Discussions
Mapping the architecture of SADC Protocols for infrastructural development under the RIDMP
William Mwanza, tralac Researcher, discusses the legal underpinnings of SADC’s regional infrastructure development initiative
Infrastructural development is a critical prerequisite for enhanced regional integration and development in the Southern African Development Community (SADC) region. The region’s plans for an investment drive in infrastructure under the Regional Infrastructure Development Master Plan (RIDMP) are therefore a welcome development. This plan and some vital issues that require attention for its effective implementation were discussed in some detail in a previous hot seat comment on operationalising SADC’s RIDMP, which can be accessed here.
In that comment, one aspect of the plan that was briefly touched upon is the need to place the RIDMP within the wider institutional setup of SADC. This aspect is particularly important and will now be elucidated further.
To start off, investment into sectors covered by the RIDMP, such as energy, transport and information and communication technology (ICT), would essentially bring about regional network infrastructure services, which would in turn galvanise regional production and trade networks. What is interesting is that the implementation of projects within the framework of the RIDMP would not be embarked on in isolation, but within a network of SADC Protocols that exists to guide the development of the respective sectors. The extent to which these Protocols are effective in the respective SADC Member States is an issue that will be explored in more detail in tralac’s upcoming book on community law and dispute settlement within the COMESA-EAC-SADC Tripartite framework. For now, however, it is fair to say the various protocols relevant to specific projects would need to be clearly mapped as implementation would ideally be through these.
The RIDMP provides for infrastructural development in six sectors namely: energy, tourism, transport, ICT, meteorology, and water. These sectors are covered by four SADC Protocols as below:
- Protocol on Energy;
- Protocol on Development of Tourism;
- Protocol on Transport, Communications and Meteorology; and
- Protocol on Shared Watercourses.
The Protocols provide for measures that would see the effective development of the respective sectors particularly through cooperation and harmonisation of policies and laws. They address the specificities of the different sectors that are vital for sectoral progress on the regional level. In spite of the specific nature of the Protocols however, it is important to keep these in view not as individual and isolated Protocols, but to trace their interconnectedness, which springs from the interrelated nature of the services that they cover. For example, within the Protocol on Transport, Communications and Meteorology, ICT can be seen as a sector that feeds into the other two respective sectors of transport and meteorology services. Further, ICT feeds into the energy, tourism, and water sectors; as does energy into the other five respective sectors.
In addition to this interconnectedness of the sectoral Protocols, there are two Protocols within SADC that can be seen to underpin each of the respective Protocols, namely the Protocol on Trade in Services and the Protocol on Finance and Investment (FIP).
Financing issues were discussed in quite some detail in the previous hot seat comment, including aspects like the Project Preparation and Development Facility (PPDF) and the Development Finance Institutions (DFI) Network, which are both covered by the FIP. However, as alluded to, the services agenda within SADC is also key to progress in implementation of the RIDMP.
The Protocol on Trade in Services has since been signed by nine out of the fifteen SADC Member States. It will enter into force upon ratification by two thirds of the region’s membership. This is itself subject to completion of negotiations on Member’s service liberalisation schedules, a process that is currently ongoing. The current negotiations for liberalisation of services in SADC have initially prioritised six sectors namely:
- Construction;
- Communication;
- Transport;
- Energy-related services;
- Financial services; and
- Tourism
The range of sectors that has been prioritised within this services agenda highlights its important interaction with the RIDMP process. Of these, four are directly linked to some of the sectors in the RIDMP, namely communication, transport, energy-related services, and tourism. Two are indirectly linked, but arguably lie at the heart of implementation of the RIDMP projects, namely financial services and construction.
Considering efforts at liberalisation within these sectors more closely, one begins to get a better sense of the complexity that implementation of the RIDMP projects could potentially entail. This is in view of the various regulatory issues that are currently prevalent or would potentially be prevalent in the highlighted sectors of respective Member States. These will not be discussed in detail here, but range from employment to procurement; equity holdings by foreigners to immigration; licenses; tariffs; state ownership; concessions and allowed entrants, among others. These differ according to the laws that are operational in the different sectors of the different Member States and where regulation is stringent, they would pose as real threats to effective implementation of RIDMP projects. Services liberalisation can therefore be seen to be of some significant utility to the RIDMP process, as commitments made by countries would ideally result in regulatory reforms that would aid the smooth implementation of projects where necessary.
This point is however with two important caveats. Firstly, one must note that such liberalisation cannot be confined to regional efforts only, particularly because when it comes to some modes of supply such as commercial presence (Mode 3), apart from those originating in South Africa, there may not be many services providers in the relevant sectors that can access regional markets to implement infrastructure projects and their associated services. Effective services liberalisation efforts would therefore need to be at the regional level of SADC and also at the multilateral level of the World Trade Organisation (WTO).
Secondly, it is not to say that such efforts at services liberalisation would eliminate all traces of regulation within the domestic economies of SADC Member States. Importantly, services liberalisation both at the regional and multilateral level preserves the right of countries to maintain or introduce new regulations on services and service suppliers, provided that these do not impact negatively on their undertaken commitments.
Ultimately, therefore, the task that exists for Governments as they approach the service liberalisation negotiations is one of balancing its liberalisation commitments with domestic regulations that will guarantee competitiveness in the domestic economy, while also promoting the economic interests and social welfare of its citizens. In terms of sequencing, one could argue that such regulatory issues would ideally need to be resolved prior to implementation of RIDMP projects. This is not practically possible, however, and so it only now makes sense that the RIDMP process and the region’s services agenda move in tandem at least. In terms of making information publically available for all Governments and partners across the board, a review by the SADC Secretariat that synchronises each sector within the RIDMP process with all relevant SADC instruments (particularly the Protocol on Trade in Services and the regulatory issues it seeks to address) will also be required.
From the above it is clear that implementation of the RIDMP will not stop at effectively planning out projects and sourcing financing for them. The terrain of sectors within which the projects will be implemented is far from smooth. Mapping the architecture of SADC Protocols as they relate to the RIDMP process will be of vital importance, so as to ensure that the various intricacies in implementation in the respective sectors are streamlined, and regulatory functions are carefully balanced. SADC’s services agenda will be vital in this regard, as effective progress there will ensure that implementation of RIDMP projects and their derived benefits are on the whole effectively facilitated.
Sources:
Documents
SADC. (2012). SADC Regional Infrastructure Development Master Plan (Executive Summary). Available online at: http://www.tralac.org/images/Resources/SADC/RIDMP%20Executive%20Summary.pdf
UNCTAD. (2010). Towards SADC Services Liberalization: Balancing Multiple Imperatives. Available online at: http://unctad.org/en/Docs/ditctncd20084_en.pdf
SADC Protocols
Protocol on Energy. Available online at: http://www.tralac.org/wp-content/blogs.dir/12/files/2011/uploads/20060623_protocol_energy.pdf
Protocol on Finance and Investment. Available online at: http://www.tralac.org/wp-content/blogs.dir/12/files/2011/uploads/20060621_finance_investment_protocol.pdf
Protocol on the Development of Tourism. Available online at: http://www.tralac.org/wp-content/blogs.dir/12/files/2011/uploads/20060629_protocol_tourism.pdf
Protocol on Trade in Services. Available online at: http://www.tralac.org/files/2011/03/SADC-Protocol_on_Trade_in_Services_Signed_2012.pdf
Protocol on Transport, Communications and Meteorology. Available online at: http://www.tralac.org/wp-content/blogs.dir/12/files/2011/uploads/20060629_protocol_comm_transport_met.pdf
Protocol on Shared Watercourses. Available online at: http://www.tralac.org/wp-content/blogs.dir/12/files/2011/uploads/20060629_protocol_shared_watercourses.pdf