UPDATE: An Introduction to the Law of the Southern African Development Community

 

By Dunia P. Zongwe

 

Dunia P. Zongwe specializes in finance and development and in international human rights, usually focusing on Africa. He was educated at the University of Namibia (law), Université de Montréal (humanities), and Cornell University (law), where he earned a master’s degree and a doctorate (foreign investments in mining and infrastructure in Africa).

 

Published July/August 2014
See the Archive Version

 

Table of Contents

1. Introduction

1.1. Historical Background

1.1.1. The Coordinating Conference 1980-1992

1.1.2. The Community 1992-Present

1.1.3. The Free Trade Area and the Customs Union 2000-Present

1.2. Economy

1.2.1. Outlook

1.2.2. The Bumpy Road Ahead

2. SADC Law

2.1. Overview

2.2. Principles

3. The Constitution

3.1. Founding Ideals

3.2. Objectives and Obligations

3.3. Policy and Implementation Gaps

4. Areas of SADC Law

4.1. Trade and Industry

4.1.1. The Trade Protocol

4.1.2. Trade in Goods

4.1.3. Trade Measures

4.1.4. Services, Intellectual Property and Competition

4.1.5. Intra-Regional Trade and Trade with Third Parties

4.1.6. Committees, Units and the Forum

4.2. Finance and Investment

4.2.1. The Overall Picture

4.2.2. The Legal Landscape

4.2.3. The Finance Protocol

4.2.4. Investment Cooperation

4.2.5. Central Banking and Financial Markets

4.3. Mining

5. Member States

5.1. Angola

5.2. Botswana

5.3. Democratic Republic of the Congo (DRC)

5.4. Lesotho

5.5. Madagascar

5.6. Malawi

5.7. Mauritius

5.8. Mozambique

5.9. Namibia

5.10. Seychelles

5.11. South Africa

5.12. Swaziland

5.13. Tanzania

5.14. Zambia

5.15. Zimbabwe

6. Main Institutions

6.1. The Summit

6.2. The Council and the Standing Committee

6.3. The Secretariat

7. Dispute Settlement and the Tribunal

7.1. The Panel Procedure

7.2. The Tribunal

7.2.1. Composition

7.2.2. Jurisdiction

7.2.3. Trade Disputes

7.3. The Tribunal in the Campbell case

7.3.1. Campbell v. Zimbabwe

7.3.2. The Suspension of the Tribunal

8. Resources

8.1. Publications

     8.2. Online Resources   

 

1. Introduction

The Southern African Development Community ( SADC ) is a regional economic community composed of 15 countries in Southern Africa (member states), namely Angola, Botswana, the Democratic Republic of the Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. SADC is thus in theory an arrangement that reduces or rules out trade barriers between member states while leaving in place barriers against imports from outside regions. The market and population size of SADC is estimated at 289 million. The official languages of SADC are English, French and Portuguese.

 

1.1.          Historical Background

 

1.1.1. The Coordinating Conference 1980-1992

The Southern African Development Co-ordination Conference (SADCC) is the ancestor of the present-day SADC. Nine countries in Southern Africa founded the SADCC in Lusaka (Zambia) on April 1, 1980 by adopting the ‘Lusaka Declaration – Southern Africa: Towards Economic Liberation – A Declaration by the Governments of Independent States of Southern Africa.’ The nine SADCC majority-ruled founding countries were Angola, Botswana, Lesotho, Malawi, Mozambique, Swaziland, Tanzania, Zambia and Zimbabwe.

 

In 1977, representatives of the Frontline States engaged in consultations. ‘Frontline States’ was the name given to the group of Southern African states (i.e. Angola, Botswana, Mozambique, Tanzania and Zambia) that set out to bring about black majority rule in South Africa. In May 1979, in Gaborone (Botswana), foreign affairs ministers of the Frontline States met and agreed that ministers responsible for the economy in the Frontline States should convene a meeting, which they did two months later in Arusha (Tanzania). The Arusha meeting that took place the following year on April 1, 1980 in Lusaka (Zambia) paved the way for the birth of SADC. The Frontline States movement ceased operations following the advent of democratization in South Africa in 1994.

 

The initial purpose of the SADCC was twofold: To coordinate development projects in an attempt to promote collective self-reliance by shaking off the economic dependence of SADCC members on apartheid and White minority-ruled South Africa as well as other countries; and to implement projects with national and regional impact. Stated differently, SADCC was originally conceived as the economic arm of the struggle for the liberation of Southern Africa from colonial and white minority rule, and not as the key instrument of regional economic integration that it later became.

 

1.1.2. The Community 1992-Present

Member states turned SADCC into SADC in 1992 in Windhoek (Namibia) and adopted the Windhoek Declaration and the Treaty establishing SADC. The meeting in Windhoek elevated the basis of cooperation among member states from a loose association to a legally binding agreement. [ [1] ] The express purpose of the transformation from SADCC to SADC was to deepen economic cooperation and integration in order to undo the factors that stop member states from sustaining economic growth and socio-economic development. [ [2] ] The small size of individual markets, inadequate infrastructure and the cost of providing this infrastructure, and low-income made it difficult for member states individually to bring in investments necessary for sustained growth. [ [3] ]

 

Prompted by concerns for greater coherence and better coordination, member states overhauled SADC in March 2001 at an extraordinary meeting Summit in Windhoek. Important decisions at that meeting include the classification of the 21 sectors of SADC into four clusters under four directorates of the SADC Secretariat, and the establishment of SADC national committees to articulate their respective individual member state interests with respect to SADC. The Summit also approved the preparation by the Secretariat of a Regional Indicative Strategic Development Plan. Another decision was to institutionalize – for the first time since the end of the Frontline States movement – security and political cooperation in the Organ on Politics, Defense and Security (Defense Organ). In that sense, the Defense Organ is the descendant of the Frontline States.

 

1.1.3. The Free Trade Area and the Customs Union 2000-present

The Regional Indicative Strategic Development Plan ( http://www.sadc.int/files/5713/5292/8372/Regional_Indicative_Strategic_Development_Plan.pdf ), SADC’s regional integration policy framework, plans for SADC to form a free trade area by 2008 and a customs union by 2010. The formation of a free trade area dates back to 2000. Member states began to join the SADC Free Trade Area gradually. The first to join the area were the Southern Africa Customs Union ( SACU ) members, which are Botswana, Lesotho, Namibia, South Africa and Swaziland. Madagascar, Mauritius and Zimbabwe then fell in the free trade area. In 2008, Malawi, Mozambique, Tanzania and Zambia formally integrated the free trade area. Only Angola, the DRC and Seychelles have not yet joined the free trade area, although it is anticipated they will do so in the course of time.

 

In October 2008, a Tripartite Summit of Heads of State or Government from SADC, the East African Community (EAC) and the Common Market of Eastern and Southern Africa (COMESA) agreed in Kampala (Uganda) to set up the African Free Trade Zone, a free trade zone with EAC and COMESA. To complement the SADC free trade area, the Summit deliberated in August 2013 in Dar es Salaam (Tanzania) on the formation of a customs union in SADC. In 2010, an attempt was made by SADC to form a customs union, but the decision to form a customs union was eventually postponed.

 

1.2. Economy

                                                               

1.2.1. Outlook

Of all the regional economic communities, the economy of SADC is the largest. It comprises roughly 289 million people, speaking English, French and Portuguese as one of their official languages. Most member states forged and maintain variously strong political, historical and cultural ties. The region also comprises 15 heterogeneous states, at different stages of development, though mostly underdeveloped; still two thirds of SADC economies consist of middle-income countries.

 

Table 1: SADC Member States by Income Levels

 

Rank

SADC country

Income level

Income bracket

(Income per Capita in US Dollars)

1

Seychelles

Upper-middle income

Between 4,086 and 12,615

2

Botswana

3

Mauritius

4

South Africa

5

Namibia

6

Angola

7

Swaziland

Lower-middle income

Between 1,036 and 4,085

8

Lesotho

9

Zambia

10

Tanzania

Low income

Between 1,035 and 0,0

11

Mozambique

12

Madagascar

13

Malawi

14

Zimbabwe

15

Dem. Rep. Congo

 

Source: World Bank (2014); Central Intelligence Agency, World Factbook (2013) .

 

 

The national economies exhibit different growth rates, reflecting different resource endowments and economic sizes (See Table 3 below). The gross domestic product (GDP) of SADC, the largest regional economic community by GDP and gross income in Africa, is in excess of 767 billion US dollars in 2014, which placed the economy of the SADC region above the Saudi Arabian economy but below that of the Netherlands. Thus, the SADC economy is the 19 th in the world.

 

Table 2: Size of SADC economy

 

No.

SADC country

GDP

(in Million

US Dollars)

Rank in Africa

(Out of 54

Countries)

World Rank

(out of 187

Countries)

1

South Africa

460,326

1

29

2

Angola

133,099

5

60

3

Tanzania

29,737

13

92

4

Zambia

24,807

17

103

5

Dem. Rep. Congo

20,457

19

108

6

Botswana

18,672

21

115

7

Mozambique

17,474

22

116

8

Namibia

14,211

25

121

9

Mauritius

12,403

27

124

10

Zimbabwe

12,054

31

130

11

Madagascar

12,032

32

132

12

Malawi

6,342

37

150

13

Swaziland

3,888

41

155

14

Lesotho

2,951

44

159

15

Seychelles

1,036

49

170

Total

767,489

 

 

 

Source: International Monetary Fund .

 

 

Figure 1: GDPs in SADC (except for Angola and South Africa)

 

 

Source: International Monetary Fund, World Economic Outlook (October 2013) .

 

The International Monetary Fund (IMF) projects that the SADC economy will reach 868 billion US dollars in 2018 from 767 billion US dollars in 2014 (see Table 3 below), that is, an increase by about 11%. It also estimates that during that four-year period a few changes will occur in the relative economic size of some member states. Mozambique will overtake Botswana while the Namibian economy will be surpassed by that of Mauritius and Zimbabwe. Malawi will be the only economy in the region experiencing a decline (see Figure 1, Table 2 and Table 3).

                        

Table 3: Projected size of the SADC economy (2018)

 

No.

SADC country

GDP

(in Million

US dollars)

1

South Africa

464,285

2

Angola

169,153

3

Tanzania

45,767

4

Zambia

33,296

5

Dem. Rep. Congo

29,108

6

Mozambique

25,040

7

Botswana

19,231

8

Mauritius

17,161

9

Zimbabwe

16,630

10

Namibia

16,603

11

Madagascar

16,052

12

Malawi

5,708

13

Swaziland

5,089

14

Lesotho

3,591

15

Seychelles

1,725

Total

868,439

 

Source: International Monetary Fund .

 

 

SADC is predominantly an exporter of primary commodities. Ninety percent of SADC exports consist of mineral and agricultural commodities. SADC exports about 53% of vanadium, 49% of platinum, 40% of chromite, 36% of gold, 50.1% of diamonds and 20% of cobalt. [ [4] ] SADC member states depend on these exports for foreign exchange earnings, investment and wealth creation. On the other hand, SADC mainly imports capital and intermediate goods, which only South Africa and, to a much lower extent, Zimbabwe has the capacity to produce.

 

1.2.2. The Bumpy Road Ahead

The road to full SADC regional integration is a bumpy one. In the SADC region as in other regional economic communities, regional trade and integration arrangements have to grapple at varying degrees with three issues: The powers of regional institutions, the effect of their decisions, and dispute resolution. [5] Insofar as regional integration is both the primary reason and ultimate goal of SADC, the Southern African regional economic community is miles away from realizing its own logic and purpose.

 

From the table below, it is evident that the most prominent SADC member states (i.e. South Africa, Angola and Tanzania) are integrated more into non-SADC economies, primarily China and the United States (SADC’s two largest trading partners), than into SADC economies. Nonetheless, South Africa accounts for the greatest volume of intra-regional trade. These data show that SADC has a very long road to walk before full regional integration can become reality.

 

Table 4: Degree of Regional Integration

 

 

3 Largest Export Partners

3 Largest Import Partners

South Africa

China

11.8 %

US

8.03 %

Japan

6 %

China 14.44 %

Germany

10.01 %

Saudi Arabia

7.7 %

Angola

China

46.03 %

US

13.9 %

India

10.1 %

China

18.71 %

 

Portugal

19.5 %

US

7.7 %

Tanzania

India

15.2 %

China

11.1 %

Japan

6.2 %

China

21.3 %

India

16.3 %

South Africa

6.4 %

Zambia

China

43.4 %

South Africa

7.2 %

D.R. Congo

6.7 %

South Africa

36.7 %

D.R. Congo

19.8 %

China

10.4 %

Dem. Rep. Congo

China

54.3 %

Zambia

22.6 %

 

Belgium

5.7 %

South Africa

22.3 %

China

15.3 %

 

Belgium

8 %

Botswana

N/A

N/A

N/A

N/A

N/A

N/A

Mozambique

South Africa

31.3 %

Belgium

12.8 %

China

9 %

South Africa

30.5 %

China

12.3 %

India

11.6 %

Namibia

N/A

N/A

N/A

N/A

N/A

N/A

Mauritius

UK

19.3 %

 

France

16.4 %

US

9.9 %

India

23.1 %

China

16 %

 

France 8.5 %

Zimbabwe

China

21.1 %

South Africa

15.1 %

D.R. Congo

12.1 %

 

South Africa

51.9 %

China

10 %

N/A

Madagascar

France

23.4 %

China

6.6 %

US

6.6 %

China

17.7 %

France 14.4 %

South Africa 5.3%

Malawi

Canada

10.6 %

Zimbabwe

9.3 %

Germany 7.3 %

South Africa 27 %

China

16.6 %

India

8.7 %

Swaziland

N/A

N/A

N/A

N/A

N/A

N/A

Lesotho

N/A

N/A

N/A

N/A

N/A

N/A

Seychelles

France

27.7 %

UK

17.6 %

Japan 15.2 %

Saudi Arabia 24 %

Spain

12.1 %

France

5.9 %

 

Source: Central Intelligence Agency, World Factbook (2013)

 

Compared with the trade picture in 2011, a number of interesting developments stand out in 2014. Most remarkably, China has greatly intensified its economic exchanges and has thereby consolidated its position as the largest trading partner in the Southern African community, especially in South Africa, Angola, Tanzania, Zambia, the DRC, Zimbabwe and Madagascar. It also deepened its trade with Mozambique and Mauritius, albeit to a lesser degree. On China’s trail, India made modest gains in trade while the United States (US) has witnessed a relative decline of its commercial activities in SADC. Last but not least, there has been a perceptible increase in intra-regional trade. A case in point is the increased export and import activities between Zambia and the DRC.

 

A second challenge that confronts SADC is the membership of its member states to other regional economic communities. The problem of multiple memberships is more acute in SADC and in east Africa. [ [6] ] For example, Tanzania belongs to SADC, the EAC and COMESA; Swaziland belongs to SACU, SADC and COMESA. The SADC Treaty does not prevent its member states from staying in regional groupings that they joined prior to their accession to the SADC Treaty, but the obligations of the distinct and separate communities are sometimes conflicting and often redundant. Membership to other regional economic blocs may be seen as undermining the principal objectives of SADC. Nevertheless, the leaders of SADC, the EAC and COMESA believe that the African Free Trade Zone will solve the problem created by multiple memberships and regional cooperation schemes – a ‘promising’ initiative that may not offer much hope of a short-term solution. [7] Third, some member states, notably Angola, Namibia and South Africa, have voiced concern over the damaging impact of a controversial economic partnership agreement (EPA) with the European Union on regional integration processes.

 

 

2. SADC Law

 

2.1. Overview

‘SADC law’ refers to the body of principles, rules and institutions adopted and created by SADC as a regional economic organization in order to foster regional integration and development in the states parties to the SADC Treaty (i.e. member states). SADC law is yet to be entrenched in the curricula of law faculties, legal literatures and public discourses in Africa. The launch of the SADC Law Journal in 2011 was a welcome and huge step towards the entrenchment of SADC law. This introduction to SADC law should be seen along the same lines as an effort to establish SADC law as a distinct field of law in its own right.  It aims to be a general reference for SADC law.

 

Most of SADC law is binding on member states. Article 6(5) of the SADC Treaty places a duty on all member states to accord the SADC Treaty the force of national law. Article 6(5) implies that legal and natural persons must be able to invoke the SADC Treaty in domestic courts, though no party has apparently done it thus far. [8] It remains unclear whether the Treaty should prevail over national laws in case of conflict between the Treaty and national laws. An argument could be made – on the basis of the 1969 Vienna Convention on the Law of Treaties – that a party to a treaty may not rely on the existence of conflicting provisions in internal law to avoid its obligations under the treaty it voluntarily ratified. Put another way, community law should supersede the internal laws of member states, except their constitutions. Otherwise, states would water down international law obligations as they would be able to avoid them by passing national legislation.

 

SADC legislation is binding only on the states that are party thereto and, once ratified or acceded to, it does not allow for any reservations by the ratifying state. This provision strengthens national policy reform. A member state may withdraw from SADC by serving a written notice of its intention a year in advance to the Chair of SADC, who must inform other member states accordingly. SADC law also comprises non-binding legal instruments, such as model laws and memoranda of understanding (MOUs). These non-binding instruments, or soft law, are usually complex regimes of default rules that SADC member states are free to leave in place or modify to suit local realities but that they tend or are encouraged to adopt as these rules ease the way people do business.

 

The Treaty and its protocols are the two primary formal sources of SADC law. The Regional Indicative Strategic Development Plan ( http://www.sadc.int/files/5713/5292/8372/Regional_Indicative_Strategic_Development_Plan.pdf ), the most powerful soft law in SADC, is the policy framework for the regional integration of SADC. It is not legally binding. Anyway, it is highly persuasive and enjoys considerable political legitimacy. The RISDP envisions that SADC will have a free trade area by 2008 (a target it has achieved), a customs union by 2010 (a target not yet achieved), a common market by 2015, and an economic union by 2018. Other sources of SADC law include international law and resolutions of SADC.

 

The SADC Tribunal must develop SADC’s own jurisprudence with due regard to (1) applicable treaties, (2) the general principles and rules of public international law and (3) the laws of member states (article 21(b) of the Tribunal Protocol). The three sources for the development of SADC jurisprudence largely duplicate the sources of public international law. Scholarly writings by highly regarded authors are not binding. Given that the SADC community comprises common law (mainly) and civil law countries, it is an unanswered question whether the dispute resolution system of SADC will follow the common law tradition of judicial precedents. The Tribunal, inaugurated by SADC in 2005, has not decided enough cases to tell if case law is a source of SADC law.

 

SADC law organizes the Southern African economic community around nine institutions, namely (1) the Summit of Heads of State or Government (Summit); (2) the Organ on Politics, Defense and Security (Defense Organ); (3) the Council of Ministers (Council); (5) the Integrated Committee of Ministers; (6) the Standing Committee of Officials (Standing Committee); (7) the Secretariat; (8) the Tribunal; and (9) SADC national committees (SNCs). The Summit is the highest political body of SADC; the Defense Organ is entrusted with peace and stability in the region; the Council superintends the operations of SADC; the Standing Committee advises the Council; the Secretariat executes SADC policies; SNCs represent individual national interests in SADC; and the Tribunal provides a forum for the settlement of disputes concerning the interpretation and application of the SADC Treaty, protocols and other relevant legal instruments.  

 

The main areas of SADC law are trade, industry, finance, investment, agriculture, infrastructure, services, natural resources, human development and security. The SADC Treaty calls upon member states to cooperate in all areas necessary to realize regional integration and development on the basis of balance, equity and mutual benefit. Member states must, through the appropriate SADC institutions, coordinate, rationalize and harmonize their overall macroeconomic and sectoral policies in the various areas of SADC law.

 

SADC member states cooperate in each area of SADC law by dint of protocols. Protocols to the Treaty are the legislative acts of SADC. Their role is to spell out the objectives and scope of, and institutional mechanisms for, regional integration and co-operation. The Summit approves protocols on the recommendation of the Council.

 

SADC has enacted protocols on:

  1. trade: http://www.sadc.int/files/4613/5292/8370/Protocol_on_Trade1996.pdf ;  
  2. finance and investment : http://www.sadc.int/files/4213/5332/6872/Protocol_on_Finance__Investment2006.pdf ;
  3. mining : http://www.sadc.int/files/3313/5292/8366/Protocol_on_Mining.pdf ;
  4. energy : http://www.sadc.int/files/3913/5292/8363/Protocol_on_Energy1996.pdf ;
  5. forestry : http://www.sadc.int/files/9813/5292/8364/Protocol_on_Forestry2002.pdf ;
  6. fisheries : http://www.sadc.int/files/5613/5292/8363/Protocol_on_Fisheries2001.pdf ;
  7. politics, defense and security cooperation : http://www.sadc.int/files/3613/5292/8367/Protocol_on_Politics_Defence_and_Security20001.pdf ;
  8. transport, communication and meteorology : http://www.sadc.int/files/7613/5292/8370/Protocol_on_Transport_Communications_and_Meteorology_1996.pdf ;
  9. shared watercourse systems : http://www.internationalwaterlaw.org/documents/regionaldocs/Revised-SADC-SharedWatercourse-Protocol-2000.pdf ;
  10. education and training : http://www.sadc.int/files/3813/5292/8362/Protocol_on_Education__Training1997.pdf ;
  11. health : http://www.sadc.int/files/7413/5292/8365/Protocol_on_Health1999.pdf ;
  12. the movement of persons : http://www.sadc.int/files/9513/5292/8363/Protocol_on_Facilitation_of_Movement_of_Persons2005.pdf ;
  13. culture, information and sport : http://www.ehu.es/ceinik/tratados/11TRATADOSSOBREINTEGRACIONYCOOPERACIONENAFRICA/113SADC/IC11313ING.pdf ;
  14. tourism : http://www.sadc.int/files/2413/5292/8368/Protocol_on_the_Development_of_Tourism1998.pdf ;
  15. wildlife conservation : http://www.sadc.int/files/4813/7042/6186/Wildlife_Conservation.pdf ;
  16. corruption : http://www.sadc.int/files/7913/5292/8361/Protocol_Against_Corruption2001.pdf ;
  17. firearms and ammunition : http://www.sadc.int/files/8613/5292/8361/Protocol_on_the_Control_of_Firearms_Ammunition2001.pdf ;
  18. illicit drugs : http://www.issafrica.org/cdct/mainpages/pdf/Money%20Laundering/International%20Instruments/Protocols/SADC%20Protocol%20on%20Combating%20Illicit%20Drugs.pdf ;
  19. extradition : http://www.sadc.int/files/3513/5292/8371/Protocol_on_Extradiction.pdf ;
  20. legal assistance in criminal matters : http://www.sadc.int/files/8413/5292/8366/Protocol_on_Mutual_Legal_Assistance_in_Criminal_Matters_2002.pdf ;
  21. immunities and privileges : http://www.ehu.es/ceinik/tratados/11TRATADOSSOBREINTEGRACIONYCOOPERACIONENAFRICA/113SADC/IC1132ING.pdf ;
  22. legal affairs : http://www.sadc.int/files/3513/5292/8366/Protocol_on_Legal_Affairs2000.pdf ; and
  23. the SADC Tribunal : http://www.sadc.int/files/1413/5292/8369/Protocol_on_the_Tribunal_and_Rules_thereof2000.pdf .

 

2.2. Principles

From the specific rules regulating SADC and its member states emerge a few general principles. The following list indicates some outstanding principles, even if it is not exhaustive.

 

  1. Non-discrimination: the foundational principle of SADC trade law is that member states must conduct trade among themselves without discrimination. The most-favored nation and national treatment principles are two manifestations of non-discrimination.

 

  1. Most-favored nation: member states must apply their tariff rules to all other member states without discrimination.

 

  1. National treatment: member states must accord to goods traded within SADC the same treatment as to goods produced nationally in respect of all laws affecting their internal sale, distribution or use.

 

  1. WTO law as normative background: SADC is a ‘free trade area’ within the meaning of the WTO. It is, in terms of Article XXIV (8) (b) of the 1994 General Agreements on Tariffs and Trade ( GATT ), an exception to the most-favored nation rule. Thus, SADC must comply with the relevant requirements of GATT as well as the Enabling Clause (which permits trading preferences in favor of developing countries) and Article V of the 1995 General Agreement on Trade in Services ( GATS ). It is not possible to fully understand SADC law without a working knowledge of WTO law. To be sure, all SADC member states, except Seychelles, are at the same time WTO members.

 

  1. Removal of trade barriers: member states must remove or reduce tariffs, import and export duties, non-tariff barriers and quantitative import and export restrictions. These measures aim at guaranteeing market access.

 

  1. Protection through tariffs: member states may protect their domestic industries only through the use of tariffs.

 

  1. International standard: member states may use applicable international standards when setting technical standards, except where these standards would be ineffective and inappropriate in achieving the legitimate objectives of member states. Insofar as SADC law duplicates or replicates international standards, including WTO provisions, SADC should seriously consider briefly summarizing its texts or reducing them to simple references to the corresponding international texts. This move will simplify the language of SADC legal texts and facilitate the deployment of personnel with expertise in WTO law and other relevant fields in the diverse areas of SADC law, thereby saving the additional resources that duplications ordinarily entail.

 

  1. Financial cooperation: member states must cooperate and coordinate their policies and strategies in investment, taxation, central banking and regional capital and financial markets with a view to the achievement of economic development and poverty eradication.

 

  1. Mining for development: mining sector activities must contribute to economic development, poverty alleviation, and the amelioration of the standard and quality of life throughout SADC.

 

  1. Decisions by consensus: subject to a few exceptions, the institutions of SADC must arrive at decisions by consensus. This is particularly the case for the Summit, the Council, the Standing Committee of Officials, and the institutions brought about by the Mining Protocol. Consensus reinforces the legitimacy of decisions, yet it carries the risk of a hold-out, which may be described as a situation where a party with veto power in a group of persons withholds or withdraws consent to an action that would otherwise benefit the entire group. The consensus requirement effectively gives each SADC member state the power to veto decisions, even those that are clearly beneficial to all SADC member states aside from the vetoing state.  

 

 

3. The Constitution

Member states drew up and adhered to the treaty of the SADC community in 1992. The Treaty came into force the following year. The SADC Treaty , amended several times, is the founding treaty, the constitution of SADC. It is the fundamental norm, the first organic law of SADC. It enunciates the founding ideals and principles of SADC, states the objectives and obligations of member states, and establishes the institutions that implement the ideals, principles, objectives of SADC. In short, it frames and shapes big-picture issues.

 

3.1. Founding Ideals

Regional integration, economic development and people-centeredness thrust themselves into attention as ideals of the SADC community. Cooperation, both regional and international, is deployed to attain those ideals. Those ideals and the means to attain them are visible in the preamble of the SADC Treaty, which outlines the philosophy behind the creation of the SADC community. Furthermore, since the SADC Treaty is a ‘treaty’ within the meaning of Article 2(1) (a) of the 1969 Vienna Convention on the Law of Treaty, it must be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the Treaty in light of its object and purpose (Article 31(1) of the 1969 Vienna Convention). The ideals formulations state the philosophy, the context, the objects and purposes of the Treaty, which in turn serve as aids to the interpretation of the SADC Treaty.

 

In creating the community, the member states had the resolve to meet the challenges of globalization and to ensure, through common action, the progress and well-being of the peoples of Southern Africa. They felt a collective responsibility to promote the interdependence and integration of national economies for the harmonious, balanced and equitable development of the community. They also felt a responsibility to mobilize resources, regional and international, to promote national, interstate and regional policies, programs, and projects within the framework of regional integration. They recognize that, in an increasingly interdependent world, mutual understanding, good neighborliness and meaningful cooperation among the countries in the community are indispensable to the realization of the ideals of the SADC community.

 

SADC puts people in the community at the center of its preoccupation and action. It tries to involve people centrally in the process of development and integration, which is why it emphasizes democratic rights, human rights, and the rule of law and poverty alleviation. Deeper regional integration and sustainable economic growth and development are the means by which SADC will concretize its ideals. For that purpose, SADC is dedicated to securing international understanding, support and cooperation; observing the principles of international law governing relations between states; and taking into account the various legal instruments adopted at the continental level. The continental legal instruments to which SADC subscribes are the Lagos Plan of Action (on Africa’s self-sufficiency) and the Final Act of Lagos of 1980 (on the establishment of an African Economic Community by 2000); the Treaty on the establishment of an African Economic Community ( http://www4.worldbank.org/afr/ssatp/Resources/HTML/legal_review/Annexes/Annexes%20III/Annex%20III-03.pdf ) ; and the Constitutive Act of the African Union ( http://www.au.int/en/sites/default/files/ConstitutiveAct_EN.pdf ) .    

 

Some principles of the SADC community transcend the narrowly defined interests of regional integration and economic development. Those principles are sovereign equality; solidarity, peace and security; human rights, democracy, and the rule of law; equity, balance, and mutual benefit; and peaceful settlement of disputes.

 

3.2. Objectives and Obligations

SADC has set for itself the achievement of a number of key objectives. The overarching goal running as a thread through these key objectives is the promotion of socio-economic development and the forging of common values and a common agenda. The key objectives of SADC are first to promote sustainable and equitable economic growth and socio-economic development to alleviate poverty, to enhance the standard and quality of life of the people in Southern Africa and support the socially disadvantaged through regional integration. The objectives of SADC are, second, to promote common political values, systems and other shared values, which are transmitted through democratic, legitimate and effective institutions. A third objective of the SADC community is to consolidate, defend and maintain democracy, peace, security and stability.

 

A fourth objective is to promote the interdependence of member states and self-sustaining development on the basis of collective self-reliance. Further, SADC has the objective to achieve complementarity between national and regional strategies and programs; and to promote and maximize productive employment and the utilization of resources of the community. It plans to achieve sustainable utilization of natural resources and effective protection of the environment. Finally, SADC plans to strengthen long-standing affinities and links among the peoples of the region; to combat HIV and other communicable diseases; and to mainstream gender in the community building process and poverty alleviation in all activities.     

 

It has been said that the objectives and targets of SADC are lofty, unrealistic and ‘overambitious’. [9] This criticism holds a lot of water. Although prime objectives are ambitious by nature, expressing as they do the desirability of the idealized worlds they imagine, a healthy dose of realism should act as constraints on the level of ambition displayed in the formulation of objectives.

 

In order to fulfill its objectives, however broad, SADC commits to take certain measures with respect to the peoples of SADC, the regional economies and international affairs. Regarding the peoples of SADC, it encourages peoples in the region and their institutions to take initiatives to develop economic, social and cultural ties across the region and to participate fully in the implementation of programs and projects of SADC. It promotes the development of human resources and technology, including the mastery and transfer of technology.

 

With respect to regional integration, SADC commits to improve economic management and performance through regional co-operation and to harmonize political and socio-economic policies and plans of member states. As states move towards deeper regional integration, the need for effective policy harmonization become pressing. Fragmentation would follow if individual member states were free to follow different approaches and apply different rules with regard to substantive issues governed by SADC law. [10] Fragmentation would defeat the purpose of the whole economic integration exercise. [11]

 

SADC undertakes to build appropriate institutions and mechanisms for the mobilization of requisite resources for the implementation of programs and operations of SADC and its institutions. It also undertakes to develop policies aimed at the progressive elimination of obstacles to the free movement of capital and labor, goods and services, and of peoples in the region. Concerning international affairs, SADC must harmonize and coordinate the international relations of member states; secure international understanding, co-operation and support; and mobilize the inflow of public and private resources into the community.

 

The achievement of the key objectives of the community requires that member states perform certain obligations over and above the measures they intend to take in terms of the SADC Treaty. Naturally, the first obligation of member states is to adopt adequate measures for the achievement of the key objectives of SADC and the uniform application of the Treaty. The corollary of this obligation is the duty to refrain from taking any measure likely to jeopardize the achievement of SADC’s key objectives or the implementation of the provisions of the SADC Treaty. The SADC Treaty imposes an obligation on member states not to discriminate against any other member states or against any person in member states on the grounds of gender, religion, political views, race, ethnic region, culture, ill-health, disability and such other ground as may be determined by SADC.

 

3.3. Policy and Implementation Gaps

SADC law is fraught with a whole slew of deficiencies at both policy and implementation levels. At the policy level, the vast body of SADC rules and principles is not a perfectly coherent and systematic corpus. It is built in a piecemeal, incremental fashion. Equally disturbing is the vague formulation of legal instruments, which may breed disputes and compromise the very principle of legality. The ambiguous language found in myriad provisions in SADC law adds to the perception that SADC law-making is not holistic. Moreover, SADC will have to figure the extent to which it is wise to copy provisions from relevant WTO Agreements and the space it needs to spare for provisions of SADC law that must speak to the local and particular circumstances in the Southern African community. That said, SADC is a relatively young regional economic community and trade arrangement. When evaluating SADC law, in mind should be kept the fact that SADC is, due to its youth, still experimenting with its policies and their implementation. As regards the vague language of SADC legal instruments, it consciously or unwittingly gives room and flexibility to member states rather than restraining their ability to legislate and act within the framework of SADC law.

 

Political considerations seem to take over economic and legal concerns. It is fair to say that, regarding economic integration, economics should precede law. Some jurists are of the opinion that a successful economic policy can only be devised by properly trained economic experts; the legal experts intervene later on to transform the economic goals into binding legal instruments. [12] Other jurists think otherwise. [13] Whatever the position one prefer to hold and while it may be somewhat understandable that the economic integration process, which is political at core, will often give priority to political considerations and democratic pressures over matters such as purely legal requirements; it is an expensive strategic mistake to readily sacrifice economic rationality and the long-term economic benefits of regional integration. The decision to disband the SADC Tribunal is one example of such strategic miscalculations.

 

Regional integration in SADC is further hampered by difficulties in applying the occasionally defective community policies. First, hastily and ‘loosely drafted’ legal instruments complicate implementation and compliance with community laws. [14] SADC suffers from capacity limitations too, including a lack of financial, material and human resources.

 

Legions of observers see a serious flaw in the SADC regional trade arrangement through the failure by the SADC Summit of Heads of State and Government to pressure Zimbabwe into complying with the decisions of the SADC Tribunal. The flaw is that compliance with the Tribunal’s decisions is not properly monitored and that no penalties avail for non-compliance. [15] This capacity weakness may be seen as a reflection of the resistance by member states against relinquishing part of their sovereignty to SADC, a feeling that may be behind the deplorable decision by the Summit to suspend temporarily the Tribunal in 2010 following the Campbell v. Zimbabwe saga. With the suspension of the Tribunal at the behest of Zimbabwe, a bad precedent has been set that might encourage other member states to brandish the principle of sovereignty to trump the SADC law obligations they willingly and knowingly assumed. [16] It is indicative of a propensity to put national law before or above community law. [17]

 

Finally, the SADC Tribunal has not yet heard a trade dispute. This situation may be explained by a lack of awareness of the SADC dispute settlement system, negative attitudes towards litigation, the absence of national legal arrangements on trade remedies (except for South Africa), or the actual neglect by member states regarding the incorporation of SADC law into domestic law. [18] These factors may in turn point to an underlying omission, that is, the absence of a carefully-thought-out policy about the distribution of costs and the sharing of burdens between supranational and national institutions, on the one hand, and among member states, on the other. The SADC Mining Protocol is one glaring exception in view of its simple provision on member states bearing each their own costs in mining matters.

 

 

4. Areas of SADC Law

 

4.1. Trade and Industry

Article 12 of the SADC Treaty, as amended, lists the following as the eight ‘core areas of integration':

1.      trade, industry, finance and investment (TIFI);

2.      Infrastructure and service (I&S);

3.      Food, agriculture and natural resources (FANR); and

4.      Social and human development and special programs (S&HD&SP).

 

The most important area of SADC law is trade. Trade is part of the trade, industry, finance and investment (TIFI) cluster of the Regional Indicative Strategic Development Plan (RISDP). The four parts of TIFI are connected as they all positively impact development and poverty alleviation in SADC. SADC links – through its protocol on trade – trade, industry, finance and investment. The trade protocol links trade liberalization to a process of viable industrial development and cooperation in finance and investment.

 

The principal challenge of SADC is the establishment of a common market within a reasonable time in order to increase the share of SADC exports in global trade. SADC views regional trade as a tool for sustainable economic development to handle this challenge as trade enables deeper regional integration and cooperation, and stimulates growth. Regional trade offers a viable alternative to the broken promises of globalization and the WTO.

 

SADC tries to address supply side constraints and industrial competitiveness. It also tries to mitigate the incidence of the reduction of tariffs on the development of smaller, landlocked and less developed member states. As one scholar observed, SADC subscribes to the principle of ‘variable geometry’ or ‘multi-speed integration’, which holds that member states that are willing and able can move on to achieve even deeper levels of integration in some areas. [19]  

 

Globalization – from competitiveness to industrial and product diversification, to productivity – poses a formidable trial of strength to the industrial sector in SADC. That is the reason why SADC industrial policies target the promotion of exports and industrial linkages, efficient import substitution, the improvement of investment climate, and the facilitation of imports of essential goods. The outcomes sought by these policy targets are the enhancement of industrial support services, the equitable distribution of industrial activity and the adoption of flexible market-oriented exchange rates.

 

4.1.1. The Trade Protocol

The 1996 Protocol on Trade ( http://www.sadc.int/files/4613/5292/8370/Protocol_on_Trade1996.pdf ) recognizes that an integrated regional market opens up new opportunities for a dynamic business sector. The Protocol on Trade in the Southern African Development Community (Trade Protocol) also takes into account the 1986-1994 Uruguay Round of Multilateral Trade Negotiations on global trade liberalization. It is the materialization of the desire expressed in the Treaty on the establishment of an African Economic Community (the Abuja Treaty) to put in place sub-regional groupings as building blocks for the creation of an African Economic Community. It provides a framework of trade cooperation anchored to equity, fair competition and mutual benefit that SADC believes will contribute to the emergence of a workable development community in Southern Africa. Twelve of the then 14 member states signed on 24 August 1996 the Trade Protocol, which came into force on 25 January 2000. The Protocol was notified to the WTO by Tanzania in 2004.

 

The primary objective of the Trade Protocol is to further liberalize intra-regional trade in goods and services on the basis of fair, mutually equitable and beneficial trade arrangements, complemented by protocols in other areas. Given the economic inequalities among SADC member states, the Protocol categorizes goods into three classes for the purposes of tariff reduction: Goods A, for which tariffs must be eliminated (i.e. liberalized) immediately; goods B, which must be liberalized progressively; and goods C, which will be liberalized last as they encompass goods that are strategic and/or sensitive to individual member states. [20]

 

Another objective is to ensure efficient production within SADC that leverages the comparative advantages of member states. SADC also plans to improve investment climate; enhance economic development, diversification and industrialization; and form a free trade area in the region.

 

Directly drawing many of its provisions from WTO Agreements, the Trade Protocol applies to a vast realm of commercial matters. It covers trade in goods (Part 2); customs procedures (Part 3); trade laws (Part 4); trade related investment measures (Part 5); trade in services, intellectual property rights, and competition policy (Part 6); and trade development (Part 7). Apart from these substantive issues, the Protocol covers trade relations among member states and with non-member states (Part 8) as well as institutional arrangements and dispute resolution (Part 9). Five annexes implementing the Protocol address rules of origin (Annex I), customs co-operation (Annex II), simplification and harmonization of trade documentation and procedures (Annex III), transit trade and facilities (Annex IV), and trade development (Annex V).

 

4.1.2. Trade in Goods      

 

(a) Removal of Trade Barriers:

The first part of the Trade Protocol is devoted to trade in goods and the removal of trade barriers. Subject to a few exceptions and the national treatment rule, the Trade Protocol provides for the removal or reduction of tariffs (article 3), import and export duties (articles 4 and 5), non-tariff barriers (article 6), and quantitative import and export restrictions (articles 7 and 8). The Trade Protocol entrusts a committee of SADC ministers responsible for trade (CMT) with the tasks of controlling the process for the phased elimination of tariffs and non-tariff technical barriers (NTBs). In doing so, the CMT will have to pay attention to the preferential arrangements between and among member states, the time frame for the elimination of barriers, the adverse impact that the removal of trade barriers may have on member states, and different tariff lines for different products.

 

Here is a table of SADC national economies, ranked by the estimated value of their exports and imports.

 

Table 5: Value of SADC Exports and Imports

 

SADC Country

Exports

in Million

US dollars

Imports

in Million

US dollars

1

South Africa

100,700

105,000

2

Angola

69,206

22,860

3

D.R. Congo

8,872

8,187

4

Zambia

8,589

7,361

5

Tanzania

5,997

10,330

6

Botswana

6,259

6,938

7

Namibia

4,335

5,586

8

Mozambique

3,469

6,167

9

Mauritius

2,674

5,107

10

Zimbabwe

3,314

3,607

11

Swaziland

2,005

1,643

12

Malawi

1,193

1,675

13

Lesotho

1,030

1,766

14

Madagascar

640

1,958

15

Seychelles

493

831

Total

 

 

 

Source: Central Intelligence Agency, World Factbook (2013) and World Trade Organization.

 

The Protocol stipulates that an industrialization strategy to improve the competitiveness of member states accompany the removal of import duties. However, the Protocol’s prohibition to impose import duties does not prevent member states from imposing across-the-board internal charges. Likewise, the prohibition to impose quantitative import restrictions does not preclude member states to apply a quota system, provided that the tariff rate under such quota system is more favorable than the rate applied under the Protocol.

 

SADC could enlist the private sector in thinking up clever ways and means of removing and monitoring trade barriers. This idea is worth considering because a priori it could help solve implementation problems. It may decrease implementation costs for the government by allocating them to parties, i.e. the business community, with a vital interest in and a greater ability to monitor them. This is a solution already used by the East African community with respect to NTBs. [21]

 

(b) Customs Procedures:

SADC customs law plays a crucial role in trade. This is so despite the want of adequate customs infrastructure in the region. [22] SADC customs law determines the classification, valuation and origins of goods to allow member states to apply appropriate tariffs and rates. Part 3 of the Trade Protocol lays down common customs procedures to be followed by member states. It obliges member states to take appropriate measures, including arrangements on customs administration co-operation, to make sure that states apply the Protocol effectively and harmoniously, simplify and harmonize trade documentation and procedures, and grant freedom of transit to goods in transit. Member states harmonize and simplify trade documentation and procedures by, among other things, aligning intra-regional and international documentation on the United Nations Layout Key and by reducing the number of documents to a minimum. The CMT is mandated to establish a Sub-Committee on Trade Facilitation to ensure that member states comply with provisions relating to trade simplification and harmonization.

 

SADC law also regulates rules of origin. The free movement of goods between SADC member states requires the elimination of tariffs on goods originating within SADC through rules of origins. Rules of origin are an essential ingredient of free trade agreements because they serve to determine which goods are qualified for preferential treatment. Without rules of origin, imports from non-SADC states would enter the free trade area through the country with the lowest external tariffs before moving on to the other SADC members, thereby depriving the latter of customs revenue, [23] a result commonly known as ‘trade deflection’. However, it appears that it is not only trade deflection that should worry SADC policy makers but also the complexity and the heft of the Protocol’s rules of origin, which work as a disincentive for the regional business community trying to apply them. [24]

 

4.1.3. Trade Measures

Part 4 of the Trade Protocol regulates the many measures that member states may adopt with regard to trade. These measures include standards-related, sanitary, phytosanitary, safeguard, anti-dumping measures, subsidies, and measures for the protection of infant industries. Standards-related measures often raise non-tariff technical barriers to regional trade, which arise from the application of divergent standards and regulations by states in SADC. Incidentally, there is reportedly a surge of these non-technical barriers to regional trade in SADC. [25] Accordingly, the purpose of the Trade Protocol is to harmonize these divergent rules by regionalizing standards.

 

(a) Exceptions:

SADC law has developed a generous regime of exceptions to the substantive rules. Article 9 of the Trade Protocol lists exceptions to obligations to remove trade barriers. As long as it is not done as a means of arbitrary and unjustifiable discrimination between member states or as a disguised restriction on regional trade, the prohibition on the imposition of quantitative restrictions does not stop member states to take some necessary measures. Member states may take measures necessary to protect intellectual property rights; national treasures; public morals and order as well as human, animal, plant life or health; and to maintain peace and security. Furthermore, they may adopt necessary measures to secure compliance with WTO obligations or any other international obligations; to prevent deceptive trade practices and critical shortages of foodstuffs; to limit transfer of certain mineral resources; or to conserve natural resources and the environment. 

 

The list of exceptions to the general duty to remove trade barriers is fairly broad. One expert says those exceptions are ‘lavish’ and ‘totally undermine’ the objective of creating a rules-based organization. [26] He maintains that this exceptions regime permits continued protectionism, and advocates the reduction of these exceptions as they usually concern the very goods where partners have a comparative advantage. [27]

 

(b) Standards-Related Measures:

Standards-related measures afford member states more flexibility in the protection of health, life, consumers and the environment while preserving at the same time the compatibility of standards with one another in SADC for the sake of regional trade liberalization. The Protocol allows member states to use applicable international standards when setting technical standards, except where these standards would be ineffective and inappropriate in achieving the legitimate objectives of member states. SADC member states have agreed on the principle of international standards in a MOU on the harmonization of standardization, quality assurance, accreditation and metrology ( http://sadc-tribunal.org/wp-content/uploads/2013/03/SQAM.pdf ) for the elimination of non-tariff technical barriers to trade within SADC.

 

The Protocol creates a presumption that a standards-related measure that conforms to an international standard does not unnecessarily impede regional trade. Member states accept as equivalent the technical regulations of other member states, provided that they sufficiently fulfill the objectives of their regulations. Moreover, a member state must, if requested by another member state, seek to promote the compatibility of specific standards or conformity assessment procedures in its territory with the standards and conformity assessment procedures in the territory of the other state. The divergent sanitary and phytosanitary measures on agricultural and livestock production in SADC are primary examples of technical barriers to regional trade. As with standards-related measures in general, the purpose of the Trade Protocol is to harmonize the divergent sanitary and phytosanitary rules by requiring member states to base the rules on international standards, namely the WTO Agreement on the Application of Sanitary and Phytosanitary Measures .

 

(c) Safeguard Measures:

Member states may apply a safeguard measure to a product if they conclude that the product is being imported into their territory in such quantities and such conditions as to cause serious injury to a domestic industry that produces like or directly competitive products. A ‘serious injury’ is defined, by reference to the equivalent WTO provisions, as a significant overall impairment in the position of a domestic industry. The Protocol does not clarify whether key concepts such as ‘product’, ‘industry’, ‘directly competitive product’, must be defined in terms of the WTO Agreement on Safeguards and the jurisprudence based on it. The guiding philosophy of safeguard measures is to cater for the interests of the member states that suffer from trade liberalization by giving them more time to adjust.  Determining when imports have caused a serious injury to a domestic industry requires that members set up strong and effective national institutions capable of making such determinations. [28]

 

Safeguard measures may also be seen as a safety valve for SADC governments to dilute protectionist pressures from local constituents. Safeguard measures apply to products in a non-discriminatory manner and regardless of the origin of the products within SADC. A member state may apply a safeguard measure only insofar and for so long as necessary to prevent or remedy serious injury and to ease adjustment. In any event, a safeguard measure must not last more than eight years, which should incidentally induce greater care in the state applying the measure. Furthermore, the Trade Protocol embodies special provisions for the protection of infant industries. Upon application by a member state, the CMT may temporarily authorize that state to suspend trade concessions in respect of like products from other member states.       

 

(d) Dumping and Subsidies:

The Protocol gives member states the freedom to adopt anti-dumping measures and, with some restrictions, apply countervailing duties. Dumping occurs where a member state exports a product to another member state at a price that is inferior to the one charged in the exporting state or the one charged by a non-member state. It also occurs where the exporting state sells the product at a price below production costs. In essence, anti-dumping laws are designed to counter what the importing state considers to be unfair or trade distorting practices. However, a consensus is emerging among experts that anti-dumping measures reduce general welfare more than they benefit the economy of the states that impose the measures. This consensus might be the reason for the requirement that a state apply an anti-dumping measure only if a product imported into its territory has caused serious injury to its domestic industry. With regard to subsidies, a member state may provide subsidies to its domestic products as long as they do not distort regional trade or contravene WTO provisions. An importing member state may levy countervailing duties on a product of another member state so that they can offset the effects of subsidies applied by that state on the product.

 

4.1.4. Services, Intellectual Property and Competition

The Trade Protocol extends its coverage to service industries (e.g. insurance, banking, and securities), intellectual property rights and competition policies. It obliges member states to formulate policies and execute measures in line with their obligations under the WTO Agreement on Trade in Services in order to liberalize the services sector in SADC. Likewise, member states must protect intellectual property rights following the WTO Agreement on the Trade-Related Aspects of Intellectual Property Rights . Finally, member states must prohibit unfair business practices and promote competition.

 

4.1.5. Intra-Regional Trade and Trade with Third Parties

Member states may maintain preferential trade arrangements that existed prior to the coming into force of the SADC Trade Protocol in 2000. Given the existence of overlapping regional trade arrangements in the Southern African region when SADC was formed, it became necessary to cater for the Southern African countries that were already party to other arrangements. [29] Member states may enter into new preferential trade arrangements among themselves if these arrangements are consistent with the SADC Trade Protocol. Henry Mutai says that this provision is an application of the principle of asymmetry, whereby members who wish to liberalize trade amongst themselves more rapidly are allowed to do so. [30] He goes on to say that, although this provision ensures that economically constrained members do not hold back their fellow members, it nevertheless undermines the legally binding nature of the obligations in the Trade Protocol. [31] Mutai’s position is clear, but the same could not be said of his assertion that the provision in question goes against the binding nature of the Protocol.

 

Article 28 of the Trade Protocol establishes the principle of the most-favored nation as it enjoins member states to accord most-favored nation treatment to one another. Member states must develop intra-SADC cooperation and coordinate as much as possible trade policies and negotiating positions in relations with third parties and international organizations to advance the objectives of the Trade Protocol. In other words, there is no obligation to negotiate as a unit with third parties.

 

A member state may also enter into preferential trade arrangements with non-SADC states, provided that such arrangements do not frustrate the objectives of the Protocol and that any concession made to non-SADC states is also extended to other SADC member states. As it can be seen, member states’ relations with third parties are a matter intimately linked to the issue of non-discrimination. [32] However, a member state is under no obligation to extend to other member states preferences of another block of which that state was a member at the time of the entry into force of the SADC Protocol.

 

4.1.6. Committees, Units and the Forum

The SADC Trade Protocol has instituted (1) a Committee of Ministers responsible for Trade (CMT), (2) a Committee of Senior Officials responsible for trade, (3) a Trade Negotiation Forum (TNF), (4) a Sector Coordinating Unit and (5) a panel of experts. The work of the CMT lies over that of the Committee of Senior Officials in the respect that they both monitor the implementation of the Protocol. Sector Coordinating Units used to be in charge of day-to-day implementation of the Protocol, but in March 2001 the Summit changed the law; article 39(1) of the SADC Treaty phased out Sector Coordinating Units and Sectoral Committees.

 

The CMT oversees the application of the SADC Trade Protocol and the work of any sub-committees. The Committee of Senior Officials report to the CMT on matters concerning the application of the Protocol, supervises the TNF, and liaises with the CMT. The TNF conducts trade negotiations and reports to the Committee of Senior Officials.

 

4.2. Finance and Investment

Investment is the second most important area of SADC law after trade. Finance and investment are the two remaining components of the trade, industry, finance and investment (TIFI) cluster of the RISDP. Investment is another way of going around trade barriers. It is the category of international business transactions that reflects the objective of a company in one economy obtaining a lasting interest in a company resident in another economy. [ [33] ] In Plain English, foreign investment arises where a person in a foreign country puts money in a lasting business venture located in another country (i.e. the host country) with the intention of making a profit.

 

4.2.1. The Overall Picture

Southern Africa has registered highs and lows in foreign investments over the past few years. Whereas Africa as a whole benefited from a 5% increase in foreign direct investment (FDI), the Southern African region (excluding the DRC) registered declines in 2012. [34] By contrast, FDI in Southern Africa experienced a significant increase in 2011, after falling by 78% in 2010. [35] The decrease of FDI in 2012 was attributable to declines in both South Africa and Angola, which plunged FDI in SADC from 8.7 billion US dollars in 2011 to 6.3 billion in 2012. [36]

 

On the other hand, South Africa and Angola account for the bulk of overseas investments from Southern Africa. [37] South Africa (along with China and India) remains one of largest developing-country investor in Africa and in SADC in particular, holding itself 16 billion US dollars of investment stock on the continent. [38] FDI in South Africa, SADC's biggest economy far and away, followed a similar chequered path. In 2012, FDI in South Africa was down, in 2011 up, and in 2010 down.

 

In 2012, Mozambique was the largest beneficiary of FDI inflows in SADC and the second largest in Africa after Nigeria while Angola suffered a 3 billion US dollars drop (see Table 7).

 

Table 6: Distribution of FDI Inflows by Range in SADC (2012)

 

Range

FDI recipients

Above 3 billion US dollars

Mozambique

South Africa

Dem. Rep. Congo

Between 1.0 and 1.9 billion US dollars

Tanzania

Zambia

Between 0.5 and 0.9 billion US dollars

Madagascar

Between 0.1 and 0.5 billion US dollars

Zimbabwe

Mauritius

Namibia

Botswana

Lesotho

Malawi

Seychelles

 

Source: United Nations Conference on Trade and Development, World Investment Report 2013 (2013)

 

The picture is slightly different and somewhat counterintuitive when it comes to FDI net inflows (new investment inflows minus disinvestment) in 2011.

 

Table 7: FDI net inflows in SADC (2011)

 

SADC country

FDI net inflows

(in million

US dollars)

1

South Africa

5,889

2

Mozambique

2,079

3

Zambia

1,981

4

Dem. Rep. Congo

1,596

5

Tanzania

1,095

6

Namibia

968

7

Madagascar

907

8

Zimbabwe

387

9

Botswana

292

10

Mauritius

273

11

Seychelles

138

12

Lesotho

132

13

Swaziland

94

14

Malawi

92

15

Angola

-3,000

Total

 

 

Source: World Bank (September 2013)

 

4.2.2. The Legal Landscape

SADC law encourages movement towards regional macroeconomic stability and convergence through [ [39] ] prudent fiscal and monetary policies. It provides a framework for cooperation in finance and promotes sound investment policies, savings, investment flows, technology transfer and innovation in the region. Strategies SADC devised to carry out its finance and investment policies include investment friendly domestic legislation, macroeconomic convergence, fiscal coordination, current and capital accounts liberalization, reform of payment systems and resource mobilization through financial institutions. SADC prepared a number of memoranda of understanding (MOUs) that embrace some of those strategies, including the MOU on macroeconomic convergence and fiscal cooperation ( http://www.sadc.int/files/6513/5333/7917/Memorandum_of_Understanding_on_Macroeconomic_Convergence2011.pdf ) .      

 

It follows from the policy objectives and their attendant strategies that the pace of integration and harmonization in finance and investment is a paramount concern of SADC policy makers. No less concerning is the necessity of sound macroeconomic and prudent fiscal and monetary policies to rein in inflation, interest rates, deficits, debts and exchange controls. SADC is also concerned about the difficulties that small and medium enterprises continue to face in accessing credit despite substantial liberalization of the financial sector in the region. Thus, SADC plans to intensify reform of the financial sector, stressing non-bank financial institutions, the participation of women in business, and anti-money laundering initiatives. 

 

4.2.3. The Finance Protocol

The Finance and Investment Protocol (Finance Protocol: http://www.sadc.int/files/4213/5332/6872/Protocol_on_Finance__Investment2006.pdf) deals with financial cooperation and macroeconomic convergence. The idea of having a protocol on regional co-operation and integration in finance and investment was mooted by SADC finance ministers as early as 1995. The Summit in Maseru (Lesotho) adopted the Finance Protocol on 18 August 2006 when all member states signed it. The Finance Protocol and the Trade Protocol are the two pivots of SADC legislation.

 

The Finance Protocol incarnates the conviction of SADC that cooperation and coordination of macroeconomic, fiscal and monetary policies will accelerate growth, investment and employment in the region. For SADC, macroeconomic stability is a precondition to sustainable economic growth and the creation of a monetary union in the region. The Finance Protocol prizes investment, the private sector, financial and capital markets for their increasingly important role in productive capacity, higher economic growth and sustainable development. Mindful of the different economic levels of member states and the need to share equitably the fruits of regional integration, the Protocol underscores the link between investment and trade and the utility of greater regional integration in making the region a more attractive investment destination.

 

The Finance Protocol spells out its main objective as the harmonization of financial and investment policies of member states to make them conform to the objectives of SADC. It ensures that changes to investment and financial policies in one member state do not lead to undesirable adjustments in other member states. To hit that objective, the Finance Protocol chose to facilitate regional integration, co-operation and coordination within finance and investment sectors. It also chose to diversify and expand the productive sectors of the economy and enhance trade to attain sustainable economic development and poverty eradication.

 

The Protocol contains a menu of the means by which it wants to achieve economic development and poverty eradication: A favorable investment climate, macroeconomic stability and convergence, co-operation in financial matters, creation of frameworks for central banks and development of capital markets. Co-operation and coordination occupy a place of choice in the achievement of economic development and poverty eradication.    Over and above financial cooperation, the Finance Protocol obliges member states to cooperate with respect to information and communication technologies among central banks, development finance institutions (DFIs), non-banking financial institutions, stock exchanges, and anti-money laundering. Accordingly, the best part of the Protocol is devoted to the various matters for cooperation. The balance of the Protocol treats macroeconomic convergence, DFIs, anti-money laundering and the creation of a development fund. These strategic themes are expounded upon in the 11 annexes to the Finance Protocol.

 

The Finance Protocol earmarks four fields for financial cooperation, namely (1) investment, (2) central banking, (3) regional capital and financial markets, and (4) taxation. Taxation will be dealt with in a future update of this introduction to SADC law.             

 

4.2.4. Investment Cooperation

In the field of investment, the Protocol obliges member states to co-ordinate their investment regimes and cooperate to create a favorable investment climate within SADC as outlined in the first annex to the Protocol (Investment Annex). The Investment Annex specifically aspires at spurring economic growth and sustainable development through regional integration and investment promotion agencies (IPAs) in the SADC region. It is guided by the ideals, objectives, and spirit of the Finance Protocol in the facilitation and stimulation of investment flows, technology transfer and innovation. It is a response to alarms over the low levels of investment in the SADC region in spite of numerous measures taken to attract investment. It is also an acknowledgement that IPAs need to cooperate among themselves to enhance the attractiveness of SADC, alive to the truism that without effective policies the region will continue to be marginalized on the global trade scene. The Investment Annex is essentially a set of measures for adoption by member states. These measures may conveniently be grouped into promotional, protective, and regulatory categories.

 

(a) Promotion:

Arguably, the core promotional activity of member states is, as far as investment in SADC is concerned, to promote (1) trade openness and intra-regional industrial policies as contemplated in the Trade Protocol and (2) regional cooperation in the area of investment, including public private partnerships (PPPs). This promotional activity insists on the link between trade and investment. For the purposes of turning SADC into an investment zone, member states must harmonize investment regimes in accordance with the best practices, for instance, ratifying the 1965 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States and the 1985 Convention Establishing the Multilateral Investment Guarantee Agency .

 

There is a duty on member states to promote and admit investments in their territory by putting in place conditions favorable to investments through suitable administrative measures, in particular the expeditious clearance of authorizations. Member states are also invited to encourage PPPs and avoid amending or modifying the terms of their authorizations arbitrarily to the detriment of investors. They should extol the free movement of capital and conclude agreements among themselves to avoid double taxation. They must advance a competition policy in SADC and develop local and regional entrepreneurship and enhance regional productive capacity within SADC through the development of skills, small and medium enterprises (SMEs), supporting infrastructures, and other necessary supply-side policies. In the process, member states are free to prioritize industries providing upstream and downstream linkages and that impact positively on foreign investment inflows and job creation. However, the duty to develop local and regional entrepreneurship does not apply to advantages, concessions or exemptions resulting from bilateral investment treaties (BITs) or any multilateral arrangement for economic integration in which a member state participates.    

 

Moreover, member states must promote transparency by instituting predictability, confidence, trust and integrity, which in turn may be accomplished by espousing and enforcing open and transparent policies, practices, laws, regulations and procedures as they relate to investment. Member states must permit investors to hire key personnel, regardless of nationality, if the host state or SADC does not have those skills and if such sourcing builds local capacity through skills transfer. States must promote the optimal use of their natural resources in a sustainable and an environmentally friendly fashion. Finally, member states are to promote investment promotion agencies (IPAs). They must ensure their IPAs operate in tune with national and regional development priorities; advise the host states, the private sector and other stakeholders on trade and investment policies; and raise awareness of investment opportunities, incentives and laws, using regular exchange of information.

 

(b) Regulation and Protection:  

The Investment Annex enunciates the right of member states to regulate. Member states may exercise their right to regulate in the public interest and to adopt, maintain or enforce any measure that it considers appropriate to ensure that investment is undertaken in a manner sensitive to health, safety or environmental concerns. The flip side of the right of member states to regulate is that investors must abide by the regulations, laws and guidelines and policies of the states. Member states may enact regulations that provide conditions favorable to the least developed countries of SADC in the process of economic integration on the basis of non-reciprocity and mutual benefit. They must ensure that the least-developed countries of SADC receive effective preferential treatment.

 

A good portion of the Investment Annex is devoted to the protection of investments. Investments and investors must enjoy fair and equitable treatment in the territory of any member state, and that treatment must not be less favorable than that granted an investor from a non-member state. Member states are forbidden to nationalize or expropriate except for a public purpose, under due process of law, on a non-discriminatory basis and subject to the payment of prompt, adequate and effective compensation. This provision protects foreign investors from political risks by restraining the right of member states to take or otherwise interfere with property and property rights. It effects that restraint by imposing requirements that lawful takings be for a public purpose, non-discriminatory and compensatory of the investors aggrieved by the takings. It is however possible for member states to give preferential treatment to qualifying investments and investors in order to fulfill national development objectives. In addition, member states must make sure that investors are able to repatriate investments and returns on investments.

                                                    

Foreign investors must have the right of access to the courts, judicial and administrative tribunals, and other competent authorities for the redress of their investment-related grievances, such as expropriation claims or differences over the determination of compensation for expropriation. Member states and foreign investors must settle investment disputes amicably and at any rate exhaust local remedies before they can submit their disputes to international arbitration if either the state or the investor so wishes. Should either party choose to go for international arbitration, they may refer the dispute to the SADC Tribunal, the International Center for the Settlement of Investment Disputes (ICSID) , an international arbitrator or an ad hoc arbitral tribunal. If parties cannot agree on any of those dispute settlement fora three months after written notification of the claim, they must submit the dispute to arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law ( UNCITRAL ).

 

4.2.5. Central Banking and Financial Markets

 

(a) Central Banking:

A note on the 2009 SADC Central Bank Model Law explains that the Model Law embodies general principles to facilitate the operational independence of SADC central banks and the harmonization of their legal and operational frameworks, and sets standards of accountability and transparency in those frameworks. [40] The long title of the Model Law is to ‘update and re-enact’ the national legislation on the central bank in SADC.

 

The Model Law is a comprehensive outline, a recipe for national legislation on the operations of a central bank. It addresses the functions and objectives of SADC central banks, currency, international reserves, payment systems, reporting requirements, the relationship of central banks with government and other financial institutions, monetary policy committees and institutional arrangements.  

 

The Model Central Bank Law retains the twin functions of central banking, namely monetary and financial stability. For the Model Law, the primary objective of the central bank is to ‘achieve and maintain price stability.’ Central banks must be independent but may support the general economic policy of the government. In pursuing its primary objective, the central bank must articulate monetary policy, including exchange rate policies; hold gold and foreign exchange reserves; regulate matters relating to the domestic currency; and act as a fiscal agent to the government and as a banker to the government and banks alike.

 

(b) Financial Markets:

The Finance Protocol provides harmonization and cooperation in three areas. It first obliges SADC member states to harmonize national laws and work together in the regulation of non-banking financial institutions and in the facilitation of collaboration between the regulators of those financial institutions. Second, the Protocol obliges member states to harmonize national laws and cooperate in developing the capacity of national capital and financial markets with the ultimate purpose of creating a single regional capital and financial market. Third, it is the obligation of member states to facilitate cooperation between their respective stock exchanges.

 

4.3. Mining

The RISDP states that mining and agriculture account for more than 50% of total SADC GDP. Apart from South Africa and Mauritius, which have sizeable manufacturing sectors, SADC member states heavily rely on mining, agriculture or services. Given the economic prominence of these sectors, this introduction to SADC law zeroes in on the Mining Protocol ( http://www.sadc.int/files/3313/5292/8366/Protocol_on_Mining.pdf ) as this is the only one of those three vital areas for cooperation on which SADC has enacted a protocol.  

 

The point of SADC mining policies is the development of an economically, socially and environmentally sustainable regional mining sector capable of meeting regional challenges and ensuring long-term competitive growth for the sector. To that end, SADC member states have since 2000 been harmonizing their mining policies in order to improve investment climate, information flows and a commercially viable small scale mining industry with greater participation of women. Inasmuch as harmonization is nonetheless still unfinished business, the first priority of SADC mining policy is to complete that process. Other challenges include constraints in the form of barriers to the flow of factors of production, something that slows down investment in the mining sector.

 

One achievement in the region is the enhanced mineral prospectivity. More specifically, all SADC member states have accessible databases.  

 

Below is a non-exhaustive table of SADC countries and their comparative advantages in the extractive industries.

 

Table 8: Main mining exports in SADC

 

Country

natural resources

Angola

Diamond, oil, natural gas

Botswana

Diamond

Dem. Rep. Congo

Cobalt, coltan, copper, diamond, gold

Lesotho

Diamond

Madagascar

Petroleum

Malawi

Uranium

Mozambique

Aluminium, coal, natural gas, titanium

Namibia

Diamond, gold, uranium, zinc

South Africa

Chromium, gold, platinum

Swaziland

Coal

Tanzania

Gold

Zambia

Copper

Zimbabwe

Diamond

 

Source: Author’s own independent research; and Central Intelligence Agency, World Factbook (2014)

 

Another achievement is that SADC has effectively networked public and private mining and training institutions. Member states are thinking up strategies for value addition in an endeavor to boost export earnings and benefits from mineral resource extraction.

 

The Mining Protocol is the centerpiece of SADC mining policy. It entered into force in 2000. It puts forth principles by which SADC member states intend to be bound and oriented. Through the Protocol, member states understand the propriety and importance of a comprehensive regional strategy and plan for the development of the mining sector. They promote the interdependence and integration of mining policies for the accelerated growth of the mining sector in SADC and for competitiveness and a larger share in international markets. By cooperating and collaborating, member states want to develop the region’s abundant mineral resources to uplift the living standards of people throughout SADC.   

 

The Mining Protocol declares 10 general principles for the mining sector in SADC. The first principle is that a thriving mining sector must contribute to economic development, poverty alleviation, and the amelioration of the standard and quality of life all over SADC. The second principle is that member states must harmonize national and regional policies, strategies and programs related to the development and exploitation of mineral resources. Third, member states must bear their own costs of participation in institutional mechanisms for the enforcement of the Mining Protocol. Fourth, decision is by consensus. Other principles (i.e. fifth and sixth) are that member states must develop human and technological capacity throughout the region. They must encourage private participation in the exploitation of mineral resources (seventh) and empower economically the historically disadvantaged in the mining sector (eight). They must make public information more available to the private sector, member states and other countries (ninth). Finally, they must observe internationally accepted standards of health, mining safety and environmental protection (tenth).

 

The Mining Protocol sets up three institutions: A Committee of Mining Ministers, a Mining Technical Committee of Officials, and a Mining Coordinating Unit. The Committee of Mining Ministers, a group of SADC mining ministers, formulates regional mining policy and strategy, advises and submits annual reports to the SADC Council of Ministers, and considers any matter having a bearing on the objectives, implementation and amendment of the Mining Protocol. The Technical Committee advises and makes recommendations to the Committee of Mining Ministers on the activities of the Mining Coordinating Unit and supervises the operations of the Coordinating Unit. The Mining Coordinating Unit is the executing organ of the mining sector. That is, it implements the Mining Protocol, the mining sector’s work program and the decisions of the Committee of Mining Ministers, and manages finances and general administration. Any dispute between two or more member states concerning the interpretation or application of the Mining Protocol that they cannot settle amicably must be referred to the SADC Tribunal for adjudication. If the dispute is between SADC and a member state, the SADC Council of Ministers must give an advisory opinion. Member states parties to the Mining Protocol may withdraw from the Protocol 12 months after giving written notice to the SADC Executive Secretary.

 

5. Member States

This section covers individual states parties to the SADC Treaty . [41] SADC is home to more than 280 million people with different cultures, traditions and speaking English, French and Portuguese in addition to a tapestry of national and local languages. The conduct of these peoples is regulated by diverse legal systems although SADC law and international law are harmonizing certain aspects of these legal systems.

 

The legal systems found in SADC region comprise African customary laws, common law, Roman-Dutch law, civil law, and African laws (passed after European colonization and not based on customary laws). SADC counts six countries based on Roman-Dutch law jurisdictions (Botswana, Lesotho, Namibia, South Africa, Swaziland, Zimbabwe), five countries ultimately based on the old French civil code (Angola, D.R. Congo, Madagascar, Mauritius, Mozambique) and three countries based on English common law (Malawi, Tanzania, Zambia). Virtually all these jurisdictions are influenced at varying degrees by African customary laws.

 

The legal systems of SADC member states have substantially structured their respective national economies, elevating the majority to middle income status and crystallizing its position as the leading regional economic community in Africa. International agreements and SADC legislation are not, as a rule, directly applicable within the domestic systems of most SADC member states, especially not in those with a common law tradition where a dualist approach to the incorporation of treaties obtains.

 

5.1. Angola

The legal system of Angola belongs to the civil law tradition. It is based on Angolan customary laws and Portuguese civil law. Portuguese is the official language in Angola. Umbundu, Kimbundu, Kikongo, Tchokwe and Ovambo are other official languages. The country’s capital is Luanda and the President of Angola is José Eduardo Dos Santos, who has been ruling the country since 1979.

 

Angola is part of the six upper-middle income countries in SADC, the other members being Seychelles, Botswana, Mauritius, South Africa and Angola.  Its oil-dependent economy is the second largest in SADC (after the South African economy) and the community’s second largest trading nation (after South Africa). Angola joined the World Trade Organization (WTO) in November 1996. The major industries in Angola are petroleum; diamonds, iron ore, phosphates, feldspar, bauxite, uranium and gold; cement; basic metal products; fish processing; food processing, brewing, tobacco products, sugar; textiles; and ship repair. A member of the Organization of Petroleum Exporting Countries (OPEC) since 2006, Angola is Africa’s second largest oil exporter after Nigeria. Angola also exports natural gas, diamonds, coffee, fish products, timber and cotton.

 

Following the end of its 27-year long civil war in 2002, Angola embarked on a nationwide reconstruction program that resulting in a construction boom, high growth rates in agriculture and the resettlement of Angolans displaced by the war. The construction boom was fuelled by billions of US dollars in credit lines granted by several creditors, especially by China.  Thanks to high oil prices and the ensuing higher level of oil production, the Angolan economy hummed along at healthy double digit growth rates between 2004 and 2008. Even if the global financial recession temporarily dented Angola’s impressive growth rates, the country’s economic trajectory is still positive.

 

Angola is endowed with a wealth of natural resources. It presents one of the greatest economic potential in SADC despite the sharp fall in net investment inflows that the country has witnessed lately. Angola presents SADC’s second largest land area as well. However, the country faces tremendous governance challenges and it is a place where it is not easy to do business. Information on business and investment opportunities in Angola can be found on the website of the country’s investment promotion agency .

  

5.2. Botswana

Botswana’s is a hybrid legal system. It is a mixed legal system based on customary laws and civil law, and influenced by common law and Roman-Dutch law. English and Setswana are the official language in Botswana. The country’s capital is Gaborone and the President of Botswana is Seretse Khama Ian Khama.

 

Botswana joined the WTO in May 1995. The major industries in Botswana are diamonds, copper, nickel, salt, soda ash, potash, coal, iron ore, silver; livestock processing; and textiles. Botswana is SADC’s largest diamond producer. It also exports copper, nickel, meat and textiles.

 

Like Angola, Botswana is an upper-middle income country. Botswana adopted and applied sound macroeconomic management practices and, as a consequence, the country graduated from a poor country to an upper-middle income country. It has achieved and maintained one of the world’s highest economic growth rates since its independence from Britain in 1966, temporarily halted for a few years during and after the global financial recession due to low commodity prices. Botswana is one of Africa’s best governed countries according to the Mo Ibrahim Foundation governance index. It is rated by some international credit rating agencies as the best credit risk in Africa. It offers one of the best places to do business on the continent.

 

5.3. Democratic Republic of the Congo (DRC)

The legal system of the Democratic Republic of the Congo (DRC) belongs to the civil law tradition. It is based on Congolese customary laws and Belgian civil law. French is the official language; Lingala, Kikongo, Swahili and Tshiluba are the national languages. The country’s capital is Kinshasa and the President of the DRC is Joseph Kabila Kabange.

The DRC is the third largest trading nation in SADC after South Africa and Angola. It joined SADC on September 8, 1997 and the WTO in January 1997. The major industries in the DRC are mining, mineral processing, consumer products, metal products, processed foods and beverages, timber, cement and commercial ship repair. The DRC is a major producer of copper and cobalt on the African continent.

 

SADC’s biggest country by population and by land area, and Africa’s second largest by land area, the DRC is probably the wealthiest in terms of natural resources in the Southern African region. Like Angola, the DRC presents a most promising economic potential. Corruption, conflict and instability sent the Congolese economy into the decline in the late 1990s until 2002, the year when the economy turned the corner. That year the country started implementing reforms, later it officially ended the country civil war, and marked in 2012 a decade of positive economic growth.

 

However, the country faces daunting governance issues and it is still a place where it is not easy to do business in spite of the modest gains made recently. Information on business and investment opportunities in the DRC can be found on the website of the country’s investment promotion agency .

 

5.4. Lesotho

The legal system of Lesotho belongs, broadly speaking, to the common law tradition. It is based on customary laws, English common law and Roman-Dutch law. English and SeSotho are the official languages in Lesotho. The country’s capital is Maseru and the Head of State of the Kingdom of Lesotho is King Letsie III.

 

Lesotho joined the WTO in May 1995. The major industries in Lesotho are food, beverages, textiles, apparel assembly, handicrafts, construction and tourism. Lesotho exports manufactures, wool and mohair, food and live animals, electricity, water and diamonds. Information on business and investment opportunities in Lesotho can be found on the website of the country’s investment promotion agency .

 

5.5. Madagascar

The legal system of Madagascar belongs to the civil law tradition. It is based on customary laws and the old French civil code. French and Malagasy are the official languages in Madagascar. The country’s capital is Antananarivo and the President of Madagascar is Hery M. Rajaonarimampianina Rakotoarimana .

 

Madagascar joined the WTO in November 1995. The major industries in Madagascar are meat processing, seafood, soap, breweries, tanneries, sugar, textiles, glassware, cement, automobile assembly plant, paper, petroleum and tourism. Madagascar exports coffee, vanilla, shellfish, sugar, cotton cloth, clothing, chromite and petroleum products. Information on business and investment opportunities in Madagascar can be found on the website of the country’s investment promotion agency .

 

5.6. Malawi

The legal system of Malawi belongs to the common law tradition. It is based on customary laws and English common law. English and Chichewa are the official language in Malawi. The country’s capital is Lilongwe. Until May 2014, the President of Malawi was Joyce Banda, who concomitantly acted as Chairman of SADC. Since May 2014, the President of Malawi is Peter Mutharika.

 

Malawi joined the WTO in May 1995. The major industries in Malawi are tobacco, tea, sugar, sawmill products, cement and consumer goods. Malawi exports tobacco, tea, sugar, cotton, coffee, peanuts, wood products, and apparel. Information on business and investment opportunities in Malawi can be found on the website of the country’s investment promotion agency .

 

5.7. Mauritius

Mauritius is a civil law country. It is based on French civil law and contains some features of English common law. English is the official language, though it is spoken by less than 1% of the population. Conversely, Creole, Bhojpuri and French, are widely spoken languages on the island. The country’s capital is Port Louis and the President of Mauritius is Rajkeswur Kailash Purryag.

 

Mauritius is an upper-middle income country. Like Botswana, Mauritius has since Independence been developing its economy with sound macroeconomic policies. As a result, it evolved from a low-income to an upper-middle income country and significantly improved its human development indicators. Just like South Africa, Mauritius has a diversified economy, with growing industrial, financial and tourist sectors. The economy is based on food production, tourism, textiles and financial services. It is branching out into fish processing, information and communications technology, hospitality and property development.

 

Mauritius joined SADC on August 28, 1995 and the WTO in January 1995. The major industries in Mauritius are food processing, textiles, mining, chemicals, metal products, transport equipment, nonelectrical machinery and tourism. This multi-ethnic, multi-religious nation exports textiles, sugar, cut flowers, molasses, fish and primates.

 

Despite the fact that Mauritius is a tiny island nation and that it is not a resource rich country, this democratic island nation of about 1.3 million inhabitants has been consistently praised as the best governed country in Africa. It is a country with a great economic potential and a stellar track record. Mauritius is, according to the World Bank Doing Business reports , the best place to do business in Africa and has been consistently holding that title in recent years. Information on business and investment opportunities in Mauritius can be found on the website of the country’s investment promotion agency .

 

5.8. Mozambique

The legal system of Mozambique belongs to the civil law tradition. Like Angola, Mozambique is both Lusophone and based on customary laws and Portuguese civil law. The country’s capital is Maputo and the President of Mozambique is Armando Emílio Guebuza.

 

At the end of its civil war in 1992, Mozambique began to reform its economy. Those reforms, including fiscal reforms, increased the country’s economic growth rates, averaging roughly 7% in the period 2003-2013. It was one of Africa’s best growth rates.

 

Mozambique joined the WTO in August 1995. The major industries in Mozambique are aluminium, petroleum products, chemicals, textiles, cement, glass, asbestos, tobacco, food and beverages. Mozambique exports aluminium, prawns, cashews, cotton, sugar, citrus, timber; and bulk electricity. Richly endowed with natural resources, Mozambique has a great economic potential.

 

Mozambique offers optimistic economic prospects given its ability to attract substantial foreign investment in the resource extraction sector. Notwithstanding its continued reliance on foreign assistance, Mozambique remains a very good investment destination. To be sure, Mozambique was in 2012 the biggest recipient of foreign direct investments in SADC. Information on business and investment opportunities in Mozambique can be found on the website of the country’s investment promotion agency

 

5.9. Namibia

Namibia has a hybrid legal system, consisting of uncodified civil law based on customary laws and Roman-Dutch law. English is the official language in Angola. Oshiwambo, RuKwangali, Otjiherero are among the other languages spoken in Namibia. The country’s capital is Windhoek and the President of Namibia is Hifikipunye Pohamba.

 

Namibia is an upper-middle income country, though income is to in wide measure unequally distributed. Namibia joined SADC upon Independence in March 21, 1990 and the WTO in January 1995. The major industries in Namibia are mining (diamonds, lead, zinc, tin, silver, tungsten, uranium and copper); meatpacking, fish processing, dairy products, pasta and beverages. Namibia is an exporter of minerals, namely diamonds, copper, gold, zinc, lead and uranium. In addition, it exports cattle, white fish and mollusks. Namibia is the world’s fourth largest uranium producer and a primary source for gem-quality diamonds.

 

Namibia is a resource rich country and its well-performing economy, closely linked to South Africa’s, has a great economic potential. It is a well governed democratic country and one of the best places to do business in Africa. Information on business and investment opportunities in Namibia can be found on the official website of the country’s government ( http://www.gov.na/ ) .

 

5.10. Seychelles

Seychelles has a mixed legal system based on customary laws, English law and French civil law. French, English and Seychellois Creole (Kreol) are the official languages. The country’s capital is Victoria and the President of Seychelles is James Alix Michel.

 

The smallest SADC country, with about 92,000 inhabitants in the south east of the African continent, Seychelles has nonetheless the highest income per capita in SADC, ahead of Botswana and Mauritius. Seychelles first joined SADC in September 8, 1997, but it is not a member of the WTO. The major industries in Seychelles are fishing, tourism, food processing, coir rope, boat building, printing, furniture and beverages. Seychelles exports canned and frozen fish, cinnamon bark and copra. It also re-exports petroleum products.

 

Seychelles is one of the best governed countries on the African continent and it is a very good place to do business. Information on business and investment opportunities in Seychelles can be found on the website of the country’s investment promotion agency .

 

5.11. South Africa

The legal system of South Africa is based on English common-law, Roman-Dutch and customary laws. South Africa has 11 official languages. IsiZulu, IsiXhosa, Afrikaans, English and Sepedi are the most widely spoken official languages. Pretoria is the country’s capital and Jacob Zuma is the President of South Africa.

 

South Africa is the leading economy and most prominent trading nation in SADC and Africa’s second largest economy after Nigeria. It used to be Africa’s number one economy until April 2014, when the rebasing of Nigeria’s economy propelled Nigeria to the number one spot. An upper-middle income country, South Africa has a diversified economy, with advanced financial, legal, communications, energy, and transport sectors.  It has Africa’s largest stock exchange in terms of overall market capitalization.

 

South Africa joined SADC on August 30, 1994 and the WTO in January 1995. The major industries in South Africa are mining, automobile assembly, metalworking, machinery, textiles, iron and steel, chemicals, fertilizer, foodstuffs and commercial ship repair. South Africa is the world’s top producer of gold, platinum and chromium. Apart from these minerals, South Africa exports diamonds, machinery and equipment.

 

Third biggest country by land area after the DRC and Angola, South Africa is one of SADC’s wealthiest countries in terms of natural resources. It is the economic engine of the community, an emerging market and a member of the BRICS (Brazil, Russia, India, China and South Africa). South Africa is the country responsible for the largest amount of intra-regional trade and investment. It has a well governed country that boasts the second best place to do business in SADC, according to the World Bank Doing Business reports. Information on business and investment opportunities in South Africa can be found on the website of the country’s investment promotion agency .

 

5.12. Swaziland

The legal system of Swaziland is based on customary laws, Roman-Dutch law and common law. The two official languages in Swaziland are English and siSwati. Lobamba is the royal and legislative capital while Mbabane is the administrative capital of the Kingdom of Swaziland. King Mswati III is the monarch.

 

Swaziland’s economy is almost entirely integrated into South Africa’s. Swaziland joined the WTO in November 1995. The major industries in Swaziland are coal, wood pulp, sugar, beverages, textiles and apparel. Swaziland exports beverages, sugar, wood pulp, cotton yarn, refrigerators, citrus and canned fruit. Information on business and investment opportunities in Swaziland can be found on the website of the country’s investment promotion agency

 

5.13. Tanzania

The legal system of Tanzania belongs to the common law tradition. It is based on customary laws and English common law. Dodoma is the political capital and Dar es Salaam, the administrative and commercial capital of Tanzania. Jakaya Kikwete serves as the country’s President.

 

Strong macroeconomic management has allowed Tanzania to be the third biggest economy in SADC after South Africa and Angola. Tanzania has boosted its economic growth rates through gold production and tourism. The Tanzanian economy, which is substantially liberalized, depends on agriculture. Its financial sector has been flourishing lately, and foreign-owned banks have a notable presence in that industry.

Tanzania joined the WTO in January 1995. The major industries in Tanzania are agricultural processing; mining, salt, soda ash; cement, oil refining, shoes, apparel, wood apparel, wood products and fertilizer. Tanzania exports gold, coffee, cashew nuts, manufactures and cotton.

 

Tanzania is blessed with vast amounts of natural resources. It is a country with considerable economic potential. Information on business and investment opportunities in Tanzania can be found on the website of the country’s investment promotion agency .

 

5.14. Zambia

Zambia is a common law jurisdiction. Its legal system is based on English common law and Zambian customary laws. English is the official language. Bemba, Tonga, Chewa, Lozi and Nsenga are some of the other languages spoken in Zambia. Lusaka is the capital and Michael Sata is the President of Zambia.

 

Zambia joined the WTO in January 1995. The major industries in Zambia are copper mining and processing, emerald mining, construction, foodstuffs, beverages, chemicals, textiles, fertilizer and horticulture. Zambia’s one of the world’s major copper producers. On top of copper, Zambia exports cobalt, electricity, tobacco, flowers and cotton.

 

In the last few years, resource-rich Zambia recorded high growth rates, averaging more than 6% between 2005 and 2014. A privatization drive and high commodity prices have meant Zambia could see a steady increase in the growth of its economy, even if the country suffered from low commodity prices during and in the wake of the global financial recession.

 

The Zambian economy quickly landed on its feet after the global financial crisis, and Zambia is once again offering bright economic prospects.  Its business environment has improved as of late years and now ranks slightly above the SADC average. Information on business and investment opportunities in Zambia can be found on the website of the country’s investment promotion agency .

 

5.15. Zimbabwe

The legal system of Zimbabwe belongs to the common law tradition. It is based on customary laws, English common law and Roman-Dutch civil law. English, Shona and Sindebele are the most spoken languages in Zimbabwe. Harare is the capital, and the President of Zimbabwe is Robert Gabriel Mugabe, who has been ruling the country since 1987.

 

Zimbabwe joined the WTO in March 1995. The major industries in Zimbabwe are mining, steel; wood products, cement, chemicals, fertilizer, clothing, foodstuffs and beverages. Zimbabwe exports platinum, cotton, tobacco, gold, ferroalloys and textiles.

 

Zimbabwe has enormous reserves of mineral resources (coal, gold, platinum, copper, nickel, tin, diamonds, clay) and one of the greatest economic potential in SADC. However, the country is confronted with a few complex governance problems. Information on business and investment opportunities in Zimbabwe can be found on the website of the country’s investment promotion agency

 

6. Main institutions

It is said the more comprehensive the trade arrangement and the more advanced the integration process, the stronger the need for appropriate institutions with supranational powers. [42] A multilateral trade system is about many sophisticated rules which are often difficult to comply with and which may require complex institutions in order to ensure implementation. [43] SADC does not escape this reality.

 

SADC law institutionalizes four mechanisms: (1) Policy-making; (2) oversight; (3) policy implementation; and (4) dispute settlement. The Summit of Heads of State and Government (Summit) is the highest political body of SADC, the Council of Ministers (Council) oversees the operations of SADC with technical advice from the Standing Committee of Officials (Standing Committee), the Secretariat implements SADC policies, and the Tribunal provides a forum for the settlement of disputes.  A troika system, consisting of a chair, incoming chair and outgoing chair of SADC, works at the level of the Summit, the Defense Organ, the Council and the Standing Committee.

 

6.1. The Summit

The Summit of Heads of State or Government ( Summit ) is the supreme policy-making institutional mechanism of SADC. The heads of state and government of all SADC member states constitute the Summit. The Summit controls the functions of SADC. It meets at least once a year and adopts legal instruments for the application of the provisions of the SADC Treaty, though the Summit may delegate the latter function to the Council of Ministers. The Summit reaches decisions by consensus and its decisions are binding. It appoints, on recommendation by the Council of Ministers, the Executive Secretary and his or her secretary, and decides on the creation of commissions, committees and institutions. The Summit elects a Chair and a Vice-Chair of SADC from among its members for an agreed period – usually 12 months – on a rotation basis. In 2013, Joyce Banda, President of Malawi, took over the chairmanship of SADC from Armand Guebuza, the President of Mozambique. President Banda is the first female Chair of SADC and the first female President of Malawi.

 

 

Term

Chair

Country

2013-2014

Joyce Banda

Malawi

2012-2013

Armand Guebuza

Mozambique

2011-2012

Hifikipunye Pohamba

Namibia

2010-2011

Joseph Kabila

Dem. Rep. Congo

2009-2010

Jacob Zuma

South Africa

2008-2009

Kgalema Motlanthe

South Africa

2007-2008

Levy Mwanawasa

Zambia

 

6.2. The Council and the Standing Committee

The Council of Ministers ( Council ) performs the oversight function of SADC. The Council is composed of one minister, preferably the economic planning or finance minister, from each member state. It oversees the functioning, the implementation of policies and programs of SADC and the operations of SADC institutions. It meets at least once a year and report to the Summit, to which it is directly responsible. It advises the Summit on overall policy; approves policies, strategies and work programs of SADC; and defines sectoral areas of co-operation. Like the Summit, the Council decides by consensus. The Summit decides on the creation of commissions. Commissions guide and coordinate co-operation and integration policies and programs in sectoral areas defined by the Council. They work closely with the SADC Secretariat and report to the Council, to which they are directly responsible.

 

The Standing Committee of Officials ( Standing Committee ) is the technical advisor of the Council. It is a technical advisory committee consisting of one permanent secretary or an official of an equivalent rank, preferably from the finance or economic planning ministry, from each member state. It meets at least once a year and decides by consensus.

 

6.3. The Secretariat

The Secretariat , which is located in Botswana’s capital Gaborone, is the institution in charge of implementing the policies of SADC. It is more specifically in charge of the implementation of decisions by the Summit and the Council, strategic planning, management of SADC programs, financial administration, representation and promotion of SADC, and coordination and harmonization of policies and strategies of member states. An Executive Secretary heads the Secretariat. Following the amendments to the SADC Treaty in 2008, the Executive Secretary is assisted by two Deputy Executive Secretaries: a Deputy Executive Secretary for finance and administration, and another Deputy Executive Secretary for regional integration.

 

The current Executive Secretary is Stergomena Lawrence Tax. Previously, in Tanzania, Mrs. Tax held permanent secretary positions in the ministries responsible for trade and industry and for East African cooperation, and held a deputy permanent secretary position in the ministry responsible for planning and the economy. She was appointed by the Summit in Lilongwe, Malawi, in August 2013. The first woman to be appointed Executive Secretary since the creation of SADC, Tax replaces in that position Tomaz Augusto Salomão, a former planning minister in Mozambique. Salomão served as Executive Secretary from 2005 until 2013.

 

The Executive Secretary is the face of SADC. He or she is elected for a term of four years, renewable only once. He or she consults and coordinates with the governments and other institutions of member states, undertakes measures to promote the objectives of SADC and enhance its performance, and promotes cooperation with other organizations. She is also answerable for diplomatic and other representations of SADC, public relations and promotion of the regional body. She is the custodian of SADC property. She prepares annual reports on the activities of SADC, the budget and audited accounts of SADC for submission to the Council. Lastly, the Executive Secretary liaises closely with commissions, directs and monitors the performance of SADC in the various sectors to ensure conformity and harmony with agreed policies, strategies, programs and projects.

 

7. Dispute Settlement and the Tribunal

The dispute settlement system of SADC consists of panels and the Tribunal. SADC dispute settlement processes appear to be ‘hastily copied’ from the dispute settlement system of the WTO. [44] SADC is perhaps the only regional economic community in Africa to replicate the dispute settlement processes of the WTO. [45] Nevertheless, such replication is not without benefits, such as the provision of a more secure platform for the application of politically unpopular decisions.

 

The replication of WTO processes notwithstanding, SADC needs to clear up a few issues. The exact nature of the relationship between the Tribunal and national courts, the effect of SADC law within domestic legal systems of member states, and the enforcement of rulings of the Tribunal should be delineated. [46] SADC law and practice cannot mature if these matters remain unclear. [47]

 

Indeed, the SADC dispute settlement system, as it currently stands, seems unable to settle any dispute through a panel procedure. Annex VI of the Trade Protocol (on panel procedures) is outdated, which may also explain why the dispute settlement of SADC is yet to process any trade dispute. [48] However, sight must not be lost on the fact that several of the most important political problems affecting member states are resolved by SADC outside of the formal dispute settlement process. SADC, through the Summit and Defense Organ, played a pivotal role in handling and/or resolving recent political and security crises in Madagascar, Zimbabwe and the Democratic Republic of the Congo. In the latter case, from 2012 to date, the DRC strongly relied on SADC as a group and on individual SADC members (South Africa, Tanzania, Malawi and Angola) to increase its multilateral bargaining power and to put an end to bloody, foreign-backed insurgencies and the decade-long instability that they fuelled in eastern Congo. In the case of Zimbabwe, SADC support largely shielded the country from feeling the full wrath of the sanctions imposed by the West on the economy and senior members of the ruling elite, though the Zimbabwean economy nonetheless suffered a great deal from the sanctions.

 

7.1. The Panel Procedure

The panel of experts is the platform for dispute resolution created by the Trade Protocol. Before the panel can come into the picture, states parties to a dispute must strive to find a settlement, involving the removal of the trade measure accused of violating the provisions of the Protocol. If the states cannot arrive at a mutually satisfactory agreement on the interpretation and application of the Protocol through co-operation and consultation, the state aggrieved by the measure may retaliate and the parties may refer the dispute to a panel of trade experts appointed by the CMT. If the panel cannot resolve it, the dispute must, as a last resort, be referred to the SADC Tribunal for settlement.

 

The Registrar of the SADC Tribunal concurrently acts as the officer who receives requests for the establishment of a panel. Clement Ng’ong’ola holds specific misgivings about the Registrar’s role in the establishment of trade panels. The Registrar’s administrative functions at both the panel and the appeal stages could create the impression that the dispute settlement process is ‘corrupt’ and recommends assigning the administration of the panel stage to another official, either the CMT or persons from the Secretariat. [49] This point may need further elaboration, however. It is not obvious the Registrar’s role at both the panel and the Tribunal stages is and will be perceived as ‘corrupting’ justice given that the Registrar is merely supposed to perform tasks that are administrative in nature.

 

7.2. The Tribunal

The SADC Tribunal , whose seat is in Namibia’s capital city Windhoek, is the dispute resolution mechanism of SADC. The Summit established the Tribunal in 1992, appointed the 10 judges (called ‘members’) of the Tribunal in 2005 in Botswana, and sworn in the members and inaugurated the Tribunal the same year in Namibia. The Tribunal Protocol ( http://www.sadc.int/files/1413/5292/8369/Protocol_on_the_Tribunal_and_Rules_thereof2000.pdf ) , adopted by the Summit in 2000, provides for the functioning, jurisdiction and membership of the Tribunal. Unfortunately and ironically, since the Tribunal has started hearing cases in 2005, it has not yet heard a trade dispute. All the matters referred to the Tribunal so far concerned human rights violations and staff issues. [50]

 

The Summit suspended the Tribunal in 2010. Lately, the President of South Africa told the media that the SADC Tribunal will be allowed to resume its activities, albeit in a modified judicial and institutional form.

 

7.2.1. Composition

The Tribunal Protocol stipulates that the Tribunal must comprise no less than 10 members, nominated and appointed with fair gender representation. Members must be nationals of member states who possess the qualifications for appointment to the highest judicial offices in their respective states or who are jurists of recognized co0mpetence. No two or more members may at the same time be nationals of the same state. Members may not seek or receive instructions from any member states.

 

Prior to its suspension, the Tribunal had the following members: Frederic Mwela Chomba (Zambia), Petrus T. Damaseb (Namibia), Antonia Guvava (Zimbabwe), Rigoberto Kambovo (Angola), Stanley B. Maphalala (Swaziland), Luis Antonio Mondlane (Mozambique), Isaac Jamu Mtambo (Malawi), Ariranga Govindasamy Pillay (Mauritius), Onkemetse B. Tshosa (Botswana), and Frederick B. Werema (Tanzania). The Council designates five members who sit regularly on the Tribunal and a pool of five additional members from which the President of the Tribunal may invite a member to sit as a judge whenever a regular member is temporarily absent or otherwise unable to carry out his or her functions. Three members form a quorum, and five judges constitute a full bench.

 

Members are appointed for a term of five years, renewable once. They must avoid conflicts of interest and may not exercise any political or administrative function, hold any office in the service of the state, or engage in any occupation, which might interfere with the proper exercise of their judicial functions, impartiality or independence. Nevertheless, they may at any time resign their office by a letter delivered to the Tribunal’s President for transmission to the Council through the Executive Secretary. A member must nonetheless complete cases partly heard by him or her before he or she can effectively quit his or her judicial office.

 

The Tribunal must sit only to consider a case submitted to it so that members do not work on a full-time basis, though the President of the Tribunal may recommend that the members serve on a full-time basis because of the Tribunal’s workload. In that event, the members who elect to work on a full-time basis must not hold any other office or employment. The Tribunal appoints a Registrar who must, under the supervision of the President of the Tribunal, see to the day-to-day administration of the Tribunal.

 

7.2.2. Jurisdiction

Generally speaking, the SADC Tribunal asserts a wide jurisdiction. That general observation must be qualified, though, as the legal position is still unclear. The question seems to be whether the Tribunal has original jurisdiction in all cases or in some cases exclusively. The jurisdiction of the Tribunal is ‘bifurcated’: It has original jurisdiction over a number of matters and, apparently, appellate jurisdiction over trade matters notwithstanding the presence of provisions to the contrary in the SADC Treaty [51] and the Tribunal Protocol. [52]

 

Article 32 of the SADC Treaty and article 14 of the Tribunal Protocol explicitly confer on the Tribunal original jurisdiction over all disputes and all applications referred to it in accordance with the SADC Treaty and the Tribunal Protocol. That means that the disputes and applications must relate to (1) the interpretation and application of the SADC Treaty or protocols, all subsidiary instruments, and acts of SADC institutions; and (2) all matters specifically provided for in agreements that member states may conclude among themselves or within SADC that confer jurisdiction on the Tribunal. All the same, though meant to be unequivocal, this explicit grant of jurisdiction does not dispose of the question as to whether the Tribunal can be a court of first instance in all matters or solely hears appeals from the Panel or lower dispute settlement fora.

 

The Tribunal exerts its jurisdiction over disputes between states, between natural or legal persons and states, between states and SADC, and between SADC as an organization and its staff. When a natural or legal person commences legal action against a member state, consent of the other parties to the dispute is not required but the exhaustion of local remedies is, unless the party bringing the suit against the state is unable to proceed in domestic courts.

 

The Tribunal’s decisions are binding and final. As a practical matter, however, the Tribunal lacks the power and ability to make SADC member states comply with its decisions. Therefore, the Tribunal cannot help but hope that member states act in good faith and enforce its decisions. The Tribunal’s decisions will be enforced only if members accept and comply with them voluntarily.

 

The Tribunal enjoys the competence to hand down advisory opinions, which may be requested by the Summit or the Council. In hearing and determining disputes and in giving its opinions, the Tribunal applies the SADC Treaty, the Tribunal Protocol, other protocols, all subsidiary instruments of SADC institutions. It must also develop its own jurisprudence with due regard to applicable treaties, the general principles and rules of public international law and the laws of member states. Experience elsewhere shows that developing the jurisprudence on the application of community law has proved invaluable in building the momentum indispensable for the effective integration and the protection of trade-related rights. [53]

 

7.2.3. Trade Disputes

It flows from the foregoing that the Tribunal does not have original but appellate jurisdiction in trade disputes. The jurisdiction of the Tribunal in trade disputes is provided for in Annex VI of the Trade Protocol, which underscores cooperation as the principle underlying the SADC dispute settlement process. Its jurisdiction notwithstanding, the Tribunal has still not adjudicated on a single trade dispute.

 

Trade matters are first heard and determined by trade panels whereas the Tribunal hears appeals from panel decisions. Initially, Annex VI did not allow appeals against decisions in panel reports, and it was not until 2007 that amendments to Annex VI made provisions for such appeals. Appeal procedures enhance the efficacy, ‘the integrity and legitimacy’ of the SADC dispute resolution system. [54] One of the primary aims of the system is to clarify and determine rights and obligations that would have been settled in negotiations. [55]

 

The jurisdictional reach of the Tribunal in trade matters overlaps with other dispute resolution systems, like the WTO, SACU, COMESA and the African Economic Community. [ [56] ] This situation of overlapping jurisdictions means that member states may opt to bring a dispute to either the SADC Tribunal or another international forum. Regardless of the prohibition on forum shopping in Article 1bis of Annex VI of the Trade Protocol, the SADC Treaty does not have clear rules to work out conflicts of jurisdiction. As a result, member states are in practice at liberty to have their dispute tried in the court or jurisdiction where they feel they will ‘receive the most favorable judgment or verdict’ [ [57] ] – a phenomenon known as ‘forum shopping’, another grey area of SADC law.  

 

7.3. The Tribunal in the Campbell case

As of February 2011, the Tribunal ( http://www.sadc-tribunal.org/ ) had delivered about 20 decisions. It handled a variety of issues regarding member states. The controversial expropriations of White-owned commercial lands in Zimbabwe was the most litigated issue from any member state, accounting for roughly half of all matters referred to the Tribunal. The Tribunal has not been in existence for a long time and its jurisprudence is accordingly modest. This has not prevented the Tribunal to display a notable level of competence and professionalism, as evidenced by the “well-articulated” Campbell judgments. [58]

 

7.3.1. Campbell v. Zimbabwe

The questions of law in Campbell v. Zimbabwe are: (1) Whether the SADC Tribunal had jurisdiction to entertain the application; (2) whether or not the Applicants had been denied access to the courts in Zimbabwe; (3) whether or not the Applicants had been discriminated against on the basis of race, and (4) whether or not compensation is payable for the lands compulsory acquired from the Applicants by Zimbabwe. [59]

 

On September 14, 2005, the Zimbabwean parliament passed an amendment to the Constitution of Zimbabwe (Amendment 17) that basically authorized the government to expropriate agricultural lands for resettlement purposes without compensation. Following Amendment 17, the Zimbabwean state expropriated many white-owned agricultural lands. Mike Campbell (Pvt) Limited, a Zimbabwean registered company, and William Michael Campbell commenced legal action in the Supreme Court of Zimbabwe, the country’s highest court, challenging the legality of the acquisition of their land by the state. Concurrently, on October 11, 2007, the two Applicants filed an application with the SADC Tribunal challenging the taking by the state of their agricultural land as well as applying for interim measures in terms of article 28 of the Tribunal Protocol.

 

On December 13, 2007, the SADC Tribunal granted the interim measure, which ordered Zimbabwe to refrain from taking any step or permitting any step, directly and indirectly, to interfere with the peaceful residence on, and beneficial use of, the land in question. On February 22, 2008, however, the Supreme Court of Zimbabwe dismissed the two Applicants’ claims entirely. Later, 77 other persons applied to intervene in the proceedings and applied to the Tribunal for interim measures, which the Tribunal both granted. The Mike Campbell (Pvt) Limited and William Michael Campbell case and the cases of the 77 other Applicants were then consolidated into one case.

 

The Applicants deployed several arguments to buttress their central contention that Zimbabwe is in breach of article 6(2) of the SADC Treaty, prohibiting racial discrimination, by enacting and implementing Amendment 17. In the main, they submitted that expropriations, carried out pursuant to Amendment 17, were based solely or primarily on consideration of race and ethnic origin, that they are directed at white farmers, whether or not white farmers acquired the land during the colonial period or after Independence. In reply to the Applicants’ submissions, Zimbabwe denied that its land reform program targeted white farmers only and claimed that the program is for the benefit of the people who were disadvantaged under colonialism.

 

After a long analysis of applicable laws, the Tribunal concluded, with one judge dissenting, that Zimbabwe, through Amendment 17, has discriminated against the Applicants on the basis of race and thereby violated its obligation under article 6(2) of the SADC Treaty. Zimbabwe reacted angrily to the decision by the SADC Tribunal and vowed not to comply with it. Shortly afterwards, Zimbabwe raised objections regarding the operations of the Tribunal and the Summit resolved to suspend the activities of the Tribunal.

 

7.3.2. The Suspension of the Tribunal

In the wake of the Tribunal’s ruling in Campbell, SADC members, at the 30 th Jubilee Summit in August 2010, ordered a review into the role, functions and terms of reference of the Tribunal. [60] The Secretariat then commissioned a review of the Tribunal’s mandate as defined in Article 16 of the SADC Treaty. The decision by the Summit to order a review of the Tribunal’s role, though legitimate on the face of it, had the cumulative effect of suspending the Tribunal as it involved the failure to renew the terms of office of judges whose tenure had expired and the removal of the Tribunal’s powers to hear cases. [61]

 

Even if the future of dispute settlement and problem resolution is not under threat, there are indications that SADC may move towards an alternative judicial model. After much protest by legal professionals, activists and other stakeholders, some SADC members have publicly showed support for the Tribunal and its work. In early 2014, the President of South Africa told parliament that SADC “could [not] live without [the Tribunal]”, but that his legal advisors were looking into an alternative court model. [62]

 

8. Resources

Virtually no general reference for SADC law has been published. It is this absence of general reference that this introduction to SADC law seeks to fill. What is more, apart from the newly launched SADC Law Journal, there exist no periodicals on SADC law. The SADC Law Journal , launched in 2011, is thus the main periodical on SADC law. The annual publication Monitoring Regional Integration in Southern Africa occasionally features legal or legally relevant information on SADC in the volumes that it started publishing in 2001. Last, the SADC Official Trade, Industry and Investment Review is not a legal publication. It is an annual publication interested in business opportunities in the SADC region. It may sometimes contain some information on SADC law.

 

8.1. Publications

Economic studies and (at a significantly lower rate) legal analyses figure in the literature on the Southern African Development Community (SADC). As legal writings on SADC are steadily increasing, and much so since the launch of the SADC Law Journal , this introduction lists a correspondingly greater number of legal publications and a more selective set of economic studies than in the previous edition of this introduction.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.2. Online Resources

Internet searches retrieve a mass of information on SADC scattered over a multitude of websites. However, two websites that collect legal information on SADC stand out. First, the Trade Law Centre for Southern Africa ( http://www.tralac.org/ ) boasts a rich compendium of SADC legal texts ( http://www.tralac.org/resources/by-region/sadc.html ) . Second, the official website of the SADC Tribunal also contains useful legal instruments of SADC .



[ [1] ] Southern African Development Community. Regional Indicative Strategic Development Plan 3 (Southern African Development Community 2004).

[ [2] ] Id .

[ [3] ] Id .

[ [4] ] Id . at 24.

[5] See Gerhard Erasmus, Is the SADC Trade Regime a Rules-Based System? 1 SADC Law Journal 24 (2011).

[ [6] ] Richard Frimpong Oppong, Redefining the Relations Between the African Union and Regional Economic Communities in Africa , in Monitoring Regional Integration in Southern Africa: Yearbook 2009 , 5 (Anton Bösl et al.eds. 2010).

[7] Henry Kibet Mutai, Regional Trade Integration Strategies under SADC and the EAC: A Comparative Analysis, 1 SADC Law Journal 95 (2011).

[8] Southern African Development Community , supra note 1, at 29.

[9] Henry Kibet Mutai, supra note 7, at 81.

[10] Erasmus, Gerhard, Is the SADC Trade Regime a Rules-Based System? 1 SADC Law Journal 18 (2011).

[11] Id.

[12] Henry Kibet Mutai, supra note 7, at 96.

[13] See Richard Frimpong Oppong, Legal Aspects of Economic Integration in Africa (Cambridge University Press 2011)(calling into question the view that effective economic integration is slowed down by purely socio-economic, political and infrastructural problems; and arguing that defective laws would hinder progress even in the absence of such problems).

[14] See Henry Kibet Mutai, supra note 7, at 95.

[15] Gerhard Erasmus, supra note 10, at 29.

[16] Precious N. Ndolvu, Campbell v Republic of Zimbabwe: A Moment of Truth for the SADC Tribunal, 1 SADC Law Journal 78 (2011).

[17] See also Werner Scholtz, Note, Review of the Role, Functions and Terms of Reference of the SADC Tribunal, 1  SADC Law Journal 200 (2011).

[18] Gerhard Erasmus, supra note 10, at 31.

[19] Clement Ng’ong’ola, supra note 1, at 127. Clement Ng’ong’ola, SADC Law: Building Towards Regional Integration , 2 SADC LJ 123 (2012).

[20] See Henry Kibet Mutai, supra note 7, at 85.

[21] Id. at 89.

[22] Precious Nonhlanhla Ndolvu, The State of Trade Liberalisation in Goods in SADC, 2 SADC Law Journal   187 (2012).

[23] Henry Kibet Mutai, supra note, at 86.

[24] Id. at 87.

[25] Precious Nonhlanhla Ndolvu, supra note 22.

[26] Henry Kibet Mutai, supra note 7, at 95.

[27] Id. at 96.

[28] Id . at 92.

[29] Id. at 94.

[30] Id.

[31] Id.

[32] Id.

[ [33] ] See International Monetary Fund (IMF), Balance of Payments Manual 86 (International Monetary Fund 1993).

[34] United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2013: Global Value Chains: Investment and Trade for Development 40 (United Nations Conference on Trade and Development 2013). [hereinafter WIR 2013]

[35] United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2012: Towards a New Generation of Investment Policies 40 (United Nations Conference on Trade and Development 2012). ). [hereinafter WIR 2012]

[36] WIR 2013, supra note 34, at 40 .

[37] Id. at 40-41.

[38] Id. at 40.

[ [39] ] United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2010: Investing in a Low-Carbon Economy 33 (United Nations Conference on Trade and Development 2010).

[40] For a complete analysis of the 2009 SADC Model Central Bank Law, see Dunia P. Zongwe, Conjuring Systemic Risk Through Financial Regulation by SADC Central Banks , 1 SADC LJ 99 (2011).

[41] In addition to the author’s own knowledge, information in this section is taken from, among others, the following sources: GlobaLex (2014); Southern African Development Community, Member states (2014); Central Intelligence Agency, World Factbook (2014); World Trade Organization (2014); World Bank databases; World Bank, Doing Business 2014: Regional profile: Southern African Development Community (SADC)(2014);and Mo Ibrahim Foundation, The Ibrahim Index of African Governance (2014);

[42] Gerhard Erasmus, supra note 10, at 18.

[43] Id. at 34.

[44] Clement Ng’ong’ola, Replication of the WTO Dispute Settlement Processes in SADC , 1 SADC Law Journal 35 (2011).

[45] Gerhard Erasmus, supra note 10, at 36.

[46] Id . at 34.

[47] Id .

[48] Id. at 31.

[49] See Clement Ng’ong’ola, supra note 44, at 55.

[50] Gerhard Erasmus, supra note 10, at 31.

[51] Article 32.

[52] Articles 14 and 15.

[53] Gerhard Erasmus, supra note 10, at 33.

[54] Id. at 21.

[55] Clement Ng’ong’ola, supra note 44, at 53.

[ [56] ] Joost Pauwelyn, Going Global, Regional, or Both? Dispute Settlement in the Southern African Development Community (SADC) and Overlaps with the WTO and Other Jurisdictions , 13 Minn. J. Global Trade 231 (2004).

[ [57] ] Note, Forum Shopping Reconsidered, 103 Harv. L. Rev. 1677, 1677 (1990) .

[58] Precious N. Ndlovu, Campbell v Republic of Zimbabwe: A Moment of Truth for the SADC Tribunal, 1 SADC Law Journal   79 (2011).

[59] The summary of the Campbell case is taken from Dunia P. Zongwe, The Contribution of Campbell v. Zimbabwe to the Foreign Investment Law on Expropriations (Comparative Research in Law & Political Econ

[60] For information on the suspension of the Tribunal and for a brief recap of the events that led up to the suspension, see Precious N. Ndolvu, supra note 58, at 77-78.

[61] Precious N. Ndlovu, supra note 58, at 78.

[62] Zuma Suggests Alternative SADC Tribunal, News24 (SA), Nov. 6, 2013, available at http://www.news24.com/SouthAfrica/Politics/Zuma-suggests-alternative-SADC-tribunal-20131106 .