legal frameworks: existing statuses, lessons, and the way ......2/22/18 4 partnership for enabling...

2/22/18

1

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Legal Frameworks: Existing Statuses, Lessons,

and the Way Forward Katrin Kuhlmann (New Markets Lab) on behalf of the PEMEFA team

Academic Affiliations: Lecturer on Law, Harvard Law School Adjunct Professor, Georgetown University Law Center

IFDC Workshop on “Developing Private Sector Agro-Input Markets: Lessons Learned and Emerging Perspectives on Subsidy Programs”

22 February 2018 – Jinja, Uganda

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

About the New Markets Lab •  Non-profitlawanddevelopmentcenterfocusedontheintersectionbetweenlaw,economicdevelopment,entrepreneurship,andsocialimpact•  Programswithadiversesetofpartnersaroundtheworlddesignedtoleveragelegalsystemsinsectorswithgrowthpotential(agriculture–includingfertilizerandseed,services,technology)thatareheavilyregulated•  Setofinterventionsandtoolstoimproverulesonpaperandtheirimplementationinpractice•  Buildmarketcapacitythroughhands-ontrainingforlawyersfromaroundtheworld

2

2/22/18

2

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Gaps in the Enabling Environment •  InformationGap:

•  Enterpriselevel(manyenterpriseslacklegalresources)•  LegalSector(marketrulesspanjurisdictionsandlegalsystems;agriculturallawnotafocus)•  PublicSector(notalwaysawareofmarketneeds)

•  ImplementationGap:Significantdifferencesexistbetweenlawsonthebooksandlawsinpracticeatnationalandregionallevels•  RuleofLawGap:Bestpracticesandmodelsshoulddrawfromdevelopingcountries’experiences;customizedandincrementalapproachnotcommon•  ScaleGap:Issuesaddressedoncase-by-casebasiswithoutimpactingsystemasawhole

3

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

•  ApproachLawandRegulationasSystem•  Designregulatorysystemtoencouragemarketinnovationandgrowth•  Focusonimplementationgap•  Highlightpriorities,tradeoffs,andsequencingforpolicymakers•  Benchmarkagainstgoodregulatorypractices

•  InnovatethroughHumanCenteredDesignSolutionsandTrainLawyers•  Reduceriskinthemarket,lowertransactioncosts,andmakeregulatoryprocessesmoretransparentandinclusive

•  Trainlawyersacrossnationalsystemstobuildcapacityandenhancepotentialforregionaltrade

•  Uselegaltools(LegalGuides,SystemsMaps,CaseStudies)toengagepublicandprivatesectorstakeholdersinlegaldesignandimplementation

NML’s Methodology

4

2/22/18

3

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Examples of NML’s Work •  Setofprogramsfocusedonsectorscriticaltodevelopmentandheavilyregulated•  Agriculture(standards,seeds,fertilizer)•  Services(ICT,financial,andtransport)•  Technology(IP)•  E-Commerce•  EmergingIndustries

•  SeedRegulationExample•  Testcasesto“pressuretest”newregulations•  Regionalimplementationcasestudies•  TanzaniaSAGCOTexample:AGRA/USAID

5

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Objectives • Understandingandinterpretingcurrentregulatoryframeworks• Commonchallenges,regulatorytradeoffs,andgapsinimplementation

• Linkingregulationwithadvocacyatnationalandregionallevels•  Identifyingprioritiesfordraftingandrevisingfertilizerregulatoryframeworks(nationalandregionallevels)

6

2/22/18

4

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

NML Partnership with AFAP (Since 2016)

•  AGRASSTP/USAID•  StrengthenUnderstandingofKeyComponentsofaHarmonizedPolicyandRegulatoryFrameworkforEastandSouthernAfrica(Malawi,Mozambique,Ethiopia,&Tanzania)

•  ConsolidateandDisseminateComprehensiveKnowledgeofthestatusoffertilizerpoliciesandregulationsØ NationalstakeholderconsultationsØ Reviewedexistingfertilizerpolicies,standardsandregulationsØ ComparativeanalysisofcurrentpolicystatusversusamodelframeworkØ RecommendedrequirementsforastrongnationalfertilizerregulatorysystemØ Policyandregulatoryreformagendatocreateanenvironmentthatismoreconducivetoopenmarketsandregionalharmonization

Ø LegalandRegulatoryGuides

7

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Good Regulatory Practices

• WellFunctioningNationalPolicy,Legal,andRegulatoryFrameworktoEncourageFertilizerMarketDevelopment•  Typicallyframeworkconsistsofseveralinterconnectedinstruments:FertilizerPolicy,Law/Act,andRegulations• Countrieshaveamixofmeasures•  Evenwhenexistmaybeoutofdatewithmarketdevelopments(forexample,fewaddressuniquenatureofbio-fertilizersandblends)

8

2/22/18

5

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Country CurrentInstruments InstrumentsUnderDevelopment

Ethiopia FertilizerManufacturingandTradeProclamationNo.137/1998;GrowthandTransformationPlan(GTPII);AgriculturalPolicyandInvestmentFramework(2010-2020);CommercialRegistrationandBusinessLicensingProclamationNo.686/2010;MoANRDirectivetoEstablishCriteriaforCompetenceCertificate

DraftFertilizerProclamation;DraftProclamationtoEstablishtheNationalFertilizerIndustryAgency(NFIA)

Malawi Fertilizers,FarmFeeds,andRemediesAct(FFRA)1973,asamended1996;NationalFertilizerStrategy(NFS),2012;MalawiGrowthandDevelopmentStrategy(MGDS);AgriculturalSectorWideApproach(ASWAp),2010

FertilizerActandRegulations(underdevelopmentsince2003;modified2007);FertilizerPolicy

Mozambique StrategicPlanofAgriculturalSectorDevelopment(PEDSA)(2010—2020);FertilizerStrategy,2012;FertilizerRegulation,2013

FertilizerAct

Tanzania FertilizerAct,2009(amended2014);FertilizerRegulations2011(amended2017),Fertilizer(BulkProcurement)Regulations,2017;NationalAgriculturalPolicy(NAP),2013;NationalFertilizerStrategy(NFS),2013

N/A

9

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Good Regulatory Practices Cont’d •  IndependentFertilizerRegulatoryAuthorityestablishedthroughRegulationsunderthenecessarylegalauthority,skilledstaffandwell-equippedlaboratories• Autonomousbodytofacilitatestableandpredictableregulatoryenvironmentandfacilitatedevelopmentofandalignmentwithregionalmeasures•  Example:TFRAinTanzania

10

2/22/18

6

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Good Regulatory Practices Cont’d •  StreamlinedandSimplifiedRegistrationProcessforNewFertilizers

•  Reducethenumberofseasonsoftestingandfees•  Example:Tanzaniaamendedregulationsin2017(shortenedfrom3seasonsto1)

•  Removetheregistrationrequirementsfornewblends•  Shifttoexpostsystemovertimeratherthanexante(focusesonenforcementratherthanmarketentry)•  Phase-outapprovedlistapproachforfertilizersandadoptatruth-in-labelingapproach•  Example:ZambiaandSouthAfricamaintainalistofnutrientsasopposedtoalistoffertilizergrades

•  Expostmeasuresareagoodregulatorypracticebutrequiresufficientcapacitytoimplement

11

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Prior Regulatory Process for Fertilizer Registration in Tanzania

Regulationsambiguousastodefinitionof“new”

ApplicantmustbeaTanzanianresidentorassignanagentwhoisapermanent

Tanzanianresident

Applicantcompletesapplication,whichincludes:(1)fertilizersample,(2)certificateofanalysis,(3)writtendeclarationfertilizerisnotbannedor

restrictedincountryoforigin,(4)3copiesoflabeltobeused,(5)informationonsuitability,(6)anyotherinformationordocumentrequiredbyTFRA,

and(7)applicationfeeofUSD50

ApplicantsubmitssignedapplicationtoTFRAforapproval

Testingforsuitabilityofknownandnewfertilizersandfertilizersupplementsmust

undergolabtestsbyTFRA.Newfertilizersandsupplementsmustbetestedvialabandfieldby

TFRAforatleast3consecutiveseasons

TFRAdeniesapplication

TFRAapprovesapplicationandgrantsregistration

certificatewithmaximumtermof2years

TFRAaddsnewfertilizerorfertilizersupplementtolistofapprovedfertilizersforuseinTanzania

ApplicantpaysfortestingbyTFRA,whichcostsapproximatelyUSD10,000/seasonoratleastUSD30,000total

[Renewal]

Season2Test Season3Test

Dealerregistration

12

2/22/18

7

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Amended Regulatory Process for Fertilizer Registration in Tanzania

Regulationsambiguousastodefinitionof“new”

ApplicantmustbeaTanzanianresidentorassignanagentwhoisapermanentTanzanianresident

ApplicantsubmitssignedapplicationtoTFRAforapproval

Testingforsuitabilityofknown&newfertilizersandfertilizersupplementsmustundergolabtestsbyTFRA.Newfertilizersandsupplementsmustbetestedvialab

andfieldbyTFRAforatleast1season

TFRAdeniesapplication

TFRAapprovesapplicationandgrantsregistration

certificatewithmaximumtermof2years

TFRAaddsnewfertilizerorfertilizersupplementtolistofapprovedfertilizersforuseinTanzania

ApplicantpaysfortestingbyTFRA,whichcostsapproximatelyUSD10,000/season

Applicantcompletesapplication,whichincludes:(1)fertilizersample,(2)certificateofanalysis,(3)writtendeclaration

fertilizerisnotbannedorrestrictedincountryoforigin,(4)3copiesoflabeltobeused,(5)informationonsuitability,(6)anyotherinformationordocumentrequiredbyTFRA,and

(7)applicationfeeofUSD50

[Renewal]

Season2Test

Season3Test

Dealerregistration

13

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Good Regulatory Practices Cont’d •  EnhancedImplementationofExistingLegalMechanisms

•  Expandcapacityandtraining(includingfocusonlaboratories,skilledstaff,equipment,traceabilitymechanism)andenforcement(withdeterrentpenaltiesforviolations)

•  StrengthenedPublic-PrivateDialoguePlatformstoImproveRegulatoryFrameworksandTheirImplementation•  AMOFERTinMozambique;TanzaniaFertilizerSociety•  Mozambique’sAMOFERTPlatformisawell-recognizedforumonissuesrelatedtofertilizer,andparticipatedindraftinganewFertilizerActthatisunderreviewbytheMozambicangovernment

14

2/22/18

8

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Good Regulatory Practices Cont’d •  AwarenessBuildingofLegalandRegulatorySystems•  Addresschallengesthrough(1)improveddisseminationofinformation(LegalGuides),(2)assistanceforpreparingorinterpretinglegaldocumentslikecontracts,(3)providingtransactionallegalservicestoindividualsworkingwiththeagriculturalsector•  Providetailoredlegaltrainingforfarmers,includingrightsandobligations•  Designtrainingprogramforlawyerstoimproveoverallregulatoryenvironmentanddeliveryofagriculturallegalservicestostakeholders

•  HarmonizedFertilizerStandardsatRegionalLeveltofacilitateeasymovementofblendswithintheregion;harmonizelaboratorycapacities

15

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization • AbujaDeclarationCallsforRegionalHarmonization•  CallsonAUMemberStatesandRegionalEconomicCommunities(RECs)totakeappropriatemeasurestoreducethecostoffertilizerprocurementatnationalandregionallevelsanddevelopcapacityforqualitycontrol•  Focusonensuringdutyandtax-freemovementacrossregions

• ContinentalFreeTradeArea(CFTA)andTripartiteFreeTradeArea(TFTA;amongEAC,SADC,andCOMESA)•  Negotiationsatanearlystageanddonotyetincludefertilizersystems

16

2/22/18

9

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization Cont’d. • COMESADevelopingHarmonizedFrameworks•  EACHarmonizedRegulatoryInstrumentsandProceduresforFertilizerMarketUnderDevelopment•  SADCRegionalAgriculturalPolicy(RAP)•  Policynotspecifictofertilizer;noseparateframeworkforfertilizerexists•  Noseparateframeworkforfertilizerexists

•  ECOWASRegulationRelatingtoFertilizerQualityControlintheECOWASRegion

17

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization Example: ECOWAS Fertilizer Regulations (1) •  StreamlinedProductRegistration(ECOWAS–ProductRegistrationNotRequired;TruthinLabeling)•  InstitutionalCooperation•  FreeMovementofFertilizer(includingblends;waytomeetmarketneeds;ECOWAS)•  StandardQualityDefinitionsandLabelingRequirements(ECOWAS)

•  IFDCcontributedtoworkonsamplingandtesting•  HarmonizedInspectionandAnalysis(ECOWAS)•  CommonLicensesforFertilizerProducersandTraders(ECOWAS)•  SharedLaboratoryResources(ECOWAS)

18

2/22/18

10

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization Example: ECOWAS Fertilizer Regulations (2) •  Requiresdomestication(differencesbetweencivillawandcommonlawcountries)•  IFDCWAFPprojectisassistingindividualECOWAScountrieswithdomesticationprocess•  Developqualitycontrolsincountrydistributionsystem(identifyandevaluatelabandhumanresources)

•  EstablishagencytoenforceECOWASregulatoryframework,includingqualitycontrolandnationalcommitteestosupporttheseefforts

•  Draftmodalitiesforissuanceofimportanddistributionlicenses;fixregistrationfeesforimportersanddistributors

•  Setuppenaltiesforinfringementofregionalandnationalregulations

19

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Principles for Harmonizing Fertilizer Regulatory Frameworks •  ImplementationatNationalLevelisCritical• ApproachesMayVaryAmongMembersofRegionalBloc• ConsiderSequencingofRegulatoryInterventions• Promote“LowHangingFruit”Reforms•  EstablishCommonMethodologyandIndicatorstoMeasureProgress•  TailorCapacityBuildingtoNeedsofIndividualMemberCountries•  ListentoPrivateSectorandCivilSocietyVoices

20

2/22/18

11

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization Interventions: Short-Term •  EstablishmentofNationalEntitiesResponsibleforFertilizerRegulation

•  Helpfacilitatestableandpredictableregulatoryenvironmentatthecountrylevelandsignificantlycontributetoamoreefficientregionalfertilizermarket

•  ClarityonProductandBusinessRegistrationandLicensingRules•  Inconsistentapplicationofregistrationandlicensingrulesimpedesharmonizationefforts

•  TariffandCustomsDuties•  Countriescouldagreetoexemptfertilizerfromcustomsdutiesandothertaxes,andharmonizeVATforfertilizer,includingforfertilizer-relatedservices

•  ListofApprovedFertilizers•  Regionalizelistofapprovedfertilizerstofacilitatetrade,withthelong-termaimoftransitioningtoanexpostapproachliketruth-in-labeling

21

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization Short-Term Interventions Cont’d. •  PackagingandLabeling

•  Establishuniformrulesforpackagingandlabeling,suchasaminimumsetofinformationtobeclearlylabeledonfertilizercontainers

•  HarmonizedRegionalQualityControl(IncludingInspection)

•  Establisharegionalqualitycontrolsystemthatextendsallalongthefertilizervaluechain

•  FertilizerStandards•  Adoptuniformstandardsforfertilizer,includingblends,basedoninternationalstandards

•  RaisingAwarenessofFertilizerLawsandRegulations•  Atnationalandregionallevels,includingbymakingsureproposedchangesaresharedandvettedwithpublicandallrulesarepublished

22

2/22/18

12

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization Interventions: Long-Term •  ShifttoaTruth-in-LabelingApproach•  ECOWASsystemisanexampleofexpostregulationandaTruth-in-Labelingapproach

•  FreeMovementofFertilizerCross-Border,IncludingTransport•  Removeorreducebordertaxes,roadblocks,andescortsystems;introduceone-stopborderprocesses;andimprovetradecorridors

•  RegionalInspection,Analysis,Sampling,andTolerance•  Inspection,analysis,andtestingprocedurescouldfollowinternationalstandardsandregionalrulesforinspectioncouldbeestablished

23

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Regional Harmonization Long-Term Interventions Cont’d. • OversightandAdministration• Establishregionalinstitutionalmechanismwithclearmandate

• RighttoAppealandConfidentiality• Harmonizegroundsforappealandensureclearrighttoconfidentialityforsensitivebusinessinformationtoavoidunfaircompetition

24

2/22/18

13

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Partnership for Enabling Market Environments for Fertilizer in Africa (PEMEFA)

Thank You! ThispresentationwasfundedbyagrantfromtheAllianceforAfricanPartnership,anewinnovativeinitiativeatMichiganStateUniversitythatseekstodevelopacollaborativeandcross-disciplinaryplatformforaddressingtoday’sglobalchallenges.

PEMEFAteam

•  MariaWanzala-Mlobela(AFAP,mwanzala@afap-partnership.org)•  NicoleMason(MSU,masonn@msu.edu)•  JoshuaAriga(IFDC,jariga@ifdc.org)•  CharlesJumbe(ReNAPRI,charlesjumbe@bunda.luanar.mw)•  KatrinKuhlmann(NML,kkuhlmann@newmarketslab.org)•  ShannonKeating(NML,skeating@newmarketslab.org)•  KillianBanda(AFAP,kbanda@afap-partnership.org)

25