The private sector is increasingly recognized as a stakeholder in MPAs, particularly in the role of financier, whether through leveraging funds such as tourism user fees to contribute to MPA management or through providing corporate social responsibility or philanthropic funds to support conservation (Brenes, 2004; UNEP, 2021). However, there is a growing body of evidence that the private sector’s role can go far beyond providing supportive funds for a site, and under the right circumstances can offer holistic, cost-effective and full package management services for MPAs (IUCN, 2016; Nordlund et al., 2013).

Chumbe Island MPA in Zanzibar, Tanzania is perhaps the best-known privately managed MPA in the world (Jones et al., 2019; OECD, 2017; Nordlund et al., 2013; UN, 2011), and has taught us much, as outlined in Box 1.

Chumbe Island Coral Park context

In the early 1990s, Tanzania was suffering high levels of marine degradation (destructive fishing, overexploitation, loss of habitat etc.). At the time there was a lack of awareness and understanding of the importance of marine ecosystems such as coral reefs for sustainable fisheries and livelihoods, and no MPAs existed (Jiddawi & Öhman, 2002). To address this, Sibylle Riedmiller, a social entrepreneur from Germany, proposed utilizing impact investing (Cosack & Bach, 2019) to establish and sustainably manage an MPA on a small uninhabited island called Chumbe, which had been recognized for its high biodiversity value (Dodds, 2012).

Riedmiller established a company – Chumbe Island Coral Park Ltd. (CHICOP) – with the aim of lobbying the government to legally establish an MPA at Chumbe, and create a public-private partnership giving the management rights of the MPA to CHICOP. In return, CHICOP committed to entirely finance the MPA’s collaborative development, design and establishment, and finance the long-term operations through revenue generated by CHICOP building a small ecolodge on the island. Tourism revenue would be entirely reinvested in the management of the MPA through a closed-loop system, with the company operating as a not-for-profit entity. By sustainably financing all MPA operations through the tourism business, the MPA would require zero funding from the state.

Following CHICOP’s extensive community consultations, awareness-raising, outreach and lobbying with seven government ministries, the Chumbe Island MPA was legally gazetted in 1994, making it the first MPA in Tanzania (Castle & Mileto, 1995).

Three contracts were signed through a public-private partnership between CHICOP and the government, for the company to:

• Fully manage the Chumbe Coral Reef Sanctuary

• Fully manage the Closed Forest Reserve

• Develop an ecolodge on the island to finance the above activities.

This made Chumbe the first privately managed MPA in the world, with all financing for MPA management provided by the company at no cost to the government (Dodds, 2012; Mitchell et al., 2018). The public-private partnership is supported by an advisory committee that meets annually to assess progress and provide guidance, comprising representatives from government, community leaders (Sheha) and academic institutions.

CHICOP’s ecotourism business has won multiple awards, and was ranked as the Top Sustainable Destination in Africa at the 2019 Internationale Tourismus-Börse Berlin. CHICOP’s ecotourism business has won multiple awards, including the National Geographic ‘Worlds Best Ecolodge’ in 2012, and ranked as the Top Sustainable Destination in Africa at the 2019 Internationale Tourismus-Börse Berlin. Chumbe MPA has also been recognized as a UNEP Global Laureate for ‘Outstanding Environmental Achievement’ and became an accredited ‘Global Ocean Refuge’ (Blue Park) in 2018 for ‘Outstanding Site Management’.

Figure 1. The Chumbe reef is the most biodiverse in the region. Copyright by Markus Meissl. Reproduced with permission.

Approaches and strategies

Obtaining financing

From 1992 to 1998, CHICOP galvanized investment of US$1.2 million through a combination of private and donor financing to:

All financing for MPA operations is the responsibility of CHICOP, and is generated through:

• Day trips to the island @ US$90 per person

• Overnight visits to the ecolodge @ US$280 per person per night.

Both of the above rack rates were set based on thorough financial feasibility and carrying capacity studies, with the island welcoming a maximum of 18 visitors per day/night. The rates include boat transfers to and from the island, full-board meals and all guided activities.

Using funds in a closed-loop system

All revenue generated from the business activities (average ~US$570,000/year) is utilized for MPA management, including 24/7 ranger patrols, monitoring, biophysical surveying, an extensive environmental education programme and all ecotourism operations (CHICOP, 2017). This sets Chumbe apart from other tourism businesses as it operates through a not-for-profit framework, using all funds generated for conservation management and site operations through a closed-loop system with zero economic leakage. This has made Chumbe one of the only financially self-sustaining MPAs in the world for more than two decades (Mitchell et al., 2018).

Figure 2. CHICOP’s Ecolodge from above. The Ecolodge won the Sustainia100 Global Solution award in 2012 for sustainability and carbon footprint. Copyright by CHICOP. Reproduced with permission.

Box 2: The three strategic priorities for Chumbe Island Coral Park

Conservation

MPA is 100% no-take, with the most biodiverse coral reef ecosystem in Zanzibar.

Effective management for more than two decades, resulting in approximately 80% live coral cover, 514 reef fish species and refuge for turtles, dolphins and sharks.

Increased fish biomass over time >1,500kg/ha creates spillover, restocking neighbouring reefs many kilometres from Chumbe’s boundaries, supporting local livelihoods and food security.

(CHICOP, 2017; Nordlund et al., 2013)

Education

(CHICOP, 2017)

Sustainable ecotourism

Tourism operations meet the highest credentials for sustainability. Award-winning ecolodge has:

• Solar photovoltaic electricity

• Rainwater catchment systems

• Solar convection hot water panels

• Vegetative greywater filtration systems and advanced composting toilet mechanisms to stop any pollutants entering the environment

All supplies sourced from local communities. All products meet 4R principles: reduce, reuse, repurpose, recycle

Minimal impact on the environment.

Involving the community

The Chumbe team comprises community members (36% women), all trained by CHICOP, with exceptional rates of staff retention (more than a third of the team have stayed with the project for over 20 years). Numerous additional local enterprises are supported, including:

• Boat handlers (former fishers)

• Farmers

• Sustainable fishers

• Women’s handicraft collectives

• Local community artisans

CHICOP provides essential search and rescue services, which have rescued more than 840 fishers from hazardous sea conditions to date. It also provides a microfinancing interest-free credit and loans scheme for team members (Nordlund et al., 2013; Mitchell et al., 2018).

Figure 3. The Chumbe rangers conduct regular on-shore buoy maintenance before returning them to sea to mark the no-take boundaries. Copyright by CHICOP. Reproduced with permission.

Using an updated management plan

Chumbe operates to a management plan, revised every 10 years, that includes analysis, planning and the setting of targets and indicators for all elements of CHICOPs work – conservation, research, education, business and financing (latest plan: 2017-2027) (Castle & Mileto, 1995; Carter, 2006; CHICOP, 2017).

Consulting widely

From the start, CHICOP engaged MPA management experts and volunteer biologists, sociologists and communication/education specialists, as well as business professionals, to provide extensive training to the Chumbe team.

Figure 4. CHICOP rangers undertaking regular seagrass monitoring. Copyright by Lina Mtwana Nordlund. Reproduced with permission.

Figure 5. CHICOP funds school trips to the island as part of its environmental education programme. Copyright by CHICOP. Reproduced with permission.

Challenges and limitations

While the Chumbe MPA shows the viability of privately managed MPAs, some prerequisites are necessary for replicability.

Finding the right private sector partner

Because privately managed MPAs are still a rarity, little guidance as yet exists for governments or NGOs to assess and engage with private partners. Likewise, information is lacking for private entities to effectively engage in full-service management arrangements.

From the beginning CHICOP was transparent in its planning, commitments and goals, including:

• Undertaking carrying capacity and financial feasibility assessments

• Market forecasting and willingness-to-pay assessments

• Clear business and management planning

• Engaging local communities from the outset

• Employing dedicated and appropriately qualified technical conservation staff to oversee and skills-build the MPA management operations and education programmes

• Working with eco-architects and sustainability engineers to build infrastructure with minimal impact on the environment

Elements like these need to be in place to show the credentials of any private sector partner. 

Building trust

Building trust is essential, between government, communities and the private company. For CHICOP it took many years of consultations and negotiations at all levels – with all relevant government agencies (from natural resource divisions through to finance and investment agencies), with community elders and fisher associations, through to scientific institutes – to build the initial trust to enter into the public-private partnership arrangement. And work has continued through the years to ensure total transparency and engagement to maintain that relationship, particularly with changes in government personnel over time.

Having access to revenue potential

The Chumbe MPA is located a 40-minute boat ride from a popular tourist area. Funding an MPA through tourism revenue is only possible in areas that are accessible to tourists, so will not be applicable to all MPAs.

Sourcing investment

Finding investment can be challenging for social entrepreneurs. Donors and funding agencies have only recently shown willingness to grant funds to entities with business components, even though the impact of such grants can often result in far more long-term, sustainable operations when compared to limited project-cycle funding. 

Avoiding reliance on a single revenue stream

While Chumbe has been successfully self-financed for more than two decades through ecotourism, the advent of the COVID-19 pandemic in early 2020 dramatically reduced visitor numbers, and for the first time CHICOP was unable to cover the core costs for MPA management (Spenceley et al., 2021). Grants from BMZ and BIOPAMA have bridged the financial gap, in the hope that normal operations will resume in 2022. For long-term resilience, however, CHICOP is now exploring diversified financing (through grants and partnerships) to ensure operations are future-proof (Riedmiller, pers comm.).

Practical tips

For the private sector

For governments

• Be open to public–private partnerships for MPA management.

• Enable security of tenure for private sector investors in MPAs.

• Provide incentives for appropriate investment (these may include tax incentives or operational incentives linked to key management achievements).

• Assess the motives of the private sector partner to ensure they are committed to the social and environmental goals of an MPA.

• Ensure there is clarity over investment requirements, favourable terms for social entrepreneurs, and long-term consistency between relevant agencies regarding all investor and business-related operational requirements (licences, permits etc.).

For NGOs

For donors

Be open to supporting the private sector for mission-aligned financing for MPA management services, to optimize sustainable, long-term impact.