Sustainable Investment Policy Perspectives of the East African Community

5. Promoting and enabling responsible business conduct

Abstract

This chapter highlights the importance of responsible business conduct (RBC) for the EAC region and presents the key elements of RBC. It then provides an overview and analysis of policies and initiatives relevant to RBC at both regional and national levels within the EAC.

Promoting and enabling responsible business conduct (RBC) is key to attract quality investment and ensure that business activity contributes to sustainable development. In recent years, the growing attention paid to RBC by governments worldwide through both legislation and policy measures, and the increasing importance of environmental, social and governance concerns for investor and consumer decision-making, have turned RBC into an increasingly important factor to remain internationally competitive as an investment and a sourcing destination. In the EAC, the aim of attracting responsible investment and achieving sustainable development is laid out throughout main strategic policies. But key economic sectors of the region still face RBC risks related to human and labour rights, environmental protection, and integrity. While civil society and businesses have started to address RBC issues, there exists a disparity in the pace at which governments and stakeholders are advancing on this agenda. Further government action is needed to implement and enforce relevant legislation and policies, develop policy frameworks relevant for RBC, and enhance businesses’ awareness and capacity to conduct risk-based due diligence.

5.1. Relevance of RBC to promote responsible and sustainable investment

Promoting and enabling responsible business practices in the EAC is important in light of the structure of the economies of Partner States’ and their trade and investment linkages, which depend strongly on the minerals and agriculture sectors. As these sectors are prone to risks of adverse impacts related to human and labour rights, the environment, or integrity, international standards and practical guidance on RBC can help governments and businesses prevent and address these risks. This section lays out the relevance of RBC for the EAC region, before providing information on the key elements and concepts of RBC.

5.1.1. RBC is relevant for key economic sectors in the EAC

RBC establishes the expectation that all businesses, regardless of their legal status, size, ownership structure, or sector, should address and avoid the adverse impacts of their operations on people, the planet, and society, while contributing to sustainable development wherever they operate. This entails that businesses must assess the risks related to human and labour rights, the environment, and integrity arising from or associated with their activities, supply chains, and business relationships.

RBC is particularly relevant for the seven examined EAC Partner States due to the structure of their economies, heavily reliant on natural resources and agricultural products whose exploitation and production may give rise to RBC risks. The EAC is home to important reserves of mineral resources such as cobalt, coltan and gold, the DRC, Tanzania, and Rwanda being among the main mineral-producing countries in the world (EAC, n.d.[1]; EAC, n.d.[2]). The Great Lakes Region, which comprises most EAC countries, produces nearly half the world's coltan and is home to some of the largest cobalt, copper and lithium deposits (ILO, 2019[3]; OECD, 2019[4]). The DRC is the largest cobalt producer, with 70% of the world’s resources. Overall, the minerals and extractive industries hold significant importance for the economy, employment, and foreign currency earnings of the region (EAC, n.d.[5]). Agriculture is also an important sector for the EAC’s economy and development. According to the EAC Development Strategy 2021/22-2025/26, in the majority of EAC economies, agriculture is the most important source of employment, providing over 70% of employment opportunities, contributing to 65% of the volume of intra-regional trade and more than 25% to the GDP of EAC countries (EAC, 2021[6]).

RBC is also key for the EAC in light of its Partner States’ integration into global value chains and the prevalence of natural resources and agricultural products in their exports. According to the latest EAC Trade and Investment Report (2022), “the region is highly dependent on export of primary agricultural and mineral commodities with little value addition” (EAC, 2022[7]). Primary mineral and agricultural products are the most traded and exported products in the EAC. Mineral products accounted for 28% of the Community’s total trade in 2023.1

As in other regions, the minerals and agriculture sectors in the EAC have historically been linked to various RBC issues. Agriculture is linked both globally and in the EAC to the most child labour and deforestation, with major concerns, for example, in tea and coffee production in Kenya, Rwanda, Tanzania and Uganda. Estimates of overall child labour rates in EAC countries are as high as 31% in Burundi and 25% in Tanzania according to ILO and UNICEF (UNICEF, 2023[8]).2 In the minerals and extractive sector, human and labour rights abuses including child labour and unsafe working conditions, as well as corruption and armed conflict are major concerns in the region. Workers in these sectors often face unsafe working conditions and economic exploitation, as reported in gold supply chains in Tanzania or cobalt and coltan supply chains in the DRC (ILO, 2019[3]). Although there is no sufficient data on the prevalence of child labour in the mining sector in the EAC, surveys have found children present at 30% of visited artisanal and small-scale mining (ASM) sites in the DRC (BGR, 2019[9]). Mining also contributes to adverse impacts on health in EAC Partner States, with the proliferation of lung diseases among workers and communities being observed in both ASM and industrial large-scale mining (NEPAD, 2023[10]).

In some countries, businesses in the extractive sector are also at risk of contributing to armed conflict, violence, and corruption, as it has been reported extensively for the Great Lakes Region in relation to tin, tantalum, tungsten and gold production. Similar examples relate to gold and oil extraction in South Sudan and copper and cobalt supply chains in the DRC (UNSC, 2023[11]; UNSC, 2020[12]; GI-TOC, 2023[13]). Since 2021, there has been a resurgence of armed group activity in Eastern DRC involved in mineral smuggling and human rights abuses connected to the extractive sector, with such groups alleged in some cases to have links to and receive support from governments of the region (UNSC, 2023[14]).

While countries in the region have made commitments, for example, to fostering peace and stability through improving governance of the minerals sector a reported lack of implementation causes harm to the conditions for investment in the region. Promoting and enabling responsible business practices in the EAC region is therefore key to prevent and address these issues. This, in turn, can support the EAC Development Strategy and Investment Policy to increase FDI and trade levels, as investment and trade partners in the region and worldwide increasingly pay attention to sustainability matters and have taken measures to promote sustainable and responsible supply chains, either through legislation or policy measures (EAC, 2021[6]). According to an OECD survey on FDI decisions, adequate legislation in the areas of human rights, labour rights, environment and anti-corruption is one of the key factors to stimulate investment in the agri-food sector (Punthakey, 2020[15]). Regional data analyses have further found that African and EAC economies having companies with robust responsible business practices, including on anti-corruption, tend to attract more FDI (Agyemang, et al, 2020[16]). Likewise, analysis suggests that conducting risk-based due diligence to address adverse impacts on human rights and the environment can benefit not only companies, but also supply chain resilience, and more broadly contribute to achieving sustainability goals. For example, the UN Group of Experts on the DRC has found that due diligence programmes have improved transparency in the tin, tungsten and tantalum sector in the Great Lakes Region in East Africa (UNSC, 2020[12]). Other studies highlight that, in areas where such programmes exist, military interference in mining has decreased and public revenues have increased (IPS, 2020[17]).

5.1.2. Key elements of RBC

The three main international instruments on RBC

The three main international instruments that have become key references for responsible business practices globally are the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (the OECD MNE Guidelines), the UN Guiding Principles on Business and Human Rights (UNGPs), and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. These instruments are aligned with and complement each other (UN et al., 2019[18]).

The OECD MNE Guidelines is the most comprehensive government-backed instrument guiding business action on sustainable development and addressing adverse impacts associated with their operations and supply chains on people, the planet, and society. They have undergone continuous updates since their introduction in 1976 to ensure their relevance considering changing societal challenges and the evolving international business landscape. The latest update in 2023 aligns the OECD MNE Guidelines with internationally agreed goals on climate change and biodiversity as well as latest developments in technology and due diligence recommendations to all forms of corruption.

The OECD MNE Guidelines are part of the OECD Declaration on International Investment and Multinational Enterprises, which has 51 adherent countries, with Mauritius soon to become the 52^nd. These countries have set up a unique implementation mechanism: the National Contact Points for Responsible Business Conduct (NCP), which promote the OECD MNE Guidelines and act as non-judicial grievance mechanisms for alleged violations of the Guidelines in cases referred to as “specific instances”. While EAC countries have not formally adhered to the OECD MNE Guidelines, between 2002 and 2023, 51 specific instances have been submitted to NCPs of adherent countries concerning business operations in EAC Partner States. Most of these cases concern the mining sector in the DRC and are linked to human rights, labour and environmental issues.

Risk-based due diligence

Due diligence is a critical component of RBC. It implies that companies identify, prevent, and mitigate adverse impacts and be accountable for addressing them. This process involves not only preventing and mitigating potential adverse impacts caused by a company’s own operations, but also addressing risks that may arise along its supply chain, thus giving all companies along the supply chain a role in the due diligence process.

The OECD Due Diligence Guidance for Responsible Business Conduct recommends a six-step process for conducting risk-based due diligence that can be applied by any enterprise, regardless of its size, location, or industry. The steps outlined in the guidance include integrating RBC into the enterprise’s policies and management systems, identifying and assessing adverse impacts, taking actions to cease, prevent, or mitigate adverse impacts, monitoring the implementation and results of these actions, communicating how impacts are addressed, and providing or cooperating in remediation when necessary.

In addition to the overarching OECD Due Diligence Guidance for Responsible Business Conduct, the OECD has developed specific recommendations for various high-risk sectors, including agriculture, minerals, garment and footwear, and finance (OECD, 2018[19]). These sector-specific Guidances aim to help enterprises implement due diligence effectively in these different sectors through concrete advice and examples. Recently, the OECD also released handbooks to support companies in their efforts to embed considerations on specific RBC risks, such as deforestation, child labour and forced labour, into their due diligence processes (OECD, 2023[20]; OECD, 2023[21]; OECD/FAO, 2023[22]).

Role of Government in Promoting RBC

In recent years, there has been a growing recognition that governments play a key role in supporting the effective implementation of RBC principles and standards by providing an enabling legal and policy environment, creating incentives, and exemplifying RBC in their own activities. To reflect this, in 2023, the OECD released the Recommendation on the Role of Government in Promoting Responsible Business Conduct (the OECD Recommendation on the Role of Government), to which 51 countries and the European Union have adhered to. It lays out a set of 21 principles and policy recommendations to assist governments, other public authorities, and relevant stakeholders in their efforts to design and implement policies that enable and promote RBC (OECD, 2023[23]).

The role that governments play in promoting RBC is evidenced by the increasing number of laws and policy initiatives related to sustainability and RBC. This includes both mandatory frameworks (e.g. legislation on non-financial disclosure, trade-based measures and conducting due diligence), as well as voluntary measures (e.g. government guidance and other government-led initiatives) (OECD, 2024[24]). To date, 75% of OECD countries have either adopted or are in the process of adopting legislation containing due diligence requirements. This legislation often makes reference to international RBC principles and standards. For example, in the minerals sector, the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the OECD Minerals Guidance) has been referred to in various legal frameworks, notably in the United States and the European Union, as well as in some EAC Partner States, such as the DRC and Rwanda. In the United States, Section 1502 of the Dodd-Frank Act requires that due diligence be conducted in relation to tin, tantalum, tungsten and gold originating from six EAC Partner States (Burundi, the DRC, Rwanda, South Sudan, Tanzania, and Uganda). In the European Union, the Conflict Minerals Regulation (EU) 2017/821 introduced due diligence requirements for tin, tantalum, tungsten and gold sourced from any country or area that is conflict-affected or high-risk. These requirements have been further complemented by the 2023 Batteries Regulation, which requires the conduct of due diligence for critical raw materials used in batteries (IEA, 2023[25]).

5.2. Promoting and enabling RBC in the EAC

Some businesses and other stakeholders in the EAC are increasingly aware of the importance of RBC and have started to develop relevant initiatives to promote responsible business practices. The EAC has put in place regional policy frameworks, both thematic and sectorial, that provide relevant entry points for RBC. However, in general, governments do not explicitly define the role of the private sector vis-a-vis human and labour rights, environmental or integrity issues. The EAC and its Partner States can thus play a more active role in creating an enabling environment for RBC. This section first explores awareness of RBC among businesses and stakeholders in the region before analysing the existing legal and policy frameworks to promote and enable RBC, both at the EAC regional and national level.

5.2.1. Business and other stakeholders in the EAC have started promoting RBC

Businesses and other stakeholders (including civil society, workers’ organisations and multi-stakeholder initiatives) in the EAC are increasingly aware of the importance of adopting responsible business practices (see overview in Annex C). Large companies and business organisations tend to be familiar with RBC and have started developing related initiatives. UN Global Compact regional networks exist in the DRC, Kenya, Rwanda and Tanzania. A total of 365 companies participate in these networks, which work to promote sustainable development as well as business action in the areas of human and labour rights, protection of the environment, and anti-corruption. In Kenya, for instance, the network is led by the Kenya Association of Manufacturers, the Kenya Private Sector Alliance, and the Federation of Kenya Employers, and it carries out various initiatives such as providing tools, advice and training relating to the SDGs, climate action, and gender equality (UNGC, 2021[26]). Moreover, in several EAC Partner States, business and industry organisations have developed RBC-related programmes and guidance. Relevant examples include the Guidance on Corporate Social Responsibility in the Mining Sector in Katanga prepared by the Mining Chamber in the DRC (Chambre des Mines), which provides information on how to implement corporate social responsibility strategies relating to specific issues such as human and labour rights, the environment, or fair operating practices (GIZ/ FEC, 2016[27]). Over the last years, MNEs operating in minerals supply chains in the EAC have also been involved in due diligence initiatives.3 While the implementation of these initiatives has been challenging so far, businesses and other stakeholders continue to promote collaborative action to support due diligence efforts (OECD, 2015[28]).

Civil society organisations (CSOs) and trade unions in the EAC also play a role in promoting RBC. For example, the Legal and Human Rights Centre in Tanzania has set up a “Human Rights and Business” programme which seeks to promote RBC in line with international RBC instruments, including the UNGPs and the OECD MNE Guidelines (LHRC, 2022[29]). The Uganda Consortium on Corporate Responsibility is another CSO that aims to enhance private sector accountability in cases of business-related violations of economic, social and cultural rights (UCCA, n.d.[30]). Trade unions in the EAC also advocate for workers’ rights and negotiate collective bargaining agreements. The trade unions of Kenya, Uganda, Zanzibar, Tanzania, Rwanda and Burundi are members of the East African Trade Union Confederation (EATUC), which has observer status within the EAC structure, and has developed a strategy to advocate for workers’ rights in trade and investment frameworks (EATUC, n.d.[31]; EATUC, 2021[32]).

Awareness-raising and promotion of responsible business practices in the EAC has also made progress thanks to multi-stakeholder initiatives. Over the last years, various multi-stakeholder initiatives have started promoting RBC and the observance of the OECD Due Diligence Guidance, in particular in the mining sector. Relevant initiatives include workshops by the Rwandan National Commission for Human Rights, jointly organised with OHCHR and the Ministry of Commerce, to strengthen stakeholders’ capacity to address business-related human rights violations (FES, 2022[33]). The Project Access by the Impact Facility, for instance, is a multi-stakeholder partnership of CSOs, communities and companies in the gold supply chain in East Africa (The Impact Facility, n.d.[34]).

5.2.2. The EAC has adopted some policy frameworks relevant for RBC

Beyond the promotion by businesses and other stakeholders, the adoption of responsible business practices in the EAC can be facilitated by government action both at the regional and national levels. As highlighted in the OECD Recommendation on the Role of Government, governments have a key role to play in the creation of enabling legal and policy environments for RBC. At the regional level, the EAC has developed policies, including overarching, thematic, and sector-specific ones, that are relevant to enable RBC, although there are so far no specific policies or initiatives on RBC or business and human rights.

Overarching policy frameworks at EAC level do not address RBC

The EAC has developed common policy frameworks to promote investment and trade in the region. These frameworks broadly refer to issues such as human rights, the environment, and sustainable development. The comprehensive EAC Vision 2050, for instance, aims to achieve the sustainable use of natural resources, improve environmental management and conservation, as well as promoting sustainable agricultural production, good governance, and human rights. It also refers to addressing social and environmental issues in the agriculture and mining sectors (EAC, 2016[35]). Similarly, the 6^th EAC Development Strategy 2021/22-2025/26 sets out the objective to protect human rights and the environment (EAC, 2021[6]). Yet, none of these documents recognise the role of the private sector in promoting sustainable development outcomes.

Beyond these strategic documents, the EAC adopted a regional Investment Policy in 2019, which provides non-binding guidance to EAC countries on investment protection, promotion, and facilitation. The guiding principles of this policy refer to "responsible and sustainable investments” as well as to the SDGs, but the policy does not include any definitions or specific policy measures to encourage responsible business practices by investors.

The EAC also developed a Model Investment Code in 2006, which remains the reference for the design of national investment policies and laws. It provides foreign investors with national treatment non-discrimination but does not include any specific sustainability provisions or expectations regarding investors’ behaviour. The only provision related to RBC is an article pursuant to which investment promotion agencies shall coordinate “the carrying out of an environment impact assessment study of the enterprise as required under the relevant environment laws” when issuing registration certificates (EAC, 2006[36]).

As discussed in Chapter 2, a Model Investment Treaty was adopted by the EAC in 2016 to provide guidance to Partner States for investment treaty negotiation. This Model includes a range of sustainability provisions, which aim to promote human rights, labour rights, the environment, and anti-corruption. Beyond references to sustainable development and human rights in the preamble, it includes provisions on the right to regulate “consistent with the goals and principles of sustainable development” (Article 15) and on the “right to pursue development goals” that deal with the environment and labour rights. On the environment, this article provides that the parties shall not incentivise investment “by relaxing or waiving domestic environmental legislation” and that “investors shall, in performing their activities, protect the environment and where the activity causes damages to the environment, […] restore it to the extent appropriate and feasible”. In relation to labour rights, it provides that host states “shall ensure that investment does not waive or derogate from labour rights” and that “investors shall comply with international conventions and existing labour policies, and, in particular, not use child labour and support for the elimination of all sort of child labour including forced or compulsory labour” (Article 16). Moreover, the Model Investment Treaty includes a provision, which states that the assessment of an investor's compensation should take into account "any harm or damage that the investor or its investment has caused to the environment or local community that have not been remedied by the investor or the investment" (Article 7). Further relevant articles refer also to an anti-corruption obligation by investors (Article 11) (EAC, 2016[37]).

The EAC established the Consultative Dialogue Framework (CDF) in 2012 to institutionalise public-private dialogue. This framework facilitates structured dialogue between the EAC, private sector organisations, civil society, and other interest groups. It aims to promote inclusive and consultative stakeholder engagement in the EAC integration process and presents a potential framework to promote RBC. The CDF provides for national dialogues through the national ministries responsible for the EAC, while regional dialogues take place through the EAC Secretariat. At the regional level, the recognised stakeholders for engagement are represented by the East African Civil Society Organisations Forum and the East Africa Business Council. As part of the CDF, an annual EAC Secretary General’s Forum is held, which brings together civil society and private sector organisations across the region to develop recommendations to the Council of Ministers (EAC, n.d.[38]). The EAC has put in place thematic frameworks in key areas related to RBC.

The EAC has developed legal and policy frameworks on areas such as human rights, labour rights, the environment, anti-corruption, and consumer interests (Table ‎5.1). While these frameworks are part of the enabling environment for RBC, most of them could be more specific on the role of the private sector in these different areas.

Table ‎5.1. EAC thematic policy frameworks relevant for RBC

EAC framework	Date	Content
Human rights
EAC Gender Policy	2018	The EAC Gender Policy aims to promote gender equality within the Community through various objectives. These include enhancing co-ordination and reporting on gender equality commitments, integrating gender concerns into all sectors of planning and budgeting, increasing women's participation in political and decision-making processes, ensuring equitable access to resources and participation in regional trade, addressing gender-based violence and harmful cultural practices, and involving women in peace and security efforts.
EAC Gender Equality and Development Bill	2016	The EAC Gender Equality and Development Bill aims to consolidate and harmonise the various commitments on gender equality that have been made at regional, continental and international levels in the context of the EAC.
Labour rights
EAC Child Policy	2016	The EAC Child Policy aims to promote the rights of children to survival, development, protection and participation.
Environment
EAC Regional Bioeconomy Strategy 2021/22-2031/32	2021	The EAC Regional Bioeconomy Strategy aims to promote food security and sustainable agriculture, health and well-being, biobased industrial development, and sustainable energy.
EAC Forests Management and Protection Bill	2015	The EAC Forests Management and Protection Bill provides for the management and protection of national forests and trans-boundary forest ecosystems in the EAC.
EAC Climate Change Policy	2011	The Climate Change Policy aims to address the adverse impacts of climate change in the region by widening and deepening co-operation among Partner States.
EAC Transboundary Ecosystems Management Bill	2010	The EAC Transboundary Ecosystems Management Bill provides a legal framework to enhance the quality of the environment and ensure sustainable use of shared natural resources in the EAC.
EAC Protocol on Environment and Natural Resources Management	2006 (currently being revised)	The EAC Protocol on Environment and Natural Resources Management aims to promote the sustainable use and management of the environment and natural resources.
Anti-corruption
The East African Integrity and Anticorruption Bill	2019	The East African Integrity and Anticorruption Bill promotes integrity and provides a framework to prevent and combat corruption in the EAC.
Consumer protection
EAC Competition Act	2006, amended in 2010	The EAC Competition Act aims to promote fair competition in the EAC and in Part VIII to protect consumer welfare.

Sources: OECD's compilation based on relevant EAC policy frameworks.

Regarding human rights, there have been attempts to develop a human rights bill at the EAC level. The East African Legislative Assembly passed the EAC Human Rights Bill in 2012, which still requires the EAC Heads of States’ assent to become law (DIHR, 2021[39]). Some thematic EAC policies also refer to specific human and labour rights. One example is the 2018 EAC Gender Policy, which promotes gender equality and refers to equal human and labour rights for men and women in the EAC. This Policy calls on promoting participation of women in leadership and institutionalising gender auditing in both the public and private sectors (EAC, 2018[40]). Another example is the 2016 EAC Child Policy, which aims to promote children’s rights in the region by referring to international conventions such as the UN Convention on the Rights of the Child but does not address the prohibition of child labour. The policy calls on the private sector to provide support to realise children’s rights, and to adopt national and international child protection policies within their organisations (EAC, 2016[41]).

With respect to the environment, the 2006 EAC Protocol on Environment and Natural Resources Management, the 2010 EAC Transboundary Ecosystems Management Bill, the 2015 EAC Forests Management and Protection Bill, and the 2021 Regional Bioeconomy Strategy address environmental issues and emphasise the role of the private sector and public-private partnerships in the management and protection of natural resources. The 2011 EAC Climate Change Policy also aims to guide Partner States regarding the adoption of measures to address climate change and, among others, seeks to promote the participation of the private sector in its implementation (EAC, 2011[42]).

In relation to anti-corruption, the 2019 East African Integrity and Anticorruption Bill promotes integrity and provides a framework to prevent and combat corruption, but focuses on the public sector and does not address the role of the private sector in combating the phenomenon (EAC, 2021[43]). Moreover, according to an EAC report, the Community is currently developing a Protocol on Preventing and Combatting Corruption (EAC, 2023[44]).

EAC sectoral frameworks provide entry points for RBC

In addition to thematic frameworks addressing aspects covered by the OECD MNE Guidelines, the EAC has formulated sector-specific policies that are relevant for RBC, particularly due to their focus on the extractive and agriculture sectors.

In the mining and extractive sector, these policies are based on overarching policy frameworks, notably the EAC Treaty, the African Mining Vision, and the frameworks of the International Conference on the Great Lakes Region (ICGLR), which all stress the importance of fostering sustainable and responsible mining practices. The 2017 EAC Mining Bill thus seeks to harmonise mining regulations to promote the protection of the environment and human rights in mining practices. It includes provisions on the rights of affected communities, artisanal and small-scale mining, and environmental protection and management (Clause 14 and 15, EAC Mining Bill). More precisely, the Bill refers to the protection of the human rights of local communities, calling on EAC Partner States “to ensure that inhabitants or communities, who have to be resettled as a result of being displaced by a proposed mining operation, are resettled by the holder on suitable alternate land, with due regard to their human rights, economic well-being, customs, traditions, social and cultural values” (Clause 10.6). It also refers to the promotion of sustainable working conditions, stating that “Partner States shall adopt appropriate legislation to provide for artisanal and small-scale mining, which promotes the realization of safe, efficient and environmentally sustainable working conditions for the miners” (Clause 14.1) (EAC, 2017[45]).

For the agricultural sector, the 2006 EAC Agriculture and Rural Development Policy sets out the broad objective to promote sustainable use and management of natural resources (soil, water, fisheries and forest) to conserve the environment (EAC, 2006[46]). Additional specific policies refer to the role of businesses in achieving sustainability goals in the sector and addressing related issues. For instance, the 2013 EAC Regional Strategy and Implementation Plan for Sustainable Aquaculture calls on the private sector to practice responsible aquaculture, apply best management practices, and conform to wetland and watershed conservation standards (EAC, 2013[47]). The EAC Food and Nutrition Security Strategy and Action Plan (2019-2023) also highlights the role of the private sector in contributing to fair relationships between corporate shareholders and smallholders and to inclusive agricultural value chain development (EAC, 2019[48]).

5.2.3. Limited development of specific policies to promote RBC by EAC Partner States

At the national level, some EAC Partner States have developed specific policies to promote responsible business practices, such as National Action Plans on Business and Human Rights. They have also ratified relevant international agreements, developed legal and policy frameworks in the areas covered by the OECD MNE Guidelines, introduced references to OECD RBC and due diligence standards in such frameworks, and signed trade and investment agreements with provisions relevant for RBC. These are all steps towards the creation of enabling environments for RBC, which could be reinforced.

Kenya and Uganda stand out as the first African countries to have published National Action Plans on Business and Human Rights (NAPs),4 while a process for developing a NAP is currently underway in Tanzania (Table 5.2). In Kenya, the government started to develop a NAP in 2016 and approved it in 2021. The NAP lays out policy priorities on business and human rights, with a focus on five substantive themes: land and natural resources; revenue transparency; environmental protection; labour; and access to remedy. It also contains policy actions for each of the three pillars of the UNGPs; as well as a chapter on implementation and monitoring (Government of Kenya, 2020[49]). While an Implementation Committee for the NAP was formed in 2021, there is limited publicly available information regarding the implementation and monitoring process of the NAP. In Uganda, the NAP was published in 2021 following a process that began in 2016. It involved various government ministries, as well as CSOs, and UN agencies. Eleven consultations were held across Uganda in 2019, gathering input on eight thematic areas, including land rights, the protection of the environment, and labour rights. The NAP aims to co-ordinate efforts across sectors to promote the respect of human rights in business operations. It contains a detailed budget, output indicators, and mechanisms for follow-up, monitoring, and review. A Multi-Sectoral Technical Committee on Business and Human Rights was established to oversee its implementation. Following its adoption, training sessions to disseminate the NAP have been carried out at the local government level by the Initiative for Social and Economic Rights in partnership with the Ministry of Gender, Labour and Social Development (Government of Uganda, 2021[50]). In Tanzania, the government, in its Human Rights Action Plan (2013-2017), directed the Commission for Human Rights and Good Governance to assist in establishing a NAP through the development of a National Baseline Study on Business and Human Rights, which was published in 2017. After further consultations, in March 2023, the Tanzanian government committed to developing the NAP (DIHR, 2023[51]).

Table ‎5.2. Development of National Action Plans and ratification of key international agreements

	NAP on RBC / BHR	Core UN Conventions on Human Rights	Fundamental ILO Conventions	Kyoto Protocol	Paris Agreement	Convention on Biological Diversity	UN Convention against Corruption
BDI	□	7/9	8/11	■	■	■	■
COD	□	7/9	8/11	■	■	■	■
KEN	■	7/9	7/11	■	■	■	■
RWA	□	8/9	10/11	■	■	■	■
SSD	□	7/9	7/11	□	■	□	■
TZA	▣	6/9	8/11	■	■	■	■
UGA	■	8/9	8/11	■	■	■	■
■ Ratified/ developed
▣ Partially ratified/ under development
□ Not ratified/ not developed

Source: OECD's compilation based on relevant EAC policy frameworks.

Beyond NAPs, EAC Partner States have ratified numerous international instruments in areas covered by the OECD MNE Guidelines, including human rights, labour rights, the environment, and anti-corruption, (Table 5.2). Almost all EAC Partner States have ratified the main international agreements on environmental issues and anti-corruption, such as the Paris Agreement or the UN Convention against Corruption. Nonetheless, several EAC countries have not yet ratified all Core UN Conventions on Human Rights nor all Fundamental ILO Conventions. For instance, most Partner States have not yet ratified the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families nor the ILO Occupational Safety and Health Convention.

EAC Partner States have also developed national legal frameworks in areas covered by the OECD MNE Guidelines (see Annex C), as well as sector-specific legislation addressing labour and environmental matters in the mining and agricultural sectors. In this context, various EAC governments have sought to include references to OECD RBC and due diligence instruments in their legal and policy frameworks. For example, the DRC and Rwanda have referenced the OECD Minerals Guidance in their frameworks applicable to the mining sector (Government of Rwanda, 2012[52]). The DRC mandated due diligence on the exploitation and trade of tin, tungsten, tantalum, gold, cobalt, copper, and other strategic minerals by integrating the OECD Minerals Guidance into its legal framework through a Ministerial Decree in 2011 (Government of DRC, 2011[53]). The ICGLR, comprising all EAC Partner States except Somalia, endorsed the OECD Minerals Guidance as crosscutting to the Regional Initiative on the Fight against Illegal Exploitation of Natural Resources, and called on companies sourcing minerals from the Great Lakes region to comply with the Guidance (ICGLR, 2010[54]). It also established a regional certification mechanism for minerals that requires traders to conduct due diligence in accordance with the OECD RBC instruments (OECD, 2011[55]). In many countries of the region, investment policies require investors to consider workers’ rights and environmental issues, or to conduct environmental impact assessments and protect indigenous communities. For instance, Burundi’s Investment Code requires investors to comply with environmental and labour laws and to submit certificates of environmental compliance (UNCTAD, 2021[56]).

EAC Partner States have also started entering into trade and investment agreements or partnerships that contain provisions relevant for RBC. For instance, the African Continental Free Trade Area includes in its 2023 Protocol on Investment an article on Corporate Social Responsibility (CSR) structured in two parts. On the one hand, the clause contains a series of non-binding CSR principles and standards that investors and their investments should strive to respect. On the other, through this clause, States commit to encourage investors operating on their territory or subject to their jurisdiction to integrate in their internal policies internationally recognised CSR principles and standards (Article 38) (WTI, 2023[57]).

Burundi, the DRC, Kenya, Rwanda, Somalia and Uganda are also members of the Common Market for Eastern and Southern Africa (COMESA), which has a Revised Investment Agreement for the COMESA Common Investment Area (CCIA). The CCIA contains a clause titled “business ethics and human rights” (Article 29), which provides that investors and their investments shall observe the UNGPs; support and respect the protection of internationally proclaimed human rights; ensure that they are not complicit in human rights abuses; and eliminate all forms of forced and compulsory labour, among others. The CCIA also contains a clause titled “corporate social responsibility” pursuant to which investors and their investments should inter alia act in accordance with fair business, marketing and advertising practices when dealing with consumers and should ensure the safety and quality of goods and services they provide (Article 30) (COMESA, 2018[58]).

Kenya and the EU signed an Economic Partnership Agreement in December 2023, which contains a chapter on trade and sustainable development. The chapter prohibits the lowering of labour and environmental standards to attract trade or investment. It also includes an article on Trade and Responsible Business Conduct and Supply Chain Management in Annex V. This article recognises the importance of RBC practices and calls on promoting RBC and CSR, “including responsible supply chain management, by providing supportive policy frameworks that encourage the uptake of relevant practices by businesses”. It also references international standards on RBC and due diligence such as the OECD MNE Guidelines and the OECD Minerals Guidance and seeks to promote “the uptake of such guidance” (Article 11) (EU, 2023[59]).

Recently, several international partnership agreements on the supply of minerals critical to the energy and digital transitions have been signed by EAC countries to attract more investment to these sectors and help enhance value addition, and they also include provisions relevant for RBC, such as cooperation for due diligence and traceability on environmental, social and governance matters.5

The awareness and expectations of responsible and sustainable business practices have increased globally and among stakeholders in EAC countries, particularly against the background of human rights, environmental and integrity risks in the agriculture and mining sectors. While the EAC and its Partner States have developed legal and policy frameworks relevant to promote responsible business practices and due diligence, there is still a way to go create an enabling environment for RBC in the region and to improve transparency and the handling of RBC issues in key economic sectors. By making progress in this direction through joint efforts between governments, businesses, and civil society, the EAC region can reinforce its attractiveness for responsible investment and promote sustainable development.

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Notes

← 1.  The top items exported in terms of value are precious and semi-precious stones (such as gold) (26%), mineral fuel (mainly crude oil) and petroleum products (18%), coffee and tea (12%), trees and other plants (mainly cut flowers) (3%) (EAC, 2023[61]). In terms of agricultural exports, Kenya, for instance is the third largest exporter of tea and the fourth largest exporter of cut-flowers in the world, while Uganda is among the most important coffee exporters. These statistics do not include the DRC and Somalia, which recently joined the EAC. The DRC’s exports are strongly centred on copper and cobalt, with copper accounting for more than 53% and cobalt for more than 26% of its exports in 2021. Somalia exports mostly sheep and goats (42%), and gold (20%) (OEC, 2021[60]).

← 2.  Definitions derived from ILO (2023), Child Labour Statistics, International Labour Organisation https://ilostat.ilo.org/resources/concepts-and-definitions/description-child-labour-statistics/.

← 3.  Examples of initiatives include among others the Certified Trading Chains by the German Federal Institute for Geosciences and Natural Resources, the ASM Cobalt Criteria by the Responsible Minerals Initiative, the industry-led International Tin Supply Chain Initiative, Better Mining by the RCS Global Group, the Mutoshi pilot project by Trafigura, and the Just Gold project by IMPACT Africa Canada.

← 4.  National Action Plans on Responsible Business Conduct or Business and Human Rights represent overarching policy frameworks for government action on RBC formulated through inclusive engagement with stakeholders. So far, NAPs have been adopted by 30 countries worldwide. They serve to outline a shared and evolving national framework for RBC, aimed at preventing and addressing business-related adverse human rights impacts. See DIHR (2023), National Action Plans on Business and Human Rights, https://globalnaps.org/ and OHCHR (2016), Guidance on National Action Plans on Business and Human Rights, https://www.ohchr.org/sites/default/files/Documents/Issues/Business/UNWG_NAPGuidance.pdf.

← 5.  See, for example, EU-Rwanda Memorandum of Understanding on Sustainable Raw Materials Value Chains (2024), https://ec.europa.eu/commission/presscorner/detail/en/ip_24_822.