Addressing legal, security hurdles of China's 'Belt and Road' projects

Legal and security challenges are among key issues identified as bottlenecks affecting development projects being undertaken by China in Africa, factors that also complicate other emerging exchange programmes and partnerships.

A more elaborate legal framework is, therefore, necessary to accelerate progress and to further streamline the fast paced development and modernisation engagement that is driven by China in Africa.

Former African Union (AU) chairperson Ambassador Erastus Mwencha, argued that countries on the continent and more so, Kenya has a lot to learn from China, which managed to lift 800,000 people out of poverty within a very short time.

Speaking at the 21st China Lecture Series held in Nairobi recently, the seasoned diplomat challenged Kenyans to emulate the deliberate reform efforts that China undertook from 1978 to make it the second most powerful country in the world today.

.

Keep Reading business

•  Local businesses urged to embrace sustainable practices
•  Behind-the-scenes rush as clock ticks for sale of Bamburi Cement Premium
•  Pension industry seeks to flex its muscle in large State projects
•  Why construction sector is on steady decline in Kenya
•  Why affordable communication is key to AfCFTA

Many gray areas that need to be worked on to clear existing legal and security challenges that could hamper more investment and trade between China and the continent in future have been identified.

That was part of the extensive discussions held by Kenyan scholars and Chinese experts in Nairobi at - The 21st China Lecture Series, that was hosted by Prof Peter Kagwanja’s Africa Policy Institute in Nairobi this week.

Prof Zhu Weidong, a senior research fellow at China Africa Institute (CASS), a key note speaker emphasised the necessity of well-defined legal structures to maintain stability and security of the BRI projects not only in Kenya, but across the continent.

He told the gathering that clear legal agreements not only mitigate conflicts, but also foster transparency and accountability, as he urged China and Africa to collaboratively shape legal frameworks that will underpin long lasting partnerships built on trust and mutual benefit.

“Implementing such legal agreements ensures that both host countries and investors have the security to make enduring commitments, and BRI, therefore, becomes more appealing to African countries as it spreads across the continent,” said Weidong.

China will also be assured that its investments and agreements are secured through a stable legal environment that can be easily be enforced to establish a reliable development partnership, as BRI expands across Africa, because safety and security of infrastructure will become paramount.

Lack of an adequate legal framework in the settlement of cross border commercial disputes has created many obstacles in the management of commercial litigation between Africa and China.

The need for the ascertainment of jurisdiction, recognition and enforcement of judgements from each side can also greatly help in dealing with emerging cross border crimes.

Only nine African countries namely Namibia, Algeria, Tunisia, South Africa, Kenya, Republic of Congo, Morocco, Mauritius and Egypt have concluded a legal framework that is currently fully effective.

So far only 14, among them Namibia, Lesotho, Algeria, Tunisia, South Africa, Angola, Morocco, Republic of Congo, Kenya, Senegal, Mauritius, Botswana, Ethiopia and Zimbabwe have concluded bilateral treaties on extradition with China that are also effective.

There are also 35 Bilateral Investment Treaties (BTIs) that have been signed between the two sides so far, but only 23 have come into effect.

The other 12 treaties entered into with Namibia, Botswana, Sierra Leone, Kenya (2001), Code’ Ivoire, Djibouti, Benin, Uganda, Guinea, Seychelles, Chad and Namibia are still work in progress.

Some 20 Double Taxation Treaties (DDTs) have also been signed to create ease of trade  between countries on the continent and China, out of which only 15 have successfully become operational with Zimbabwe, Zambia, Ethiopia, Algeria, Morocco, Tunisia, Nigeria, South Africa, DRC, Angola and Rwanda.

The ineffective five DTTs are entered into with Kenya, Gabon, Senegal, Uganda and Cameroon, because those laws are largely ignored by the taxman.  

Kenya entered into an agreement with China that says; “Where a resident of Kenya derives income, which in accordance with provisions of this agreement, may be taxed in China, Kenya shall allow a deduction from the tax, an amount equal to tax paid in China,”  but importers complain that they never receive relieves.

To improve cooperation and guarantee the successful implementation of BRI projects agreed between China and Africa, a comprehensive legal framework should also be built to provide judicial exchange and also strengthen public legal awareness on both sides.

More bilateral treaties on judicial assistance in civil and commercial matters is also recommended and the same applies to criminal matters, bilateral treaties and DTTs.

To achieve the required standard across the continent and create room for cross cutting projects that can run across regions, more and more African countries are encouraged to accede to multilateral treaties in both civil, criminal and commercial matters.

But before that is realised, all parties operating under the current legal framework, were advised to also settle civil, commercial and investments disputes through arbitration protocols that already exist between some African countries and China.

The China-Africa joint Arbitration Centre in Nairobi was launched to fast track dispute resolution between China and African countries and so matters that would have ended up in court can be settled through arbitration or mediation.

The Organisation for the Harmonisation of Business Law in Africa (OHADA), that serves 16 West and Central African nations launched in 1993 has also become useful in dealing with debt resolution law, arbitration, general commercial and insolvency laws and harmonisation of corporate accounting, among other laws.

Amb. Mwencha emphasised that African countries should not be pushed to take positions that threaten their survival, as they engage with development partners.

 Prof Kagwanja cautioned that more developments can only be realised where proper security is guaranteed for the BRI projects. “You cannot operate in anarchy. Legal guarantees are important for secure agreements,” said Kagwanja.

The relationship between China and Africa should, however, be non-hegemonic and non-authoritative, but a friendship that is cordial and one build on brotherhood so that African can be assisted to develop more rapidly.

Prof Zhang Xiaojing, the Director General of the Institute of Finance and banking at CASS emphasised that China’s development approach, which integrates environmental sustainability, aligns with Africa’s own long aspirations for long term progress.

He singled out the commitment for sustainable energy within the BRI programme, which exemplifies a shared vision for environmentally responsible development.

Another essential component of the BRI is knowledge transfer and capacity building, which equips African professionals with vital technical skills to sustain and manage large scale projects that are being developed across the continent.

“Programmes, such as the Kenya- China Technical and Vocational Education Training (TVET) partnership are tailored to equip Kenyan youth with technical expertise supporting its development agenda,” said Xiaojing.

The Principle Secretary for Foreign and Diaspora Affairs Roseline Njogu also highlighted the importance of skills development and called for an engagement that empowers Africa’s youth through knowledge sharing and practical experience from the BRI projects.