Mbeza response on 9 Jan 08 to ZAWA Board/SHOAZ proposals...

MBEZA SAFARIS RESPONSE TO:
SAFARI HUNTING OPERATORS’ ASSOCIATION OF ZAMBIA (SHOAZ) REPORT ON 8 JANUARY 2008 (RE PAYMENTS 2008 SEASON) RESULTING FROM TALKS WITH THE ZAMBIA WILDLIFE AUTHORITY BOARD.

The following is the position of the board:
1) The lease agreement is not cast in stone and can be amended at any time to suit current conditions.
COMMENT MBEZA SAFARIS:
It can, and must be, so as to accommodate the quota/safari category requirements - with the agreement of the tripartite partners

2) They are not in the least intimidated by the threat of legal action by outfitters.
COMMENT MBEZA SAFARIS
At all times the procedure between the partners should be followed as laid out in the Hunting Concession Agreement (HCA): 1) good faith negotiations, followed if necessary by 2) mediation, and then 3) arbitration – the latter presumably under the auspices of the Arbitration Commission. Should these fail it is a matter for the courts. Unfortunately, these procedures have not been followed by all parties in the past, nor at the present – with current court actions (Leopard Ridge v ZAWA) being prejudiced by nationalization of the Leopard Ridge concession.

3) The board contend that as outfitters themselves identify the quota that they require at their annual quota setting meetings, they should be able to utilize and pay for 100% of this quota.
COMMENT MBEZA SAFARIS
The Board is under a misapprehension. Outfitters do not identify the quota that they require – albeit this being the present trend. I quote from my review of hunting in Zambia:
“When hunting finally resumed in 2003, the offtake quotas provided by ZAWA in the first year of the new ten-year leases were, according to ZAWA, influenced by a number of factors - in addition obviously to the pre 2002 quotas; these were the feedback from resident and established citizen hunting returns in 2002, but chiefly, by the needs of the lease agreement and the 2003 ZAWA financial budget so as “…to ensure that numbers of species provided meet the minimum requirements for both classical and mini safaris”, concessionaires being required to meet these on pain of the loss of a $50 000 surety deposit, or the cancellation of their concessionary agreement. Although ZAWA admitted that wildlife had decreased considerably due to poaching and that few GMAs had been censused, they gave a contradictory justification for a quota increase of between 5 and 15% based on “the abundant state of the species” and also, “on the assumption that:
1. The hunting blocks were successfully allocated to bidding safari companies
2. Logistics for law enforcement are made available
3. Funds were secured for aerial counts and monitoring
4. As a result of the above animal populations will increase or stabilize.”

In the first year of the old leases in 2003, only 30% of the quota was utilized; in part being due to the fact that six Prime areas did not function due to litigation.”

Quota meetings are held in the season prior to the quota setting – actually in the busiest hunting period. In Mbeza’s first year under new ownership, we workshopped the quota over a full day, only to discover that when Chilanga issued the quotas they bore no relation to the agreed quota. In 2006, the MD of Mbeza was not invited to the quota meeting, nor the Chairman of the Luembe CRB, and the other director, on safari at the time, was given one day’s notice to attend, clearly an impossibility. In 2007 we did not operate due to legal issues, but again were not invited to a quota meeting. Quotas are, in any event, not something which the operator has – or should have, control of. He may make his submissions, which, together with the inputs of the CRB and ZAWA, should be followed by Chilanga. If the operator is to set a quota i.e. a sustained yield quota – without it fulfilling reasonable scientific standards, then it should be properly called an allocation. What is missing from all of this is a monitoring system which will ensure that only the older age classes are being taken. The allocation therefore becomes a guide only for the benefit of ZAWA, who may from this deduce their income, and therefore their cash-flow. I find it worrying that the Board appear to be assuming powers they do not have. This is not about policy, this is about management and sound science.

4) With the above in view and taking in to account our objections they have asked us to give them a counter proposal.
5) We suggest that you consider a proposal along the lines of the quota being split into a 60% fixed quota and 40% optional quota.
COMMENT MBEZA SAFARIS
Fine, if based on what the operator and his CRB consider to be reasonable. In Mbeza’s case, this would require ZAWA to meet other conditions (see my previous submission)

6) The 60% financial quota would be paid in 3 instalments and the optional quota paid for as and when used.
COMMENT MBEZA SAFARIS
Agreed

7) The current animal deposit would fall away.
COMMENT MBEZA SAFARIS
Agreed

8) We will suggest removing the 50% surcharge on 2nd. animals.
COMMENT MBEZA SAFARIS
Agreed

9) We will also suggest removing the time and animals restriction currently in place for mini safaris.
COMMENT MBEZA SAFARIS
Agreed

10) Oufitters can revisit their quotas if necessary.
COMMENT MBEZA SAFARIS
Agreed. We require the timing of this.

11) Specialized and understocked areas will be exempt from the above and will negotiate separate arrangements with ZAWA.
COMMENT MBEZA SAFARIS
Why? Quotas are quotas, whatever the area. I can see no reason why they should be exempt.

I.P.A. Manning
MD
Mbeza Safaris
9 January, 2008.

Hunting concession nationalizations in Zambia...

Leopard Ridge Safaris still awaits the decision of the Supreme Court concerning its appeal against the removal of its Nyampala Hunting Block by the Zambia Wildlife Authority. However this has not stopped ZAWA further prejudicing the action - having now cancelled the public tender process, and now advertising for professional hunters to hunt the area on its behalf. A few other areas are shortly expected to suffer the same fate.

In the negotiations presently being conducted by the Safari Hunting Operators' Association of Zambia with ZAWA over payments for the 2008 season, the members of SHOAZ have agreed to a 60% non-refundable payment of the quota - the latter to be individually negotiated, but with no advance payment.

Mbeza submissions to Zambian Government

SUBMISSION (TWO) TO THE ZAMBIA WILDLIFE AUTHORITY (ZAWA) AND ITS BOARD ON PAYMENTS FOR THE 2008 SAFARI HUNTING SEASON

I.P.A. Manning (MD. Mbeza Safaris Ltd)
2 January 2008

A Safari Hunter Operators Association of Zambia (SHOAZ) E-MAIL COMMENTS ON MEETING WITH ZAWA TODAY

IF their proposal for payment of 100% of financial quota be set aside, then:
1. Outfitters to guarantee 80% use of animal quota.
2. Present refundable $12500 deposit be increase to $20000 as guarantee against 80% useage. Deposit applies to prime and secondary areas only.
3. In the event of the 80% of animal quota utilisation not being agreed on, a possible alternative benckmark will be 60% of monetary value of quota being attained.
4. An additional optional quota will be made available which will be 20% of of the originally allocated quota. This will only apply to sustainable species and not include classic species.
5. All 2008 quotas must be revisited and finalized with ZAWA by 11th.January 2008.
6. Operation of specialized areas will be negotiated seperately and directly by the outfitters with ZAWA management.

B MBEZA COMMENTS (See Annexure 1: Submission One of 21 December 2007)

My earlier submission, having fallen on deaf ears, now follows with some brief comments on the above.

1. ZAWA are prepared to negotiate advance and non-refundable quota payments within the range of 60 – 100% of the quota
2. No mention is made of the fact that concessionaires in Primary and Secondary areas pay for a set minimum number of classical and mini hunts, which may or may not be satisfied by the finally negotiated quota.
3. Should between 60 – 100% of the quota be agreed to, will this quota then be fitted to the requirements for classical and mini hunts – as laid out in the Hunting Concession Agreement (HCA), and where there is a shortfall, the operators be credited with the payments, which together, make up the concession fees?
4. As for an additional quota of ‘sustainable species” of 20% to be awarded; why would this be necessary after the operators has requested his quota? One presumes that what was meant was common species.
5. And why should it be made to appear that those holding ‘specialized areas’ are being given special dispensation to negotiate directly on quotas with ZAWA, when all operators are in fact being invited to do so?
6. We are quite happy to be able to negotiate a smaller quota, though in some instances, an increased quota would be called for. Does this not however open the door to corruption of ZAWA, Operators and of due scientific process?

CONCLUSION

In the absence of legal council – and noting the inconvenient period which ZAWA has chosen to deal with such important issues, Mbeza and its CRB representatives, as it was prepared to do before, are willing to sit down with ZAWA before 11 January and agree on a rational quota. This quota would then be defined in terms of a 60% of quota guaranteed payment – $20,000 to be paid up front. The quid pro quo for this is as follows:
1. The number of Classical and Mini safaris to be adjusted accordingly in the HCA, and credits made to the Mbeza account
2. Mbeza to be credited with the ‘underachievement fine’ - made on it for the 2005 season, the late payment fines and the outstanding trophy fee deposits
3. An audit of income and expenditure of the Luembe and Nyalugwe CRBs
4. Having taken into account the present judicial review and stay of execution granted Mbeza versus the Minister of Home Affairs, the Attorney-General and the Chief Immigration Officer, which case to be heard in the High Court of Lusaka on 30 January, 2008, a declaration from the DG and the Chairman of the Board that ZAWA will not, in the absence of breaches of the HCA or criminal activity, remove Mbeza’s concessionary rights to the West Petauke Hunting Block; and should they consider there are breaches, to state them by the 11 January 2008.

BACKGROUND

Under the Hunting Concession Agreements (HCAs), ZAWA, the CRBs and their Patrons (chiefs) are to receive concession fees for a certain concessionary period. These fees are based on a tendered amount for Classical and Mini safaris, the number of which are stipulated by ZAWA for Primary, Secondary and Understocked areas. The Mbeza tender, accepted by ZAWA and the CRBs, and the HCA itself, does not stipulate what the gross expected income would be, or what ZAWA’s share of that would be. Therefore, any payment required by ZAWA, in addition to this, falls outside of this agreement. Such a payment is the deposit of $12,500 made by Operators against trophy fees at the beginning of the season, a voluntary act of goodwill so as to assist ZAWA with its cashflow. This is not a mandatory payment, neither is payment of the concession fees earlier than the day before the opening of the hunting season, though demands are made of Operators early in each year by ZAWA to make these payments, to which they voluntarily comply.

In 2006, Mbeza was forced to pay trophy fees in the sum of $43,000 for the 2005 season which ZAWA considered would have been the gross trophy fee earnings had the stipulated number of Classical and Minis safari hunts been carried out, despite the fact that the quotas had been drastically cut by ourselves, the CRBs and the SLAMU quota-setting unit, making the achievement of 5 Classical and 7 Mini hunts impossible. Clearly this payment was not legally obtained; if it had, the same system would have applied for all Operators from that year forward, and there would be no necessity now to try and impose a non-refundable and advance minimum payment for a certain percentage of the quota. In addition, Operators have been fined 10% of trophy fees paid later than three days after the cessation of a hunt, a diktat which is clearly illegal. On the other hand, CRBs – on whom the main responsibility falls for wildlife protection, are paid quarterly – a payment which is rarely made on time, having the immediate impact of turning them into poachers – as is the proven case in West Petauke. Despite numerous attempts, our two CRBs and ourselves have been unable to obtain an audit from ZAWA of what moneys have been paid in respect of concession and trophy fees. Currently, ZAWA owes Mbeza $18,000 from advance trophy fee payments, which despite numerous attempts on our behalf, has not been returned.

As we speak, the operating environment for concessionaires in Zambia is deteriorating due to rampant poaching (with ZAWA scouts and CRB village scouts involved), the lowering of carrying capacity due to uncontrolled fire, an oil price per barrel of $100, which will impact heavily on future operating costs, a weakening dollar, and most seriously, the perception that Government intends nationalizing the hunting safari industry.

For ZAWA, without adequate funding for the running or reform of the institution, the ZAWA Board and the Minister of Tourism, Environment & Natural Resources have decided on a policy of radically increasing income: from tourist entry fees to National Parks; from non-refundable income for 100% to 60% of quotas; from the nationalization of the first hunting concession (Nyampala), with others - already stated in high Government circles, to follow. All of this is being done without full consultation and negotiation with partner CRBs and non-SHOAZ members, but also without the input of other stakeholders.

ANNEXURE 1: Submision One of 21 December 2007

Mbeza Safaris Limited’s response to the conclusions of the SHOAZ/ZAWA meeting of 21 December, 2007

The results of the meeting held on 21 December between the Safari Hunting Operators Association of Zambia (SHOAZ) and the Zambia Wildlife Authority (ZAWA) to discuss the forthcoming 2008 hunting season, was reported to SHOAZ members and non-members by the SHOAZ Secretary, Barry Bell-Cross, as follows:
1) ZAWA insist on payment of 100% of the quota up front on instructions from the Board.
2) Individual quota numbers to be mutually agreed.
3) You may not enter your hunting area if payment is not made.
4) Concessions from them are:
a) Current laws and regulations will be amended to allow a client to shoot as many species as he wishes with no additional charge for 2nd. 3rd. etc. animals shot.
b) Time restrictions on hunts will no longer apply
c) In addition it would appear they are prepared to accept tranche payments for quota.

The follow up meeting is to be held on 24 December, 2007.

MBEZA’S RESPONSE

1. As non-members of SHOAZ we are most grateful that they keep us informed of meetings with ZAWA, and of current moves afoot in the industry. Unfortunately, ZAWA continue to ignore the fact that there are many operators who are not members of SHOAZ and who therefore require to be communicated with as independent operator partners within the tripartite Hunting Concession Agreement (HCA) entered into with ZAWA and the local community resident in the hunting concession, and awarded by tender. We received no invitation to the meeting, nor any other meetings, other than the truce meeting and one other in January 2007, the first called by the Minister, despite assurances from the Chairman of the ZAWA Board, Walisiku Lisulo, that in future ZAWA would fully consult with its partners, the Community Resource Boards (CRBs) and the safari operators.
2. The insistence of the ZAWA Board that 100% of the quota fee be paid in advance, presumably non-refundable, cannot be agreed to. The quotas issued by ZAWA cannot be scientifically substantiated, and there is no trophy monitoring system in place with a feedback loop modifying future quotas. Of the quota issued in the 2006 season, only 46% of it was utilized. Yet in 2007, ZAWA insisted on 60% of the quota being paid for in advance, without a refund should the animal not be shot. As I pointed out previously, my refusal to adhere to this diktat was that it was clearly bad conservation and that it would in any case require the HCA to be renegotiated. Now, with 100% of the quota being required to be paid for, we have some 54% of the quota to be paid for and not shot, inviting all sorts of abuse and placing a considerable financial burden on operators. ZAWA appear motivated solely by its need to generate funds, avoiding good, scientific practice. And what are we to make of ZAWA’s statement that ‘Individual quota numbers to be mutually agreed.’ We are issued a quota, whether we and the community agree with it or not, then we are told that we can come in and renegotiate this quota as individual operating partners. This rather negates the whole process of having held quota meetings in the first place. And once again, our community partners are excluded from the process.
3. The concessions which ZAWA are prepared to make – as laid out in section 4, nullifies the HCA, sensible as the concessions are. But we cannot avoid the fact that the sole legal agreement in place is the HCA, the alteration of which is very long overdue.

It is important to point out that any agreement reached between SHOAZ and ZAWA is not legally binding on non-SHOAZ members, in any event requiring the agreement of the community partners.

The whole issue of quotas and the HCA agreement itself should have been workshopped under the auspices of the Natural Resources Consultative Forum at the beginning of December, at a time when most people were still in Zambia. ZAWA is attempting to push through its Board’s policy without proper consultation. The sustained use of renewable resources is also the responsibility of the Environmental Council of Zambia, and therefore such decisions by ZAWA do require adherence to the Pollution and Control Act in terms of an EIA of the short, medium and long-term results of such policy and management decisions. And ZAWA, and the industry as a whole, should conform to the draft National Policy on Environment of 1995.
The current trend within the SADC region of highly centralized governments to extract as much as possible from investors and customary landowners is counterproductive. In this region the hunting industry is under threat, which, with conventional tourism, is the only industry which – together with traditional hunter gathering, supports the rural inhabitants, and which provides the incentives for wildlife conservation. The ZAWA Board appear unaware of the law of unintended consequence.