Are quality regulations an exercise in futility?

An effective harmonised “quality regulation” system was mooted back in 2010. What has happened since then? Too little, reports NICK PORÉE.

The terms of the Southern African Development Community (SADC) Protocol on Transport, Communications and Meteorology (PTCM) reveal an underlying 19^th century philosophy of negotiated terms of trade between member states. The emphasis is on a regulatory structure to protect national interests, which are established by means of bilateral agreements between governments within the PTCM and a cross-border permit system. The assumption was that officialdom could regulate the supply of transport in cross-border trade.

The need for revision and modernisation of the PTCM was described by trade law centre Tralac in 2015: “The scope of the protocol is vast and its objectives very ambitious. However, the circumstances in the transport sector have changed since its adoption in 1996. SADC member states are now negotiating the establishment of the Tripartite Common Market for Eastern and Southern Africa (COMESA) – East African Community (EAC) – SADC Free Trade Agreement (FTA), which requires, amongst other things, the harmonisation of road transport regulation in the Tripartite Region to facilitate trade among them.”

The description continues: “Greater focus is also now placed on the development of transport corridors and the facilitation of transport, border, customs, and transit measures along particular routes. This may necessitate a review of the Protocol on TCM to make provision for these changing conditions. Many obligations remain unimplemented or partially implemented. Some of the obligations contained in the Protocol on TCM may have proven unattainable or unrealistic.”

In 2010, my consultancy Nick Porée and Associates (NP&A) was appointed to review the “Liberalisation of the Road Transport Market in the SADC Region”. The project analysed the PTCM, the terms of the bilateral agreements in existence, and the impacts of the permit system. The recommendation was made to scrap the permit system as a futile attempt at “quantity regulation” serving minimal useful purpose and simply placing an exit tax on transporters. Cross-border trade is driven by demand, which is generated by private industries and is not controllable by government officials.

The recommended alternative was to develop an effective harmonised “quality regulation” system which would create liberalised cross-border market access for compliant quality-regulated transporters. The definition of “quality” included the identification of qualified operators with their Responsible Competent Persons (RCPs), vehicles, drivers, and violations within a regional database.

The formation of the Tripartite Alliance of SADC-COMESA and EAC regional authorities expanded the scope from 15 to 27 countries. The recommendations were accepted and the details of a proposed system were described in a subsequent report by NP&A, which was reviewed and accepted by the Tripartite Members in Johannesburg in 2013.

The project implementation was supported by the European Union, which volunteered to fund development of the harmonised operator registration system. The project, managed by SADC, was called the Tripartite, Transport and Trade Facilitation Programme (TTTFP) and was in progress since 2014, terminating in May 2023. There is the suggestion of a “successor project” but it will be a formidable and expensive task to pick up the current fragmentation and continue the implementation process.

A review of the TTTFP project in the Draft Final Report shows that the scope was broadened beyond the original objectives to the development of an entire set of Road Transport regulations (many based on South Africa’s dubious legislation) to be implemented by all 27 countries of the Tripartite. These include documentation as well as training manuals for officials and transporters in all the functions of the system. The Transport Registration and Information Platform (TRIPS) database has been developed and tested. The uptake by countries is not consistent and many of the countries show minimal progress.

The implementation is hampered by the very different conditions in the many countries and regional economic communities involved in the Tripartite region: SADC, COMESA, EAC, the Southern African Customs Union (SACU), the Intergovernmental Authority on Development (IGAD), the African Union (AU), and now the African Continental Free Trade Area (AfCFTA). Progress was also complicated by the Covid-era diversion into developing the Corridor Transport Management System (CTMS), dependent on communications technology and customs connections which may or may not be acceptable to operators, or border authorities in all countries.

A significant omission in the project has been the lack of communication, involvement, and promotion of the entire concept amongst the private sector transport operators and industries in the region. The situation is reminiscent of the famous George Bernard Shaw quote: “The single biggest problem in communication is the illusion that it has taken place.” This has left the proposed systems as a looming threat of more legislation and costs, instead of a cooperative public-private mutual benefit.

The Federation of East and Southern African Road Transport Associations (FESARTA), with its membership in countries across the region, has maintained a watching brief but remains disengaged. It is significant that the basic principles of the TTTFP are identical to the quality regulation recommendations of the South African Road Freight Strategy approved by Cabinet in 2017, but equally regarded as superfluous by government and industry.

Quality standards in the South African road freight industry are being increasingly impacted by a lack of effective regulation and what the previous transport minister coyly referred to as “democratisation” – as opposed to “quality regulated competition”. There are, however, no signs of interest in addressing the problems apart from fitful and random additions to legislation.