ETHANOL producer, Green Fuel has failed to justify its existence despite enjoying massive hand-holding from government in the form of a protected monopoly as well as laws requiring the mandatory blending of petrol with 15% ethanol, parliament has revealed.
The parliamentary portfolio committee on youth, indigenisation and economic empowerment made the damning findings that the ethanol producer had failed to deliver on promises of providing cheaper, environmentally friendly fuel, compliance with indigenisation laws as well as stimulating massive investment and jobs for the local Chisumbanje community.
The findings were made after more than a year of investigations and fact-finding missions that included visits to the project site in Chisumbanje, interviews with the local community and sessions in which company officials and other stakeholders gave oral evidence in parliament.
Despite the mandatory blending and promises of cost reduction, fuel in Zimbabwe remains expensive with only Malawi and the Democratic Republic of Congo (DRC) having costlier fuel in Africa.
The company has also failed to make good on its promises of environmentally friendly production as the villagers have complained of toxic substances being released into the area affecting water and livestock.
According to the parliamentary committee’s report released last week, the villagers’ claims were corroborated by the Environmental Management Agency (Ema)’s findings that “Green Fuel is illegally discharging millions of litres daily of harmful and acidic effluent (vinasse) from its plant into the environment”.
Green Fuel, owned by local businessman Billy Rautenbach, has also failed to comply with indigenisation laws requiring it to cede 51% shareholding to black Zimbabweans and to create a share ownership trust for the local community.
“This is not the case in Chisumbanje where the investor has a contentious 90% stake through Macdom Investments and 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%/49% joint-venture (arrangement) with government according to the spirit of statutory instrument 17 of 2013 on mandatory blending,” reads part of the report.
Parliament also failed to find evidence to support the company’s assertions that it had set up projects to benefit the local community, saying that although Green Fuel took them on a guided tour showing them land supposedly set aside for war veterans and out-grower farmers, “there were no beneficiaries present to support the claims”.
Furthermore “the committee did not see other projects mentioned by (company) officials to the committee during the briefing meeting in the morning (of their tour)”.
The committee described the meeting with the local community as “super-charged” and said they did not mince their words over the company’s failure to address burning grievances which had remained unresolved despite several visits by government delegations.
“The community dispelled claims by Green Fuel … that it had compensated the community for land and livestock losses suffered due to the ethanol project,” the report says, adding “members of the community are now in their sixth year without receiving compensation”.