Who will benefit from Zimbabwe’s carbon trading regulation?

Is the move a game-changer for emissions reduction and community empowerment or a gateway for greenwashing and money grabbing? Source: Who will benefit from Zimbabwe’s carbon trading regulation? | FairPlanet As Zimbabwe leads the way in carbon trading regulation, concerns surrounding corruption and greenwashing loom large. On 16 May, Zimbabwe’s carbon credit players were caught […]

Is the move a game-changer for emissions reduction and community empowerment or a gateway for greenwashing and money grabbing?

Source: Who will benefit from Zimbabwe’s carbon trading regulation? | FairPlanet

As Zimbabwe leads the way in carbon trading regulation, concerns surrounding corruption and greenwashing loom large.

On 16 May, Zimbabwe’s carbon credit players were caught off guard when the government introduced mandatory regulations for the sub-sector, stipulating that 50 percent of the proceeds from the sale of carbon credits be allocated to government funds.

The announcement outlined the establishment of a comprehensive Carbon Credit Framework for Zimbabwe, which encompasses the creation of a National Carbon Credit Registry, the implementation of a National Climate Change Fund and the regulation of carbon credit agreements.

This makes the southern African nation the first country in the Global South to move in to regulate the controversial carbon offset market, after it announced the voiding of all existing agreements, giving players 60 days to align their activities to the new regulation.

Carbon credits refer to the mechanism in which companies, governments, and individuals make payments to enable others to reduce greenhouse gas emissions on their behalf, thus allowing them to receive recognition for their contribution towards climate action.

MOVE MEANT TO EMPOWER COUNTRY, COMMUNITIES

The government states the move is meant to curb greenwashing while ensuring real benefits to the nation and to local communities.

Up until now, the carbon credit projects operated by over 30 organisations in Zimbabwe remained largely unregulated, as their registration was limited to local councils and traditional community leaders. As a consequence, the government explains that there has been a lack of reliable data on the scale of the country’s carbon market. Environment and Tourism minister Mangaliso Ndlovu said that moving forward, all carbon projects in the country must be registered with the central government.

Under the new framework, the government of Zimbabwe will take 50 percent of all revenue from carbon projects, with foreign investors limited to 30 percent and the balance of 20 percent funneled to local communities.

“We are determined to make sure that climate finance resources, meant to empower the country, accrue to the most deserving,” Ndlovu said at the launch of the new carbon market policy in the capital, Harare. “We do not want instances of climate washing.”

The southern African country is the world’s 12th largest producer of carbon offsets, with 4.2 million credits generated from 30 registered projects last year. The Kariba REDD+ Project, encompassing a 785,000-hectare stretch of forest in the northwest part of the country on the border with Zambia, is the best known of these projects. Switzerland-based South Pole runs it in partnership with Green Carbon Africa, a local firm.

REDD+, a climate change mitigation solution developed by Parties to the United Nations Framework Convention on Climate Change (UNFCCC), stands for countries’ efforts to Reduce Emissions from Deforestation and forest Degradation and foster conservation, sustainable management of forests and the enhancement of forest carbon stocks.

NEW REGULATIONS TRIGGER JITTERS

The move has caused anxiety among players in the field, with South Pole announcing that it was reviewing the announcement by the Zimbabwean government on the carbon credit framework.

“We are assessing the implications that this new potential regulation might have on the Kariba REDD+ project and the local communities,” the Switzerland-based company said in a 17 May statement. “We will comment further when this review is complete.”

INCREASED MONITORING

The action taken by the government of Zimbabwe follows an exposé by the investigative journalism platform Follow The Money, which raised allegations of significant overestimation of emissions reduction in South Pole’s Kariba REDD+ project, alongside other irregularities.

The investigation further showed that although local communities were supposed to receive a minimum of 50 percent of the revenue, this expectation is far from being fulfilled. Instead, a significant portion of the proceeds is funneled towards obscure intermediaries situated higher up in the value chain. It emerged that the project, which was structured to channel money through several companies registered in tax havens, failed to bring material benefits to local peasant communities.

For example, of the roughly 27 million Kariba REDD project credits (worth at least USD 100 million) that were sold by South Pole, some were priced for as little as a half euro each at the start of the chain where the share of the Zimbabwean peasant communities is calculated. It was discovered that these very same credits were subsequently sold to global brands for as high as 20 euros each, indicating a substantial profit margin along the supply chain.

Analysts state that this type of exploitation makes some form of regulation necessary.

A MONEY SPINNING VENTURE?

While the global voluntary carbon offset market is currently worth about $2 billion, it is expected to grow exponentially, with the African market alone expected to reach $6 billion by 2030.

According to certain analysts, the fact that the financially strained government of Zimbabwe is seeking to acquire 50 percent of the scheme’s revenue clearly indicates that monetary gain is its primary driving force, overshadowing considerations for the well-being of local communities or forest conservation.

Farai Maguwu, the director of the Centre for Natural Resource Governance (CNRG), a local watchdog for resources, expressed the view that although the regulation of the carbon credit market is justified, he holds significant reservations regarding carbon credits as an effective climate solution.

“First and foremost, regulating the ever-growing carbon offset trading market is a good idea,” Maguwu told FairPlanet. “Governments must know what is happening and safeguard against unethical practices.”

“But I must point out that carbon trading is a false solution to climate change,” he added. “It is the rich countries paying poor countries for the right to continue polluting.

“In the poor countries it is the rich and powerful who will [reap the benefits] while the vulnerable communities continue to be exposed to climate disasters.”

Maguwu also emphasized that irrespective of the initial intentions behind implementing the new regulations, the pervasive corruption within the Zimbabwean government is expected to impede substantial progress.

“The 20 percent earmarked for the communities will not reach them,” Maguwu said. “Overall, the move is a money-spinning venture. There are no mechanisms in place to ensure the [truly] vulnerable communities will benefit.”

Earlier this year, President Emmerson Mnangagwa hinted at this development when he expressed the need for a revamp in the generation of carbon credits in Zimbabwe to ensure that the government receives “a fair share of the proceeds from the trade.”

‘A RADICAL APPROACH’

“It is an interesting development,” Gilles Dufrasne, a policy officer at Carbon Market Watch (CMW), a Brussels-based non-profit, told FairPlanet, commenting on what the move by Zimbabwe means for the industry.

“As far as I know, there is no other such measure anywhere, although it seems that since the announcement, the Zimbabwean government has now backtracked a little bit and started consultations with VCM (Voluntary Carbon Market) actors.”

He further mentioned that while certain countries have implemented temporary bans on the sale of credits in the past, they have not taken the step of invalidating all prior VCM agreements.

CMW observed that countries in the Global South started developing strategies for domestic carbon trade on a more frequent basis due to a lack of transparency in the market.

Although uncertain about the potential impact of the decision made by the Harare authorities, Dufrasne acknowledged that the rationale behind the move was understandable.

“I think it’s fair that governments are keen to take better control of the emission reductions or removals that are being traded since these are essentially a national asset,” he said.

“I am not sure that the method is the right one,” he added. “It seems quite blunt as an approach and will leave many market actors unhappy. But I think the objective is something we support.

Dufrasne also expects that enhanced transparency within the Voluntary Carbon Market, specifically regarding the allocation of funds and the actual benefits received by local communities and host countries, would mitigate the need for such uncompromising measures.

“For a government that’s seeing a lot of its national assets being sold abroad, without much control over it and without understanding what the benefits for it are, it’s clear that they will want to change course quite radically,” he concluded, “Maybe Zimbabwe’s approach is just a bit too radical. The future will tell.”

AFRICAN PARTICIPATION IN CARBON MARKETS

Zimbabwe’s move aligns with broader efforts across the African continent as it strives to establish itself as a key player in the global carbon trade.

Numerous African nations are actively seeking to expand their participation in the voluntary carbon markets. In support of this objective, the Africa Carbon Markets Initiative (ACMI) was launched in November of the previous year. The initiative aims to foster the growth of carbon credit production and generate employment opportunities throughout Africa.

The new partnership aims to harness Africa’s largely untapped potential to contribute to the supply of carbon credits while unlocking billions in revenue.

Countries such as Kenya, Malawi, Gabon, Nigeria and Togo have already started collaborating with ACMI to scale carbon credit production through voluntary carbon market activation plans.

As it moves to position itself as the continent’s carbon trading hub, Zimbabwe is set to host the Africa Voluntary Carbon Markets Forum in early July. During the event, the country plans to register offset-generating projects on a carbon registry at the Victoria Falls Stock Exchange, denominated in dollars.

“The forum aims to create a pan-African focused register of carbon credits to be traded on the Victoria Falls Stock Exchange,” reads the pamphlet issued by the state-backed organisers of the event. “A key highlight of the forum will be the signing of a Memorandum of Understanding (MOU) between key stakeholders to establish the Pan-African Voluntary Carbon Credit Register and Victoria Falls Stock Exchange Carbon Market.”

The announcement confirmed the participation of guests and speakers from Ethiopia, Uganda and Kenya in the upcoming event, which is scheduled to take place from 3 to 9 July in the resort town of Victoria Falls.

Edgars head office relocates from Bulawayo

Rutendo Nyeve, Sunday News Reporter LISTED clothing retailer and manufacturer, Edgars Stores Limited, will be relocating its retail chain management offices from Bulawayo to Harare where they have more shops in order to manage them on a day-to-day basis, the company has said. The development is expected to be part of the broader thrust to […]

Rutendo Nyeve, Sunday News Reporter

LISTED clothing retailer and manufacturer, Edgars Stores Limited, will be relocating its retail chain management offices from Bulawayo to Harare where they have more shops in order to manage them on a day-to-day basis, the company has said.

The development is expected to be part of the broader thrust to remodel its business to tap into new opportunities while focusing on cost containment to ensure the long-term viability of the business as the group eyes expanding its geographic footprint.

Responding to questions from Sunday News, Group Chief Executive officer Mrs Tjeludo Ndlovu confirmed the latest development saying the board and management had considered the relocation.

“Edgars Stores Limited Group operates over 62 branches across the country with headquarters being based in Bulawayo. Management and the board are considering the relocation of retail chain management to Harare where there are more shops to manage day to day,” said Mrs Ndlovu.

Founded by Mr Sydney Press, Edgars Stores was registered as a company in Zimbabwe, then Rhodesia, in November 1948. Ever since, the company has been headquartered in the Bulawayo with its management stationed at their Edgars building and LAPF house in the Central Business District.

Edgars closes Retail Outlet

To hedge against potential risks associated with erratic supplies and stock outs which could have easily impeded service delivery, the group acquired Carousel Clothing factory in 1974 and the Jeans Company in 1993.

In 1984, another retail brand called Express was introduced and its first store opened in Harare’s Julius Nyerere Way. By 1988 there were 24 Express outlets. In November 2011, Express Mart was rebranded and Jet Stores launched, to offer more value and variety to customers.

In February this year, the company closed one of its prominent and pioneer branches in Bulawayo citing the need to secure an alternative location that suits its brand expectation amid pressure from illegal forex dealers and vendors. Popularly known as Sales House or branch 501 as the company code-named it, the closed branch was situated at the corner of Herbert Chitepo Street and Leopold Takawira Avenue near Tredgold building in the city centre, which is a hive of activity for vendors and illegal forex dealers.

Mrs Ndlovu added that renovations were underway at Ascot Shopping Centre where the company is set to open another branch as they believe the location is appropriate and convenient for its target market and clients.

“We are in the process of renovating premises at Ascot Shopping Centre for an Edgars branch,” she said.
Meanwhile, in a statement accompanying financial results for the full year ended January 8, 2023, released  last month, group chairman, Mr Thembinkosi Sibanda

said the company continues to remodel the business to capitalise on opportunities that arise while cost containment remains a focus area so as to ensure long term viability of the business.

“The Group seeks to expand its geographic footprint through the opening of new stores in strategic locations. Smart merchandise procurement and optimal inventory planning remain key focus areas to ensure that target margins are achieved without compromising the merchandise quality.

“We will continue to transform our customer experience through updating our stores to world-class standards, offering widened merchandise ranges at affordable prices and flexible credit terms,” said Mr Sibanda. — @nyeve14

Bulawayo burns: 46 fire cases in two weeks

Rutendo Nyeve, Sunday News Reporter THERE has been an alarming increase in cases of fire that have been reported and attended to with the Bulawayo Fire Brigade saying they have received 46 fire incidents in the past two weeks against a “normal” figure of at most 10 cases in the same period. Bulawayo City Council Acting […]

Rutendo Nyeve, Sunday News Reporter

THERE has been an alarming increase in cases of fire that have been reported and attended to with the Bulawayo Fire Brigade saying they have received 46 fire incidents in the past two weeks against a “normal” figure of at most 10 cases in the same period.

Bulawayo City Council Acting Chief Fire Officer Mr Linos Phiri said the surge in cases of fire resulted in one fatality, saying a daily average of three calls was abnormally high.

He said the bigger chunk of cases were caused by overgrown grass and urged people to cut or trim it especially where it was close to their properties while also warning residents to avoid carelessly discarding lit material. 

“From 2 to 15 June we recorded four property types of fire with one being an electric cooker left on, the other being a lit candle left unattended, the other being carelessly discarded lit material while the last is unknown. We attended to three vehicle fires where two were caused by electrical faults and the other being grass fire. We had four rubbish cases caused by deliberate burning and 34 cases of grass type of fire. We recorded one False Alarm with Good Intent (FAGI) as a pressure cooker was left on. The total number of calls attended from 2 to 15 June was 46,” said Mr Phiri.

He said 76 percent of the fires were caused by carelessly discarded lit material while 74 percent of the calls attended were grass fires. Three were injured at grass fires while there was one fatality at a house fire. With 34 of the 46 fire cases being grass fires, the city’s fire department said the major causes of bush fires include lighting fires at road servitudes, careless disposal of lit cigarette stubs by the public including motorists, smoking out of bees, deliberate fire setting (arson). The other major causes of bush fires include children playing with matches, using fires to open up or clear arable land as well as camp fires left un- extinguished.

“Common causes of fire in the community include faulty electrical appliances, children playing with matches or other forms of fire, hoarding of fuel in the home, irons, stoves and or cooking fires left ‘on,’ candles or paraffin lamps left unattended, careless smoking, homemade wax polish, trees coming into contact with electric cables, lightning, sparks from bush, rubbish fires, deliberate fire setting, arson as well as smoking out of bees,” said Mr Phiri. 

He urged communities to make fire guards to protect their properties from bush fires.

“Construct fireguards to control bush fires, slash the fireguard and keep it clear of any vegetation. If advised to evacuate, do so immediately, choose a route away from the fire hazard. Watch for changes in the speed and direction of the fire and smoke. Beat the fire using beaters, tree branches or wet sacks and douse the flame with water,” said Mr Phiri.

He said when calling for Fire and Ambulance Services residents should give the address or location of an incident, identify themselves, reveal what is involved (property on fire, person in need of an ambulance, road traffic accident, etc) as well as informing them of the nearest common landmark, like shops or school. Latest council minutes reveal that there is an exodus of firefighters at the Bulawayo City Council (BCC) where they are either joining other professions or leaving the country in search of the so-called greener pastures. The minutes also noted that BCC’s fire department has been hit by a shortage of life- saving equipment such as breathing apparatus, lamps and emergency lighting generators. @nyeve14

Government reverses NUST retrenchment, academics promoted

Rutendo Nyeve, Sunday News Reporter THE Government has reversed the National University of Science of Technology (Nust)’s staff rationalisation exercise that had seen more than 60 workers sent home to “create a lean, efficient, effective and fit-for-purpose staff”. More than 60 employees were reportedly handed letters of retrenchment by the institution’s human resources office on 30 […]

Rutendo Nyeve, Sunday News Reporter

THE Government has reversed the National University of Science of Technology (Nust)’s staff rationalisation exercise that had seen more than 60 workers sent home to “create a lean, efficient, effective and fit-for-purpose staff”.

More than 60 employees were reportedly handed letters of retrenchment by the institution’s human resources office on 30 May, notifying them that 31 May would be their last day at work. However, in a recent turn of events, Nust Vice-Chancellor Professor Mqhele Dlodlo notified of the reversal of the retrenchment exercise.

“The Vice-Chancellor’s Office wishes to advise that the staff rationalisation exercise, which had resulted in some employees being laid off, has been reversed with immediate effect. All staff members who were affected should report for duty at their workstations,” notified Prof Dlodlo.

On 22 July 2021, a notice was issued notifying of a restructuring and staff rationalisation exercise as well as the call for voluntary retrenchment. Another call for early retirement was issued on 15 March last year. On 23 May 2023, the institution advised that the exercise had reached the final stage and issued retrenchment letters.  “The purpose of the exercise was to create a lean, efficient, effective, fit-for-purpose staff that is motivated to deliver on the institution’s mandate as outlined in the pillars of Education 5.0. After all due processes as stated in the notice of 22 July 2021, the exercise resulted in the creation of new posts, and the abolishment of other posts. Some staff members responded to the call for voluntary retrenchment, and early retirement…”

Professor Mpathisi Ndlovu

Meanwhile, the university has promoted three academic staff from the Faculty of Communication and Information Science’s Department of Journalism and Media Studies to the positions of Associate Professor. The three PhD holders are now Professors Mphathisi Ndlovu, Bhekinkosi Jakobe Ncube and Lungile Augustine Tshuma. They have been honoured for their contribution in widening the knowledge body through writing academic papers that have earned international recognition. 

New charge imposed on foreign payments

Harare Bureau All outward payments from Zimbabwe to any foreign country for the next six months will attract a one percent charge up to a maximum of US$50 000 as part of measures gazetted by President Mnangagwa yesterday to stem the loss of value of the local currency seen in the past few months. The […]

Harare Bureau

All outward payments from Zimbabwe to any foreign country for the next six months will attract a one percent charge up to a maximum of US$50 000 as part of measures gazetted by President Mnangagwa yesterday to stem the loss of value of the local currency seen in the past few months.

The measures are contained in Statutory Instrument 107 of 2023 cited as Exchange Control (Control of Payments) (Charge on Specified Outbound Foreign Currency Payments) Regulations, 2023 which the President gazetted in terms of the Exchange Control Act. 

The one percent charge is paid by all banks and similar institutions, including mobile money transfer agencies paying someone outside the country.

According to SI107 the protection of the domestic currency is an aspect of monetary sovereignty exercisable by the President by virtue of his prerogative powers, that is as head of Government.

The collected funds will be deposited in a Debt Redemption Sinking Fund established in terms of section 32 of the Public Debt Management Act.

The funds that will attract the charge should have been obtained from the Dutch Auction Foreign Currency Market operated by the Reserve Bank of Zimbabwe every week or, for most of the funds now sent out, from the interbank market operated by banks to payees outside Zimbabwe.

The regulations set the one percent rate to be charged, levied and collected on outbound foreign payments in accordance with the up to a maximum of US$50 000 or the equivalent in any other foreign currency at the international cross rate of exchange prevailing on the time of the mediation. The payment would need to be more than US$5 million, which very few are, before the maximum applied.

Banks must withhold and remit to the Debt Redemption Sinking Fund the outbound foreign currency charge on each such transaction that the bank mediated, and must pay the charge into the fund within 10 days of the payment. 

Late charge payments mean a modest surcharge, but any bank delaying further so that the delay is now an offence, will be fined the full sum that was not paid in the charges. And if they cannot pay that fine then every director of the bank will be liable to six months jail.

The SI said the value of the Zimbabwe dollar was largely pegged to the value of recognised foreign currencies commonly used as a means of international payments and that the volume of outbound payments made from Zimbabwe in those foreign currencies was exerting substantial downward pressure on the value of the Zimbabwe dollar.

The burden of servicing the country’s foreign debt was also putting indirect but significant strain on the value of the Zimbabwean dollar and it was therefore desirable to mitigate such pressure by imposing as a temporary measure a charge on such payments.

The financial institutions covered include banks, building societies, the Reserve Bank of Zimbabwe, the People’s Own Savings Bank, the Zimbabwe Development Bank, the successor company to the Agricultural Finance Corporation, ZimPost, all providers of mobile banking services, and the operator of any mobile money transfer platform, regardless of how it is licenced, that facilitates the receipt of cash by a customer through hosting that customer and the bank, cellular telecommunication or telecommunication service operator or any combination of them.