Edward Fennell, Published in ‘The Times’ and on ‘Times Online’, 28 June 2005
According to the latest publicity hype from Christian Aid, “everyone who is anyone” is wearing a Make Poverty History campaign band as world leaders prepare for the G8 pow-wow at Gleneagles.
But just how many lawyers are doing so?
It is an important question because if politicians, charities and celebrities are serious about jump-starting Africa’s economic development then the lawyers should be key figures in the strategy. Yet, so far, they have been almost entirely ignored.
For example, the report of the government-backed Commission for Africa made frequent references to the need to “improve Africa’s capacity” – starting with the systems of higher education, science and technology and public servants. But there is no mention of lawyers.
This is odd because the roll call of reforms demanded by the commission – for example, in financial and regulatory systems, central banks and land registries – are all dependent on legal skills. Then there are the bureaucratic barriers to trade that have been set up by African governments. Again, lawyers are needed to cut through these to create systems that are effective and simple. And, perhaps most important of all, Africa needs the “rule of law”. But, as Joe Whitfield, of the specialist African law firm Africa Legal, explains: “Judges” pay is often paltry – meaning it can be difficult to attract high quality professionals to the Bench. Or judges may be susceptible to “other means of persuasion” to supplement their income. Or a regulatory regime may be in place but no regulator appointed. Or regulators may have inadequate resource to perform their roles efficiently.”
It is inescapable then that high-quality legal skills are a key ingredient within the reform process upon which Africa is, one hopes, about to embark. This should not come as a surprise. Once Central and Eastern Europe started on the path of reform after the fall of the Soviet empire it was realised immediately that the region needed both new laws and professionals who could apply them. The same applies in Africa.
We can, however, learn from the Eastern European experience – and vow not to make the same mistakes, according to James Dallas, of Denton Wilde Sapte. Too often, he says, Western legal advisers to new governments in countries such as Russia and Poland simply trotted out the standard legal solutions as found in the European Union or America. Off-the-shelf solutions were presented to unique historical problems. In some cases, as we have seen recently, these jurisdictions are still trying to undo the damage.
Whitfield argues that Africa must find its own legal answers. Africa Legal, which is linked to the South African firm Deneys Reitz, is focused on economic development and legal needs north of the Limpopo. “Part of the rationale of Africa,” Whitfield says, “is to develop the type of legal skills and international standards locally that we think Africa should be applying in its business dealings. Africa should be looking to develop and apply these skills for itself rather than relying on Foreign Service providers who perhaps have a vested interest in keeping the knowledge to themselves.”
Not all foreign firms, though, are outsiders in the sub-Saharan region. With a dedicated network of “best friends” offices across Africa, Denton Wilde Sapte feels that it has better credentials than most. Apul Bugingo, the firm’s head of Africa development, says that Sudan, for example, will need “new laws for everything” it if is to develop economically. And Sudan is not alone. Across many parts of Africa, Bugingo says, there is either no relevant legislation in place to support investment or what there is dates back to the imperial era and is scarcely useful any longer.
“Often the laws are designed for state monopolies that no longer exist,” Bugingo says. Their placement is just as important a component of infrastructure as new roads, power and water systems.
So what is the impact of this legal deficit? Whitfield says: “It is one of the main reasons why Africa is at the bottom of the world rankings for foreign direct investment. In practical terms the impact is very broad: tender processes can be unpredictable; due diligence can be difficult; registration of title or security can be problematic; enforcement of contracts can be both risky and challenging; the process of setting up a business is often extremely time consuming and bureaucratic; insolvency processes can be slow moving and cumbersome.”
Yet the picture is not bleak. Botswana, Ghana, Mauritius and Seychelles are all widely regarded as business-friendly, and in South Africa the decision to sack the Vice-President, Jacob Zuma, on suspicion of being hand-in-wallet with a French arms supplier has been widely welcomed.
Meanwhile, in key territories, business is proceeding. Mark Saunders, an energy lawyer with Dewey Ballantine, says that in Nigeria the law set up under British rule has evolved successfully to cover the present-day oil industry and that, for example, the country’s Petroleum Act is fully adequate. “It’s actually quite a sophisticated legal system,” he says. “And given the importance of Nigerian liquid nitrogen gas upon which America may increasingly rely it is essential that the legal systems are as robust as the technology.”
Garry Pegg, of Hogan & Hartson, points out that telecommunications, water and energy projects are continuing to go ahead in some parts of Africa and that the World Bank has already started to make investment in regulatory reform in selected countries.
So for lawyers the fashionable campaign band need not be Make Poverty History. Instead it should read Make Legal History.