Investment in Wildlife Sector; New Hunting Blocks Declared       

The Thriving Investment in Wildlife Sector; New Hunting Blocks Declared

• Government announces 28 New Tourist Hunting Blocks up for Allocation for Tourist Hunting Operators 

• Both Domestic and Foreign Investors  for investment in wildlife sector invited to apply

On the 22^nd May, 2015 the Tanzania Ministry of Natural Resources and Tourism (Hereinafter “the MNRT”) announced via a daily newspaper, the Daily News that it invites applications for investment over 28 new hunting blocks for tourist hunting. Successful bidders will be allocated such hunting blocks for the short tenure of three years, 2015 – 2018. The MNRT had previously in the year 2013 allocated other pre-existing blocks for the statutory tenure of five (5) years, 2013 – 2018. Hence the current short tenure is calculated to match the expiry date of all other investment agreements of the pre-existing blocks to warrant a collective assessment, appraisal and re-invitation of tenders of all the blocks come 2018 onwards. A hunting block is defined in the Hunting Regulations 2010, as an area with game animals which has been delineated or set aside and approved by the Director of Wildlife for trophy hunting.

Breakthrough Attorneys’ team of contracts and investment lawyers, who boast a belt of experience over applying for, negotiating, facilitating and overseeing the execution of multi-million dollars investment agreements over hunting blocks, and litigation over wildlife matters, give a glimpse of what the invitation entails and the law behind tourist hunting.

The MNRT has shortlisted qualifications for the aspirant applicants according to the Wildlife Conservation Act, 2009 Chapter 283 of the Laws of Tanzania to have the following qualities:-

i.    A company with tourist hunting objectives registered in Tanzania

ii.  At least one Director with 5 years’ experience in wildlife sector business in Tanzania

iii. At least 25% shares in the respective company to be owned by citizens of Tanzania

iv.  Attach; copies of Memorandum and Articles of Association of the hunting company, Certificate of Incorporation, TIN Certificate and VAT Registration Number, Four Passport size photographs for all Directors and Shareholders as well as fee payable in accordance with the directions of the MNRT.

The Law regulating the operations of the Hunting Blocks and entire Tourist Hunting sector is mainly the Wildlife Conservation Act as supported by the Tourist Hunting Regulations, 2010 as well as The Wildlife Conservation (Wildlife Management Areas) Regulations 2012 among others. Under the Tourist Hunting Regulations the hunting blocks can be established by declaration of the Director of Wildlife within Game Reserves, Game Controlled Areas, Open Areas, Wildlife Management Areas and other areas provided that they are not protected areas. The law stipulates that such blocks would be categorized depending on their nature, size, quota and land use planning. Hunting Blocks within Wildlife Management Areas (WMAs) must be designated in alignment with the Resource Zone Management Plan (RZMP) or the General Management Plan (GMP) of the said WMA.

Regarding establishment and allocation of the hunting blocks, there are several matters to note and Breakthrough Attorneys hereunder highlights the same;-

1. Applications for Hunting Blocks (other than WMAs)

Under the Hunting Regulations (Regulations 9 and 10) an applicant (with above highlighted qualities and attachments) shall submit a formal application in prescribed form. The Application is submitted to the Director of Wildlife and pegged for assessment in accordance to set standards to be outlined hereunder.

2. Applications for Hunting Blocks in WMAs

Wildlife Management Areas are different from the other areas under the purview of the Act. These are designated in areas which are used by local community members within village lands and outside protected areas. Basically the management of such areas is put under Community Based Organizations (CBOs) which have attained what is called an Authorized Association (AA) status.

In this aspect therefore, subject to The Wildlife Conservation (Wildlife Management Areas) Regulations applications for hunting block allocations are advertised by the AA and the applications are sent to the AA. The AA will, in conjunction with representatives of the Director of Wildlife and District Council assess the same in accordance to the same criteria as for allocations in other Areas.

3. Criteria for Assessment of Applicants of Hunting Block Allocation

The law has categorized Applicants for hunting blocks in two groups namely, a fully Tanzanian owned hunting company; and a foreign owned company or not fully owned by Tanzanians. Factors for assessment of each type entails bringing forth proof of the following issues;

• The Director of Wildlife however retains the power to require an applicant to deliver original copies of the said documents for purposes of authentication.

SN	Fully Tanzanian Owned Company	Foreign Owned Company
1.	Having a suitable office premises	–       Having a suitable office premises-       Evidence of registration with the Tanzania Investment Centre
2.	A fleet of not less than Two (2) 4WD pickup vehicles, registered in Tanzania in Company’s name, not more than 3 years since registration and comprehensively insured	A fleet of not less than Five (5) 4WD pickup vehicles, registered in Tanzania in Company’s name, not more than 3 years since registration and comprehensively insured
3.	VHF Radio comm. frequency license	VHF Radio comm. frequency license
4.	At least six (6) tents	At least twelve (12) tents
5.	Two (2) refrigerators and two (2) freezers	Five (5) refrigerators and five (5) freezers
6.	Beds and other necessary furniture	Beds and other necessary furniture
	OR the applicant company may produce a Bank Bond or guarantee of USD 300,000.00 in lieu of the above equipment as commitment for the purchase of the equipment within three months after allocation of the block	OR the applicant company may produce a Bank Bond or guarantee of USD 1,000,000.00 in lieu of the above equipment as commitment for the purchase of the equipment within three months after allocation of the block
7.	NA	Acceptable business plan
8.	NA	Track record of adherence to fees payment (for existing operators)
9.	NA	Reference of any good business record
10.	NA	Good track record of adherence to payment of taxes and other levies

4. Tenure of Allocation

The Hunting Regulations have been explicit on this point. The Minister is tasked to declare the tenure of such grants in the gazette and the same shall be for five (5) years from the date of declaration. Breakthrough Attorneys’ lawyers took part in negotiating, drafting and sealing various Investment Agreements for different companies and hunting blocks when the current tenure of allocation (2013 – 2018) was declared sometimes in the year 2012 and previously in the interim period of 2010 – 2013.

The law entails that any person that is allocated a hunting block after the commencement of the tenure period of ownership shall be allocated for only the remaining period of tenure, and hence the current declaration of grants for only three (3) years between 2015 – 2018.

5. Notifications, Grants and Fees

Notifications

The Director of the Wildlife is required to acknowledge receipt of an application for allocation to an applicant within fourteen (14) days of receipt thereof. The Director will then immediately submit application(s) for a hunting block to the Hunting Block Advisory Committee (HBAC) which is tasked to deliberate and assess applications.

The Minister will afterward, discretionally and on advisement of the HBAC allocate the Hunting Block to a deserving Company. The allocation must be done within ninety (90) days from the deadline day of the applications submission.

Block Fees

Fees for the hunting blocks are in clusters based on the hunting block’s categories are stipulated in the law and they must be payable every year by 31^st March.

6. User Rights, Transfer of User Rights, Quota Control and Related Matters 

Hunting & Quota

Subject to the payment of fees for the hunting block and related levies, the grantee of a hunting block is at liberty to conduct tourist hunting therein. Of course, this liberty is subject to further restriction on amount of hunting quota that is granted to the hunting company. The Company is also tasked with controlling the quota within the block. Trophies hunted must be exported outside the block within twelve (12) months otherwise the hunting company should apply for a longer storage permit with a surcharge fee of 10% value of the trophies chargeable, in case the permit is granted.

Hunting Permits and Licenses – (Professional Hunters and Tourists)

A hunting safari must be commandeered by a licensed professional hunter together with either a Wildlife Officer or Certified Village Scout where the block is within a WMA. The Tourist Hunter must as well be having a hunting Permit from the Director of Wildlife.

Transfer of User Rights

Breakthrough Attorneys’ lawyers have in the past swiftly facilitated transfer of user rights between hunting companies. The Law has simply underlined few checklists to be assessed on whether the transfer can take place.

i. Payment of transfer fee (statutory fixed

ii. Submission of all documents relating to the transfer agreement

iii. Proof of payment of all necessary taxes and authorization from other laws

iv. Proof that the transferee does not own five or more hunting blocks.

NOTE:

1. Any change of majority shareholding ownership in a grantee of a hunting block is deemed a transfer of user right and needs to be sanctioned by the Minister beforehand.
2. Upon satisfaction of the above conditions the Minister may approve transfer.

7. Extensive Powers of the Minister and the Director of Wildlife

The Law and its regulations have vested a lot of discretional powers on the Minister and the Director of Wildlife. These powers open a leeway for abuse of power and corrupt practices. The Minister personally, has wide powers which include; declaring blocks, granting and cancelling allocations, approve transfers and so forth. The Director on the other hand has powers on issuing licenses, permits, hunting block certificate of grant, setting standards of trophies for each hunting company etc.

Breakthrough Attorneys’ lawyers having been in the forefront during the 2013 – 2018 tenure grants and its aftermath, opines that most of the existing hunting blocks’ disputes (which are more than 20) could have been avoided if the discretional powers of these key executives were thinned. A lot of failed bidders claimed foul play and that the allocation decision were uninformed and one sided. A number of cases are still pending in the High Court of Tanzania and most with injunctive writs invoked to completely paralyze the tourism investment intended.

8. Offences.

The Act and the Regulations have established numerous offences, both specific and general. The same are either punishable under the said Regulations’ penalties of fines and imprisonment or transcend to the main Act. To be noted is that a crime under the Regulations may be traversed as a crime under the Wildlife Conservation Act, Cap 283 which automatically is defined as an economic crime, gravity of which is heightened.

Breakthrough Attorneys believes that the twenty eight (28) newly announced Hunting Blocks will serve to hype the tourism investment sector and subsequently upsurge the country’s forex. The engagement setup as highlighted above is straightforward and with the help of informed and knowledgeable experts the process gets simpler. Tanzania’s touristic ecosystem is rich and abundant with gaming openings and the government is doing well to capitalize on foreign investment and also resident hunting to eradicate poaching problems in most of these areas.

 

Disclaimer:

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.