CSR and sustainable development within the African Continental Free Trade Area (AfCFTA)

The African Continental Free Trade Area (AfCFTA)’8 covers the entire 55 member states of Africa with a market of 1.2 billion people and a gross domestic product of $2.5 trillion, and, as a result of the share number of participating countries, AfCFTA constitutes the world’s largest free trade area since the formation of the World Trade Organization.59 Article 3 of the main agreement of AfCFTA contains its general objectives, which include to:

  • (i) Create a single market for goods and services, facilitated by movement of persons in order to deepen the economic integration of the African continent and in accordance with the Pan African Vision of’ An integrated, prosperous and peaceful Africa’ enshrined in Agenda 2063;
  • (ii) Create a liberalized market for goods and services through successive rounds of negotiations;
  • (iii) Contribute to the movement of capital and natural persons and facilitate investments building on the initiatives and developments in the state parties and RFCs;
  • (iv) Lay the foundation for the establishment of a Continental Customs Union at a later stage;
  • (v) Promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the state parties;
  • (vi) Enhance the competitiveness of the economies of state parties within the continent and the global market;
  • (vii) Promote industrial development through diversification and regional value chain development, agricultural development and food security;
  • (viii) Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.

Showing the connection between AfCFTA and sustainable development as a core CSR value as discussed in this book, the ECA confirms that:60

The cumulative effect of AfCFTA is to contribute to the achievement of the United Nations 2030 Agenda, in particular, to the Sustainable Development Goals, from targets for decent work and economic growth (Goal 8) and the promotion of industry (Goal 9), to food security (Goal 2) and affordable access to health services (Goal 3).

On the question of what institutional arrangements are needed for the effective implementation of AfCFTA, it is noted that the responsibility for coordinating the implementation of the AfCFTA agreement will be within the AfCFTA secretariat,61 which will form an autonomous institutional body within the African Union system and with an independent legal personality, akin to an agency of the African Union. It shall work closely with the African Union Commission and its departments, and the Commission shall provide the necessary transitional support until AfCFTA secretariat is fully operational. The funds of the secretariat shall be sourced from the overall budget of the African Union, and its headquarters, structure, roles and responsibilities shall be determined by the Council of Ministers responsible for trade.

The AfCFTA agreement is divided into seven parts, with thirty-one Articles in the main text of the agreement. The document has three protocols at the moment: one on trade in goods, the other on trade in services and the last on dispute settlement. AfCFTA is written in four original texts, which are in the Arabic, English, French and Portuguese languages, all of which are equally authentic.62 While the AfCFTA agreement was adopted and opened for signature on 21 March 2018 in Kigali, it entered into force on 30 May 2019, 30 days after having received the twenty-second instrument of ratification on 29 April 2019. On 7 July 2019, its operational phase was launched at the 12th Extraordinary Session of the Assembly of African Union Heads of State and Government in Niamey, Niger. No doubt, the AfCFTA is truly emblematic of the flagship projects of Agenda 2063 of the African Union, with widespread reception across the continent. Both Nigeria and Benin having signed the AfCFTA agreement at the Niamey summit, and the AfCFTA having 28 ratifications, Eritrea remains the only African country not part of the trading bloc as of 5 November 2019.

Free trade is a means to the end of sustainable development, and it is one thing to pay lip service or at least casually mention CSR and sustainable development in the AfCFTA agreement, but mainstreaming the implementation of the core values of these CSR and sustainability constructs within the AfCFTA framework is another. It is remarkable that the drafters of the AfCFTA agreement have mentioned the phrase ‘sustainable development goals’just once in the entire agreement, with no clear strategy or details about the methodology of attaining the SDGs. The word ‘sustainable’ features six times, while the phrase ‘sustainable development’ features four times in the entire document, and those mentions made are included in a protocol to the agreement. Beyond this, while AfCFTA recognizes the right of state parties to, for instance, regulate towards their overall sustainable development63 and confirms its general objective to promote sustainable development in accordance with the sustainable development goals (SDGs),64 apart from the previous passing mention and comments about SDGs and overall sustainable development, the AfCFTA agreement appears to discount the need for a properly defined framework through which the said objectives can be realized. Such mere mentioning appears to have no real value in practically promoting the ideas of CSR and sustainable development. In other words, it should not be simply a question of inserting the words ‘sustainable development’ or even CSR in the AfCFTA but rather seeking to mainstream throughout the document what is meant by such and how to be realized in more practical terms. For instance, there is the Southern African Development Community (SADC) Model Bilateral Investment Treaty Template and Commentary, which was completed in June 2012 by member states of SADC (the ‘SADC Model Treaty’).65 Article 1 of this template treaty’ mentions that:

The Main objective of this Agreement is to encourage and increase investments . . . that support the sustainable development of each Party, and in particular the Host State where an investment is to be located.

This stated objective by the drafters did not start and end with the previous quotation. Unlike with the AfCFTA, the drafters of the SADC Model Treaty ensured its stated objective was sustained throughout the agreement, making certain the treaty incorporated sustainable development thinking from the beginning to the end of the text. Practically speaking, the SADC Model Treaty had gone ahead to provide specific clauses that properly mainstream the intended development agenda into the treaty beyond mere mentioning.66 It is important to also underscore that this mere mentioning of the subject as some ‘grandiose western concept’ in the AfCFTA is a repetition of previous mistakes that led to the failures of past integration efforts and suggestive of not having undertaken proper legal integration as required for the achievement of the AfCFTA objectives. There have been a few problems encountered in previous regional integration attempts in Africa including:67

  • (i) Divergent legal systems;
  • (ii) Non-ratification and non-implementation of key obligations;
  • (iii) Lack of fully developed legal principles within the municipal law;
  • (iv) Conflict of laws;
  • (v) Ambiguity of treaty language;
  • (vi) Lack of (financial) incentive to ensure compliance;
  • (vii) Inadequate (financial and human) resources and technical expertise for implementation;
  • (viii) Weak economic structure of African states;
  • (ix) Differing macro-economic policies;
  • (x) Unbridled attachment to national sovereignty, to political instability and conflicts.

Perhaps, the most crucial of the previously mentioned, which appears to remain elusive to date, is the absence of a proper legal harmonization through an effective legal integration exercise.68 The fact is that the regional integration process is a creation of the law, and while the process usually germinates from the political interactions and negotiations between and/or among

Roadmap to embedding CSR in A frica 189 states, legal instruments, such as treaties and protocols, outline the road-map of such process.1'9 The present AfCFTA framework appears to have ignored the importance of a properly defined, integrated and shared CSR and sustainable development policy and regulatory framework, having only paid such nominal significance to such shared CSR values within the integration scheme. This diminishes the seriousness of the African integration agenda in relation to CSR implementation and, to be clear, achieving the SDGs. Further, the previous status appears to run in the opposite direction of research showing that effective regional integration and mechanisms are no longer confined to trade and finance but have increasingly also been linked to regional social policies across a wide range of sectors. Upon reviewing the provisions of the AfCFTA including the statements contained in the ECA publication, the author reiterates the view that the drafters and negotiators of the AfCFTA agreement might have focused too much on regional integration in the area of trade liberalization in terms of goods, services and investment as an end in itself without paying adequate attention to important principles embedded in concepts such as developmental regionalism, transformative regionalism7" and effective legal harmonization, especially in relation to CSR and sustainable development. It must be further reiterated that the incidence of free trade constitutes only a means towards achieving the end of sustainable development and not an end in itself. If Africa intends to achieve sustainable development, state parties must properly harmonize their legal systems and integrate the core values of CSR within their trade agreements. This will provide relevant framework with which the globalization-driving corporations may act socially responsibly and sustainably on the continent.

In conclusion, consequent upon the previous discussions, CSR can no longer be treated as something antithetical to trade liberalization or regional integration scheme in Africa. The AfCFTA framework appears inadequate and/or seems to have insufficiently provided the necessary and workable framework to meet the realities of modern times that have shown the transboundary nature of social, economic and environmental challenges arising from economic globalization and regional integration. This warrants more robust and deliberate regional social policy efforts. This is where the core values of CSR become imperative. It is important that the AfCFTA framework does not foster a situation of business as usual for multinational enterprises with double operations standards in their activities in developed economies (with relatively strong CSR policies) as opposed to their operations in developing markets (perceived with weak systems). The policy proposal towards mainstreaming effective CSR within the African regional integration scheme and ensuring businesses behave responsibly within the integration framework is underpinned by the RSM framework discussed in Chapter 7. Instead of policy makers paying halfhearted attention to the principles of CSR and sustainable development in the course of regional integration in Africa, especially within the AfCFTA regime, there is need to realize the potentials of using CSR for trade facilitation and at the same time ensuring that responsible corporate behaviours underpin suchfacilitated trade. This approach stands a better chance of ensuring that the vision of the founding fathers of regional integration in Africa towards a regionalism emphasizing the need for trade to serve as an instrument of accelerated industrialization and structural transformation in Africa is not only realized but also ensures that Africa is indeed not left behind in the attainment of the SDGs.

 
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