Letter from Dave Joubert re compensation/restitution for farmers

Breaking The Mushroom Syndrome

21 March 2014

Greetings All Farmers

After some considerable time in the doldrums, there has been a deliberate and urgent push to register with Valcon (the Valuation Consortium) on the database for compensation. Several farmers phoned me to say “things were really getting close now”, and failure to register would “disallow or delay participation” in the deal, etc.etc etc! As it happened, having consulted with two senior Commercial Farmers’ Union (CFU) members, I was quickly and very efficiently sent data capture forms from Valcon. Any suggestion that I may have been encouraged by a change of heart  evaporated immediately, upon reading the forms; same data form, same old requirement to sign on the bottom line for an undisclosed  service , to pay a commission for the undefined service and to absolve Valcon from any wrongdoing or liability in the process.

Same old dark mushroom farm, same mushroom fertilizer, made palatable by a splattering scented perfume to disguise the smell. Despite the fact that I was communicating with Valcon, my email was circulated amongst farmers with the urgent note to contact me to immediately “sign up to avoid disappointment.”

It is odd that the same negative marketing of the deal has remained unaltered since 2010, where the desperation of a broken and demoralised farming community has been played in concert with the lure of an “imminent” solution to compensation. Clearly, four years further down the line the frustration and desperation for some closure is more pronounced and Valcon have seen fit to use the situation to recruit more farmers to the database, whilst at the same time grooming the farmer expectations to far lower compensation values than he deserves, or is entitled. By now, we surely must ask who would benefit from the quick fix approach or what consequences could follow by abandoning our rights.

Reference to both the newsletters of CFU and Valcon, together with information offered on the websites hint that there is a severe conflict of interest between farmers over the Valcon/CFU initiative. CFU membership has in fact declined significantly of late and that current Valcon statistics show a large number of farmers are still not registered on the database. Interestingly, approximately 20% of those registered have not signed the undertaking, which leads one to believe that despite the enormous pressure that farmers have endured, there is a deep rooted distrust for both the CFU’s and Valcon’s bully tactics, probably even amongst those who signed up earlier, prior to and on the back of the Dutch Farmers case, but remain no better off despite being at the front of the queue.

The Dutch farmers themselves, clearly motivated by the quick fix, will find themselves severely prejudiced in the not too distant future.   If reports are correct, they have discounted their already understated award to a debt collector connected to an American law firm. No doubt these awards will, at the appropriate time, reappear in court for re-evaluation and a tidy profit will be made by someone, but, regrettably it will not be the Dutch farmers. The judgement in the recent ICSID (International Centre for Settlement of Investment Disputes)/World Bank various Zimbabwe companies versus the Government of Zimbabwe case to be handed down in Washington in the near future is likely to have embarrassing consequences for Valcon and others. Both regard to methodology and fairness under Public International Law or as prescribed under Public International Law.

There is no doubt that a lack of transparency, false promise, half truths, hidden agendas  and the failure to include the opinions of other stakeholders and international legal and valuation expertise form the basis of the division amongst farmers. Unfortunately, demoralised farmers have been left confused and with the erroneous impression that they do not have other options.

Nothing could be further from the truth, but there is an urgent need for farmers to become proactive once again and chart the way forward and influence their own destiny.

Issue must be taken on a number of quotes raised in the latest Valcon newsletter 02/14 and website:

“We have been advised by people that are active players in the know, to “manage expectations”.

What this means is that Valcon/CFU are working with other parties and actively manipulating valuations to suit the “players”, and not the interests of farmers who have clear rights in Public International Law. No one is suggesting that a 100% award would be achieved, but the appropriate methodology and correct valuation criteria at the outset is critical to a fair outcome. Valcon also claim not to use specific valuation methodology (website information) and in fact have not given farmers a valuation of their properties, suggesting they may fear farmer backlash when true valuations inevitability surface.

“Valcon is an independent, professional consortium with NO ties to any representative body. We represent our individual clients and have our funding obligations to the World Bank. There have been claims that only those registered with a certain union will receive compensation, NOT true.”

Does this mean that the announcement at a meeting of farmers in Bulawayo by then President Deon Theron that CFU had entered into a joint venture agreement with Valcon to share commissions was incorrect, or, is it perhaps the case that it is now convenient for Valcon to withdraw from the arrangement on the basis of CFU has not proved to be sufficiently “instrumental” of recruiting farmer support for the compensation deal?

“Claims that Valcon registration will close, NOT true. Registration with Valcon is not the only path to compensation; however unregistered owners may well find themselves at the back of the bus.”(again!) If Valcon are genuine in this statement why should farmers be so aggressively pursued, especially where there is no deal on the table? Surely, if the best interests of farmers are important, and indeed the Valcon door is always open, then farmers should have the right to participate in the process, evaluate the offer, and make an informed decision on their future at the appropriate time.  As is the case of the Dutch farmers, it may well be that a position at the back of the bus may be a better option.

In response to questions posed, information gleaned has offered some clarity and time lines to the process. It is interesting to note the subtle twists and nuances between what is the true position and the marketing versions tossed out as ground bait to farmers to attract support to a process which is nowhere close to, nor certain to reality, as has been suggested. The following points of interest have been extracted from written notes to player’s notes to me which must be considered and commented on in the following sequence presented.

There is a realisation government cannot go forward without dealing with the past. We all agree this is the predicament government must confront.

They have to pay compensation and acquire the 7,000 title deeds covering about 8,000,000 hectares of land. We agree. The question is how and when.

A land audit has to be conducted to ascertain what land is acquired. This was a pre-requisite requirement to re-engagement to determine who was on the farms prior to the April election which has never been carried out and certainly should not be a post settlement initiative, as is being alluded to.

Once accomplished, a decision has to be made about tenure and the issue of secure negotiable tenure to any new farmers who wish to remain on the land under commercial conditions. (The litmus test to the success of any tenure system has always been the bankability and transferability of the tenure system.) Presumably this refers to beneficiaries who have taken up farms.

This will leave about 70% of the land purchased unoccupied and empty. A land market must then be established and the land bank must dispose of the farms through the market. Little of this suggestion is known other than it is a suggestion that land will be floated on the market, and that farmers could re-engage in agriculture through the repurchase of their farms. The point is that it raises the plausible prospect that land may find its rightful value without intervention. It serves only to illustrate that many opportunities are out there which can lead to an amicable and productive conclusion to the problem. Much would depend on the bona fides, the terms of reference of the proposed land bank, which could just as likely emerge to be the next phase of a land scam.

The principles on which compensation will be paid are still being worked out but will include at least the land and fixed assets. It is unlikely that loss of profits or interest will be included. The principles soundly established through the efforts of a few who have worked tirelessly to establishing our rights.

The right to compensation for Compulsory Acquisition in Zimbabwean Law has its origins in Commonwealth Law and thus is rooted in Public International Law.

The way all calculations for compensation are done is based on Public International Law (Dutch Case, Campbell Case and various companies versus the Government of Zimbabwe through the ICSID in Washington) and not Zimbabwe Law. Public International Law provides relief for all the above mentioned exclusions.

The funding as you rightly claim will be released by World Bank/IMF, and they are guided only by Public International Law.

It is now an established fact in Law and in practice. We must only demand its implementation equally and universally, noting that it is the founding principle of compensation that is important. No one expects full compensation, but any reasonable negotiated settlement must be founded upon established principles of law.

A total valuation of between USD 7 -10 billion is expected. Basing any form of payout on these numbers serves to illustrate the extent to which the estimated cost has been manipulated and discounted in accordance with ‘managing expectations’. The true valuation is likely to be between USD 30 to 50 billion. There is no expectation that 100% payout is achievable, but commencing with the correct valuation is vital, if “fairness” is to be achieved. “Fairness” must not be interpreted as “the best you will get” nor “it’s that or nothing”

Payment will be in negotiable securities with tenure of 25 years, at about 3% interest in USD. The bonds will be backed by international agencies but it is yet to be decided if they can be cashed externally. Whilst there appears to be consistency regarding the interest rate of 3%, the time tenure period floated by VALCON is 10 years. In addition, VALCON suggest these bonds may be cashed in or form collateral externally. I submit there is a vast difference in acceptability between a 10 year bond with external value and a 25 year term security with only local value. Similar bond settlements in the 1980s became worthless over a period of time with those farmers eventually getting nothing.

A team is working on this, Valcon is being funded so they can complete the data base and are working on proposals that will go to the World Bank and others for consideration, before a funded proposal is put to government. They expect to finish their work by May 2014. This is perhaps the most serious and unacceptable aspect to the issue. Both CFU and Valcon have persistently resisted any participation or input from stakeholders or valuation experts, all of which could assist in moving the process forward in a transparent and acceptable manner. Rather we are coaxed to participate in a non specific proposal, but on the other hand expected to accept the outcomes without being party to any negotiation process. Be that as it may, it is clear that prior consideration to major stumbling blocks of valuation, the consequences of Public International Law and World Bank pre-requisites have yet to be considered.

The following conclusions to the points made above are:

Valcon/CFU have, on their own admission, have been actively co-operating with “players”, discounting and manipulating the expectations of farmers interests from the outset and continue to do so.

They have rigidly applied methodology and law to their process which is inappropriate to the established rights of farmers’ and their staff and refuse to receive input from the title holders themselves or experts in the field of compensation issues.

Despite announcements to the contrary, there are no terms, compensation agreed, and no more than an interest expressed from vital sectors of the international community.

The current situation is not conducive to a solution, but the haste only serves to appease a few at the detriment of the national interest and undermining the collateral value of the agricultural sector, which will be essential to Zimbabwe’s reconstruction on Zimbabwe citizens’ terms.

For all that has been said, it must be conceded that a lot of valuable work has been undertaken by CFU and Valcon. There is a need for national leadership to develop and a fair and reasonable solution to be at least put in place for presentation when the time comes. One should avoid “throwing the baby out with the bath water” but rather to build a tangible solution which is fair, reasonable and for the betterment of Zimbabwe.  This may not be welcome to present players, but will be so in the near future.

For this to happen the following has to happen;

Valcon must accept that the issue of Restitution/Compensation has outgrown their expertise and their capacity and the database they are being paid to complete, must inevitably belong to the farmers themselves. They must accept expert assistance. More importantly, they together with the CFU must incorporate transparent and accountable stakeholder representation and appoint professional skills to the team, where appropriate.

CFU for their part form the natural platform for farmer issues. At present they cannot serve this need and need to restore the confidence of past members. As with Valcon they must abandon claims of exclusivity and thoughts of financial gain. Most importantly, they should return to the role of serving and defending farmers as they are required in terms of the CFU constitution and be prepared to play the critical role of re-establishing agriculture to its crucial role in the economy.

Some serious attention should be paid to the current political situation, and its pivotal effect on the agricultural crisis. The Election of (31 July) 2013 convincingly won by ZPF has created more problems for the country, than it has provided answers.  Despite the surprisingly mute acknowledgement of some neighbouring countries and a few other more distant dictator states, it is clear that the world at large have turned their backs on Zimbabwe. The electoral process may have put the opposition politics to bed, but created a new enemy; the economic realities, that cannot be subdued or dismissed at a whim. With the “look east” mantra failing dismally, and no recognition or participation of the traditional donor nations to prop up the economy, the harsh, self inflicted consequences of the farm invasions, indigenization and rampant corruption are now fuelling serious issues of economic survival.

The present government serves as a means to an end for the party elite, but a future government will have to lend political will to the dire situation and adopt policies of reason and compromise if crucial donor support is to return and economic vibrancy restored. Certainly, the present government is hostile to civil society in general and currently negotiation would be a pointless exercise. However, it is this desperation that will sooner rather than later soften positions and open the door to a workable solution, and we should be preparing ourselves for that eventuality. No quick fix wizards will get you to that point any sooner, as we have learned from the Dutch farmers.

The real intent to this essay is to hopefully bring back some of the spirit that we have such a reputation for. We have enough excuses and reasons for our negativity but the fact remains is that having been stripped of our traditional forums of debate, we have become pale, lipid mushrooms trapped in a dark place, and react, only to the garbage we are fed and the pipe fed stimuli creating the fear that we will get left behind. We should consider that we are not alone in the dark, smelly mushroom shed. We are part of a far greater and diverse community who are equally trapped in a similar shed whose losses in many cases are far greater than our own. We all have to believe that the shed doors will open, bring in light and the sweet smell of a fresh clean beginning. If we throw our title deeds down for some crumbs that fall off the table, with a quick fix, we will not be there for that final day to make decisions in our best interest and the best interests of all Zimbabweans.

Necessity has influenced outcomes more often than not. Figures released last week by the Zimbabwe Statistical Agency show that the economy is sliding towards deflation, a situation that could see overall output and competitiveness of industry being affected, and leading to a further decline in employment levels.

University of Zimbabwe economics lecturer Tony Hawkins says without a financial bailout, Zimbabwe’s economy will continue to slide. “Without an International Monetary Fund (IMF) deal leading to eventual debt forgiveness, economic growth will continue to be hamstrung, not by economic sanctions, as ministers and many business people claim, but by an unsustainable debt burden,” Hawkins told the Daily News. “Just as something will have to give politically — the current ‘factioneering’ will further undermine governance, vividly illustrated by Salarygate — so too economically.”

Like the water pouring over the bulkheads of the Titanic, the process is irreversible and without drastic intervention, it is only a matter of time before the sheer weight, breaks the backbone, and the economy enters a catastrophic dive. In Zimbabwe’s case only the total and immediate restructure of the commercial agricultural and mining industry can bring it back.

We should believe that the shed door will open and usher in the breeze of fresh opportunity.

I have noted that there are scheduled meetings of all farmer stakeholders with Mills Fitchet of South Africa and farmers set in Bulawayo and Harare for the first week in April. I strongly urge all farmers to be proactive and attend these functions to which all have been invited including CFU and Valcon, which would give all a timeous opportunity to interact on these matters of vital importance.

Dave Joubert

E-mail:   dj.ezanzi@telkomsa.net

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JUSTICE FOR AGRICULTURE – 

RESTITUTION / COMPENSATION COMMUNIQUE
SPECIAL LAND DEBATE FORUM

DATED 23 MARCH 2014
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Email: jag@mango.zw : justiceforagriculture@zol.co.zw

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