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Recommendations for revisions to the commercial law and justice component
of the draft JSSIP III
Volume 1: Report
20 February 2015
The impact of the Ebola crisis on Sierra Leone’s commercial law
and justice priorities
The Law & Development Partnership Ltd 1-3 Staple Inn, London, WC1V 7QJ t +44 (0)20 7636 6856 f +44 (0)20 7900 6886 www.lawdevelopment.com info@lawdevelopment.com
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Contents
Executive Summary ............................................................................................................................. 3
Abbreviations ....................................................................................................................................... 4
Background and Introduction .............................................................................................................. 5
Overview of the economic impact of Ebola on the Sierra Leonean economy .................................... 5
GoSL post Ebola planning .................................................................................................................... 7
The impact of the Ebola outbreak on commercial law and justice in Sierra Leone ............................ 8
Recommendations for revisions to the commercial law and justice component of the draft JSSIP III10
Strengthening GoSL’s processes and capacity for commercial contract negotiation and strengthening ......................................................................................................................... 10
How LASER could help ....................................................................................................................... 13
Annex A: Documents considered ...................................................................................................... 15
Annex B: People met ......................................................................................................................... 16
Annex C: Long list of potential legislative reforms ............................................................................ 17
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Executive Summary
This report was developed at the request of Sierra Leone’s Attorney General and Minister of Justice
and is funded by the Legal Assistance for Economic Reform (LASER) programme. The report
identifies three immediate commercial law and justice priorities for the Government of Sierra Leone,
(GoSL) to assist with its post Ebola recovery, and suggests how LASER could support the GoSL to
address these.
1) Strengthen processes and capacity for commercial contract negotiation
Firstly, post Ebola recovery offers opportunities for new concessions to be granted to international
extractives firms, aimed at expediting economic recovery. It is vital that systematic processes of legal
scrutiny are applied when entering into new MOUs and contracts.
Should due consideration not be given to this area, there stands to be significant financial and social
implications for Sierra Leone. Not only does the GoSL stand to lose out financially, but if agreements
are hastily made with investors without due attention being given to the rights of local communities,
there is the potential for social unrest and conflict.
2) Strengthen commercial dispute resolution – including at the community level
Commercial dispute resolution mechanisms were slow, complicated and expensive before the
outbreak of Ebola. The Ebola outbreak has led to a substantial worsening of the court backlog. Quick
and immediate measures to deal with the mounting backlog could include piloting the use of ADR
and enhanced case management techniques drawing on experiences in Nigeria and Ghana.
In addition it is foreseen that support will be needed for dispute resolution at the community level.
One potential fall-out from the Ebola crisis is likely to be an increase in disputes, particularly an
increase in inheritance, succession and property disputes. Particular attention must be given to the
most vulnerable groups (woman and children) who have historically been side-lined in such disputes.
3) Develop a programme for prioritising, enacting and implementing key commercial laws
Not only does Sierra Leone face a backlog of laws from before the crisis, but the crisis has itself
revealed and spawned the urgent need for legislative updating. There is a ‘long list’ of 33 laws that
have been identified across government for reform, including newly proposed laws, which have
arisen as a result of the Ebola crisis.
LASER’s Technical Support
If requested by the GoSL, LASER could supply an adviser to the Ministry of Justice with a focus on the
development of processes and procedures for effective contract negotiation and enforcement,
drawing in and leveraging specialist technical legal support where required. Support could also be
provided to the Judiciary to develop an ‘emergency’ plan to deal with the backlog of commercial
cases, and pro bono expertise sourced (e.g. from the UK Judiciary) to assist with implementation.
Support could also be provided to the GoSL to develop a prioritised legislative programme.
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Abbreviations
A4P Agenda for Prosperity ACC Anti-Corruption Commission ADR Alternative Dispute Resolution ASJP Access to Security and Justice Programme CA Christian Aid CAC Corporate Affairs Commission CBO Community Based Organisations CHISEC Chiefdom Security Committee CLJ Commercial Law and Justice CP Child Panel CPA Criminal Procedure Act CSOs Civil Society Organisations DFID Department for International Development DISEC District Security Committee FTCC Fast Track Commercial Court FSU Family Support Unit GoSL Government of Sierra Leone GLC General Legal Council HRCSL Human Rights Commission of Sierra Leone IPCB Independent Police Complaints Board JLSC Judicial and Legal Service Commission JP Justice of Peace JSCO Justice Sector Coordination Office JSRSIP Justice Sector Reform Strategy and Investment Plan LAB Legal Aid Board PLC Parliament Legislative Committee LG Leadership Group LOD Law Officers Department LPPB Local Police Partnership Board LRF Law Reform Commission MAFFS Ministry of Agriculture, Forestry & Food Security MIA Ministry of Internal Affairs MDA Ministries, Departments and Agencies MFAIC Ministry of Foreign Affairs and International Cooperation MSWGCA Ministry of Social Welfare, Gender and Children’s Affairs MTI Ministry of Trade & Industry NRA National Revenue Authority OARG Office of the Administrator and Registrar General ONS Office of National Security OoO Office of the Ombudsman SEZ Special Economic Zone SLCB Sierra Leone Central Bank SLIEPA Sierra Leone Investment & Export Promotion Board SLCS Sierra Leone Correctional Services SGBV Sexual and Gender Based Violence SME Small & Medium Size Enterprises
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Background and Introduction
1. This report was developed at the request of Sierra Leone’s Attorney General and Minister of
Justice and is funded by the Legal Assistance for Economic Reform programme (LASER1). It
reviews the impact that the Ebola outbreak has had on Sierra Leone’s economy and in
particular on commercial law and justice (CLJ) issues. In the light of this analysis the report
makes recommendations on key CLJ priorities for the Government of Sierra Leone (GoSL) as
the country moves into post Ebola recovery. The recommendations imply some re-focusing of
the GoSL’s CLJ priorities identified during the development of its third Justice Sector Strategy
and Investment Plan 2015-18 (JSSIP III).
2. Since November 2014, the GoSL has been working to analyse both pre-Ebola priorities, which
were interrupted by the Ebola outbreak, and post Ebola recovery planning and strategies. This
report draws on these developing plans and strategies, together with information provided
during meetings in Freetown with key informants. The report identifies three immediate CLJ
priorities for the Government of Sierra Leone to assist with post Ebola recovery:
Strengthening GoSL’s processes and capacity for commercial contract negotiation;
Strengthening commercial dispute resolution – including at the community level; and
Developing a programme for prioritising, enacting and implementing key commercial laws.
3. The analysis for this report was undertaken between December 2014 and February 2015 by
the LASER team, including an in-country international legal expert. The UK Sierra Leone Pro
Bono Network also gave input into this report.2 Documents considered are listed in Annex A
and people met in Annex B.
Overview of the economic impact of Ebola on the Sierra Leonean economy
Economic challenges for post Ebola recovery
4. The Ebola outbreak in Sierra Leone has all but devastated the commercial and investment
sectors. The country, listed among the poorest countries in the world, lies 11th from the
bottom of the Human Development Index.3 Ebola is a humanitarian crisis first and foremost;
but it is also a mounting economic disaster for Sierra Leone. The World Bank has estimated
that the cost of the epidemic could be up to $6.2bn.4 The World Bank forecasts a -2% decline
in GDP for 2015 in Sierra Leone.5 The impact is measurable in terms of reduced production,
1 LASER is funded by the UK Government and is implemented by KPMG and The Law & Development Partnership 2 The UK Sierra Leone Pro Bono Network (UKSLPBN) was established in 2014, and is supported by LASER. It is an umbrella network for UK legal professionals and organisations interested in providing pro bono legal assistance to Sierra Leone. The UKSLPBN focuses on meeting specific demands from the GoSL for legal assistance. The UKSLPBN were consulted before the publishing of this final report 3 See http://hdr.undp.org/en/countries/profiles/SLE 4 See World Bank Press Release ‘Ebola: Most African Countries Avoid Major Economic Loss but Impact on Guinea, Liberia,
Sierra Leone Remains Crippling’ [January 20, 2015]. Full text document available at:
http://www.worldbank.org/en/news/press-release/2015/01/20/Ebola-most-african-countries-avoid-major-economic-loss-but-impact-on-guinea-liberia-sierra-leone-remains-crippling 5 See World Bank ‘Update on the Economic impact of the 2014 Ebola Epidemic on Liberia, Sierra Leone and Guinea’ [December 2, 2014]. Full text document available at:
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diminished trade, disrupted agriculture, output forgone, higher fiscal deficits and rising
prices.6 Household incomes are dropping due to the reduction in the labour market, the loss
of harvests, reduced passengers for transport operators, the temporary and occasional closure
of markets, partial operations of banks, restrictions on the movement of people, the closure
of government offices and laying off of workers.
5. Sierra Leone’s business environment is challenging, with the 2015 Doing Business Index
ranking Sierra Leone at 140 out of 189 economies.7 With the Ebola outbreak businesses
including extractive industries, and small and medium-sized enterprises, have suffered a
monumental blow to their operations, with redundancies, corporate restructuring and
liquidation now a frequent outcome.8 Operations at Sierra Leone’s port present bureaucratic
and other challenges9, which the Ebola outbreak has complicated. While the International
Maritime Organisation has not classified Freetown as an ‘unsafe port’10, several shipping
organisations11 have issued their own guidance on the risks associated with vessels calling at
affected countries.12
6. Three million people of Sierra Leone’s population of six million need jobs, but that there are
only 90,000 formal jobs in the economy. An estimated 800,000 youth between the ages of 15
and 35 are actively searching for employment.13 The Ministry of Finance has summarised the
situation in its draft Post Ebola Recovery Plan (see Document 1 in Annex 2):
The disease has caused unprecedented social and humanitarian damage, accompanied by severe
economic consequences. It has remarkably decreased the impressive gains made in economic growth
over the years, as farmers, traders14, investors and a range of economic agents have extensively been
affected by the epidemic. Key economic activities, including agriculture, mining, manufacturing,
construction, trade and commerce, transport, and tourism, have been disrupted, and this has hiked
the rate of national unemployment.
http://www.worldbank.org/content/dam/Worldbank/document/Economic%20Impact%20Ebola%20Update%202%20Dec%202014.pdf 6 See Ministry of Trade National Threat Assessment paper in Volume 2 at Document 3 7 See http://www.doingbusiness.org/~/media/giawb/doing%20business/documents/profiles/country/SLE.pdf, Accessed 16/01/2015 8 For example AML, London Mining, Comium, Tropical Farms Ltd. 9 Note that The Agenda for Prosperity (PRSP 3), under Pillar 4, International Competitiveness observes under Objective 2: ‘Improve the Doing Business Environment’, where the Government’s ‘Key Reforms to target, in particular’ include: Improving procedures at the port to facilitate export and import trading. See also WB Doing Business Index, 2015, ranking Import Procedure days (‘Time to import’) at 28, with 8 documents required. GDP 10 The International Maritime Organisation has not classified Freetown port ‘unsafe’ as per the safety standards set out by precedent in “Eastern City” [1958] 2 Lloyd’s Rep. 127, at page 131. 11 This includes the International Chamber of Shipping, the International Maritime Employers’ Council and the International Transport Workers’ Federation 12 Source: interview with Sierra Leone Maritime Administration 13 See UNDP website: Tackling youth unemployment in Sierra Leone at
http://www.sl.undp.org/content/sierraleone/en/home/ourwork/povertyreduction/successstories/tackling_youth_unemployment_umaru/ visited 23/12/2014. JSEC should be mindful under the National Budget 2015 presented on 14/11/2015 under Labour and Social Security: the consultant notes that ‘Le5.3 billion is proposed to be allocated to review obsolete laws for private sector employment promotion’. 14 In Sierra Leone, trade is based on the exchange of goods and ideas, but people are too scared to shake hands, or leave their homes.
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The role of the private sector in mitigating impact
7. The Ebola Private Sector Mobilisation Group (EPSMG)15, a coalition of more than 48
companies with major assets and operations in West Africa, has attempted to mitigate the
effects of the wider private sector economic commercial impact in Sierra Leone through its
consortium. The EPSMG have provided operational support for any company with a presence
in the country, with a focus (although not exclusively) on assisting those in the mining and
natural resource sector.
8. Additionally, various private sector organizations in Sierra Leone16 have fledgling position
papers, which are being further developed. (See document 2 in volume 2 of this report
prepared by the Sierra Leone Business Forum).
Economic opportunities afforded by the Ebola outbreak
9. It is also the case that some sectors of the economy have benefitted from the outbreak. The
GoSL is spending a larger than planned part of its 2014/2015 budgets on healthcare, and on
reactive and preventive measures to contain the disease. Businesses selling materials used for
the screening and treatment of the disease, and products widely perceived to protect from
potential infection, such as hand sanitizers and antibacterial soap, have benefitted.
10. The outbreak presents opportunities for businesses in Sierra Leone such as pharmaceuticals
and research and development organisations, particularly with regard to joint ventures with
international firms in relation to vaccine research and development, trials, etc. In the Ebola
recovery phase we are also likely to see an increase in the contracting out of basic social
services, which provides significant opportunity for service providers.
11. There is also the potential for e-commerce to increase in popularity as people avoid public
places. Various new e-commerce platforms are already evident. An Irish consortium has
almost completed the installation of a fibre optic ‘highway’ in Sierra Leone.
GoSL post Ebola planning
12. Various MDAs have begun to plan for post Ebola recovery, although limited coordination
between them is a cause for concern. Of particular importance is the Ministry of Finance and
Economic Development’s Sierra Leone Post Ebola Recovery Strategy (ERS) (initial draft January
2015) which sets out a framework for speedy recovery of economic activities, compatible with
the goals of the Agenda for Prosperity. Section 4.5 of the ERS sets out the GoSL’s strategies to
recover economic sectors, the key objectives of which are:
i. To re-launch economic activities in the various sectors to stimulate employment and
revenue generation.
15 See www.epsmg.com, see also generally consortia success in the UK House of Commons, International Development Committee ‘Recovery and Development in Sierra Leone and Liberia’ Sixth Report of Session 2014–15, 2 September 2014, HC-247, Point 15, Use of Consortia. 16 The consultant visited the following private sector organizations during January 2015 in order to ascertain their post-Ebola planning: The Sierra Leone Chamber of Commerce; the Sierra Leone Agriculture Chamber of Commerce; and the Sierra Leone Business Forum (SLBF).
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ii. To improve the image of the country to re-gain the confidence of private investors.
iii. To plan and work towards expanding public infrastructural investment
programmes to
1. meet emerging demand from a planned health sector that is robust to
responding to any future health emergencies and addressing the general
healthcare needs of the population;
2. meet emerging demand from all socioeconomic sectors that will be directed
towards ensuring increased economic growth and sustainable
development.
13. The epidemiological uncertainty of predicting the cessation of Ebola outbreak in Sierra Leone,
has prompted the Government to present two budgets for the financial year: the first for a
‘best case scenario’ of Ebola being eradicated by March 2015 and a worst-case budget
scenario.
The impact of the Ebola outbreak on commercial law and justice in Sierra Leone
14. The draft JSSIP III which was developed in the midst of the Ebola crisis noted
The Ebola pandemic has also gravely affected the implementation of the strategy and action plan.
While trying to stick to the strategy and action plan, both the TWG and the LG are trying to be creative
in adapting to the current circumstance. For instance, decongestion plans have been fast-tracked with
the sector proposing an augmentation of the number of people to be granted the Prerogative of
Mercy and the use of more ADR mechanisms to settle cases that could have been taken to the police
and court.17
15. This section considers the impact of Ebola on three key CLJ issues in Sierra Leone:
Commercial contracts;
Commercial dispute resolution; and
Commercial legislation
Commercial contracts
16. The unprecedented scale of the Ebola outbreak has led to the discharge of many commercial
contracts. Contractual obligations are being discharged, with contracting parties evoking
force majeure clauses in light of the Presidential decree of the State of Emergency in July
2014. This has created an unstable and unpredictable commercial climate to contract within.
This is further compounded by the GoSL’s general lack of technical capacity with regards to
commercial legal negotiations. Unclear on the language of force majeure clauses, and their
rights and obligations with regards to the same, GoSL negotiators are poorly equipped to
manage the volume of commercial contracts being discharged. As a result, several contracts
17 ‘Justice Sector Strategy and Investment Plan III 2015-2018 at paragraph 2.30
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spanning all industries have been discharged, but particular impact has been felt in the mining
sector where several large-scale mining projects have suspended activity altogether.
Commercial dispute resolution
17. The Ebola crisis has slowed down the functioning of most courts, with the High Court closing
down entirely for many months.18 This has significantly delayed the machinery of justice, and
has resulted in the already-large backlog of cases increasing. The Fast Track Commercial Court
observed that pending cases19 have been significantly delayed due to non-appearance by
litigants affected by travel bans, concomitant with the general view that the dual procedural
codes of the court20, often hampered speedy litigation prospects. By January 2015, the Court
had only addressed 4 cases21 since the outbreak of Ebola.
18. More generally, perceived human rights violations may mount and actions by individuals,
groups, civil society may be evident. Food insecurity, massive joblessness, idle youth and
fundamentalism may test GoSL to the proclamation of a state of emergency. Efforts are
needed now to identify justice sector responses and establish preventative measures.
Commercial legislation
19. Before the outbreak, Sierra Leone had a long list of areas of commercial (and other) laws,
which required modernisation. This list remains and new legislative priorities have been
added to it. The full legislative agenda envisaged for 2014 – 2015 by Parliament has been
delayed with MPs struggling to commute to Freetown to attend its sittings. Planned
commercial legislation has been temporarily shelved. Details are provided in box 1 below.
Box 1: Legislative priorities
As of December 20th 2014, The Attorney-General’s Offices, reports the following Bills were in Parliament: The Sierra Leone Correctional Service Act; National Carrier (Amendment) Act 2014; The Petroleum (Exploration & Production) Amendment Act 2014; The Companies (Amendment) Act 2014; The Universities (Amendment) Act 2014; The Borrowers and Lenders Act 2014; The Appropriation Act 2015;The Finance Act, 2015; The Road Transport Authority Amendment Act, 2014;Local Court (Amendment) Act, 2014; The Petroleum Regulatory Agency Act, 2014; Sierra Leone Correctional Service Act, 2014; The Universities (Amendment) Act, 2014; The Polytechnics (Amendment) Act, 2014; The Companies (Amendment) Act, 2014; The Public Health (Amendment) Act, 2014. In addition the following statutory instruments were also pending: The Ernest Bai Koroma University of Science & Technology (Establishment) Instrument, 2014; The Registration of Business Fees (Amendment) Rules, 2014;The Registration of Instrument (Fees) (Order) 2014; The Stamp Duty (Duty) (Fees) Amendment Order, 2014;The Public Emergency Regulations, 2014;The Minimum Wage Order, 2014 (S.I.); The Public Service Commission (Disciplinary Procedure) Regulations, 2014 (S.I.); The Arms and Ammunition Regulations, 2014; The Public Emergency (Detention) Order, 2014;The Fourth Parliament of Sierra Leone (Commencement of Third Session) Proclamation, 2014; Public Notices: Proclamation
Commercial legislation not yet in Parliament and considered a priority includes:
18 The High Court of Sierra Leone closed down for two and a half months after Ebola broke out, and only re-opened in September 2014. 19 The Registrar of the FTCC reported to the consultant, that 59 cases were filed between January – June 2014, 12 concluded at ADR, 20 concluded at judgment/rulings and 27 cases pending (document FTCC of 15/01/2015). 20 For example, the FTCC has its own Procedure Rules, however, must also utilise the High Court Rules (2007). It is suggested that a new set of Rules harmonizing the two Rules should be urgently developed. 21 For example Case number 039/14: Huawei Technologies Co. Ltd, on January 13, 2015.
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Ministry of Agriculture: Strategic Grain Reserve policy and Regulations; Live Animal Disease Act; Seed Policy and Seed Act; Phytosanitary policy and law; Produce Monitoring Board Inspection Regulations
Ministry of Trade & Industry: Sale of Goods Act; Competition law; Consumer Protection law, Food Safety law (latter being developed by Law Reform Commission)
Ministry of Lands: Land Policy and Provincial Land Act (Cap. 112).
20. As well as creating a legislative backlog, the Ebola outbreak has limited the GoSL’s ability to
take forward the development of much needed policies and new legislative initiatives. An
important example is the review and consultation of specific land policy proposals and
legislation necessary to implement a National Land Policy. Draft Five of the policy has not
evolved or progressed over the past year, from even the pre-Ebola era.
Recommendations for revisions to the commercial law and justice component of the draft JSSIP III
21. It is recommended that the work plan of the JSSIP III (and ideally the draft JSSIP III itself) be
amended in the light of the analysis above to reflect re-focused priorities in the light of the
impact of the Ebola outbreak. Recommended amendments are shown in table 1 below.
Table 1: Recommended amendments to outcome 4 of draft JSSIP III
Outcome 4: Commercial law and justice improved
Output Recommended amendments
Capacity of Law Officers Department, Judiciary and lawyers in private practice strengthened (output 1)
New activity: Strengthen capacity of GoSL lawyers and officials to negotiate
and manage commercial contacts, especially related to extractives. (Includes development and implementation of procedures, processes and training).
Perception of judicial independence and impartiality improved (output 4)
New activities: Develop and implement action plan to improve performance of
Commercial Court and address backlog Pilot initiatives to address community level disputes arising from
Ebola outbreak, and scale up if appropriate
Legislative and regulatory reform strengthened (output 3)
New activity: Develop and take forward prioritised legislative programme for
commercial law reform in light of new priorities identified by MDAs in light of Ebola outbreak.
22. These recommendations are discussed further below
Strengthening GoSL’s processes and capacity for commercial contract negotiation and strengthening
23. UK law firm Herbert Smith Freehills (HSF) has been providing assistance to the GoSL (Ministry
of Justice) during the Ebola crisis on the operation of force majeure provisions in contracts and
memoranda of understanding, building on their previous work to support contract negotiation
and management. The Ministry of Mining is in the process of putting together a Negotiations
Team, composed of key decision-makers in Government who will focus specifically on the
commercial re-engagement of large-scale mining projects. Post Ebola recovery offers
opportunities for new concessions to be granted to international extractives firms, aimed at
expediting speedy economic recovery. It is vital that new MoUs and contracts are entered into
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in the light of proper legal considerations and proper procedures for legal scrutiny. This area
was a challenge for the GoSL before the Ebola crisis. Following it, it is likely to be more acute.
The results of deficiencies in this area not only are that the GoSL stands to lose out financially,
but also the potential for social unrest and conflict arises if agreements are made with
investors, without due attention being given to the rights of local communities.
24. A further potential area for attention relates to legal issues associated with shipping and
international trade. Legal assessments should be made in relation to maritime transportation.
In addition, the Sierra Leone Insurance Commission may consider re-defining accepted risks of
loss22 in first-party property insurance policies. Some of the issues are outlined in box 2
below.
Box 2 Outline of potential legal issues arising out of the Ebola outbreak relevant to shipping and
international trade
Charterparties
Unsafe ports: Time charters will often contain express or implied safe port warranties, which will continue to apply despite the master’s duty to follow a charterer’s lawful orders.
Delays: Liabilities for delay will depend on the relevant facts and the charterparty wording. Potential relevant causes of delay, which may even amount to force majeure, may include refusals to grant free pratique, refusal of pilots to board vessels arriving from affected areas, the placing of vessels under quarantine, port closures, or the refusal of members of the crew to visit affected ports.
Force majeure: Port closures may lead to increased risks of delay, or deviation to alternative ports being necessary. Force majeure defences may be applicable
Bills of lading
Parties should also take account of their obligations under respective bills of lading issued for the cargo carried on board. Delays or late delivery or deviations may lead to claims from cargo interests for damages for deterioration to cargo or landing cargo in the wrong place.
Duty of care
Employers have a duty of care under individual contracts of employment. This duty has been reiterated in the various industry guidelines imposing stringent requirements on owners as a result of the outbreak.
Contracts of sale
If owners boycott Freetown Port, there will be a knock-on effect on sale contracts. In contracts on cost insurance and freight terms, sellers may find themselves unable to find a vessel to load and/or deliver their goods, in breach of their obligation to arrange for carriage.
25. Finally, to promote investment in off shore oil and gas exploration, consideration should be
given to UNCLOS applications for maritime delimitation in relation to the coastal waters
between Liberia and Sierra Leone and Guinea and for exclusive economic zones.
22 Property insurance policies generally insure either (1) “all risks” of physical loss unless perils are specifically excluded; or (2) “named perils” such as losses from specifically identified causes, for example, fire or earthquake. The typical “all-risk” policy begins with a broad insuring provision which states that the policy covers “direct physical loss or damages to Covered Property.” The insurer then specifies which risks it will not assume by listing those causes of loss as policy exclusions.
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Support to commercial dispute resolution
26. The proper functioning of Sierra Leone’s Commercial Court has been challenging from its
inception. The World Bank’s Doing Business data for 201523 gives an average number of 515
days for a commercial dispute to be resolved in Sierra Leone at an astounding cost of, on
average, nearly 40% of the claim. The Ebola outbreak has lead to a worsening of the backlog
situation, negatively affecting both the time and cost of resolving commercial disputes. There
is now an opportunity for a thorough review of the operations of the Commercial Court, with
a view to putting it on a proper footing so that it is fully fit for purpose. There are strong
regional models to learn from – for example Ghana and Nigeria. A much stronger emphasis on
the use of alternative dispute resolution (ADR) may be part of the solution. It was not possible
within the scope of this study to assess whether the backlog of commercial cases has now
reached a critical level and to develop an emergency response. Such an assessment should be
made quickly and an action plan developed to deal with the backlog – for example trialling /
piloting the use of ADR and enhanced case management techniques. A crucial first step for
expediting commercial dispute resolution is for Sierra Leone to ratify the New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1959, a point that
has also been highlighted by the UK Sierra Leone Pro Bono Network as a key action to
facilitate foreign investment, particularly post the Ebola crisis.
27. The High / Commercial Court deals with formal, large disputes. For the vast majority of the
population of Sierra Leone commercial dispute resolution (for example relating to land
disputes) happens at the community level. One potential fall-out from the Ebola crisis is likely
to be an increase in disputes – for example in relation to inheritance and property issues,
where the most vulnerable (women and children) are likely to be the losers. Building on work
done under the GoSL’s successive Justice Sector Strategies to make justice more accessible to
the people of Sierra Leone (supported by ASJP), an assessment need to be undertaken of the
extent of the issues and an understanding gained of where the problems are likely to be most
acute. The response could include support to Chiefs and to Magistrates to process cases
including training, support to community mediation and to community based paralegals. In
addition ASJP’s Leh Wi Know legal phone helpline and radio programme aimed at women
could have an important role to play.
Support for the development of key laws
28. Not only does Sierra Leone face a backlog of laws from before the crisis, the crisis has itself
revealed and spawned the urgent need for legislative updating. Perhaps one of the most
urgent needs is for a modern public health regime to replace the Public Health Act (1960),
introducing 21st Century sanitation regulations. There are also commercial laws that need
attention – including to respond the commercial opportunities offered by the Ebola crisis, for
example to provide an appropriate regulatory framework for vaccine research and
development and drug trialling. Annex C sets out a ‘long list’ of 33 laws that have been
identified across government for reform, including new laws which have arisen in relation to
the Ebola crisis. This is an impossible legislative programme. There is urgent need for
23 World Bank ‘Ease of Doing Business in Sierra Leone’ 2015 data sheet. Full text available online at: http://www.doingbusiness.org/data/exploreeconomies/sierra-leone#enforcing-contracts
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prioritisation across government and the development of a realistic and sensible
Parliamentary legislative programme so that the most urgent laws are dealt with as a priority.
How LASER could help
29. LASER is a small programme, which offers demand driven, flexible support on commercial law
and justice issues. The support is not for ‘big ticket’ items, but instead for technical assistance,
including specialised legal expertise, and support in strategy development and planning.
LASER has been supporting the Ministry of Justice throughout the crisis, including assisting
with the development of the first ever commercial law and justice component of the national
Justice Strategy. Before the crisis LASER had already responded positively to the Minister of
Justice’s request for a long-term adviser to work with the Ministry on commercial contract
negotiation and management, to support shorter term inputs provided by HSF. This support
was put on hold due to the crisis.
30. As Sierra Leone moves into the post Ebola recovery stage, it is suggested that the next step
would be for LASER to support the GoSL and the Ministry of Justice in particular to develop
and implement plans to address the issues identified in this report. A key aspect of this
support would be to support HSF in their detailed technical work, and to work with the GoSL,
particularly supporting the newly proposed Negotiations Team attached to the Ministry of
Mining, to ensure that proper processes are in place across Government for entering into
MoUs and agreements with investors. Table 2 below summarises the support that LASER may
be able to provide, if requested so to do by the GoSL.
Table 2: How LASER could help
Outcome 4: Commercial law and justice improved
Output Recommended activities How LASER could help
Capacity of Law Officers Department, Judiciary and lawyers in private practice strengthened (output 1)
New activity: Strengthen capacity of GoSL
lawyers and officials to negotiate and manage commercial contacts, especially related to extractives. (Includes development and implementation of procedures, processes and training).
Supply of adviser to the Ministry of Justice with focus on development of processes and procedures for effective contract negotiation and enforcement across the GoSL MDAs, with specific support to the proposed Mining Negotiations Team, drawing in and leveraging specialist technical legal support where required
Perception of judicial independence and impartiality improved (output 4)
New activities: Develop and implement action
plan to improve performance of Commercial Court and address backlog
Adviser to Ministry of Justice could also work with the Judiciary to develop the plan, and source pro bono expertise (e.g. from the UK Judiciary) to assist with implementing it
Pilot initiatives to address community level disputes arising
Potential for LASER to source assistance from HiiL24 on post Ebola dispute
24 HiiL The Hague Institute for the Internationalisation of the Law is an advisory and research institute. HiiL operates by (i) offering justice strategy advice to make processes more accountable, (ii) measuring justice to make progress comparable and transparent, and (iii) through their justice innovation law which develops, tests, improves and endorses prototypes of new approaches. HiiL is currently supporting the Community Justice Teams through the Accountability Lab, in Liberia (please see: http://www.innovatingjustice.com/innovations/accountability-lab-community-justice-teams-liberia). The
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Outcome 4: Commercial law and justice improved
Output Recommended activities How LASER could help
from Ebola outbreak, and scale up if appropriate
resolution, drawing on work they are already undertaking in Liberia or working in partnership with them to pilot an SL programme. Would need to be carefully coordinated with ASJP
Legislative and regulatory reform strengthened (output 3)
New activity: Develop and take forward
prioritised legislative programme for commercial law reform in light of new priorities identified by MDAs in light of Ebola outbreak.
Adviser to Ministry of Justice, with short term specialist support from LASER could work with GoSL to develop prioritised legislative programme
Community Justice Teams operate 24/7 offering community dispute resolution to the poorest communities in Liberia, which has been particularly impactful during the Ebola crisis when courts have been poorly functioning.
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Annex A: Documents considered
General Justice Sector Strategy and Investment Plan III CLJP Evidence Reports (Vol. 1 & 2) PRSP III Agricultural Sector Policy SL, MAFFS, 2007 MAFFS Strategic Plan 2006-2011 Country Strategy Paper and National Indicative Programme, 2008-2011, not dated DTIS, 2006 Agriculture Sector Review, MAFFS, all thematic documents & Main Report EIU, Quarterly, IV, 2012
Port
Strategic Plan 2014 - 2015 Financial reports 2013 – 2014 Operations Manual (undated)
Financial Services for Exporters
Rural Finance and community Improvement Programme, Appraisal, vol . I, Draft, 2007 BoSL, Prevention to Money Laundering, Financial Intelligence, 2009 BoSL, Banking Act 2000, Statutory Instrument and Banking Regulations, 2003 BoSL, Annual Report, from 2010 to 2012 Bank of Sierra Leone Annual Governor's Dinner speech 2013 BoSL, Commercial banks branches, 1212008 BoSL, List of Community banks and Discount houses in SL, l212012 MITAF, Community banks support strategy, draft, 2012 MITAF, Quarterly Report, 9/2012
Quality control
National Quality Policy October 2012 SLBS Food Storage Standards SLBS Environmental Standards Inspection Rules, Agriculture Act Cap 185 Native Produce Inspection Rules
Government Reports Policies & documents
Agenda for Prosperity National Export Strategy
Legislation Acts & Bills listed in Annex C
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Annex B: People met
Office of the President First Lady Madam Sia Nyama Koroma
State House Residence Paramount Chief Salifu Kalawa III
National Revenue Authority Commissioner General Madam Haja L. Kallah-
Kamara
Office of the Administrator and the Registrar-
General
Michala Mackay, CEO and Registrar of the
Corporate Affairs Commission
Ministry of Agriculture, Forestry & Food Security 1) Minister Dr Sam Sesay
2) Dr Mohamed Barie
3) Director of Crops
4) Director PEMDS
5) Deputy-Director PEMDS
Ministry of Finance Dr Sheku Bangura
Ministry of Trade and Industry Mr Mereweather, Director
Fast Track Commercial Court Office of the Master & Registrar
Central Bank of Sierra Leone Mr Eugene E.T. Caulker, Head of Monetary Policy
& Financial Stability Division
Sierra Leone Produce Marketing Company Mr Henry Yamba Kamara, Managing Director
Sierra Leone Maritime Administration Mr Jallow, Director
Sierra Leone Standards Bureau Mr Amadu Jogoh Bah
Sierra Leone Business Forum Mr Franklyn Williams
Sierra Leone Import and Export Promotion
Agency
Mr Kawa, Director
Chamber of Commerce Mr Oscar
Agriculture Chamber of Commerce Mr Nanoh
Law Reform Commission 1) Mr Idrissa
2) Mr Timbo, Director of Research
Maersk Shipping Line Mr Nadeem Ahmed, Managing Director
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Annex C: Long list of potential legislative reforms
No New law / law to be amended Rationale (if known) Source (if relevant)
Exploiting commercial opportunities introduced by Ebola outbreak
1. Medical laws including regulation of medical trials (currently no regulatory framework)
Potential for new foreign investment / joint ventures for medical research into EVD, including medical trials
2. Insurance laws / regulatory framework Expanding risk consideration to new areas as agricultural insurance e.g. for crops and livestock
Ministry of Agriculture post- Ebola planning document
3. Data protection, call recording and telephone marketing regulations
Potential for new foreign investment in call centres (building on Sierra Leone’s experience of Ebola hotline)
4. E-commerce laws Potential for expansion in light of installation of fibre optic ‘highway’ and increase in popularity due to avoidance of public places
Legislation in response to Ebola outbreak – aimed at supporting recover of economic sectors
AGRICULTURE / FORESTRY SECTOR
5. Draft Seed Act instruments. In relation to potential Strategic Grain Reserve for post-Ebola food security Ministry of Finance post-Ebola strategy document
6. Phytosanitary Act Ministry of Agriculture post-Ebola planning document
7. Cooperatives Act (1977) revision To reflect modern functions and roles of cooperative societies
8. Warehouse Receipts law
9. Produce Monitoring Board Regulations Ministry of Agriculture post-Ebola planning document
10. Agricultural Act and the Rural Area Act
Review and consider enforcement for charcoal exports and reinforce phytosanitary rules for plant exports.
Ministry of Agriculture post-Ebola planning document
11. Climate change Develop comprehensive policy on climate change together with regulations on use of carbon credits to encourage reforestation and afforestation
Ministry of Agriculture post-Ebola planning document
12. Forestry law Formulate a new forest policy and legislation, based on the principles of Sustainable Forest Management
Ministry of Agriculture post-Ebola planning document
GENERAL COMMERCIAL LAWS
13. Food Standards Agency law Ministry of Finance post-Ebola strategy document
14. Competition Bill 2012 Sierra Leone does not yet have a competition policy or regime.
15. Consumer Protection Act
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No New law / law to be amended Rationale (if known) Source (if relevant)
16. Taxation laws To incentivise businesses25
17. Special Economic Zone Act Amend to provide broader manufacturing possibilities for exporters at the Newton site.
18. Factories Act 1974 Amend to modernise the definition of ‘factory’ and bring draft in harmony with health, safety, environmental considerations.
19. Sale of goods and supply of services In possible collaboration with European Commission (A4D project), update the Sale of Goods Act and consider Supply of Services within update
Ministry of Finance post-Ebola strategy document
20. Intellectual Property Rights law
21. Micro, small and medium sized enterprise law To encourage formalisation of MSMEs Ministry of Finance post-Ebola strategy document
22. Review of land laws To give legal status to freehold interests; facilitate access by non‐Sierra Leoneans through leasehold that will serve as legal tender (note developing GoSL Land Policy)
Pre Ebola commercial legislative programme (laws not listed above)
23. The Petroleum (Exploration & Production) Amendment Act 2014
Amend to further regulate the development and production of petroleum operations
24. The Companies (Amendment) Act 2014
25. The Borrowers and Lenders Act 2014
26. The Appropriation Act 2014
27. The Petroleum Regulatory Agency Act 2014
28. The Registration of Business Fees (Amendment) Rules 2014
29. The Registration of Instrument (Fees) Order 2014
30. The Minimum Wage Order (2014)
Planned commercial legislation not yet in Parliament (laws not listed above)
31. Land Policy and Provincial Land Act (Cap.112)
32. Food Safety Law Currently being developed by the Law Reform Commission
33. Live Animal Disease Act In light of Ebola, to establish regulations that prevent and control animal disease
25 For example, the Companies Commission is proposing no-fee registration of new companies over an 18 month period meeting with CEO of Companies Commission 30/12/2014); the Sierra Leone Central Bank is developing position papers concerning support to SME’s linking microfinance institutions to a recovery package through finance facilities (meeting 16/1/2015 with Central Bank Head, Monetary Policy & financial Stability Division Research Department, Mr. Eugene E.T. Caulker); the NRA is considering tax breaks for SMEs