JOINT VENTURES BETWEEN COMMUNITIES AND TOURISM INVESTORS: EXPERIENCE IN SOUTHERN AFRICA
JOINT VENTURES BETWEEN COMMUNITIES AND TOURISM INVESTORS: EXPERIENCE IN SOUTHERN AFRICA Caroline Ashley* and Brian Jones** Accepted for publication in the International Journal of Tourism Research, special issue on fair trade in tourism, Vol.3, No.2, March 2001. * Research Fellow, Overseas Development Institute, Stag Place, London SW1E 5DP, UK Tel: +44 (0) 171 393 1642 Fax: +44 (0) 171 393 1699 Email: c.ashley@odi.org.uk ** Environment and Development Consultant, PO Box 9455, Eros, Windhoek, Namibia Tel. and Fax: +264 61 236 186 Email: bjones@namib.com Joint ventures between communities and tourism investors: Experience in southern Africa SUMMARY Tourism joint ventures between communities and private investors are an emerging trend in Southern Africa. In each country they take different forms. This paper reviews experience in Namibia, within the wider regional context, to identify some key principles and challenges. Several lessons can be learnt from the eight Namibian negotiations, and three operating ventures concerning the long process of establishing joint ventures, and about the positive and negative impacts it has for both parties, which cover a range of commercial and livelihood concerns. The analysis suggests several critical factors influence JV success including: committed individuals, company philosophy, facilitation, time and trust, local institutions, national policy context, and tourism market trends. Regional comparison indicates that critical factors need to be present in some – but widely varying – form. JVs should become easier to develop as lessons are shared. Although they will remain a niche market, due to high transaction costs, further policy and practical support can help develop this promising potential. KEY WORDS Joint ventures Tourism Community–private sector partnership Southern Africa 1. INTRODUCTION AND BACKGROUND Tourism joint ventures between communities and private investors are an emerging trend in southern Africa. The term ‘joint venture’ is not used in the strict legal sense used in commerce, when two companies form a joint venture. We define community-private sector joint ventures as a contractual partnership between a community or local institution and a private investor, to work together in establishing and operating a single tourism or hunting enterprise. While they may not both own the company assets in legal terms, both have rights and responsibilities to contribute to and benefit from the enterprise. There are two common forms: one is where a tourism lodge is established by an investor on communal land, under a formal agreement with the resident community or its representatives. Usually, the operator pays a lease fee or bed night levy, but in some cases the community has an equity stake. The other common form is where a community institution has control over a hunting quota for wildlife in its area, which it leases to a trophy hunter. Joint ventures are emerging for several reasons: • In most parts of the southern African region, the wildlife and/or land in areas populated by rural communities are owned by the state. But thanks to a trend of devolving rights over wildlife, land, or other natural resources to residents, communities are now gaining rights over assets such as wildlife and tourism concession rights. • It is difficult for communities to develop their assets on their own, as they lack access to capital, tourism expertise and marketing skills. So many view a partnership with a private operator as a way to tap into the market value of their assets. • In a context where tourism is growing in the region, private investors need access to new opportunities, and hence to the assets owned by communities. 2 -- • Tourism companies are also responding to changing trends in the market, which demands greater sophistication and variety and not just daily sightings of the ‘Big Five’ (lion, leopard, elephant, rhino and buffalo). Joint ventures add cultural and ethical components to the product. • Given the changing political context (the end of white rule in Zimbabwe, Namibia and South Africa in the last 20 years), there are also long-term strategic reasons for tourism companies to demonstrate their commitment to local development, and to justify what has been seen as an elitist industry. • Tourism is increasingly being seen as a livelihood option by communities and by development organisations that support them. There are many initiatives to support community tourism, including promotion of joint ventures. • Both non-consumptive and consumptive tourism1 are also seen as important among conservationists as an appropriate form of sustainable use of wildlife, and a way to create incentives for community conservation. Several facilitators of community tourism are therefore motivated by a conservation agenda. This paper explores experience in Namibia, compares it with experience in other southern African countries, and seeks to identify implications for the further development of such ventures within the tourism industry. The paper first looks at the regional context in which joint ventures are developing and then documents some Namibian examples. A Namibian case study is described and analysed drawing comparisons with experience elsewhere. Some critical success factors are identified and their broader relevance to the industry considered. The paper concludes that many factors that affect the likelihood of success will be context specific, but the critical success factors identified to date point to the emergence of some key principles that can be applied in different circumstances. These are summarised in the conclusion. 1 Non-consumptive tourism in southern Africa is mainly wildlife-viewing or photographic safaris. Consumptive tourism is mainly trophy hunting and sport hunting, plus some fishing and bird shooting. 3 -- This paper is based on practical involvement and research by the authors in Namibia’s Community Based Natural Resource Management Programme (CBNRM). Both were involved in facilitating the emergence of tourism joint ventures and have conducted research on the issues involved (for example, for IIED’s Evaluating Eden project, Manchester University’s wildlife and people research, action research for development of DFID-Namibian project on wildlife and livelihoods (WILD) and for a UK Department for International Department (DFID) assessment of pro-poor tourism issues). Both have been based in Namibia, while doing work in the broader region. Details of the Damaraland Case study are based, in particular, on research interviews at the lodge in April 1999, action research on pros and cons of tourism plans with community members in 1997, joint venture planning workshops with the community in 1994–96, and opinions expressed in presentations made by community and non-governmental organisation (NGO) staff at workshops. 2. APPROACHES TO JOINT VENTURES IN SOUTHERN AFRICA 2.1. Regional approaches Within southern Africa a number of different approaches to developing tourism joint ventures have emerged. In Zimbabwe, Botswana and Namibia joint ventures between rural communities and the private sector have been developed within the context of national CBNRM programmes. These programmes aim at linking conservation and rural development by giving rural communities rights over wildlife and tourism. It is argued that if rural communities have sufficient authority and control over wildlife and if the benefits from wildlife management (including income from tourism) outweigh the costs, then communities will manage wildlife sustainably. In South Africa joint ventures have developed where National Park authorities have 4 -- sought ways to increase the legitimacy of conservation areas through providing benefits to rural neighbours. Another major impetus is now being given to joint ventures by the Strategic Development Initiative which seeks new ways to develop sustainable local economies and has a strong focus on tourism. Tourism joint ventures in South Africa are also developing in East Africa, supported by both conservation and development-oriented institutions. The joint ventures that have developed in the region reflect the specific political, social, cultural and economic contexts of each country, but also demonstrate similarities. Zimbabwe The Communal Areas Management Programme for Indigenous Resources (CAMPFIRE) has promoted joint ventures particularly in the safari hunting sector. Rural District Councils (RDCs) have been given rights to manage wildlife including the sale of hunting quotas allocated to the councils by government (Metcalf, 1994; Steiner and Rihoy, 1995). The hunting quotas are put out to tender and bidders are asked to quote in US dollars. The income is either distributed to residents in the area where the hunting takes place or is used for community projects or a combination of both. Sometimes responsibility for wildlife management and negotiation with the private sector is devolved by the councils to a lower level of administrative unit, the Ward. A Zimbabwean development NGO, the Zimbabwe Trust, builds the capacity of the councils and wards for negotiation with the private sector, assists in developing greater accountability by these bodies to residents, and facilitates the development of transparent income distribution. In recent years, some joint venture photographic tourism lodges have been established. 5 -- Botswana As part of Botswana’s CBNRM programme, large blocks of land, particularly around game reserves and national parks are designated for lease to either the private sector or local communities for hunting or photographic safaris or a combination of both (Jones, 1997; Steiner and Rihoy, 1995). Communities that form representative and accountable management groups may obtain 15-year leases from tribal land boards for hunting or tourism activities. They may then sub-lease to the private sector if, as is most likely, they do not have the capital and skills to run the operations themselves. The Botswana Government has developed a series of formal guidelines for the establishment of joint ventures. These guidelines provide for a formal role by various government agencies in advising and assisting the community in negotiating with the private sector and evaluating tender bids. Namibia In Namibia, the Government devolves limited ownership over some species of wildlife and use rights over others to local communities that form a natural resource management institution called a conservancy (Jones, 1997; Steiner and Rihoy, 1995). A conservancy must have a registered membership, legal constitution, representative management committee, and defined boundaries. The first four conservancies are registered and have each embarked on joint venture negotiations. Other conservancies and negotiations are developing. Conservancies are beginning to integrate wildlife management and wildlife-based tourism with other land uses. Namibia has the strongest legislation in the region that devolves authority over wildlife and tourism directly to community-level institutions. South Africa 6 -- Under South Africa’ Strategic Development Initiative, a wide range of joint ventures are developing on communal land, inside protected areas, and on land that residents have reclaimed (through the land claim process) from within protected areas, and which the communities choose to keep under wildlife use. A range of structures have developed that are more complex than in the other countries, including equity and lease arrangements for both development and operating companies. The ‘community’ is normally represented by a tribal authority and in many cases partnerships are tri-partite as they include a local government authority. This is particularly true inside protected areas where government has an inalienable stake. For example, Rocktail Bay and Ndumo Wilderness Camp in Maputoland are tri-partite ventures between the commercial wing of KwaZulu Natal’s Department of Nature Conservation (Isivuno), a South African tourism company (Wilderness Safaris), and the relevant Tribal Authorities neighbouring each protected area (the Mqobela Isigodi and Matenjwa Tribal Authority, respectively) (Elliott, 1999). 2.2. Namibian examples Namibia, at the south-west tip of Africa, is the most arid country south of the Sahara (MET, 1994). Since Independence from South Africa in 1990, Namibia’s international tourism industry has grown rapidly. While mainstream tourists focus on the national parks, and trophy hunters on the commercial farms, more adventurous tourism to the Northwest (Kunene Region) and Northeast (Caprivi Region) communal areas has taken off. Both have stunning scenery and wildlife, with desert-adapted species in the dry west (including ‘desert elephants’ and rhino), and more typical African game in the central savannah and wetter north-east. The main land uses are subsistence livestock production and agriculture, which residents combine with off-farm income and migration to survive. Over recent years, several initiatives to develop ‘community tourism’ have emerged. The first tourism joint venture negotiations began in 1994, but the trend was given much greater impetus with the passing of conservancy legislation in 1996. As conservancies are 7 -- legally registered community institutions, which receive concession rights over wildlife, they form the basis for communities to enter tourism joint ventures. The eight initiatives to develop tourism joint ventures in Namibia so far are summarised in Table 1. One photographic tourism and two hunting joint ventures are operating. One tourism enterprise is under development. The other four negotiations stalled and are not proceeding. In addition to these eight, there are other ideas developing in emerging conservancies. Table 1: Initiatives to develop joint ventures in Namibia Enterprise and partners Damaraland Camp Torra Conservancy and Wilderness Safaris Poachers Camp Torra conservancy and S. African investor Torra Conservancy and a Safari Hunter Salambala Conservancy and Peddie Safaris Nyae Nyae Conservancy and a Safari Hunter Grootberg Conservancy and a Safari Hunter Lerato Company, negotiating with a number of conservancies Emerging Mayuni Conservancy and tourism investor Tourism or hunting Up-market tourism lodge Location Kunene Region, Northwest Namibia Status Negotiated 1994-96. Operating since 1996 Very exclusive tourism lodge Kunene Region, Northwest Namibia Negotiated 1994-6. Didn’t proceed. Trophy hunting Kunene Region, Northwest Namibia Caprivi Region, Northeast Namibia Otjozondjupa Region, Eastern Namibia Kunene Region, Northwest Namibia Kunene and Caprivi Regions, Northwest and Northeast Namibia Caprivi Region Negotiated 1998-99, being implemented Negotiated 1995-6. Investor withdrew Negotiated and operated 1998 Negotiated and signed in 1998. Cancelled. Negotiations started and halted in 1998. Sport hunting and fishing lodges, plus tourism Trophy hunting Trophy hunting Tourism lodges Tourism lodge Negotiated 1998-9. Being implemented. Lessons can be learnt about the process of negotiation from all eight. Only the first, Damaraland Camp, has been operating long enough to reveal insight on implementation and impacts of the partnership. We therefore focus on Damaraland Camp in detail, while bringing in comparisons and contrasts to the other initiatives in Namibia, and the other approaches in the Region. 3. ESTABLISHMENT AND OPERATION OF DAMARALAND CAMP 8 -- The Damaraland Camp is an up-market 16-bed tented lodge on the fringes of the Namib Desert in Kunene Region, north-west Namibia. It is situated in the Huab River Valley in an area, which is home to desert-dwelling elephants, black rhino, giraffe, springbok, oryx and a number of other species of large game. The area is sparsely inhabited by a mixture of people, living a harsh existence from small stock farming, some cattle herding and the tending of small-scale vegetable gardens. Few people have permanent jobs. Elephants damage water points and raid gardens, while the livestock is vulnerable to predators such as jackals and hyenas. The joint venture was negotiated between a southern African photographic safari company, Wilderness Safaris (WS) and the residents of the area. For many years the residents have appointed their own community game guards and the reduced poaching in the area has contributed to a significant increase in wildlife (Durbin et al., 1997). The product marketed by WS is desert wilderness with spectacular landscapes with the possibility of seeing desertdwelling elephants and other wildlife. The company also emphasises the links to the local community. Construction of the camp was completed in 1996 following lengthy negotiations with the local community over a two-year period. After realising that WS was interested in developing a lodge in the area, the community sought legal assistance and were told that if they wanted to enter into a contract with the company they needed to form a legal body. The result was the establishment of a Residents’ Trust with a legal constitution and an elected management body. The negotiations led to the development of a written contract between the company and the Residents’ Trust. The contract included the following provisions: • a commitment by WS to local recruitment of staff and training up to management level 9 -- • WS to pay 10% of the net daily rate to the community in the form of a levy per bed-night • WS to pay an additional flat fee of GB£ 300 a year for ‘rent’ of the site of the lodge • WS to present its books to the Trust every quarter for inspection • WS to ensure an annual audit is carried out • an option for the community to purchase the assets and continue alone after 10 years or an option for the community to renew the contract for a further five years 20% of the acquired fixed assets each year and to take over fully at the end of the extended period. In the case of both options the company to continue to bring tourists to the camp • provision for the lodge to buy wood and procure other services such as washing of laundry from the community • establishment of a Joint Management Committee of WS and community representatives to discuss development of the lodge and wider area • the community provides WS with exclusive use of the lodge area (i.e. no livestock in the immediate vicinity), tourist access to a much larger mixed-use area, and a guarantee not to engage in tourism ventures with other companies in the larger area; • other community commitments including environmental management, respect for the security and safety of clients and business needs of the lodge • clauses on termination, dispute resolution, etc. Any changes to the contract have to be agreed by both parties Significantly, the company agreed that the income would be paid directly to a community account and that the use of the income would be entirely up to the community. The camp has proved successful in attracting tourists, beginning with a 40% occupancy in its first year, and projections that occupancy would rise to 65–70% by 1998. The lodge won second 10 -- place, the Silver Otter Award, in the British Travel Writers’ Guild Award for 1997 for ecotourism destinations worldwide. Part of the criteria for this award was the service to the community. Once Namibia’s conservancy legislation was passed; the Residents’ Trust was transformed into the Torra Conservancy following widespread community consultation. 4. KEY ISSUES 4.1. Developing the partnership Clearly in the development of the Damaraland Camp there were a number of factors not normally present in the establishment of the average tourist lodge. Usually the investor would secure the land through rental from the government, gain approval (in a rudimentary way) for the type of development, and then go ahead with construction. In this case, however, the investor spent two years negotiating an agreement with local residents, the people who depend upon the land and resources the lodge wanted to use. Time and style of negotiation The two-year negotiation period was a learning experience for both the community and the company, as they both had to adapt to different negotiating styles and paces of decision-making. The company was not dealing with a small group of individuals who could take decisions on their own or quickly refer important issues to their backers. The elected members of the Residents Trust had to discuss issues amongst themselves and then refer them back to the broader community whom they represented. Although the community is relatively small it is spread out over a large area of land at isolated settlements and cattle posts. To organise a community meeting is time consuming for the leadership and residents. Attendance at such a 11 -- meeting also means time away from the farm and more productive activities necessary for trying to eke out a living in such a harsh environment. Time is clearly also a factor for investors, who want to see a return on their investment. Delays cost money. For example, a similar negotiation process occurred at Salambala conservancy in Caprivi. However, at the end of two years when the investor withdrew, he blamed delays in registering the conservancy and formalising the deal for his departure. There is a clear tension here between securing the deal, and ensuring a good deal and an empowering process for the community. Table 1 illustrates that trophy-hunting contracts have generally been negotiated and implemented much more rapidly. The same trend is observed in Zimbabwe. This is generally because they are shorter and simpler contracts. This suggests that some communities may do better to focus on trophy hunting joint ventures first, while building up capacity for tourism negotiations. However, the risk of this is that tourism opportunities will be seized by others meanwhile. Defining the community A substantial part of the two years was taken up with formation of the Residents Trust: defining membership, agreeing a constitution and acquiring legal recognition. The existence of the Residents Trust is deemed crucial by the Managing Director of WS, as it provided him with a body of community representatives with whom he could negotiate, and whom he could trust as representing wider community views. A common question in all CBNRM initiatives including joint ventures is ‘who is the community?’ In Zimbabwe and South Africa easier answers are found, by using government authorities – local councils in Zimbabwe – and traditional authorities – Tribal Authorities in South Africa. In Botswana, there is more opportunity for communities to define themselves, as in 12 -- Namibia, when applying for leases from the Land Board. At Damaraland Camp, the process of institution building meant that negotiations were delayed, but on the other hand it brought the joint venture closer to grass-roots level. Facilitation An important feature of the negotiation phase was assistance to the community provided by a wide variety of external organisations. The local non-governmental organisation, Integrated Rural Development and Nature Conservation played the role of facilitator, helping the community to organise, consult and negotiate. They also brought in several advisors with expertise, including economics and legal advice. Although rural communities can be shrewd and skilled negotiators in matters familiar to them, they are clearly at a disadvantage when dealing with business investors in the tourism industry. They lack knowledge of the industry, of its potential and its pitfalls, and are not used to analysing company financial statements. The potential for them to enter into a poor deal for themselves is great. The assistance from outside helped to redress the imbalance of power between the company and the community in terms of knowledge and information. However, there are tensions in the role of facilitator. To what extent should they be helping the weaker partner, the community, to enter negotiations, and to what extent serving as an objective broker between both parties? In the Damaraland Camp negotiations, IRDNC played both of these roles. It was as important to help the company understand the community as to help the community understand the concerns and needs of a business company. In assisting the community, to what extent should facilitators ‘advise’ the community with their opinion on such complex issues, and to what extent merely support their process of decision-making? IRDNC were able to focus more on the latter by bringing in advisors on the former. This dilemma rose 13 -- more strongly during the recent negotiations between Lerato and several Namibian conservancies. A wide range of advisors were involved in the conservancies’ workshop and found they had contrasting opinions of the Lerato offer, generating debate about the extent to which advisors’ opinions should be offered at all. The value of facilitation is demonstrated by the several cases where deals have been signed without facilitation. For example, where a headman is offered some token recompense on the spot for signing a piece of paper typed by an investor. Ensuring a fair deal There is no market in communal tourism land in southern Africa, so it was very difficult for the community to judge what would constitute a fair return for their contribution to the joint venture. Economics advice was brought in which relied on two forms of assessment: first drawing on experience across the region. There was no published information on contracts, so personal contacts through the CBNRM programme proved invaluable at gleaning regional experience, although most of these were for hunting joint ventures. Secondly, using projections provided by WS, analysis was done to assess levels of profitability for the company based on different lease fees. This showed the limits of what was possible and not possible. It was important to show the community how what was feasible depended on key factors such as occupancy, scale of investment, and particularly the trade-off with the length of the contract. However, greater access to commercial expertise within the industry probably would have helped in further understanding what was feasible and not from the company’s perspective. As more deals develop, and hopefully as more information on contracts becomes available, market trends should become evident, though case-by-case analysis will still be needed. 14 -- In Zimbabwe, a tender process has proved invaluable at securing a fair market-related price for community contributions. By requesting investors to bid for a trophy quota, revenues earned by the Councils have increased dramatically yet without the risk of pricing themselves out of the market (Bond, 1995). When Damaraland Camp was negotiated, a tender was not an option, because the initiative came from the company and the community did not yet have legal rights over wildlife to be tendered. Tender processes are now being considered in Namibia, but even now, a tender process would be more difficult for a similar venture. This is because tourism lodges require a longer-term contract than trophy hunting deals, are more complex and locallyspecific, and rely even more on a spirit of cooperation than on contractual details. This places value on personal contact, and an initiative from a specialist company who knows the area well, and on details that might not be revealed in a documented tender bid. Legal rights A key issue for the Residents’ Trust, and one recognised by Wilderness Safaris as being important for the success of the venture, was the securing of rights to the site on which the lodge would be built. The company agreed that the Trust would take out the lease (called Permission to Occupy or PTO) from government over the site, rather than the company make the application, which had always been the case in the past with tourism developments on communal land. The acquisition of the site helped redress the imbalance of power between the company and the community in terms of what each was bringing to the partnership. It was also an implicit recognition by the company that although the title to the land in Namibian law rests in the state, the people who live on it and use it have rights to the land that should not be ignored. The process and product 15 -- The negotiation of a written agreement and contract was important as a process of developing a shared vision of what the lodge could bring both for the company and community. The fact that some real negotiation took place and compromises were made on both sides meant that both could claim commitment to the agreement. Equally the product – the written agreement – has been an important reference point for both partners in the ongoing operation of the lodge. A contrasting example The experience of Damaraland Camp contrasts considerably with the development of a joint venture for safari hunting between a neighbouring conservancy and a Professional Hunter. The conservancy was represented in the negotiations by two individuals who had little contact with other committee members during the negotiating process, and no issues were referred back to the rest of the community (Jones, 1999). The individuals involved in the negotiation had no external support and the hunter wrote the agreement himself. The result was a document that the conservancy had no ownership over, the committee did not know what it had agreed to and many provisions were unreasonable. Once the committee realised how bad the agreement was for the conservancy and that the hunter seemed to have no intention of carrying out safaris, they drew on legal advice and were able to terminate the agreement. However, the conservancy had lost a year’s potential income from trophy hunting. 4.2. Implementing the partnership The development of a sound working partnership between the Residents Trust (later the Torra Conservancy) did not end with the signing of the contract and construction of the Damaraland Camp. The main forum for maintaining partnership is through the Joint Management Committee. Although it has proved difficult to get meetings as often as planned, the functioning of the Joint Management committee has been crucial in maintaining the spirit of the agreement 16 -- and the trust that had built up between the company and the community during the negotiation phase. Other informal avenues are daily contacts between management and local staff (who included some committee members of Torra Conservancy), a new workers’ committee which handles negotiations over wages and work conditions with lodge management, and occasional visits to the lodge by conservancy committee members for various reasons including checking progress. Namibian communities involved in negotiations with the private sector have indicated that building trust with individual managers is important to them and they would like to see continuity of lodge management teams (this was expressed during discussions of the Lerato proposals) (LIFE, 1999). However, the industry tends to rotate management teams for a number of reasons and the continuity sought by communities is lost. The current manager of Damaraland Camp suggests this can be mitigated through ensuring that agreements and decisions on new issues are recorded and available for new management teams and the conservancy representatives. At Damaraland Camp, continued if occasional involvement of the Managing Director, who led the negotiations, also ensures continuity. From the company side, there are still some problems in building the partnership. The camp manager reports that taking decisions to the JMC costs time and effort, although he does not regard it as a burden, and is worthwhile. However, the Managing Director identifies ways in which the partners still lack shared understanding. He indicated that community members have unreasonably high expectations of what the lodge can deliver financially, and need to develop a better understanding of the business side of the operation. This has been improving over time. Staff who have often have never had a permanent job before, have to adjust to a structured working day geared to deadlines dictated by the movements of tourists and the need for high 17 -- quality service. Community negotiating skills are still very blunt, which could easily lead to friction if not understood by their partner, 4.3. Is it a ‘partnership’? What is the nature of the relationship between Wilderness Safaris and the Torra Conservancy? Can it be called a partnership, and if so, why? In a normal business partnership the partners have co-ownership of the business and there is joint decision-making. The partnership is formed on the basis of each bringing assets to the business, usually in the form of capital or expertise. But Torra Conservancy is not a formal business partner of the company. Essentially, the company has entered into an agreement to pay the conservancy for the use of its land and other resources such as water. This is equivalent to a rental, with implicit compensation for the opportunity costs of using the land (i.e. recognition that the community would have been using the land and water for other purposes). However, the nature of the relationship between the two entities raises the arrangement well beyond that of landlord and tenant. The provisions in the agreement for the conservancy to take over the lodge if they wish, for the functioning of the JMC, training for community members to management level, and the spirit in which the company are willing to operate the lodge all encourage a sense of real partnership between the two parties. There is evidence that that the conservancy feels ownership over the lodge. Committee members visit the lodge to check on progress and staff issues, are keen for JMC meetings to take place, and show national and international visitors to ‘their’ lodge. According to one of the community staff members: “People see the camp as the future for the area. They think the camp belongs to them and feel proud about it and they know they will take over the camp.” 18 -- However, it is unlikely that every joint venture in the region would elicit similar responses. Clearly a joint venture can amount to little more than a paper agreement and landlord-tenant relationship. In the case of Damaraland Camp, a combination of factors including the process of negotiation, the details of operation, the ambitions of the community, and the individuals involved have probably helped to build a better partnership. 4.4. Advantages and disadvantages for the operator Wilderness Safaris were already familiar with the Kunene area. They invested in Damaraland Camp at a time when they wanted to move into operation of accommodation and not just provision of tours, and the camp is a key part of the circuit that they offer tourists. The company business philosophy embraces community participation, and it also operates joint ventures at Ndumo Park and Rocktail Bay in South Africa’s Maputoland. While any company would expect a good return on its investment, these factors indicate that profit-seeking was not the only motivation. The deal with Torra Conservancy gave WS access to a prime site in southern Kunene, at a time when other sites were either unavailable or of uncertain status. Large tourism tracts were already tied up in 2 large government concessions, while other sites on communal land could have been developed with agreement of the Government, but may have been subject to growing pressure from communities. Discussions with the Managing Director of WS and the Manager of Damaraland Camp in January 1997 and April 1999 have indicated four advantages to the company from operation of the lodge. Firstly ‘it is a seller.’ Feedback from tourists indicates that for many it is the favourite lodge on the tour. This is partly ascribed to the unusual degree of staff warmth and attention, 19 -- which in turn can be partly ascribed to their own stake in the camp, and partly to cultural characteristics of the Riemvaskmaker people (the majority in the area). Given the importance of word of mouth in marketing, this is significant. Secondly, it benefits the company and their marketing at a more general level. They gain a ‘market boost’ and ‘exposure in the tourism world’. Prizes such as the Travel Writers Guild Silver Otter Award help draw attention to the lodge and company in a market that is highly competitive and in which southern African safari lodges and packages need to distinguish themselves from each other. Thirdly, if problems arise with government or other outsiders, the company can be confident that the community will provide support. While this has not yet been an issue, the political context and changing land-use patterns in many Southern African countries makes it useful to have this additional political credibility. For example, in south-eastern Zimbabwe, an up-market lodge was established at Mahenye by ZimSun in collaboration with the local community, and the two have worked together in dealing with problems in government (Murphree, forthcoming). Fourthly, the tourism product is dependent upon maintenance of the wildlife and wilderness. While local commitment to wildlife conservation had been increasing for several years, the lodge partnership may well have given it extra momentum, because people can see visible benefits. For example, the Company Director and Camp Manager believe that attitudes to elephants, which cause enormous physical damage in the area and occasionally kill people, have become more positive since the lodge began. 20 -- Despite good occupancy rates, profit to date appears to be limited, particularly given the amount of income that is paid over to the community. Detailed analysis has not been done of Wilderness Camp, but commercial assessment of the two other Wilderness joint ventures in Maputoland has been done by Africa Wildlife Foundation (Elliott, 1999) (in these cases WS operates the camps but does not own them). Rocktail Bay Lodge opened in 1996, and generated profits for WS in 1997/7 and 1997/8. Ndumo Wilderness Camp, also opened in 1996, had not yet returned a profit by February 1998, reflecting its more specialised market (bird-watchers), but was expected to succeed. Given that new tourism operations are rarely expected to break even within the first five years, this performance was regarded as acceptable. This suggests that tourism joint ventures can be profitable, but profits can take time and other company benefits can be equally important. The main disadvantages to WS of operating a joint venture instead of a conventional private investment is the amount of time invested in working with the community, during both negotiation and operation. The Director estimates that the negotiation process cost N$200,0002 in time, flights and other resources. Now it is operational, the need to agree any changes with the Committee can still cause delays, although the right of WS to get on with day-to-day management without interference is recognised in the contract. As indicated above, different attitudes to business continue to be a challenge in building the partnership. The Director and Manager clearly believe that the advantages of the joint venture outweigh the disadvantages for them. However, the benefits are of several types, which are important to WS in their context: access to a new site, market boost, improved conservation, fitting with company philosophy. This suggests that the benefits to other companies, at other joint venture sites, would also depend on the context and range of advantages (not just profit) sought. 21 -- 4.5. Advantages and disadvantages for the community The negotiation process and comparison with other potential joint ventures demonstrates a wide range of community concerns and desires in relation to tourism development. Cash income is far from the main or only motivation. This is illustrated by the fact that the Residents Committee negotiated two joint ventures but only decided to proceed with one. The other offer, for a small exclusive lodge at ‘Poachers Camp’ was discussed for three years, but reached the point where the company said it must be ‘yes’ or ‘no’, and the community decided not to go ahead. It would have been possible to go ahead with both offers. Table 2 contrasts the two proposals. In essence, the community was happy to go ahead with the Wilderness Safaris offer because they saw tangible benefits with relatively low trade-offs in terms of loss of land for other current uses. Poachers Camp offered significantly more money but had three major disadvantages: it was a high risk, it involved keeping people and livestock out of a much larger area, and it involved a much longer commitment. In addition, the negotiation was more difficult because proposals kept changing, making it difficult for the community to assess and discuss the deal. These disadvantages outweighed the potential benefits. The way that Torra members negotiated for Damaraland Camp and then assessed it, shows the importance of a range of livelihood concerns. During the negotiation, they pressed harder to increase Wilderness Safaris’ commitments to senior-level training and to transferring ownership, than to increasing their revenue share by another percentage point. The following year, when assessing pros and cons of tourism as a land-use, money for community funds, elephant damage and drought were ranked highly. But they also highlighted the importance of jobs near farm. Even if tourism jobs are lower paid than city jobs, the fact that they are near home means that 2 Approximately £35,000 at exchange rates prevailing at that time. Currently £1 = N$9.7 approximately. 22 -- ‘farmers can continue as farmers’ instead of paying someone else to look after their livestock (Ashley, 1997). Given that farming is not just what people do but is how they define themselves, the fact that the lodge can complement farming is very important. Participants also emphasised that tourism is a ‘foundation for development’. In ranking of benefits, two of the three groups ranked this first. Table 2: Comparison of Wilderness Safaris proposal and Poachers Camp proposal The offer from Wilderness Safaris Likely community income of N$ 50-70,000 per year Exclusive use of a small tourism-only area. Access to a larger mixed-use area. No other lodges/camps in larger area. Low risk – well established company Clear on what was wanted 10 year contract with 5 year renewal Community free to develop trophy hunting if areas agreed with WS Community gains ownership in years 11-15 The offer for Poachers Camp Possible community income of N$100-200,000 per year Exclusive use of large area: no livestock or people, nor other tourism developments. Area included a spring useful in droughts High risk – no tourism track record Plans changed, goal posts moved Wanted 30 year contract Wanted rights to both tourism and trophy hunting, but plans for the latter unclear. Unclear ownership at end of contract Contract negotiated, signed and implemented Adapted from Davis 1998. Draft contracts negotiated but did not proceed The lodge has also generated intangible social benefits, which are reported but difficult to measure. Community members show their lodge to visitors, talk about it with a sense of pride, and have been invited to national and international meetings to make presentations about it. The process of conservancy formation has involved building institutions and social cohesion, and this process has been given added impetus by the joint venture. However, conservancy members also identify disadvantages. The main disadvantages identified during the 1997 research were associated with wildlife: increased wildlife numbers compete with livestock for grazing, and elephants are aggressive, often threatening lives and equipment (in all three groups, these were ranked in the top three disadvantages (Ashley, 1997)). They perceive these as indirect costs of tourism because their tourism plans go hand in hand with expansion of wildlife numbers, and they perceive tourists as disturbing wildlife and making elephants more aggressive. 23 -- Although the benefits go beyond cash, the opportunity for cash earnings has been a major motivation. There are minimal local employment opportunities and virtually no other ways for communities to earn collective income. Three different types of cash income are generated by the lodge: i Collective income earned by the community from lease fees. ii Wages earned by workers. iii Casual earnings for those supplying the lodge and its tourists with local products or labour. It is important to consider each of these separately, as they are earned by different people and have different significance, and also to consider whether earnings are different from a conventional non-partnership lodge operating on communal land. Community collective income has increased each year, reaching nearly N$150,000 in 1998 (over £15,000) and nearly N$250,000 in total (over £25,000), see Table 3. It increases each year as lodge fees and occupancy go up. Although two private lodges in Namibia voluntarily give out bed-night levies to surrounding communities, these are generally in the region of N$15–20,000 and most lodges provide nothing. This collective income is therefore a direct result of the partnership. However, a major challenge is that the income has not yet been distributed. Some has been used for operating expenses and a photocopier but most is in the bank. While there are good reasons for this – the conservancy has only just developed its revenue distribution plan in early 1999 – it means that most conservancy members have not yet seen the tangible benefits, in the form of either household dividends or community projects. It also means it is too early to assess the equity impact of the joint venture. 24 -- This contrasts strongly with the approach adopted in some CAMPFIRE areas, where great emphasis is put on visible distribution of community income (Metcalf, 1994; Peterson, 1991). Ceremonies are held where the private partner (e.g. trophy-hunter) hands over the cash in public, which is then divided up into its agreed uses in front of everyone. Cash for projects is put back in the pot while cash for families is handed out on the spot. This has been emphasised in order to increase transparency, enhance tangible impacts, and hence boost the impact on conservation incentives. Table 3: Cash payments from Damaraland Camp to the Bergsig/De Riet Community (Torra Conservancy) 1996–98*. N$. Levies Wages Other earnings** Training Year 1 17,247 75,314 4,537 Year 2 78,335 135,354 19,814 Year 3 147,154 208,629 14,814 16,502 Total 242,736 419,297 39,175 16,502 * First three years of operation. ** Includes payment for laundry and wood supply services to the community. Total local wages exceed community payments amounting to over N$ 200,000 in 1998 (see table 3). While any lodge could be expected to employ 7–12 unskilled local staff, generating aggregate wages of N$50–150,000, the strong commitments to employ local staff in the contract mean that local employment has been maximised within existing skill constraints. As training proceeds, more skilled jobs should be taken by residents, although management training is reported to proceeding more slowly than anticipated. Casual income earned by supplying goods and services to the lodge is relatively low so far at less than N$20,000 (£2000) per year. While tourism is often praised for its potential to generate secondary enterprises and local economic linkages, such linkages are rare in practice. A joint 25 -- venture should offer potential to develop more linkages because of the contact, trust and goodwill that are built up between partners. At Damaraland Camp, so far, casual income is only earned from wood sales, laundry, and an occasional home-dinner. The latter two are both provided only by the nearest homestead. However, there is discussion of making dinners at homesteads a more regular feature, developing rhino tracking with local guides, and assistance from the lodge with vegetable gardens to provide regular supplies. More time is needed to see if the partnership can bring these and other options to fruition. Other experience in Namibia also indicates that impacts significant to communities cover a wide range of livelihood issues, though the specific concerns vary from place to place. Important issues generally include cash earnings, community control, nature of the partnership, long-term prospects, risk, and opportunity costs. This is demonstrated by recent negotiations between Lerato Company and a number of Namibian conservancies. Lerato was proposing to develop several 10-bed lodges in Namibia, as well as elsewhere in southern Africa. Conservancy representatives and advisors came together to assess the proposals. They identified many problems, such as lack of clarity on the size and exclusivity of proposed areas, risk, no proposals for joint management or local training, risk of environmental damage, and Lerato’s ‘domineering attitude’. They made a counter-proposal of the kind of issues they would like to see reflected in a contract, which offers insights on the benefits the communities seek from a joint venture and the disadvantages they seek to minimise. The issues, summarised in Table 4, indicates major community concerns about issues on control, partnership, environmental management, and securing their future (adapted from LIFE, 1999). Table 4: Elements of the communities’ response and proposals to Lerato Issue Objectives Community proposal Bring tourists, earn money from natural resources, use wildlife sustainably, protect yourself, and have legal recourse 26 -- Land-use and environment • • • Nature of the partnership Employment Finance • • • • • • • • The site, not the whole conservancy area should be rented The area must fit with a land-use plan for the conservancy, and the site rehabilitated after the contract Areas sensitive for wildlife should not be used. Consultation is needed to ensure sustainable land use Joint management structures, including a Joint Management Committee The Permission to Occupy (legal planning approval) must be in the name of the community Relationships should be based on co-operation, respect of people and of local culture A process for dispute resolution The contract must be transparent to the community. Training and preferential employment for local people Conservancy should have access to financial information and a monthly update A minimum financial performance clause It is clear that joint ventures can generate a range of positive and negative impacts on sustainable livelihoods of residents. In addition to cash benefits, issues on control and long-term security need to be explored. Specific local concerns cannot be assumed but need to be explored in each case. 5. CRITICAL FACTORS AND RELEVANCE TO OTHER PLACES While some problems are acknowledged, Damaraland Camp is generally regarded as a success for both parties and a useful example of a joint venture. What are the critical factors underlying this case, and how relevant could they be to other areas? 5.1. The role of individuals Crucial to the successful development of the Damaraland Camp joint venture was the role that key individuals played in the negotiations. The managing director of Wilderness Safaris, Namibia was personally involved from the beginning. He admits that he went through a quick learning curve in dealing with local communities and that outside facilitators helped him to understand the community perspective and the need for adopting certain compromises. He has 27 -- since become someone that the community trusts and will continue to be involved in liaison after retiring from WS. On the community side a key individual has been the former conservancy chairman, who devoted a considerable amount of time and energy to making sure that the community’s interests were represented during the negotiation process. While such committed individuals can be found in many contexts, their role does suggest that not every context will be an easy ground for developing joint ventures. 5.2. The type of investor Wilderness Safaris has a company philosophy of involving local communities where possible. The fact that there were no other tourism joint ventures developed in Namibia prior to the passing of the conservancy legislation suggests that company philosophy is an important factor where there is no legislative framework which forces the private sector to deal with local communities (see below). Even with a legislative framework, the spirit of partnership will depend on the approach of the company. 5.3. Local context: networks and facilitation The specific local context was important in contributing to the development of the joint venture. The area chosen by Wilderness Safaris for its lodge has had a long history of community involvement in wildlife and tourism. Since 1982 a Namibian NGO, IRDNC, had been facilitating the increased involvement of local residents in wildlife conservation and the increased benefit to local people of wildlife utilisation and tourism (Jones, forthcoming). IRDNC helped facilitate the 28 -- development of the Residents’ Trust, which was made easier by the relatively homogeneity and small size of the community. IRDNC, in turn, was part of a broader group of organisations, both governmental and non-governmental, that was developing Namibia’s national CBNRM programme. The community and NGO were therefore able to access advice and expertise within this emerging network. Across the region, the role of facilitators varies, as does their institutional affiliation: they come from NGOs, government agencies and park authorities, legal advisory centres, and individuals. But invariably some kind of facilitation has been needed for a successful deal. This raises questions about capacity and expertise – as joint ventures develop, are there enough facilitators? If not, will this lead to fewer deals or bad deals? It also raises questions of who pays the facilitators? At present, several development and conservation bodies recognise the contribution that joint ventures can make to their own institutional objectives. This is fortunate, as it would be generally very difficult for communities to pay them and inappropriate for the companies to pay them. 5.4. The institutional context As in all cases, the existence of a local institution to negotiate and contract with was essential at Damaraland Camp. The type of local institutions involved – first the Residents Trust and then the Conservancy – meant that the process was slow. In developing joint ventures, there is often a trade-off between the need for a clearly defined body with legal status, and the need to involve local residents and not just leaders. For example, the Zimbabwean District Councils and South African Tribal Authorities provide clearly defined well established negotiating partners. But on the other hand the extent to which local residents are involved in decisions and benefit-sharing is 29 -- questioned. The approach used at Torra enabled both conditions to be achieved (legally registered but with grass-roots involvement), though at the cost of some time and effort. The fact that population density is extremely low in Kunene probably makes it easier to adopt this open ended approach to development of community institutions. In densely populated areas of Zimbabwe or South Africa, it is hard to see how an approach which leaves communities to define themselves, rather than using government or traditional structures, would work. 5.5. National and policy context The conservancy approach in Namibia has undoubtedly had an impact on the confidence and ability of local communities to enter into joint venture agreements. The significance of the Damaraland Camp example is that the investor was willing to work closely with the local community before legislation gave communities rights over tourism. However, the new legislation has devolved to local communities’ control over an asset that has market value, and has strengthened the community’s rights. If the private sector want to develop tourism facilities on communal land it now has to negotiate with conservancies. The Government is not approving PTO applications from outsiders for tourism development in established or emerging conservancies. The government views the conservancy approach and giving rights to communities to control tourism developments as part of post-apartheid political transformation. However, community control over access of independent tourists is still limited by the fact that they do not own the land, and according to the Constitution, Namibians can travel anywhere on communal land. This may lead to disputed interpretation over conservancies right to control nonconsumptive use of wildlife. 30 -- In each country of the Region, a legislative or policy change has been necessary to devolve rights over marketable assets to local level, but the form has varied enormously: devolution of appropriate authority to Councils under CAMPFIRE, the land claims process in South Africa, and a policy agreement between two ministries in Botswana that resident communities should have preferential and cheap access to land leases in certain designated areas. In each case, the policy context has generally moved in favour of communities but several policy and legal constraints remain. Without secure land tenure, these complexities are likely to remain. 5.6. Market context The Torra Conservancy was fortunate to have a comparative advantage over many other parts of Namibia. The area combines spectacular desert scenery with the presence of large mammals not normally associated with such arid landscapes. Indeed generally Namibia’s communal areas have more big game and more interesting landscapes than the former white freehold farms, which take up nearly 50% of the country. Many communal areas can offer a wilderness experience with the possibility of seeing wildlife and of interacting with the local culture. This product matches that which an increasing number of overseas tourists to Africa are seeking. If communities are in a weak market position, any amount of facilitation, institution-building and devolution of tenure will not stimulate joint ventures. 5.7. The CBNRM context The fact that the Damaraland Camp joint venture took place within a broader framework of a national CBNRM programme meant that the community could draw on a support network set up 31 -- to provide advice and information in such circumstances. NGO and government personnel played an important role in facilitating the negotiation process. The community could also draw on lessons from elsewhere in the Region through the national CBNRM programme links to similar activities in neighbouring countries. Significantly the community was aware that it needed outside assistance and had the ability to ask for advice. A neighbouring conservancy that had to terminate its hunting agreement with a private sector partner (described above) was largely outside the national CBNRM network, and was overconfident in believing it could handle the negotiation process unassisted. In Zimbabwe and Botswana, the CBNRM programme has also provided a supportive role. The CBNRM link has also helped to ensure that links between the joint venture and wildlife conservation are highlighted. In South Africa’s Strategic Development Initiative, the context is quite different – SDI is driven by economic development rather than conservation goals. But again, it puts the joint ventures in the context of a larger programme, and builds a body of expertise engaged in a range of joint ventures that can share information. 6. CONCLUSION The above analysis leads us to conclude that tourism joint ventures between the private sector and rural communities can work in different contexts. Although many factors that affect the likelihood of success will be context specific, the critical success factors listed above point to the emergence of some key principles that can be applied in different circumstances. Particularly where joint ventures are being developed on communal land, the existence of strong community institutions with legal rights over land and resources is important. Legal rights strengthen the community’s negotiating hand, but their market power also depends on the market value of their 32 -- assets. A problem facing communities is lack of information on market values. Communities with legal rights over valuable assets can still be weak in negotiation compared to the private sector, which has more capital, knowledge and expertise. Outside facilitation helps to redress the imbalance of power that comes from a lack of experience and understanding of the industry by rural communities. Facilitation can help both sides to develop a greater understanding of each other’s needs, fears and aspirations. The role of individuals, whether a community member with drive and initiative, or an investor willing to see the community perspective, is important. National policy and legislation can play an enabling or a constraining role. Where a combination of these factors are present, there is an opportunity for successful joint ventures to be developed. The terms of the agreement might be different, but the nature and spirit of the agreement are likely to be similar in successful joint enterprises. Success can be defined as a joint venture that is sustainable, and generates more benefits than costs for both parties, according to their perception. Experience shows that benefits are not just profits for the investor and cash income for the community, but cover a range of commercial and livelihood concerns. So a successful venture is likely to take these into account from the start, to maximise priority benefits. It is unlikely that any one joint venture will be replicable elsewhere, but lessons can be learned from those that do succeed. As more are developed the process of developing tourism joint ventures can become easier. It would appear, though that they will always involve higher transaction costs than ‘conventional’ tourism. Such tourism enterprises represent a particular niche in the tourism market, rather than an option to be promoted in all circumstances. They will not be feasible or desirable for all companies or communities. Governments, donors, and 33 -- industry leaders, can however, help to ensure that this particular niche in the industry can develop by helping to provide appropriate enabling frameworks. 34 -- References Ashley, C., (1997), ‘Feedback from meetings in Bergsig Area exploring Wildlife, Livestock and Livelihoods’, report prepared for the WILD project. 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H., (1991), ‘Bottom up development in decentralised common property regimes: The experience of two district councils in southeastern Zimbabwe’, paper presented at the International 35 -- Association for the Study of Common Property, Common Property Conference, Winnipeg, 26–29 September 1991. Steiner, A. and Rihoy, E., (1995), ‘The Commons Without the Tragedy? Strategies for Community Based Natural Resources Management in Southern Africa’. A Review of Lessons and Experiences from Natural Resource Management Programmes in Botswana, Namibia, Zambia and Zimbabwe in E. Rihoy The Commons Without the Tradegy? Strategies for Communiy Based Natural Resources Management in Southern Africa. Proceedings of the Regional Natural Resources Management Programme Annual Conference. Lilongwe, Malawi: SADC Wildlife Technical Coordination Unit. 36 --
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