1. REEP A Process Model for Developing and Implementing Collectively owned enterprises in rural areas (AgriSETA Workshop: Premier Hotel O.R. Tambo) 21 September 2012 Zandile Ndaba Senior Manager

2. INTRODUCTION This process model initiative referenced Empowerment and Equity as its fundamental drivers to develop an all encompassing integrated process model that addresses the many challenges faced by many community based enterprises. This model has been labeled the Rural Enterprise Empowerment Process (REEP) The REEP model provides a comprehensive reference point to support facilitators and others in addressing the complex problem-solving and decision-making challenges that face project managers and facilitators. It enables facilitation of the development of sustainable rural enterprises in a way that also leads to effective empowerment of the communities involved. An integrated modeling approach enables a facilitator to be an effective change agent by: Assisting rural communities to choose practical solutions to their problems Attracting potential investors through the promotion of cost-reducing economies of scale, and Adopting a systematically supported, programmatic approach.

3. DEVELOPMENT PHASES The three broad development phases that an enterprise/project should pass through are defined as follows: Mobilisation (of the community and the business) Enterprise development Transfer and transformation Within each of these phases, a number of activities take place and thus a number of criteria must be met before the project can progress to the next phase.

4. Mobilisation: This comprises two aspects, mobilisation of the community and mobilisation of the business (strategic and business planning, preparation of guidelines for enterprise development and signing of Memoranda of Understanding). Enterprise Development: The model provides a step by step guide for implementation of the enterprise, highlighting key stages such as securing all necessary authorisations for compliance with all legislation, establishing the legal entity for the operation of the enterprise and securing financial resources for implementation including technical support, infrastructure and equipment. Transfer and Transformation: The transition and transformation stage provides a guide to achieving a transfer of equity and benefits to the community that reflects the change in their contribution to the enterprise as they are empowered and develop capacity and skills.

6. Checklist for the Mobilisation Phase (community and business)

8. CHECK LIST FOR THE TRANSFERE AND TRANSFORMATION PHASE

9. EMPOWERMENT Empowerment is an ongoing process that must be ‘built in’ to every aspect and phase of the enterprise in order to ensure that there is appropriate capacitation of the community partner in order that they may share equitably in the benefits generated through the enterprise. This empowerment will need to be realized through a range of direct and indirect activities that will include: Ongoing mentorship by facilitators Active participation of community members in planning, decision making and implementation The transfer of responsibilities and power The preparation and implementation of a social plan that addresses empowerment interventions and leadership development training being made available to community leaders and participants

10. CHALLENGES

11. The mobilisation phase incorporates: A guide to identifying and reviewing the enterprise opportunity. For example an enterprise for rural empowerment could be based on one or more of the following opportunities: -Natural resource base opportunity -Intellectual property or indigenous knowledge owned by a community -A market opportunity -A resource of community entrepreneurs (individual or group) The specific key variable in each case will vary from project to project or sector to sector. In the case of compliance, a guide is provided for the steps of community mobilisation and assessment of economic viability of the enterprise.

13. EXIT CRITERIA: SUCCESS SCENARIO CriteriaAre they met? Good social capital and sustainable social plan in place: Balanced and sustainable partnerships Ownership has been transferred to a capacitated community partner Empowered community partner with appropriate equity in enterprise Ongoing skills and capacity transfer to community partner. Enterprise is economically and socially sustainable Enterprise is generating sufficient profits for all partners on a regular basis. Equitable distribution of benefits. Suitable partnerships have been established: Do not require any more facilitation to resolve conflicts Partnerships are equitable. The community partner is sufficiently empowered to manage the enterprise and meet its responsibilities

14. FAILURE SCENARIO If any of the following scenarios emerged, it is likely that facilitation would have to terminate its involvement in the project: Sustainable markets cannot be secured. Economic viability cannot be achieved and the project is not profitable (i.e. it cannot evolve from startup into rapid growth & maturity phases). Key inputs cannot be secured (options exhausted). Unresolved conflicts - facilitation cannot resolve inter- or intra-partnership disputes on equity and benefit distribution. Partners are failing to meet their roles and responsibilities, to the extent that the project cannot proceed.

15.  In the process model, exit points were identified at the following stages: Revision of the BP has not allowed the identification of changes that would make the project economically viable. An appropriate legal entity cannot be identified/established. Financial support cannot be obtained. Necessary skills are not present and cannot be sourced. Successful enterprise development has not taken place.

16. EXIT CRITERIA: FAILURE SCENARIO SituationsAre they met? Sustainable markets cannot be secured. Economic viability cannot be achieved and the project is not profitable. Key inputs cannot be secured (options exhausted). Unresolved conflicts that facilitation cannot resolve. Partners are failing to meet their roles and responsibilities. Exit points identified in the process model: An appropriate legal entity cannot be identified/established. Financial support cannot be obtained. Revision of the BP has not allowed the identification of changes that would make the project economically viable. Necessary skills are not present and cannot be sourced. Successful enterprise development has not taken place.

17. Conclusion The focus of this model therefore is to ensure that the `enterprise vehicle’ is sustainable from a business perspective and a community empowerment perspective. Empowerment is an ongoing process from mobilization to exit, and is implicit in all stages of the establishment of the enterprise. Only then can the promise of equity and real wealth creation be fulfilled. The role of the private sector partner is recognised as most critical to the sustainability of the enterprise. In particular, the private sector partner should represent access to markets, value addition opportunities, mentoring and technical know-how.

18. THANK YOU