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PROCEDURES FOR COMMUNITIES TO ENTER INTO JOINT VENTURES IN WMAs

Authors:
  • Independent
Tanzania Wildlife Discussion Paper No. 31
Rolf D. Baldus and Ludwig Siege (Eds)
PROCEDURES FOR COMMUNITIES TO ENTER INTO JOINT
VENTURES IN WMAs
By
V. Booth, G. Nangale and H. Majamba
Wildlife Division
Deutsche Gesellschaft für Technische Zusammenarbeit
GTZ Wildlife Programme in Tanzania
Dar Es Salaam 2002
This study was financed by:
EPIQ – USAID/Tanzania and GTZ
The Discussion paper may contain authors’ views and positions which do not
necessarily correspond with the official position of the Wildlife Division, GTZ, USAID and
the editors
Address: Deutsche Gesellschaft für Technische Zusammenarbeit
Community Based Wildlife Conservation Programme
P.O.Box 1519, Dar Es Salaam, Tanzania
Tel: 255-22-2866065
Fax: 255-22-2116504
Email: scp@africaonline.co.tz
Website: http://wildlife-programme.gtz.de/wildlife
Ministry of Natural Resources and Tourism
Wildlife Division
Joint Ventures In Wildlife Management Areas
TABLE OF CONTENTS
PROCEDURES FOR COMMUNITIES TO ENTER INTO JOINT VENTURES IN WMAs................... 1
1EXECUTIVE SUMMARY............................................................................................. v
2INTRODUCTION............................................................................................................1
2.1Studies Completed to Date...................................................................................................................... 1
2.2Scope of Work......................................................................................................................................... 4
3ANALYSIS OF CRITICAL ISSUES............................................................................. 7
3.1Definition of a “Joint Venture” Contract.................................................................................................7
3.1.1Interpretation of a “Joint Venture” in the WMA Guidelines............................................................7
3.1.2Legal Interpretation of a “Joint Venture”......................................................................................... 8
3.1.3Type and Duration of Contracts....................................................................................................... 9
3.1.4Summary of Types and Duration of Agreements............................................................................11
3.2Options for Awarding Contracts............................................................................................................13
3.2.1Examples of Agreements Currently Active in Tanzania.................................................................13
3.2.2Advantages and Disadvantages of Direct Negotiation................................................................... 16
3.2.3Advantages and Disadvantages of an Open Auction System......................................................... 16
3.2.4Advantages and Disadvantages of an Open Competitive Tender...................................................17
3.3Examples from within the Region..........................................................................................................18
3.3.1Botswana.........................................................................................................................................19
3.3.2South Africa....................................................................................................................................22
3.3.3Zambia............................................................................................................................................ 27
3.3.4Zimbabwe....................................................................................................................................... 28
3.3.5General Conclusions on Principles of Allocation and Pricing........................................................30
3.4Pros and Cons of the Existing Systems in Awarding Contracts............................................................ 30
3.5Security of Investments..........................................................................................................................32
3.6Access Rights of Local Communities and Enforcement of these Rights...............................................33
3.6.1Mechanisms to Protect Community Rights.....................................................................................33
3.6.2Mechanisms to Create Awareness of these Rights......................................................................... 33
3.7Areas of Potential Disputes and how these may be Resolved............................................................... 33
3.8Mechanisms for Contract Enforcement................................................................................................. 35
3.9Institutions Responsible for Monitoring and Monitoring Parameters................................................... 35
3.10Enforcement of Environmental Parameters......................................................................................... 36
3.11Provision of Social Services by Entrepreneur..................................................................................... 37
3.12Use of Local Labour............................................................................................................................ 38
3.13Mechanisms to Ensure Local Community Equity in Investments....................................................... 39
3.13.1Mechanisms to Ensure Community Equity in Investments.......................................................... 39
3.13.2Level of Local Communities Contribution in the Investments..................................................... 40
3.13.3Value of Community Contributions..............................................................................................40
3.14Provisions that must be Incorporated by Reason of Applicable Law or Policy.................................. 41
3.15Mechanisms that Guarantee Supply of Local Inputs Needed by Entrepreneurs..................................41
3.16Review WPT Policy on Problem Animals...........................................................................................41
4CONTRACTUAL, POLICY, LEGAL AND INSTITUTIONAL ISSUES .............. 44
4.1Contractual Issues..................................................................................................................................44
4.2Policy Issues.......................................................................................................................................... 44
4.3Institutional Issues................................................................................................................................. 46
5ACCESS TO PROFESSIONAL SERVICES..............................................................47
5.1Currently Available Organisations.........................................................................................................47
5.2Organisations Capable of Providing these Services.............................................................................. 47
5.3Criteria for Selecting Service Providers................................................................................................ 48
5.3.1Mechanisms to Attract Qualified Service Providers.......................................................................49
6DRAFT GUIDELINES AND “JOINT VENTURE” CONTRACTS........................ 50
6.1Overall Tendering Procedure.................................................................................................................50
6.2Specific Recommendations Regarding the Tender Process...................................................................52
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6.2.1Provision of an Information Sheet for the Concession Area.......................................................... 52
6.2.2Bidding Document..........................................................................................................................53
6.2.3Tender Assessment Process............................................................................................................57
6.3Draft “Joint Venture” Contracts............................................................................................................ 60
6.3.1Need for Standardised “Joint Venture” Agreements...................................................................... 60
6.3.2General Structure of a “Joint Venture” Agreement......................................................................60
7DRAFT AGREEMENT FOR WMAs IN TANZANIA – THE WAY FORWARD.65
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ACRONYMS
AA Authorized Association
AWF African Wildlife Foundation
CBC Community-Based Conservation
CBNRM Community Based Natural Resource Management
DC District Council
EPIQ Environmental Policy and Institutional Strengthening Indefinite
Quantity Contract
GCA Game Control Area
GMP General Management Plan
GoT Government of Tanzania
LGA Local Government Authority
LUP Land Use Plan
MBOMIPA Matumzi Bora Maliasili Idodo na Pawaga
MoU Memorandum of Understanding
NGO Non-government Organisation
NFM Natural Forest Management
NRM Natural Resource Management
NP National Park
PA Protected Area
PAC Problem Animal Control
SANP South African National Parks
TANAPA Tanzania National Parks
ToR Terms of Reference
USAID United States Agency for International Development
VC Village Council
VGS Village Game Scouts
VLA Village Land Act
VNRC Village Natural Resources Committee
WCA Wildlife Conservation Act
WD Wildlife Division
WMA Wildlife Management Area
WPT Wildlife Policy of Tanzania
ZAWA Zambian Wildlife Authority
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ACKNOWLEDGEMENTS
The authors would like to thank Dr Hussein Sosovele and Ms. Eva Kiwango of EPIQ and
to Ms C. Kullaya and Dr Rolf Baldus of GTZ for all their support and enthusiastic co-
operation in completing this study. We would also like to thank the Wildlife Division
leadership and are particularly grateful to Benjamin Andulege who traveled with the team
at short notice.
We are also grateful for the support and co-operation received from TANAPA, African
Wildlife Foundation and the various safari companies in Arusha for meeting with us and
answering our probing questions at very short notice. Similarly we would like to thank
the members of the MBOMIPA project in Iringa and the Hunters Association of Tanzania
(Iringa) for their kind hospitality, and for their stimulating and open discussions regarding
issues relating to the formation of WMAs.
Finally we would like to express our appreciation to the community leaders in the villages
with whom we met and discussed their expectations of the proposed joint venture
agreements. We trust that this report will go a long way to achieving their desired results.
Any errors committed in this report belong to the authors and not to any of the above
mentioned individuals or institutions.
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1 EXECUTIVE SUMMARY
The sectoral reform programme currently underway in Tanzania will see the
implementation of far reaching initiatives that will pave the way for local communities to
directly benefit from the presence of wildlife in their areas. This initiative has been made
possible by the introduction of the Wildlife Policy of Tanzania and the Village Land Act
of 1999 that envisages local communities taking greater responsibility for the
management and utilisation of wildlife resources in village lands. Several studies have
been completed that examine the implications of these initiatives focusing on important
policy, legal and institutional issues that must first be resolved.
This study examines the options and impediments that local communities will encounter
when they attempt to enter into some form of contractual arrangements with the private
sector in order to exploit the natural resources in their village areas. The report is divided
into five sections that deal with the scope of work identified in the Terms of Reference. It
also provides several examples of “joint venture” agreements that have been developed in
the region.
Analysis of Critical Issues
Embarking on a programme such as this that involves a major shift in policy invariably
raises a wide range of issues for both the administrators and the beneficiaries. Our report
deals with these on an individual basis, drawning on experiences from within Tanzania
and the region. In particular, we discuss the definition of a “joint venture” and what this
means in legal terms to the parties. We believe that it is critically important that all
stakeholders have a thorough understanding of the implications of a “joint venture”
agreement as it applies to the development of wildlife-based enterprises in the context of
communally owned natural resources by local communities.
Also discussed in this section are the various options available to local communities to
enter into some form of contractual arrangements with the private sector, highlighting the
advantages and disadvantages of the various contractual arrangements. We also review
examples of “joint venture” agreements that have recently been negotiated in Tanzania,
and discuss the pros and cons of the various methods used to award contracts. To
demonstrate the different approaches adopted to implement community-based
photographic and hunting concessions, we provide examples from Botswana, South
Africa, Zambia and Zimbabwe. Whilst a common theme can be distinguished in each of
these approaches, notably the issue of transparency, each country has adapted its approach
to deal with the prevailing circumstances. The approach adopted in Botswana is
comprehensive and clearly demonstrates how local communities can be protected from
unscrupulous entrepreneurs while at the same time securing the maximum market value
for the concession. A comparison of these approaches with the existing system adopted
in Tanzania highlights a number of shortcomings where improvements could be made.
Other issues of concern include:
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Security of investments
Access rights of local communities
Areas of potential disputes
Contract enforcement
Monitoring
Enforcement of environmental parameters
Each of these topics is discussed in detail, and attempt to address the concerns of the
stakeholders. One particular issue that is at the forefront of most people’s minds is the
provision of social services and how local communities can secure equity in any
investment opportunities. These issues are discussed at some length, pointing out the
difficulties associated with these concepts as well as possible way that they may be
addressed. We also review the position of the Wildlife Policy on Problem Animal
Control and what this will mean for local communities in the future.
Contractual, Policy, Legal and Institutional Issues
Entering into contractual arrangements will expose local communities to a number of
issues that will require the attention of the various stakeholders. We attempt to highlight
the most pertinent issues in this section, paying particular attention to policy and
institutional issues. In particular we draw attention to the crosscutting impediments that
may affect the successful negotiation of “joint venture” agreements. For example, the
role of District Councils and the Wildlife Division and the impact that these institutions
may have on contractual negotiations instigated by Authorised Associations is discussed.
Access to Professional Services
Local communities (and related government institutions) are not well versed in normal
commercial practices. They will therefore require the services of professional institutions
to ensure that any negotiations for concessions etc. are concluded to the mutual benefit of
both parties. There are a limited number of neutral organisations in Tanzania that are
capable of providing these services, however, they will be hard pressed to service the
anticipated demand from local communities once WMAs are established.
We have developed some guidelines to select such service providers and highlight
mechanisms that may attract potential service providers in the future.
Draft Guidelines and “Joint Venture” Contracts
In this section we provide the framework to be adopted by Authorised Associations to
allocate concessions in WMAs in the future. It is anticipated that the majority of
concessions will be for hunting blocks, nonetheless, we strongly recommend that the
allocation of these blocks be undertaken through a qualified tender system that relies on
separate technical and financial proposals.
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The recommended approach draws heavily from examples used elsewhere in the region,
particularly Botswana. The overall tendering procedure is discussed in detail, including
specific recommendations that should be included in the tender process.
We have also stressed that there is a need to “standardise” the agreements so as to avoid
misunderstandings in the future. To achieve this, we recommend that the contract be
established using five key principles:
The purpose of the agreement
Responsibilities of both parties
Financial arrangements
Termination clauses
General terms and conditions under which the venture will operate.
Draft Agreement for WMAs in Tanzania
In this final section, we provide a provisional draft agreement that we believe could form
the basis for negotiation between an Authorised Association and a potential investor.
This agreement has drawn on the examples used elsewhere in the region and has been
tailored to meet the legal requirements applicable in Tanzania.
We must stress however, that this draft agreement still requires a great deal more input to
develop a working document. Time did not allow this process to be developed in this
study. Furthermore, we strongly believe that this process is best developed through
dialogue with all stakeholders and recommend that the process be taken further using a
workshop forum.
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2 INTRODUCTION
Implementation of the Wildlife Policy of Tanzania (WPT) and the creation of Wildlife
Management Areas (WMAs) under the proposed Village Land Act will open the door for
a number of enterprise opportunities for the local communities that now benefit little
from the presence of wildlife in their areas. In order to take full advantage of the
economic opportunities that arise by virtue of WMA designation, they will need to enter
into contractual arrangements with hunting and photographic safari operators, hoteliers,
wildlife ranchers, and providers of transport and other ancillary services. The
sustainability of the ventures they enter into depends importantly on whether the
legitimate expectations of both sides are properly taken into account as contracts;
concessions, etc. are prepared. Yet local residents and private sector operators have little
experience in dealing with each other. Moreover, local residents may not be well versed
in normal commercial practice, and in this respect find themselves at a disadvantage in
terms of assuring that their legitimate interests and concerns are addressed during the
negotiation process.
Additionally, there may be important policy, legal and/or institutional impediments to the
conclusion of contractual arrangements that both local communities and entrepreneurs
would find satisfactory.
It is against this backdrop that this study is being conducted. Its objectives are to define
and discuss the issues that will enable local communities to enter into negotiations with
the private sector, and to recommend and develop suitable contractual instruments that
ensures the protection of both parties.
2.1 Studies Completed to Date
Several studies have been completed that provide valuable background information for
this study. These are:
a Review of the Legal Aspects of the Draft Guidelines for WMAs Study –
April 2000
This report provides an in depth analysis of the draft Wildlife Management Area
Guidelines from a legal prospective, emphasizing how the guidelines can be effectively
incorporated into the existing national wildlife conservation policies and legislation. It
also reviews the relationship of the proposed guidelines on WMAs and land tenure, as
well as their relationship with international conventions on wildlife conservation and
management. Mechanisms to enforce the draft WMA Guidelines are also provided.
The study exposes a number of areas where the current 1998 Wildlife Policy of Tanzania
(WPT) is in conflict with the existing Wildlife Conservation Act (WCA). In particular,
although the policy embraces the improved participation by communities in wildlife
conservation and management through the establishment of WMAs, there does not appear
to be a clear-cut procedure for establishing this category of protected area. To rectify this
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situation will require that the WCA be amended to take on board the developments
resulting in the shift in paradigm proposed by the WPT.
Secondly, WMAs will be situated on lands belonging to villages and the law governing
village lands (the Village Land Act of 1999) vests in the Village Council absolute power
over the control and administration of village land. However, powers of the Village
Council to deal with matters relating to wildlife are limited by the present WCA. By the
same token the power of the Wildlife Division to deal with village land (where wildlife
may be located) is also limited since this power is vested in the Village Council.
This situation requires urgent resolution since it will complicate the operation of the
WMA particularly regarding issues relating to land use, ownership of wildlife and land
tenure. Another salient feature of the WMA Guidelines concerns the provisions relating
to the proclamation of by-laws and the contractual capacity and powers vested in the
Authorised Association (AA) and those vested in the Village Council under the provision
of the Local Government (District Authorities) Act of 1982.
The report concludes that in order to adequately and effectively implement the WMA’s,
there is a need to ensure that the provisions of the guidelines are harmonized with the
following legislation:
The Village Land Act, 1999
The Wildlife Conservation Act, 1974
The Local Government (District Authorities) Act, 1982
The Law of Contract Ordinance, Cap 433
National Parks Ordinance, Cap 412
The Tanzania Investment Act, 1997
b Economic Opportunities in Wildlife Management Areas – May 2000
This study examined four economic opportunities that could be developed by local
communities in the proposed WMAs. These are:
Tourism and resident hunting
Photo-tourism
Improved beekeeping and marketing of products
Natural Forest Management (NFM)
It was demonstrated that all four activities were financially feasible, and that government,
district councils and the local community could benefit through a revenue-sharing
arrangement. The study envisages that the timing of these interventions would be
staggered, beginning with tourist hunting. This would allow the AA sufficient time to
adjust to these new initiatives and develop the necessary skills and capacity.
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However, the study recognises that in order to implement successfully the WMA concept,
it will be necessary to overcome several constraints. Amongst the more important of
these are:
The capacity for planning and managing business enterprises amongst rural
communities is low. Communities will therefore require outside expertise to
strengthen their institutional capacity in this regard.
The economic study anticipates that there will be a period of time during which there
will be a shortfall in revenue due to the GoT as a result of initiating the WMAs. It is
suggested that that this “revenue gap” be addressed through bridging finance and
improved marketing.
c Policy Guidelines for Game Farming and Game Ranching in Tanzania –
May 2000
The purpose of developing these policy guidelines is to assist the Wildlife Division to
facilitate the establishment and operation of this form of land use in Tanzania in order
that the Government of Tanzania, District Councils, local communities and the private
sector can benefit from game farming and ranching activities. The report distinguishes
between “game farming” and “game ranching” and provides an overview of different
forms and models of these activities elsewhere in Africa and abroad. Essentially “game
farms” involves intensive husbandry of one or a few species of wildlife while “game
ranching” consists of extensive multi-species and multi-form utilisation that requires
relatively large areas of land. This land can either be fenced or unfenced depending on
the circumstances.
The options for developing game farming initiatives in Tanzania are reviewed, and a
number of species that could be exploited (Giant African Snail, African Button Quail,
Crocodile, Ostrich etc.) are identified. Comprehensive guidelines for the establishment
and management of game farms are provided.
With regard to “Game Ranching”, the report extensively reviews the development of this
form of land use across southern and eastern Africa, focusing on the changes in policy
that brought this about and the benefits that have accrued to the stakeholders. The
exception has been the involvement of local communities where factors such as land
tenure, access rights, revenue sharing and capacity to manage wildlife areas has
complicated the issue.
In the Tanzanian context, the Wildlife Division is eager to encourage the establishment of
fenced and unfenced game ranches, although it does have some reservations regarding the
implementation of this form of land use. The guidelines developed by the report attempts
to address these concerns, particularly the location, size and fencing requirements of
game ranches.
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In the context of WMAs, it is argued that this form of land use could be accommodated
either as fenced game ranches or as “conservancies” where the AAs could take advantage
of the professional management and infrastructure development associated with this type
of land use. However, the WMA Guidelines do not permit game farming or ranching to
be developed in the proposed WMAs. The rationale for this is unclear since the
difference between a “wildlife management area” and a “game ranch” is difficult to
distinguish. It is argued that this may be related to the reluctance on the part of the
Wildlife Division to sanction the fencing of extensive areas that may impact on wildlife
movements, or simply because the term “game ranching” is not defined in the WPT.
2.2 Scope of Work
The Scope of Work for this study (see Appendix 1) identifies four major tasks to be
addressed. In summary these are:
1. Provide recommendations on contractual, policy, legal and institutional issues that
may arise during the process of negotiating joint venture agreements with
entrepreneurs, including changes in legislation, guidelines or by-laws.
2. Provide an analysis of critical issues and provision of answers to a wide range of
questions including:
what types and duration of contracts are appropriate,
how contracts should be awarded,
consider the pros and cons of the existing systems in awarding contracts
how can security of investments assured,
access rights of local communities and enforcement of these rights,
identify areas of potential disputes and how these may be resolved
identify mechanisms to protect community rights, and mechanisms to create
awareness of these rights
mechanisms for contract enforcement
identify institutions responsible for monitoring, and suggest monitoring
parameters,
enforcement of environmental parameters
provision of social services by entrepreneur,
use of local labour,
mechanisms to ensure local community equity in investments, including value of
their contribution
level of local communities contribute in the investments,
Other issues to considered include:
Suggest provisions that must be incorporated by reason of applicable law or
policy.
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Suggest mechanisms that can guarantee supply of local inputs that will be needed
by entrepreneurs.
Review WPT policy on problem animals and suggest methods for
control/management of problem animals in areas contractually assigned to
entrepreneurs for designated purposes.
Suggest ways for collaboration between WD, Village Game Scouts, Anti
poaching Unit and District Game Scouts for law enforcement in areas
contractually assigned to entrepreneurs for the purpose of carrying out agreed
upon activities.
3. Suggest how local communities can access services to provide them with expert
advice on contractual issues, and indicate what kind of organization(s) could provide
these services effectively and efficiently (public sector agencies at all levels, reputable
private sector organizations, including both for profit firms and NGOs. Criteria for
selecting a given NGO/private sector organisation to provide such services are to be
provided. In the event that private sector organizations are not available in country,
suggest ways that such organisations could be attracted, with or without the kinds of
enticements that would have to be provided by government, donors or both.
4. Provide draft guidelines and contracts on how communities can enter into joint
venture with potential investors. The guidelines must be complete with procedures,
description of institutional responsibilities, rights and obligations of each stakeholder
as well as draft contracts.
Our approach to dealing with these issues has been to review all available literature and
meet with key stakeholders, including the Director of the Wildlife Division,
representatives from TANAPA, NGOs and the private sector, and representatives of local
communities. For ease of understanding, the report is structured in five sections:
An analysis of critical issues
Contractual, policy, legal and institutional issues
Access to professional services
Draft guidelines and “joint venture” contracts
Draft agreement for WMAs in Tanzania – The way forward
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3 ANALYSIS OF CRITICAL ISSUES
The introduction of “joint venture” initiatives and the implications of the WPT will have
a far-reaching impact on the management of wildlife in village areas in future. Naturally
this major shift in policy has raised a wide range of questions. In this section, we attempt
to provide answers to some of these.
3.1 Definition of a “Joint Venture” Contract
It is important at the very outset to clarify what is meant by “joint venture” – a term that is
freely used to describe the type of contractual arrangements that is envisaged between a
community and an entrepreneur.
3.1.1 Interpretation of a “Joint Venture” in the WMA Guidelines
The draft WMA guidelines envisage that a community and an entrepreneur will enter into
some form of agreement (or contract) to exploit the wildlife resource that occurs on
village land that has been designated as a WMA. In terms of the WMA Guidelines, a
Joint Venture” means:
When the AA and other parties form a separate organisation to undertake protection, management
and/or utilisation of resources in WMAs.
The Guidelines also cater for a “Partnership” that means:
Two or more authorised parties of which one must be an AA enter into agreement to undertake
protection, management and/or utilisation of resources in WMAs.
Other key concepts include:
Security of Tenure: means the authorised period, which an area designated as a
WMA, shall remain as such.
User rights: means the lawful permission to use wildlife resources found within the
WMA according to the existing laws and regulations.
Wildlife Management Area: means an area declared by the Minister to be so and set
aside by village government for the purpose of biological natural resource
conservation.
The Division of Wildlife through a Memorandum of Understanding (MoU) will grant
User Rights to an AA responsible for the management of the WMA. Once user rights
have been granted, the AA can enter into contracts with investors for the purpose of
utilising the wildlife resources. The Division of Wildlife can withdraw the user rights if
the MoU is not adhered to.
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Of crucial importance here is that the AA may only enter into an agreement for a period
of not more than 10 years, and that the AA may only enter into a Joint Venture or
Partnership with the concessionaire provided the AA holds the majority (i.e. greater than
50%) of the shares1.
3.1.2 Legal Interpretation of a “Joint Venture”
Usually a contract is the foundation of the relationship between two consenting parties (in
this case between the entrepreneur and the producer community). However it is
important that the legal meaning of the term “joint venture” is thoroughly understood by
all parties since it has far reaching implications in the manner in which agreements are
concluded.
Traditionally a “joint venture” will involve two (or more) parties who bring together their
respective skills, assets and financial resources to develop and take advantage of an
economic opportunity (in this case it could be tourist hunting or a photographic safari
lodge). In doing so, both parties to the agreement will provide the technical, financial and
managerial skills necessary for the success of the “joint venture”. Equally, both parties
will be responsible for their actions and will be required to share all the risks associated
with the venture. More importantly they will be required to equally share the financial
risks involved depending on their equity in the venture i.e. all parties will be liable for
any financial losses, law suits and tax implications associated with the venture.
The critical issue here is that local communities (or in this case the AA) are unlikely to
inject any substantial financial resources to a “joint venture” nor will they be exposed to
the “financial risk” associated with a hunting or tourism venture. That is not to say that
their contribution in the form of access to the land and the wildlife resource is not without
value. Rather, the vulnerability and circumstances surrounding community participation
in wildlife-based “joint ventures” dictates that local communities should be protected
from the financial risk associated with such ventures. Given that the access to the
resource is “communally owned”, an institution such as the AA cannot compromise this
position in a way that they loose control of their access rights to the resource to a third
party through a financial impropriety.
At the same time, given the level of investment and the nature of wildlife-based
commercial activities, it is essential that the interests of both parties be protected through
a legally binding agreement. In particular the structure of the agreement should ensure
that the communities receive a fair return for the assets under their control – in this case
access to the wildlife resource – and the interests of the entrepreneur are secured.
It is therefore critically important when developing “joint venture” initiatives that both
parties understand that it is the entrepreneur who will assume all financial risk and will be
responsible for providing the technical and managerial skills necessary for the success of
the venture. It is for this reason that the entrepreneur will seek security of tenure to
1 This requirement is under review
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ensure that he/she can recover their investment, and insist that the local community
uphold certain obligations and responsibilities in order to protect his/her investment.
Legally and technically therefore such agreements should be referred to as Resource
Management Contracts. However, for simplicity sake, it is easier to describe the type of
arrangement as “joint ventures”.
3.1.3 Type and Duration of Contracts
The two most important parts of the contract is its financial structure and the duration.
How these are agreed upon will determine the complexity of the agreement and how the
contract will be marketed.
The Payment System
There are many ways in which a community can charge a safari operator for the use of an
area, and for access to the animals on the land. Four popular ways are:
A single fee for the use of the area (applicable for either short duration safari hunting
and/or photographic safari ventures)
A fee for each animal shot/wounded/captured (applicable to only to hunting
operations)
A percentage of the gross income of the operation (applicable to either hunting or
photographic operations of medium duration ventures)
A negotiated “joint venture” in which the entrepreneur agrees to certain direct and
indirect costs, including certain social and environmental obligations (applicable to
either long-term hunting or photographic operations).
Some of the above methods are already being employed in Tanzania, both for hunting and
for photographic operations. The pros and cons of these various methods are discussed
below.
a Single fee lease paid annually
In such agreements, the community and the entrepreneur agree on a lump some figure that
is paid annually for the right to use an area for photographic tourism or to hunt a quota of
animals. The community is not exposed to any complicated legal arrangements and the
financial risks to both parties are minimal.
The disadvantage of this system is that there is the possibility that the community will not
receive the full value for their assets. Furthermore, the entrepreneur is not bound through
any legal arrangement to meet certain obligations (employment, provision of social
services etc.) since security of tenure is not assured. It is also difficult to demonstrate the
linkage between the value of wild animals and the tourism activities – communities
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therefore cannot see the long-term future of such ventures and tend not to have the
incentives to conserve wildlife in their areas.
b Fee paid for each animal shot
In this type of contract, the community agrees that the safari hunting company will pay a
set fee for each animal shot (or wounded). It may also set certain conditions regarding the
hunting season, delivery of meat and where animals may be hunted. The duration for this
type of agreement varies from three to five years with the option to cancel the agreement
at short notice.
The advantage of this approach is that the agreement is easy to administer and it is
possible to demonstrate the linkages between the value of wildlife and conservation. The
strong incentive for communities to conserve their wildlife is easily demonstrated because
they are paid directly for the animals that they produce.
The disadvantage of this system is that the hunting company is not afforded any level of
security and thus will be reluctant to invest or develop the WMA. There is also the risk
that the operator may not shoot all the animals on the quota and thus the community may
not receive the maximum income. Another disadvantage is that it is not always possible
to determine the market value of the individual animals. As a result, there is the risk that
the community could “undersell” the animals and thus be disadvantaged, particularly if
the agreement is for an extended period of time. This case is illustrated in the
MBOMIPA project where the local community has gradually increased the cost of
animals to resident hunters from Tshs 5 million in 1996 to Tshs 18 million in 2000.
c Percentage of gross income of the operation
This type of agreement assumes that the community has an understanding of the business
environment in which the entrepreneur operates. Furthermore the agreement is based on
gross income rather than net income so that the community is protected from the affects
of the entrepreneur’s ability to control costs. Depending on the structure of the
agreement, it also provides the community with the opportunity to become more directly
involved with the management and operation of the business through the transfer of
skills. It is, however, important to define how gross revenue will be calculated and how it
will be monitored. This presupposes a thorough understanding of the tourism business.
The advantage of this form of contract is that the community will benefit when the tour
operator has a good year, however, the disadvantage is that in a poor year both parties
will suffer. It is possible to protect against this by building a guaranteed minimum
income into the agreement so that communities will at least receive some income in bad
years. Another disadvantage is that it is difficult to monitor such agreements since it
requires accurate and honest bookkeeping on the part of the operator. In most cases tour
operators are not willing to share information regarding their financial arrangements with
third parties, especially in situations where they are assuming all the risk.
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d Negotiated “Joint Venture”
These are individually negotiated partnerships that describe in detail the responsibilities
of both parties to take advantage of both safari hunting and/or photographic tourism
activities within the limits set by the community. The duration of this type of agreement
can vary from three years to 25 years, and may include a renewal clause of some form.
The advantage of this type of agreement is that it provides security of tenure, and the
financial rewards for both parties can be high. There is also the incentive for the safari
operator to invest in the long-term future of the WMA, which in turn improves the
management of wildlife.
In essence the agreement incorporates five key sections2:
The purpose of the agreement.
The responsibilities of both parties.
The financial arrangements, including the payment schedule.
Conditions under which the agreement may be terminated, including clear remedies to
correct any breach of the agreement by the operator.
General terms and conditions that protect the interests of both parties and the
biophysical features of the WMA.
The “spirit” of such agreements ensures that the “land holder” is always in control of the
WMA and is fully integrated into the day-to-day operations of the project but at the same
time is protected from the financial risks involved in the venture. It is also important that
the entrepreneur be assured that his/her assets and investments will be fully protected and
that the venture can be successfully implemented.
The disadvantage of this approach is that the negotiations can be protracted and there is the possibility that
the final agreement may foreclose options for the community for an extended period of time. In addition,
the agreement can contain complicated legal jargon that the community may find difficult to understand.
Adopting this approach therefore requires careful planning to ensure that the interests of the community are
protected.
3.1.4 Summary of Types and Duration of Agreements
The following table summarises the type and duration of various agreements:
Type of
Agreement
Duration Advantages Disadvantages
2 See Section 6 for further details.
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Single Lease Fee
Applicable to both
hunting and
photographic operations
Annual with option to
renew Easy to administer Price can be undervalued
Limited investment by
operator
Difficult to demonstrate
linkages between Lease
Fee and value of
resource
Little security of tenure
Creates instability in the
industry
Fee paid for each animal
shot
Applicable to hunting
operations only
Up to 3 years with
option to renew Easy to administer
Linkages between value
of wildlife and
conservation can be
demonstrated.
Fees can be negotiated in
US$ for foreign based
companies.
Attractive to resident
hunters in poor blocks
High risk of
undervaluing wildlife
resource
Community may not
receive maximum
potential income if
animals not hunted
Little security of tenure
Percentage of gross
income
Applicable to hunting
and photographic
operations
Up to 5 years for
hunting operation
Up to 10 years for
photographic
operation
Both with option to
renew
Incentive for the
community and operator
to work together is high.
Both parties benefit
during good years
Encourages development
of concession
Suitable for tender
system
Requires a high level of
understanding of
business environment.
Community can be
prejudiced in poor years
unless safeguards are
built into the agreement.
Can be difficult to
administer and monitor
Negotiated Joint Venture
Applicable to hunting
and photographic
operations
Up to 10 years for
hunting operation
Up to 15 years for
photographic
operation
Both with option to
renew
Possible to develop an
agreement to suit a
specific situation.
Responsibilities of both
parties clearly defined.
Provides security of
tenure
Rights of both parties
protected
Can be lucrative for both
parties.
Improved wildlife
management
Engenders stability in
the industry.
Suitable for tender
system
Can take time to
negotiate and develop
the agreement.
Requires thorough
understanding of
business environment.
Usually requires
professional expertise to
negotiate the agreement.
Potential to foreclose
future options is high
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3.2 Options for Awarding Contracts
The options available to communities for awarding contracts are confined to one of the
following:
Direct negotiation with a prospective investor
Open Competitive Tender
Open Auction
Each of these options has advantages and disadvantages, and the approach can be
modified to suit particular circumstances (e.g. qualified tender or auction). In this section
we examine examples of agreements that have been concluded in Tanzania and discuss
approaches that have been used in Botswana, South Africa, Zimbabwe and Zambia.
3.2.1 Examples of Agreements Currently Active in Tanzania
There are examples of contractual arrangements between communities and private tour
operators in Tanzania that have been individually negotiated. These vary in complexity
from an informal arrangement with the community for access to an area to a formal
contract that commits the two parties to a long-term agreement.
It is understood that a long-term agreement has been negotiated between the
OLOLOSOKWAN VILLAGE COUNCIL and CONSCORP (a South African based
company) 3 in the Loliondo GMA that commits both parties to a 25-year agreement over
an area of 25 000 acres. It is also understood that a further six agreements are pending in
the Arusha District that are currently been negotiated with the assistance of AWF. Loose
arrangements also exist between mobile photographic operators and various village
councils in which ad hoc fees are paid for the right to set up temporary tented camps on
village land. It is understood that this practice has been in operation since 1991 with
more formal arrangements being established in 1998. Recently, however, the Wildlife
Division has suspended these arrangements pending the release of the WMA Guidelines
(Director of Wildlife, pers. comm.)
In another example, a photographic company (Sokwe Safaris, Arusha) has assisted a
community to establish three camp sites in their area that are under the control of the
Village Natural Resources Committee. These campsites are located close to the Serengeti
National Park and provide a base from which several operators can conduct safaris into
the park. No formal agreement has been signed between the operators and the
community but an informal arrangement exists in which the following payments are
made;
US$20/client/day – Paid to Natural Resources Committee of the Village
US$10/client/day – Paid to District Council
3 The consultants were not able to meet with these parties or establish the terms and conditions of
this agreement.
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US$10/entry/client – Paid to District Council
Under the auspices of the Selous Conservation Programme, an agreement has been
concluded between the Trustees of the JUKUMU SOCIETY and a TENT WITH A VIEW
SAFARIS LIMITED. In terms of this agreement, the company has been allocated 25ha to
establish a tented camp on customary land adjoining the Selous Game Reserve. The
duration of the agreement is for 10 years with an option to renew. An escalating “right to
operate” fee has been negotiated that increases from US$3 000/year in Year 1 to US$9
000/year in Year 10. In addition a bed-nite levy of US$5/client that escalates by at least
5% per year is also imposed.
Wildlife Division Agreements
The Wildlife Division has developed a standard agreement that is issued to safari outfitters who have
secured hunting blocks either in the Game Reserves or Game Control Areas. This agreement outlines the
undertakings (= responsibilities) of the Government and the outfitter (referred to as the “client” in the
agreement). The responsibilities of the government include:
Issuing the necessary permits
Allocating hunting blocks
Prescribe the fees to be paid, including any changes to the fees
Supervision of all hunting expeditions and safaris
Monitor all fees to be paid by the client
Control the transfer of licenses
Withdraw hunting permits in instances where the WCA is contravened
Ensure that the outfitter contributes to community development projects in the district within which the
hunting block is situated
Withhold issuing any hunting permits to an outfitter and/or Professional Hunter who has failed to
adhere to the ethics and standards required by the hunting industry in Tanzania
The responsibilities of the outfitter (= client) are to:
Produce evidence that he has acquired all the necessary permits and licenses, has the necessary
financial resources, and that the company is registered in Tanzania.
Provide names and particulars of the professional hunters
Obtain all hunting permits from the government
Hire the services of a professional hunter for all hunting safaris
Only conducts hunting safaris in blocks that are allocated to the outfitter
Only hunts the species specified on the permits
Only employ Tanzanian nationals for manual and casual labour
Abide by all directives, regulations and by-laws relating to the WCA, Revenue Laws, Exchange
Control Laws, Immigration Laws
Pay all prescribed fees (set at US$7 500/block/year)
Undertake to utilise not less than 40% of the total quota of key species allocated as well as to generate
revenue of not less than 40% of the value of the total quota so allocated
Undertake anti-poaching operations during and after the hunting seasons
Ensure that all hunting trophies are exported within 60 days after the completion of the safari
Be conversant with the WCA
Pay for all animals killed and/or wounded before trophies are exported
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Not resort to court action before complying with the provisions of the WCA to resolve his remedies
against government
Pay for the block(s) before the hunting season starts
Contribute to the development and welfare of the Community in the District
Other miscellaneous requirements include:
Professional hunters are in overall charge during a safari
Any accidents that occur during a hunting safari are to be reported to government
Outfitter is to replace a Professional Hunter in the event that he is injured or becomes unavailable
during a safari
Carcasses that are not utilised by the outfitter may be appropriated by government at no charge
All arms and ammunition not utilised by the client are to be exported unless the client surrenders these
to the government
All professional hunters are required to pay the prescribed fees
Contravention’s of the agreement can lead to termination by the government
Outfitter to ensure that all employees adhere to the terms and conditions of the agreement
Whilst this agreement appears to be comprehensive, there are a number of clauses that make the agreement
extremely cumbersome to administer. One particular area of concern is that the agreement includes
conditions pertaining to the regulation of the outfitter whilst in the field. This means that if the Wildlife
Division wishes to alter any of the operating procedures or impose new conditions on the outfitter, the entire
agreement has to be amended. It is for this reason that agreements rarely include such conditions – these
are better managed through a permit system that can be modified without interfering with the primary
contract agreement document.
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3.2.2 Advantages and Disadvantages of Direct Negotiation
This option usually involves an investor approaching a community directly to negotiate a
contract to exploit an opportunity in their area without having to formally tender. An
example of this is seen in the Conscorp agreement with the Ololosokwan Village
Council.
Advantages
The advantage of this approach is that the community does not have to invest any effort
or finances into preparing any documentation to market its wildlife resources. On the part
of the investor, the advantage is that competition from other potential investors is
removed.
This approach also allows the two parties to conclude their negotiations without the
pressure from other investors and this provides both parties with the opportunity to
discuss the various contractual issues in an amicable environment. Furthermore, unless
the proposed contract includes complicated clauses, there is no need to involve third
parties in these negotiations.
Disadvantages
The major disadvantage of this method is that there is a high risk that the community may
not receive the maximum value for the concession. In addition, there is a high risk that
the community could foreclose options if the duration of the lease is for an extended
period. This is particularly the case where hunting concessions are concerned.
3.2.3 Advantages and Disadvantages of an Open Auction System
Under this system the concession areas are advertised, providing background information
regarding the details of the area, duration of contract and contractual arrangements.
Potential investors are given an opportunity to visit the area to assess the situation on the
ground, and to query any issues regarding the terms and conditions of the contract. The
potential bidders are then invited to attend a public auction where the highest bidder
secures the concession.
The suitability of this of this option depends upon the management objectives for the
concession concerned. If the management objective is to maximise revenues, and ensure
transparency, then this is the best system to use. However, if there are other management
criteria for the concession (such as award to a concessionaire with a good track record, or
the community require certain management programmes and or social services to be
undertaken by the concessionaire), then this may not be the most appropriate mechanism.
Advantages
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The open auction system addresses the issue of transparency and is relatively simple to
administer. This system also clears the market and establishes the market value for the
concession. There is also the added advantage that the investor is required to pay the full
amount on securing the concession unless special conditions are negotiated.
Disadvantages
The major disadvantage of this system is that the auction system is open to all potential
investors. The community cannot therefore select the “best” partner in the joint venture.
In addition, it is difficult to impose conditions through a contractual arrangement unless
these have been clearly described to all participants prior to the auction. Even so, there is
still the risk that the winning bidder may still want to negotiate the terms and conditions
of the contract and this could delay the implementation of the project.
Another disadvantage is the fact that because the highest price has been paid for the
concession, there may be a tendency for the successful bidder to attempt to maximise
revenue generation from the concession e.g. shoot all the animals on quota and be less
inclined to invest in the area or spend money on management activities.
There is also the risk that objections from the domestic industry may be raised if the
auction is open to foreign bidders even though this would generate the maximum
revenues.
3.2.4 Advantages and Disadvantages of an Open Competitive Tender
The most common method of awarding contracts is through an open competitive tender
system. This approach does, however, require a certain amount of background
preparation in order to be successful. For example, the community will have to decide
exactly what it wants to sell, and will have to make decisions regarding:
What animals are to be hunted (if it is a hunting concession)
Where hunting will take place
The duration of the agreement
The structure of the agreement
The minimum value of the tender
How the tender will be marketed (advertising, contact with the industry etc.).
How the tenders will be evaluated.
It is also important to allow sufficient time to process the tender documents in order to
allow potential investors to respond to the tender notice. Care should also be taken not to
advertise the tender notices at the height of the tourist season since potential investors
will find it difficult to respond during their busiest time.
The community should also be aware that potential investors would require a certain
amount of background information regarding the WMA on which to structure their bid.
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To accommodate this, an information package can be prepared that provides the
following information:
A covering letter explaining the contents of the information pack and the proposed
agreement.
The full hunting quota (and the minimum value that the community expect for the
quota)
Any other base fees that the tenderer will be expected to pay (e.g. bed levy,
concession fee etc.)
Description of the area, including a map that indicates the boundaries
Date by which the tender is to be submitted
A standard tender form that provides background information regarding the company,
its directors, professional guides/hunters etc.
Provided that standard tender procedures are followed, and the tender process has been
well planned, there should be very little problem of selecting the winning tender from
among the applicants.
Advantages
The open competitive tender system will clear the market and provide all potential
investors with an equal opportunity to secure a concession area. This method will also
provide the opportunity to determine the market value for the WMA on offer and thus the
community can be assured that it will receive the maximum income for the area. It also
allows the community some flexibility in awarding the tender, and they do not necessarily
have to accept the highest bidder. Another advantage is that the concession can be
awarded on the basis of criteria other than financial. This system is greatly improved by
insisting that technical and financial proposals be submitted separately. Furthermore the
community is not obliged to accept any or the highest offer if the proposals do not meet
their requirements.
Disadvantages
The disadvantage of this system is that, unless the are specific restrictions put in place, anybody can
participate in the tender. This means that the community may enter into a contract with a potential investor
who knows very little about the industry and therefore will fail to meet their commitments.
The process is not transparent and can leave the organisation exposed to allegations of corruption unless
specific conditions are put in place to mitigate against this. Furthermore, the selection process can be
problematic if the tenders offer a wide range of benefits that are difficult to assess. There is also the risk
that the revenues raised through the tender system may not be as high as under the auction system.
3.3 Examples from within the Region
Community-based photographic and hunting concessions have been negotiated
throughout the region and the following examples summarise the approaches adopted in
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Botswana, South Africa, Zimbabwe and Zambia. The complexity of these approaches
varies greatly depending on the area, value of the resources and the level of competition.
3.3.1 Botswana
Several community-based conservation programmes have been successfully initiated in
Ngamiland in north-western Botswana in recent years. This initiative has been put in
place following a substantial amount of land use planning on the part of the district land
board that identified various WMAs. These WMAs were then categorised as either
hunting and/or photographic areas that were under the control of a local community or the
district authorities.
Communities wanting to enter into a joint venture agreement are required to establish a
registered Trust4 whose objective will be to sustainably manage the natural resources of
the WMA for the benefit and development of the community. The Trust and the Land
Board enter into a “Head Agreement” in which the Trust is granted sole rights of
managing the resources within the WMA.
Through the “Head Agreement”, the Trust is empowered to set the terms and conditions
under which companies submit their tenders for the concession. These include:
The purpose of the tender (enter into a joint venture, managing hunting and tourism,
guidelines to preparing technical and financial proposals etc.).
Rights of the Trust and safari company (restricted to Botswana registered companies,
structure of the joint venture, duration of lease, condition for renewal, exclusivity
rights etc.).
Conditions imposed by the Trust (provision of Community Escort Guides, delivery of
meat, community traditional rights to collect firewood, thatching grass etc., hunting
season, citizen hunting, hiring of local labour etc.).
To qualify for the tender, only companies registered in Botswana can apply. In addition,
safari operators are forbidden from canvassing for votes in the WMA between the time
that the tender is advertised and the award of the tender. Canvassing in any form is
prohibited and can lead to disqualification.
The tender procedure requires that three documents be submitted under a separate cover.
These are:
1 The Technical Proposal
This is to be submitted in accordance with detailed terms and conditions prepared by the
Trust. These are:
4 This Trust is similar to the proposed Authorised Association under the WCA
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The technical proposal must not contain any reference to the tenderer, its directors,
shareholders or its employees, or any reference to the financial offer. Failure to meet
this requirement will result in disqualification5.
The technical proposal should be within the framework of relevant government
legislation and any land use or development plans for the WMA.
Clear and concise statements regarding the social, ecological, economic and
management objectives of the joint venture are to be provided, including the
proposed joint venture arrangement.
A brief outline of the natural and economic environment is to be provided (i.e.
national, regional and local setting of the project, current business and economic
environment, understanding of government policies, understanding of social and
development needs of the community, understanding of district development plans,
understanding of natural and socio-economic environment within the WMA).
The proposal must demonstrate knowledge and understanding of the current wildlife
status of the area, including the intentions of the tenderer towards managing the
wildlife populations and how the wildlife populations will be protected from illegal
use.
The technical proposal must clearly show the activities proposed to be undertaken
within the WMA (hunting, photographic, walking, canoeing etc.).
The technical proposal must demonstrate how the harvesting of natural resources by
the local community will be accommodated under the project, including how
community/resident hunting will be managed to avoid conflicting with the
commercial activities.
All proposed development of infrastructure in the WMA must be described and
detailed on appropriate maps, including detailed costed plans and work programmes.
These plans must also demonstrate that they will not adversely affect the area, its
people or wildlife populations.
A detailed development plan is to be included that takes into account climate,
breeding seasons, any animal migrations etc.
The tenders should stipulate the number of local employment opportunities that the
company will provide and the respective positions, competitive salaries, guaranteed
minimum of community members employed, season contract work, staff training,
type of accommodation etc.
Tenders are required to provide clear indications of their proposed community
development programme (e.g. skills transfer, staff recruitment, development of
handicrafts, development of small scale businesses, assistance with transport,
provision of water, provision of food, cultural tourism, educational development,
schools, clinics etc.).
A cash flow analysis of the proposed infrastructure development and sources of
finance are to be included. Projected income should be clearly explained with
anticipated tourist numbers and turnover.
Tenderers are required to demonstrate how they will market the area.
5 This overcomes the problem of transparency in the tender process – the evaluators do not know which
company is being evaluated.
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2 The Financial Proposal
This is a relatively simple document that highlights the following:
A guaranteed minimum land rental with proposed increments during the course of the
agreement.
A resource royalty as a proposed percentage of the gross income accruing from the
use of the natural resources (usually set at about 4%).
A fee for each species on the quota equal to or above the reserve price. Tenderers
should show their proposed increments.
3 The Company Background
The tenderer is required to provide the following minimum information in this document:
Copy of the company’s Certificate of Incorporation, including a list of all major shareholders, the
directors and their nationality.
Copy of any tourism licenses.
An overview of the companies activities in hunting and/or photographic tourism in Botswana.
Names and CVs of their professional guides and hunters the company intends to employ.
Any brochures/advertising material that the company may want to include.
Tender Assessment Process
A technical committee is appointed by the Trust to review the Technical Proposals. This
committee consists of members of the Trust, Land Board, Department of Wildlife and a
community representative. Each technical proposal is scored in terms of its technical
aspects, merits and compliance with the tender conditions. A short-list of tenders
(usually not more than six) is then prepared and presented to the Review Committee of
the Trust.
The Review Committee then opens the envelopes containing the Financial Proposal and
Company Background. With the help of the Technical Committee, a short-list of the
three best tender proposals is selected. These are then presented to the Village Council.
In certain circumstances, the shortlisted tenderers may be required to present themselves
for an interview and present a synopsis of their company to the meeting.
Thereafter a secret ballot is conducted to select the successful candidate. In the event that
the financial offer of the winning proposal is lower than any of the other bids, then
successful company may be asked to match the highest financial bid.
Advantage of this approach
This approach to awarding a concession may at first appear to be complicated and require
a high level of technical input. However, its main advantage is that it protects the
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communities from canvassing by safari operators. The technical proposal also allows the
technical committee to assess the commitment of the tenderer and their understanding of
the natural and socio-economic features of the WMA. Furthermore, by insisting that no
reference is made to the company, its shareholders or directors in the technical proposal,
it is extremely difficult for the technical review committee to identify or recognise the
company. This means that the best six technical proposals are shortlisted irrespective of
the company background.
With regard to the financial structure, the format encourages the tenderer to submit a
competitive bid since it is possible that they could be eliminated when the financial
proposals are reviewed. In addition, if the winning proposal is lower than the others,
there is the opportunity to match the best financial offer.
Disadvantages of this approach
The major disadvantage of this approach is that it requires a substantial input from
technical experts in setting up the tender notification and to assess the technical
proposals. Furthermore, tenderers are usually required to employ professional assistance
to prepare the tender documents, which could be costly and time consuming.
The tender assessment process also assumes that the Land Board has a clear vision of
how they intend to develop the region. In the case of Tanzania, this would require long-
term planning on the part of the Village Council and thus emphasizes the importance of
village land use plans.
3.3.2 South Africa
The South African National Parks (SANP) has adopted a strategy termed
“Commercialisation as a Conservation Strategy” that provides the private sector with the
opportunity to operate within a national park, but without alienating any of the SANP
assets6.
A detailed analysis of SANP’s existing commercial operations identified that within
SANP’s existing commercial operations, the organisation has relative competencies and
certain problem areas. This provided the foundation for a phased approach to the
implementation of the commercialsiation strategy. The first phase of this process consists
of the following:
Outsourcing all the shops and restaurants throughout the organisation. SANP is
currently exploring different ways of implementing this element, very mindful of the
market research conducted showing that visitors are very sensitive to “over
commercialisation”.
6 It is important to note the difference between commercialisation and privatisation. Privatisation in
terms of the conventional definition involves the transfer of assets from the State to the private sector.
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Concessioning out the existing small camps in Kruger National Park that can be
effectively managed by specialists in the industry who are able to make better use of
the resource base.
Granting a number of new peripheral concessions in Kruger National Park, Addo
Elephant and Kalahari Gemsbok.
Concessioning the hotel and chalet facility at Golden Gate Highlands National Park.
The concessions for the existing small camps have been advertised on the SANP website,
and are scheduled for implementation by October 2000. Other facilities are being
considered for commercialisation in both the near and medium term, but this requires
extensive analyses and thorough consideration of a number of issues, including, critically,
accessibility.
Approach
SANP is mindful of the numerous potential pitfalls associated with embarking on such a
strategy. In order to ensure that the risks of making mistakes are minimised, SANP has
retained the services of the International Finance Corporation, the private sector arm of
the World Bank, who are specialists in such transactions. The IFC is acting as SANP’s
lead advisor and is making use of a number of specialist sub-consultants to further inform
the process. These are:
Description of the Sites
Environmental Issues
Social Issues
Contractual and Process Issues
In the context of this report, we have highlighted the contractual and process issues of this
approach.
Main Contract Terms
The means by which private sector interests will be granted rights to take over or
establish new game lodges within the National Parks boundaries is the concession
contract. This is a contract by means of which SANP grants to the concessionaire the
rights to use certain assets (in particular, land and any buildings that may already exist) in
return for payment of concession fees. There are important features of concessions:
SANP remains the owner of the assets (land and buildings) and immediately becomes
the owner of all new fixed assets built on the site even if the concessionaire financed
these.
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The exercise of the rights is congruent with the term of the contract – when the
contract expires, subject to termination provisions, the concessionaire’s rights expire
with them.
At the expiry of the contract, the land, plus any buildings thereon, revert to the
possession of SANP.
As counterpart to these rights, there are a set of obligations on the part of the
concessionaire to respect the rules regarding the environment, social objectives,
empowerment and so on.
Infringement of these rules incurs penalties and ultimately the rupture of the contract
with the assets reverting to SANP.
Principal terms of the draft concession contract include:
Term: In the normal case, the term will be for 15 years. Exceptions may be possible in
the case of very large investments that require a longer period of amortisation.
Option for Renewal: Concessionaires will not have an option to renew at the end of
the term.
Re-Bid Upon Expiry: At the end of the concession period, the contract will be put up
for re-tender to interested bidders. The incumbent concessionaire will be entitled to
bid.
Use of Concession Area: The concessionaire will have exclusive use of a specified
area of land ("the Exclusive Traversing Area"), under specified terms. These areas
will be off-limits to normal Parks visitors.
Construction of New Facilities: The concessionaire will bear the cost of construction
new facilities, including roads, buildings and infrastructure.
Environmental Regulations: All concessionaires must comply with all existing SANP,
Provincial and national legislation concerning protection of the environment, in
addition to those regulations specifically spelt out in the contract
Payment of SANP Fees: Concessionaires will pay fees to SANP for the right to use
the concession area, either as a minimum annual rental, or as a percentage of gross
revenue - whichever is the greater.
Penalty and Termination Provisions: Concessionaires will face a sliding scale of
penalties, for breaches of environmental, social or financial terms of the contract.
After financial penalties have been exhausted, SANP may terminate the contract for
continued breaches.
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Prequalification
The purpose of prequalification is to ensure that all bidders have the technical and
financial strengths, and the ability to implement the project according to prescribed
standards. Bidders for the concessions should have demonstrated experience in eco-
tourism, and sufficient financial standing that they can be expected to mobilise the
investment needed. Prequalification criteria will be set to require this.
The prequalification hurdle will be set to ensure that the pool of potential bidders is
sufficiently large to generate competition. Criteria will be set on a site-by-site basis,
based on the level of interest for each site, and the quality of operators who have
expressed interest.
Due Diligence Process
Prequalified bidders are invited to conduct their due diligence at SANP and are given two
months to do so. SANP charge an administrative fee for providing support services to
bidders during their due diligence that involves:
Site inspections (organised by SANP)
Access to data and other information
Access to, and the opportunity to comment on, the draft concession documents
A detailed explanation of how the bidding criteria will work
The entire process is controlled by SANP in order to ensure that all bidders receive the
same access to information.
Bidding System and Evaluation Criteria
The design of the bidding system is driven by the need for transparency. The primary
criterion for selection of bidders will be financial: the amount of revenue the concession
will generate for SANP over the contractual term. However, it is recognised that there is
a need to incorporate other, non-financial criteria in the bid evaluation process.
The recipe for transparency is to provide all bidders with the same information before the
bid; pre-agree the major contractual points among all bidders; tie down the non-financial
aspects of the concession as contractual obligations; and have a clear and well-defined
method of evaluating the bids. All bidders will be faced with the same length of contract,
development conditions, allowed activities, environmental safeguards, etc. The
obligations then become the same for all bidders, and the bids are differentiated solely by
pre-agreed criteria.
Bidders will be provided with draft contractual documents prior to the bid. Their
individual and collective reactions to the documents will be heard and, to the extent
possible, changes will be made to the final documents to respond to bidder concerns.
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Once finalised, these documents are binding, however; and they cannot be changed
thereafter.
Financial Arrangements
There will be a fixed annual element in the concession fee formula, which must be paid
regardless of actual revenues. In addition to the fixed annual element, in their financial
bids, bidders will also bid on fees to be paid as a percentage of future turnover. Fees
payable to SANP for any given year will be the greater of the fixed fee or the percentage
of turnover. The evaluation process then discounts this stream of revenues to a Net
Present Value (at a discount rate chosen by SANP and disclosed to the bidders).
In addition to the financial bids, the bidding methodology will also evaluate other, non-
financial aspects to the bid proposal. As well as ensuring that the business plan is well
founded, and that environmental criterion have been understood and will be respected,
empowerment will play an important role in the evaluation.
Bidders must submit the following documents in their bid submissions:
A Price Offer, strictly according to the wording to be provided by SANP in the
bidding instructions;
A Business Plan, indicating detailed proposals for establishing the concession,
number of beds, anticipated market, revenues and occupancies, historical track record
of sponsor, capital investment, employment projections, etc. (detailed format to be
provided by SANP);
Financial projections, showing total projected revenue (with underlying assumptions),
projected fee income to SANP, operating costs and net profits;
Signed Memorandum of Understanding (format provided by SANP); and
Fully executed Bid and Performance Bonds, as per format provided by SANP.
SANP will allow one week for evaluation of bids, after which the winning bidder will be
declared, and invited to commence discussions with SANP to finalise and execute the
contractual documents. In case the winning bidder is unable to execute the project
according to the terms contained in the tender documents, the Bid Bond will be called,
and SANP will move on to hold discussions with the second-placed bidder.
The technical and other appraisals will be done first, and then the financial bids will be
opened in public, permitting instantaneous announcement of the winning bidder.
Bid and Performance Bonds
The bid submissions will be backed by a Bid Bond, which will be refunded to the bidder
if (i) the bidder loses; or (ii) the winner signs all the contracts within a reasonable closing
period. This is to ensure that all bidders demonstrate their financial commitment to the
bid process, and do not submit inflated bids that they are not able to fulfill.
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In order to enforce compliance with the terms of the concession by the winning bidder,
they will be required to post a Performance Bond, to be valid throughout the duration of
the concession. This could be in the form of an irrevocable letter of credit from a bank of
sufficient standing, immediately callable upon the failure of the concessionaire to respect
financial or other obligations contained in the concession contract. The Performance
Bond will be an amount equivalent to 10% of the estimated capital cost of the total
facility.
3.3.3 Zambia
The Zambian wildlife agency is going through a restructuring process that has seen the
formation of a parastatal known as the Zambian Wildlife Authority (ZAWA). To generate
sufficient income, ZAWA is re-examining its options regarding various hunting and
photographic concessions with a view to attracting private sector investment.
ZAWA has adopted an approach that is similar to that in Botswana and South Africa
where potential bidders are required to prequalify for the right to bid for a concession in a
national park. Stringent conditions have been set that require the bidders to provide a site
plan and a detailed business plan.
The Tourism Concession Agreement is a comprehensive document that details the fixed
and variable charges, the level of capital investment (as described in the business plan)
and payment schedule. The agreement does not bestow any land rights or ownership of
rights whatsoever on the concessionaire and the Grantor will assume ownership of all
infrastructure build on the site at the end of the agreement.
The rights of the concessionaire are limited to carrying out the tourism services as
outlined in the business plan without interference from ZAWA, including the right to
dispose or transfer the rights of the agreement to a third party subject to conditions set
by ZAWA7.
The obligations of the concessionaire are equally spelt out in great detail, emphasizing
that the concessionaire shall establish best business practices and procedures intended to
incorporate sustainable development strategies. This includes capital investment,
preventative maintenance and repairs, training and manpower development.
The rights of the grantor are guaranteed by the relevant legislation that retains the right to
inspect the operation at any time. The Grantor also has the right to change the fee
structure etc. in consultation with the concessionaire but only implemented after due
notice of one calendar year.
7 This position is not normally adopted in short to medium term concessions because it allows the
concessionaire to sell the concession to a third party who may not be in favour with the government.
However, this option is necessary where long-term concessions are involved.
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The obligations of the grantor are to ensure that the park management systems and
procedures are maintained and conducive to sustainable tourism development. Other
major obligations include acknowledging receipt of payments and responding to requests
from the concessionaire to undertake developments that will enhance the tourism
activities. A key obligation of the grantor is to guarantee not to build or allow building of
any permanent tourism structures within a 5-kilometre radius of the existing tourism site.
3.3.4 Zimbabwe
Two approaches are used in Zimbabwe. First is the auction system that is favoured by the
Department of National Parks and Wild Life Management (DNPWLM) for concessions
in safari hunting areas. In contrast, Rural District Councils tend to favour the tender
process that usually involves some form of “joint venture” arrangement.
Auctions for Concession Hunting Areas
In this approach the DNPWLM sets a guaranteed minimum quota for a period of 3 to 5
years for a concession area, including the terms and conditions of the agreement.
Potential bidders are then required to bid in an open auction system for the right to hunt
for the full period of the agreement. This amount is paid up front to the DNPWLM in full
prior to the start of the concession. In addition, the winning bidder is also required to pay
30% of the value of the license fees for all the animals on the guaranteed minimum quota
with the balance being paid as and when they are shot (or wounded). Any additional
animals offered on the quota are paid for in the same way.
This can be summarised as follows:
Right to Hunt -Once off payment for the duration of the contract
(established at auction)
Trophy fees -Paid for each animal shot/wounded
(Minimum quota guaranteed)
Annual Resource Use Fee -Calculated at 30% of the value of the Minimum
Quota
Joint Venture Contracts (Hunting and Photographic)
The approach adopted by the RDCs has been described above (see section 4.4.3). The
first step in this process is to advertise the concession area and invite bidders to submit
tenders. In some cases, the RDC may stipulate that the bidding companies demonstrate
that “indigenous Zimbabweans” hold 50% of the shareholding.
The tender procedure is not as detailed as that adopted by the Botswana authorities, but
does require that the bidders prepare a detailed description of the proposed “joint
venture”. This will include details of the type of hunting operations (and/or photographic
operations), infrastructure developments, level of investment, contributions to anti-
poaching and PAC and the envisaged contract arrangement.
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An important aspect of the proposal is the proposed financial arrangements. The system
widely adopted in Zimbabwe Communal Lands is the Percentage of Turn-over System in
which the concessionaire pays the lessor an agreed percentage of his annual turnover from
the concession. This is usually subject to a guaranteed minimum in order that the lessor
is protected from situations where the operator fails to sell the full quota. In return the
lessor has to guarantee a certain minimum quota, which gives the operator some comfort
that he will not be required to pay the guaranteed minimum in a situation where the
animals are not available through excessive illegal hunting or drought.
It is not unusual for the potential bidders to offer up to 45% of all revenues generated by
the venture to the RDC for a hunting concession8. In addition, some bids are prepared to
pay up to 80% of the predicted fee as a guaranteed minimum up front at the beginning of
each season. The direct financial arrangements for a concession can be summarised as
follows:
Financial Arrangement Amount (US$)
Total Income from 600 Hunter Days 375 000
Total Income from Trophy Fees 300 000
Total income from the Venture 675 000
Share of Revenue due to RDC (45%) 303 750
Guaranteed payment (80%) of Revenue
Due
243 000
Balance Due 60 750
RDCs’ may receive up to 20 offers for a concession and therefore the tenders need to be
assessed. In this regard, RDCs have received extensive training from NGOs such as
WWF in recent years and this process no longer presents a major problem for the RDCs.
Virtually all the RDCs have developed set procedures for dealing with this issue, and
although there are concerted efforts to maintain a transparent environment, the process
can still be politically influenced.
The advantages of this system can be summarised as follows:
By quoting in US$, inflation in the domestic currency and changes in quota
composition are automatically adjusted for.
The lessor benefits from profitability of the operation in good years, but is protected
from losses in bad years.
Lessor has the incentive to properly manage the concession and its wildlife, which can
lead to an increase in quotas and thus and increase in revenues for the lessor.
The lessor can become more involved in the operation than would be possible under a
straight lease.
8 The percentage offered for photographic concessions is usually much lower and ranges from 6 – 10%.
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The only significant disadvantage is that there is an incentive to the concessionaire to
under-declare his revenues. This can be minimised by insisting than independent auditors
prepare an audit certificate.
3.3.5 General Conclusions on Principles of Allocation and Pricing
With regard to hunting operations, there is a tendency for the authorities to split the fee to
operate a concession between a concession fee and a trophy fee. This is meaningless to
the potential bidder because it is the total price that matters to the operator. How he
recovers this money to pay the concession fee is of little concern to the lessor, and it has
been suggested that the two prices be lumped together. The problem with this suggestion
is the question of how to adjust the concession price for inflation or for changes in the
quota structure.
Nonetheless, on the basis of the foregoing discussions, it can be concluded that the
following principles should be applied in devising systems for allocating access to
hunting and photographic concessions, and for determining the price of these
concessions:
The system should to a maximum extent clear the market.
Competition between operations should be fostered.
Systems should be practical and enforceable.
Where possible, systems should be transparent, and avoid any command allocation
decisions.
Unfair competition between the State and the private sector should be avoided to the
maximum extent possible.
Investment in, and development of, the industry should be encouraged.
Revenues from the hunting/photographic operations should be maximised, subject to
environmental and ecological safeguards.
Operators securing concessions should be given security of tenure.
The systems for regulating the industry must be appropriate, and conducive to further
development of the industry.
It is easier to regulate the industry by minimising the rules and maximising the
penalties for contravention.
3.4 Pros and Cons of the Existing Systems in Awarding Contracts
The existing system of awarding hunting blocks entails applicants submitting their
applications to the WD, which compile and screen the applications based on:
Company legal status
Type of venture (local, foreign or JV)
Capital and working equipment commitment.
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An Advisory Committee on Block Allocation (composed of lawyers, politicians, retired
civil servants and private business people etc.), appointed by the Minister of Natural
Resources evaluates the applications and provides recommendations to the Minister for
approval. The Director of Wildlife Department is both the Secretariat to the Advisory
Committee and advisor to the Ministry's Permanent Secretary. The Permanent Secretary
is the main adviser to the Minister on all technical issues.
The contract is awarded for a five-year period with the option to renew, and there is no
limit on the number of blocks awarded to a single tour operator. The Block Fee for each
hunting block is set at US$7 500, which has not changed for at least ten years.
Once allocated a block, the outfitter is required to pay all the necessary fees, and apply for
hunting permits for all clients that intend to visit the area. The outfitter is also required to
enter into an agreement with the Director of Wildlife that outlines the responsibilities of
the government and the outfitter.
Pros :
The Advisory Committee on Block Allocation serves as a filter to ensure that hunting
blocks are only allocated to qualified operators. This means that there is some form of
prequalification in place and to a certain degree, the process can be considered a
transparent procedure (applicants who are not awarded contracts have a right of appealing
to the Minister). The system offers security of tenure for up to 5 years, but there is still a
high level of risk that the Director can revoke the agreement.
Cons :
The most serious constraint of the Tanzanian system of awarding tenders is the fact that it
is not conducive to maximising revenues, and there does not appear to be any incentive
for the WD to increase its revenue generation. This situation may now change given that
local communities will be in a position to negotiate directly with the private sector.
Nonetheless, the fact that the WD has set the concession fee value of a hunting block at
US$7 500/year and maintained this value for more than 5 years has probably seriously
under-valued the hunting industry in Tanzania. An attempt to change this position by
imposing a higher fee will probably meet with stiff resistance from the local industry,
unless this fee is established through some form of open tender.
This strategy of setting the “block fee” also jeopardises the position of local communities
who will be seeking the market value for “their” wildlife resources. They will not be able
to compete with government if the prices are lower on government controlled Game
Reserves.
Secondly, there are significant dangers attached to the requirement by the WD that insist
that operators shoot 40% of their quota and generate revenue to the value of 40% of the
quota. This policy will only encourage operators to over-hunt the quotas in order to meet
this requirement, and therefore there is the risk that the wildlife populations could be
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over-hunted. If this strategy is extended to communal areas there is the risk that the
wildlife resources in these areas could be exploited in an unsustainable manner and thus
will not be in the best long-term interests of the community.
Thirdly, under the current system a single outfitter can be allocated more than one
hunting block. The implications of this are:
It prevents new players from entering the industry and tends to create monopolies.
Outfitters who control several blocks may not use these as efficiently and thus
prejudice government of foreign currency earnings.
Competition for the blocks is reduced with the result that the maximum revenue for
the blocks may not be realised.
This system does not clear the market since the allocations are made on the basis of
arbitrary rationing by the authorities.
Other issues that are detrimental to this method of allocating contracts include:
Difficult for new entrants to secure contracts
Difficult to revoke block contractors as there are no laid-down tourist hunting
regulations
The process can be subjected to political pressures
Because the blocks have been under-valued, the government structures responsible for
management have been unable to keep pace with developments in the wildlife
industry.
Associated with this have been poor budget allocations with the result that the
infrastructure has deteriorated, and effect law enforcement is not conducted. The
result has been a decline in wildlife populations.
3.5 Security of Investments
Under the proposed “joint venture” arrangement, it is envisaged that the one party of the
venture (i.e. the community) will not assume any of the financial risks. Security of
investments will therefore be the responsibility of the entrepreneur. Therefore, only
investors willing and able to tolerate the potential loss of their investments should
consider taking part.
However, this arrangement is not conducive to maximising returns from the joint venture
and it is for this reason that it is important that the investor is offered security of tenure.
In addition, the duration of the agreement should provide the investor with confidence
that he will recover his investments during the course of the agreement. It is for this
reason that hunting joint venture agreements in Zimbabwe include a guaranteed minimum
quota.
A further issue that must be taken into consideration is the manner in which the
agreement is terminated. Both parties require a reasonable period of time to disengage
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from the agreement so as not to prejudice their investments. Of critical important here is
the termination clause of the agreement - communities cannot summarily cancel an
agreement at short notice without just cause and visa versa. To protect both parties in the
event that this does occur, there are usually fairly stringent clauses that require one or
other party to the agreement to pay full compensation.
3.6 Access Rights of Local Communities and Enforcement of these Rights
Access rights of local communities should be clearly described in the background
information provided to the potential bidder before submitting their proposals. These are
then enshrined in the agreement and could include:
Access to water
Access to firewood and other forest products
Access to carcasses and subsistence hunting quotas
Access to cultivated lands and right of way
3.6.1 Mechanisms to Protect Community Rights
As pointed out above, the rights of the community are usually identified in advance of the
joint venture being advertised. These are then incorporated into the agreement and thus
are legally binding on both parties. Penalty clauses and remedial actions are included in
the agreement that allows the community to rectify any infringements of these clauses.
This can range from a simple financial payment to temporary cessation of the hunting
and/or photographic operations of the outfitter until the issue at stake are resolved.
3.6.2 Mechanisms to Create Awareness of these Rights
Creating awareness centres on developing robust lines of communication with all the
various stakeholders in the agreement. This involves the Village Council as well as
individual villagers in the concession area. It is for this reason that “joint venture
management committees” are established under the agreements. This committee acts as
the forum through which both parties can discuss the various issues associated with the
venture.
3.7 Areas of Potential Disputes and how these may be Resolved
Potential areas of dispute could involve the following:
a Payment
This potential area of dispute arises in situations where the community is not fully
conversant with the payment structure for the agreement, especially those that require the
outfitter to pay a percentage of the gross income. Other areas of potential conflict include
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misunderstandings of payment schedules, late payments and failure to agree on
incremental price increases (especially where this involves trophy licenses).
It is important therefore that the payment schedule is clearly defined in the agreement,
and that both parties have a thorough understanding of the terms and conditions of the
agreement.
b Quotas and quota setting
The size of the quota and the animals included on license presents a potential area of
dispute because this determines the profitability of the hunting operation. An outfitter is
not able to market the quota effectively if it is constantly changing from one year to the
next. Furthermore, cognisance must be taken of the outfitter’s recommendations
regarding increasing or decreasing the quota for specific species. After all, they spend
virtually every day in the field and thus are usually in a better position to provide an
opinion regarding the composition of the quota.
One way to resolve any differences of opinion is to guarantee a minimum quota that will
not be reduced during the duration of the agreement, but can be increased if this is
warranted. It is also important that the outfitter is informed about the quota well in
advance of the hunting season so that he has sufficient time to market the quota.
c Grazing and Cultivation
Outfitters who are prepared to risk substantial investments in developing a wildlife-based
enterprise in a WMA will require some surety that cattle or people wanting to cultivate
crops will not invade the area. This is especially the case during the tourism season when
such activities can disrupt game viewing or cause the wildlife to move into different areas
and away from the disturbance.
The outfitter must be able to meet with the Village Council (or AA representatives) to
address these issues should they arise, and the Council must be in a position to take action
against the people responsible for these activities.
d Privacy
Outfitters based in village areas must accept that they will encounter local people during
the course of their safaris. However, although a limited amount of local movement will
be tolerated, foreign paying clients who want a “wilderness experience” are not usually
prepared to have their privacy invaded by large numbers of people. This can become a
rather sensitive issue if not managed correctly. Again, this issue can be addressed
through the “joint management committee” meetings.
e Illegal hunting and Problem Animal Control
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Outfitters who have purchased the right to hunt a quota of animals in a WMA will not
tolerate illegal hunting by the local communities, especially if this impacts on their safari
operations. Foreign clients are not prepared to pay top dollar for an area where there is
evidence of illegal activity. If the village is to allow subsistence hunting, this must be
carefully planned in close co-operation with the outfitter.
Similarly, if the village adopts an irresponsible attitude regarding problem animal control
e.g. killing trophy animals, or allowing excessive numbers to be hunted, can cause
misunderstandings between the operator and AA.
To resolve these problems requires the full commitment from the AA/Village Council to
control these activities. Where this is necessary, the circumstances must be fully
explained to the outfitter and if possible the outfitter must be given the opportunity to
take advantage of the situation.
3.8 Mechanisms for Contract Enforcement
As mentioned above, it is essential that the agreements contain clauses that are binding on
both parties. Furthermore, the agreement is structured in a way that gives the AA powers
to either suspend the agreement until the issue has been resolved, or to take the issue
before a court of law.
In South Africa, the winning bidder is required to post a Performance Bond that is held by
the AA for the duration of the agreement. If the concessionaire fails to meet his financial
or other obligations contained in the agreement, the lessee is entitled to call in the Bond,
claim the money and cancel the agreement.
3.9 Institutions Responsible for Monitoring and Monitoring Parameters
The issue of identifying institutions responsible for monitoring any joint venture
arrangements is complicated by the fact that three different government bodies are
involved. The Ministry of Lands deals with any matters relating to village land while
administrative issues are the responsibility of Local Government. All matters relating to
wildlife will be the responsibility of the Wildlife Division. The following table attempts
to illustrate the linkages between these three government bodies and the different
parameters each would be required to monitor9.
9 The Draft WMA Guidelines also outline the responsibilities of the various institutions (see section 2.1)
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Government Institution Monitoring Parameters
Authorised Association
Enter into MoU with the Division of
Wildlife
Responsible for day-to-day administration
of joint venture agreement.
Compliance with the agreement
(including MoU)
Payments made to AA
Outfitter activities in the field
Adherence to hunting quotas
Illegal hunting of wildlife
Employment of local staff
Occupancy levels at safari camps
Village Council
Responsible for activities of the AA
Receipt of funds from the Venture
Payment of dividends
Resolution of conflicts
Setting of hunting quotas
Minutes of Joint Management
Committee Meetings
Adherence to environmental safeguards
District Council
Responsible for Village Council
Implementation of social service
projects
Wildlife Division
Responsible for wildlife management in
WMAs
Status and distribution of wildlife
populations
Setting of quotas and quota utlisation
Activities of professional hunters and
guides
3.10 Enforcement of Environmental Parameters
The process of concessioning out land for the exclusive use of private sector safari
operators raises a number of issues regarding long-term environmental management and
monitoring of these areas. TANAPA has developed comprehensive procedures for the
development of eco-tourism ventures within the national parks (DALP –
Development/Action/Lease Procedures, July 1995). Section IV of these procedures
provides an environmental impact checklist that the potential bidder is required to
complete before the project proposal is considered by TANAPA. Enforcement of the
resulting environmental management plan is the responsibility of TANAPA
This case of the AA, it will be necessary to develop its own environmental safeguards and
undertake periodic evaluations to re-assess compliance with environmental covenants.
This means that the AA will have to develop some basic environmental policies,
standards and guidelines to guide its activities.
Some of the parameters that will have to be considered include:
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Site Carrying Capacity
Construction Activities
Visual Impact
Roads and Tracks
Biosphere Modification
Support Infrastructure
-Electricity
-Potable Water
-Artificial Water Features
-Communications
Waste Management
-Liquid Wastes
-Solid Wastes
-Air emissions
Buildings and Structures
Fire Management
Guest Activities and Safety
Off-road Driving
Supervision and Monitoring
All above issues will require careful supervision and monitoring by the AA (if it has the
capacity). Monitoring can be done in accordance with guidelines agreed to by both
parties and incorporated in the agreement. Regular monitoring visits to the WMA by
responsible AA member(s) should take place at any time and to any part of the WMA.
Environmental issues can also be discussed at the “joint management meetings” and
resolved to the mutual benefit of both parties.
3.11 Provision of Social Services by Entrepreneur
The prospect of entering some form of agreement often raises the expectations of local
communities who anticipate that the entrepreneur will provided a wide variety of social
services. Furthermore, entrepreneurs are often guilty of canvassing the support of local
communities by promising to provide various social services that they are unlikely to
honour.
The issue of providing social services must therefore be approached with great care as
this is a sensitive issue that can turn a community against adopting wildlife-based
activities as a form of land use. The design of the tendering system must therefore take
this into account, and ensure that the bidders have the financial and institutional capacity
to meet their commitments. It is also essential that the review committee critically
examine the type of social services that are being offered to determine whether these are
suitable and whether they can be sustained once the project ends.
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In many instances the AA (or its equivalent) will prefer to assume the responsibility of
providing social services using the finances provided by the venture. This is not to say
that the individual concessionaire should not develop linkages at his own initiative with
the community, but rather that the provision of social services should be closely
coordinated to ensure that the expectations of the community is met.
Monitoring and Measuring Social Impact
Where concessionaires have agreed to provide social services, they will be required to
agree in writing to the key indicators to which they have committed prior to operation of
the concession. During the term of the concession, they will be monitored for the extent
to which they have complied with quantifiable targets set at the beginning of the
concession period. These indicators could include measures such as:
Involvement in youth environmental education
Contribution in kind and cash to community projects
Schools development
Water development.
It must be recognised though that the development of social services is often fraught with difficulties and
unforeseen risks. Success or failure of a project is sometimes beyond the control of a promoter. It is
therefore important that this is not regarded as a provision to terminate the concession.
3.12 Use of Local Labour
A standard norm when assessing joint venture proposals is to examine the number of
employment opportunities that the tenderer envisages creating. This trend is also seen in
the agreements issued thus far in Tanzania. The Wildlife Division includes a clause in
their agreement that the outfitter undertakes not to employ persons not ordinarily resident
in Tanzania for manual and casual labour (i.e. drivers, skinners, trackers, gun bearers,
cooks, camp staff, general labourer etc.).
From the point of view of the outfitter, there is a tendency to employ staff on contract
during the season and then pay a retainer to the staff during the off season. In this way
the outfitter is able to retain staff that he has trained and the employees are assured of an
income throughout the year.
As the tourism industry develops in a community WMA it is possible to develop other
tourism related employment opportunities such as craft markets, cultural village tourism
and supplying local commodities to the camps (vegetables etc.) There are also
opportunities for the involvement of skilled and semi-skilled workers from nearby
communities who can maintain electrical and water supply systems, or undertake
construction and routine building maintenance.
There are a number of indicators that can be measured to assess the use of local labour in
a venture. These include:
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Number of staff employed from neighbouring communities
Quantity and value of supplies purchased from local communities (vegetable gardens,
etc.)
Number of contracts with, and value of services obtained from, local communities
(e.g. repairs and maintenance to roads, camp construction, provision of firewood etc.)
3.13 Mechanisms to Ensure Local Community Equity in Investments
As discussed above, there is a high level of risk associated with a community investing in
a tourism venture and where possible this risk should be kept to a minimum. There are,
however, certain circumstances where and local community can invest in a venture and
thus gain a certain degree of equity. This usually applies in instances where substantial
investments are made in safari lodges (i.e. 40 or more beds), but very rarely in ventures
such as tourist hunting, tented camps or mobile safari operations.
3.13.1 Mechanisms to Ensure Community Equity in Investments
The simplest method to ensure equity in investments is through the acquisition of shares
in the company. Various options are available to the community:
a Direct Investment
The community, through its Authorised Association, directly invests in the company and
buys a percentage of the shares. This could be as high as 49% but depends on the level of
investment and the skills and capacity that the community brings to the company.
b Share allocation
Under this option, the community is awarded an agreed number of shares by the
company. The community does not have to invest any capital in the company at the
beginning of the project, but is given the option to purchase the shares from the
concession fees that would normally be paid to the AA.
This means that the AA may elect not to receive any direct income from the venture for a
number of years, but it will gradually assume a greater interest in the company as time
goes by. This option is generally only suited for long term projects (say 25 years) and
could apply to a major hotel-type development.
c Employee Share Ownership Scheme
Under this scheme, the employees are awarded a certain number of shares depending on
their employment level. Depending on the profits, the company pays dividends to the
shareholders each year. On the leaving the company, the shares are purchased by the
company and re-issued to the new employee. The incentive of this scheme is therefore to
encourage the employees to perform well and remain in employment with the company.
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The more profit the company makes and the longer they remain in employment, the
greater are the returns.
3.13.2 Level of Local Communities Contribution in the Investments
The level of community contribution in the investment will depend on the circumstances.
The key issue here will be the length of tenure offered to the investors. Investing in short-
term ventures of 5 years or less is unlikely to be of much benefit to the community. In
such circumstances it is better for the community to request a guaranteed return rather
than risk investing their capital in the venture. In this way the community can address its
immediate socio-economic needs.
In contrast, long-term projects (such as the construction of a safari lodge/hotel) are
probably more attractive. The level of investment will depend on what the entrepreneur
is willing to forego but is unlikely to be as high as 50%. This would imply that the
community has the capacity to provide management and administrative skills to operate
the company and thus is prepared to equally share the risks involved in the venture.
The alternative is for the community to provide all the capital to establish a safari venture
and then seek the services of a manager to run the operation i.e. reverse the roles. The
risk here is that unless the community thoroughly understands the business of running a
safari operation, there is a fair chance that the venture will run at a loss and the returns to
the community will be minimal.
With regard to hunting operations, some operators in Zimbabwe have been prepared to
offer the community up to 45% of their gross income, which in effect is offering the
community a substantial stake in the venture.
3.13.3 Value of Community Contributions
Placing a value on the contributions made by a community is extremely difficult.
Consideration has to be given to:
The “quality” of the WMA as a tourist destination (species of wildlife, numbers,
wilderness area, access etc.)
The length of tenure offered. Short-term tenure is less attractive than long-term
tenure.
Magnitude of the tourist operation. An area that can support a large number of
tourists and offer a wide variety of activities (walking, game viewing, boating,
hunting etc.) is more likely to attract investors than an area that does not have such
opportunities.
It is for these reasons that it is important to adopt a tender system that tests the market.
Furthermore, the proposal must be made attractive to the potential investor and create
competition amongst the potential bidders. Once the baseline market value has been
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established (through an open auction system or tender), and the WMA develops a
reputation as a prime tourist destination, then it is possible to gauge the value of the area
and thus the value of the community contribution.
3.14 Provisions that must be Incorporated by Reason of Applicable Law or Policy.
Provisions of the Joint Venture must take into account provisions of the law that are
intended to protect certain categories of persons in the process of entering into contractual
undertakings.
The relevant and applicable law that governs contract undertakings in Tanzania is the
Law of Contract Ordinance, Cap. 433. This law stipulates conditions that have to be met
in order for contracts to be legally binding. For purposes of the Joint Venture (a form of
contract), the provisions of the Contract Law that need to be focused on are those relating
to Consent of Parties. This implies that the issue of “consensus ad idem”, (a meeting of
minds) between the Parties to the Contract. Where there is no consensus, the contract
would not be valid. Further, the consent of the Parties must not be obtained by fraud or
by misrepresentation of facts.
There also exist certain principles of the Law of Contract, which though not specifically
entrenched in the provisions of the contract law have to be considered. In this respect,
therefore, these have to be borne in mind while formulating the Joint Venture
Agreements. Every effort must be made to ensure that the Parties to the Agreement fully
understand the implications of the Agreement. This is especially important where one of
the Parties to a contract is at a disadvantaged position. For example, say by reason of
illiteracy, such person or group of persons could not comprehend and understand the
contents or implications of the contract. Where such a situation arises, such Party/ies
may invoke the defense of “Non est Factum” to seek the protection of the law. Where a
Party/ies to a contract invoke this plea as a defense and prove that the contents of
Agreement/Contract being contested were not fully understood at the time of executing
such Agreement or Contract, courts in Tanzania have declared such contracts unlawful.
3.15 Mechanisms that Guarantee Supply of Local Inputs Needed by Entrepreneurs
There are no mechanisms to guarantee supply of local inputs (vegetables, meat, building
materials etc.). A safari operation offering a top quality service must be assured that they
will be able to secure their needs on a regular basis. Their reputation will suffer if they
cannot provide a top quality service. Therefore, to ensure that local suppliers are able to
take advantage of the local tourist industry, they will have to develop a sound business
relationship with the tourism venture and ensure that they can supply local top quality
products on a regular basis.
3.16 Review WPT Policy on Problem Animals
Section 3.3.12 of the WPT addresses the issue of human-wildlife conflicts that occur in
rural areas. The policy recognises that wild animals do cause damage to property and that
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human lives are at risk. However it also recognises that wildlife has an economic value
and that rural communities will be able to benefit from this resource through community-
based conservation programmes (CBC). In addition the WPT draws attention to the fact
that excessive control of problem animals could lead to a reduction in potential earnings
for the community. Accordingly, the government does not intend to introduce a
compensation scheme for wildlife damage.
Under the current scenario, the control of problem animals is the responsibility of the
Wildlife Division through its District Game Officers and Game Scouts. This usually
involves the hunting of dangerous animals such as lion, leopard, hyaena, elephant,
buffalo, hippo and crocodile. It does not usually involve the problems caused by non-
dangerous animals such as baboons, monkeys, bushpigs or animals that local
communities are able to deal with in their own right using traditional methods.
Under the WPT, it is envisaged that the responsibility of problem animal control (PAC)
will devolve to rural communities operating CBC programmes. The role of the Wildlife
Division will be reduced to providing technical assistance to rural communities who have
not developed the capacity to deal with this issue, but also actively carrying out PAC
when requested to do so by the community.
The WPT also identifies a number of long term strategies that could be implemented to
reduce the potential conflict. These include:
Incorporating PAC animals into hunting quotas.
Ensuring that those most affected by problem animals are the main beneficiaries of
revenue earned from wildlife.
Explore the use of non-lethal methods (electric fences etc.).
Where practical, capture and translocate animals of high commercial value.
Increasing the awareness of the economic value of wildlife
The key issue here is the underlying principle of the WPT that devolves management
responsibility of areas outside protected areas to rural people and the private sector
(Section 3.3.3 (i)) and conferring user rights of wildlife on landholders (Section 3.3.3(v)).
This provides rural communities with the option of exploring alternative strategies to deal
with problem animals in addition to those identified in the WPT. One alternative will be
to contractually involve the concessionaire/entrepreneur in management and/or control of
problem animals. In essence, this appears to be a fairly straightforward solution however
there are a number of issues that must be taken into consideration. Some of these are
identified and discussed below:
Incidence of crop damage occurs at a time outside of the hunting season. This means
that the contracted hunter has to maintain a presence in the field through the non-
hunting (or closed season). This can be an expensive exercise and not an option that
will be easily concluded with the entrepreneur, particularly if this involves
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maintaining a camp, vehicle and associated staff in the field for a prolonged period of
time.
It is not always possible to include “problem animals” in the hunting quota because
very often they are not “trophy animals” (i.e. too small, not adult, female animals
etc.). This strategy is also open to abuse since the quotas can be unsustainably
inflated to pacify pressure from the local communities.
A “problem animal” incident may occur when there are no safari clients available to
hunt the animal.
The “problem animal” may have moved away or back into the protected area by the
time that the hunters reach the area.
Individual villages are not able to report the incidence of “problem animals” rapidly
enough for the contracted hunter to take action.
The incidence of “problem animals” is exaggerated or falsely reported so that the
villages are able to take advantage of any animals that are actually killed.
Contracting entrepreneurs to deal with the issue of problem animals in a Wildlife
Management Area is therefore not an easy task. Most often the concessionaire is unable
to meet their obligations in this regard and this leads to confrontation with the local
community. To overcome this, the following strategies have been adopted elsewhere in
the region.
The concessionaire employs a local hunter to deal with problem. This can be
negotiated in terms of the contract.
The AA employs local scouts who are trained to deal with problem animals. The cost
of this exercise has to be met from the revenues received from the joint venture. The
advantage of this approach is that the community has full control over the operations.
The disadvantage is that the system can be abused resulting in PAC becoming an
expensive exercise.
The concessionaire assumes full responsibility for PAC in which case the AA must
expect a reduced concession fee.
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4 CONTRACTUAL, POLICY, LEGAL AND INSTITUTIONAL ISSUES
This section provides highlights on some contractual, policy, legal and institutional issues
that may arise in the process of negotiating joint ventures/contracts/agreements between
AAs and investors/entrepreneurs. The pertinent issues include among the things, changes
in legislation, guidelines, and by-laws.
4.1 Contractual Issues
It would be prudent to point out at the outset that the principle law governing contractual
obligations in Tanzania is the Law of Contract Ordinance, Cap. 433. This implies
therefore that the provisions of the Agreements to be entered into relating to operations in
WMAs between AAs and Investors would have to comply with the provisions of this
legislation. What need to be specifically focused on are provisions of this law that relate
to consent, a meeting of the minds of the Parties and fraud and misrepresentation. Where
the conditions stipulated in regard to the above heads are not adhered to, then the validity
of the Agreements would be jeopardized.
Since the formation of partnerships in the management of resources in WMAs is also
envisaged by the draft WMA guidelines, it would be pertinent to point out here that the
provisions of the Companies Ordinance, Cap. 212, which relate to the formation,
registration and dissolution of partnerships would also have to be taken into account. The
requirements provided for by the relevant provisions of this legislation would have to be
incorporated in the agreements/contracts/joint ventures between the AA and prospective
investors. Specifically, provisions relating to formation, registration and shareholding
structure would have to be addressed.
4.2 Policy Issues
The provisions of the wildlife conservation policy and those of the draft WMA guidelines
would have to be addressed when deliberating policy, law and contractual and
institutional issues in joint ventures between AA’s and Investors. The draft WMA
guidelines that emerge as a result of the wildlife conservation policy provide that all
contractual undertakings shall be monitored by the District Council on behalf of the AA.
This includes negotiating joint venture undertakings. In fact the District Councils would
have the overall power to decide whether or not a contract/agreement/joint venture should
be entered into between an AA and a prospective investor. The draft WMA guidelines
provide that the Distinct Council would have to endorse the agreements/contracts/joint
ventures.
It would appear that the idea of having the District Council have some control on the
process is intended to ensure that the government monitors the activities of WMAs,
which do not have the requisite negotiation skills, with a view to ensuring that they are
not manipulated by investors. This procedure has been adopted in some jurisdictions, for
example, Zimbabwe.
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However, the fallacy of having District Councils endorse agreements/joint
ventures/contracts is that it erodes the concept of freedom of contract of the AA. It also
abrades transparency and consequently leaves a lot of leeway for investors to manipulate
the contractual process. The arrangement further violates the primary objective upon
which the wildlife policy is founded i.e. to transfer overall management and utilization of
wildlife resources to local community members and the private sector. The role of
government will be to oversee the more general aspects of control and provision of basic
services and maintaining law and order. Empowering the District Council (essentially a
government institution) with supervisory powers of overseeing the contractual process,
without a mechanism to check this power, however well intended the objective, is likely
to defeat the fundamental purpose of the wildlife policy.
The implication of entrusting the District Council with the ultimate decision-making
powers in the negotiating and concluding of contracts/agreement/joint ventures between
AAs and investors could have the following effects:
Diffuse the accountability and stability of the AA
Result in difficulties in determining the parameters, obligations and liabilities
of the parties in relation to the contract/agreement/joint venture
Encourage corruption, bureaucracy and red tape and;
Discourage investment in WMAs
Changes in the by-laws made by AAs could also have implications for the joint
ventures/contracts/agreements that are entered into between AA and investors. One could
rightly argue this fear could be taken care of by having a provision/clause in the
agreements/contract/joint venture to take avert this situation. However, under the Local
Governments (District Authorities) Act of 1992, the District Council could make by-laws
to be applied by villages and ultimately by the AAs. If the District Council is not aware
of the existence of contractual arrangements between AAs and investors, it may make by-
laws that would have negative implications on such arrangements. It would also be
difficult for an investor to hold the District Council liable, as it would be performing a
statutory function and would be privy to the contract/agreement.
Although a case may be made for the necessity of involving the District Council in the
negotiating processes this should not go to the extent of making it the main actor and
consequently overshadowing the principal party to the agreement/contract/joint venture.
Rather than having the District Councils as the main players, it would be more prudent to
involve them as observers in the exercise, together with local NGO’s and other interested
groups whose technical expertise could be tapped on by both parties, especially the AA.
Meaningful investment in WMAs would require that the bargaining plane to be clear of
any policy, institutional and legal ambiguities. The disparities between the wildlife policy
and the Wildlife Conservation Act, 1974 would need to be addressed. Whereas the policy
calls for a tranquil investment atmosphere that is free from excessive government control,
the wildlife legislation does not seem to reflect this development. The process that is
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underway to revise the Wildlife Conservation Act should endeavor to address and
redefine, among other things, the relationship, role and place of government institutions
(e.g. the District Council) in the running of the affairs of AAs, and conflicting legal and
institutional frameworks (as pointed out in previous studies).
4.3 Institutional Issues
The main institutions that are envisaged by the draft WMAs guidelines as having a
significant role in the agreements/contracts/joint ventures entered into between the
WMAs and prospective investors are the following:
The Wildlife Division
The Village Assembly
The Village Council
The WMA
The District Council
Authorised Association (AA)
In their respective varied forms, the above institutions are likely to encounter conflicting
mandates as a result of the under the present framework of the draft WMA guidelines.
For AAs would in most cases be formed in villages under the provisions of the law
governing wildlife conservation. On the other hand, the Village Council and Assembly
are grassroots institutions recognized by the Local Government (District) Authorities Act.
The composition of the WMAs may include members of the Village Assembly, but it
does not necessarily follow that all members of a Village Assembly would be members of
an AA. Unless the draft WMA guidelines are harmonized with the provisions of the
Local Government (District) Authorities Act, institutional conflicts between AAs and
Village Assemblies/Village Councils are bound to occur.
The WMA guidelines also envisage the a Memorandum of Understanding executed
between the Wildlife Division and an AA. The content of the MOU that is to be executed
by these two institutions is, however, not stipulated. This scenario is likely to act as a
disincentive to a prudent investor committing his/her resources in undertaking a joint
venture/agreement/contract with the AA.
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5 ACCESS TO PROFESSIONAL SERVICES
The Terms of Reference call for suggestions to deal with the following issues:
How local communities can access services to provide them with expert advice on
contractual issues?
Indicate what kind of organization(s) could provide these services effectively and
efficiently.
The criteria for selecting a given NGO/private sector organisation to provide such
services.
In the event that private sector organizations are not available in country, suggest
ways that such organisations could be attracted, with or without the kinds of
enticements that would have to be provided by government, donors or both.
This section attempts to deal with these points.
5.1 Currently Available Organisations
Several “joint venture” agreements have been negotiated in Tanzania in recent years. The
Wildlife Division has negotiated agreements with hunting companies while TANAPA
have brokered agreements with private sector tourism organisations. In some instances
entrepreneurs, who have engaged local legal expertise to draw up the final agreements,
have initiated the negotiations with communities.
International donor organisations have also facilitated agreements between communities
and potential investors. For example the Selous Conservation Programme funded by
GTZ has recently facilitated an agreement for a lodge site adjacent to the Selous Game
Reserve, and the MBOMIPA Project in Iringa has assisted the local community to
negotiate hunting rights with the local resident hunting association. NGOs, such as the
AWF, have also played a significant role in facilitating negotiations between local
communities and the private sector.
These opportunities have arisen as a result of the changing environment in the wildlife
sector of Tanzania. This trend is likely to accelerate once the WMA Guidelines have
been formally approved.
5.2 Organisations Capable of Providing these Services
In the first instance, organisations such the Wildlife Division and TANAPA, who have
many years experience in dealing with private sector tourism companies, are in a position
to assist local communities with the fundamental issues associated with contractual
agreements. However, there is a potential area of conflict in this arrangement since both
these organisations will in future be competing with local communities for investment
from the tourist industry. Similarly, organisations such as the Tanzania Hunters
Association, are not in a position to act as brokers because of their vested interests.
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To overcome this problem elsewhere in the region, communities have organised
themselves into some form of association (for example, the CAMPFIRE Association in
Zimbabwe) whose responsibility it is to promote community-based natural resource
management (CBNRM) programmes. Associations such as this are thus in a position to
contract specialists to assist with negotiations on behalf of their members. However, until
such organisations emerge in Tanzania, communities will have to rely on NGOs and the
donor community to provide these services in the short term.
In addition, given the growth of CBNRM initiatives in the region, there is an extensive
pool of expertise in NGOs such as the World Wide Fund for Nature in Zimbabwe who
are able to mobilise specialists either from within their own organisation or identify
independent specialists in the field. Furthermore, the CBNRM initiative has its own web
site where requests for assistance can be posted.
Time did not allow the team to investigate the capacity of the private sector organisations
within Tanzania to provide such services. However based on the evidence available and
the fact that joint venture agreements have been successfully concluded in the past, it is
clear that this expertise does exist. What is needed is exposure to the options available so
that both parties can gain experience in negotiating the most financially rewarding
arrangement.
5.3 Criteria for Selecting Service Providers
Service providers can be drawn from the NGO/donor community, private individuals or
professional financial firms. The criteria for selecting service providers should include
organisations (or individual persons):
They should have no vested interest in the venture. As mentioned above, the WD and
TANAPA are capable of providing services, but these organisations will be in direct
competition with local communities in future. Their role in negotiating joint venture
agreements must therefore be carefully scrutinised.
They should not be connected financially or professionally with either party.
They should have experience and expertise in providing advisory services and/or
acting as a broker between two negotiating parties.
They should have a thorough understanding of the business environment in which the
tourism industry operates. In particular, they should understand the economic drivers
of the hunting and photographic industry so that they can negotiate the most effective
and efficient agreement for both parties.
They should have experience in the philosophy and objectives of the CBNRM
initiatives in Tanzania and the region as a whole.
They should have the ability to incorporate local socio-economic concerns and
politics in the negotiations.
They should have an understanding of “joint venture agreements”, particularly the
legal implications of such agreements.
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5.3.1 Mechanisms to Attract Qualified Service Providers
Service providers will be attracted to any situation where there is a business case. In this
situation, there is a great deal of interest amongst communities to embark on joint venture
initiatives, and both the private sector and the communities are eagerly awaiting the
formal WMA Guidelines.
Given the high level of enthusiasm, it is envisaged that there will be a great demand for
the services of professional advisors in the short term as the various AAs become
established around the country. Managing this situation will be extremely difficult given
the current capacity in Tanzania.
This suggests that there is an opportunity for the donor community to become involved at
establishing this capacity within the NGO community in Tanzania. Organisations such as
AWF, WWF or the Lawyers Environmental Action Team (LEAT) are suitable conduits to
providing these services. In addition, there is the opportunity to organise and develop
capacity within the various village council’s but this will require a long-term input from
both government, donor and NGO community.
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6 DRAFT GUIDELINES AND “JOINT VENTURE” CONTRACTS
Whilst there are examples of “joint venture” contracts in Tanzania, very few of these have
been negotiated using any formal structures or approaches. With the advent of WMAs, it
is envisaged that there will be a rush to develop “joint venture” arrangements throughout
the country. However, it is anticipated that the greater majority of these agreements will
be concluded with the safari hunting fraternity rather than with the photographic tourism
ventures.
Many of the potential WMAs have been operating as Controlled Hunting Areas under the
auspices of the WD for several years. These areas are therefore well known and thus the
future AAs will not have to market these areas to the hunting industry. However, in the
past, the WD set the concession and license fees for the hunting block, and a committee
selected the hunting operations. As a result, the market value for these blocks was never
established through any competitive tender system.
It is therefore strongly recommended that the future allocation of the hunting blocks
in the WMAs be undertaken through a qualified tender system that calls for separate
technical and financial proposals.
However, in adopting this approach, care must be taken to protect the local communities
from unwarranted lobbying by different hunting operations which can lead to a great deal
of confusion. Direct contact with communities must be avoided at all costs since it is
quite feasible that a community can enter into an agreement that appears to be lucrative
but on closer examination is grossly undervalued.
This section provides draft guidelines and contracts on how communities can enter into
joint venture with potential investors in the hunting and photographic industry
respectively. Examples of “Joint Venture Management Agreements” are provided in the
appendix.
6.1 Overall Tendering Procedure
The recommended tendering procedure is as follows:
a Identification of WMAs for Tendering
With the assistance of the WD and TANAPA, potential WMAs suitable for tendering as
hunting and photographic concessions from within the existing Controlled Hunting Areas
(CHAs) and Open Areas are identified. This identification should take into consideration
the existence of potential AAs, village land use plans, and the tourism potential of the
area (this could include existing tourism operations and/or applications to invest in such
ventures).
b Formation of Authorised Associations
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Under the Village Land Act and the WCA, Authorised Associations are to be constituted
and Natural Resource Committees established. The AAs should then set objectives of
how they intend to develop the natural resources in their village areas. This could involve
developing a combination of commercial safari hunting, resident hunting and/or
photographic safaris.
c Formation of Tender Evaluation Committee
Having identified the potential WMA, the AA should form a Tender Evaluation
Committee numbering no more than six individuals whose eventual job it will be to
evaluate bids received. This Committee should consist of, inter alia, the Village Council,
District Council, AA, Community Representative, WD and/or TANAPA. Other potential
members of such a committee could include representatives from Local Government and
impartial members from the private sector and the tourism industry. Together they
should all be able to assess the bids received, but have the mandate to engage professional
assistance if they deem that this is necessary.
The responsibility of this committee will be to:
Determining the duration of the agreement and any special requirements (community
development, labour, social services etc.)
Drafting of tender advertisement
Advertising of tender
Preparing background information for bidding document
Sale of Bidding Document to defray advertising and printing costs (say US$100/copy)
Setting the terms and conditions of the tender document (e.g. separate technical and
financial proposal)
Tender assessment process
Opening of bids
Evaluation of bids
Recommendations to AA and Village Council
d Formulation and Submission of Proposals
Interested bidders are to be given up to three months from date of advertisement to
formulate and submit their proposals to the AA.
It is extremely important at this stage that communities be protected from unsolicited
lobbying by potential bidders. Technical and Financial Proposals should be submitted
separately in sealed envelopes with both envelopes placed inside one larger sealed
envelope. The terms and conditions for submitting proposals should make it clear that
proposals will be disqualified if:
The community is canvassed in any way after the tender has been announced
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The company details and name(s) of any shareholder or director are revealed in the
technical proposal
Potential bidders cannot prove that they have purchased original Bidding Documents
Proposals are submitted by fax, telex or e-mail
e Negotiations With Prospective Concessionaires
Following the announcement of the winners, the AA enters into formal negotiations with
the prospective concessionaires. These negotiations should not be hurried. This is to
ensure that both parties are confident that they fully appreciate the implications of the
agreement before a formal offer is made, culminating in the signing of the agreement.
6.2 Specific Recommendations Regarding the Tender Process
In order for the tender process to run smoothly, the following specific recommendations
should be considered.
6.2.1 Provision of an Information Sheet for the Concession Area
There is a need to provide relevant information on existing WMAs and potential new
areas where local communities wish to attract investment from safari operators. This is
particularly important if the communities wish to attract investors from outside Tanzania,
and where a substantial investment is envisaged in a safari lodge or some other long-term
project. This can best be done through the production of an Information Sheet for each
of the concessions on offer.
The Information Sheet can be printed for distribution, but it can also be posted on a web
site (such as the South African initiative for the Kruger National Park). Being PC-based,
these sheets can be easily reproduced and undated as required. The Information Sheet
would provide a range of information on the specific WMA or concession site and would
include:
The size and location of the site
Brief description of the WMA and its development
WMA management objectives as defined by the AA
Social development expectations of community
Any specific rights and conditions attached to the concession
Attractive features (scenery, flora and fauna) and unique selling points
Local climate
Health considerations (malaria, tsetse fly etc.)
Existing developments (if any)
Support infrastructure (if any)
Type of operation envisaged (hunting, photographic etc.)
Potential tourist activities (sport hunting, game viewing, walking/hiking safaris etc.)
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Indicate minimum hunting quotas available (in the case of a hunting concession area)
Indication of minimum fee structure (fixed, variable, trophy fees etc.)
Duration of concession being offered
Tender procedures (e.g. separate technical and financial proposals)
Available incentives
Contact details.
6.2.2 Bidding Document
The following example of a Bidding Document has been drawn from experiences in
Botswana and Zambia10 where both hunting and photographic concessions have been
tendered using this format. The structure and content has been adapted from these
examples to illustrate what the Bidding Document would contain.
No doubt this will require editing to suit the Tanzanian circumstances, however it is
strongly recommended that a “standard” Bidding Document be developed for use by
AAs throughout the country. This will greatly facilitate the assessment of tenders by
the review committees and introduce consistency in the tender process.
The general structure of the Bidding Document is given below.
Title page
Table of Contents
Part I – Invitation to Tender notice
Part II – General instructions for bidders
Part III – Special instructions for bidders
-Language to be used
-Contracting agency
-Conformance to Laws and Regulations of Government of Tanzania
-Documents required from Bidder
-Disclosure of interest
-Enquiries
-Structure and content of proposal
-Selection process to be followed
-Evaluation criteria and scoring system to be used
-Duration of concession on offer
-Expected commencement date of concession
-Requirement for performance reviews
Part IV – Annexes
-Specimen Tourism Concession Agreement
-Financial tender form
10 The authors have drawn on an example developed by Philip Johnson for the Zambian Wildlife Authority
(ZAWA)
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-Hunting quota and minimum trophy fees
-Sketch map of location of site/sites (for photographic concessions)
-Brief description/s of site/sites being tendered (for photographic concessions)
It is not possible to go into any great detail with regards every section, however, it is
necessary to comment on certain sections some of them in detail. These include the
following:
Part I – Invitation to Tender Notice
The Invitation to Tender notice should be a word-for-word reproduction of what appears
in the advertisement that is placed in the printed media. This is to ensure that a smooth
and unambiguous linkage between the advertisement and the Bidding Document those
potential bidders receive.
In general, Part I includes:
a brief description of the WMA being tendered,
where bidding documents can be obtained,
to whom and where bids must be submitted and by when,
when and where the bids will be opened and,
a disclaimer from the AA responsible should the entire tendering process be
cancelled.
Part II – General Instructions for Bidders
This section states that all bids must conform to the instructions in the Bidding
Document, gives the person (Chairman of the AA) and address to whom the bids must be
addressed, where they should be deposited, the closing time and dates for receipt of bids,
the manner in which the envelopes are submitted and the date, time and place when the
bids would be opened. The AA can also include a brief description of the purpose of the
tender (e.g. the AA intends to enter into a joint venture arrangement with a safari
company to operate hunting safaris, or it intends to lease a site to a photographic operator
etc.).
The rights and conditions of the AA and potential bidder should also be clarified here.
For example, is the tender open to foreign-based companies, whether the agreement will
be renewed, and rights of the safari operator (e.g. company will have exclusive rights to
conduct hunting and/or photographic safaris).
The conditions of the tender could include specific reference to the community retaining
their traditional rights to the whole area for the purpose of collecting firewood, building
material, grazing cattle, retention of meat, retaining a portion of the quota for their own
subsistence use etc.
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Part III – Special Instructions for Bidders
There are a number of important comments that need to be made here.
The Language to be used in the bids must be English.
The Contracting Agency would be the AA responsible for the WMA
Enquiries should be directed to the Chairmen of the AA (or Natural Resources
Committee) with both the enquiries themselves and the replies being copied to all
bidders.
The Proposals that are eventually submitted by the bidders to the AA will
undoubtedly differ in style, content and detail. However, the Bidding Document must
set out to guide bidders as regards the structure of their proposals and the headings
under which the proposal is written and presented. This will be of practical
importance when it comes to evaluating the proposals.
The Technical Proposal must NOT contain any reference to the tenderer, its directors,
shareholders or its employees nor any reference to the financial offer. Failure to
adhere to this stipulation will result in disqualification.
The tenderer is required to provide clear concise statements regarding the social,
ecological, economic and management objectives of the joint venture.
The tendering procedure will require the bids to be submitted in two separate parts,
namely, the Technical Proposal and the Financial Proposal. In light of this, the suggested
structure for each proposal is given below.
Suggested structure of Technical Proposal :
General description of intended operation
Site and building plans
Sketch map of area
Site plan and layout of camp (for photographic camps/lodges)
Drawings of buildings (for photographic camps/lodges)
Physical and technical plan
Development Plan
Economic Environment
Brief outline of national, regional and local setting of project
Company demonstrate clear understanding of government policies and business
environment
Company demonstrates clear understanding of social and development needs of the
community
Natural Resource Management
Proposals demonstrate knowledge and understanding of current wildlife status
The intentions of the tenderer towards managing the wildlife populations during the
joint venture
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How wildlife will be protected from illegal use
Proposed methods to monitor wildlife population trends and impact of safari hunting
Demonstrate who the rights of local communities to harvest natural resources will be
accommodated under the project to avoid conflict with any commercial activities.
Environmental management
Development schedule
Management of construction activities and materials
Waste management
Energy management
Vegetation management
Vehicle management
Environmental awareness and interpretation programme
Staffing
Organisational structure
Description of staffing posts
Intended staff training programme
Staff accommodation and other staff welfare matters
Stipulate the number of local employment opportunities
Indicate number of temporary and seasonal positions
Marketing and promotion
Marketing and promotion strategy
Marketing capabilities
Community support and civic responsibilities
Policy on community involvement
Social responsibility programme
Proposed contribution towards community development
Proposed civic responsibilities
Proposed contribution towards economic and educational development
Financial Analysis
This section must not be confused with the Financial Offer for the land, hunting quota fee
or any other fixed and/or variable costs that the tenderer intends to offer. These are to be
given the Financial Offer.
What is required here is a Cash Flow Analysis of the proposed infrastructure
development, including costing at market prices of the physical and technical plan.
Sources of finance should be included. Staff requirements should be listed and costed.
The derivation of details on projected income should be clearly explained, with details of
anticipated tourist numbers and tourist occupancy levels, marketing strategies for hunting
operations etc.
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Suggested structure of Financial Proposal:
Company profile
Past experience of company
Past experience of principal staff
Past performance of company with similar developments
Financial plans and projections
Financial base
Projected capital investment
Projected sales
Sales and revenue forecast
Profit and loss forecast
Proposed opening balance sheet
Payments to AA
With regard to a Hunting Concession, the AA can set a reserve price for the WMA using
the existing “Block Fee” of US$7 500. Similarly it can set reserve prices for each species
offered on quota using the current WD price list as a guide. Potential bidders can then
indicate11:
Block Fee, including proposed annual increments which will be payable to the AA
annually
Game Fee for each animal shot or wounded, including proposed annual increments
which will be payable to the AA annually
Observer Fee, charged on a daily basis for any observer staying in the hunting camp
but not hunting
Conservation Fee charged on a daily basis for all hunters
Payment schedule
With regard to a Photographic Concession, the can set reserve prices for the concession
site, but should structure payments on a fixed and variable cost system. The fixed cost
can be based on the number of beds in the camp (e.g. 16-bed camp) while the variable
costs are based on a bed-nite levy.
This is system is described in greater detail in the appendix.
6.2.3 Tender Assessment Process
The Tender Assessment Process would involve the evaluation of the Technical Proposals
first. These would be scored with the top three (or four, depending on the number of bids
received) going onto to the second part of the selection process, namely, the evaluation of
11 Note: This approach follows the current system employed by the WD. Thought should be given to
streamlining this procedure into a concession fee and a trophy fee similar to the method used in Zimbabwe.
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the Financial Proposal. The highest scoring Financial Proposal would then presumably
be selected as the winning tender.
The two-envelop system is recommended here since it conforms to methods that are
regularly used in Tanzania. This system is also useful when dealing with a large number
of applicants. However, consideration should be given to using a three-envelop system in
which the company details are only disclosed after the financial proposals have been
opened. In this way, the evaluation committee is protected from being influenced by the
“big players” in the industry12.
Evaluation and Scoring
The evaluation and scoring of the proposals would be conducted by the Tender
Evaluation Committee appointed by the AA, and would be based largely on the lines of
the headings outlined above. To provide an as objective as possible evaluation of the
proposals, a scoring system should be used. In reality, the ‘objective’ scoring will be
based largely on individual ‘subjective’ assessments and ‘gut feel’ of the evaluators in the
Tender Evaluation Committee. With practice and more experience, however, the
Committee should find the evaluation and scoring of proposals easier with time.
The following scoring system is suggested:
Evaluation Criteria Score
Technical Proposal Out of 100 Minimum Score
Deemed Responsive
Project Concept
Natural Resource Management
Staff Planning
Community Support
20
20
30
30
10
10
15
20
Financial Proposal
Out of 100 Minimum Score
Deemed Responsive
Financial Plan and Projections
Payments to AA
40
60
25
40
Individual members of the Tender Evaluation Committee would assess each proposal
independently. Scores for each category would then be added together and an average
taken. The average score, which presumably reflects the overall assessment of the
Committee, is what is used to deem the responsiveness to the tender of each proposal. It
is likely that some Committee members will score consistently higher or lower than the
average, some of them considerably so. This will most probably reflect unfamiliarity or
lack of experience with the category being evaluated. It will be up to the Committee to
decide what to do about outlying or anomalous scoring. In time, it will be found that
Committee members will become more adept at evaluating and scoring and consistency
12 This system has been used very effectively in Botswana
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in scoring will start to become much more apparent. It is important, however, to retain as
much as possible the same individuals in Committee13.
Should none of the proposals reach the required minimum scores, the Tender Evaluation
Committee will need to make a decision whether to accept the ‘best’ bid or to launch an
entirely new tender.
13 Given the inexperience of the future AAs in this process, it is strongly suggested that that some for of
Technical Assistance be provided here is facilitate this process.
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6.3 Draft “Joint Venture” Contracts
The trend in most African countries where CBNRM initiatives are being promoted is for
the community to engage the services of private sector entrepreneurs to develop tourism
facilities or opportunities. This strategy is employed mostly because the community does
not have access to the necessary funds or expertise to develop, maintain and run tourism
operations. It must be made clear that this is not a process of “privatisation” since the
community still retains ownership and ultimate authority of the concession area. Rather it
should be considered as a strategy that is best suited to exploit and run the tourism
opportunity to the mutual benefit of both parties.
6.3.1 Need for Standardised “Joint Venture” Agreements
Experience from within the region has shown that without some form of formal
agreement, difficulties such as commencement dates, levels of fees, under-selling,
payment schedules, lack of annual incremental increases, apparent loss of control over the
concessionaire, site delineation, etc., were all shown to be common problems. At the
same time, these agreements must not be structured in a way that local communities may
find difficult to understand, but at the same time be “legally strong” enough to promote
the development of tourism operations without discouraging the developers.
Furthermore, it is important that a standardised format for the agreement be adopted in as
far as this is possible. This will avoid confusion from within the industry and will assist
the implementers to enforce these agreements. The term ‘standard’ implies that it can be
applied across the board with little modification and with equal success to both hunting
and photographic concessions. It is recognised that no two tourism operations or
concessions are the same and that each will require different agreements, even if only
marginally so. However, where an AA is in the position to offer more than one
agreement, it is important that the same format, terms and conditions, obligations etc. are
applied equally to all agreements. If this is not done, there is the real possibility of
conflicts arising between the AA and the various operators. Furthermore the AA may
find it difficult to keep track of the various permutations and combinations of the
different agreements. Having a consistent structure and content will also helps
considerably when it comes to negotiating with potential concessionaires and managing
those concessions when they are signed and secured.
6.3.2 General Structure of a “Joint Venture” Agreement
The general structure of the “Joint Venture Agreement” proposed here is designed to
incorporate both safari hunting and photographic tourism activities that will permit a
wide range of recreational activities to be undertaken within the limits set by the AA. We
provide three examples of agreements in the appendix.
In essence the agreement incorporates five key sections:
a The purpose of the agreement.
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b The responsibilities of both parties.
c The financial arrangements.
d Conditions under which the agreement may be terminated.
e General terms and conditions that protects the interests of both parties and
the biophysical features of the WMA.
These agreements deliberately avoid terms and conditions that deal with day-to-day
operational activities of the concessionaire. These issues are better managed and
controlled through a separate agreement (or "permit" system) than can be renewed
annually rather than through a lease agreement. This is because the conditions under
which both parties will operate during the tenure of the agreement may change from one
year to the next. By excluding these from the lease agreement, both parties will have the
flexibility of being in a position to change the conditions under which the project
functions without the legal complications associated with amending lease agreements.
The key issues addressed in the agreement are:
The purpose of the agreement is clearly defined.
The responsibilities of both parties to the agreement are clearly laid out.
The agreement absolves the AA from all financial risk.
The AA will be fully integrated into the day-to-day operation of the project through
Joint Management Meetings (see below).
The payment schedule to the AA is clearly laid out.
The "spirit" of the agreement ensures that the AA is always in control of the
concession but at the same time protects the interests of both parties.
There are clear remedies to correct any breach of the agreement.
The terms and conditions under which the agreement can be terminated are clearly
defined.
In general, all the main sections contain standard or frequently used contract clauses. The
great majority of these will be common to all tourism concessions that are entered into.
However, it is very likely that a number of clauses will be amended to suit specific cases.
For example, the following specific clauses may be incorporated into the agreement
depending on the terms and conditions of the original tender proposal.
Whether the agreement is signed in the name of a company or an individual
Whether the lessee will be permitted to sublet or sell the lease agreement
Incorporation of the development programme time schedule
Community rights
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No attempt will be made here to describe or discuss any of the clauses, as all of them are
self-explanatory. However, the reader is strongly urged to become familiar with the
example given in the appendices. There is a need, however, to highlight some general
aspects of the agreements.
These include the following:
Lessor’s and lessee’s signatory body
There is a legal requirement to include the position of the chief signatory to the
agreement. This will commit the AA to honouring the agreement even though the chief
signatory may no longer hold the official position. However, It is important that the name
of the lessee representing the Safari Company be included in the agreement. This
prevents the agreement changing hands in the event that the Safari Company is sold or
sublet.
Grant of tourism concession
The Grant of Tourism Concession effectively details what it is that the AA, as Lessor,
would be granting to the Concessionaire. In most instances, this is simply the
identification of the tourism product or operation in question, with exceptions made to
land, minerals, wildlife, etc., occurring in, on and around the WMA.
Payment Schedule
The most important clause deals with the details of the payment schedule, type and
amount of fees to be paid to the Lessor by the Concessionaire, when these fees are to be
paid and the amount of capital investment involved.
Rights and obligations of the Concessionaire and Lessee
The rights and obligations of the Concessionaire and the Lessee form the bulk of the main
text of the agreement. These can either be simple or very detailed depending on the
concerns of the lessee and the concessionaire. It is beyond the scope of this report to go
into specific rights and obligations of each party in any detail, and the reader is again
referred to the appendix for working examples of the various clauses that can be used in
the agreement. The clauses will clearly indicate the issues that are being addressed.
Generally, one should strive to strike a balance between the rights and obligations of the
Concessionaire and the rights and obligations of the Lessor. The more flexible the
agreement, the easier it will be to administer and manage. It is for this reason that it is
recommended that many of the day-to-day obligations be dealt with through a permit
system rather than through the lease agreement. In this regard, the role of an independent
facilitator (or broker) is important.
Remedies and termination of the Agreement
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The agreement should contain clear and concise remedies that can be taken by both
parties to rectify any breaches of the agreement. Similarly both parties must be protected
from unwarranted cancellations of the agreement, especially where large investments are
involved. This can be dealt with through strong compensation clauses that are financially
punitive in the event that one or other party cancels the agreement without reasonable
cause.
Role of the Joint Management Committee
Under a Joint Venture Agreement it is extremely important that both parties are kept fully
informed about all aspects of the project during its operation. To achieve this, “Joint
Management Committees" are established that consists of key representatives of the AA,
the community and the tour operator. This committee will usually meet formally at least
twice a year (preferably three times) at a date that is mutually agreed by both parties.
The main purpose of this Joint Management Committee is to keep both parties to the joint
venture well informed of its progress. Any issues that may arise can be discussed in a
frank and open manner and resolved before they become untenable and lead to a possible
breakdown in communication.
These meetings thus provide an opportunity for the AA/tour operator to raise any issues
of concern regarding the safari operations or suggest ways in which the relationship
between the tour operator, the AA and the local communities can be improved.
Similarly this forum can be used to discuss mutual issues relating to the smooth operation
of the agreement, and keep the AA fully informed about the progress of the project. This
would include issues such as marketing success, tourism occupancy levels and indicative
potential income levels and payment schedules. It also provides an opportunity to discuss
any new opportunities with the AA that may arise and how the joint venture could take
advantage of these.
In short, the Joint Management Committee is the forum for dialogue in which both parties
can discuss the progress of the project, and monitor its success.
Functions of the Joint Management Committee
The functions of the Committee may be summarised as follows:
It is a forum for consultation and decision -making on all matters affecting the
implementation of the agreement e.g. road construction, road maintenance, security
issues, construction of additional fixtures, fire and management and use of natural
resources, anti-poaching, provision of social services, discussion of hunting quotas
etc.
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The committee will be responsible for monitoring the books of accounts and annual
financial statements of the tour operator that relate to the Joint Venture Agreement,
and ensure that all payments are made on time.
The committee will serve as a forum for settling disputes as may arise between the
parties. Where this is not possible, the dispute can be referred to an arbitrator agreed
upon by both parties.
The committee will be responsible for ensuring that all parties act lawfully so that the
operations of the tour operator can be effectively and efficiently implemented.
The composition of the Committee can vary but should not exceed 5 to 8 key people who
are drawn from both the community and the operator. By mutual agreement, the AA can
determine who can stand on this committee and for how long a period. Rules can also be
established to disqualify people from sitting on the committee (e.g. criminal convictions,
death, mental disability etc.).
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7 DRAFT AGREEMENT FOR WMAs IN TANZANIA – THE WAY FORWARD
Taking all of the above issues and concerns into account, the following provisional draft
agreement that can form the basis of negotiation between potential AAs and prospective
investors is presented.
It must be stressed here that this draft agreement requires further input from all
stakeholders before it can be regarded as a sound working document. This will require
that all stakeholders are given the opportunity to discuss the document and suggest
mechanisms for its improvement. We suggest that the most appropriate forum to achieve
this is a workshop that consists local community leaders, government institutions, NGOs
and the private sector.
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING is made and entered into on this …
…………day of
………………200….. between (Name of AA) (hereinafter referred to as the AA) of P.O.
Box ……….. of the one Part and …………………(Name of Person) representing (Name
of Company or Firm intending to invest in the WMA) (hereinafter referred to as the
Investor) of P.O. Box ………………. of the other Part:
WHEREAS the AA, acting for and on behalf of the local community members in its
jurisdiction and in accordance with its Constitution, has the power to grant a concession
over (Name of the WMA/Tourist site) located in (Name of District/Region/Village Area).
AND WHEREAS the AA and the Investor have agreed to enter into an agreement to
conduct (hunting safaris, game viewing safaris and photographic safaris – delete
inapplicable) (hereinafter referred to as "the Agreement").
NOW THIS DOCUMENT WITNESSES AS HEREUNDER:
That the AA and the Investor (the Parties) have entered into and concluded this
Agreement under the terms and conditions stipulated hereunder:
1 PURPOSE OF THE AGREEMENT
The purposes for which this Agreement has been entered into are:
To bring together the skills, knowledge, financial resources and assets of local
community members and the investor with a view to develop and take advantage of
the wildlife resources and related economic activities in the WMA.
To provide technical, financial and managerial skills necessary for the success of the
Venture.
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To ensure that local community members receive a fair share of the benefits from the
use of the assets under their control and that the interests of the investor(s) are
secured.
2 OBLIGATIONS OF THE PARTIES
The AA hereby agrees that:
It shall endeavor to keep and maintain all that area comprising the WMA free from
any human settlement, whether temporary or otherwise, for the entire duration of the
agreement.
It shall provide the Investor and/or his/her agents access to the WMA at all times.
It shall not grant any user rights to any third Party to operate a business similar to that
inn which the Investor is involved.
It shall draw the Investor’s attention and involve him/her in all matters that the AA
may believe to be detrimental to the continued existence of the investment or the
Investors activities in the WMA.
It shall not enter into any other agreement or merge with any other organ or body
without prior notice and consent of the Investor.
It shall not develop by-laws that would override or affect the provisions of this
Agreement.
The Investor hereby agrees:
To provide all the finances necessary for the success of the business investment.
To provide all equipment and assets necessary to make the investment a success.
That all immovable fixtures of a permanent nature, whose removal may cause damage
to the environment. Shall devolve to the AA upon lapse of the agreement.
To construct and maintain all necessary building infrastructure.
To respect the cultures and traditions of local community members.
To absolve the AA from any financial risk or liabilities associated with this
Agreement.
To train and employ local community members in the day to day activities of the
venture. In particular, the Investor shall employ at least 60% of his/her staff from
local community members.
To plan, implement and develop projects that are for the benefit of the community.
Supply basic social infrastructure and necessities as agreed to with the AA.
To permit livestock grazing in the WMA as agreed to with the AA.
Permit the local community access for the performance of cultural rites and rituals
provided that these activities are not detrimental to the existing facilities and activities
of the venture.
To ensure that all waste is disposed of in a manner that will not affect the
environment and/or health of the local community and/or their livestock.
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Not to interfere or tamper with, or apply political, financial or economic mechanisms,
or in any other manner whatsoever, with a view to influence the administration and
the day-to-day activities of the AA in his/her favour.
Not to use the land provided for the venture for any purpose save for that which has
been approved in terms of this Agreement without prior written consent of the AA.
Not to sublease, sublet or transfer, in any manner whatsoever, the Agreement, or any
part thereof, without the written consent of the AA obtained in a general meeting of
the AA duly convened for the purpose of considering the consent.
That all property, movable and immovable, used in the facility would be the property
of the investor and that the investor shall not borrow, rent or lease any immovable
property for the purposes of using such facility without the written consent of the AA.
3 MANAGEMENT OF NATURAL RESOURCES
The Investor undertakes:
To take all necessary measures to prevent soil erosion and other damage to the
ecosystem within the WMA in accordance with the law.
Not to remove, sell, damage or otherwise dispose of any sand, gravel, earth, stone or
timber in accordance with the law.
Not to destroy any trees without the written consent of the AA.
4 ASSIGNNMENT
The Investor hereby undertakes not to sublease, assign or part with possession of the
concession or facility or part thereof, that has been granted for purposes of investment by
the AA under this Agreement.
5 PERFORMANCE BOND
The Investor shall deposit a Performance Bond of US$ …………. (based on a
percentage of the overall investment) to an account jointly owned by the Investor and AA,
as security for undertaking the development of the Venture. This amount plus the interest
accrued thereon shall be liable to forfeiture by the AA where the Investor either absconds
or abandons the project/investment or to enforce a judgement against the Investor where
the Investor is in default of payment.
The Performance Bond and interest accrued thereon shall otherwise revert back to the
investor upon the lapse of the Agreement.
6 FEES FOR THE RIGHT TO OPERATE
That the fees for the right to operate safaris shall be calculated at the rate of:
INSERT AGREED FEE STRUCTURE
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7 INDEMNITY
The Investor shall indemnify the AA for all sums, which the AA shall become legally
liable in respect of any claims resulting from injury or death of any person occasioned by
accidents caused by the use of the WMA.
8 REMEDIES, INTERPRETATION AND APPLICABLE LAW
Any breach of this Agreement shall entitle the aggrieved Party to seek remedies in
accordance with established laws, rules, regulations and principles governing the
contracts pertaining in the United Republic of Tanzania. Any matters or questions arising
in relation to the interpretation of the words or any word or phrase appearing herein
relating to this Agreement shall be interpreted in accordance with any definition or use
thereof in accordance with the relevant applicable laws of the United republic of
Tanzania.
9 DISPUTE SETTLEMENT
Any dispute or misunderstanding that may arise from or that which is connected or
incidental to the execution of this Agreement shall be settled amicably at regular meetings
called by both Parties. The Parties further agree that any dispute or misunderstanding
shall be referred to an Arbitrator in accordance with the relevant law. Before any matter
is channeled to an Arbitrator, the Parties shall have exhausted all alternative avenues of
settling the dispute.
10 ACCESS TO RECORDS
The Investor shall maintain and keep records and books of accounts and make these
available upon request for inspection by the AA. The Investor shall submit such books
and records to the satisfaction of the AA. Non compliance with this requirement shall be
considered a breach of the Agreement and shall entitle the AA to revoke this Agreement
forthwith.
11 OPERATION AND DURATION
Unless otherwise stated herein, or in any other law in force and to which this Agreement
applies, this Agreement shall be deemed to have commenced on the date of signing by the
appropriate and relevant persons for and on behalf of both Parties duly authorised to do
so. The Agreement shall be operative for a period of ………..years commencing on ……
……day of ………….200…..
12 AMENDMENT
The Parties may by mutual consent amend this Agreement or any part thereof should
they deem that this is necessary in order to conform to changes in legislation, by-laws,
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regulations and/or policies, or they deem that such changes shall enhance the performance
of the Agreement.
13 RENEWAL
The Parties to this Agreement may, upon mutual understanding, renew this Agreement
for a further period(s) and upon terms and conditions as they may have decided. In the
event that either Party deems it fit to renew the Agreement, either Party shall give twelve
calendar (12) months notice of such intention.
14 TERMINATION OF AGREEMENT
Either Party to this Agreement shall have the right, upon giving a minimum of one (1)
year's written notice to that effect, to terminate this Agreement provided, however, that
such notice shall only expire upon the 31st December in any one year during the currency
of this Agreement. In the event of such a termination the operator shall not be entitled to
any compensation for the improvements.
15 COMPENSATION
The Parties hereby agree that upon expiry of this Agreement and in the absence of any
renewal:
The AA may require the Investor to remove any improvement that has been affected
by the Investor and restore the land to a condition acceptable to the AA within three
calendar (3) months. In exercising this option, the AA shall however, give six months
(6) notice to the Investor. In the event the Investor fails to remove such
improvements, the AA may remove the said improvements with a view to restoring
the land and recover the costs incurred in the exercise from the Performance Bond
deposit.
That all or any part of the said improvements that the Investor does not demand shall
not be removed, shall revert to the AA and no compensation shall be due or payable
in any way whatsoever to the Investor in respect of the said improvements.
16 NOTICE
Page 69
Ministry of Natural Resources and Tourism
Wildlife Division
Joint Ventures In Wildlife Management Areas
Any notice or correspondence addressed or served upon either Party shall be deemed to
have been sufficiently given, served or addressed as the case may be, if sent by registered
mail addressed to:
The Investor if sent to:
FILL IN THE FULL NAME AND ADDRESS OF THE INVESTOR
The AA if sent to:
FILL IN THE FULL NAME AND ADDRESS OF THE INVESTOR
Or such other mailing or physical address ass either Party may from time to time specify
in writing.
Page 70
Ministry of Natural Resources and Tourism
Wildlife Division
Joint Ventures In Wildlife Management Areas
17 SIGNED, SEALED AND DELIVERED
With the Common Seal of …………………………………………
……………
(Name of AA) by ……………………………………
(Name of Authorised Officer of the AA) at
………………………………………………………
(Name of place/town)
this ………….day of ………………..200……
AA
SEAL
Name:………………..(Authorised Officer)
Position in AA:……………………………..
Signature:…………………………………….
18 SIGNED, SEALED AND DELIVERED
With the Common Seal of …………………………………………
……………
(Name of Investor) by ……………………………………
(Name of Authorised Officer of the Investor) at
………………………………………………………
(Name of place/town)
this ………….day of ………………..200……
INVESTOR
SEAL
Name:………………..(Authorised Officer)
Position:……………………………..
Signature:…………………………………….
Page 71
Ministry of Natural Resources and Tourism
Wildlife Division
Joint Ventures In Wildlife Management Areas
BEFORE ME:
Advocate/Commissioner of Oaths Witness: ……
……………………….
Name:…………………………… Name:………
……………………….
Qualification:……………………..
Qualification:…………………………
Signature:…………………………. Signature:……………
………………..
Date:……………………………..
Page 72
... Starting in December 1999, MBOMIPA staff (and other project stakeholders) have taken part in a serious of workshops and meetings in which the draft guidelines have been progressively refined. The project and project stakeholders have also been visited on a number of occasions by consultants and Wildlife Division staff undertaking studies relating to the development of the guidelines and specific areas of concern therein (see Kiwango 1999;EPIQ/TANZANIA 2000a;Booth et al. 2000;Christophersen et al. 2000;Mabugu and Mugoya 2000;Majamba 2000). ...
Article
Full-text available
Twenty-four small coastal forests within the Saadani National Park have been surveyed. According to their topographic position different types have been defined, i.e., small hilltop forest on hillock, gully forest, forest patch/thicket clump, groundwater forest, gallery forest and large hilltop forest. Their floristic composition is analysed and their conservation value is outlined. The dynamics of the wooded vegetation and their main determinants are described. Furthermore, the firewood collection practices of the local communities and its impact on the vegetation are briefly assessed. Based on the findings several management strategies are suggested.
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