Tapping a New Deal

We find ourselves re-reading Time Magazine’s coverage of Firestone’s relationship with Liberia with some disbelief.  Here is an article about a multinational’s relationship with an African country that goes back to 1926 and it’s a positive story!  No coziness with paramilitaries, child labor, pollution of drinking water…

What stands out on a closer reading is the very sensible decision by Firestone to re-negotiate with the Liberian government and agree to social benefits (among other contractual changes) that will begin to correct what Time calls “conditions that have generated a torrent of negative publicity in recent years.”

This story suggests to us that there might be many such contracts between multinationals and developing countries that could be profitably re-negotiated with benefits for both sides.  As the geopolitical landscape changes, what might have looked like reasonable contracts 20 years ago may not appear so benign today.  At the very least, companies should be looking at such contracts signed decades ago to see if they ought to be getting to the negotiating table first.  The reputational benefits could be significant.


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