Zimbabwe’s government says it can’t be picky about who to do business with
Black peasant farmers in Zimbabwe’s Eastern Highlands have accused controversial white Zimbabwean businessperson Billy Rautenbach of forcing them off their land and destroying their livelihoods through a $600-million ethanol plant that enjoys extensive government support.
They are also complaining that Rautenbach did not honour an offer to set them up as sugar cane growers to feed the factory.
Rautenbach has already taken 9 400 hectares from local farmers, uprooting more than 1 700 households with an estimated 10 000 members. But he says he will need 45 000 hectares for cane production when the factory is at full capacity, suggesting that the land grab will continue.
Government backing for the plant, which includes legislation giving Rautenbach a production monopoly, represents an ironic reversal of Zanu-PF’s proclaimed land reform policy, which is supposedly intended to benefit small black farmers.
Rautenbach’s fast and furious rise to riches in South Africa and other African countries has frequently stirred controversy (see “Billy Rautenbach’s disingenuous and slippery story” below). He is alleged to have profited from Zimbabwe’s military adventure in the Democratic Republic of the Congo in 1998 and to have donated generously to Zanu-PF’s election coffers. His close relationship with the ruling party saw him added to the list of individuals on the European Union’s targeted sanctions against the Zimbabwean elite.
He was sent questions this week, but did not respond.
Rautenbach established the ethanol plant in the Chisumbanje district of Manicaland in 2009. It operated as the Green Fuel company after his Macdom Investments company partnered with the state-owned Agricultural Rural Development Authority (Arda).
It ceased production in 2010 because of a low uptake of ethanol, but was reopened in 2013 with increased hand-holding from government in the form of a statutory monopoly and legislation prescribing a mandatory blending of all petrol in Zimbabwe with 15% ethanol.
President Robert Mugabe’s government has kicked more than 6 300 white farmers off commercial farms since 2000. Foreign and white owned businesses are also required by law to cede a 51% shareholding to government and black people, ostensibly to redress colonial injustices.
However, Rautenbach has ceded just 10% of Green Fuel to Arda. He even received assistance from the government in displacing people without compensation.
Locals told amaBhungane that they watched helplessly as Green Fuel strayed beyond the 5 112 hectares it received from Arda and took their land, destroying their crops and ancestral graves.
“When the company came into the area, we were happy and thought we were going to benefit. However, when they were taking over our fields, they destroyed our maize and cotton which was ready for harvesting and even destroyed graves of our relatives,” alleged a villager, Vhondai Mashava, who made similar claims to a parliamentary committee that toured the area late last year.
Putting the country ‘in jeopardy’
Another local resident, Claris Madhuku, concurred with Mashava, saying that “the land question in Zimbabwe has been clearly articulated by President Robert Gabriel Mugabe in a manner that makes it very difficult to allow an individual to put the whole country and the villagers of Chisumbanje in jeopardy”.
“We do not consider it fair to allow business interests to triumph over the sociocultural interest of the community. Political interference has been given too much licence to wreak havoc and willy-nilly disregard resolutions of Cabinet and national policy frameworks.”
Madhuku is also director of the Platform for Youth Development Trust, which has been lobbying the government to ensure people’s rights are respected by big business.
He has written to Parliament on behalf of the Chisumbanje community to complain that, “since we are now approaching the rain season, with ploughing about to start in October, it would be much appreciated if the boundary dispute is formally clarified in line with your recommendations”.
The “boundary” referred to demarcates land owned by Arda from communal land.
Parliament’s indigenisation and empowerment committee, chaired by Zanu-PF MP Mayor Justice Wadyajena, said in its report that “most of the villagers whose land was taken by the project have not been compensated up to this day, despite undertakings by Green Fuel to do so when the project was first established”.
“The committee recommends that Arda board chairperson Basil Nyabadza must clarify the issue of land ownership between Arda, Green Fuel and the community, and that the audit on land, buildings, livestock, crops, family sizes and business enterprises lost to make way for the project, be expedited to facilitate meaningful and realistic compensation before the 2015 farming season.”
The committee also raised concern about the company’s noncompliance with the indigenisation law, saying that Rautenbach, “has a contentious 90% stake and the government owns the remaining 10% through Arda”.
“It was also noted that Green Fuel was granted an ethanol blending licence despite not fulfilling the 51% to 49% joint venture with government according to the spirit of Statutory Instrument 17 of 2013 on mandatory blending,” the committee reported.
The committee’s report came after more than a year of investigations and fact-finding missions that included visits to the site of the factory, interviews with residents and the company.
Harmful, acidic effluent
It also found Green Fuel failed to make good on its promises of environmentally friendly production. Villagers have complained of toxic substances being released into the area that affect water and livestock.
“Green Fuel is illegally discharging millions of litres daily of harmful and acidic effluent (vinasse) from its plant into the environment,” it states.
In an interview with amaBhungane this week, Arda’s Nyabadza said Green Fuel has different priorities centred on maintaining production “in order to make savings on the country’s import bill”.
“Savings on our fuel imports is the priority at this hour. Of course we have to look at the shareholding issue as we go on, but for the time being, the main issue is to extract value,” he said.
Nyabadza also defended Rautenbach’s majority shareholding in Green Fuel, insisting that Zimbabwe “clearly can’t afford the luxury of picking and choosing [investors] now”.
“The nation respects investment regardless of the source. We’ve got Chinese investment here, Indian investment, Russian, American, British. We look at investment capital – we don’t look at the colour of investment. In fact, we say we don’t mind whether the cat is black or white. That’s our approach in business.”
Most expensive ethanol in Africa
Despite the addition of ethanol, petrol in Zimbabwe, at US$1.44 a litre is among the most expensive in Africa – behind only Malawi and the Democratic Republic of the Congo.
At the outset, Rautenbach also promised his project will generate 26 megawatts of electricity, saying this would be enough to meet Manicaland’s needs.
AmaBhungane established from company officials that two megawatts are being generated, sufficient only for the plant’s operations.
During a media visit to the plant this year, a company official said that this was because the plant was not operating at full production.
He also said the effluent from the plant was not harmful, and could be used to fertilise the cane fields.
Agriculture Minister Joseph Made promised to call amaBhungane with a comment, but had not done so at the time of printing.
From SA to the DRC: A man of many storms
The business activities of Muller Conrad Rautenbach – aka “Billy” – first sparked controversy in November 1999 after South Africa’s investigating directorate for Serious Economic Offences raided his Wheels of Africa group, which included Hyundai motor distributors.
By January 2000 most of the group’s companies were placed under liquidation, leaving debts of R1-billion in South Africa and R900-million in Botswana. Rautenbach reportedly skipped the country. In 2009, he eventually reached a settlement with the National Prosecuting Authority under which one of his companies paid a R40-million fine, though he personally did not admit liability.
Rautenbach also caught the attention of United Nations investigators over his operations in the war-torn Democratic Republic of Congo, where he reportedly worked with senior Zimbabwean political and military officials. During Zimbabwe’s incursion into the DRC to prop up former president Laurent Kabila, the Congolese government appointed him chairperson and managing director of state-owned mining company Gecamines.
Rautenbach soon fell out with Kabila who removed him from his position, accusing him of looting the DRC’s mineral resources. This followed an audit by Ernst & Young and a UN report which stated that “some of Gecamines’s best cobalt-producing areas were transferred to a joint venture between Mr Rautenbach’s Ridgepoint Overseas Developments and the Central Mining Group, a Congolese company, controlled by Pierre-Victor Mpoyo, then minister of state”.
Rautenbach was deported from the DRC in 2007 after reportedly making $50-million from the sale of shares in the United Kingdom-registered company Camec, into which he had folded many of his Congolese and Zimbabwean mining interests. Camec was key to his ongoing relationship with the Zimbabwean government. Through its purchase of Lefevre, an opaque British Virgin Islands-registered company, he gained access to Zimbabwean platinum concessions wrested from Anglo Platinum by the government.
In return, Camec granted Lefevre a $100-million loan “to meet its obligations to the Zimbabwean government” in April 2008. Robert Mugabe appears to have used the money in a violent campaign to stave off looming defeat in the presidential election.
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