EAST AFRICA COMMUNITY LAW NOTES PRT 1

*DISCLAIMER*

The notes below are adapted from the Kenyatta University, UoN and Moi University Teaching module and the students are adviced to take keen notice of the various legal and judicial reforms that might have been ocassioned since the module was adapted. the laws and statutes might also have changed or been repealed and the students are to be wary and consult the various statutes reffered to herein

   

Currently there is still no developed East Africa Community Law given the young court established under the treaty, as such we shall dwell on the provisions of law e.g.

(a)    the legal nature of international organizations? How do the same inform the framework established in the community.

(b)   The theory of regional integration. See the justifications for states coming together; how do these hold true in the case of EAC?

(c)    Types of economic integrations schemes? Where does EAC fall?

Okunda case

There was a conflict between a community law and constitution of Kenya. In event of conflict, which law reigns supreme?

Held: By virtue of the treaty of EAC having been established through an ordinary Act of Parliament, this means community law was ordinary law in Kenya and thus in case of conflict, community law must give way to the constitution.

Even though Kenya is a member of EAC, the fact that they domesticated the treaty under an ordinary Act of parliament implies that in the event of conflict the treaty must give way to the constitutional provisions. Can Kenya hide behind this position and decline to meet her obligations under the treaty? What is the effect of that?

Under the new treaty, there is a requirement that national courts refer matters to the regional court for a plenary hearing. This is discretionary therefore the courts can fail to refer certain matters touching on the treaty law which will take us back to the position under Okunda. The Okunda case remains an impediment to the implementation of EAC law, within the domestic legislation.

THE THEORY OF INTEGRATION

It seeks to explain the conditions necessary for effective integration of states. The argument is that the success of every integration scheme will depend on positive achievement in three main functional areas:-

i)                    The strength and nature of nationalist sentiments in the member states. Where you have citizens of member states having stronger nationalist feelings, the merger of national and regional objectives becomes difficult. This has tried to dog the integration of the E.U. because in most European nations, France, Germany, the UK etc., is because of strong nationalist feelings. One of the reasons why UK has not embraced the Euro is because of strong nationalist feelings regarding the sterling pound. These feelings stagnate relations among member states.

ii)                  Divergence in social, economic and political structures as opposed to structural homogeneity. An example is the position of East African countries between 1960 to early 1980s where member states were pursuing different ideological positions which ideologies informed their social, economic and political structures. Because of these differences, it is said that they were not able to agree on important policies for the East Africa region. This factor is cited as one of the reasons for the collapse of the former EAC corporation. Where you have structural homogeneity in terms of socio-economic and political structures among member states then chances of success are much higher as opposed to divergence

iii)                The need for an established culture of bureaucracy in decision-making within the member states i.e. in order to carry forward the regional agenda you need to have within member states an established culture of civil service that would bring about the necessary bureaucracy in decision making at regional level that is important for implementation of the regional policies and programmes.

The differences in the level of industrialization between member states ordinarily brings about conflicts between the states that may affect integration efforts. This is because these differentials generate interests between the states that are antagonistic to the process of integration. Such interests include the need to protect infant domestic industries from competition from the industries established in other member states or the need to maintain the level of revenue that may be reduced as a result of embracing integration etc.,

As a result of these conflicts negotiations of for instance, common external tariffs by member states are usually protracted because of the need by each state to protect its national interest. Developed countries within the integration scheme will e.g. want lower tariffs while the less developed member states will want higher tariffs to protect their domestic industry.

NB: In reality, every state will want to join an integration scheme so as to bring about greater development for itself. IOWs the so called need for the development of the entire region is never a priority of the individual member states. This therefore means that the goal of balance and equitable development of the entire region comprising all member states is usually contra national interests.

In order to attain the benefits of integration as promulgated by the theory, there must be an effective body within the scheme to follow up and implement the policies and programmes of the scheme. While IOWs theoretically integration will bring about economies of scale, expanded markets, stability of the region because of forum whereby member states can come together, identify common problems and how to resolve them etc for these benefits to be realized you must have an effective body that will be able to effectively implement the laws of the scheme and its policies and problems.

Integration is seen as a complex process and its success must necessarily account for political, social and economic dimensions of all the member states. Within the integration schemes you must ensure that the structures are applicable within the member states and designed to provide a foundation for attainment of regional objectives. If there is a disconnect between the structures of the member states and at the regional level then you cannot have any meaningful success in terms of integration.

One of the reasons for the failure of the EAC is that the treaty had ignored the importance of domestic political structures for the attainment of regional objectives i.e. there were no standards set by the community to be attained by member states on the rule of law, democracy protection and guarantee of human rights necessary for the success of the integration.

But when effectively harnessed, the strategy of regional integration can help member states attain their domestic development aspirations. This is because the integration will enable member states participate effectively in the global system.

TYPES OF ECONOMIC INTEGRATIONS

1. Free Trade Area

It involves abolition of quotas and tariffs in trade among member states. In a FTA goods of member states are accorded preferential treatment by the other member states e.g. COMESA which was originally started as a free trade area before it became a common market.

2. Customs Unions

It is a FTA that extends further to have a common external tariff for all member states; this is in addition to abolition of quotas and tariffs in trade among member states.

3. A Common Market

A customs union with the free movement of factors of production i.e. labour, capital, financial resources and with it the right of establishment.

4. An Economic Union

It is realized where you have a complete harmonization of monetary and economic policies by member states within a single unit. Where you have an EU, it is possible to establish a monetary union by the members. EU’s usually provide a prelude to the formation of a political union by the members e.g. the European Union that is grappling with the idea of establishing a federal union, which is a political union. It failed because of rejection of the constitution by some member states.

THE HISTORY OF THE EAST AFRICAN COMMUNITY

The purpose of this inquiry is to understand where the integration effort started and compare it with the current position. This will be divided into two periods.

Integration efforts in this region was started by colonial powers i.e. British as regards Uganda, Kenya and Tanzania. When the colonialists initially came into East Africa, they were concerned with abolition of slave trade mainly at the coastal areas. This objective changed when they realized the economic potential within the EA region. This realization saw the convening of the Berlin Conference  in 1885 which marked a turning point in the European powers in their scramble for Africa. The conference led to Europeans agreeing to partition the content of Africa among themselves. The conference was meant to avoid any misunderstanding regarding their authority over various territories.

Through the conference, the powers purported to lay down international law regarding acquisition and establishment of authority over foreign territories. They justified this process as a means of abolishing the slave trade and bringing civilization to the natives of the continent. Pursuant to this conference, Britain and Germany came together in 1886 and agreed to demarcate their respective spheres. In East Africa e.g. the current Kenyan Tanzanian border.

This demarcations were done without consultations whatsoever of the local inhabitants of this region therefore cutting across the chieftains and kingdoms within the region.

In 1887, a company the British East African Association was formed by Sir William Mckinnon. This company was used by the British to acquire territories in Africa particularly in East Africa.

Once a territory was acquired, the company involved itself in commerce and civilization within the territory. The company also entered into agreements and treaties with tribal chiefs giving them authority over their chiefdoms.

In 1888 the company was granted a rough charter of incorporation by the British government and came to be known as the Imperial British East African Company (IBEAC). The Charter signified to other foreign powers that the company derived its powers from the British government and therefore was its agent.

After the charter was granted, it was required that every agreement and treaty entered into by the company had to get approval from the foreign secretary. The company therefore assumed obligations of the British government in its operations in the region. It administered the territories and promulgated laws that were applicable within these territories.

In 1890, the German government ceded the control of Uganda to the British and so the company’s operations then extended from Kenya through to Uganda. In 1893, Uganda became a protectorate of the British following an agreement with the Kabaka. In 1895, Kenyan territory likewise became a British protectorate.

The declaration of protectorate of the two territories marked the beginning of direct British rule in these territories. Therefore, in 1902, the foreign office transferred the Eastern province of Uganda i.e. Kisumu – Naivasha from the Ugandan protectorate to the Kenyan protectorate. In 1904, again parts of the Lake Victoria then in Uganda was then transferred to Kenya.

Note: The declaration of protectorate over these foreign lands and not legally make the lands dominions of the crown. They remained foreigners.

In 1920, Kenya was made a colony to the British. At the same time Tanganyika was brought under the British rule as a mandated territory under the League of Nations.

INTEGRATION

Divided into two periods:

Ø  1900 – 1947

Ø  1947 – 1960

This period marked intensive studies in the region for a closer union between the territories.

Note: Upto 1960, the integration efforts were driven by the colonialists.

Despite the studies of closer union, there was no legal basis established during this period for cooperation between the two territories. There was however much progress between the territories that is spearheaded by the three governors. This corporation was achieved through agreements by the three governors and directives issued from the colonial office including imperial legislations that were made applicable on a regional basis.

Before 1920, the cooperation was mainly between Uganda and Kenyan territories. Tanganyika joined in after being brought within the British mandate.

Noticeable features of Cooperation

1. 1902 – there was established the common administration of railway line that served Kenya and Uganda. The court of appeal of East Africa was also established by an order in council in the same year where appeals from both territories lay.
2. 1905 – a currency board was instituted to issue notes and administer the common currency of the two territories.
3. 1911 – Established a common postal union between Kenya and Uganda
4. 1917 – The two territories established a customs union and amalgamated their custom authorities.
5. Following the administration of Tanganyika by the British, Tanganyika was admitted into the currency board in 1921 and currency was admitted into the currency board in 1921 and currency was harmonized with that of the two neighbouring territories.

All the three territories in 1921 made arrangements for reciprocal enforcement of judgments arising from either of them in any of the other territories.

6. 1922 – Tanganyika reached in agreement with Kenya and Uganda for a common tariff but Tanganyika continued to maintain a customs authority until 1949. Also in 1922 Tanganyika was brought under the appellate jurisdiction of the Court of Appeal of East Africa.

There was also cooperation in the area of higher education and research. Therefore the establishment of Makerere as an East African university.

Note: Find out other instances of establishment of common services and institutions.

The World War Two is said to have led to the acceleration of the East African corporation as it led to the establishment of many inter-territorial councils and boards which were intended to coordinate the war efforts of Britain and secure economic use of resources within the region during the war.

Among those is the:

Ø  Production and supplies council

Ø  The Industrial council

Ø  Refugee administration council

Ø  Anti-locust directorate

Ø  Import and price control inter-territorial advisory committee

Many of these councils which were established for the entire region continued to be in existence even after the war to serve regional interests within the territories.

Because of the development of many inter-territorial bodies and institutions, the issue of the legal basis of the cooperation between the territories continued to dog the region. This is because despite the extensive cooperation between these territories there was no constitution machinery to support the same.

The corporation continued to be coordinated and administered by the Governors through the so-called ‘Governors Conferences’. The issue regarding the administration and regulation of the corporation within those territories led to the establishment of various commissions to consider modalities for closer co-operation and their legal basis.

Pursuant to these commissions and their recommendations, the colonial power through the governors established in 1947 the East African High Commission as an institution to administer the cooperation between the three territories.

THE EAST AFRICAN HIGH COMMISSION AND COOPERATION FROM 1947 – 1960

The First East African Regional institution

The Commission was established by the East African (High Commission) order in council of 1947. It had no blessings of the Africans or local inhabitants. The order in council established two organs:-

1. The Commission
2. The Central Legislative Assembly

These two organs were to exercise their functions under the order-in-council in accordance with royal instructions issued from time to time by the colonial office. The colonial power, Britain retained residual power under the order in council to disallow any law enacted by the two organs for the region (veto power).

The High Commission

It was made up of three governors to the three territories, the Chief Executive who was the administrator and six head of departments of the Commission.

It was chaired by the Kenyan Governor who was mandated to exercise powers when the governors were not in conference. In certain cases, the chair was required to consult the other two governors. It was a requirement under the order in council that the decisions of the commission be unanimous.

The colonial secretary of Britain could intervene to ensure unanimity by the three governors on issues concerning the High Commission.

Powers of the Commission

1. To administer the services common between the territories such as Railways, Posts and Telecommunications and harbours
2. To take over the administration and functions of the East African Air Transport Authority and the East African Transport Policy Board
3. To approve bills before the same could be introduced into the central legislative assembly

The central legislative assembly comprised the speaker appointed by the commission, seven senior executive officers of the commission, one nominee from each territory appointed by respective governors, three persons from each territory one of which was to be from each major race in the three territories nominated by the respective governors except in the case of Kenya where the European and Asian communities of the LEGCO were to elect their representatives i.e. Kenyan Governor could only nominate an African.

There was to be one Arab member appointed by the commission and one member from each territorial legislature (parliament) elected by the members. Under the order in council established by the commission laws applicable in the region could be made in three ways i.e.

1. By the commission with the advice and consent of the central legislative assembly
2. By the central legislative assembly with consent and advice of the parliament and of the three territories where the laws were for the purposes of peace and good governance within the region

Note: Any law made by one or two was applicable in the three territories notwithstanding any inconsistency with the territorial laws.

3. By the Commission bringing into effect any Bill not withstanding refusal by the central legislative assembly where the commission considered such law to be expedient in the interest of public order and good governance. But in this event, the commission was mandated to make a report to the colonial secretary.

Functions of the Assembly under the order in council

1. Vote appropriations of the funds for each of the self-contained common services
2. Vote appropriations from the fund for non-self containing services within the region.

However, the assembly had no power to pass laws regarding the levying of taxes for the purposes of the commission neither did the commission have the power to levy taxes to meet its daily expenditure. Therefore the commission depended on the territorial governments entirely for funds.

The order in council that established the High Commission for the first term provided a legal basis for the cooperation within the three territories.

Note: Not all regional services were brought under the High Commission through the order in council e.g. The East African Currency Board which remained distinct and separate from the Commission.

Further, the determination of tariff rates, licensing of industries, commercial legislations and licensing of industries was outside the mandate of the High Commission and the order in council.

These are important aspects of any given common market between different countries meaning the common market then in existence between the three territories was never brought under the commission. Therefore the commission continued to be administered by consultation and agreements among the three governors without any legal basis.

Towards 1960, there was a movement within each of the three territories towards self-governance. This in itself brought tension in the administration of the common services and the common market. The issue then was how these two could be sustained beyond the attainment of self-government by the three territories.

The co-operation between the countries up to this time is said to have brought several benefits to the region one being economies of scale in terms of the technical services. Further, the common market brought a powerful stimulus for industrialization of the region. In fact inter-territorial trade had increased tremendously following the end of World War Two. However, up to this time, the uneven distribution of the benefits of cooperation among the three countries could be noticed.

Many manufacturing industries were located in Kenya which resulted into accumulation of a large surplus inter-territorial trade in favour of Kenya while Tanganyika and Uganda experienced deficits e.g. because Tanganyika purchased a large portion of manufactured good from its two partners it gained very little from the common market. This is to be viewed against the fact that by agreeing to the common external tariff, Tanganyika lost revenue in terms of tariffs (taxes).

The common services benefited the three territories equally. This is because for those countries that had less developed services they acquired subsidy from the other members with more developed services e.g. Kenya is said to have subsidized the common services in Tanganyika.

Under the High Commission, the Headquarters and most departments were based in Kenya. Therefore the other two members felt cheated regarding the whole scheme.

As way back as 1950’s, Tanganyika raised complaints regarding the inequitable distribution of the three resources of the common market among the three territories.

Because of the complaints by the members regarding the common market, members established the Raismann Commission to look into the complaints and make appropriate recommendations to address this complaint. The commission recommended first the establishment of a distributable pool fund which was intended to achieve the following:

1. Establish fiscal advantages for Uganda and Tanganyika with a view to reducing the emerging tensions.
2. Produce an independent source of revenue for the commission and thereby reduce its dependence on the territorial governments.
3. Enable the commission to charge the governments for the services of tax collection within the region.

The commission commended that the distributable pool fund was to comprise of 6% of proceeds from customs and excise duty charged within the region, 40% was to come from taxation of manufacture and finance industries within the region and half of this fund was to be distributed among the three countries equally and the other half was to finance the operations of the commission.

At this point in time, all the three territories were moving towards self governance. Therefore, the constitutional changes were taking place in these territories to reflect this new development. However, no such similar changes were made in the order in council that established the commission i.e. the commission remained dominated by the governors and by extension by the colonial powers.

In 1962, Tanganyika was at the verge of attaining independence. Therefore, the commission had to be reformed to allow the participation of an independent country. Consequently, an agreement was reached between the three territories and Britain which saw the establishment of the East African Common Services Organisation in 1961.

The establishment of the East African Common Services Organisation witnessed for the first time the participation of African leaders in issues of cooperation within the region. The organisation was established based on an agreement between Tanganyika and the two governors of Uganda and Kenya who were represented by the British government. For the first time, we see regional integration being undertaken without an imperial decree. After the conclusion of the agreement, the three countries enacted legislation that implemented it within their respective domestic jurisdictions.

Under the agreement, the governments within the three territories were only bound to the extent that they had approved the agreement. The common services organisation was more politicized compared to the High Commission in that there were few technical executives as opposed to political appointees in its various organs and committees. The agreement established  both executive and legislative organs without the judiciary.

However, we see in 1962 the Court Of Appeal for East Africa was incorporated under the agreement and from then on the court ceased to be in a British Court.

The Organs that were established by the Agreement

1. The Authority under the Agreement

The Authority comprised of the principal ministers of the three territories that were later to become their presidents. It was responsible for the general direction and control of the organisation. It was also responsible for the executive function of the organisation. The Authority was operating under the rule of unanimity meaning that any one member could veto discussions of any proposal or a decision of the Authority.

2. Ministerial Committees

There were various committees i.e.

Ø  Communications Committee

Ø  Finance Committee

Ø  Commercial and Industrial Co-ordination Committee

Ø  Social and Research Services Committee

Each committee comprised of a minister from each territory and the chairmanship of each committee was rotational. Again, the rule of unanimity applied in the workings of the ministerial committees. Any disagreements within the committees to be referred to the Authority for decisions.

3. The Secretariat comprised of the secretary-general who was the principal officer of the organisation and was an appointee of the authority.

There was also the General Manager of Railways and Harbours administration, Posts and Telecommunications

4, 5, 6, 7: The Post Master General, Legal Secretary, Financial Secretary and the Auditor General respectively.

The Agreement also established for any self-contained service within the three territories. There was also a PSC for all non-self contained services.

The executive functions of the authority extended to the administration of the common services which included Railways and Harbours, Posts and Telecommunications, Directorate of Civil Aviation, Collection of customs, Excise and other taxes and research facilities within the region.

There was also under the agreement the central legislative assembly which comprised forty one members excluding the speaker. The speaker was also appointed by the authority. Of the forty-one members, fourteen were official members. These were members of the four ministerial committees plus the secretary-general and the legal secretary of the organisation. Twenty-seven were representatives from the territories with nine being from each territory. These twenty-seven members vacated the office on dissolution of their national assemblies.

It was a requirement that all regional legislations had to be introduced in the assembly. The authority still retained a veto power over any legislation that was passed  by the assembly and it was further provided that if any Bill was presented to the authority for assent and the same was not assented to within 9 months, it automatically lapsed.

The organisation retained the distributable pool fund as established under the High Commission. This organ continued after the independence of Kenya and Uganda with Britain transferring the relevant powers under the agreement to the two states.

The operation of the organisation also faced several  problems one of which was calls for a closer union between  the three states following the independence by the citizens. The call for a closer union  was informed by several factors:

1. There existed a strong public opinion for the political union of the three countries
2. There was a wave of Pan-Africanism ideology across the continent that saw the establishment of the OAU.

This ideology called for closer union between independent African states but also the common  colonial background, the existence of native tribes across the colonial borders, the geographical affinities between the three states, the impressive record collaboration between the emerging African leaders of the three countries among others provided a strong basis for closer union of the three countries.

In any event, there was a belief that closer union would bring about economic development in the entire region.  The call for a closer union was so much so that  in 1963, the African leaders of the three countries declared that they would establish a political federation within that year. However, this was never to be and the failure can be explained by a number of issues:-

All the three countries had just attained independence and therefore were busy building national institutions and political structures.

Establishment of a regional political federation was therefore a burden that could be ill afforded in the circumstances.

The three countries were best pre-occupied with their national sovereignties.

Even further, political federation faced constitutional difficulties especially in Kenya and Uganda which had attained independence with a very complex federal constitution. The establishment of a regional political union would require the approval of every federal unit within these two countries which was viewed as a huge task that could not be given priority at this point in time.

Others saw no need for a federation because to them, the focus should be on economic advantages which were in any event being realized under the existing co-operation which is involved in common market and a highly integrated system of common services.

Because of Tanganyika actually felt that it was not benefiting properly from the cooperation, it saw federation as the only means for ensuring that the resources of the region were equitably shared between the member states. It therefore, had stuck into the organisation with the hope that there was a serious movement towards a political union and therefore when it realized that this federation was not forthcoming, it saw no need to continue in the organisation.

Therefore, in 1964, Tanganyika declared her intention to go ahead with the formation of a one-party state which indicated a serious movement towards establishing African social ideology which actually is regarded as the ideology of the other member states.

Later, in 1967, through the Arusha declaration, Tanzania adopted the Ujamaa system based on African socialism. Earlier in the year, Tanzania had also imposed restrictions on certain types of imports from Kenya in total disregard of the common market rules.

A serious blow to the organisation came in 1964, when Finance ministries of the three countries announced that the common currency would cease and each country would establish a central bank.

These developments and tensions between the member states in the operations of the organisation resulted in a meeting of the heads of state in 1965 in Kampala, Uganda with a view to explore ways of addressing the grievances raised by some of the member states.

This meeting resulted in the Kampala agreement which agreement did the following:

1. It permitted the deficit member countries to impose on an agreed basis quota restrictions against specified imports from the surplus member states.
2. It agreed on decentralization of certain manufacturing industries within the region from Kenya to Uganda and Tanzania.
3. It also agreed on allocation of any new industries equally between the member states.

Only the first item was implemented by the member states following these meeting. Even so, it was not implemented as agreed because Tanzania and Uganda unilaterally imposed restrictions against a large variety of Kenyan goods which were never agreed upon. The action by the two countries in putting restrictions on imports from Kenya slowed inter-territorial trade in the region.

Following the failure to implement the terms of the Kampala agreement by the member states, the three countries appointed another commission headed by Professor Philip  who was from Denmark to look once more into the issue of integration, grievances of the member states and make appropriate recommendations for the purpose of furthering integration.

The recommendation of the Philip Commission saw the establishment of the East African Corporation under the East African Corporation treaty of 1967.

EAST AFRICAN CORPORATION

It was signed by Kenya, Tanzania and Uganda. This treaty comprises of 98 articles with 15 annexes. Through it member states sought to deal with the grievances that had undermined the operation of the East African Common Services Corporation.

The EAC Treaty established an EAC with a common market as the integral part. This is found in the preamble of the treaty.

Through the treaty member states sought to strengthen the industrial and commercial ties between them with a view of achieving a balanced economic development. The aim was to be achieved through a number of actions:-

1. Established a common excise tariff and customs union between the member states.
2. Abolish inter-state trade restrictions
3. Developing a common agriculture policy in the long run between the member states
4. Member states resolved to establish the East African Development Bank to enable investment in member states.
5. Member states resolved to achieve the aim by harmonizing their monetary policies.
6. They continued to operate the common services between them.
7. They continued to coordinate economic planning and transport between themselves.

Through these measures members hoped to strengthen their industries and commercial ties to economic development in all three member states. To assist the attainment of this aim, the treaty established institutions under Article 3 i.e.

Ø  The authority

Ø  The assembly

Ø  E.A. Ministers

Ø  The councils

These institutions  were to perform the functions and act within the limits provided under the treaty. Under article 4, member states undertook to take all necessary measures to ensure a common functioning market and achieve the aims of the community.

This treaty for the first time in history of integration in East Africa harmonized the common market of the East Africa states.

The common market under the treaty

In the common market, member states were obliged to maintain a common external tariff in respect of all goods imported from a third party state. But a member state was free however to prohibit certain types of imports from a foreign country under Article 9(4).

It was also a provision that no member state could enter into a trade arrangement with a foreign country so as to obtain favourable tariffs to the exclusion of the other two members. Article 7 of the treaty.

The treaty prohibited qualitative and quantitative restrictions on trade between member states. But the common market under the treaty left out certain agricultural products from its operation i.e. maize, wheat, rice, coffee, pyrethrum among others. Annex 3 to the treaty has a list of the products that have been excluded from the market.

This is because the member states had their economies based on agriculture. The treaty therefore left a very important segment of the member state economies from the common market and this undermined the achievement of the common market as then established.

The treaty did not also provide for the free movement of factors of production between member states. This included the right of establishment by any citizen of any of the member states. It left intact immigration laws and requirements relating to migrating to member states.

This therefore meant that the establishment of the common market left out a very basic element of definition of a common market. One questions whether the establishment of the common market was established as truly understood. Another provision of the treaty was the transfer tax that was provided for in Article 20 of the treaty.

It was hoped that through the operation of the transfer tax member states could be able to protect their infant domestic industries from being driven out of the market by other industries in the markets of the member state. The treaty therefore allowed a member state that was undergoing a deficit in trade with the other members to impose a transfer tax on the manufactured goods from this member states not exceeding the amounts of the deficit. Such goods had to be similar with the goods produced in the member state imposing the tax or where there were no similar goods to the goods attracting the transfer tax then the member state had to prove that such similar goods would be manufactured within three months of imposition of tax from the other member states.

The position for the imposition of this tax greatly undermined the idea of a common market which entails a total abolition of internal tariffs applied by each member state on goods originating from each member state. These kinds of provisions undermined the establishment of the common market.

Apart from this transfer tax which was meant to address the issue of inequitable distribution of benefits between member states. Member states undertook to master fiscal incentives to foster industrial development in each member state. However there was no agreement by the members on any fiscal incentives by the time the community collapsed in 1977. The common market established two main institutions that were meant to oversee its implementation.

1. Common Market Council

Article 30 of the Treaty.

It was composed of three East African ministers and three ministers from each member state. Its main function was to ensure observance of the common market provisions by the member state and settle any disputes that may arise between the members on the implementation of the common market.

To ensure the discharge of its functions the treaty empowered the council to issue directives and make recommendations to the member states. In the event the council was unable to agree on an issue before them the same was to be referred to the common market tribunal which was another institution established for the common market.

2. Common Market Tribunal

It comprised of five members and its main function was to ensure that the terms of the treaty for the common market were adhered to by giving authoritative interpretations. All member states were permitted to invoke jurisdiction of the tribunal. In its decisions the tribunal was only permitted to give one single judgment i.e. the treaty disallowed dissenting judgment from any one member of the tribunal. Under Article 4(3) of the treaty the common services between the member states were taken over by the community and were to be administered by the community and corporations established under Article 71.

This article is provided for in annex 9.

The corporations established under the treaty portray a situation where we have a government in all the sectors of the economy including the provisions of services that could be left to the private sector. These corporations were to conduct business according to commercial principles and were required to be self-sustaining in their operations. They were run by a B.O.D and headed by a director general who was an appointee of the authority. The corporations were then required to employ their own staff that were necessary for the carrying on of their functions as required by the treaty.

The treaty in Article 67 carried on the distributable pool fund that was established with a view to address the issue of inequitable distribution of benefits between the member states. These provisions were similar to the provisions under the EA Common Services treaty.

Institutions Under The 1967 Treaty

1. The E. A. Authority (E.A.A)

Established under Article 6 of the Treaty.

It was the principle executive body in the community and was charged with issuing directives to ministers on the performance of their functions.

2. The E. A. Ministers

It was made up of three persons that were nominated by each member state. Their function was to assist the authority in exercise of its executive function. They acted as a link between authority and the national governments. They were not required to hold any political office in their countries and they could be dismissed from their office at the request of the nominating government. This provision lacks in the current treaty as it is in the discretion of the government of member state to establish an office in charge of the East African Community.

3. Ministerial Councils

It is established under Article 53 which has five councils in number.

• Common market council
• Communications council
• Economic planning
• Finance council
• Research council

Communications council has the overall responsibility of overseeing the functions of the other corporations established under Article 71. These are E.A. Railways Corporation, E. A. Harbours Corp., E. A. Posts and Telecommunications Corp., and E. A. Airways Corp.

4. The E. A. Legislative Assembly

The treaty also established the East African legislative assembly which was to perform the legislative functions of the community. It was composed of the three East African Ministers, their three deputies, twenty seven appointed members of which nine were to be from each country under Article 56(2), Secretary-General, the council to the community and the chairman of the assembly who was an appointee of the assembly. The procedure for appointment of the twenty-seven members was left to be determined by each member state.

This is still the same and applicable under the current treaty. There is little involvement of the civil society and the public by extension to participate effectively in the operations of the community. It is mostly a government affair.

5. E. A. Court of Appeal

It is established under Article 80 of the treaty. This was a continuation of the court under the common services organisation. It was the responsibility of each member state to determine the jurisdiction of the court. Most of the countries only gave the court matters referred to it by the national courts and thus had no original jurisdiction and there was no obligation on the national courts to refer any matter to the East African court.

Okunda Case

It has serious implications on the laws of treaty as the case was not referred to the East Africa Court. If the matter was referred to the court given the conflict between the provisions of the treaty and the laws of Kenya and given the court was a creation of the treaty and given the provisions of the treaty it was given that the court would not have reached the same finding as the Court of Appeal of Kenya.

6. Industrial Court

Established under Article 85(1) of the treaty. It was composed of the presidents of the Industrial Courts of Kenya and Uganda and the chairman of the labour tribunal of Tanzania. The chairmanship was rotational between the three persons. Its function was to settle industrial disputes within the community including the corporations in accordance with the principles as may be laid down by the authority. Under article 84 the court was required to apply the labour laws of individual countries in respect of any industrial dispute before it that originated from the given country e.g. E.A. Airways Corporation dispute was to be resolved in accordance with the laws of Kenya. This would lead to conflicting decisions of the court on labour issues within the community. This runs counter to the undertaking of the member states to harmonize their laws and with a view of strengthening their industrial and commercial ties so as to attain economic development.

7. Central Secretariat

Established under Article 31 of the treaty.

It was headed by the Secretary-General who was an appointee of the authority. The secretary was expected to coordinate all the activities of the authority. Other officers are:

• The Council
• The Auditor-General etc

East Africa Development Bank

Established under Article 21 of the treaty as read together with annex 14 to the treaty.

It provides for how its capital will be distributed between the members.

Article 86 of the treaty provides for centralization of certain services and institutions of the community between the members states. This was to address the issue of over concentration of the institutions of the community under the common services organisation. Therefore for instance the headquarters of the community was taken to Arusha, the bank is taken to Kampala, the Harbours is taken to Dar es Salaam while the Railways and Airways is left in Kenya.

By allocating these institutions between the members on an equitable basis then all member states will benefit from the triple effect on the operations of the community. This is a glibering attempt to try and address some of the issues that were raised by some of the member states in the earlier integration so as to ensure progress in the community.

This includes provision of the transfer of maintenance funds, established of the East Africa development bank, decentralization of industries and institutions among member states. Under article 92 of the treaty, the common market of the community was to be for a period of 15 years whereupon the same was to be reviewed by the members to decide on whether to continue with the same or not.

This means that the common market was to expire in 1982. However, the other elements of the community including the operation of common services were to have unlimited duration. The treaty made no provision for admission of third party states into the community. In fact article 93 of the treaty only provides for association of the community with a third party member state i.e. there was no room for expansion for the then established E. A. C.

In compliance with article 95, Kenya enacted the E. A. Corporation Act of 1967. (Does this Act comply with the requirement of Article 95?)

Note: Under Article 95 regarding the obligations of the member state to implement measures of the community. Under this article, member states are obligated to take all steps to enact such legislation that would necessarily give effect to the treaty and through such legislation they were to confer to the community legal capacity and personality to enable it to perform its functions under the treaty. They were also required to confer upon all legislation of the community the force of law within their respective territories.

There is no specification of the nature of legislation that the member states are required to enact which means member states can decide to comply with this provision through ordinary legislation.

Q. Whether complying with the Article through ordinary legislation is an effective compliance with the requirements of that article? The current treaty stated that community law shall take precedence over national law. This was not in the former treaty.

THE COLLAPSE OF THE FORMER EAST AFRICAN CORPORATION

It happened in mid 1977 following a failure by the member state to approve the 1977 – 1978 budget of the community. But before this time there were individual actions by member states that pointed to the disintegration of the community. For instance, Kenya had before then established her own national airline while Tanzania closed her border with Kenya thereby practically bringing to a halt the operations of a common market.

The collapse of the community can be attributed to one main factor and that is lack of goodwill by the then governments of the member states. Related to this main factor are issues such as the uneven distribution of the resources of integration.

• Lack of central planning at the community level
• The balance of payments and foreign exchange problems experienced by the member state around this time
• The Amin factor
• The different ideologies pursued by the member states and;
• Other new developments within the member states that diluted the common services of the community

Looking at the issue of uneven distribution of resources one should understand that integration of states at different levels of developments tend to concentrate further developments into those countries that are already developed.

For any integration scheme to succeed it is important that every member state must be satisfied and must remain satisfied with the benefits of integration. This draws from the fact that every state joins an integration scheme for selfish reasons. This therefore means  that measures to achieve an acceptable distribution of benefits of distribution between member states is an important feature in any integration scheme.

Coming to the E.A.C., as early as 1950s Tanzania and Uganda had started to complain about not reaping the benefits of integration compared to Kenya. It was because of these complaints that the treaty sought to satisfy Uganda and Tanzania through the provision for some measures such as the transfer tax, the distributable pool funds and the establishment of the East African Development Bank. By 1977 however, the measures provided for in the treaty appeared not to have achieved equal distribution of the resources between the three countries as intended i.e. the unequal distribution continued even after the coming into force of the treaty.

The two member states that is Uganda and Tanzania therefore saw no need to continue the membership of the community. The established community was as much dependent on the harmonious relations between the three heads of states i.e. the integration under the treaty was President – driven.

The treaty gave very few powers and functions to the officers at the Secretariat and left all crucial decisions to be made by the authority through agreement of all member states. Because most of the heads of state were preoccupied with sovereignty following the independence of their countries they had little time for the issues of the community. This resulted in several fundamental matters of the community stagnating by reason of lack of decision by the authority which was the principal executive body.

Further issues of transport and tourism added to the tension then existing between the member states e.g. Kenya benefited from access to the game parks of Tanzania in the north of that country. It was the position of Tanzania that it never benefited from the tourists that entered her national parks through Kenya because the tourists basically used Kenyan facilities.

When the issue of sharing the benefits accruing from tourists could not be resolved by the states, Tanzania decided to ban entries of tourists through Kenya into her national parks.

Also during this time, there had developed considerable road traffic between Kenya and Zambia through Tanzania due to trade that had developed between these countries.

It was again the view of Tanzania that even though Kenya benefited from the trade with Zambia through her road network, Kenya was not contributing to the maintenance of this road so when Kenya failed to make contributions to the maintenance of the Tanzania road network, Tanzania decided to close her borders to Kenya’s heavy commercial vehicles.

Regarding the issue of planning at the community level, there was over-reliance by member states on foreign capital for industrial development. According to Hazelwood the fact of over reliance on foreign trade by member states of East Africa made it mandatory for inter-state planning of all the industrial developments within the community. This is because without this inter-state planning, you will have a duplication of industries within the community.

This duplication results in non-economic use of resources within the community. Because then one would not be able to take advantage of the comparative advantages within each member state that would under normal circumstances lead to specialization by the industries within the community.

Despite the existence of the economic consultative and planning ministerial council established under Article 71, the planning proposals made by this committee were never implemented. This therefore means that every member state undertook implementation of individual national plans. This therefore means that there was coordinated economic development within the community. The consequence was that the level of industrial development within each member state depended on the level of foreign capital it was able to attract. This situation therefore entrenched the unequal levels of development between the member states.

It is safe to say that the whole integration process was forced on the African leaders by the former colonial powers. Another was set of planning of programs that was supposed to be in the East Africa but when it failed to take off members saw no need to integrate anymore. There were services and industries that undermined the integration process. A further factor that led to grievances by members was the issue of balance of payments and foreign exchange that was experienced by members of the community at that time.

The common currency having come to halt in 1964, member states established their own currencies and this being the case they continued to transact business within the community using foreign exchange.

Because of the economies of the member states were agriculturally based i.e. founded on primary products, which meant that any trade with the third world countries always ended up in bring up less foreign exchange because the amount spent on capital goods by the countries was far much excess than what was spent on exportation of primary products. From the outset forex was highly scarce in the member states. To make matters worse they transacted between each other using forex. Because Kenya had trade surplus from trading with Uganda and Tanzania, then Uganda and Tanzania experienced a deficit in the inter-state trade between the community. Matters were then made worse by the then oil crisis in the 1970s and in order to safeguard their own individual interests member states restricted transfer of foreign exchange to the other members.

This basically meant that a Kenyan company could sell its products to Uganda but the government would put a block on the transfer of funds by the recipient of the goods. This undermined trade between member states in the community. The ban on transfer of funds by member states extended to the funds obtained from the common services and corporations within the member state. The community and the common services having been starved of funds could then not operate.

Another factor that contributed to the fall of the E.A.C. was the Amin Factor. Amin attained power in Uganda through a coup in 1971. The governments in Kenya and Tanzania refused to recognize the government of Idi Amin. This therefore meant that the authority comprising of the three heads of states could not meet to transact the business of the community i.e. they never met from 1971 until the time the community collapsed in 1977. What happened during this time was that crucial matters that required the agreement of the three heads of state had to be circulated to them in their respective countries. This was tedious and time consuming.

To make matters worse it was a requirement under the treaty Annexture II the decisions of the Authority had to be unanimous and any given objection by one head of state would stall the given proposal or decision. Given that the authority was the executive body of the E.A.C. it was hard to transact any business given those circumstances.

Another factor was the Entebbe Raid that was said to have further worsened the relations of the Presidents of Uganda and Kenya who were crucial members of the Authority. This basically arose from the fact that Kenya had provided a base for the rescue of the passengers of a plane who were mainly Israelis that had been hijacked by some militants who were sympathetic to the Palestinian Liberation Organisation. When Amin discovered that the Israeli military had used Kenya as a base to organize the rescue mission he decided rather to declare Kenya an enemy and that he would reclaim the boundary of Uganda up to Naivasha as it had earlier existed.

These developments continued to poison further the environment of the community especially as between the heads of state and therefore it was only a matter of time before the community was declared impossible to implement.

Another issue was the coffee boom that flourished at the time Idi Amin came to power. The beneficiaries of the confusion that existed in Uganda then were Kenyans who smuggled Ugandan coffee into Kenya and benefited therefore. When Uganda realized what had been going on they were never happy with Kenya as a member of the community as the interests of others were to be safeguarded for the benefit of all.

Another factor was ideological differences. There existed an ideological divide between the three countries. Particularly between Kenya and Tanzania whereby Tanzania was guided by the idea of African socialism as manifested through the famous Ujamaa villages. This ideology was implemented following the Arusha Declaration of 1967. It was the view of the Tanzanian leadership that the community should be guided by African socialism whereby the societal values of Africa could be upheld and the state being in charge of providing various public goods. On the other hand, Kenya was guided by capitalism which emphasized private ownership of property and in essence individualism as practiced in the West. In the case of Uganda, Milton Obote had promulgated the Common Man’s Charter which produced a middle ground between capitalism and socialism.

Because of these ideological differences between the three member states it was extremely difficult to agree on various policies and programs of the community to be applied in the entire region. This mainly affected social and economic programmes. There are other factors that are seen to have led to the collapse of the community i.e.

Emergent dilution of common services for the community as a result of development of other infrastructural facilities within the member states.

By dilution we mean that the revenue accruing from the operations of the common services declines as a result of competition arising from development of new facilities and services e.g. the development of the road transport system within the community greatly undermined the railway services offered under the community. Further, building of the Tanzania-Zambia railway which was separate and distinct from the East Africa railway also undermined the operations of the community’s railway services. This is because Tanzania started to direct its services in terms of railway services to the Zambia transport system rather than the community’s transport system. This had symptoms that the EAC could not continue as it was initially intended.

LESSONS LEARNT FROM THE EXPERIENCE OF THE FORMER COMMUNITY

The experience of the former EAC brings forth several lessons as far as successful inter-state integration is concerned more particularly regarding Tanzania, Kenya and Uganda.

1. It involves certain issues of sovereignty thus political will is very important and necessary to succeed in any inter-state integration schemes as it involves compromises that must be made by government which is political.
2. Must have competent institutions or organs that can effectively implement the functions of the community instead of having an organ that has power in name only e.g. the Authority
3. The issue of ensuring that there is equal sharing of benefits by member states is very important in an integration scheme.
4. The issue of external factors influencing integration as opposed the initiative coming from the member countries i.e. if integration process is initiated by external factors as opposed to genuine belief by each member states, to integrate makes a big difference to the whole process as the foundation of the integration is rather without than within.
5. There is need to ensure that you do not give political leaders any central role in the integration process i.e. the institutions of the scheme should be signed in such a way that they are not dependent on the governments of the member states. Political leaders should be given very little role if at all in the implementation of the policies and programs of a scheme. The heads of states of the three countries had power to make executive decisions and to make matters worse was that the decision had to be unanimous. This therefore meant the success of the community was basically at the mercy of these three gentlemen.
6. The need to involve the ordinary citizens of member states in the establishment of any integration scheme. There is need to consult the people of every given country intending to integrate before such integration is commenced. When this is done the people then own up the entire integration set up. This would in turn make the integration scheme and institutions accountable to the people as opposed to the governments of various member states. In such a case the survival of the scheme will lie with the people as opposed to the politicians. Just as the governments established the defunct E.A.C. they also decided to terminate it without consulting the people who as it were the beneficiaries of the community.
7. The issue of equitable distribution of the gains of integration between member state is crucial for the success of any given scheme. The scheme must provide systems and measures that ensure that all member states enjoy the benefits of integration equitably because every state joins integration with a view of benefiting from the same, failure to provide the expected benefits will leave a member withdrawing from that given regional set-up.
8. There is need to recognize the irrevocable linkage between a regional integration scheme and the domestic political systems of the member state. There must be symmetry between regional goals and domestic goals of each member state. The regional system must therefore provide standards to be applied by every member state in terms of governance, the rule of law and human rights. Failure by the former community to take into account this crucial linkage contributed to its collapse when there were disruptions in the Ugandan political system.
9. The need to cloth the institutions and organs of every integration scheme with the necessary powers and competence for the implementation of the regional agenda. This may require in some cases a waiver of the sovereignty by member states in favour of the region and its institutions. In such a case we talk of the supra-personality of the region or union vis-à-vis the member states and their laws.

Because the institutions established by member states under the integration scheme did not have the power to carry out the regional agenda the operations of the community were brought to a stand still by the reason of the actions of the political leaders.

Even though the economic planning council had come up with economic plans for the region, these were never implemented because the issue of implementation was mandated to political officers within the community. It may also be necessary to ensure the implementation of the programs of the community that certain decisions are made by the majority rule rather than the unanimity rule. This would ensure that no one member of the community vetos its programs and activities.

Establishment of the community under the current treaty

It was established in 2000. Following the collapse of the EAC in 1977, in 1984 the partner states signed an agreement known as the East African Countries Mediation Agreement to provide for the modalities of winding up the community.

The party states to the agreement were required to incorporate the same within their domestic system. In compliance with this requirement, Kenya enacted the EAC Mediation Agreement Act Cap 4 of the Laws of Kenya. This statute contains the agreement signed by partner states in its schedule. Under Article 14.02 of the agreement, member states agreed to explore and identify further areas of future cooperation between them and work out concrete arrangements for any such cooperation.

Pursuant to this Article in November 1993, the heads of states of the three countries signed an agreement establishing a permanent tripartite commission for East Africa. This commission was composed of ministers who formed the highest body, a coordination committee of the permanent secretaries of the ministers, a secretariat which was its executive organ and sectoral committees. The commission was charged with the responsibility of initiating, planning and implementing cooperation programmes in areas of cooperation between the member states. During its tenure the commission developed and launched the East Africa Development Strategy for a five-year period from 1997 – 2000. In this strategy was an undertaking to re-establish the EAC and pursuant to this objective the commission launched a draft treaty for establishment of EA in 1998.

This treaty was eventually signed by the partner states on the 30^th of November in 1999 but came into force in 7^th July 2000. The treaty establishes the EAC under Article 2(1) and in its preamble it traces the history of integration in E.A. and identifies some of the reasons for the collapse of the former EAC.

It also declares the intention of member states to strengthen their economic, social, cultural and political and other ties for a balanced and sustainable development. This is to be achieved through the establishment of a customs union which is an entry point to the community, a common market, a monetary union and a political union. The objective of the community as stated under Article 5(1) is to develop policies and programs aimed at widening and deepening cooperation among the partner states in political, economic, social and cultural fields, research and technology, defences, security and legal and judicial affairs for their mutual benefit.

The treaty establishing the EAC as a body corporate with perpetual succession, with the power to sue and be sued in its own name, power to acquire, manage and dispose of property in any of the partner states and its clothed with the power to perform any of the functions conferred upon it by the treaty and do all things necessary for the performance of those functions.

Membership of the EAC is by the contracting parties and any other country that is granted membership in accordance with Article 3. The guiding principles of the EAC are provided under Articles 6 & 7 & included among others equitable distribution of benefits, cooperation among members for their mutual benefit, good governance, peaceful settlement of disputes, people driven and market based organizations, free movement of goods and people, capital and information technology.

Under Article 8(2) the member states undertake to secure the enactment of legislation and the effective implementation of such legislation in order to give effect to the provisions of the treaty and in particular confer upon the community legal capacity and personality to discharge its functions within her territory.

Pursuant to this obligation Kenya enacted the treaty for the establishment of the treaty of the EAC No. 2 of 2000 which also contains the treaty in its schedule. Under Article 9 the treaty establishes organs of the community which are among others the summit comprising heads of states of member states which is charged with the general duty of giving directions and guidelines to the community.

There is also established the council which is composed of ministers and the policy organ of the community. The council is required to oversee implementation of the treaty and programs of the community. The third organ is the coordination committee which comprises the permanent secretaries of ministries of member states. This committee is required to implement the decisions of the council. There are also sectoral committees which are ad hoc committees. The 5^th organ in the EA court of justice which is to ensure adherence to the law in the interpretation and application of the treaty.

The EA legislative assembly is also another organ charged with making laws of the community. The secretariat is the executive organ of the community and comprises various offices including the secretary-general, legal counsel, auditor-general among others. The treaty identifies the areas of cooperation amongst the partner states. These are:

1. Trade, liberalization and development. Here there is the establishment of the customs union and the common market as integral parts thereof.
2. Investments and industrial developments. See Article 79 -80 of the treaty.
3. Standardization, quality assurance, meteorology and testing. This provided for under Article 81 of the treaty.
4. Monetary and financial cooperation which is under Article 82 – 88 of the treaty.
5. Infrastructure and services provided for under Articles 89 – 101.
6. Development of human resources, science and technology – articles 102 – 103
7. The treaty also provides for cooperation in agriculture and food security – articles 105 -110
8. Cooperation in environmental and natural resources under article 111
9. Tourism and wildlife management article 115
10. Cooperation in health, social and cultural activities amongst the members – article 117
11. Cooperation in political parties – article 123
12. Cooperation in legal and judicial affairs amongst member states as per article 126.

Look at the functions of the various organs under the treaty and the interplay of these organs and how do they achieve the objectives of the EAC under Article 5?

The treaty is a type of a framework treaty otherwise known as Traitis Cadre which therefore it only contains an outline of policy objectives of the community and leaves it upon the organs and institutions of the community and the partner states to give the objectives concrete forms through protocol, legislation, directives and guidelines.

This therefore means that the attainment of the objectives of the EAC depends to a large degree on the goodwill of the member states and the powers of the organs and institutions of the community as granted under the treaty. There are two theories regarding the approach and practice of regional integration by states. These two theories are:

1)      Federalism

2)      Functionalism

1)      Federalism

According to federalism it is stated that in order to achieve effective integration between sovereign states one must curtail the sovereignty of the members. The institutions of the region must be given super-nation authority over the nation state through the legal instrument. It is only when you have a strong central authority that an effective integration can be realized between sovereign states. The authority ensures of the development of a community attitude between the member states.

2)      Functionalism

It contends that a successful integration must necessarily entail a gradual integration of nations towards a region. This gradual interaction has to be driven and influenced by economic integration and cooperation among the member states. According to this theory, economic integration must precede political integration. The theory advocates incremental structural integration based on the convergence of interests of the member state over time. This theory therefore does not de-emphasize the nation state at the initial stages of integration.

The treaty adopts the functionalism theory to integration as it provides for fast economic integration through the establishment of a customs union, common market, monetary union and political union. There have been recent attempts at fast-tracking political union amongst the partner states of the community. This maybe points to a deliberate attempt to depart from the functionalist theory by the EAC.

AN OVERVIEW OF THE COMMUNITY’S LEGAL SYSTEM AS ESTABLISHED UNDER THE TREATY

The treaty for the establishment of the EAC of 1999 may be described as the constitution of the community. The EA Court of Justice established under Article 9 is however yet to develop a body of law through its decisions to compliment the provisions of the treaty, the protocols, the regulations and decisions of the community comprising the legal system of the EAC.

As already noted Article 2(1) establishes the community with a legal capacity within the member state. Further Article 138 gives the EAC an international legal personality.

The principles of good governance which entail the principles of democracy, rule of law, social justice and protection of human rights as stipulated under Article 7(2) shall inform the operation of the community’s legal system. Under Article 8(1) (c) every partner state is mandated to abstain from any measures likely to jeopardize the achievements of the objectives or the implementation of the provisions of the treaty. This provision provides a basis for a system of remedies for enforcement of community law against partner states.

Under Article 9(4) the organs and institutions of the community are obligated to act within their powers and discharged their functions as provided for and specified by the treaty. This therefore means that any action by an organ or institution of the EAC that is ultra vires, the treaty is a basis for action against such organ under community law.

The EA court of justice is the organ charged with the responsibility of ensuring adherence to the community law within the community. It has jurisdiction under article 27 to interpret and apply the provisions of the treaty. In order to ensure compliance and enforcement of community law article 28 of the treaty authorized partner states to cite any other partner state before the court for failure to observe community law. A partner state is also permitted to question the legality of any community law or action before the court.

Article 29 gives the secretary-general of the community the power to bring a partner state before the court on allegation of breach or infringement of any community law with the approval of the council of ministers. Under article 30 individuals within the community are permitted to refer issues of breach or infringement of community law before the court for determination. To ensure implementation of community law, article 8(3) requires partner states and the council of ministers to take without dealing the measures required to implement a judgment of the EA court of justice.

The judgments of the court are final, binding and conclusive though the supervision for reading of such judgments by the court in relevant circumstances. The court is empowered under article 39 to issue interim orders in matters brought before it where such order is necessary. Pecuniary judgments of the court are to be enforced within partner states in accordance with the civil procedure rules in force in that given partner states under article 44. Article 143 also provides for sanctions against any partner state as determined by the summit for defaulting in its obligations under the treaty.

A partner state may also be suspended from the activities of the community under article 146 where its established that the state has failed to observe and fulfill the fundamental principles of the community.

There is also a provision for expulsion of a partner state under article 147 where there is gross and consistent violation of the provisions of the treaty. The treaty establishes rights and obligations for the partner states and the community which are directly enforceable i.e. self-executing provisions e.g. article 75(4) of the treaty which obligates parties not to impose any new duties and taxes or increase the existing ones in respect of products traded within the community.

Also article 75(6) requires partner states to refrain from enacting legislation or applying administration measures which directly or indirectly discriminate against the same or like products of the other partner states. Another example of a directly enforceable provision is article 8(1) (h) which requires partner states to take measures to avoid double taxation within the community. Article 83(2) (a) obligates partner states to remove all exchange restrictions on imports and exports within the community.

Under sub-article (d) member states are required to liberalize financial sectors by freeing and deregulating interest rates. The community law penetrates into national legal systems and to that extent can and must be applied by national courts. To ensure application of community law in national jurisdictions each partner state is required under article 8(2) to secure the enactment of legislation and effective implementation of such legislation within its territory as its necessary to give effect to the treaty. Such law must inter alia confer upon the community’s legislation, regulation and directives the force of law within the partner states. In the interplay between the community law and national law, community law is to take precedence over similar national law and every partner state is required to ensure that the enactment of necessary legal instruments to confer such precedence. This is in accordance with article 8(5) which again qualifies as a directly enforceable provision of the treaty. Regarding implementation measures under article 8(2)  which refers to legislation that gives effect to the EAC treaty and other laws of the EAC.

It is not clear whether the word ‘legislation’ as used in the article includes constitutions of member states. The effect of this ambiguity is that by a member state complying with that requirement through an ordinary act of parliament but leaving intact the provisions of her constitution that are in conflict with the provisions of the treaty shall have complied with the requirement.

Such ambiguity was for instance the cause of the decision in Okunda v Republic where the court affirmed the supremacy of the Kenyan constitution over the then treaty by reason of the fact that the treaty was implemented in Kenya through an ordinary Act of Parliament. The confusion is compounded further by Article 8(5) which provides that community law shall take precedence over similar national law.

Qn: For the purposes of these articles the treaty can be said to be similar to national constitutions of member states. Individuals may therefore rely upon rules of community law in national courts as giving them rights which national courts are bound to protect and enforce. In this regard national courts are therefore responsible for enforcement of community law.

Article 33 of the treaty provides that except where jurisdiction is conferred on the EA court of justice by the treaty disputes to which the community is a party shall not on that ground alone be excluded from the jurisdiction of the national courts. However, in enforcing and applying community law the decisions and rulings of the EA court of justice in interpretation and application of the treaty and any other community law shall have precedence over decisions of national courts in similar matters.

It is for this reason in order to avoid conflicts between decisions of the EA court of justice and national courts that article 34 of the treaty requires that national courts to refer issues of interpretation and application of the treaty or issues of validity of any community law or action to it for preliminary rulings before the national court gives a judgment of a ruling in the matter.

The requirement to refer preliminary issues by the regional court is discretionary under article 34. There is no provision that requires national courts to abide by a preliminary ruing of the community court in disposing of the matter before it. In the EU, the national courts have to send preliminary issues to the EU court and any decision by it is binding on the national courts. The implication that arises from the provision of the treaty is that it is  only the EA court of justice which has the power to invalidate a rule of community law. It is therefore apparent that proper and effective implementation and enforcement of community law requires effective cooperation between national courts and EA court. The power to seek for preliminary rulings lies solely with the national courts.

The treaty, the protocols, the Acts of the community, regulations, directives and decisions of organs and institutions of the community, the general principles of law as shall be developed by the EA court of justice and binding norms of international law together constitute the body of sources of the EAC.

CUSTOMS UNION UNDER THE EAC

The Theory of a Customs Union

Trade should be at the core of every customs union. Because of the crucial role played by trade, internal tariffs and NTBs that hinder trade between partner states of a customs union have to be eliminated so as to form one large single market and investment area.

According to the theory of a customs union, for a customs union to be beneficial to the member state it has to be “trade creating” as opposed to “trade diverting”. Removal of tariffs on intra-union trade tends to increase the volume of trade between the member states of a customs union.

A customs union will be beneficial where intra-union trade between the member state is the result of trade creation as opposed to trade diversion. If a customs union forces member states to replace its own high cost of production of particular commodities with imports from other members of the union which have low cost of production there is trade creation.

Trade creation will normally occur between countries which produce the some range of products but differ in comparative advantage in the production of the various products. After the establishment of a customs union competition leads to a pattern of specialization in which each country produces and supplies to the others the products in which it has a comparative advantage in terms of the cost of production. High cost industries will therefore tend to be replaced with low cost industries within the union.

On the other hand if a customs union forces a member state to switch from its low cost external sources of products to high cost sources within the union there is trade diversion. In such a case, the union will result into a shift of resources into less efficient uses i.e. member states will be forced to apply high cost products that were formally available at cheap prices before the customs union was formed. This is because member states are expected to apply a common external tariff.

Trade creation is said to be likely predominant in unions between countries where a high proportion of their external trade is between themselves i.e. the less importance the external trade with non-member states the smaller will be the union in diverting imports to high cost sources within it. Whether the EA countries in their economic states satisfy the conditions necessary for a beneficial customs union. The economies of these countries are characterized by large external importation trade of capital goods and small inter-state trade amongst themselves basically comprised of primary commodities, reliance of exports of primary products which are basically raw materials coupled with a developed economy with low purchasing power. A customs union also acts as a stimuli for economic growth due to a larger market for goods and services. The large market will result in economies of scale to the existing industries and investment to the new industries. Effective operation of a customs union requires the harmonization of economic policies of  member state and the development of the requisite infrastructure within the union.

Challenges of a customs union to states

1)      The management of the loss of revenue by the member states. Loss of revenue arises where goods which previously attracted duty within the member states become duty free.

2)      The high prices of goods and services where the customs union results to trade diversion as opposed to trade creation the challenge that will be facing member states will be to legalize and manage the high prices especially on basic commodities given their social consequences.

3)      It may result in unequal benefits to the member states as a result of differential levels of development. The differential levels  of developments results in polarisation of development within the union because an established center tends to attract more investors as opposed to the underdeveloped centres.

4)      It may result in loss of industries in member states due to competition within the union thereby leading to unemployment and a further loss of revenue in terms of taxes. Because of the negative effects of the establishment of a customs union there is need for regulation of every customs union to address the challenges  and put in place corrective measures to ameliorate the negative effects. Sub-regulation will normally be provided for in the instrument establishing the customs union.

Features of a customs union

Every customs union must have a common set of import duty rates applied to goods from third world countries by all the member states i.e. common external tariffs.

There is also a duty free and a quota free movement of goods within a customs union i.e. there must be elimination of all internal tariffs and non-tariff barriers to intra-union trade among the members.

A customs union must also have a common safety measure for regulating the importation of goods from third countries such as phytosanitary requirements and foods standards. There must also be a common set of customs rules and procedures including documentation of all relevant customs documents. There must also be a common coding and description of all tradable goods within the union i.e. common tariff nomenclature (CTN)

There is also need for a common valuation system of goods within the union for tax purposes coupled with a structure for collective administration of the customs union. Over and above these there must be a common trading policy that guides the trading relationships between the union and third countries.