Abuja Treaty Establishing the African Economic Community: ratification

Meeting report

FOREIGN AFFAIRS, TRADE AND INDUSTRY AND FINANCE PORTFOLIO COMMITTEES, FINANCE AND ECONOMIC AFFAIRS SELECT COMMITTEES: JOINT MEETING
20 September 2000
ABUJA TREATY ESTABLISHING THE AFRICAN ECONOMIC COMMUNITY: RATIFICATION

Relevant Documents:
Abuja Treaty Establishing the African Economic Community
Table of Contents for Treaty Establishing the African Economic Community (see Appendix 1)
Explanatory Memorandum (see Appendix 2)
Legal Opinions by Chief State Law Advisor: Justice Department, dated 22 October 1999 (see Appendix 2)

SUMMARY
This was a briefing by Mr W Nhlapo, Deputy Director-General: Africa, Foreign Affairs, on the Abuja Treaty. The aim now is to have the treaty ratified. Mr Nhlapo gave a brief summation of the Treaty, with an overview of the status of the different African regional organisations. He said the aim now is to look realistically at the institutions the Treaty calls for so that it is realistic and functioning rather than simply a "grand idea".

Discussion focused on whether South Africa needs to pass any legislation in order to ratify the Treaty. The answer appears to be "no", although this is not certain. Other than this, members were concerned with the "ambitiousness" of the Treaty, particularly the idea of monetary union and a single currency. Mr Nhlapo reminded Members that can ratify the Treaty on principle and keep the option of passing legislation to meet the needs of South Africans.

MINUTES
Mr Nhlapo described some of the processes relevant to the Abuja Treaty and its latest developments. The Treaty which South Africa signed on 10 October 1997, calls for the creation of an African Economic Community.

The first stage of this process ended in June 1999. The overall assessment is optimistic but there have been problems with regional integration, particularly in north and central Africa. The first stage of the treaty calls for all regional economic communities to be in place. Although they are in place, there have been problems with their functioning. This raises the question of objectives being realised. For example, the latest SADC summits have required extensions. This is indicative of problems and the fact that integration has been hard to facilitate. One of the main problems still to be addressed is the issue of inter-trade. These and other issues will have to be addressed to turn the Treaty from a signed document into something that functions.

The West African regional union is the best organised one so far. Its existence as a union "goes beyond its institutions". At the other end of the spectrum is the Economic Community of Central African States, which has been barely functioning since its existence. This has been largely due to problems in the DRC, Rwanda and Burundi; however, there has lately been revival and determination to get it functioning. East Africa has three economic groups and this puts a strain on some countries in terms of split allegiances. The Arab union is the only one not to have signed the protocol. All who have signed are being urged to ratify the Treaty. South Africa will be a driving force during the transition period.

In all parts of Africa, there is now a process of tightening up and a search for functioning building blocks to help implement the Treaty. There has been a call for an accelerated implementation of Abuja, through a shortened process and the speedy establishment of all institutions called for, especially the Pan-African Parliament and a central monetary union. Mr Nhlapo calls for a look at the feasibility of these institutions so they are not just "grand ideas". He does not want to rush to establish these institutions before they can be managed or they might be an embarrassment to the African continent. Mr Nhlapo suggested that since regional integration is proving to be difficult, continental integration should be approached with caution. He noted, however, that this caution would be hard to maintain in the face of overwhelming continental enthusiasm.

Mr Nhlapo also noted that South Africa will not be able to continue its work with SADC if it remains outside of the Abuja Treaty framework and pointed out that leadership is expected from South Africa.

Discussion
(Q) Dr Davis, Chairperson of the Trade and Industry Portfolio Committee: I want to remind everyone of the profound leap we are taking in entering into the Abuja Treaty. Think, for example, of Article 6 that calls for a common African currency. Please keep this in mind.

I see the second stage of the Treaty involves working toward regional free trade. What is happening in this area? I also note that the fourth stage calls for continental unity only two years after regional unity. Isn't this a big leap?

(A) Mr Nhlapo, Deputy Director-General: Africa, Foreign Affairs: Different regions will have different reports on their progress in free trade. Overall, we have to look at the implications of our decisions and how to implement them. A lot still needs to be done. We need to look at sustainable mechanisms so that this Treaty will not be unrealistic. To this end, we do not have to follow the stages of the Treaty as written. We have to take into consideration problems of corruption and particularly the fact that Africa has weak leadership.

(Q) Mr Moosa, Chairperson: Economic Affairs Select Committee: The State Law Advisor emphasises this is not a self-executing Treaty. Are we therefore to prepare legislation for this, or not until much later? I am also concerned with the decision-making mechanism at Article 10(4). It says decisions will be adopted by consensus or, failing that, by a two-thirds majority of Member States. I think this is too far-reaching in that it would be easy for a two-thirds majority to take decisions. This could have a negative impact. I also wonder what the State Law Advisor means in referring to "municipal courts", considering that South Africa has no municipal courts.

(A) Mr Nhlapo: I am not a lawyer but I will get clarification on these "municipal courts".
As far as legislation is concerned, it is determined by the nature of the protocols.
Remember, we have no obligation to move into anything that will undermine our own interests. This is our guiding principle. Our problem as South Africans is that we don't participate in these meetings at the appropriate level. This means decisions are being taken without us. We must be there while decisions are being made. As for the Treaty's decision-making mechanisms, they were based on the OAU Treaty.

(Q) Mr Moosa: Perhaps they mean "domestic courts"?

(Q) ANC Member: What about domestic legislation regarding enforcement? Also, do we envisage any amendments to the Treaty? I think this is a very ambitious treaty.

(A) Mr Nhlapo: So far the major concentration has been on building blocks. As for legislative implications, I am unaware of any country having to pass legislation in order to ratify this Treaty. But we will look into that. As for envisaged amendments, this will be impacted on by decisions. Once the union is completed, the potential need for amendments will be clear.

Yes, I agree the Treaty is ambitious. So are Africans! But our ambition must be informed. This is why leadership is important. We aim to reduce our ambitious plans into concrete, realistic objectives and put these realistic mechanisms into place.

(Q) Member: The answer to Mr Moosa's question is still not clear. Do we have all the necessary legislation in place to ratify this Treaty?

(A) Mr Nhlapo: The State Law Advisor seems to imply so; otherwise, it wouldn't be giving advice. But we are looking at the implications and obligations of ratification. I will look into whether we have the necessary legislation to ratify. In addition, remember that we can enter into the Abuja Treaty on principle and this will not impede us from passing legislation to meet our needs.

(Q) Ms Mohamed (ANC): Yes, it is very ambitious. Look at Stage 6. What is behind this single currency and monetary union? Has this been debated? Remember that economic and political stability are linked.

(A) Mr Nhlapo: In terms of political stability, it is mostly the central African states that are not stable. I am thinking of the volatile "Great Lakes" region of Rwanda, Burundi and the DRC. We can't have development without addressing stability, democracy and peace. Also, there is no peace and stability without economic development and vice versa.

(A) Dr Davis: Look at the European Union as a precedent. This is now a general, enabling document so any delay is unnecessary. There is no reason for us not to implement. And the State Law Advisor's document looks as if it is giving us the "go ahead".

(Q) Mr Moosa: What about the gender provisions? This whole Treaty needs engineering to be brought up to speed.

(A) Mr Nhlapo: I think it has been debated. It appears to be consistent. The process of all review will have to take all this into consideration.

The government's request for approval of the Bill was voted on. The Foreign Affairs Portfolio Committee gave its approval, as did the Trade and Industry Portfolio Committee. The Finance Portfolio Committee did not have a quorum so it was decided they would vote at another time.

Appendix 1:
TREATY ESTABLISHING THE AFRICAN ECONOMIC COMMUNITY

TABLE OF CONTENTS
PREAMBLE
Chapter 1 Definitions
Chapter 11 Establishment, Principles Objectives, General Undertakings and
Modalities
Chapter 111 Organs of the Community
Chapter 1V Regional Economic Communities
Chapter V Customs Union and Liberalisation of Trade
Chapter V1 Free Movement of Persons, Rights of Residence and Establishment
Chapter V11 Money, Finance and Payments
Chapter V111 Food and Agriculture
Chapter 1X Industry, Science, Technology, Survey, National Resources and Environment
Chapter X Transport, Communications and Tourism
Chapter X1 Standardisation and Measurement Systems
Chapter X11 Education, Training and Culture
Chapter X111 Human Resources, Social Affairs, Health and Population
Chapter X1V Co-operation in Other Matters
Chapter XV Special Provisions in respect of certain countries
Chapter XV1 Solidarity, Development and Compensation Fund
Chapter XV11 Financial Provisions
Chapter XV111 Settlement of Disputes
Chapter X1X Relations between the Community and Regional and Economic Communities, Regional, Continental Organisations and Other Socio-Economic Organisations and Associations
Chapter XX Relations between the Community, Third States and International Organisations
Chapter XX1 Relations between Member States, Third States, Regional and Sub-Regional Organisations and International Organisations and International Organisations
Chapter XX11 Miscellaneous Provisions

Appendix 2:
EXPLANATORY MEMORANDUM

Documentation attached:
Legal Opinion by the Chief State Law Advisor, Department of Justice dated 12 October 1999
Legal Opinion by the Chief State Law Advisor, International Law dated 22 October 199

1. Summary
The Treaty Establishing the African Economic Community (Abuja Treaty) was adopted on 3 June I991 and entered into force on 12 May 1994. The treaty has been signed by all member states of the Organization of African Unity (OAU), except Eritrea. South Africa signed the treaty on 10 October 1997. The treaty still has to be ratified by nine member states. including South Africa.

The treaty lays the foundation for the eventual establishment of an African Common Market and, together with the OAU Charter, regulates the work and aims of the OAU. The treaty is the focal point of current OAU thinking, as was evident in the deliberations at the OAU's Fourth Extraordinary Summit, which took place in Libya in September 1999. It is therefore imperative that South Africa ratifies the treaty as a matter of priority.

In terms of Article 231 (2) of the Constitution. the Abuja treaty is herewith submitted for ratification by Parliament. Ii is recommended that the matter be referred to the relevant Parliamentary, Committees for scrutiny prior to ratification.

2. Background
The treaty provides for the creation of an African Economic Community through a gradual process of co-ordination, harmonisation and progressive integration of the activities of existing and future Regional Economic Communities (RECs) in Africa. This will be done in six successive stages over a period of 34 years.

Stage 1 Strengthening and creating RECs, i.e. SADC, COMESA etc within the first 5 years;

Stage 2: Stabilisation of tariff and other barriers to regional trade and the
strengthening of industry and energy (next 8 years) sectorial integration particularly in the field of trade, agriculture, finance transport and communication;

Stage 3.. Establishment of a free trade area (further 10 years);

Stage 4 Harmonisation of tariff and non-tariff systems 2 years);

Stage 5: Establishment of a Common Market and the adoption of common
policies (4 years); and

Stage 6: Integration of all sectors, establishment of a Central Bank and a single African currency, setting up an African Monetary Union and creating and electing the first Pan-African Parliament.

In June 1999, the first stage for the establishment of the AEC came to an end and the OAU again called on member states to continue with the process of strengthening existing regional economic communities. The OAU is currently assessing the progress made to date and it has become clear that the issue of African economic integration is a focal point in its thinking at the dawn of the new century This was evident at the OAU Summit in Algiers in July 1999 and again at the OAU's Extraordinary Summit in Sirte, Libya in September 1999

In the Algiers Declaration, the Heads of State and Government emphasised their strong belief "that the promotion of economic co-operation and integration for the establishment of the African Economic Community as provided for under the Abuja Treaty will help consolidate the efforts being deployed by our countries to revive and develop their economies and to address the major problems including the scourge of AIDS, as well as environmental problems, namely water and desertification related issues and threats to bio-diversity.

The Sirte Declaration went further by calling for the acceleration of the process of implementing the treaty by shortening its implementation periods. In particular, it aims to ensure the speedy establishment of all the institutions provided for in the treaty such as the African Central Bank. the African Monetary Union, the African Court of Justice and in particular, the establishment of the Pan-African Parliament by the year 2000.

3. Implications for South Africa
Cabinet approved, South .Africa's accession 10 the Abuja Treaty and membership of the AEC on 4 September 1997 (Cabinet Memorandum l3/1997). At that time, South Africa was under considerable political pressure to sign the treaty since it. was one of only two countries (the other being Eritrea) that had not yet signed the treaty. In the process of obtaining Cabinet approval for South Africa's signature of the treaty, the Department of Foreign Affairs consulted with the Departments of Trade and Industry and Finance. It was accepted that the treaty would create some far reaching implications and obligations for South Africa, but that South Africa would not be able to continue its prominent role n the sub-region and on the Continent if it remained outside the framework of the treaty

The implications of the treaty for South Africa are self-evident and far-reaching. Since it will have financial and legislative implications throughout the stages of development of the AEC, it is recommended that the matter be referred to the Portfolio Committees on Foreign Affairs, Finance, Trade and Industry, the Select Committee on Economics of the National Council of Provinces as well as other relevant role players in parliament. The nature of the treaty also requires that both Houses of Parliament should approve its ratification.

It is the opinion of the Office of the Chief State Law Adviser (International Law) that there are no self-executing provisions contained in the treaty that will become law in the Republic upon approval of the treaty by parliament. The subject matter of the Abuja Treaty does not lend itself to self-executing provisions. As a constituting document for an African Economic Community, the provisions of the treaty are vaguely phrased and the States Parties will be required to give effect to these provisions through legislation, regulations or policy decisions. Furthermore, as the AEC will be implemented in stages, many of the specific legal obligations that would require legislative implementation must still be determined through the negotiation of the specific protocols and the regional co-operation required by the treaty.

Ratification of the treaty is as much a political consideration as it is an economic decision. Although there is understanding for the implications the treaty has for South Africa, it is, from a political point of view, imperative that the treaty be ratified if South Africa wishes to remain a committed, influential and credible member of both the OAU and SADC. South Africa will also not be able to escape the economic implications of the treaty, since it has already fundamentally influenced the principles upon which African countries base their economic planning. The future planning of and decision making within African regional economic communities such as the SADC will also necessarily be influenced by the aims of the AEC. The fact that the Sirte Summit of the QAU accepted the notion of accelerating the AEC process gives further urgency to the process of ratifying the treaty.

President Mbeki has, on a number of occasions, expressed South Africa's support for the ideals of the AEC and the value it has as an appropriate response by Africa to the challenge of globalisation. In his address to the OAU Summit in Algiers in juicy 1999 the President said the following:

"The steps we have proposed towards vigorous and practical implementation of the provisions of the Abuja Treaty by ourselves, taken together with the suggestions that were made relating to the fundamental issues of democracy, good governance, the recovery of humane African values, peace and stability would, we believe, constitute an appropriate response to the challenge of globalisation".

The member states of the OAU have unanimously accepted the aims of the AEC and have given their support to the acceleration of this process. Against this background, it is imperative that South Africa should display its commitment to the development of the Continent and its solidarity with the views of its partners in Africa. Parliament is therefore urged to ratify the Abuja Treaty as a matter of priority.

Pretoria
2 November 1999

Appendix 3:
OFFICE OF THE CHIEF STATE LAW ADVISER INERNATIONAL LAW
DEPARTMENT OF FOREIGN AFFAIRS
22 October 1999

PARLIAMENTARY RATIFICATION OF THE TREATY ESTABLISHING THE AFRICAN ECONOMIC COMMUNITY (THE ABUDJA TREATY)

1. Your urgent request for legal advice dated 19 October 1999 refers.

2. Parliamentary ratification of the Treaty Establishing the African Economic Community (the Abudja Treaty) is proposed before the end of this parliamentary session. The State Law Advisers (International Law) have been requested to advise on:
i) Whether the Abudja Treaty is consistent with international law in general and South Africa's international obligations.
ii) Whether the Abudja Treaty contains any self-executing provisions which will become law in the Republic upon Parliamentary approval.

3. General
3.1 We have noted in the background information supplied to us that a legal opinion was given on this matter on 30 June 1994 (Re 198/94) in which it was stated inter alia that because of the far-reaching implications of the Abudja Treaty that the matter be referred to the appropriate authorities for a thorough investigation of all the implications and consequences involved.

3.2.1 We wish to reiterate that it is imperative that these consultations should have been held before this treaty is ratified in view of the far-reaching implications of the Abudja Treaty. It is trite law that once a treaty has been ratified the provisions of that treaty become binding on that State and the State accordingly has an obligation to implement the provisions of that treaty. South Africa should thus ensure that it is in position to implement the provisions of the Abudja treaty prior to ratification. As the Treaty affects a wide spectrum of line function departments such a determination cannot be made by one department alone, although the Department of Trade and Industry should play a lead role in this regard.

4. International law obligations in the treaty
4.1 The provisions of the Abudja Treaty are consistent with international law in general.

4.2 The provisions of the Abudja Treaty are however by their nature very far-reaching and may have implications for existing international obligations such as those contained in the GeneraI Agreement on Tariffs and Trade (GATT), the South Africa/European Union Trade Agreement and regional co-operation of the SADC States, particularly the Southern African Customs Union. As the administration and implementation of these agreements are the line-function of the Department of Trade and Industry we are not in a position to comment on these agreements in detail.

4.3 As noted above, broad consultation and involvement of all affected departments in the Abudja Treaty is imperative. We suggest that as part of this broad consultative process that the Treaty be submitted to all Parliamentary Committees before it is submitted to the plenary of the National Assembly and National Council of Provinces for approval.

4.4 As a multilateral treaty which will have financial and legislative implications throughout the stages of development of the African Economic Community, ratification of this treaty should be approved by both Houses of Parliament in accordance with section 231(2) of the Constitution of the Republic of South Africa (Act No 108 of 1996) before an instrument of ratification can be deposited with the OAU.

5.1 Self-executing provisions in the Abudja Treaty

5.2 With regard to the self-executing provision of the ABUDJA Treaty it should be noted that a treaty establishes two inter-related kinds of obligations. The first are obligations on an international level which are binding upon the State Parties and only enforceable under international law. The second are obligations to incorporate the provisions of the treaty into domestic law, which would them be enforceable in South Africa's municipal courts. Incorporation into domestic law would normally be done by enacting Iegislation and in terms of section 231(4) of the Constitution the obligations of a treaty only become law in South Africa once they have been so incorporated. Section 231 (4) of the Constitution however also makes provision for self-executing treaties.

5.3 Although there is much academic debate on self-executing treaties a working definition can be accepted as the treaty (or provisions therein which lend themselves to Judicial or administrative application without further legislative implementation i.e. whether or not legislation is required to put the treaty obligations into effect. Determining whether provisions of a treaty are self-executing can be a complex process however certain guidelines are gradually emerging in international practice. These include the intention of the parties to the treaty, the necessity of legislation, the precision and detail of the language employed, the subject matter of the treaty, negative obligations and the rights and rights and duties of the individual.

5.4.Taking these factors into consideration we are of the opinion that no provision of the Abudja Treaty is self executing for the following reasons:

5.4.1 Self-executing provisions will normally be found in treaties that grant rights to individuals, such as human rights treaties. By contrast. the Abudja Treaty creates certain obligations for the State Parties and not rights for individuals per se. Thus the subject matter of the treaty does not lend itself to self-executing provisions

5.4.2 The intent of the Parties is clearly to establish and African Economic Community.
This is a function of the State and a certain amount of discretion is required by the State as to how they will implement the obligations within the framework of the Treaty. Self-executing provisions which would be directly applicable in the domestic would hamper the necessary discretion which is required in this regard;

5.4.3 The provisions of the Treaty are vaguely phrased. As a constituting document the Treaty focuses on the principles and framework under which an African Economic Community will be established. The details of the actual establishment of the AFC as well as how these provisions will he implemented over time will require further details and legislation by the parties.

5.4 4 Although some provisions of the treaty are phrased in the negative these are not principles that would require or be capable of domestic implementation on their own. These obligations must be interpreted within the context of the Treaty and accordingly we are of the opinion that even these negative obligations cannot be considered to be self-executing.

5.5 The implications of this is that if the provisions of the Abudja Treaty require domestic implementation then this will have to be done through legislation. As a principle of international law a State should have the necessary legislation in place to give effect to the provisions of a treaty before it ratifies that treaty. Whether or not legislation is required at this stage depends on the stage of implementation of the AEC and whether giving effect to the obligations contained in that stage will require legislation. This will ultimately be for the line function department to determine. The first two stages of implementation of the APC deal with regional economic communities and it will thus be for the Department of Trade and Industry to determine whether legislation in this regard will be required. As the AEC is being developed in stages it may also be necessary to draft legislation for the implementation of these obligations as the details of each stage of implementation are finalised. However this can only be done at a later stage as the development of the AEC progresses.

6. We trust that the above will he of assistance and are available should you have any further queries in this regard.

pp CHIEF STATE LAW ADVISER (IL)
22 OCTOBER 1999