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Promoting South-South Civil Society Cooperation

A bi–monthly e-newsletter of the CUTS Africa Resource Centre (CUTS-ARC), published with the objective to promote South-South Civil Society Co-operation and provide information about the latest happenings in the African region on various trade issues.

Vol. 1 No. 2 - June 2001
Vol. 1 No. 1- April 2001

Contents

Editor’s Note

Event Report

National Reference Group Meetings

Representation

DFID’s Africa Trade and Poverty Programme

News Brief

Doha Preparatory Meeting for African Negotiators

Bill Opens Door for Generic Drugs

ZCC to Prosecute MOCs

Announcement

Scholarship for Consumer Leaders

Editor’s Note

The month of July 2001 was momentous for Africa as it witnessed the transformation of the 38 year old Organisation of African Unity (OAU) into the African Union (AU) during the summit which ended on 11^th July 2001 in Lusaka, Zambia. Leaders from across Africa expressed optimism on the continentwide cooperation that could lift their countries out of the scourge of poverty.  

This was echoed by two regional leaders, Erastus Mwencha of Common Market for Eastern and Southern Africa (COMESA) and Prega Ramsamy of Southern Africa Development Community (SADC). They revealed that their organisations were determined to cooperate with each other in order to ensure that the region grows by at least 7 percent if they are to address issues of poverty, malnutrition and sustainable development.

This new development should be supported especially that the constitutive Act of the African Union recognises the need to build partnership between governments and all segments of the civil society, in particular women, youths and private sector. This was evident from the Civil Society Conference that was convened by OAU in partnership with United Nations Economic Commission for Africa (UNECA) and Inter Africa Group held in Ethiopia on June 11, 2001. This was part of the consultative process, which culminated into the transformation of the OAU into the AU. The conference was aimed at enhancing and consolidating cooperation between OAU and the African civil society organisations.

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Event Report

National Reference Group Meetings

The month of June witnessed holding of National Reference Group (NRG) Meetings in Kenya (13^th June), Tanzania (15^th June), Zambia (18^th June) and South Africa (29^th June). These meetings were held in the context of the 7-Up Project: Comparative Study of Competition Regimes in Select Developing Countries of the Commonwealth.

These groups constitute representatives from all stakeholders such as relevant Government officials including members of competition authorities, representatives from business or industry, civil society including consumer groups, academia, media and other experts in the competition field.

The aim of these meetings was to test the results of the phase-1 outcome of the 7UP project including incorporating the comments and suggestions, which surfaced during the meetings into the final country report. The NRGs are also responsible for dissemination of information coming out of the project.

The meetings which were attended by representatives from CUTS, highlighted the following issues and points:

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Kenya

·        The Competition Authority should enjoy full autonomy and receive more budgetary support.

·        State owned enterprises must come under the purview of the Competition Act.

·        There has to be comprehensive consumer protection law.

·        There should be controls on Merger & Amalgamation (M&A), but that should address the concern that even the biggest Kenyan companies are much smaller compared to the multinational companies.

·        Concerns were expressed on the possibility of effective enforcement of competition policy in the era of globalisation where cross border abuses are very common.

·        Unrestricted foreign entry might kill the domestic players that are necessary for the development of the country.

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Tanzania

·        The Competition law in Tanzania is quite broad in scope and also applies to the state owned companies. The provisions of the Act are quite exhaustive. The only problem that is faced is the implementation.

·        The Restrictive Trade Practices Commissioner’s office comes under its parent ministry and does not enjoy sufficient autonomy. Moreover, the Act only provides for a single person as the regulatory decision-maker. This coupled with the fact that the Commission does not have adequate resources, makes it even more difficult to discharge its duties.

·        The Government is actively considering funding consumer organisations.

·        The authorities have not released funds to the Commission.

Zambia

·        Zambia Competition Commission (ZCC) is a quasi-adjudicative body accountable to a special legislation and the Ministry of Commerce and Trade. It also has prosecutorial and adjudicative power thereby making it legally very effective.

·        Budgetary support from Government has gone down over the years this has made the Commission scale down certain activities.

·        The Commission has handled Merger & Amalgamation ( M&A), Unfair Trade Practices      (UTP) and Anti-competitive Practices (ACP) cases. Decisions in M&A cases are made within 3-6 months and ACP cases within three months whereas ATP cases are decided upon within a month.

·        The main obstacle that ZCC is facing is that the workload is too heavy for the available staff. The shortage of staff is due to poor funding such that there is no prosecutor.

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South Africa

·        The Competition Authority should be accountable to the public for the decisions taken, i.e. how are decisions taken.

·        That strategy should be worked out to create greater awareness on issues concerning competition.

·        Some fundamental management problems were noticed when the rating of the Competition Authorities as per the Global Competition Review Survey was discussed.

All the NRG meetings were organised by CUTS’s 7-Up project partner institutions in the four African project countries. The partner institutions are; Institute of Economic Affairs (IEA) in Kenya, Economic and Social Research Foundation (ESRF) and the Christian Council of Tanzania (CCT) in Tanzania, Institute of Economic and Social Research and Zambia Consumer Association (ZACA) in Zambia and International Global Dialogue (IGD) in South Africa.

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Representation

DFID’s Africa Trade and Poverty Programme

CUTS-ARC was invited by DFID to a logframe workshop on Trade and Poverty Programme in Africa, which was held at Lusaka, Zambia, on 5^th June. The workshop drew participants from all National stakeholders from Government and non-government stakeholders including academia, NGOs, private sector and civil society.

The workshop was aimed at mapping out a need assessment for Zambia with a goal of establishing a pro-poor and environmentally sustainable economic integration and participation by Zambia in the, regional and international trading system.

The background to this programme is that arising from the Scoping Mission to East and Southern Africa in mid 2000, DFID decided to launch the Africa Trade and Poverty Programme (TPP) in 2001.

To this effect funding of 7.5 million Pound Sterling has been approved for TPP to work in up to 12 countries across Sub-Saharan Africa (SSA), as well as in regional organisations, to build capacity for trade reforms which serve poverty reduction and associated environmental sustainability objectives.

The expected outcome is enhanced government capacity to formulate and implement trade negotiations strategies which reflect the poverty and environment opportunities and threats posed by trade liberalisation.

Regarding NGO stakeholders (including academia, private sector and civil society), especially representing the poor and women and concerned with environmental management, it is expected that their capacity to analyse impacts of trade policies and to engage with and influence trade policy formulation will be enhanced.

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News Brief

Doha Preparatory Meeting for African Negotiators

Trade negotiators from 30 African countries met in Addis Ababa, Ethiopia from 26-29 June for a preparatory meeting for the fourth WTO Ministerial Conference (9-13 November in Qatar).

The aim of the meeting was to discuss whether African countries should support a new round of trade negotiations, how to address the failure to implement existing WTO rules, and whether labour and environmental standards should be part of a new trade round.

Patrick Asea on behalf of the Executive Director of the Economic Commission for Africa called for “large reductions in actual levels of market distorting protection and support in all countries” as a fundamental requirement for successful trade negotiations.

In Conclusions and Recommendations of the meeting, delegates considered the status of “other issues” as proposed by some WTO members. They concluded that there is “no consensus to negotiate and set up rules in these areas in the WTO”, as these issues are not within the WTO competence, would overload the WTO agenda, and would add more burden of obligations.

Furthermore, delegates emphasised the need for Africa to maintain unity in multilateral trade negotiations and continue to seek the “effective implementation of WTO obligations by developed countries, especially those relating to special and differential treatment measures for developing countries.

The preparatory meeting was jointly organised by the Economic Commission for Africa (ECA) and the Organisation of African Unity (OAU), in collaboration with United Nations Conference on Trade and Development (UNCTAD), The African Economic Research Consortium (AERC) and the WTO. The outcome of the meeting will be forwarded to the meeting of the African Union (AU) Ministers of Trade, to be held in Abuja, Nigeria, from 17^th to 21^st September 2001.

For details: www.uneca.org/what_is_new_home.htm

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Bill Opens Door for Generic Drugs

With the passing of the Industrial and Property Bill, the restrictive patent protection enjoyed by half the anti-retroviral registered in Kenya vanished when the country’s parliament unanimously passed the Bill.  This means that for the first time the government and importers will buy patented drugs from the cheapest source.

The Bill gives the Kenyan Government a free hand in licensing generic manufacturers, thereby raising the possibility of local production of generic versions of a wide range of drugs for other diseases. This has come at a time when some Kenyan manufacturers are conducting preliminary trials in the formulation of Key anti-retroviral.

The reaction on Kenya’s move from the Director-General of the Geneva based International Federation of Pharmaceutical Manufacturers Mr. Harvey Bale was “from our perspective, nothing will change at all”. This was in contrast with the reaction of Indra van Gisbergn, Medicin san Frontiers who said “Patient rights have won over patent protection, first in South Africa and now in the parliament of Kenya”.

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ZCC to Prosecute OMCs

The intended prosecution of Oil Marketing Companies (OMCs) who have been involved in collusion aimed at fixing oil prices will go ahead irrespective of the fact that the prices have been reduced after threats by the Energy Regulation Board (ERB).

This was stated in an interview by the Zambian Competition Commission (ZCC) executive director George Lipimile who said that the Commission would proceed to prosecute any oil marketing company that would be found to have violated the Competition and Fair Trading Act. “We are going ahead with investigations aimed at prosecuting companies which will be found to have violated the Competition and Fair Trading Act,” said Lipimile.

He further emphasised that ZCC investigations are aimed at ensuring that a complete liberalisation of the sector is attained and also to allow market forces determine the price, allocation and storage of fuel in the country. He stressed the need for effective enforcement of all business-related statutes applying in any sector in order to minimise causes of collusion.

The ZCC chairman Nicholas Kwendakwema also stated that OMCs had connived by setting up uniform prices for the commodity and by jointly signing a communiqué to the ERB regarding the level of prices.

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Announcement

Scholarship for Consumer Leaders

Applications are invited from Consumer Leaders in select African countries for Indian Scholarship in the form of study tours in India. The objective of these study tours will be strengthening leadership skills of consumer activists in the region. Candidates from Sub-Saharan African countries are requested to apply to CUTS ARC at following address.

Contact Us

Africa Resource Centre

Suite 4.11, Main Post Office Building,
Cairo Road, P.O. Box 37113, Lusaka, Zambia
Ph: (00) 260-1-224992
Email: cutsarc@zamnet.zm
lusaka@cuts.org  

This is a strictly non-commercial and educational service for non-profit organisations and individuals.