that investigate corruption. Liberia is signatory to the Economic Community of West African States (ECOWAS) Protocol on the Fight against Corruption, the African Union Convention on Preventing and Combating Corruption (AUCPCC), and the UN Convention against Corruption (UNCAC).

Resources to Report Corruption

Contact at government agencies responsible for combating corruption:

Baba Borkai, Chief Investigator
Liberia Anti-Corruption Commission (LACC), Monrovia,
http://lacc.gov.lr/  
bborkai@lacc.gov.lr 
Tel: (+231) 777-313131
Email:  bborkai@lacc.gov.lr 

Contact at a “watchdog” organization (local or nongovernmental organization operating in Liberia that monitors corruption):

Anderson Miamen, Executive Director
Center for Transparency and Accountability in Liberia (CENTAL)
Tel: (+231) 886-818855
Email:  admiamen@gmail.com 

President George Manneh Weah’s inauguration in January 2018 marked the first peaceful transfer of power from one democratically elected president to another since 1944. Increasing freedom of speech for Liberians as well as the relatively free media landscape in the country has led to vigorous pursuit of civil liberties, resulting in active, often acrimonious political debates and organized, non-violent demonstrations.  In 2019, the government signed into law the Kamara Abdullah Kamara Act of Press Freedom to strengthen its commitment to several legal instruments it previously signed, such as the Freedom of Information Act and the Table Mountain Declaration.  Numerous radio stations and newspapers distribute news throughout the country. The government has identified land disputes and high rates of youth and urban unemployment as potential threats to security, peace, and political stability.

The Government of Liberia has shouldered national security responsibility since the United Nations Mission in Liberia (UNMIL) officially withdrew from the country in March 2018.  Protests and demonstrations may occur with little warning. The United States and other international donors continue to assist in the education and training of the Armed Forces of Liberia and law enforcement agencies. Security is being maintained throughout the country by members of the Liberian National Police, Liberia Immigration Service and other state-owned security apparatus. However, the majority of the security personnel are based in and around the capital city region, largely due to funding gaps and the poor state of infrastructure in other areas.

With a literacy rate of just under 50 percent, much of the Liberian labor force is unskilled.  Most Liberians, particularly those in rural areas, lack basic vocational or computer skills.  Liberia has no reliable or official data on labor force statistics, such as unemployment rates.  Government workers comprise the majority of formally employed Liberians.

An estimated four out of five Liberian workers (80 percent) engage in “vulnerable” and/or “informal” employment. Many in the informal and vulnerable employment sectors suffer from inadequate earnings as well as difficult and/or dangerous conditions that undermine workers’ basic rights.  The Ministry of Labor (MOL) largely attributes high levels of vulnerable and informal employment to the private sector’s inability to create employment.  An acute shortage of specialized labor skills, particularly in medicine, information and communication technology, and science, technology, engineering, and mathematics (STEM) remains a challenge. Migrant workers are employed throughout the country, particularly in service industries, artisanal diamond and gold mining, timber, and fisheries.

Liberia’s labor law, the 2015 Decent Work Act, gives preference to employing Liberian citizens and most investment contracts require companies to employ a defined percentage of Liberians, including in top management positions.  Foreign companies often report difficulty finding local skilled labor as one of their most significant operational hindrances. Child labor remains a problem, particularly in the extractive industries.

The Decent Work Act guarantees freedom of association and gives employees the right to establish labor unions. Employees can become members of organizations of their own choosing without prior authorization. Workers, except for civil servants and employees of state-owned enterprises, are covered by the Act.  The Act allows workers’ unions to conduct activities without interference by employers. It also prohibits employers from discriminating against employees because of membership in or affiliation with a labor organization. Unions are independent from the government and political parties.  Employees, through their associations or unions, often demand and sometimes strike for better compensation. When company ownership changes, workers sometimes seek payment of obligations owed by previous owners or employers.

The Decent Work Act provides that labor organizations, including trade or employees’ associations, have the right to draw up constitutions and rules regarding electing representatives, organizing activities, and formulating programs.

There were no major labor union-related negotiations affecting workers or the labor market during 2020, though public teachers and health workers went briefly on strike. Additionally, in September 2020, the Dock Workers Union of Liberia (DOWUL) staged a go-slow strike action against APM Terminals (APMT) at over a salary dispute.  The union alleged that dock workers had not received their “13th month salary” bonus, though APMT explained that the company pays the 13th month bonus in installments throughout the year and not in a lump sum.  Instead of engaging with APMT management, the union presented the workers’ grievances directly to the Liberian Senate. The Senate then charged the company’s position as offensive and penalized APMT with community service at a local high school. Another foreign company experienced a labor dispute in which officials from the Labor and Justice ministries appeared to encourage union members to push for higher pay, despite the fact that the union protests were based on a misunderstanding of salary packages.

In 2019, Firestone Liberia, the country’s largest private sector employer, worked closely with the Ministry of Labor and the Agricultural Agro-Processing and the Industrial Workers Union of Liberia (AAIWUL) to ensure that a 13 percent reduction of force was completed in accordance with Liberian labor laws, company policies, and the company’s collective bargaining agreement with AAIWUL.  Firestone plans to cut its losses through further reduction of its workforce and the use of contract tapping firms have met with strong resistance from Liberia’s legislature.

While the law prohibits anti-union discrimination and provides for the reinstatement of workers dismissed because of union activities, it allows for dismissal without cause provided the company pays statutory severance packages. The Decent Work Act sets out fundamental rights of workers and contains provisions on employment and termination of employment, minimum conditions of work, occupational safety and health, workers’ compensation, industrial relations, and employment agencies.  It also provides for periodic reviews of the labor market as well as adjustments in wages as the labor conditions dictate. The government does not waive labor laws in order to attract or retain investment, but the National Investment Commissions (NIC) provides investment incentives based on economic sectors and geographic areas (see Investment Incentives in section 4 above).

The MOL does not have an adequate or effective inspection system to identify and remedy labor violations and hold violators accountable. It lacks the capacity to effectively investigate and prosecute unfair labor practices, such as harassment and/or dismissal of union members or instances of forced labor, child labor, and human trafficking. The MOL is charged with coordinating the government’s efforts on trafficking in persons and it made some progress in 2019 in coordinating efforts across the Government of Liberia, case tracking, service provision, and referring hotline cases to the Liberia National Police.  No new labor-related laws or regulations were enacted during the last year.

* Source for Liberia Data: Central Bank of Liberia, Annual Report 2019 covering January 1 to December 31, 2019, Published January 27, 2020.

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.

U.S. Commercial Service Contact Information
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