Regulatory Double Bind in the Horn

The Regulatory Double bind in the Horn

The Regulatory Double bind in the Horn: Legal Misengineering, Misapplication or Dislocation

A. The Study Hypothesis and Assumptions

D

The principal hypothesis in this paper is that the reason for the double bind is the existence of the three spheres of authority: the civic, ethno‐ customary and predatory. As discussed in our previous paper under this study,¹ the 'civic citizen' and the 'English speaking Government' are located in the first sphere: the civic sphere. Within the civic sphere the State is bound by the rule of law, democratic political participation, due process and human rights. The second sphere is the predatory sphere regulated by 'bandit law'. This is the sphere in which the 'bandit economy' and resource extraction from the convergences are located. In our previous paper we identified the third sphere as the normative‐ traditional sphere but upon further consideration, we renamed as the ethno‐customary sphere. In our view, the ethno‐customary sphere is a merger of the ethnic identity interacting in a normative space. This interaction then generates customs and norms. This sphere is built around high‐trust institutions and its law arises from traditions and social interactions in the community. Each of the three spheres is governed by different laws, each with a unique morality defined by the interest it serves. The morality appropriated by each of these laws then determines whether or not that law can be implemented. This trifurcation of morality undermines the implementation of law. There is no moral obligation to abide by all three spheres of authority and the actors within each of these spheres are not static; they alternate between the spheres depending on the interests and play. Thus the sphere that is conformed to is that from which value is derived.

A R

From Soft to Hard Insecurity in the Horn of Africa: The Role of Militia, Predatory States and Rogue Capital, TCH Working Paper Number 001 of 2012 presented at the TCH Methodology Workshop held on 20-21 June 2012

O R

T F

E Z

In this paper, we postulate that the lack of a unified underpinning morality in legislation in Africa is partly what accounts for the regulatory double bind. Where civic morality is a direct representation of elite interests then there is a rejection of civic law and an exit to the ethno‐ customary sphere. But, where the morality underpinning the law is an expression of the collectif then the law is applied as intended. It is the assumption of this paper that civic legislation as originally formulated in Africa was to serve the interests of capital. The paper attempts to provide From Soft to Hard Security||TCH Working Paper 04/11/2013

1

The Regulatory Double bind in the Horn a plausible theory, not beyond criticism, that the discordance in regulations which has led to the regulatory double bind was initiated with the sole intention of geo‐strategic dominance and extraction. Civic legislation thus takes on the morality of the capital interests it serves and this pits it against ethno‐customary morality. Formal law is located within the civic sphere thus when the actors, move to the other spheres, formal legal instruments are not fully enforceable and in some instances results in regulatory incongruence between the different spheres. We therefore hypothesize that where there is a unity of morality, the double bind is less obvious; however in situations where there is a bifurcation or trifurcation of morality, then the double bind is apparent.

B. Colonial Law: The Failed Fusion

O R

Capitalism, imperialism and colonialism share the following definitions: political and cultural domination and economic exploitation.

At a particular point in time it became necessary that the three processes exist together. ² Law and order was, therefore, maintained in the interest of capitalist accumulation. Legal foundations are grounded on the philosophy and derived from the culture that “an integrated system of learned behaviour patterns which are characteristic of the members of a society and which is not a result of biological inheritance.” ³ Morgenthau claims that “political realism” is governed by objective laws that have their roots in human nature,” which have “not changed since the classical philosophies of China, India, and Greece endeavoured to discover these laws. ⁴ Africa's legal philosophy was not integrated within the classical philosophies or colonial legal system.

D

Law was central to colonialism; the introduction of 'western law justified and legitimated conquest and control'. ⁵ The statutory laws and regulations adopted by the States of the Great lakes and the Horn of Africa were predominantly laws based on the value systems, religious beliefs and social conditions of the individual colonisers. Through colonization, the laws and legal institutions of the colonizer were transferred to a colonized people who already had their own distinct legal culture. This resulted as stated earlier in dual legal systems. The colonial laws sought to impose a new political order and a new culture.

What was the rationale behind this imposition? According to Schmidhauser '[l]egal imperialism universally imposed law where civil stability and order were at stake, where economic penetration‐whether land tenure or modern trade and commercial development‐ was at issue, and, most critical, where the authority and power of the conqueror might be threatened by invocation of indigenous law.' ⁶

A R

Colonialism and its Legacies in Kenya, Lecture delivered by Peter O Ndege, Associate Professor of History Department of History, Political Science and Public Administration during Fulbright Hays Group Abroad Program, July 5th August 6th 2009 at the Moi University Main Campus Hoebel, Adamson, (1966), Anthropology: The Study of Man, McGraw-Hill, New York Robert Kaufman, (2006), Morgenthau's Unrealistic Realism, Yale Journal of International A airs, Volume 1, No. 2 pgs 24-38 Sally Engle Merry (1991), Law and Colonialism, Law & Society Review, Volume 24, No. 4 pg 890 Schmidhauser, J.R. Legal Imperialism: Its Enduring impact on Colonial and Post-Colonial Judicial Systems pg 328 in Santiago, R.M. (2012) Law and the Civilizing Mission: The Expansion of the Western State Model pg 28 Ibid pg 891

T F

E Z

The role of law in the colonial process is contextualized. Although patterns developed in one colony were often transferred to another, the needs for land and labour, and the strategies of rule and social order varied. 7 By and large, colonial law 'served to extract land from pre‐ colonial users and to create a wage labor force out of peasant and From Soft to Hard Security||TCH Working Paper 04/11/2013

2

The Regulatory Double bind in the Horn subsistence producers'. ⁸ The legal structures that embedded the geo‐ strategic treaties and exploitation of resources was not a system of norms that conferred rights and imposed duties. The principles of democracy had already been tried upon by the French who had been subjected to profound revolutionary changes which not only transformed French society but, in a real sense, created 'modern society' as a global phenomenon. The French Revolution and the Napoleonic period experimented with and then exported the elementary principals of modern democracy, namely liberty, equality, and fraternity (or secular solidarity). ⁹ This civic morality was not to be for the African people.

B.1 The Civic Morality of Law: Moral Duality

O R

According to Peter Ekeh (1975) ¹⁰ the general rule in the West is that both the public and the private realms share a common moral foundation. And this common morality is based on generalized Christian beliefs. In post‐colonial Africa however, Ekeh identifies two public realms with dissimilar links to the private realm. The first public is the civic public.

It is based on civil structures i.e. the military, and the civil service. It is identified with popular politics and is historically associated with colonization. This public is amoral and it has no moral linkages with the private realm. We liken the civic public to the civic sphere identified by Mamdani¹² and discussed in our previous paper. ¹³ The second public is the primordial public. This public is characterized by primordial groupings, ties and sentiments that influence and determine an individual's public behaviour. We can draw parallels between this sphere and the etho‐ customary sphere as we understand it. Ekeh states that the primordial public is moral and operates on the same moral imperatives as the private realm. ¹⁴ In the context of the colonisation of Africa, law and morality were conceptually distinct. Political realism refused to identify the moral aspirations of [Africa] with the moral laws that govern the universe. ¹⁵ Because the laws of the civic public were imposed in Africa by the colonialists and have no moral linkages with the private realm, actions within the civic public are in some instances suboptimal.

A R

Ibid Emile Durkheim, (1973), His Life and Work, London: Allen Lane p.xv Peter P. Ekeh, (1975), Colonialism and the Two Publics in Africa: A Theoretical Statement, Comparative Studies in Society and History, Vol. 17, No.1, pp. 91-112 Ibid, pg 91 See Mahmood Mamdani, (1996), Citizen and Subject: Contemporary Africa and the Legacy of Late Colonialism, Princeton: Princeton University Press From Soft to Hard Insecurity in the Horn of Africa: The Role of Militia, Predatory States and Rogue Capital, TCH Working Paper Number 001 of 2012 presented at the TCH Methodology Workshop held on 20-21 June 2012 Ibid Hans Morgenthau, (1948), Politics Among Nations: The Struggle for Power and Peace, Knopf: New York

D

T F

E Z

A Possible Rogue Public. A question for consideration is: has a third public emerged that is rouge in nature? We identified the emergence of the bandit sphere, regulated by bandit law. In order to fully understand this sphere we must identify the morality that underpins it. Could this morality be a mutation of the morality of both the civic public and the primordial public? And does this rogue public share moral imperatives with the private realm? Al Shabaab, for instance is an Islamic militant group. Whereas religion is practiced in the private realm, Al Shabaab's radical ideologies are exercised in both the primordial public and in the civic public. The fact that morality as practiced by Al Shabaab cuts across the public‐private divide identified by Ekeh is worth a mention. Also of note is that the Lord's Resistance Army of Uganda and Mungiki in Kenya had generalized religious connotations in their formation bridging the public‐private divide. Is religion being used to normalize that which is From Soft to Hard Security||TCH Working Paper 04/11/2013

3

The Regulatory Double bind in the Horn 'bad' thus resulting in the emergence of a new morality? Could this morality as defined by militia be the beginnings of a new civic morality? If it is organic, is it necessarily rogue? Is our definition of what constitutes 'rogue' morality based on a comparison with western moral ideals? This morality as exercised by militia finds resonance in lumpen spaces, why is that?

B.2 An Attempt at Understanding the Scramble for Africa The crafting of the legislation around the African question and the colonies was defensive in nature and constructed to protect the interests of the parties to the Berlin conference in order to ward off any future threats. What was this threat and where would it come from? It is our assertion from historical readings that the perceived threat came from the United States of America. It was widely believed that American foreign policy would be isolation and separation. But far from seeking permanent separation from the Old World, the Puritans...'aimed to establish a base from which to launch a counteroffensive across the Atlantic.' ¹⁶ In speaking of America, Quincy Jones stated that “[t]he universal feeling of Europe in witnessing the gigantic growth of our population and power is that we shall, if united become a very dangerous member of the society of nations.” ¹⁷

E Z

O R

In order to stem American hegemony, the scramble would gain momentum in an attempt to control the waterways of Africa which would determine the speed of trade and commerce. Whoever controlled the Suez Canal would control world commerce. With the invention of the cotton ginnery by American inventor Eli Whitney in 1793, capital formation had moved from Great Britain (London) to the United States of America (New York and Boston). It would create an enormous demand for slave labour. In 1823 President James Monroe declared what would be the seeds of American foreign policy and American imperialism and the start of its super power status: that the entire American continent was off limits for further colonisation by European powers. Fifteen years after the announcement of the Monroe doctrine in 1838 the British drove the slave emancipation movement.

D

A R

Robert Kagan, (2007), Dangerous Nation: America's Place in the World from its Earliest Days to the Dawn of the Twentieth Century, Knopf: New York Comment by John Quincy Adams on the United States, (1817) Encyclopaedia Britannica Roderick A. McDonald, (1979) The Williams Thesis: A Comment on The State Of Scholarship, Caribbean Quarterly, Vol. 25, No. 3, Pp. 63-68

T F

Relationships between America and Britain had been strained since 1807 after a general embargo by the United States congress against Britain and France. Both Britain and France were seizing American cargo which they suspected was being channelled to the European th belligerents. ¹⁸ On June 18 1812, the U.S. declared war on Britain over British interference with American maritime shipping and westward th expansion. The war officially ended on December 24 1814. Whereas emphasis was laid on morality as the motivating factor for ending slavery, ¹⁹ it has been argued in the Williams Thesis that “It is one great evil the industrial revolution arises out of another perhaps even greater revolution, the transport of human as slaves from Africa to the new world.” On August 1, 1984, Prime Minister Forbes Burnham of Guyana told a rally of 5,000 in From Soft to Hard Security||TCH Working Paper 04/11/2013

4

The Regulatory Double bind in the Horn George‐town that Britain had freed the slaves not for humanitarian reasons but because slavery had become unprofitable, risky and expensive. ²⁰ Whether slavery had become risky and unprofitable is arguable, what is a fact is that the campaign to end slavery would have a devastating effect on the United States of America, which would go through a great moral crisis during its civil war. The politics and economics of slavery had been acutely understood by the British.

It was understood by the seafaring nations that whoever would control the sea routes coupled with resources would control the world; the major resource being petroleum. These geo‐strategic waterways and resources had already been identified as far back as 2nd August 1918 in a cabinet memorandum the German themselves in a paper on Mesopotamia written in 1916 had observed that “the greatest importance after that of the Suez canal...are the possessions of Mesopotamia” where petroleum wells had been known for thousands of years. ²¹

O R

In the early 1800's the Egyptians and the French formed a company with common interests known as the Universal Suez Ship Canal Company which was given the right to begin the construction of the canal and operate it for 99 years, after which time, the Egyptian government would take over control of the canal. The construction of the Suez Canal officially began on April 25, 1859. It opened ten years later on November 17, 1869 at a cost of $100 million. Egypt would eventually sell its ownership to the United Kingdom in 1874. The Suez Canal would become the world's most significant waterway, cutting the time in transit of goods significantly.

T F

E Z

B.2.1 The Historical Agreements on the Suez Canal

D

A R

Seymour Drescher, Eric Williams: British Capitalism and British Slavery, History and Theory, Vol. 26, No. 2 (May, 1987), pp. 180-196 Published by: Blackwell Publishing for Wesleyan University accessed 16/09/13 Kwasi Kwarteng, (2011), Ghosts of Empire: Britain's Lasting Imperial Legacy, Bloomsbury: New York

The first resource to be controlled on the African continent would be the waters of the world's longest river, the Nile. The initial treaties ensured that nothing would threaten this waterway or the country that bordered it, Egypt. On April 15th 1891 the Anglo‐Italian Protocol was brought into existence. Article III of that protocol stated that “the Italian government engages not to construct on the Atbara River, in view of irrigation, any work which might sensibly modify its flow into the Nile.”

On May 15, 1902 the Treaty between Great Britain and Ethiopia was entered into. It stated in Article III that “His Majesty, the Emperor Menilik II, King of Kings of Ethiopia, engages himself towards the Government of His Britannic Majesty not to construct or allow to be constructed any work across the Blue Nile, Lake Tana, or the Sobat, which would arrest the flow of the waters except in agreement with His Britannic Majesty's Government and the Government of Sudan”. On May 9, 1906 an Agreement between Britain and the government of the Independent States of the Congo was finalised which in Article III stated that “The Government of the independent state of the Congo undertakes not to construct, or allow to be constructed, any work over or near the Semliki or Isango river which would diminish the volume of water entering Lake From Soft to Hard Security||TCH Working Paper 04/11/2013

5

The Regulatory Double bind in the Horn Albert except in agreement with the Sudanese Government”. Belgium signed this agreement on behalf of the Congo.

On December 13, 1906, recognising the common interests of The United Kingdom, France and Italy to maintain intact the integrity of Ethiopia, the Tripartite Treaty (Britain‐France‐Italy) stated in Article 4 (a) “To act together...to safeguard;...the interests of Great Britain and Egypt in the Nile Basin, more especially as regards the regulation of the waters of that river and its tributaries (due consideration being paid to local interests) without prejudice to Italian interests”. Eventually on May 7, 1929, the Agreement between Egypt and Anglo‐Egyptian Sudan was entered into. The agreement spelt out the use of the Nile waters between Egypt and Sudan. Each country would utilize 48 and 4 billion cubic meters of the Nile flow per year, respectively furthermore the agreement would include the following: The flow of the Nile during January 20 to July 15 (dry season) would be reserved for Egypt. Egypt reserved the right to monitor the Nile flow in the upstream countries; Egypt further assumed the right to undertake Nile river related projects without the consent of upper riparian states and the right to veto any construction projects that would affect her interests adversely. ²² B.2.2 The Scramble for Africa

D

The legal infrastructure and foundations for global trade were being methodically laid out by the imperial powers while America had been in a civil war. Immediately after the completion of the Suez Canal and almost three centuries after the arrival of the Portuguese, the scramble for Africa began at the Berlin conference of 1884. Article 34 of the Berlin Act stated that any European nation that took possession of an African coast, or named themselves as “protectorate” of one, had to inform the signatory powers of the Berlin Act of this action. If this was not done then their claim would not be recognized. This article introduced the “spheres of influence” doctrine, the control of a coast also meant that they would control the hinterland to an almost unlimited distance. Article 35 determined that in order to occupy a coastal possession, the nation also had to prove that they controlled sufficient authority there to protect existing rights such as freedom of trade and transit. This was called the doctrine of “effective occupation” and it made the conquest of Africa a less bloody process. ²³

A R

Whittington and Guariso, 1983:41 David W. Koeller, (1996-1999), The Berlin Conference 1884, See http://www.thenagain.info/webchron/africaberl inconf.html

E Z

O R

T F

The effective occupation was to be exploitative and as brutal as the slave trade that the British emancipation took credit for. In the Report of the British Consul, Roger Casement, on the Administration of the Congo Free State it was stated that foremost in the campaign to expose the regime‐‐based on forced labour and various forms of terror‐‐was E.D. Morel whose ceaseless pursuit of Leopold's regime resulted in questions being raised in the British House of Commons, for Britain, after all, had been a signatory to the Berlin Act which bound the Congo Government “to bind themselves to watch over the preservation of the native tribes and to care for their moral and material welfare.”

From Soft to Hard Security||TCH Working Paper 04/11/2013

6

The Regulatory Double bind in the Horn The Report of the British consul sent to investigate the accumulating reports of torture, murder and virtual enslavement was published to the world in 1904 and from that point on the pressure for reform mounted until, finally, Leopold was forced to yield up his private African preserve to the Belgian government which formally took over the 'Belgian Congo' by an act of annexation in August 1908. ²⁴ Forced labour would be the hallmark of colonisation from Matadi to Mombasa. The emancipation of slaves which had led to a civil war in the New World would be replaced with indentured labour within the British Empire.

B.3 The Imposition of Law: Colonial Examples

O R

British Colonialism. The principle of indirect rule guided the administration of British colonies. This principle can broadly be defined as the 'imposed government of Africans through their own institutions'. ²⁵ However, local practices were never adopted on a whole‐scale. Indirect rule was subject to the overall political and economic objectives of colonial rule. According to Deflem, British colonialism entailed an 'alien imposition of power and a mixture of political and economic interests determining the government of the conquered territory'. ²⁶

D

A R

http://www.urome.be/fr2/re exions/casemrep o.pdf accessed 20/09/2013 Mathieu De em (1994), Law Enforcement in British Colonial Africa: A Comparative Analysis of Imperial Policing in Nyasaland, the Gold Coast and Kenya, Police Studies, Volume 17 No. 1 pg 45 Ibid Charles Miller, (1971), Lunatic Express: An Entertainment in Imperialism, Macmillan & Co.: London

E Z

In 1895 on December 11th a young English man named George Whitehouse arrived at the East African port of Mombasa. His assignment there: to perform an engineering miracle, the building of a railway. ²⁷ Railways were meant to and continue to serve flourishing industrial areas, or densely populated agricultural regions, or they must open up new land (as in the United States) along which a thriving population develops and provides the railways with traffic. Except in the mining regions of South Africa, all these conditions are absent. Yet railways were needed, for the benefit of European investors and heavy industry, and for some vague purpose known as the “opening up” of the continent. The opening up of the hinterland of East Africa would facilitate access to the source of the Nile, immigration of settlers and the possibility of a Jewish homeland. The Empire Settlement Act, 1922, enacted on the 31st of May 1922 for His Majesty's overseas dominion was an Act to make better provision for furthering British settlement. When the bill was being th debated on the 26 of April 1922 Colonel Josiah Wedgewood asked the question, 'What about Kenya now?' Mr Edward Wood replied: 'If we departed from that policy we would be lacking a great deal of support now. The reason why this Bill has won a general measure of support is that it has recognised the subject of emigration as an Imperial concern. In other words, the Bill recognises, as the Hon. Member for Woolwich (Captain Gee) said, that it is of importance to every community in the Empire as far as possible to secure that its population should be made up of homogeneous elements, that that can be achieved only by the co‐ operation of all concerned at every stage, and that it is worth doing only if it can be carried out on a basis which is reasonably permanent. That, this Bill does. Therefore I think the House as a whole shares the feeling of my hon. Friend who spoke last—....be removed by any single factor. The

T F

From Soft to Hard Security||TCH Working Paper 04/11/2013

7

The Regulatory Double bind in the Horn utmost that the most enthusiastic advocate of this policy can claim is that it is a move in the right direction and in the long run will tend inevitably to ease the situation for many of our people here by affording opportunities to those who wish to avail themselves of those opportunities, of re‐ making their lives elsewhere and in remaking their lives elsewhere to produce a reflex action of advantage to our commerce and trade” ²⁸ For ease of administration in British East Africa, the British settlers imported laws and their system of governance from Britain, and British laws which had been codified in India, to apply to the East African Protectorate. These laws at the onset, were mainly for the benefit of the settlers, and were applied without regard to the already existing African/native society. The natives were considered to be too primitive to understand the intricacies of the law, and were thus left to practice African Customary law. The Hindus who had emigrated from India were also allowed to practice Hindu Customary law in the area of personal law, while the Muslims and Arabs, who were centralized at the coast, practiced Muslim Law. There were now several parallel systems of law.

Though the British tried to phase out the parallel system by enacting laws to govern the whole country, the effect of the multiplicity can still be felt and seen in the current Kenyan legal system. ²⁹

D

The Case of Kenya. The first piece of legislation in the East African Protectorate was the 1915 Crown Land Ordinance Act. It facilitated European settlement in the protectorate. ³⁰ Along with the seizure of land for settlers, the trust lands were established. The trust lands were the land in use of natives, it was held in trust for them for the crown. ³¹ This move ostensibly halted the allocation of lands occupied by Africans to Europeans settlement, by placing African lands in trusts. ³² And to implement the colonial labour system the Kipande system was first passed into law in 1915, implemented by 1919, and abolished in 1947. ³³ In 1918, the Resident Native Ordinance was passed to demand that squatter payments were made in labour and not in kind or in cash. These laws entrenched a harsh system of labour. In Britain's other colonies such as Mauritius and the West Indies indentured labour was introduced in order to facilitate the growth of cash crops to fund the building of the railway and cotton for millers. These were raw material for the industrial revolution. Colonialism in Kenya, as in much of Africa, pitted the peasant household against capitalist enterprise.

A R

http://hansard.millbanksystems.com/people/h on-edward-wood/ accessed on 26/9/2013 http://www.nyulawglobal.org/globalex/Kenya. htm accessed on 28th August 2013 Caroline Elkins, (2006), Imperial Reckoning: The Untold Story of Britain's Gulag in Kenya, Macmillan and Co.: London p. 15 See the 1933 Carter Commission Report, the Native Lands Trust Ordinance enacted in 1938 Abdullahi A An- Na'im, (ed), (2002), Cultural Transformation and Human Rights in Africa, Zed Books, pgs 146-14 Tiyambe Zelaza, "The Colonial Labour System in Kenya" In William Robert Ochieng' and Robert M. Maxon, (eds), (1992), An Economic History of Kenya, East African Publishers, Kenya p. 181

E Z

O R

T F

The genesis of labour law and practice can be traced to the 19th century when need arose for the colonial government to pass legislation to ensure an adequate supply of cheap labour. The terms and conditions of employment were regulated by statutes and common law. The Indian Contract Act of 1872 applied to the three countries: Kenya, Tanzania and Uganda. The first trade union regulation was made in the introduction of Ordinance No. 35 of 1939 that required all crafts organizations to apply for registration which they could be granted or denied depending on whether they had legitimate dealings consistent with government policy.

From Soft to Hard Security||TCH Working Paper 04/11/2013

8

The Regulatory Double bind in the Horn The Ordinance also permitted any group of seven people to form a trade union and operate as one upon registration. Cancellation of registration under the Ordinance was not subject to appeal or open to question in a court of law.

C. New Interest Owners: Post‐Colonial Legislation Newly independent African states would attempt to change the inherited civic morality through institutions, policies, laws and regulations that would be in congruence with the belief systems of the people. The state formation along the liberal western Hobbes theory was clearly alien to Africans. Soon after independence many African leaders who had so eagerly embraced western concepts began to advocate for indigenous solutions. It was becoming obvious that the sociological conditions of the indigenous people may not have been taken into consideration except under specific circumstances catered for by customary legislation.

E Z

O R

In some instances, the new political elites took over the capital/accumulation interests of the exiting colonialists. A manipulation of law to serve the interests of capital continued, but the beneficiaries had changed. In Kenya, the Goldenberg scam is a prime example of rogue capital acquired for political reasons using the loopholes in the legal infrastructure. The Kenya Africa National Union (KANU) war chest needed to be replenished at the advent of multi party politics. Foreign exchange was being bought on the black market with the usual fifteen percent premium, brought to the Central Bank accompanied by fake export documentation and local currency, the Kenya shilling, was being collected at the official rate plus a thirty five percent compensation leaving a cool twenty percent net profit in the hands of the schemers for doing nothing but kiting money between the black market and the central bank.

D

A R

34Jennifer Shamalla (2007), Goldenberg The Scam That Refuses to Die, unpublished

T F

Obviously for the scam to work the co‐operation of a wide group of people was necessary. The law required that customs officials verify the importation and exportation of gold and diamonds. Commercial banks and the Central Bank of Kenya had to verify the inflow of foreign exchange through the banking system and the treasury had to monitor the money supply in the market. At the subsequent enquiry it became clear that almost all the transactions were fraudulent. Since the Central Bank was paying a premium of thirty five percent on the foreign exchange, Goldenberg circulated a tremendous amount of Kenya shillings. The immediate effect on the markets was the defacto devaluation of the Kenya shillings and an increase in the money supply.

This had a devastating effect on the Kenyan economy. ³⁴

Norm Contradictions. Legal tradition as a rule has no place for contradictory legal norms. And, the legal norms espoused in the three publics may in some instances contradict. In fact, norm contradictions From Soft to Hard Security||TCH Working Paper 04/11/2013

9

The Regulatory Double bind in the Horn were anticipated between the norms of the civic public and the primordial public. For instance, there is a clash in South Sudan between the old and the new systems of regulation. The extended war led to an erosion of the normative systems. These were replaced with a mutation of the normative structures as interpreted and defined by the army generals. It is the contention of some respondents in South Sudan that SPLA reinvented the traditional system so that they could recruit soldiers without resistance from chiefs. This mutated normative system is at loggerheads with the civic system that the new government is attempting to introduce.

An example of this clash is evidenced in the manner in which the murder of the South Sudanese Minister of Cooperatives was addressed.

The Minister of Cooperatives was killed by his brother in law. After his trial in the formal courts, he was sentenced to hang. In a separate and parallel process, the communities to which the deceased and the accused belonged met and agreed on a payment of blood money. The relevant Chiefs then wrote to the Judiciary seeking the release of the accused. The Chief's also issued a threat to the court stating that if the Court executed the accused a person from the deceased's community would be killed.

E Z

O R

D. Neo‐Colonialism: The 'Unintended Consequence' of Foreign Aid D.1 A Review of Mining Regulations and Codes

D

T F

Over 30% of the world's global mineral reserves are found in Africa, yet less than 5% of the total global mineral exploration and extraction budget is invested in the continent. Legislations in the mining sector have metamorphosed in recent times. The World Bank as quoted by Campbell (in Campbell 2009)estimates that: “Over the past 20 years, more than 110 nations either replaced or considerably altered their mining laws in response to increased competition for Foreign Direct Investment (FDI) as well as pressure from major donors. Support has been offered by institutions, including the World Bank and the International Finance Corporation, to develop transparent and investor‐focused mining laws.

At a government level, many African countries have devised mining concessions and specific import duty exemptions to encourage foreign investment in infrastructure building and mining exploitation. In Africa, 30 states passed new legislation between 1990 and 2000 with many more policy changes occurring in the last decade many of these reforms have been directed towards attracting greater foreign investment through decreased regulation, liberalised social and labour policies, and more private sector‐friendly ownership and taxation schemes.”

A R

More recently, non‐stringent regulatory regimes have been criticised in many African countries. The criticisms have been informed by increase in prices of resources, and large profits made by mining companies; awareness of the inadequacy of the regulations to meet difficulties in development challenges in African countries as well as the legitimacy of From Soft to Hard Security||TCH Working Paper 04/11/2013

10

The Regulatory Double bind in the Horn externally motivated regulatory codes in the sector. Campbell further states that these have “put pressure on governments to renegotiate contracts and revise mining codes to include remedial processes and favourable policies.” Within the past two years, for instance, the governments of Angola, Tanzania, Guinea and Mozambique have adopted new mining laws containing provisions for “greater national participation, facilitation of mining activities, increase of fiscal revenue and local community development”. ³⁵ At the same time, the rapid growth of new investors – particularly the BRICS states (Brazil, Russia, India, China, and South Africa) – in the African minerals sector, as well as the expansion of investment into previously untapped resource‐rich areas such as the DRC, Liberia and Sierra Leone, have raised new challenges for achieving sustainable development in the extractives industry. As a result, Africa's mining codes are now at the centre of a broader policy debate over natural resource governance and sustainable economic development on the continent.

E Z

O R

Pre‐independence Colonial‐era policies, including the introduction of cash economies and infrastructure investments, were aimed interalia at expanding access to valuable mineral resources. Nevertheless, European‐controlled mining operations during the colonial‐era contributed little to overall continental and domestic development, with the majority of the revenues being transferred abroad; this resulted in a subsequent lack of local resource sourcing and ownership. Additionally, owing to the activities of mining, communities tended to suffer severe social dislocation and environmental destruction.

D

A R

De Backer Stephen, (2012), 'Mining Investments and Financing in Africa: Recent Trends and Key Challenges' Africa's Mining Industry: The Perceptions and Reality (Toronto). Available at: http://www.mineafrica.com/documents/2%20%20Steve%20De%20Backer.pdf Ibid Ibid

T F

The Political Economy of Law (1987) by Francis Snyder, Robin Luckham and Yash Ghai, tells the story of a Pacific Ocean Island that was made uninhabitable by the mining of its phosphates under British colonial supervision in the 1900's. ³⁶ In spite of 1893 regulations that restricted the purchase and lease of land from native land owners, the mining company went around the regulation through a 1913 agreement that allowed it to purchase mining rights for some areas and to pay royalties for the land on condition that they replanted it with coconut trees and returned it to the owner when mining was completed. The previous inhabitants of the land sued the British government in 1971 for restoration of their land and unpaid royalties to facilitate their return. Judgment given by the court in 1976 ordered the mining companies to return the land to its previous owners and awarded the plaintiffs 75 Australian dollars and acre to replant coconut palms but did not require a restoration of the soil. ³⁷

Due to the “inequality of benefits” in host countries during the colonial period, many African countries nationalised the natural resource sector. Populist and socialist governments in Guinea, Nigeria, and Tanzania, for example, nationalized large swaths of the economy after the withdrawal of the colonial powers, although multinational From Soft to Hard Security||TCH Working Paper 04/11/2013

11

The Regulatory Double bind in the Horn companies continued to play a role in resource extraction in these countries; Post‐independence governments also implemented stricter regulations relating to local employment, domestic input sourcing, improvement schemes, and taxation. During this period of nationalisation, Africa's share of worldwide mineral production declined dramatically. Low mineral prices discouraged investment in high‐risk areas, leading to a collapse in exploration operations on the continent.

This decline was credited by international observers to state mismanagement of the mining sector, lack of stable property rights, and high rates of taxation and regulation on private sector investment. ³⁸ Moreover, poor governance practices and misallocation of state resources resulted in the deterioration of national economic infrastructure across much of the continent. The nationalisation of the mining sector by most African states did not amount to great success in the terms of managing the same. Generally, government managed mining activities proved inefficient and for a long time the mining sector in Africa heavily depended on loans to stay afloat. This position was highly unsustainable and it was a question of time before the regimes liberalised the sector.

D

Sector Liberation or Actor Re‐introduction. There was need therefore to redefine the approach of the states or governments towards the sector. There was also need to separate the roles of the public and private stakeholders in the sector as Campbell further puts it: The Washington Consensus agenda entailed the wholesale privatisation of state companies, an end to foreign ownership restrictions, decreased rates of taxation and royalties, the reform of labour laws to permit greater “flexibility” and the termination of requirements for local sourcing and hiring. Most African states became heavily indebted during the post‐ independence period of nationalisation. This was as a result of 'underperformance by state run enterprises in the mining sector'. There was therefore pressure from international financial organisations as well as donors to restrict the role of state from that of Proprietor to a facilitator of investments by the private sector. The process has been quoted to involve three phases as from 1980 in the following words: First Generation in Ghana for example, where the International Monetary Fund (IMF) applied substantial pressure on the state government from the mid 1980s to amend its Investment Promotion Act, allowing for greater foreign investment in the country's mining sector.

A R

Bridge, G. (2004), Mapping the Bonanza: Geographies of Mining Investment in an Era of Neoliberal Reform, Professional Geographical, Volume 56, No. 3, 406-21

E Z

O R

T F

Liberalisation of ownership and taxation regulations resulted in an inflow of investment from the USA, Canada, Australia, Britain and South Africa, who rapidly took over underperforming state‐owned mining operations and opened new projects. Foreign investors were granted a number of incentives for doing business in Ghana, including the right to repatriate their profits, exemption from paying duties on imported equipment, and total ownership of business ventures in the country.

Prompted by these pro‐investment policies, the recovery in global demand for primary commodities, and direct efforts by the Ghanaian From Soft to Hard Security||TCH Working Paper 04/11/2013

12

The Regulatory Double bind in the Horn government to attract and support joint ventures with foreign firms (for example, by creating the Ministry for Private Sector Development to play a facilitating role between the government and private companies), since the late 1980s the three largest mining companies in the country – Newmont, Golden Star and AngloGold – invested over $3 billion in mining operations. ³⁹ The second generation of mining codes unfolded in the early to mid‐ 1990s, continuing the trend of liberalisation and privatization but with nominal recognition of the need for certain social and environmental regulations. ⁴⁰ Finally a Third Generation occurred from the end of the 1990s, with countries such as Mali and Madagascar opening up their mining industry to foreign investment. ⁴¹ In Mali, a new mining code drafted in 1999 was modelled on the Ghanaian framework, designed to attract foreign investment through various incentives to foreign mining companies and make Mali “one of the major poles of the African gold trade”. In addition, the new mining policy aimed to increase the contribution of mineral production to the country's GDP, primarily through taxation on the operations of mining firms (this, despite the fact that many tax exemptions were created for mining companies by the 1999 code). Likewise, in Madagascar, a new mining code in 1999 sought to “accelerate the process of state disengagement from commercial exploration, production, and marketing operations,” while promoting greater private sector investment in the natural resources sector and increasing the sector's contribution to national economic growth. ⁴² In the following years, this wave of mining code liberalization would continue to be adopted across a large number of African states.

D

The Policing Power of the Bretton Woods Institutions. For a time, perhaps in the late 80s (after the collapse of communism) and the early 90s, the international financial institutions were the custodians of the imposed western morality. According to Anghie, 'the civilizing mission of the BWI [Bretton Woods Institutions‐ the World Bank and the International Monetary Fund] and the interventions such a mission requires can be justified on the basis that they are necessary in order to transform and improve the welfare of an economically deprived group of people. The neutral, scientific discourse of economics justifies these expanding and increasingly sophisticated forms of intervention. ⁴³ The interventions of the international financial institutions were premised on the concept of 'good governance' which is broadly defined as the 'creation of a government which is...democratic, open, accountable and transparent, and which respects and fosters human rights and the rule of law.' ⁴⁴ Why would institutions constituted to regulate financial and economic issues require political and legal transformations? More so since the concept of good governance appears, at least on the face of it, to have little to do with finance and economics. Although Article 10 of the World Bank's Articles of Agreement provides that the Bank shall not interfere in the political affairs of any member the Bank has justified its political reform initiatives as necessary for progress by 'asserting that

A R

Opoku-Dapaah, E. and S.H. Boko, (2010), Liberalization in the Mining Sector in Ghana and its Impact on the Economy: A Sociological Approach, in Diery Seck and Sylvian Boko (eds), Back on Track: Sector-led Growth in Africa and Implications for Development, Africa World Press: Asmara NJ 40Ibid., 34 Hatcher Pascale, (2004), Mali: Re-writing the Mining Code or Re-de ning the Role of the State?

In Campbell (ed), Regulating Mining in Africa, pg 43 Sarrasin, Bruno (2009), Mining and Protection of the Environment in Madagascar in Campbell (ed), Mining in Africa, pg 61 Anghie, A. (2007). Imperialism, Sovereignty and the Making of International Law. New York: Cambridge University Press pg 193 in Santiago, R.M. (2012) Law and the Civilizing Mission: The Expansion of the Western State Model pg 41 Ibid

T F

E Z

O R

From Soft to Hard Security||TCH Working Paper 04/11/2013

13

The Regulatory Double bind in the Horn economic development depends on good governance, on the political system of a country'. ⁴⁵ The same principle is not applied to the west.

Anghie states that 'western States are immune from the operations of international financial institutions although they engage in forms of protectionism, for example, that have been targeted by the international financial institutions when presented in third world societies'. ⁴⁶ The end market for resources from the predatory sphere is predominantly western capitals. As recently as September 2013 Belgium demanded that the European Union lift sanctions on the state‐run Zimbabwe Mining Development Corporation (ZMDC) which has put it at odds with other EU countries such as Britain which was reluctant to rush into a move that could be seen as rewarding Mugabe. ⁴⁷ The proliferation of mining legislation in the 90s whose objective was to encourage foreign direct investments was spearheaded at the same time as the push for democracy after the fall of the Berlin wall. It can be argued that the Breton Wood institutions acted more in the interest of the multinationals as opposed to the interests of the indigenous communities.

D

Moral Imposition. The thriving morality that underlies international relations is western. According to Bush, '[a]fter the collapse of communism in the 1980s, the postcolonial world and the underdeveloped parts of the ex‐USSR were expected to follow in the footsteps of the West in terms of economic organization (capitalism and integration into the global markets); individualism and enterprise; moral and political values (Christianity and liberal democracy) and popular culture (mass consumerism, music, films, food). Western ideas of modernity, democracy and human rights were presented to the non‐ West as universal...Such “universal” values were promoted through powerful government aid agencies and the US‐dominated IMF and the World Bank. Aid was made conditional on democratization, improved human rights and “structural adjustments”, privatization and integration into global markets'. ⁴⁸ The insistence, for instance on the universality of human rights can be seen as a modern form of imperialism since human rights are founded from western legal tradition. Glenn states that 'universal rights are simply another form of universalizing the truths of a particular tradition'. ⁴⁹

A R

Ibid Ibid pg 42 Reuters News Agency Bush, B. (2006). Imperialism and Postcolonialism. Harlow England: Pearson Longman, pg 193 in Santiago, R.M. (2012) Law and the Civilizing Mission: The Expansion of the Western State Model pg 39 Glenn, H.P. (2000), Legal Traditions of the World: Sustainable Diversity in Law. New York: Oxford University Press pg 245 in Santiago, R.M. (2012) Law and the Civilizing Mission: The Expansion of the Western State Model pg 40

E Z

O R

T F

D.2 The Effect of Liberalisation of Mining Legislations in Africa

According to McKinsey Global Institute, the growth of natural resource exports has been an advantage to most African economies concerned. It has been quoted that such exports account for about 1.25% of the real GDP growth in Africa between the years of 2000 and 2008.

Ghana, for example, was associated with undeniable benefits from the windfall of private investment in its minerals sector. Approximately 220,000 new mining jobs were created for Ghanaians between 1987 and 2002, and the mining sector spent millions each year on goods and services from local businesses around areas of operations. In 2007 From Soft to Hard Security||TCH Working Paper 04/11/2013

14

The Regulatory Double bind in the Horn Newmont planned to spend over $8 million in Ghana on social and environmental projects, including compensation funds to dislocated communities, and four of the largest companies have agreed to construct an 80 megawatt power plant to buttress the national electrical grid.

In retrospect, the growth that is currently being experienced in Africa has no comparison. The growth in mining operations is also largely unchecked leading to questions regarding the real advantages of resource exploitation in the host communities. The liberalist approaches to legislation as seen above have the general effect of directing profits to foreign owned multinationals and a few local elites at the expense of the locals. It has also been said that dependence on natural resources has a negative effect on leadership. Natural resource dependency also insulates national leaders from public pressure since they do not rely on the taxation of their populations for revenue, with an established correlation between resource abundance and political corruption. ⁵⁰ States like the DR Congo, Angola, and Equatorial Guinea appear trapped by a “resource curse,” where economic rents gained from the export of minerals and petroleum permit governments to neglect taxing personal or corporate incomes, to divert public revenues to patron‐cliental networks, and to deplete natural resources without re‐investing in assets to diversify the national economy. ⁵¹ The World Bank's Africa's Pulse reported in 2012 that strong economic growth in resource‐rich countries had “failed to make a significant dent on their poverty levels,” most often due to a failure by governments and multinational companies to re‐invest resource revenues into health, education, and employment creation services. ⁵²

D

Finally, Campbell highlights that the external origins of these regulatory frameworks risk undermining the popular legitimacy of the states which adopt them. In particular, the public policy space available to African governments and the ability of the local citizenry to have direct input into decision‐making processes concerning natural resource management is circumscribed by the enhanced role granted to foreign private sector operators, and the transfer of legal authority in the mining sector from national to transnational regimes.

While successful in attracting increased foreign investment, liberalized mining regimes adopted across Africa since the 1980s have displayed key shortfalls in their ability to meet the development challenges of the continent. The lack of capacity on the part of African states to monitor and enforce natural resource management regulations, limited benefits for local employment and pro‐poor economic growth at the community level, and a perceived lack of transparency in resource revenue management policies have prompted calls for stronger natural resource governance strategies. Hatcher (2004), for example, notes that new mining regulations introduced in Mali in 1999 permitted the development of the Sadiola gold mine in the Kayes region, but that the regulations required no financial compensation to local populations displaced as a result of the operation.

A R

Ross Michael, (2012), The Oil Curse: How Petroleum Wealth Shapes the Development of Nations, Priceton University Press: Princeton Supra note 41; pgs 49-50 Tran, M. (2012), Africa's Mineral Wealth Hardly Denting Poverty Levels, says World Bank, The Guardian, 5 October

T F

E Z

O R

From Soft to Hard Security||TCH Working Paper 04/11/2013

15

The Regulatory Double bind in the Horn ⁵³ Indeed, the mine apparently had “limited economic impact on the Kayes region. Development of educational and health infrastructure benefited only the Sadiola region … [and] the tax revenues and dividend income collected by the government of Mali seemed to remain in Bamako”. ⁵⁴ These problems reflect the broader politico‐economic and ethnic tensions which intersect with natural resource governance issues, raising the risks of instability and conflict in resource‐rich countries.

D.3 The Emergence of Civil Society

Supra note 41; pg 49 See also Gosselin, C. and Touré B., (2000), Cohérence des politiques et interventions cannadiennes dans la lute contre la pauveté: La cas du Mali, The North-South Institute: Ottawa, pg 62-63 Howell J and Pearce J (2002), Civil Society and Development: A Critical Exploration, Lynne Rienner: Boulder Dashwood H., (2006), Global Initiatives to Promote Corporate Social Responsibility in the Mining Sector, in Just Business Practices in a Diverse and Developing World: Essays on International Business and Global Responsibilities, Palgrave Macmillan: New York Coumans .C., (2010), Alternative Accountability Mechanisms and Mining: The Problems of E ective Impunity, Human Rights and Agency, Canadian Journal of Development Studies, Volume 30, No. 1-2 pg 27-48 Sagebien, J. and Lindsay M., (2011), Governance Ecosystems: CSR in the Latin American Mining Sector, Palgrave Macmillan: New York UN Special Representative and Academic Ruggie J., (2008), Protect, Respect and Remedy; A Framework for Business and Human Rights.

Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, A/HRC/8/5.7

D

With a perceived decline in the authority and capacity of nation‐states to effectively govern natural resource exploitation, new forms of private and transnational governance have emerged to promote a “socially responsible capitalism” wherein markets and states work together with civil society. As a result of the vacuum evident in the so far explored liberalised regimes, there has been need to supplement those generations of mining code legislations. Evidently the role and authority of governments to effectively manage the exploitation of natural resources has decreased overtime as a result, new forms of private and transnational governance have emerged to promote a “socially responsible capitalism” wherein markets and states work together with civil society. ⁵⁵ The launch of the Global Mining Initiative (GMI) in 1998, spearheaded by a consortium of mining company executives without any direct involvement by sovereign states, marked the beginning of this new approach. ⁵⁶ These “alternative accountability mechanisms” include various private, voluntary, and regional initiatives which are driven by a host of heterogeneous actors, including corporations and state governments, but also regional organizations and civil society groups at both the domestic and international level. ⁵⁷ The emergence of these new governance initiatives – what might be called a “fourth generation” of natural resource governance codes – has its origins in the debates over corporate social responsibility, CSR. ⁵⁸ Particularly in the Latin American mining sector, where civil society organizations successfully drew attention to human rights and environmental abuses committed by multinational mining corporations.

A R

T F

E Z

O R

John Ruggie characterized the movement as a response to a global “governance gap” He further stated that “the root cause of the business and human rights predicament today lies in the governance gaps created by globalization – between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation”. ⁶⁰ These campaigns put a renewed focus on transparency and accountability not only among host governments but also on investing partners and private companies. In Africa, civil society groups such as Global Witness increasingly put emphasis on the lack of transparency in the extractive industry, including the 1999 report A Crude Awakening, which documented the complicity of From Soft to Hard Security||TCH Working Paper 04/11/2013

16

The Regulatory Double bind in the Horn

D

major multinational oil companies in the embezzlement and mismanagement of Angola's oil revenues during that country's 40‐year civil war. ⁶¹ Unlike earlier waves of global activism, the newest wave of governance initiatives has largely focused on a constructive dialogue which includes private sector actors as vital partners in natural resource management. Acknowledging the fact that the exploitation of Africa's vast mineral resources holds enormous potential for positive economic development and improvement in the quality of life for many of the continent's citizens, civil society groups have adopted a more cooperative stance with the private sector. Mining firms, for their part, have taken an increasing interest in participating in such voluntary initiatives as part of a broader shift in the extractive industry towards the embrace of CSR strategies. As a result, debates over natural resource governance and CSR have moved beyond the traditional positions of supporting or opposing extractive industry activities, and instead towards a more sophisticated dialogue on forms of regulation and policy proposals. ⁶² The sources of fourth generation codes are highly varied.

They originate with industries, governments, standard setting and certification bodies such as the International Organization for Standardization, Non‐Governmental Organizations, financial institutions, and the United Nations. Some cover a broad spectrum of social and environmental issues, while others target specific themes such as labour practices, corruption, corporate governance, human rights, environment impact and protection, and compliance reporting. ⁶³ One of the most noteworthy recent initiatives has originated from African nations themselves, through the adoption of the Africa Mining Vision (AMV) by Heads of State at the 2009 African Union (AU) summit. The AMV is significant for two primary reasons. First, it represents a self‐ conscious effort on the part of African political leaders to find a “common voice” with which to negotiate access to the continent's natural resource wealth. Second, and critically, many view the Vision as a fundamental departure from the model of economic development underpinning the first three generations of mining code liberalization. It calls for “more fiscal space and responsive taxation to allow host countries to better capture windfall gains and to encourage the use of revenues for value addition. Thus, the AMV has been described as a reaction to the “failure” of Washington consensus policies, the rejection of the role of host governments as mere regulators of private sector activity, and the return of the “developmental state” in Africa.

A R

Global Witness, (1999), A Crude Awakening: The Oil of the Oil and Banking Industries in Angola's Civil War and the Plunder of State Assets (London) Canel E., Idemudia U., and North L., (2010), Rethinking Extractive Industry: Regulation, Dispossession and Emerging Claims, Canadian Journal of Development Studies, Volume 30, No. 1-2 Ibid, pg 32 Harbeson, W.J. Rothchild, D. Chazan, N. (eds) (1994) Civil Society and the State in Africa, London: Lynne Rienner Publishers

T F

E Z

O R

It can be hypothesized that the new custodian of civic morality is civil society. In both national and international discourses, civil society is viewed as the 'missing key to sustained political reform, legitimate states and governments, improved governance, viable state‐society and state‐ economy relationships and prevention of political decay'. ⁶⁴ However, whose definition of state legitimacy, 'good' governance and 'viable' state relationships is civil society propagating? According to Archer, 'the 'good government' agenda has deployed the concept of civil society within the wider initiatives of supporting the emergence of more competitive From Soft to Hard Security||TCH Working Paper 04/11/2013

17

The Regulatory Double bind in the Horn market economies, building better‐managed states with the capacity to provide more responsive services and just laws, and improving democratic institutions and deepening political participation. Support for the emergence and strengthening of non‐governmental organisations has formed a central part of this agenda.' ⁶⁵ Support for civil society is an integral part of donor 'packages'. It takes various forms from capacity building to, voter/civic education and electoral monitoring support. This support trend is replicated in several countries across Africa where development partners fund governments and civil society simultaneously. This allows the 'development partners to influence from both sides. And, civil society then does not influence the state from the bottom (i.e. with organic changes wrought from the people) but acts as an agent of external ideals.

O R

D.4 International Regulation of the Mining Industry: The Link between the International Community, States and Civil Society International conventions are sources of international law as provided for in Article 38 of the Statute of the International Court of Justice.

Conventions are/can be ratified by states that thereafter incorporate it as part of its laws depending on whether the State is a monist or a dualist state. Once a monist state ratifies a treaty it automatically becomes part and parcel of its laws i.e. USA, whereas dualist states have to domesticate a treaty or convention even after ratifying it, i.e. follow the normal procedures of law making through Parliament. Customary International law however does not have to be ratified. The condition to be met is that the assumed rule should have attained Opinio juris (being practiced as a legal obligation and state practice (wide State practice). ⁶⁶ It is thus possible that a custom can be codified into a treaty or a Convention or a custom can develop from a codified international treaty/convention.

For instance, the Geneva Conventions which have attained customary international status after nearly all the states ratifying the conventions.

The Geneva Conventions most importantly establish standard best practices that may be adopted by states when making laws. It is noteworthy that Constitutions can make provision for the inclusion of international law as part of the laws of a state.

D

A R

Archer, R. (1994). Markets and good government. In A. Clayton (ed.), Governance, democracy and conditionality: What role for NGOs?, International NGO research and Training Centre (INTRAC), Oxford Professor FX Njenga on International Law and World Order Problems

T F

E Z

D.4.1 Security Council Sanctions Committees: An Overview

Under Chapter VII of the Charter, the Security Council can take enforcement measures to maintain or restore international peace and security. Such measures range from economic and/or other sanctions not involving the use of armed force to international military action. Targeted sanctions, for instance, can involve the freezing of assets and blocking the financial transactions of political elites or entities whose behaviour triggered sanctions in the first place. Recently, smart sanctions have been applied to conflict diamonds in African countries, where wars have been funded in part by the trade of illicit diamonds for arms and related materiel as was the case in the Kimberly Process.

In 1998, Global Witness launched a campaign to expose the role of From Soft to Hard Security||TCH Working Paper 04/11/2013

18

The Regulatory Double bind in the Horn diamonds in funding conflict, as part of broader research into the link between natural resources and conflict. In response to growing international pressure from Global Witness and other NGOs, the major diamond trading and producing countries, representatives of the diamond industry, and NGOs met in Kimberley, South Africa to determine how to tackle the blood diamond problem. The meeting, hosted by the South African government, was the start of an often contentious three‐ year negotiating process which culminated in the establishment of an international diamond certification scheme. The Kimberley Process was endorsed by the United Nations General Assembly (UNGA) and the United Nations Security Council (UNSC) and launched in January 2003.

O R

Both the Organisation for Economic Co‐operation and Development (OECD) ⁶⁷ and the United Nations (UN) ⁶⁸ have released broadly similar guidelines for company due diligence on minerals from conflict affected and high risk areas, and in the case of the UN, specifically for the DRC. UN Security Council Resolution 1952 (2010) adopted unanimously on 29th November 2010 supported the taking on of the Group of Experts' recommendations on due diligence provided in its 2010 report⁶⁹ and called upon all States to take appropriate steps to raise awareness of such due diligence guidelines. The US Department of State has endorsed the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict‐Affected and High‐Risk Areas, adopted as a recommendation by the OECD Council on May 25, 2011, under the chairmanship of US Secretary of State Hillary Clinton. As such they [US Department of State] encourage companies to draw upon the OECD guidance as they establish their due diligence practices. ⁷⁰ These guidelines are meant to outline actions that will allow trade to continue while promoting responsible sourcing and progressive improvement.

A R

T F

E Z

D.4.2 The Kimberley Process

D

See http://www.oecd.org/document/36/0,3746,en_2 649_34889_44307940_1_1_1_1,00.html See http://www.un.org/sc/committees/1533/egroup guidelines.shtml S/2010/596 Statement Concerning Implementation of Section 1502 of the Dodd-Frank Legislation Concerning Con ict Minerals Due Diligence, US Bureau of Economic, Energy, and Business A airs, July 15, 2011. See http://www.state.gov/e/eeb/diamonds/docs/168 632.htm

Under the Kimberley Process (KP), the import and export of rough diamonds is only allowed if the diamonds come from or are being exported to another Kimberley Process participant. There is an import‐ export certification scheme which requires participating governments to certify the origin of rough diamonds, and put in place effective controls to prevent conflict stones from entering the supply chain. Participant countries must enact domestic legislation to implement the scheme, and can only trade rough diamonds with other members.

This creates a strong incentive for countries that want to produce trade or process uncut stones to join. As of 2010, there are 75 governments participating in the KP.The shipments must also be transported in tamper‐resistant containers and must be accompanied by a government‐validated Kimberley Process certificate. In addition, to aid the Kimberley process, the World Diamond Council has implemented a system of warranties for diamonds that has been endorsed by all Kimberley Process participants and al buyers and sellers of rough and From Soft to Hard Security||TCH Working Paper 04/11/2013

19

The Regulatory Double bind in the Horn polished diamonds. Under the system, Kimberley process participants as well as all buyers and sellers of diamonds must make a written guarantee on all their invoices that their diamonds “have been purchased from legitimate sources not involved in funding conflict and in compliance with United Nations resolutions.”The seller also guarantees that the diamonds are conflict free, based on personal knowledge and/or written guarantees provided by the supplier of the diamonds. ⁷² The KP's technical provisions are implemented by governments, but its tripartite structure means that non‐governmental organisations and the diamond industry hold official status as observers and take part, along with member states, in all working groups and decision making processes. The Kimberley Process has chalked up some notable achievements in the past ten years, including pioneering a tripartite approach to solving international problems, and helping some of the countries that were worst‐hit by diamond‐fuelled wars to increase their official diamond revenues. However, member governments have repeatedly failed to deal effectively with problem cases such as Zimbabwe, Côte d'Ivoire and Venezuela. Despite the existence of the Kimberley Process, diamonds are still fuelling violence and human rights abuses. Although the scheme makes it more difficult for diamonds from rebel‐held areas to reach international markets, there are still significant weaknesses in the scheme that undermine its effectiveness and allow the trade in blood diamonds to continue.

D

Enforceability. The Kimberley process is not a legally binding treaty; it is a voluntary agreement that states can choose to join or not join however it hinges on a combination of national legislation and industry self regulation. In order to become Kimberley process members, states are required to draft national laws that conform to the internationally agreed‐upon minimum standards that restrict the trade of conflict diamonds set out by the process certification scheme. There are three ways under the process to review participant compliance, investigate noncompliance, and hold noncompliant participants accountable: the first is annual reporting, the second is review visits, and the third review missions. Whereas review visits are voluntary, review missions are not.

They can be ordered at any time the Kimberly Process Working Group on Monitoring finds credible evidence of significant non‐compliance with the process.

A R

Ibid Pickrell, John, Scientists Struggle to Identify Con ict Diamonds, Science News, August 10, 2002

T F

E Z

O R

Shortcomings of the Kimberley Process. The Kimberley process has four major shortcomings. One, Kimberley process certificates can be forged and falsified. Two, it is difficult to differentiate conflict from non‐ conflict diamonds. This is because diamonds are created under similar conditions and are generally pure. ⁷³ The impurities present in diamond are only visible in very small concentrations. This makes the identification of conflict diamonds difficult. Three, there is a limited scope of testing techniques available. This is because diamond exporters and traders are averse to any technique that would require the gem to be cut or that From Soft to Hard Security||TCH Working Paper 04/11/2013

20

The Regulatory Double bind in the Horn would affect the gems physical appearance. Four, the testing techniques that are currently in use are complex and time consuming. The cost of implementing these techniques on a large scale is prohibitive.

Usefulness of the Kimberley Process in the DRC. It is notable that DRC was the chair of the Kimberley Process in 2011. This is because DRC is a well known source of conflict minerals. The chair is responsible for overseeing the implementation of the Kimberley process certification scheme, the operations of the working groups and committees, and general KP administration. Did DRC's membership in the Kimberley process stem the trade in conflict diamonds in the country? Not completely. In 2004, the Republic of Congo, which neighbors DRC, was removed from the Kimberley process because it was unable to prove the origin of its gems. The gems were believed to have originated from DRC. The Republic of Congo was reinstated to the process in 2007.

D.4.3 Conflict Free Gold

D

Since 2009 there has been a conflict free gold standard designed to apply to world gold council members and other companies involved in the extraction of gold. The standard has been developed to establish a common approach by which gold producers can demonstrate that their gold has been extracted in a manner that does not fuel conflict or the abuse of human rights typically associated by such conflicts. ⁷⁴ In addition, national‐level legislation such as the UK Bribery Act 2010 and the US Dodd‐Frank Act have placed greater legal scrutiny on the transparency of commercial activities in oil, gas and mineral resource development. The UK Bribery Act 2010 extends extra‐territorial jurisdiction to prosecute bribery committed abroad by persons resident in the UK as well as UK nationals and corporate bodies. In the United States, the Dodd Frank Act 2010 compels American companies to disclose the use or sourcing of “conflict minerals” from the DRC and adjacent states, the source of certain listed metals, as well as the payments made to governments for commercial exploration of oil, gas and mineral resource development. ⁷⁵ Section 1502 of the Act, ⁷⁶ was amended to identify four minerals as potential conflict minerals: gold, tin, tantalum and tungsten, and gold.

The US Dodd‐Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama on July 21st 2010 defines 'Conflict Minerals' as including 'cassiterite and its derivatives' along with two other minerals and gold. The objective of this law is to progressively reduce the link between mining and conflict in the Eastern Provinces of the Democratic Republic of Congo (DRC).

A R

World Gold Council, Con ict Free Gold Standard, Second Edition Supra note 35 http://www.legislation.gov.uk/ukpga/2010/23/ notes/division/2

E Z

O R

T F

This cycle of violence that envelopes the DRC has presented opportunities for various armed groups, both state and non‐state, to plunder natural resources by creating and maintaining an environment of exploitation, instability, horror, and appalling inequality. Militia groups and the state fight for control and access to mines. Armed groups in the area made an estimated total of $185 million in 2008 from the mines. As of From Soft to Hard Security||TCH Working Paper 04/11/2013

21

The Regulatory Double bind in the Horn July 2012, nearly half of the tantalum‐smelting companies worldwide have been certified as conflict‐free. Because of this, the disclosure requirements of the Dodd‐Frank Act are a necessary check on both actors in the US and the DRC. D.4.4 International Case Law In the case at the International Court of Justice concerning armed activities on the territory of the Congo (Democratic Republic of the Congo v. Uganda) Judgment of 19 December 2005, one of the issues was the illegal exploitation of natural resources. The Contention of the DRC was that Ugandan troops had systematically looted and exploited the assets and natural resources of the DRC. The findings of the Court concerning the acts of illegal exploitation of natural resources was that Uganda was guilty of plundering the natural resources of the DRC and that the conduct of Uganda People's Defence Forces (UPDF) officers and soldiers was attributable to Uganda. In making that determination, the court stated that it was irrelevant of whether UPDF personnel acted contrary to instructions given or exceeded their authority. The principle of permanent sovereignty over natural resource was applicable to this situation and that the illegal acts by UPDF were in violation of the jus in bello duty of vigilance by Uganda with regard to illegal acts of UPDF. Uganda had the international responsibility for the acts of its army as an occupying power.

D

In 2001 gold accounted for 84 percent of the total value of all minerals exported fromUganda; in 2002 it was 99 percent. It was reported that most of the gold exported from Uganda came from Congo, however there were discrepancies in records between gold production and gold exports. In 2002, for example, domestic gold production was valued at $24,817 while gold exports for the same year were listed as just under $60 million. When Human Rights Watch researchers asked Ministry representatives about this discrepancy, they refused to comment. ⁷⁷ Subsequently the Swiss refinery company Metalor Technologies suspended gold imports from Uganda: “because of controversy over the origin of the supplies following investigation by UN experts and the Human Rights Watch into the gold trade in the DRC.”

A R

Human Rights Watch, (2005), The Curse Of Gold Democratic Republic Of Congo, Human Rights Watch

T F

E Z

O R

D.4.5 Regulating Multinational Corporations in the Extraction and Sale of Resources from Conflict Sources

European Union Accounting and Transparency Directives. The EU Accounting and Transparency Directives adopted on 9 April 2013 is an agreement that is aimed at increasing the transparency of revenue made

by European Union companies that extract oil, gas, log and mining of natural resources. Extractive industry companies are to publish reports disclosing all payments made to the governments of the resource countries. The payments disclosed include royalties, fees, dividends, taxes, production entitlements, bonuses and payments for infrastructure improvements.

From Soft to Hard Security||TCH Working Paper 04/11/2013

22

The Regulatory Double bind in the Horn This law is to ensure that there is increased transparency and accountability of funds within the industry. This is with particular reference to ensuring that revenue can be traced by national citizens of both involved countries. Note that what is under regulation in the directive is fund accountability. There are no measures to curb exploitation, or if there are they are not immediately determinable. What then is the purpose of the accountability and transparency directives?

The United Nations Involvement. The United Nations Mission in the DR Congo (MONUC) is the largest and most expensive peacekeeping mission in UN history comprising of about 20,000 personnel on the ground and a 09/10 budget of $1.35 billion. Human Rights bodies have suggested the UN is risking becoming complicit in atrocities against civilians. In 2009, a report by UN commissioned exports said that the UN had done nothing to quell the violence. In August 2010, the MONUC was under harsh criticism for doing nothing to prevent the rape of over 200 woman and children within miles of their base, claiming that they only heard of the event 10 days after.

E Z

O R

The Extractive Industry Transparency Initiative. The Extractive Industry Transparency Initiative (EITI) is an initiative launched in 2002 through a coalition of governments, companies, international organizations, and the civil society. Its objective is to create an international standard of transparency of the revenue flows within the extractive resource industries. With a focus on oil, gas and mineral resources the EITI standard allows citizens of the respective extractive countries to monitor the payments made by companies on licenses and taxes as well as the revenue received and utilized by governments. The aim of the initiative is to increase stability, accountability, trust and anti‐ corruption in the sector. The initiative also seeks to ensure that the citizens of the extractive countries are the key beneficiaries of the revenue made from these resources.

D

A R

T F

The Securities and Exchange Act. The United States Congress was of the opinion that the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo was helping to finance conflict. Thus, in 2010 an amendment was included in the Securities Exchange Act of 1934 to allow for disclosure of conflict minerals originating from DRC. The Act requires the submission of reports to the Securities and Exchange Commission detailing two things.

One, a description of the measures taken by the person to exercise due diligence on the source and chain of custody of such minerals. ⁷⁸ Two, a description of the products manufactured or contracted to be manufactured that are not DRC conflict free. These disclosure requirements are to terminate on a date on which the President determines and certifies to the appropriate congressional committees, but in no case earlier that the date that is one day after the end of the 5‐ year period beginning on the date of the enactment of this subsection.

Section 13, United States Securities and Exchange Act

From Soft to Hard Security||TCH Working Paper 04/11/2013

23

The Regulatory Double bind in the Horn The amendment to the Act further required that the Secretary of State, in consultation with the Administrator of the United States Agency for International Development, submit to the appropriate congressional committees a strategy to address the linkages between human rights abuses, armed groups, mining of conflict minerals, and commercial products.

Interestingly, the Act requires a map of mineral‐rich zones, trade routes, and areas under the control of armed groups in the Democratic Republic of the Congo and adjoining countries. For what purpose would the US Congress require this map? This is a critical question. It has been argued by US companies that these regulations are too far‐reaching and costly to implement. ⁷⁹ DRC appealed to the Securities and Exchange Commission to ensure that the reporting rules would not result in a total embargo of minerals from the region. Burundi and Tanzania also submitted comments to the commission noting their concern over the effect the regulation will have on their economies. In the wake of the increased regulation in the trade of minerals from the DRC some questions are necessary: will the regulation be effective in curbing trade in conflict minerals? Will a decline in the trade result in a decline in the conflict?

E Z

O R

D.4.6 Regulating the Proceeds of Crime

T F

International Regulation. Laundering of money is done in capitals that facilitate or promote international justice. The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances enables the confiscation of proceeds from drug related criminal offences. In addition, the Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (ETS No. 141 referred to as “the 1990 Convention”) gave rise to the 2003 United Nations Convention against Corruption. The European Convention and the International Convention for the Suppression of the Financing of Terrorism, adopted by the General Assembly of the United Nations on 9 December 1999 oblige States Parties to establish the financing of terrorism as a criminal offence.

D

A R

National Regulation. In Kenyan the Proceeds of Crime and Anti‐Money Laundering Act, 2009 came into force on 31st December, 2009. Uganda passed the Anti‐Money Laundering Act in June 2013, Rwanda 2008 and the Democratic Republic of Congo in 2004. National legislation can be viewed as window dressing to avoid being listed as a high risk, non‐ cooperative country by the by the International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation.

Enforcement within the region of money laundering and corruption related crimes remain practically nonexistent.

IRIN, DRC: Controversy over "con ict minerals" law, 2 August 2011

From Soft to Hard Security||TCH Working Paper 04/11/2013

24

The Regulatory Double bind in the Horn D. 4.7 The Rights of Indigenous People in Resource Extraction Specific provisions on modalities to protect the human rights of groups in the context of natural resource exploitation and serve the interests of people, such as the International Labour Organization Indigenous and Tribal Peoples Convention, 1989⁸⁰ (ILO Convention) are yet to be ratified by the African countries. Only one African country has ratified it: the Central African Republic. The ILO Convention, an international treaty adopted by the International Labour Conference of the ILO in 1989, represents a consensus reached by ILO tripartite constituents on the rights of indigenous and tribal peoples within the nation‐States where they live and the responsibilities of governments to protect these rights.

O R

It is based on respect for the cultures and ways of life of indigenous peoples and recognizes their right to land and natural resources and to define their own priorities for development. The Convention aims at overcoming discriminatory practices affecting these peoples and enabling them to participate in decision making that affects their lives.

Therefore, the fundamental principles of consultation and participation constitute the cornerstone of the Convention. Further Article 7(4) of the ILO Convention requires that governments take special measures to protect the environment in territories inhabited by such indigenous and tribal peoples. The convention also safeguards their rights to their ancestral lands and natural resources providing comprehensive provisions for their compensation in case of alienation. Self‐identification as indigenous or tribal shall be regarded as a fundamental criterion for determining the groups to which the provisions of this Convention apply.

T F

E Z

E. Conclusion

D

A R

ILO Convention No. 169 Emile Durkheim, (1958), Professional Ethics And Civic Morals, Free Press: Glencoe Ill

We are sometimes surprised that the reverence for legality should be so slightly rooted in our consciousness and that we are always so ready to abandon it. But how can there be any reverence for any legal fiat that can be replaced from one day to the next by a different fiat on a single decision of a certain number of individual wills? How can we respect a law which may cease to be the law as soon as it ceases to be willed to be so?

The true source of respect for the law lies in its clearly expressing the natural inter‐relation of things. ⁸¹ In order to achieve a wholesome approach as concerns the wider benefits of the extractive sector, there is need by policy makers to respond to the challenges articulated in this paper and ensure maximum development benefits of the industry in Africa. The following are some pointers as sourced variously.

Transparency in agreements reached between stakeholders is paramount. This can only work where host nations and Mining Corporation involve the participation of the local communities at the negotiation level. As aptly put by Campbell: “[…] contractual arrangements between [stakeholders] must be created in a transparent From Soft to Hard Security||TCH Working Paper 04/11/2013

25

The Regulatory Double bind in the Horn manner in accordance with established mining codes, rather than through secret and individually negotiated deals. […] Increased transparency and accountability alone, however, may be insufficient for African states to engage in further positive development. Many African governments are simultaneously locking themselves into bilateral treaties which protect the interests of foreign investors and restrict the scope for public policy‐making.” ⁸² In a 2010 report, Deloitte observed that extractive companies are beginning to recognize that engaging stakeholders at every stage of the extraction process, from exploration to completion, is beneficial and necessary. To avert political crisis and protect their own investment, corporations are slowly attempting a re‐evaluation of their relationship with local and indigenous communities, reflective of a free, prior and informed consent model of engagement. Corruption is the other ill that ought to be attended to urgently. Due to it, the entire process of mining is flawed and benefits that ought to accrue from it lost. Beyond the sector‐ specific steps that can be taken in this regard, more fundamental institutional changes such as respect for the rule‐of‐law, independent judiciary and legal systems, and an informed and engaged citizenry would go a long way to deal with the vice of corruption.

E Z

O R

The multinational mining corporations, international donors, and civil society groups must recognize the long‐term value of investing in local technical capacity and adhering to the regulatory regimes of host governments. In this regard, development assistance should focus on improving auditing and accounting capacity among local administrators and civil society organizations. It has been proposed that perhaps what is required is not a further proliferation of legal codes and regulations, but a re‐imaging of those we already have and a refocusing of efforts on leveraging natural resources to create broad‐based economic opportunities. This will ensure that while demands for extractives are met, it is done in a manner which increases local development, protects populations, reduces harm to the environment, and promotes a sustainable future for generations to come. ⁸³

D

A R

United Nations Conference on Trade and Development (UNCTAD) (2007), World Investment Report, UNCTAD: Geneva Ibid pg 21

T F

In close co‐operation with Governments and NGOs, leading members of the tin production industry and integrated tin producers have committed to achieve three goals. The first is not to trade in cassiterite that directly or indirectly finances or benefits armed groups in the DRC and/or adjoining countries. The second is to promote ways for legitimate minerals from the region to enter the global supply chain, thereby supporting the economy of the region and the local communities that depend on this trade. While the third is the promotion of the sustainable development of the tin industries in DRC and Rwanda through investments in industrial scale exploration, mining, processing and smelting of tin and associated minerals resource.

From Soft to Hard Security||TCH Working Paper 04/11/2013

26

The Regulatory Double bind in the Horn The current regulatory framework is marked by the nihilistic view that law represents the will of society's most powerful members, those that control the instruments of power. This view is articulated by Thrasymachus in Plato's Republic, when he tells Socrates that in every government “laws are made by the ruling party in its own interest,” and “the ruling element is always the strongest.” When courts speak in terms of what is right and just, Thrasymachus said, they are speaking “in the interest of those established in power.” Justice Holmes echoed these sentiments when he wrote that the law must not be perverted to prevent the natural outcome of dominant public opinion. ⁸⁴ In an attempt to wiggle out of the double bind, a comprehensive study of the legal process of traditional customary governance systems is required as it is evident that existing legislation was never emblematic of African thought. It must begin with the question asked by Chiek Anta Diop: is there a collective African national personality? New constitutional law has begun to recognise the need to define and embrace “Africanesse” hence national values, principles and the right to assert culture are now enshrined in supreme laws. Articles 10 and 11 of the Constitution of Kenya spell out the participation of the people; and recognise culture as the foundation of the nation and as the cumulative civilization of the Kenyan people and nation. Further the National Land Commission in Article 67 (e) and (f) is empowered to initiate investigations, on its own initiative or on a complaint, into present or historical land injustices, and recommend appropriate redress as well as to encourage the application of traditional dispute resolution mechanisms in land conflicts.

T F

E Z

O R

Ultimately the double bind is perpetrated by the demand supply and end user markets that are yet to be subjected to criminal sanctions.

International justice systems have recognised and tried genocide, crimes of aggression, war crimes and crimes against humanity however the end users of the illegal economic activity by which these crime are committed is not recognized. There is no international legislation that criminalises importing, processing and re‐exporting of illegally obtained resources from timber to diamonds in “peacetime”.

D

A R

Lochner v. New York, 198 U.S. 45, 25 S. Ct. 539, 49 L. Ed. 937 [1905] Annual address to the American Mining Congress, 1981 Albert Camus in Laurence J Peters Quotations (1977) 87Ibid pg 153 Chiedozie Okoro (2010), Law and the State: a Philosophical Evaluation pg 152 accessed at http://nobleworld.biz/images/Okoro.pdf

The role of civil society must be underscored in shaping policy and legislation. The erstwhile President of the American Mining Congress, Barbour referred to anti‐mining activists in the following terms: “...like Gulliver, the mining industry is a robust giant held down by a million silk strings.” ⁸⁵ Stakeholder participation must be encouraged. It will be required to be driven in a holistic manner taking into account the historical perspective that has been significant in defining everything else. The laws final justification is in the good it does or fails to do to the society of a given place and time. ⁸⁶ According to Chiedozie (2010), 'law is a terminal point where decisions and policies come into action in any community' thus 'law should be just in order that the society may be just'⁸⁸.

From Soft to Hard Security||TCH Working Paper 04/11/2013

27