$700m hunting industry faces bleak future
By Jack Mikaili
24th July 2011

Foreign firms unhappy withnew hunting legislation
Natural Resources and Tourism Minister Ezekiel Maige

The lucrative hunting industry faces a bleak future as the government moves to implement the new law, which among other things limits the number of hunters as well as forcing foreign firms to give shares to Tanzanians, The Guardian on Sunday has learnt.

Foreign investors are said to be concerned by the recent legislative changes that compel all foreign hunting firms operating in Tanzania to cede 25 percent of their shareholdings to locals.

As if that was not enough, the wildlife conservation Act of 2009 further provides that foreign-owned companies allocated hunting blocs should not exceed 15 percent of the total hunting companies at any particular time.

If the law is anything to go by, only nine foreign hunting firms out of 27 will be allocated hunting blocs, locking out in the cold 18 others with estimated combined investment capital of $700 million.

About 65 hunting firms applied for 156 hunting blocks concessions for the period 2013 to 2018, and the government is yet to announce the successful companies.

Information reaching this paper indicates that suspect key hunting corporate firms with majority foreign shareholders are currently mulling over laying off thousands of workers anytime soon.

And if the law is implemented as it is now, and 18 major firms are forced to leave Tanzania nearly 5,200 helpless Tanzanians will lose their jobs, with the treasury likely to suffer nearly $15 million in tourism-related taxes annually, while suppliers will miss earnings amounting to $67 million a year.

One of the giant investors told The Guardian on Sunday in confidence that a majority of them are considering shifting their capital, technology and skills to other destinations like Uganda, Rwanda, Zambia, Botswana, Namibia, South Africa and Zimbabwe with similar hunting blocks.

Bad law

A visiting Tumaini University lecturer of Wildlife, Corporate, and Land Laws, Nyaga Mawalla, said the WC Act of 2009 is contravening the investment guarantees offered to investors under the Tanzania Investment Act of 1997 and the constitution of United Republic of Tanzania.

“Most of these companies had applied under the Tanzania Investment Act number 26 of 1997 and, therefore, are bonafide investors and they enjoy [an] investment guarantee of [a] predictable investment climate,” Mawalla said.

He added that the TIC Act section 22 (b) provides that no person who owns, whether wholly or in part, the capital of any business enterprise, shall be compelled by law to cede his interest in the capital to any other person.

The don who is also an advocate of the High Court of Tanzania cited the WCA of 2009 section 39 subsection (3) as totally against the TIC Act number 26 section 22 (b).

“We pledged that our laws and regulations will be predictable, and we will never force them to transfer their shares, out of the blue, the same people enacted a law and imposed a provision that force[s] them to cede 25 percent of their shares - very wrong,” Mawalla argued.

Mawalla further criticised the WC Act provision that provides that foreign-owned companies allocated hunting blocs shall not exceed 15 percent of the total hunting firms at any particular time, saying it contravenes the constitution.

He argued that the law is discriminative, because it locks out in the cold both foreigners and their Tanzanian partners who bought 25 percent shares from their companies as required by the same law.

“The Constitution of the United Republic of Tanzania of 1977, bill of rights, part 3, which provides for the basic rights and duties, Article 12 (1) provides that all persons are equal before the law and are entitled, without any discrimination, to protection and equality before the law,” the don explained.

Sub-article 2 of the same article, the law lecturer said: “No law enacted by any authority in the United Republic shall make any provision that is discriminatory either of itself or in its effect.” Mawalla explained that Sub-article 5 of the constitution provides that "Discriminate means to satisfy the needs, rights, or other requirements of different persons on the basis of their nationality, tribe, place of origin, political opinion, color, religion, sex, or station in life..."

“But the Wildlife Conservation Act No. 5 of 2009, favours hunting firms owned by a majority of Tanzanians, discriminating those Tanzanians who purchased 25 percent shares from the foreign firms,” the don said.

Government position

The spokesperson of the Natural Resources and Tourism Ministry Matiko Mwita said that arguments with regard to the bad law were supposed to be raised during the enactment and not now. “Why [are] these people criticising the Wildlife Conservation Act this time around when we are in the process of allocating hunting blocks?” Mwita queried, adding that his ministry was not responsible to make laws.

The key ministry Public Relations and Communications Manager said that his docket was only implementing the laws, regardless whether they are good or bad.

With regard to when they will announce the awarded companies, Mwita said the process is still underway, promising to issue a comprehensive statement next week.

Tanzania has formulated new rules to help tap at least $30 million more from its struggling hunting industry, which sector policymakers see as a key economic growth driver from 2013.

Experts say the sector will bring home $53 million, up from an annual $20 million, bringing it closer to being one of Tanzania’s largest foreign exchange earners.

Natural Resources and Tourism Minister Ezekiel Maige said the rules should help the industry make a bigger contribution to the economy, due to its huge potential.

Under the tourist hunting rules, the wildlife-rich country will see the license fee for its prime hunting blocks rising from $27,000 to $60,000 a year. The revised guidelines also categorized the hunting blocks into 5, depending on the type and number of animals to be hunted.

Maige said category I has 24 blocks with a hunting permit fee of $60,000 each, while group II has 98 blocks and a hunting fee of $30,000 a piece.

Category III, with 18 blocks, has a hunting license fee of $18,000 each; while class IV and V with 8 hunting blocks each will have a permit fee of $10,000 and $5,000, respectively.

The categorization was done according to the animals to be hunted, block size and availability of wildlife resources to ensure sustainable tourist hunting and diversity of animal species.

Other factors include hunting block accessibility, in terms of terrain and infrastructure from the country’s commercial city of Dar es salaam or the safari capital of Arusha, reliable water supply, and scope of human activities within the bloc.

Maige said in establishing a hunting block the boundaries of the proposed blocks are demarcated by Global Positioning System (GPS), according to their potential for wildlife recovery in a given time frame and investment.

Though the minister was silent on the trophy fee, word has it that under the new structure, the trophy fee for hunting a lion is most likely to have risen to $12,000, up from just $2,500.

Hunters may also be required to pay $15,000 to kill an elephant, from the previous fee of $5,000. Hunters are still silent on the fee increase.

Of the African hunting countries, Tanzania undoubtedly stimulates the imagination. It has long been considered a prime hunting destination in Africa.

Fulfilling the dream of a traditional big game hunting safari continues to be a big draw to Tanzania’s unspoiled wilderness.
SOURCE: GUARDIAN ON SUNDAY