GVL makes annual development contributions to land-holding communities in the form of payment to Community Development Fund (CDF), and assistance to administer and report on the fund and its use.
The CDF is intended for community-based development that has long-standing and local effect, such as infrastructure improvement benefiting the whole community, rather than intended for consumption, distribution, or holding events.
Each community determines the scope of its relevant CDF. Thus, some agglomerated communities have a single fund for a larger developed area which may accumulate substantial amounts of money over several years. Other communities may decide for very localized funds based on small land areas, which results in a very locally controlled and used fund but with smaller accumulation of investable money. Under GVL policy, such groupings are communities’ own decisions to make.
CDF setup for each community may take between 1-2 years from start of development. In several cases, the Fund is the second formal agreement (after the GVL MOU) and first holding of transparently managed financial assets (the CDF bank account) that the community has ever engaged in. Verifying the fund principles, the particular CDF charter, the Committee members and in particular the bank account signatories, takes time and many discussions. Some communities have accumulated substantial un-deposited balances through long processes.
The CDF fund payments by GVL are typically made annually in April to June for the preceding year’s developed hectarage. After internal books are closed, company hectarage statements are available normally in February. Community Committees are provided the development figures which typically are confirmed in March to May. Payments are subsequently made.
Decisions about the CDF are made by the community’s appointed representatives on the CDF Committee for each individual fund. The fund Committee consists of up to 10 members of whom 5 are appointed by the community and the Government and 5 by GVL. By policy, the GVL balanced role on the committee is to ensure that fund spending is carried out in accordance of the CDF charter e.g. in such instances as appointment of construction contractors. GVL’s role on the committee is not decision-making, but assurance of this aspect.
The CDF regulations are established in the GVL Concession Agreement section 19.7 (see below) and typically reaffirmed in each community Memorandum of Agreement with GVL.
Each Community is to confirm its own CDF Charter. GVL has contributed a model Charter which is subject to community adjustment or rewriting. The Charters may be found in each CDF’s documentation pages on the website.
19.7 Community Development Contribution.
(a) Investor shall annually contribute its accrued contribution at the end of each year of the Term, of US$5.00 per hectare of land within Developed Areas to a community development fund established for development purposes. Such contribution shall be tax deductible and may be carried forward for an indefinite period during the Term.
(b) Such fund shall be administered by a management team consisting of not more than ten (10) members nominated and selected by the surrounding community, Government and Investor, of which half of the management team shall be nominated by Investor. Monetary amounts within such fund shall be placed into aninterest-bearing depositary accountwith an internationally recognized financial institution reasonably acceptable to Government.Such Committee shall develop an annual budget in consultation with the Government and the Investor or as otherwise required by Law. Funds from the segregated account may be disbursed only (i) for direct delivery of services and community infrastructure improvements, and not to fund the general work programs of administrative offices or officials, and (ii) for the benefit of Liberian communities in the affected counties. The budget for and the actual disbursements from the segregated account shall be public and shall be subject to the same audit procedures provided for expenditures by the Government and as may be further provided by Law. The community development fund shall be subject to audit by an internationally recognized auditing firm, or by a Liberian firm or professionals, provided they are otherwise qualified, and information regarding the community development fund’s advances, receipts and expenditures shall be publicly available. The Investor shall maintain a website on which are posted the members of the Committee, all audit reports, and a short description of each program funded and the amount of funding provided. For the avoidance of doubt, expenses incurred by Investor to fulfill its obligations under this Agreement, including expenses related to the provision of housing, education, medical care and other social services, shall not be deducted from the community development fund.