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Legal Instruments for Trade and Transport Facilitation for Africa:AN ASSESMENT OF THE STATUS OF IMPLEMENTATION OF AGREEMENTS TOWARDS A CONTINENTAL FREE TRADE AREA
Prepared for UNECA Experts Group MeetingJuly 15, 2013
Addis Ababa, Ethiopia
by
OMETERE OMOLUABIConsultant on Trade and Transport
ContentContent1. Objectives/Purpose of Study2. Methodology and Scope3. Study Highlights4. Specific Findings by Topic
◦ Maritime and Port Facilities◦ Harmonization of Customs Procedures and
Documentation◦ Customs Transit Guarantees and Bonds◦ Third Party Motor Vehicle Insurance Systems◦ Trade Liberalization◦ Free Movement of People ◦ Corridor Management Initiatives◦ Transit for Landlocked Countries◦ Interstate Road Transport5. Key Reasons for non-Implementation of Legal
Instruments6. Recommendations for Improving
Implementation of Legal Instruments 7. Conclusions and General Recommendations
1. 1. Introduction Introduction Study Objective: Assess the implementation of legal instruments and agreements made on trade and transport for Sub-Saharan Africa (SSA) at the international, continental and sub-regional levels.
Why: Provides a baseline for evaluating progress and recommendations for harmonizing legal instruments towards a Continental Free Trade Area (CFTA).
Methodology: ◦Desk Review of existing compendium of
legal instruments (2012) completed by SSATP/UNECA/AU/AfDB
◦Developed separate questionnaires for interviews with relevant departments within RECs, Member States (implementers) and Others (private sector, civil society, etc)
◦Evaluation of Implementation of legal instruments by status of Signing, Ratification, Promulgation in national law, and actual practice
◦Comparison of international best practices with regional practice
RECs surveyed : COMESA, EAC, ECCAS, ECOWAS, SADC
2.2. Study HighlightsStudy Highlights Implementation of legal instruments is occurring at varying degrees
through several regional, national and bilateral efforts, creating a challenge for convergence towards the Continental Free Trade Area (CFTA).
Dissemination of the rules set forth by legal instruments in addition to
monitoring and evaluation of their implementation has been neglected, therefore resulting in poor information for implementers and end-users.
Uninformed private sector results in non-compliance and lack of trust in the regional systems
Poor coordination and communication between RECs and Member States also accounts for a decent percentage of poorly implemented instruments.
The private sector also reports the lack of political will of their national governments as the greatest impediment to trade and transport facilitation.
3.13.1 Maritime Port FacilitiesMaritime Port Facilities
Some progress has been made with regards to adoption of key maritime conventions, such as the 1965 London Convention on facilitation of international maritime traffic (22 of 114 contracting states are in SSA).
CEMAC made the most visible attempt at incorporating international best practices in maritime transport into the CEMAC Shipping Code.
Other countries also became party to the Abidjan Maritime Charter of ECOWAS and the 1977 Accra Convention on the Institutionalization of the Ministerial Conference on Maritime Transport.
Maritime Port Facilities:Maritime Port Facilities:Challenges to Challenges to ImplementationImplementationPoor infrastructure and low use
of ICT for electronic data sharing, as recommended in international conventions
Low volumes of maritime transport continent-wide, fewer investments have been made in this regard.
MEMBERSHIP OF SSA STATES TO KEY LEGAL INSTRUMENTS GOVERNING MARTIME TRANSPORT
COUNTRY
1961 Brussels Convention on carriage of passengers by sea
1965 London Convention on facilitation of international maritime traffic
1974 Athens Convention on Carriage of passengers and luggage by sea
1976 London Convention on limitations of liability for maritime claims
1978 Convention on the Carriage of Goods by Sea (Hamburg Rules)
1991 Vienna Convention on the Liability of Terminal Operators
Benin Burkina Faso Burundi Cameroon Cape Verde Congo Congo DRC Cote d’Ivoire Egypt Gabon Gambia Ghana Guinea Kenya Lesotho Liberia Mauritius Madagascar Mali Malawi Morocco Nigeria Senegal Seychelles Sierra Leone Tanzania Tunisia Uganda Zambia
3.23.2 Harmonization of Customs Harmonization of Customs Procedures and DocumentationProcedures and Documentation
Way Forward: The WCO has encouraged its Members to accede to the revised Kyoto Convention as it provides additional benefits, especially in early accession, including the “announcement effect” which has positive implications of being certified as having international customs standards in place. It also provides an advantage versus non-contracting parties in trade negotiations and capacity building. Countries which have not acceded to key WCO conventions such as the Revised Kyoto Convention.
3.33.3 Transit Bonds and Transit Bonds and GuaranteesGuarantees
All RECs have integrated transit guarantees into regional requirements for transport of goods, however, only COMESA and SADC have shown significant progress in implementation.
COMESA has recently implemented the Regional Customs Transit Guarantee (RCTG), which is operated via insurance companies, and has shown to be a reliable model, subject to its sustainability.
The private sector is generally content with the guarantee system within SADC.
ECOWAS, through the Inter-State Road Transit (ISRT) Convention instituted a Guarantee Scheme, however, the private sector remains frustrated with having to obtain a new bond for every country in the transit journey.
Objective Facilitate transit and establish harmonized regional transit guarantees
International Legal Instrument
TIR Convention; Goods should travel in secure vehicles or containers; Duties and taxes at risk should be covered throughout the journey by a regionally recognized guarantee; Goods should be accompanied by a regionally accepted Carnet taken into use in the country of departure and accepted in the countries of transit and destination; Customs control measures taken in the country of departure should be accepted by the countries of transit and destination.
RECs
Instrument Key Elements Evaluation/Challenges
ECOWAS 1982 Convention A/P 4/5/1982 Inter-State Transit Convention (Lomé) Inter-state Road Transit Guarantee Scheme (ISRT)
The Inter State Road Transit (ISRT) Convention prescribed that goods being transported within ECOWAS be covered by a declaration document, otherwise known as the ISRT logbook.
Embraces the TIR Convention system, however, its application in the region is faulty.
CEMAC 2010 CEMAC Regulation No. 07/10-UEAC-205-CM-21 establishing regulation on legal regime of community transit and mechanism of a single security or guarantee
This instrument seeks to facilitate transit within CEMAC states by providing a mechanism for guarantees to secure payment of debt that may arise during transit. It outlines the rights and obligations of parties and steps to be taken to constitute a guarantee.
The CEMAC attempt at regional guarantees has not been successful till date.
COMESA COMESA Treaty (Annex I) RCTG Agreement (Ratified by 10 Member States) Inter-Surety Agreement (Agreement entered into among the National Sureties participating in the Scheme) PTA Road CustomsTransit Declaration Document (RCTD) and RCTG
Separates the customs declaration procedures from customs bond or guarantees. RCTG - Participating states set up national sureties which are regionally bound by signing Inter-surety agreements. The Council of Sureties manages the Scheme and an Insurance Pool underwrites the operations of the RCTG. The RCTG is acquitted in the National IT systems.
Goods transit under Customs Trade Regime while vehicles transit under the COMESA Carrier License. Both the Regional Customs Transit Document (RCTD) and the Regional Customs Transit Guarantee (RCTG) are functional in COMESA. Most of its success can be attributed to the RCTG system being handed over to the private insurance industry, as in the case of Third Party Motor Vehicle Insurance in COMESA. Burundi, Kenya, Rwanda and Uganda are participating sureties, while Djibouti, Ethiopia and DRC have shown interest.
SADC Goods in Transit Guarantee
SADC operates transit bonds which are national transit guarantees.
3.4 3.4 Third Party Motor Vehicle Third Party Motor Vehicle Insurance SystemsInsurance Systems Third party motor vehicle insurance has been one of
the most successfully translated concepts from international legal instruments into regional law.
ECOWAS-CEMAC-COMESA-SADC Insurance schemes work on the basis of cooperation between insurance companies and national bureaux responsible for managing the system.
Challenges: ◦ Claims settlement process is often unclear, tedious and
lengthy; ◦ In the event of an accident, transporters are left stranded
in the transiting country and are unable to access help even when they report to the Bureau.
◦ Language and translation barriers, ◦ falsification of insurance cards, especially within
ECOWAS.
Recommendations: Third Recommendations: Third Party Motor Vehicle Party Motor Vehicle InsuranceInsuranceMember States should adopt an
electronic system of issuance of insurance cards which will help to streamline the process and ensure the genuineness of cards issued.
Member States should also audit motor vehicle insurance companies to ensure that pending claims are settled, in line with the provisions of third party vehicle insurance.
Objective Compensation for victims of traffic accidents caused by vehicles in transitInternational Best Practices or Relevant Legal Instrument
Vehicles in Transit must have insurance coverage in every country of transit or purchase a regional third party motor vehicle insurance scheme. The regional schemes should compensate victims of traffic accidents
RECs
Instrument Key Elements Evaluation/Challenges
ECOWAS 1982 Convention A/P 2/5/1982 Regulating Inter-State Road Transport within ECOWAS ECOWAS Brown CardProtocol A/P 1/5/82 on the Establishment of an ECOWAS Brown Card
Both conventions make third party insurance mandatory and prohibit combined transport of passengers and goods in the same vehicle.
The Private sector attests to the brown card being a requirement for vehicles at all border crossings in the region. However, the claims settlement process can be lengthy in member states, as is reported in Nigeria and Ghana.
CEMAC CEMAC Third Party Motor Insurance Scheme (Pink Card)
Works on collaborative arrangement within Member States and insurance companies to secure insurance claims in the event of accident.
The CEMAC Third Party Motor Vehicle Insurance is functional
COMESA 1993 COMESA Protocol for the Establishment of a Third Party Motor Vehicle Insurance Scheme
As a requirement under Article 85 of the COMESA Treaty, the Third Party Motor Vehicle Insurance (Yellow Card) Protocol, seeks to provide minimum guarantees for vehicles required by the laws in force in Member States when a vehicle is transiting.
The Yellow Card Scheme is functional and provides coverage in all COMESA member States and pays medical costs for truck drivers in the event of an accident.
SADC SACU Fuel Levy Scheme
The fuel levy system is based on tax levied for fuel purchases
The system works well for domestic traffic because vehicles can be tracked. Fuel levy does not cover property damage
NCTA
Protocol No. 9 Third Party Motor Vehicle Insurance
The provisions of Protocol No. 9 mandate an international third party liability insurance scheme covering road carriers against all third party risks in traffic within the territory of another NCTA Contracting state.
Members of the NCTA, who are part of COMESA are covered by the Yellow Card Scheme
UMA Green Card Third Party Motor Insurance Scheme (also available to European and Mediterranean countries)
The Green Card system is based on insurance premiums
It is ideal because transporters are solely responsible for securing insurance and claims can be settled directly.
3.5 3.5 Customs Modernization Customs Modernization towards Trade Liberalizationtowards Trade LiberalizationAll RECs have realized the benefits
of intra-regional trade in principle, as is obvious through the majority being WTO members and ratifications of the GATT.
Only 30% of SSA states have ratified the 1999 Revised Kyoto Convention, which is a crucial element SSA states must consider for advancement in trade and customs matters.
Recommendation : Customs, Recommendation : Customs, Trade and Transit RegimesTrade and Transit Regimes
Member States should strive to incorporate ICT in trade facilitation reform
Interconnectivity of Customs systems will also enhance information exchange and cooperation between member states.
ECOWAS should expedite the Regional Customs Interconnectivity project
3.6 3.6 Free Movement of PeopleFree Movement of People
Updates on Free MovementIn June 2013, CEMAC Heads of States reached an agreement on the abolition of visa requirement for all CEMAC citizens effective January 1, 2014. Zambia and Tanzania recently ratified the 2005 SADC Protocol on Free Movement, which requires ratification of at least three-quarters of its member states for it to enter into force. EAC is making similar attempts through the Common Market Protocol, which is however, experiencing some delays against its targeted implementation date of 2015.
Challenges: multiple memberships to RECs, slow harmonization of national law with regional agreements, peace and security issues, fear of loss of jobs for citizens and xenophobia
Way Forward towards CFTA: The complexity of managing multiple memberships and challenges of free movement creates an opportunity for the COMESA-EAC-SADC Tripartite to lead towards convergence of regulations on immigration for a large population of Africans.
Recommendation : Free Recommendation : Free Movement of PeopleMovement of People Members of SADC who are yet to ratify the Protocol on Free Movement of People should be given a deadline to do so, such that the Protocol can enter into force.
CEMAC states should ensure implementation of the new agreement on free movement of people which will become effective on January 1, 2014
Member States within RECs should ensure uniform application of rules on visa requirements and immigration, and evolve towards regionally harmonized travel documentation.
COMESA-EAC-SADC Tripartite should leverage its existing agreement and harmonize regulations on free movement of people, in line with its fundamental goals which will further lead to increased intra-African trade.
3.73.7 Transit for Landlocked Transit for Landlocked CountriesCountries
Some Corridor Organizations and Shippers’ Councils have made an impact, but can do more!
Progress has been made through corridor organizations such as the Abidjan-Lagos Corridor Organization (ALCO), Central Corridor Transit Transport Facilitation Agency (TTFA), the Northern Corridor Transit Transport Facilitation Agency (NCTTA), and the Maputo Corridor Logistics Initiative, which is described by the private sector as one of the most successful of its kind in the region. FESARTA is also actively mediating between RECs and private sector.
Challenges: Reluctance to grant access for landlocked countries, few ratifications to international Conventions, lack of freighting options for landlocked countries, poor infrastructure from roads, port and rail
Way Forward: landlocked and transit countries which have not already done so, should make efforts to streamline movement along corridors through accession to international transit conventions ; 1965 New York Convention on Transit Trade of landlocked countries, the Montego Bay Convention and make progress on the Almaty Programme of Action.
Recommendation : Corridor Recommendation : Corridor ManagementManagement Encourage implementation of the Almaty Programme of Action (APoA) through corridor performance monitoring and diversifying transportation networks, such as investments in rail infrastructure to create freighting options for landlocked countries.
Share and Learn from successful and unsuccessful experiences in One Stop Border Posts (OSBPs) design and implementation continent wide
Replicate SADC NTB reporting system which has had some successes in Southern Africa
Member States must make a firm commitment to support corridor organizations in their efforts at improving the competitiveness of the region.
Involve the private sector in developing trade and transport facilitation programs since they are the end-users of these initiatives.
Success Story: Success Story: Tripartite NTB Reporting Tripartite NTB Reporting SystemSystem
Available in EAC, COMESA and SADC The private sector can register complaints
along the corridors regarding harassment, illicit fees or arbitrary application of rules
According to FESARTA, Over 500 complaints have been recorded, 80% from SADC region
FESARTA plays a mediation role negotiate with relevant member states to solve the road transport complaints
3.83.8 Inter-state Road Transport: Inter-state Road Transport:
Axle Load ControlsAxle Load Controls For international conventions, the 1948 Convention on the Contract of
International Carriage of Goods, 1949 Geneva Convention on Road Traffic and the 1968 Vienna Convention on Road Signs and Signals are relevant and have seen very few ratifications or accessions from SSA.
Although most RECs have successfully adopted regional vehicle standards, except for EAC, which is in the process of adopting a harmonized axle load limit, implementation is often times lacking, inconsistent and arbitrary. Additional effort must be made by member states to comply with regional standards.
Several attempts have been made within ECOWAS for intra-regional
harmonization of axle loads as specified in the ECOWAS Land Transport Programme. The general experience in ECOWAS revealed that varying axle load limits created unpredictability along journeys.
Way Forward:
Since Member states are responsible for ensuring compliance at the national level, the private sector must be given a realistic deadline for compliance, given that the short to medium term costs of compliance will be significant for businesses.
Vehicle Technical Standards Vehicle Technical Standards across RECsacross RECs
RECs Axle Load Limit Max Load
Max Length
Max Height
Max Width
Single Axle
Tandem Axle (tonne)
Triple Axle (tonne)
(Tonne) Meters Meters Meters
CEMAC 13 21 27 50 18 4 2.5
ECOWAS 11.5 21 25 56 22 4 2.5
COMESA 10 16.5 24 46 22 2.5
EAC 10 18 24 56 22 4.2 2.65
Recommendation : Inter-Recommendation : Inter-state Road Transport – state Road Transport – Regulations and Regulations and DocumentationDocumentation
EAC should speed up discussions at the legislative assembly on the Axle Load Harmonization Bill
ECOWAS: The private sector within ECOWAS should be given a reasonable deadline to comply with axle load limits in the region and begin implementation in unison.
4.4. Key Reasons for non-Key Reasons for non-Implementation of Legal Implementation of Legal InstrumentsInstruments Lack of designated institutions at the national level to follow up with
ratification process
Regional Conventions which cite international conventions which member countries have not ratified or acceded
Precedence of Bilateral Agreements over Regional Agreements
Failure to Properly Document Legal Instruments within Institutions
Lack of Knowledge and Poor Information Dissemination
Multiple memberships to RECs/ overlapping membership
Lack of Political Will
Poor Infrastructure to support Policies
Poor inter-agency coordination
Obsolete or Out-dated legal instruments
COMMON POLICY IMPLEMENTATION PROCESS BOTTLENECKS
5.5. General General RecommendationsRecommendations
Issue Action By Whom
1 Coordinate REC programs with member state activities
RECs and implementers in member states must coordinate activities to ensure that all facets of agreements signed are taken into account from the moment of their entry into force.
RECs, Member States
2 Ratify outstanding Legal Instruments
Assist countries who are yet to ratify key international conventions by publicizing the benefits of membership to legal instruments through several available studies and assessments.
UNECA, Development Partners, Member States
3 Monitor and Evaluate Progress regularly
Monitor and evaluate progress made on each instrument with a record-keeping matrix of all signed legal instruments
RECs
4 Engage the private sector by making information available
Member States should make information available on regional regulations for trade and transport, through public awareness campaigns and signs along corridors and borders.
RECs, Member States
5 Keep track of existing bilateral agreements and ensure fairness
Ensure their coexistence in the least disruptive manner with regional or international conventions. RECs should keep a well-documented catalog of all trade and transport bilateral agreements and evaluate their compatibility or otherwise with other regional or international legal instruments.
RECs, Member States
IDEAS FOR OPTIMIZING MEMBER STATE COMPLIANCE
6. 6. ConclusionsConclusions
To ensure full implementation, national governments must evaluate the suitability, adaptability and process of becoming party to international legal instruments and identify the duration and changes necessary to be in full compliance.
RECs must leverage existing opportunities in relatively functional policies, as in the case of the COMESA-EAC-SADC Tripartite. Harmonizing policies will foster convergence and ultimately create larger trading opportunities continent-wide.
Proper Documentation of Legal Instruments is Key – Allows
for dissemination, monitoring and evaluation and better coordination of efforts
Shared Responsibility in Implementation – RECs, Member States, Private Sector, Civil Society
Thanks for your attention!
