COVID-19: Which South African Businesses Can Operate During the Nation-wide Lockdown?

The Minister of Trade, Industry and Competition, Ebrahim Patel, has announced that all businesses permitted to provide ‘essential services’ during the national lockdown period in South Africa must first seek approval from the Department of Trade, Industry and Competition (the “DTIC”). If obtained, the approval enables a business to operate during the mandatory lockdown period in accordance with the Disaster Management Act, 2002 (Act No. 57 of 2002) (the “Act”), read in tandem with the regulations promulgated under the Act under Government Gazette number 43107 (as subsequently amended on March 25, 2020) (the “Regulations”).

The Regulations define ‘essential services’ as (among others): (a) grocery stores, including spaza shops; (b) electricity, water, gas and fuel production; and (c) laboratory and medical services. ‘Essential goods’ are defined as (among others): (a) food, such as any food product and non-alcoholic beverages; (b) cleaning and hygiene products, such as toilet paper and hand sanitiser; and (c) fuel, including coal and gas.

Companies that fall under the ‘essential services’ category must:

  1. Identify who in their business is classified as ‘essential,’ as identified by the permit to perform an essential service in Annexure C (Form 1) to the Regulations;
  2. Apply for a certificate using the Companies and Intellectual Property Commission (“CIPC”) BizPortal website at www.bizportal.gov.za. The portal will contain a menu icon listed as “Essential Service Business,” which will activate the process; and
  3. Ensure that all members of staff who are classified as ‘essential’ carry their permits at all times from midnight on March 26, 2020 until April 16, 2020. Failure to present the permit will result in individuals being forced to return to their place of residence.

The DTIC has advised that companies that submit false applications which do not qualify as companies rendering an ‘essential service’ as per the Regulations, will be subject to criminal prosecution and sanction.

For further information, please reach out to Covington’s COVID-19 Task Force at COVID19@cov.com, Robert Kayihura at RKayihura@cov.com, or Mosa Mkhize at MMkhize@cov.com.

 

 

Covington’s Ability to Help Respond to the COVID-19 Pandemic in Africa

With African governments increasingly taking strong actions to impede the spread of the COVID-19 virus – including in a number of jurisdictions, imposing full lockdowns – we are able to provide assistance to our clients, financial institutions, developmental finance organizations, companies and organizations on the continent. We are available to get on a call at short notice, at no cost, or respond to questions sent via email. Our interest is to share our perspective on various measures being implemented by governments in Africa and elsewhere, the impact these actions might have, and how our experience can be of assistance at this critical time.

Force Majeure: COVID-19 will have a significant impact on project development markets, construction and infrastructure transactions, supply contracts, and a host of other commercial transactions. As a result, companies will be compelled to assess the costs and benefits of claiming force majeure relief. Force majeure is generally found when an event is (i) beyond the breaching party’s control; and (ii) is not reasonably foreseeable. For example, travel bans imposed by governments will impact the ability of skilled labor and professionals from other countries to complete work under the project development contracts. This will cause delays and create grounds for force majeure claims. Other issues, such as scheduled maintenance, especially if governments limit gatherings to no more than 10 people, could be grounds to claim force majeure. And what happens when a contract stipulates that a project suspension notice must be delivered by hand—and people are not permitted to leave their home or offices are closed?

Financing Transactions, Mergers and Acquisitions (M&A) and Material Adverse Effect: Navigating commercial, M&A and finance agreements during these times can and will be an extremely difficult and daunting task. Whether there are potential issues of force majeure (as discussed above), questions as to the occurrence of a Material Adverse Effect, issues relating to the impossibility of performance, issues relating to disclosures and announcements, or other issues, our multi-faceted and multi-jurisdictional team can mitigate the negative consequences of these complex matters.

Insurance: Covington’s insurance practice group has helped policyholders with losses arising from hurricanes (Katrina), terrorist attacks (September 11), industrial accidents and environmental damages (Deepwater Horizon and Exxon Valdez) and numerous other large losses, and we can be helpful in issues arising from the COVID-19 pandemic. As we have described in a recent alert on insurance best practices, for entities that are considering pursuing insurance claims related to COVID-19, it will be important to document timeframes for shutdowns, supply disruptions, as well as all lost income attributable to the pandemic.

Sourcing Supplies from China and Europe: Companies in Africa are naturally looking to other markets to source ventilators, surgical gowns, masks and other Personal Protective Equipment to respond to the pandemic. Our Food and Drug Regulatory practice and our offices in Shanghai and Beijing can be helpful in evaluating suppliers, their relevant certifications and putting in place commercial contracts to ensure the timely export of materials out of Asia. We can also be helpful in this area from our offices in Brussels, Frankfurt and London in respect of exports being made from the United Kingdom and continental Europe.

Interactions with Government: As governments attempt to blunt the pandemic’s public health and economic effects, many companies are frantically working to seek the help they believe they need to survive these trying times and to preserve their employees’ jobs. In addition, companies with products or services that could assist the ability of governments to respond to the crisis are considering ways to contract with government agencies. As a consequence, many companies are more deeply engaged with government officials than ever before, including by seeking financial loans, grants, contracts, product approvals, regulatory relief, or guidance on how to operate in these times. But the basic rules covering interactions with government—including ethics, bribery, and procurement fraud laws—all remain in place. Companies that cut compliance corners now may pay a price down the road. We also have a number of former diplomats in our ranks who have experience working with decision-makers at all levels of governments in our Global Problem Solving practice.

Lessons from Other Regions: As a global law firm head-quartered in Washington, D.C., we are closely tracking federal, state and regional developments in the United States that might impact our clients. We have put together our analysis of these developments in a Legal and Business Toolkit that can be accessed here. To the degree that there might be relevance for what companies are experiencing in Africa, we would be happy to share our experience working with clients in the U.S. and other jurisdictions.

The Next Pandemic: While organizations and governments may be currently overwhelmed responding to the COVID-19 crisis, they can seize opportunities to consider how they might best prepare themselves for the next pandemic, incorporating lessons from the current and previous pandemics. Lessons already evident from this pandemic are that social and economic disruption may be prolonged, medical interventions may not exist or not be available, and that decision makers may be held to account. A review of existing or new plans should also inform broader catastrophe planning and business continuity.

For further information on any of these topics or other questions, please reach out to Covington’s COVID-19 Task Force, COVID19@cov.com, Witney Schneidman, wschneidman@cov.com, Ben Haley, bhaley@cov.com, Mike McLaren, mmclaren@cov.com, or Mosa Mkhize, mmkhize@cov.com.

 

 

 

 

 

Coronavirus: Potential Implications for Africa

The Coronavirus (hereinafter “COVID-19”) is upending lives around the world—equally in developed and developing countries. Some are already affected by the deadly impact of COVID-19 (e.g. China, Italy, and France), while others’ lives have been altered due to efforts taken to “flatten the curve,” to ensure hospital systems are not overrun with patients in need all at once (e.g. the United States). Knowing that the worst is yet to come, experts are bracing for potentially devastating impacts throughout the African continent.

As of March 18, 2020, the World Health Organization (“WHO”) reported that there were just over 475 cases in 30 countries on the continent. For a continent of 1.2 billion, this is a low number. However, we know that just as testing in the United States is not widely available, nor is it in Africa. Therefore, the number of actual cases is likely much higher than is currently being reported. In February, Bill Gates warned that COVID-19 may kill upwards of 10 million people in Africa.

High Risk Factors

There are several high risk factors facing the continent. First, as discussed by the Lancet’s Preparedness and Vulnerability study, not all countries on the continent are equipped to implement the technical and operational interventions necessary for rapid testing and isolation of infected individuals who are traveling to the continent. China is Africa’s largest commercial partner, which means there is a high travel volume of Chinese nationals—where the pandemic started—to the continent and therefore, potential risk for the rapid spread of COVID-19. While this link has not yet been documented, it is too early to rule it out. Thus far, many of the confirmed cases have documented links to travelers coming from the United States and Europe.

Second, not all travel to the continent has been halted. As of March 14, 2020, the Lancet reported that Ethiopian Airlines, the largest carrier in Africa, continued flights from Africa to China, while all Chinese airline companies and others continued to operate as well. Lancet assesses that the overall risk of importation to Africa is lower than that to Europe (1% vs 11%, respectively, according to current estimates), but “response and reaction capacity are also lower.”

Third, the healthcare infrastructure throughout the continent is fragile, and the public health impacts are likely to be further complicated by populations disproportionately affected by HIV, tuberculosis (TB), and other infectious diseases. Tedros Adhanom Ghebreyesus, Director-General of the WHO, recently said his “biggest concern” was COVID-19 spreading in countries with weak health systems. Coordinated action across all government sectors, utilizing trusted networks of professional civil servants, will be key to responding to COVID-19 in Africa.

Potential Mitigating Factors

One thing Africa has going for it in the face of COVID-19 is its youthful population, with the median age under 20. Only three percent of sub-Saharan Africa’s population is older than 65, and thus far, all indications are that children and younger people with no underlying conditions fare quite well with COVID-19.

Some have also suggested that higher average temperatures on the continent will make it harder for COVID-19 to survive and spread, but this is disputed and still an open question.

African Governments Respond

On March 15, 2020 South Africa’s President, Cyril Ramaphosa, declared a “national state of disaster,” and closed schools and banned mass gatherings. He also imposed travel restrictions on nationals from high risk countries including Italy, Iran, the US, the UK, China and elsewhere. The number of known confirmed cases in South Africa sits at 62 as of March 17, 2020.  As described by Mail & Guardian, “With the disease currently growing at a rate of 61% a day in South Africa, by the end of this month we could run out of ICU beds.”

Kenya’s President Uhuru Kenyatta followed suit by closing schools, discouraged large gatherings, and banned travel to Kenya except for Kenyan citizens and foreigners with valid residence permits. In an effort to discourage the physical handling of money, Kenya’s largest telecom provider, Safaricom, will implement a fee-waiver on all mobile-money transactions under $10 that are carried out on its platform, M-Pesa. Kenya has three confirmed COVID-19 cases.

Many other countries are taking similar actions to prevent a wave of infections, but large gatherings continue to occur in some countries. Regardless of how many Africans are infected and have adverse health impacts, the negative economic impact cannot be avoided. The UN Economic Commission on Africa projects that economic growth across the continent will drop from 3.2 percent to about 2 percent in 2020. Tourism, supply chains, commodity exports, and remittances are just a few of the sectors likely to be negatively impacted. Governments will have to pay more for food products, pharmaceuticals, and energy.

Implications for Project Finance Projects

COVID-19 will have a significant impact on project development markets across Africa with companies contemplating claiming force majeure relief during these unprecedented times. Force majeure is generally found when an event is (i) beyond the breaching party’s control and (ii) is reasonably unforeseeable. For example, travel bans placed on many Chinese companies will have a direct impact on the ability of persons from affected countries to travel to the continent to complete work under project development contracts. This will cause delays and create grounds for force majeure claims. When negotiating transaction documents, parties should be mindful of the potential impact of COVID-19 may have on their contracts.

Chinese manufacturers have issued shutdown notices which will have a direct impact on projects in the construction phase. Various African countries have entered into short and long-term collaborative arrangements with Chinese partners that not only supply the material for the development of various projects, but also supply the technical support and expertise for various projects—from the feasibility study to the commercial operation phases, and the subsequent continued management of the project. As the number of new confirmed COVID-19 cases decreases in China, it appears that the shutdown notices may soon be lifted.  However, as the number of cases continues to rise in Africa, the continuity of projects may not improve until the spread of COVID-19 is controlled.

We will continue to monitor the rapidly evolving situation on the continent as a consequence of COVID-19. If you are doing business on the continent and require further guidance and legal advice, please contact Witney Schneidman at wschneidman@cov.com or Bob Kayihura at RKayihura@cov.com.

COP 25: “Missed Opportunity” for Climate Change Action in Africa

Reports project that given current activities, the world will exceed the threshold for dangerous climate change in 2030. To address this forecast, 196 States plus the European Union met in Madrid, Spain in December 2019 for COP 25—the 25th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change.

The goal of COP 25 was to move towards the operationalization of agreements under the Convention on Climate Change (the “Convention”), including the Paris Agreement, which codifies States’ pledges to reduce greenhouse gas emissions. Though the Convention’s implementation guidelines were agreed to last year at COP 24 in Poland, COP 25 largely failed to make progress on those guidelines. The region with perhaps most at stake is Africa.

Why Africa?

Though Africa accounts for less than 4 percent of global carbon emissions, the continent has a keen interest in global climate negotiations due to its vulnerability to climate change.

Experts identify Africa as the most vulnerable continent to climate change impacts under all climate scenarios above 1.5 degrees Celsius. Key reasons for this are:

  • Ninety-five percent of global rain-fed agriculture grows in Sub-Saharan Africa—a significant share of which is critical to GDP and employment, and as a food source for consumers and the millions of small-holder farmers on the continent.
  • The degree of expected climate change is large. The two most extensive land-based end-of-century projected decreases in rainfall occur over Africa: one over North Africa and the other over southern Africa.
  • Africa’s climate system is controlled by a complex mix of large-scale weather systems, many from distant parts of the globe and, in comparison with other inhabited regions, is vastly understudied.
  • The capacity for adaptation to climate change is relatively low given the effects of poverty, which reduce choice at the individual level.

Therefore African governments will need to prioritize and act on climate change. Unfortunately, COP 25 failed to galvanize international momentum on this.

In what ways did COP 25 fail?

Overall, COP 25 was “disappointing” in that, as the UN Secretary General stated, “the international community lost an important opportunity to show increased ambition on mitigation, adaptation, and finance to tackle the climate crisis.” COP 25 fell short in three key areas:

First, negotiators failed to agree to a deal that would limit global warming to 1.5 degrees Celsius above pre-industrial levels — a key goal of the Paris Agreement. As described above, if warming occurs above this range, Africa is most at risk of experiencing the severe negative consequences.

Second, no concrete decisions were made at COP 25 on key agenda items such as the carbon markets (under Paris Agreement Art. 6), and the financing of climate disasters. Instead, these agenda items were moved to 2020.   Failure to agree on these items—which govern how States can work across borders to meet their climate change targets, particularly the rules on Article 6 and relatedly, potential double-counting issues—could break the efficacy of the Paris Agreement.

Carbon markets allow States to purchase emissions reductions from other States that have already cut their emissions more than pledged. This is important for States that struggle to meet their emission-reduction targets under their nationally determined contributions, or otherwise want to pursue less expensive emission cuts. Article 6 of the Paris Agreement contains three paragraphs related to the carbon markets: one which provides an accounting framework (Art. 6.2), one that establishes a mechanism for trading credits from emissions reductions (Art. 6.4), and another that establishes a program for non-market approaches (Art. 6.8). COP 25 meant to finalize the rules supporting these concepts.

The ultimate objective of the Convention on Climate Change is to stabilize greenhouse gas concentrations “at a level that would prevent dangerous anthropogenic [human induced] interference with the climate system” (Convention Art. 2). Therefore, a well-designed Article 6 framework could help States significantly increase their efforts to tackle climate change. From a financial perspective, the potential cost savings from a globally integrated carbon market are as high as hundreds of billions of dollars per year. If written poorly, the Article 6 framework could instead frustrate meeting current contributions and undercut progress on this front.

Third, COP 25 did not reach agreement on more ambitious global targets. Though African States and small island nations pushed for more ambitious targets, those efforts were generally opposed by the United States, Brazil, India, and China. As Africa’s climate system depends on weather systems from other parts of the world, the failure to agree to more ambitious targets will affect conditions in Africa.

Increasingly important for Africa, is that developed countries deliver on their pledge from COP 15 to jointly raise $100 billion per year in climate financing by 2020 to address the needs of developing countries, including those in Africa. Since COP 15, the parties have agreed to set a more ambitious targets by 2025. In 2016, developed countries raised approximately $59 billion and in 2017, they raised approximately $71 billion. Following COP 25, it is uncertain whether the original $100 billion target will be met.

The road ahead

Given the shortcomings of COP 25, Africa has a strong interest in becoming more involved in climate talks in 2020. Key interests include advocating for well-written rules concerning Paris Agreement Article 6, a plan for financing climate disasters, financing that at minimum reaches the $100 billion/year pledge, and more ambitious targets that will help the continent not only mitigate, but also build resilience and reduce vulnerability to climate change.

Top Issues to Watch in Africa in 2020

Commencement of the AfCFTA. The landmark African Continental Free Trade Area (AfCFTA) is slated to go into force on July 1, 2020. When fully implemented, the trade agreement will eliminate tariff and non-tariff barriers, and substantially increase intra-regional trade to volumes worth over $3.3 trillion. Twenty-nine countries have deposited their instruments of ratification, and Eritrea remains the only African Union member state that has not signed the agreement. We will be watching the role that technology will play in lifting traditional barriers to entry and accelerating the creation of a well-diversified and inclusive regional value chain. This is especially true for the ease and transparency enabled by e-commerce and the growing trade in digital services.

Increasing the Bankability of Projects in Africa. One of the key issues on the continent in 2020—and in the decade ahead—that we will be watching is the need to increase the bankability of infrastructure projects in Africa. Critical to this effort is the need for development finance institutions (DFIs) and commercial banks to work together more cohesively to deliver innovative solutions for the continent. Consider the launch of the Africa Greenco project in Zambia. This project is designed to introduce a credit enhanced special purpose vehicle (SPV) to act as an intermediary power purchaser from independent power producers (IPPs) in the energy renewables sector, so that the direct risk of IPPs and lenders to national electricity companies is mitigated. This involves DFIs and commercial banks assuming different risk allocations in the SPV and adopting innovative strategies to manage their exposure to the relevant national electricity company. We will also be watching the continued development of standardization, most notably with the International Finance Corporation (IFC)’s Scaling Solar project (recently extended from Zambia to Togo) and KfW’s Global Energy Transfer Feed in Tariff (GET FiT) Programme, together with the standardization of documentation and regulation in other business sectors.

Additionally, as the global movement on climate change gathers momentum and issues of responsible sourcing come to the fore, we will be watching to see if there is a greater emphasis placed on Environmental Social and Governance (ESG) compliance in financing transactions with liability (for lenders and borrowers alike) for noncompliance. We expect that even more finance will go towards clean energy with financial institutions and governments committing more funds towards the achievement of the 7th (Clean Energy) and the 13th (Climate Action) United Nations sustainable development goals (SDGs). In the context of the African Continental Free Trade Area (AfCFTA) agreement, we expect to see an increase in the financing of transport infrastructure, particularly in connecting neighboring countries and regional trade corridors as more countries ratify the AfCFTA. There may well be an upswing in the financing of soft commodities on the back of reduced barriers to intra-Africa trade, which many hope will open up new markets closer to home for many of Africa’s agri-economies.

Climate Change. The 2019 UN Climate Change Conference COP 25 failed and Africa has the most to lose. Though Africa accounts for less than 4 percent of carbon emissions globally, it is extremely vulnerable to climate change scenarios above 1.5 degrees Celsius. The continent is vulnerable because Sub-Saharan Africa has 95 percent of rain-fed agriculture globally, and agriculture accounts for a large share of the region’s GDP and employment. In fact, the two most extensive land-based end-of-century projected decreases in rainfall occur over Africa: one over North Africa and the other over southern Africa. Finally, the capacity of African nations to adopt to climate change is relatively low given the effects of poverty, which reduces choice at the individual level. At COP 21 in 2015, parties resolved to mobilize USD 100 billion per year by 2020 to address the needs of developing countries. They also agreed to set a more ambitious financing target prior to 2025. We will be watching the investments made by industrialized countries to mitigate the most harmful effects of climate change in Africa.

Aligning Africa’s Digital Transformation Strategy with Enabling Regulations. The African Union Commission (“AU”) has put forward a bold vision to build a Digital Single Market in Africa by 2030. The Draft Digital Transformation Strategy for Africa (2020-2030) identifies specific actions to achieve this vision. Specifically, adoption of an AU convention on Cyber Security and Personal Data Protection is a top priority for this year. To achieve this, policy and regulatory reforms need to be harmonized across a widely diverse group of Member States with vastly different priorities. We will be watching these trends to determine whether advances in computing capacity, storage, and the protection of digital data help to build a vibrant digital ecosystem that accelerates economic integration and the development of the continent. We will also be watching to see if the regulations result in excessive costs, compliance requirements, and related barriers for African entrepreneurs and businesses.

Business and Human Rights. For companies doing business in Africa, there are three areas deserving of attention in the business and human rights space in 2020: (1) compliance with existing and emerging regulations, (2) enhanced due diligence in light of an increased number of enforcement actions related to forced labor, and (3) risk mitigation in view of creative lawsuits. As we reported in December 2019, the global regulatory and enforcement business and human rights landscape is evolving rapidly. A plethora of national and regional initiatives have emerged which require companies to either report on their human rights compliance measures or conduct substantive human rights due diligence in relation to their global supply chain, or both. Many companies doing business in Africa are subject to regulations like the California Transparency in Supply Chains Act, UK and Australian Modern Slavery Acts, and the French Duty of Vigilance Act, and must ensure compliance with these regulations.

In regard to enforcement actions, we saw a significant uptick in 2019 and expect to see additional enforcement actions in 2020. The United States Customs and Border Protection (“CBP”), for example, has significantly ramped up enforcement of the forced labor prohibitions contained in Section 307 of the Tariff Act of 1930. Whereas only 32 Withhold Release Orders (“WROs”) (which effectively seize goods destined for import into the United States) were issued in the more than 50 years between 1953 and 2015, 13 have been issued in the last four years alone, including seven in 2019. Recent actions taken to block imports from Africa include regional bans on gold mined in artisanal small mines in eastern Democratic Republic of the Congo (“DRC”), rough diamonds from the Marange Diamond Fields in Zimbabwe, and all tobacco from Malawi.

Finally, companies doing business in Africa must be cognizant of the creative human rights lawsuits being filed around the world. For example, lawsuits have been filed in the U.S. based on novel theories of companies aiding and abetting child labor. In the UK, a claim has been filed on behalf of children and parents from Malawi against British American Tobacco alleging unjust enrichment based on the harvesting of tobacco leaves for little compensation.

Anti-Corruption/Compliance: In 2019, we saw continued international anti-corruption enforcement efforts focused on conduct in Africa, including high-profile U.S. prosecutions of individuals involved in Mozambique’s “Tuna Bonds” scandal, UK Serious Fraud Office investigations in the mining sector, and an investigation by Norwegian authorities into the so-called “Fishrot Files” matter in Namibia. We also continue to see increased enforcement activity on the domestic front. For example, in Angola, we saw the first conviction for graft of a senior official under Angola’s president João Lourenço, with the sentencing of the former Transport Minister to 14 years in prison for charges of corruption and embezzlement of state funds. In South Africa, as the “State Capture” inquiry grinds forward, at the end of 2019 we saw a spate of high-profile arrests, some in connection with alleged bribery at state-owned enterprises.

Along with this trend of cross-border enforcement and local authorities stepping up enforcement efforts, we see continually heightening expectations from enforcement authorities for corporate compliance programs. Against this backdrop, we believe that companies operating in Africa should be carefully considering the business case for investing in their compliance programs and taking proactive steps to mitigate compliance risk.

Elections. There are 12 major presidential and parliamentary elections on the continent this year: Burkina Faso, Burundi, Central African Republic, Comoros, Côte d’Ivoire, Ethiopia, Ghana, Guinea, Niger, Tanzania, Seychelles, Sudan, and Togo. Given the anticipated impact on foreign investment, opportunities for positive economic growth, and fears of destabilization and international interference, we are paying special attention to Ghana, Côte d’Ivoire, Tanzania, Central African Republic, and Ethiopia. Ghana is a stable democracy and key to economic growth in West Africa. Though President Nana Akufo-Addo’s face-off with former president John Mahama appears to be a close race, Akufo-Addo’s incumbency and track record on positive economic growth may offer him an advantage. In Côte d’Ivoire, it is unclear whether President Alassane Ouattara will seek re-election (as he has until July to make his decision), but if he declines to run or is defeated, the country will experience its first transfer of power since the 2002-04 civil war. In Tanzania, although Magufuli’s party, Chama Cha Mapinduzi, has been in power longer than any other political party on the continent, Magufuli’s socially conservative laws and alleged human rights abuses may give room for opposition presidential candidate Edward Lowassa to make the election competitive. The control of rebel groups in Central African Republic has caused President Faustin Touadéra to seek military relief from Russian mercenaries. That, along with recent Russian disinformation election tactics in Africa, may affect CAR’s elections. For Ethiopia’s parliamentary elections, Prime Minister Abiy Ahmed’s democratic reform agenda is expected to increase economic growth and greater inclusive development as the country undergoes a number of political and legal reforms.

Trump Administration’s Policy: Russia, China, the UK, the EU, India, Turkey, and other nations are working hard to unlock Africa’s commercial potential. Last year the Trump Administration rolled out an Africa policy built around promoting more U.S. investment on the continent. The key pillars of the policy are Prosper Africa and the new U.S. Development Finance Corporation (“DFC”). We will be watching the implementation of both of these initiatives. Prosper Africa promises “deal teams” that will help American companies with everything from market intelligence to identifying potential local partners. The DFC was created to make equity financing available for projects that have a developmental impact. We will be watching how the Trump Administration implements Prosper Africa and the new DFC in support of U.S. companies in Africa.

 

 

 

Openness is key to Africa’s success in a data-driven world

Shift to a services era

While Africa’s trajectory remains full of daunting challenges, there is reason to be optimistic. Ratification of the Continental Free Trade Agreement demonstrates critical collaboration between African leaders, and promises to unlock the region’s potential. Equally important, growing investments in broadband ensure that affordable access to leading technology will accelerate the continent’s productivity.

However, the tried and true path to higher income economies through manufacturing is changing. Research by McKinsey Global Institute finds that developing countries have a lot of cheap labor at a time when decisions based on labor cost are declining. Conversely, global trade in services has grown more than 60 percent faster than traditional goods traded over the past decade, and the U.S. International Trade Commission reports that half of all global trade in services depends on access to cross-border data flows.

Globalization is entering a new phase defined by “information,” where millions of small and midsize businesses are building e-commerce marketplaces to trade with the rest of the world. In a digital world, technologies like cloud computing, blockchain, artificial intelligence and machine learning are the drivers of future economic growth. These technologies don’t just benefit from the open flow of data across international borders, they depend on it, and so will Africa’s future.

Cross-border data flows are critical to Africa’s prosperity

The most recent DHL Global Connectedness Index — which ranks 169 countries by international flows of trade, capital, information and people – indicates that African countries lag behind with considerably lower averages of connectedness. The index shows that the gap is greatest in information flows where advanced economies are nine times as deeply integrated as developing countries.

Progress in some African jurisdictions may be undermined by regulations requiring that data remain within national borders. Data localization requirements fall in three categories. The first category includes the broad application of laws designed for outdated methodologies in a digital era where information is captured and processed in a fundamentally different way. The second category stems from growing anxiety around cyber and national security concerns, despite data classification standards that enable organizations to categorize and manage data based on different priorities and levels of sensitivity. A third category appears to be fueled by catchy claims that “data is the new oil.” Is it? The underlying logic suggests that African states should keep and process that “oil” within their borders. But when one realizes that oil is a scarce resource that can be used only once, whereas information is infinitely plentiful and reusable, the analogy falls apart. One thing that is clear in a growing digital age, the future of Africa’s development depends on African states being connected to and trading goods and data-driven services with the rest of the world.

A study by the European Center for International Political Economy on the economy-wide impact of data localization policies in the European Union shows diminished innovation and productivity, and finds that restrictions on the movement of data far outweigh any marginal gains for the domestic Information and Communications Technology sectors. But unlike the European Union, the African continent lacks a common and enforceable data protection regime. Most African states have no specific data protection regulation, and instead rely on a patchwork of civil, criminal and constitutional laws for a data protection framework and individual rights of privacy — which may explain the rush to protect our “new oil.”

Africa’s policymakers are on track to get it right

Africa is at a critical inflection point. The continent’s ability to compete in a services and data-driven global economy hinges on whether African entrepreneurs and enterprises will be free to innovate and scale their products and services using the most advanced commercial cloud technologies powered by cross-border data flows.

Trust in the security of cross-border data flows will increase as the continent adopts harmonized privacy and data protection policies and regulations in line with the most measured and enabling international standards. The African Union Convention on Cybersecurity and Personal Data Protection (Malabo Convention), which seeks to create a continental data protection framework, has been signed by 14 of 55 member states. A working draft of the Digital Transformation Strategy for Africa reflects a priority to support ratification of the Malabo Convention and the Budapest Convention on Cybercrime during the 2020 session of the African Union.

Bottom line: There is good reason to be optimistic about Africa’s development trajectory. Overly broad data localization requirements would undermine the continent’s progress. With global trade in services growing more than 60% faster than traditional trade in goods, Africa’s success in a data-driven era will depend on modern and harmonized regulations that protect the open flow of data across international borders. Africa’s policymakers have every opportunity to get it right.

 

This article was first published by The Africa Report.

 

 

 

 

 

Articulating the Business Case for Investing in Compliance Programs

In our experience, compliance professionals spend a significant amount of time and resources focusing on the “how” – designing, implementing, sustaining, and improving effective compliance programs. This focus is no doubt warranted given recent emphasis by enforcement authorities on the need for corporates to test the effectiveness of their compliance programs. However, we believe it is critical for compliance professionals and their business clients not to lose sight of the “why” behind their compliance agendas, including how to best articulate the business case for investing in a robust compliance program.

When asked why a particular compliance initiative or resource is necessary, compliance professionals may have the urge to rely on guidance from enforcement authorities, framing their response under the rubric of “the regulators’ expectations.” While pronouncements from enforcement authorities can, and should, be a part of such a conversation, relying solely on such pronouncements may not be fully satisfactory to business stakeholders who are not experts in compliance. Worse, it can give business stakeholders the impression that the compliance professional’s response to the “why” question is effectively “because I said so.”

Regardless of the maturity of a company’s compliance program, the ability to effectively articulate the business case for the program can be a vitally important item in a compliance professional’s toolkit, and critical to the overall effectiveness of the program. Among other things, achieving buy-in and support from employees, executives, and directors, as well as external stakeholders, such as business partners, will depend in large part on whether they believe that compliance initiatives are ultimately actually worth the time, resources, and effort.

With this in mind, we briefly outline below some of the key aspects of the business case for investing in a compliance program. As the business case will vary depending on the risk profile, operations, and culture of the organization, there is no “one size fits all” solution here.

  • The Insurance Policy

A number of international legal regimes provide powerful incentives for the development and implementation of effective compliance programs by offering the prospect of more favorable resolutions in enforcement actions. Most notably for companies with potential exposure to U.S. law are the U.S. Sentencing Guidelines, under which a company can receive substantial discounts to criminal fines where it can demonstrate the maintenance of an effective compliance program. Along similar lines, under the U.S. Department of Justice’s (“DOJ”) Foreign Corrupt Practices Act Corporate Enforcement Policy, a company may be entitled to the presumption of a declination of prosecution altogether, or considerable discounts on applicable fines, if, in addition to voluntarily disclosing misconduct and cooperating in DOJ’s investigation, it demonstrates the “[i]mplementation of an effective compliance and ethics program.” In both cases, the ability to put a dollar amount on the value of an effective compliance program, at least as regards the costs of resolving an enforcement action, can be quite powerful in making the case for additional compliance resources.

The UK Bribery Act takes a different approach, providing an affirmative defense for the corporate offense of failure to prevent bribery where a company can demonstrate that it has put in place “adequate procedures.” And even in legal regimes where such incentives are not hard-wired into the enforcement framework, enforcement authorities may consider the strength of a company’s compliance program as a matter of prosecutorial discretion, e.g., as a mitigating factor in the assessment of penalties, or a reason to decline to bring an enforcement action altogether.

  • The Security System

While the potential for more favorable resolution of enforcement actions is, in our experience, one of the most compelling aspects of the business case for investment in a compliance program, compliance officers should also focus on the potential for effective programs to detect and prevent potential fraud, corruption, and other compliance breaches either before they happen, or soon enough for companies to take meaningful mitigation actions. In this sense, a company’s compliance program functions as an early warning detection system.

The potential cost savings in this regard can be substantial. In its 2018 Report to the Nations, after analyzing over 2,600 cases of corporate fraud, the Association of Certified Fraud Examiners estimated median direct losses of USD 130,000 per case, with more than 20% of cases involving losses of USD 1 million or more. Moreover, given that these estimates do not include indirect downstream losses such as loss of business, legal fees, or costs from personnel turnover, they likely understate the true cost of compliance breaches, and, correspondingly, the true value of effective compliance programs in avoiding or reducing such losses.

  • Avoiding Bad Deals

Along similar lines, when it comes to investment transactions or other transactions with business partners, a robust compliance program can help companies avoid bad deals. For example, robust integrity due diligence on potential business partners and investments can help a company identify significant fraud and corruption risks before the ink is dry and deals are consummated, thereby reducing the risk of follow-on investigations and/or enforcement actions. Additionally, robust pre-investment compliance measures can reduce the risk of adverse operational and financial consequences, such as overpayment for assets, the need to unwind problematic relationships with business partners, or exiting markets or business lines altogether due to compliance concerns.

  • Enabling Business and Creating a Competitive Advantage

While much of the foregoing discussion focuses on avoiding losses, compliance professionals should also make the case for compliance efforts as activities that affirmatively create value for a business enterprise.

At the highest level, an effective compliance program provides guardrails that help a company to achieve business objectives while mitigating compliance risks. Good compliance officers are “business enablers” who do not say “no” reflexively, but instead work with the business to fully understand risks and business objectives and devise tailored, fit-for-purpose mitigation measures.

A company with an effective risk-based compliance program may be able to function successfully in a high-risk market, whereas a company with a weaker compliance program may decide that it is not up to the challenge of operating in such a market, or worse, may go into the market unprepared for the compliance challenges it will face. This dynamic is particularly noteworthy in Africa, where we sometimes encounter companies who perceive the compliance risks of certain markets as too high, leading them to pass on opportunities that could be realized if they had sufficiently robust compliance programs. Realization of efficiencies from well-run compliance programs, e.g., streamlining vendor diligence and on-boarding processes with the use of technology, can also impact the bottom line by freeing up valuable resources.

The ability to operate efficiently in higher-risk environments can give companies a significant competitive advantage, but they are by no means the only competitive advantages that companies can realize from maintaining robust compliance programs. In the procurement context, for example, many of our clients evaluate the strength of their suppliers’ compliance programs alongside traditional commercial criteria such as price and quality of services. In addition, lenders and investors are increasingly factoring compliance considerations into their decision-making processes. Finally, in an environment where issues such as sustainability and human rights are driving consumer and employee choices, companies should be prepared for integrity issues to become increasingly relevant to consumers and employees, who may vote with their feet if they are unsatisfied with a company’s commitment to compliance.

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The factors outlined here are by no means exhaustive, and the framing of a business case will be informed by the information available to a company. It may go without saying that companies that are better able to capture and analyze information that quantifies the return on investment from their compliance programs are better able to articulate a compelling business case. This provides additional reason for companies to focus on the use of metrics in designing, implementing, and evaluating the effectiveness of their programs.

If you have questions about corporate compliance matters, please contact Ben Haley at bhaley@cov.com, Sarah Crowder at scrowder@cov.com, or Mark Finucane at mfinucane@cov.com. This article is intended to provide general information. It does not constitute legal advice.

 

© 2019 Covington & Burling LLP. All rights reserved.

Five Key Considerations For Handling Internal Corporate Investigations

Companies today face increasingly complex regulatory frameworks globally and intense levels of corporate scrutiny from government enforcement agencies around the world. As government agencies embrace sophisticated crime-busting technology and the world shrinks through greater inter-agency cooperation, there are more ways than ever for governments to identify misconduct and hold companies to account through criminal prosecutions and steep fines. Accordingly, companies faced with a potential compliance issue need to be prepared to respond to these issues with an effective internal investigation.

An effective internal corporate investigation can benefit a company in a number of ways. Not only does it assist a company in uncovering compliance failures and putting remedial measures in place, it also assists the company, when faced with evidence or allegations of potential wrongdoing, to respond deliberately and thoughtfully, ensuring that it understands all the facts. Effective internal investigations can also benefit the company by influencing the amount of a criminal fine, the type of government resolution potentially available, and protecting the company’s reputation. To maximize these benefits, corporate defendants need to be able to show prosecutors that the internal investigation was independent, reliable, and credible.

In a previous article, we have outlined the unique challenges of conducting effective internal investigations in Africa. Here, we revisit some of the lessons learned from our investigations practice (in Africa and elsewhere), outlining five universal considerations for effectively handling sensitive internal corporate investigations.

  • Define the Scope of the Investigation

Investigations can be initiated for a multitude of reasons, from allegations of wrongdoing by the media, civil litigation, whistleblower complaints, regulatory inquiries, or even findings in an unrelated investigation. The potential issues to probe can be just as varied. Defining the scope of the investigation is therefore a crucial step to be taken at the outset of the inquiry. Among the questions to ask in order to ensure that the investigation is appropriately scoped are the following:

  • What are the specific allegations?
  • What is the company’s potential legal exposure?
  • Who are the potential perpetrators?
  • What are the relevant timeframes?
  • Who are the potential witnesses?
  • Who may possess documentary evidence relevant to the inquiry and where can these documents be found?

A written investigation plan is a useful tool to outline the goals of the investigation and the investigative steps, and more generally to keep the investigation on track. The contents of the investigation plan and the proposed investigative steps will of course have to be determined on a case-by-case basis, but it should generally include at least a review of documents and interviews with key individuals and witnesses. Bearing in mind that it is never possible to predict the entire course of an investigation, from the outset, with mathematical precision, it is important to ensure that the investigation plan allows for a degree of flexibility, providing the investigation team the ability to adapt the plan as the investigation progresses and evidence is reviewed.

  •  Preserve All Potentially Relevant Data – Documents, Devices and Testimony

Document and data preservation is a vital consideration in any investigation. Generally, companies should consider issuing a document hold (sometimes called litigation hold) to all individuals who potentially have relevant documents. There are, however, sometimes strategic reasons for not publicizing an investigation through a document hold, such as where there are concerns that notice of the investigation may raise the risk that employees will make efforts to destroy relevant documents and data. In such cases, companies can mitigate this risk of spoliation through advanced imaging of employee devices, disabling deletion functionality on company platforms, and other preservation measures as may be appropriate.

To the extent that preserving witness accounts by interviews is concerned, there may be instances in which the investigation team is faced with the imminent departure of an employee from the company. In those instances, it will be important that the employee’s account is obtained as quickly as possible. If a government agency is or becomes involved in the investigation, the company is likely to be called upon to explain what steps it took to preserve potentially relevant data, and it is therefore essential that all steps taken to do so are well documented.

  • Interview Witness At The Right Time

Companies need to be thoughtful about the appropriate timing of witness interviews. In an ideal world, interviews would not take place until a company has been able to review and digest all of the relevant documents necessary to have a full picture of the written record. Documents not only provide the interviewer with context to ask targeted questions, they also serve as a vital tool to jog forgetful interviewees’ memories, or to confront witnesses with facts they may be reluctant to acknowledge.

But investigations are often fast-moving, with real-time implications for the company and unique circumstances that merit accelerating certain witness interviews before a full document review can be completed. These situations include instances where an employee is imminently departing the company, where misconduct may be ongoing, or where they are necessary to meet the demands of government agencies.

Additionally, to account for circumstances where witnesses may speak to one another regarding the substance of the interviews (despite instructions not to do so), the company should consider the order and timing of interviews, including potentially conducting simultaneous interviews.

  • Consider Whether To Voluntarily Disclose

Deciding whether or not to make a voluntary disclosure to prosecutors is often a vexing question for the company, with the potential for significant ramifications. Depending on the laws of the relevant jurisdiction, there may be significant incentives to making a voluntary disclosure in the form of a more favorable resolution of an enforcement action, or a declination from prosecution altogether.

While there is no magic formula to make these decisions, some of the factors a company should take into consideration include the likelihood that enforcement authorities will come to learn of the investigation findings in the absence of voluntary disclosure, the seriousness of the alleged conduct, and the risk posed to the company should the allegations come to light.

  • Remediate

With the benefit of a credible and reliable investigation, a company will be well positioned to make effective decisions about how to remediate any issues identified.

The critical element of any remediation plan is that the actions taken be appropriate and proportional to the conduct identified. The appropriateness of the remedial steps taken by a company, including initiating disciplinary action against the responsible employees and potentially terminating their employment, and implementing and/or enhancing existing practices, policies and procedures, are critical factors taken into account by government agencies when assessing an appropriate resolution of potential civil or criminal charges.

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Conducting an effective corporate internal investigation that is well-designed, with a specific work plan that addresses key elements such as document preservation, witness interviews, and prompt remediation, can yield many benefits for a company facing allegations of misconduct.

While no two investigations will ever be the same, building an investigation with these five building blocks in mind will provide companies with a solid foundation from which to move their organizations forward while minimizing disruption to the extent possible.

If you have questions about handling internal corporate investigations, please contact Ben Haley at bhaley@cov.com, Mark Finucane at mfinucane@cov.com, Sarah Crowder at scrowder@cov.com, or Ahmed Mokdad at amokdad@cov.com. This article is intended to provide general information. It does not constitute legal advice.

© 2019 Covington & Burling LLP. All rights reserved.

It’s Time for AGOA 2.0

The African Growth and Opportunity Act (AGOA) is set to expire in 2025. That may be the distant future for some but given the time required to pass trade legislation in the U.S. Congress, it’s the functional equivalent of tomorrow’s mid-day meal. Preparation for the post-AGOA trade relationship between the U.S. and Africa needs to begin now.

AGOA has had important successes but improvements need to be made to the program. The legislation, which removed all tariffs on 6,400 products available for export to the U.S., helped to move the U.S.-African relationship from aid to trade, from donor-recipient to one of mutual benefit and gain. In return, the U.S. required only that the nearly 40 participating African countries be making progress on economic and political reforms and pose no threat to U.S. national security. These conditions constituted a low bar as the number of AGOA countries has been relatively stable since the legislation went into effect in 2000.

In terms of promoting exports to the U.S., AGOA has had measured success. Some countries, such as South Africa, have benefitted significantly. South Africa’s auto exports to the U.S. under AGOA have created tens of thousands of jobs in that country and in the auto supply chain in neighboring countries.

Apparel exports from other countries, such as Lesotho, Ethiopia, Mauritius, eSwatini and Kenya have also created a similar number of jobs. These apparel exports are important not only for the jobs created but for the labels that say Made in Mauritius, Made in Lesotho and Made in Kenya, for example. When apparel from AGOA exporting countries are found by American consumers in their favorite stores next to clothing from Canada and Mexico, not to mention China, they begin to think about African nations as reliable and cost-effective suppliers to American households.

AGOA’s shortcoming is that not enough African countries have benefitted on a scale that genuinely moves the needle when it comes to job creation, exports of apparel and how Americans perceive the continent. The call by Congress in 2015 for all AGOA beneficiaries to develop export strategies to take advantage of the program has borne little fruit as barely half of AGOA countries have created such strategies.

Yet other important benefits have been generated by AGOA. It put trade and investment at the center of the U.S.-African relationship which the Trump administration is trying to deepen through its Prosper Africa initiative. Passage of the legislation also created an enduring bipartisan consensus between Democrats and Republicans in Congress based on the recognition that the U.S. has interests in Africa worth investing in. This bipartisan consensus funded the President’s Emergency Plan for AIDS Relief (PEPFAR), the creation of the Millennium Challenge Corporation and most recently led to the establishment of $60 billion U.S. Development Finance Corporation, in addition to a host of other programs. In short, AGOA is the cornerstone of the U.S.-African relationship.

The principal challenge to AGOA, apart from the fact that only a small number of nations have taken advantage of the legislation, are the dramatic changes that have occurred in Africa in the twenty years since President Clinton signed the law into effect. The region has become home to half of the world’s twenty fastest growing economies and a middle class in the tens of millions. The African Continental Free Trade Agreement (AfCTA) is poised to significantly increase intra-regional trade. In addition, China has overtaken the U.S. as the continent’s leading trade partner, the European Union is implementing Economic Partnership Agreements (EPAs) across the continent and countries such as Turkey, India and Russia have become significant commercial actors on the continent.

It is time therefore to update the AGOA framework. Most specifically, reciprocity needs to replace the non-reciprocal structure of the current trade relationship. AGOA 2.0 also needs to be developed in a manner consistent with the implementation of the AfCFTA. AGOA’s benefits should be extended past 2025 as long as agreement has been reached on the phase-in of mutually reciprocal trade benefits. The phase-in periods should be different for Africa’s low income, lower-middle income and upper-middle income countries.

Revising the AGOA framework should be a priority in the U.S.-African relationship as U.S. goods and services are being increasingly discriminated against in Africa—at a time when the commercial relationship should be deepening. Given the EPAs, for example, a refrigerator or tractor being exported from an EU country will enter the South African market with a 4.5 percent tariff. That same refrigerator or tractor coming from the U.S. will face a 18.4 percent tariff. Not only does this stifle the U.S.-African commercial relationship but it also discriminates against African consumers and companies who will automatically find American products to be more expensive.

The task of AGOA 2.0 therefore is not only to level the commercial playing field for U.S. goods and services in Africa but to do it in such a way that it facilitates the implementation of AfCFTA. Negotiations for a modernized AGOA framework should be well underway by the time of the next U.S.-Africa trade ministerial to be held in Washington in 2020. At the same time, the Trump administration should jettison its time-consuming and unproductive effort to find a single African government with whom to negotiate a “model” free trade agreement and double down on its welcome endorsement of the African Continental Free Trade Agreement. Supporting the implementation of the AfCFTA and ensuring American competitiveness in all of Africa’s markets is the most immediate and important U.S. commercial objective in the region.

 

This post was originally published on The Africa Report.

 

Forests are on Fire: What the UN Climate Action Week Means for Africa

Fires have ravaged Brazil’s Amazon rainforest, burning over 1,330 square miles of tree cover, and placing people, wildlife, and their habitats at risk. Experts warn that further degradation could inhibit the forest’s ability to release oxygen and absorb heat-trapping carbon dioxide—a key function for combatting climate change.

The fires in the Amazon have been met with an international response. The G7, for instance, offered to contribute approximately $20 million to fight the blazes.

Yet the Amazon is not the only forest whose welfare is key for habitability. The Congo Basin forest, also known as the Earth’s “second lung,” is the second largest tropical rainforest behind the Amazon. It too is on fire.

In the month of August alone, at least 70% of the fires burning worldwide on an average day were in Africa, many of which were in the Congo Basin. Though fires can serve a critical component of savanna ecosystems, deforestation from practices such as “slash and burn,” pose a great threat to the forest. Continued deforestation could impact rainfall patters and exacerbate insecurity of freshwater and food supplies.

While a direct comparison as to which fire is worse remains unclear, it is evident that deforestation strains the environment in the short-term, and can have far-reaching implications long-term.

Below are two critical mechanisms through which the international community can unify stakeholders to address deforestation and climate change, particularly as they relate to Africa.

The Paris Agreement

The Paris Agreement is an international agreement under the UN Convention on Climate Change that codifies States’ pledges to reduce greenhouse gas emissions, and sets a framework for these reductions, beginning in 2020. Entered into force on November 4, 2016, the Agreement was ratified by 186 parties, including 90% of African countries.

In principle, the Agreement was intended to improve upon and replace the Kyoto Protocol, which bound signatories to emission reduction targets. The Paris Agreement specifically aims to do two things:

  1. Strengthen the global response to the threat of climate change by pursuing efforts to limit warming this century to 1.5 to 2 degrees Celsius above pre-industrial levels; and
  2. Strengthen the ability of countries to deal with the impacts of climate change.

As the Intergovernmental Panel on Climate Change has indicated, “most African countries are highly vulnerable to climate change.”

To address this concern, the Agreement envisions putting in place appropriate financial flows, a new technology framework, and an enhanced capacity building framework to support action by the most vulnerable countries. Importantly, these frameworks are designed to be in line with States’ own national objectives, known as nationally determined contributions (“NDCs”) (Article 4, para 2).

Of particular importance to many African countries, the Agreement recognizes the different positions of developed and developing countries and adjusts the goals accordingly. Where for instance, the Agreement states that “developed countries should the lead by undertaking economy-wide absolute emission reduction targets,” it recognizes that developing countries should instead “continue enhancing their mitigation efforts, and are encouraged to move over time towards economy-wide emission reduction or limitation targets in the light of different national circumstances” (Article 4, para 4).

UN Climate Action Summit

The UN Climate Action Summit (the “Summit”) on September 23, 2019, brings together leaders from governments, the private sector, civil society, and other international organizations to accelerate actions to implement the Paris Agreement. Specifically, the Summit encourages these stakeholders to create concreate, realistic plans to enhance their NDCs by 2020, in line with reducing greenhouse gas emissions by forty-five percent over the next decade. The Summit focuses on the following areas:

  • a global transition to renewable energy;
  • sustainable and resilient infrastructures and cities;
  • sustainable agriculture and management of forests and oceans;
  • resilience and adaptation to climate impacts; and
  • alignment of public and private finance with a net zero economy.

One area directly concerns deforestation, while another concerns adaptation—both relevant to Africa’s landscape. Moreover, the UN Secretary General has prioritized several action portfolios, which are recognized as having high potential to curb greenhouse gas emissions and increase global action on adaptation and resilience. The two below offer potential for increased participation from African countries:

  • Finance — mobilizing public and private sources of finance to drive decarbonization of all priority sectors and advance resilience;
  • Resilience and Adaptation advancing global efforts to address and manage the impacts and risks of climate change, particularly in those communities and nations most vulnerable.

In tandem, the mechanisms above provide avenues through which stakeholders can address climate change in Africa at an international level. Due to increased forest fires, in part caused by deforestation, there is a need to continue supporting climate governance in Africa and ensure progress towards the articulated goals.

There is still an opportunity for governments and the private sector to fight the fires—by innovating within this framework to develop actionable regional approaches.

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