UNIVERSITY OF ZIMBABWE

CE406: HYDRAULIC STRUCTURES

PRINCIPLES OF COMPENSATION & BENEFIT
SHARING
Dr. Eng. M. J. TUMBARE
March 2020
 COURSE OBJECTIVES

TO UNDERSTAND THE PRINCIPLES AND APPLICATION OF

COMPENSATION & BENEFIT SHARING POLICIES

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 REFERENCES AND RECOMMENDED READING
• The Zimbabwe Institution of Engineers, 1997, Environmental Code
of Professional Practice, Harare
• Chinamora W., 1995, Zimbabwe Environmental Impact Assessment
Policy 1994: Can It Achieve Sound Environmental Management?,
Zambezia Vol. 22 No. 2 pp 153 – 164
• Government of Zimbabwe, 1994, Zimbabwe Environmental Impact
Assessment Policy 1994, Government Printer, Harare
• FAO, 1996, Environmental impact assessment and environmental
auditing in the pulp and paper industry, ISBN 92-5-103794-9.
Available from: www.fao.org/DOCREP/005/V9933E/V9933E00.html
• WCD. (2000). Dams and Development: A new Framework for
Decision-making, Earthscan Publications, ISBN 1-85383-798-9,
London & Sterling, VA.

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ENVIRONMENTAL IMPACT ASSESSMENTS (EIAs)
(CONT….)
In Zimbabwe, the following institutions/legislation/policies
have been put in place to manage EIA processes;
• Establishment of the Environmental Management Agency
(EMA) with prosecuting powers
• Promulgation of the Zimbabwe Environmental Impact
Assessment Policy of 1994
• The putting in place by the Zimbabwe Institution of
Engineers of the Environmental Code of Practice.

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Dr. M. J. Tumbare:CE406: Principles of Compensation & Benefit Sharing March 2020 5
 COMPENSATION & BENEFIT SHARING

1. Key Principles: Compensation & Benefit Sharing

2. Types of Benefit Sharing Mechanisms
3. Types of Compensation Mechanisms
4. Discussion on In-kind Compensation
– Advantages & Disadvantages
5. Discussion on Monetary Compensation
– Advantages & Disadvantages

6. Application of In-kind & Monetary Compensation

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 KEY PRINCIPLES: COMPENSATION & BENEFIT SHARING
Resettlement Compensation Policies should ensure a prompt and measurable
improvement in the lives & livelihoods of the affected people including the host
communities by GENERALLY:
• Fostering the adoption of appropriate regulatory frameworks
 Changes to legislation, regulations and policies regards resettlement
• Building required institutional capacities
 Institutionalised project planning processes
 Participation of all affected groups in decision making processes
• Planning and implementing long term integrated community development
programs
 Overally, the resettlement of the affected people should be part and
parcel of the development project

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KEY PRINCIPLES: COMPENSATION & BENEFIT SHARING
KEY PRINCIPLES: COMPENSATION & BENEFIT SHARING
(Cont...)(CONT....)
Policies should ensure a prompt and measurable
improvement in the lives of the affected people including the
host communities by SPECIFICALLY:

 Ensuring the improved livelihoods of affected people

 Implementation of developmental approaches

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KEY PRINCIPLES: COMPENSATION & BENEFIT SHARING (Cont...)

 Enhancing participatory approaches

 Building capacity

 Ensuring compliance with agreements

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 TYPES OF COMPENSATION MECHANISMS
Compensation mechanisms applicable to large (dam) projects can
be defined as those that aim to:
• compensate project-affected populations for lost assets and
lost access to resources; and
• restore and improve the livelihoods of project-affected
populations living in the vicinity of a dam development.
Such compensation mechanisms include the following types of
measures:
• In-kind or monetary compensation.
• Non-monetary benefit-sharing.
• Monetary benefit-sharing.

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 IN-KIND OR MONETORY COMPENSATION

In-kind or monetary compensation for lost assets and loss of

access to resources irrespective of land tenure status.
The underlining principle of this type of compensation is that;
• compensation be paid out at market value for lost assets
and/or loss of access to resources
• that all land users are eligible to compensation irrespective of
tenure status
• cash compensation at replacement cost allows displaced
persons to restore incomes and living standards.

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KEY PRINCIPLES: COMPENSATION & BENEFIT SHARING
(Cont...)

 In-kind compensation in place of cash compensation

 Compensation of affected people without formal
entitlement to the land
 Prioritising vulnerable groups

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 IN-KIND COMPENSATION
TYPE
Replacement: land for
land lost, new houses for
lost ones, etc
Irrigation schemes,
fisheries
Provision of schools,
clinics, roads, electricity,
domestic water supplies
etc
Vocational training, off-
farm employment
ADVANTAGES DISADVANTAGES
Better farmland with Difficult to replace non-
tenure, improved housing economic assets (such as
with tenure, etc shrines, cemeteries, etc.).
Long term income Capital to start?
generators Commercialisation skills?
Markets?
Improved service ??
provision
Improved skills, Literacy levels?
sustainable incomes
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March 2020
TYPES OF MONETORY BENEFIT SHARING COMPENSATION
MECHANISMS - GENERAL
Monetary benefit-sharing mechanisms involve sharing part of the
monetary flows generated by dam operation with affected communities.
Three main objectives of monetary benefit-sharing schemes are to:
• Provide additional long-term compensation for project-affected
populations.
– compensation for lost assets alone is insufficient to secure the
productive and enduring re-establishment of those displaced.
• Establish long-term local/regional economic development funds.
– channelling a proportion of benefits from the dam project to local
and regional communities
• Establish a partnership between developers and local communities.
– part or full community ownership of the dam project or
community development funds.
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 TYPES OF MONETORY BENEFIT SHARING COMPENSATION
MECHANISMS (Cont...)

Examples of monetary benefit-sharing schemes

• Revenue sharing

• Development funds

• Equity sharing or full ownership

• Property taxes

• Preferential electricity rates

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 MONETARY COMPENSATION
TYPE ADVANTAGES DISADVANTAGES
Cash Independence of Obstacles in conversion of cash into
use replacement assets
Need for Banking facilities and Accounts
Cash amount may be insufficient
Timing of compensation
Payment of lobola, debts etc instead of
replacement assets.
Inclusion of Host Communities difficult
Other
Monetory
forms?

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Dr. M. J. Tumbare:CE406: Principles of Compensation & Benefit Sharing March 2020 17
 IN-KIND versus MONETORY COMPENSATION
When is each best applied?
IN-KIND MONETORY (CASH)
For compensating physically displaced For compensating economically displaced
persons persons
As part of a holistic resettlement Active Markets readily available to replace
development programme lost assets or lost access to assets
Land of sufficient quantity and quality Livelihoods are land-based but the land taken
available for resettlement for the project is a small fraction of the
affected asset and the residual is still
economically viable

When access to economic opportunities (such Livelihoods are not land-based

as nearby jobs, fishing areas, irrigation works,
etc) is lost
When non-economic assets (such as shrines,
cemeteries, etc.) are lost
To ensure the long-term sustainability of
displaced and host communities.

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 POLICY PRINCIPLE APPLIED
KARIBA DAM (1950s) (Y/N)

Implementation of developmental N
approaches.
Did the construction of
Kariba Dam overally give
In-kind compensation instead of N
prompt and measurable cash compensation.
improvement to the
livelihoods of the affected Compensation of affected people N
people? without formal entitlement to the
land

Enhancing participatory approaches N

Prioritising the needs of vulnerable N

groups.

Ensuring compliance with N

Agreements
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 THANK YOU

mjtumbare@gmail.com

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