A Federal Solution to the Conflict in Sudan

Dr. M A Fazal

[Initially written in 2002 (updated subsequently)]

 

[Based on the federal model constructed in ‘A Federal Constitution for the United Kingdom – An Alternative to Devolution” (Dartmouth/Ashgate, 1997) by M A Fazal.]

 

The conflict between the north and the south of Sudan is summed up by the statement:

 

“Broadly the war pits rebel forces seeking more autonomy for the mainly Animist and Christian south against the Muslim government in the north. Oil and ideology have further complicated the conflict in Africa’s largest country”. 

 

This sums up the issues underlying the conflict between the north and the south of Sudan.

 

Background

 

The origin of the civil war in Sudan dates back to the 1950s. The three southern provinces of Al Istiwai, Bahr al Ghazal and Aali an Nil  were centres of opposition  to Khartoum’s authority since the days before independence. After independence in 1956, southerners resented the replacement of British administrators in the south with northern Sudanese. The problem concerned the status of the civil service. On August 18th 1955, the Equatoria Corps, a military unit composed of southerners, mutinied at Torit. This marked the beginning of the first war in southern Sudan. By the late 1960s, the war had resulted in the deaths of about 500,000 people. Several hundred thousand more southerners fled into the forests or escaped to refugee camps in neighbouring countries.

 

In February 1962 owing to the harsh treatment of southern civilians by northern armed forces, better educated southerners (who had served in government posts or were teachers) formed the Sudan Africa Closed Districts National Union. In April 1963 the Group changed its name to the Sudan African National Union (SANU) and advocated outright independence for southern Sudan.

 

Meanwhile numerous less educated southerners formed guerrilla bands the Anya Nya which began activities in 1963. By 1969 they had established foreign contacts and obtained weapons and training. Thus the Anya Nya developed into an effective military force.  By 1971 it controlled most rural areas in the south. The military leaders of the Anya Nya formed a political organisation, the Southern Sudan Liberation Movement (SSLM),

 

Jaafar Nimeiri who became the President of Sudan in 1969 negotiated an agreement with the SSLM in 1972 in Addis Ababa (the capital of Ethiopia). Under the provisions of the Addis Abba Accord the central government and the SSLM agreed to a ceasefire and Khartoum recognised the regional autonomy of the three southern provinces. During the course of the negotiations the SSLM had demanded a federal state with a separate southern government. After signing the accord, Nimeiri issued a decree providing for the establishment of a Southern regional assembly.

 

Throughout the 1970s the Nimeiri government observed the Addis Ababa Accord fairly and faithfully and the south’s relative political freedom contrasted sharply with the authoritarian rule in the rest of the country. However, subsequently the Addis Ababa Accord was undermined for the same reasons as had prompted the southern rebellion in the 1960s, namely the fears that the north was determined to force Arabisation and Islamisation on the south. Owing to the increasing influence of the Muslim Brotherhood (the right-wing Islamic party) over the central government policies Nimeiri virtually abrogated the Addis Ababa Accord by dissolving the Southern Regional Assembly in 1981 (US Library of Congress Country: Sudan).

 

The proportion of the main religious groups in Sudan is as follows: Sunni Muslims: 70%; indigenous beliefs: 25%; Christians: 5%. The problem has always been one of reconciliation among these religious groups. The SPLM is opposed to the application of Sharia law (the Islamic religious law) to the non-Muslims. In February 1983 a mutiny broke out among the southern troops. In August 1983 a former colonel in the Sudanese army, John Garang, formed the Sudanese People’s Liberation Movement (the SPLM). In September 1983 when Nimeiri imposed the Sharia over the whole country, the SPLM rebellion coordinated by its newly formed military wing the Sudanese People’s Liberation Army (the SPLA) turned into a full scale war – a conflict that has lasted until now. It is estimated that about 2 million people have been killed since 1983. More than 4.5 million have been internally displaced.  Khartoum alone has a refugee population of 4 million. One million Sudanese are living in exile in other countries. These are the figures out of a total population of 30 million in Sudan (Amnesty International: Sudan).The figures are indicative of the extent of damage caused by the civil war.

 

Unlike its predecessor the SSLM sought not secession from Sudan but a solution based on a secular, democratic and a federal political system. Since one of the first acts of the transitional government that overthrew Nimeiri in 1985 was to suspend the enforcement of the Sharia law promulgated in September 1983, the SPLM agreed to negotiate with the central government. In 1986 the SPLM leaders and several northerners met at the Ethopian Koka Dam where they signed an important declaration. Nevertheless the primary issue separating the SPLM from the northern parties - the role of the Sharia remained unresolved.  That issue remains still unresolved despite subsequent attempts to resolve it.

 

Discovery of Oil and Gas

 

Sudan is called the potential “breadbasket of the Arab world”. Large-scale mechanised agriculture expanding into southern Kordofan, a huge influx of international capital and the discovery of oil and gas ought to bring into reality this vision.  Nonetheless oil seems to have been the final spark for uprisings and the formation of armed opposition in Sudan such as Anyana II and the SPLA in 1984. The SPLA’s first armed activities in 1984 were targeted at the workers of the oil company Chevron which began operations in Red Sea and near Bentiu, Makkal and Muglad in south and south western Sudan in 1974.  In 1980 Nimeiri embarked on “re-division” of the south from one autonomous unit to three states.  A map attached to the Regional Government Bill put the area where oil had been found into the northern part of Sudan. His creation of a new “Unity” state around Bentiu to prise it from the south caused political upheaval among southerners, as did the presidential decree that an oil refinery was to be built at Kosti, in the north, instead of in Bentiu.

          

Despite the SPLA-Government agreement negotiated under the Machakos Protocol signed on 20th July 2002, the SPLA launched military strikes in the oil-rich areas. According to the SPLA statement of 2 October 2002, one of its commando units mounted an attack on the oil collection and production complex in Heglig and destroyed the main station, thereby cutting off oil supplies to Khartoum. Heglig accounts for the bulk of Sudan’s oil production running currently at 240,000 barrels per day.  It came on stream in August 1999 making Sudan an oil-exporting country. If this were to happen, that would strike a blow to the government’s plans to boost production to 300,000 barrels per day by the end of 2003 and to more than 450,000 barrels per day by 2005. Heavy fighting was also reported from the Western Upper Nile regions at about the same time. The SPLA claimed in a press statement issued on 2nd October 2002 that the attack on Heglig was codenamed “Our Petrol”. “It targets the government plan to pillage our people’s resources”. In its statement the SPLA renewed its warnings to all oil companies, telling them to halt oil production until a just peace was achieved. The statement said that all oil contracts would be renegotiated if a peace deal were to be signed. According to the latest press reports at the time of writing this paper, the Government forces have recaptured those oil-rich areas and peace talks have been resumed under the auspices of the Inter-Governmental Authority on Development following a temporary agreement to cease hostilities.

Because of these hostilities, according to the press report of 30 October 2002, Talisman Energy Inc., the Canadian oil company, sold its Sudan oil interest to a subsidiary of India's national oil company, Oil and Natural Gas Corporation Ltd., for $758 million. Talisman had been involved in Sudan for four years through a 25 per cent stake in the greater Nile Petroleum Operating Co. production and pipeline project. The rest of the development is owned by state-owned oil companies from China (40 per cent), Malaysia (30 per cent) and Sudan (five per cent). Canada’s Tailsman Energy Inc. finally completed a deal on 9th March 2003 to sell its oil interests in Sudan for about $ 1.2 billion to a subsidiary of India’s national oil company.

 

This raises the question whether mines and minerals including oil and gas should come under the federal or provincial jurisdiction in the event of a federal solution to the conflict  in Sudan being achieved.

 

Solutions to the Sharia Question

 

The question of the role of Sharia has been the stumbling bloc in all negotiations between the Government of Sudan and the SPLM/A about the character of the state. An official role for Islamic law in the state is perceived by the latter as a tool for northern domination.  In September 1983 when Nimeiri introduced Sharia law, his regime used it to terrorise and humiliate his opponents with indefinite detention, public floggings, amputation and death penalty for ‘heretics’. Nimeiri used the   Sharia law to justify the execution of Mahmoud Mohammed Taha who was regarded by many as a saintly man. The role of the Islamic law in the state has been the most challenging issue in other Muslim countries as well. Thus the most passionate debates on this issue took place in the Constituent Assemblies of Pakistan where the question of the adoption of the country’s constitution arose. [See the Reports of the Constituent Assemblies of Pakistan (1948-1956).] In the end the only Islamic provisions that appeared in the Constitution of 1956 provided (a) that the President of Pakistan was to be a Muslim and (b) that the Islamic principles ought to govern the lives of the Muslims – a mere exhortation and no more  (Articles 24 and 32 of the Constitution of 1956).

 

In Sudan several attempts have been made from time to time to resolve this question.

 

[A] One approach is based on the works of the late Mahmoud Mohammed Taha. His main work is entitled “Ar Risallah Athaniya Al-Islamiah” (Second Message of Islam). His works draw a distinction between the sources of Islamic law (mainly the Holy Koran) and the system of law that was developed from those sources afterwards. It argued that the latter was based on aspects of the Koran and Sunna (the teachings and practices of the Islam’s holy prophet Muhammad (Peace and Blessings of God be upon him)) particularly appropriate to the specific social and political needs of the Middle East in the eighth and ninth centuries. It was therefore “based”, so the argument went, “on the prevailing institutions and norms of that particular time and place which had no conception of constitutionalism and the rule of law in the modern sense of these terms.” By basing their governmental system on the fundamental principles of justice, equality and liberty contained in other parts of the Koran and Sunna, the Muslims can now develop a modern constitutional order which reconciles the aspirations of the Muslims to be governed in accordance with Islam with the rights of all citizens”

 

It is submitted that this approach accepts some Islamic laws and rejects others as being incompatible with modern ideas.  It also rejects the established way of interpreting Sharia. This author is unable to endorse and support this approach as authentic as being Islamic.

 

[B] Another approach is that of Dr Peter Nyot Kok.  Nyot Kok was the chairman of the South Sudan Law Society. He suggested in 1991 that a general principle of political and legal coexistence could be derived from a device used in the Criminal Bill of 1988.  This was introduced by al-Turabi, Attorney-General of the National Islamic Front (NIF), founded by Muslim Brotherhood leaders (in particular Hassan al Turabi who as Nimeiri’s Attorney-General played a key role in introducing Sharia in September 1983 thereby starting the current civil war.  Thus it was said that a Muslim in the south would have the choice between a huduud penalty (Islamic penalty) and a non-huduud one.

 

It is submitted that this approach adopts a partial and regional application of Islamic law. It is questionable as to whether it is an appropriate Islamic approach. Depending on where a Muslim happens to live the application of the Sharia law would be a matter of choice for him. In one part of the country he would have no choice in the matter while in another part of the country he could accept or reject it.  This author would find such an approach unacceptable as being Islamic.

 

The Fazal Approach to the Question of the Role of the Sharia

 

This author’s approach to the question is as follows. It is submitted that the Sharia law ought to apply to all Muslims throughout the territories of the proposed federation of Sudan irrespective of whether they live in the north or in the south.  All the courts, tribunals, public authorities and statutory bodies will administer the Islamic laws to the Muslims.  However, the Sharia law will not apply to the non-Muslims, irrespective of the province in which they live – whether in the south or the north. 

 

The theological justification for this application of the Sharia to Muslims only and its non-application to non-Muslims is provided by the Holy Koran, the Muslim Holy Book.  Thus, Chapter 109 (v. 2-6) of the Holy Koran directs Muslims to say to non-Muslims,

 

“2. I worship not that which you worship.”

“3. Nor will you worship that which I worship.”

“4. And I shall not worship that which you are worshipping.”

“5. Nor will you worship that which I worship.”

“6. To you be your religion and to me my religion.”

 

It is anticipated that there will be freedom of movement throughout the territories of the federation of Sudan.  As a result, Muslims will be living in the south and non-Muslim will be living in the north, including the federal capital Khartoum. The question of application of the Sharia to a person will be determined not by his choice (as recommended by Nyot Kok) but by whether he or she is a Muslim or non-Muslim, as provided by the proposed constitutional settlement. 

 

The areas of law governed by the Sharia are as follows:

 

[A] Civil law: Marriage, divorce, custody of children, parentage and legitimacy, guardianship, inheritance, wills, gifts, trusts and the administration of estates. (Asaf A A Fyzee, Outlines of Muhammedan Law (OUP 2002); Jamal J Nasir, The Islamic Law of Personal Status (Graham & Trotman, 1990).

 

[B] Criminal Law: homicide and law of equality (Quasas), adultery, defamation, treason and conspiracy, robbery, an intoxicant, apostasy, desertion from the battlefield. (Abdur Rahman, I. Doi, Shariah: The Islamic Law (Ta-ha Publishers, London 1984.)

 

[C] Commercial Law: Contract, partnership, agency, guarantees, hire including consumer credit (Abdur Rahman, I. Doi, Shariah: The Islamic Law, chapters 20 & 21).

 

What has been labelled in this article as the Fazal approach (i.e. the application of Sharia law to Muslims only) was adopted in the Indian Sub-continent under British rule as far as civil law, as stated above, was concerned.  There Muslim law applied to Muslims only and Hindu law applied exclusively to Hindus in the sphere of civil law.  The system has been continued in India, Pakistan and Bangladesh (formerly East Pakistan) after the independence in 1947.

 

Where one party to the same legal proceedings is Muslim and another non-Muslim, this approach might present a problem.  As for instance, where the rules of evidence and procedure e.g. those relating to competence, compellability and reliability of witnesses are different, the question of whether Sharia or different laws should apply will arise.  The Fazal approach will dictate that Sharia should apply to the party/parties who are Muslim and a different rule should apply to the party/parties who are non-Muslim.  In such a case, it is submitted that the solution should be as follows.  The Islamic and non-Islamic rules should apply to different parties (where both the rules are identical the case should present no problems), the former to the Muslim party and the latter to the non-Muslim party.  However, the court will have an overriding duty to administer justice fairly and equitably, both under Islamic law and under the proposed federal constitution.  Therefore, judicial discretion will play a part in the eventual decision in the case between the parties. Precedents of case law are likely to develop so as to formulate the rules governing the exercise of judicial discretion.  As a result, the judicial discretion is likely to be structured by rules.

 

The essence of Islamic jurisprudence is JUSTICE and FAIRNESS.  This might provide additional grounds for judicial review of legislation and governmental actions.  That would not be discriminatory as between Muslims and non-Muslims.  Instead it might enrich the jurisprudence of the laws and rules across the board.  Thus the High Court and the Supreme Court of Pakistan have injected into the substantive law of judicial review of legislative and governmental actions ‘something in the nature of general principles of law’ (as known in French administrative law) incorporating the concepts of impartiality, uniformity, fairness and frankness (connoting a duty to give reasons for decisions).  Islamic sources of law have furnished the jurisprudential basis for this extended judicial review.  In Pakistan ‘all three organs of the state have to act in accordance with the provisions of the Constitution, keeping in view the Injunctions of Islam as set out in the Holy Koran and Sunnah’.  (M A Fazal, Judicial Control etc. p. 152.)  Certain legal consequences have followed from such an approach.  [A] Justiciability.  The sphere of non-justiciability seems to be diminishing. [B] Judicial review of legislation has expanded. [C] The exercise of statutory power has to pass the test of Islamic jurisprudence.  [D]  The ‘status’ and ‘contract’ distinction as known in English law (public employees having no ‘status’, but only a ‘contract’ can be dismissed without a right of hearing) has been successfully challenged.  As a result, the employees of statutory corporations as well as civil servants cannot be arbitrarily dismissed.  [E] The broad proposition that ‘where there is a right, there is a remedy’ (as opposed to English law’s position that ‘only where there is a remedy, there is a right’) has been founded on Islamic jurisprudence. 

 

The reader is referred to a book of this author for a detailed discussion on these points.  [M A Fazal, Judicial Control of Administrative Action in India, Pakistan and Bangladesh (Butterworths, 2000) pp 152-157.]  This shows that the operation of Islamic law side by side with other laws as well as judicial discretion in administering the Sharia is likely to be a healthy development in the proposed federation of Sudan. 

 

However, the Fazal approach will have implications for legal education. It will presuppose that practising lawyers, judges of the courts and tribunals as well as other officials concerned with the administration of law are familiar with Islamic Sharia law and non-Islamic law, which would operate side-by-side within the proposed federation of Sudan. For this reason, the courses of law run by the universities, colleges and professional bodies must contain in their syllabi provisions of both Islamic and non-Islamic law. This will ensure that lawyers, judges and administrators will be competent to administer both systems of law to Muslims and non-Muslims.

 

For these reasons, the Fazal approach is recommended to the parties to the conflict for adoption as a basis for a solution to the question as to the role of the Sharia in the proposed federation of Sudan. 

Islamic Finance

A specific question concerning an aspect of Islamic finance is pursued in this section. It is relevant in the context of an Islamic state. That is: what is Riba or usury [Riba is of two kinds (a) Riba Nasia i.e. interest charged on money lent and (b) Riba Fadl i.e. taking of superior goods in exchange for goods of inferior quality]. Riba is forbidden in Islam (The Holy Koran, chapter 3, verse 130). The moot question is: what is Riba/usury? There are two possible answers to this question. One is that any amount of money received by the lender from the borrower as interest is Riba which is prohibited in Islam. On this view, interest of a penny accepted by an investor from an investment company on his investment of a million pounds will be Riba/usury and is forbidden. The investor in such a case commits a sin. Those who support this view would cite verses 278 and 279 in chapter 2 of the Holy Koran [stating “O you believe! Observe your duty to Allah and give up what remains (due to you) from Riba, if you are (in truth) believers. And if you do not, then be warned of war (against you) from Allah and His Messenger. If you repent then you have your capital sum (without interest). Wrong not and you shall not be wronged].

This view has serious implications for financial investments and the banking system. The only way to avoid this prohibition and the ensuing penalty (see, for instance, Sahih Al-Bukhari vol.3, Hadith no. 298 at pp. 168-169 stating "The Prophet (Peace and Blessings of Allah be upon him) said 'This night I dreamt that two men came and took me to a Holy land whence we proceeded on till we reached a river of blood, where a man was standing and on the bank was standing another man with stones in his hands. The man in the middle of the river tried to come out but the other man threw a stone in his mouth and forced him to go back to his original place. So whenever he tried to come out, the other man would throw a stone in his mouth and force him to go back to his former place. I asked ' Who is this man'? I was told ' The person in the river was a Riba-eater'.") is to engage in trade (which is permissible) and share the profit and loss of the investment in which the capital is invested. Thus the Holy Koran states "And Allah has permitted trade and forbidden usury" (chapter 2, verse 275).

The second view is that Riba/usury refers to excessive or exploitative amount of interest charged on the capital lent. If the interest charged is fair and reasonable and not excessive that is not Riba/usury. In Saudi Arabia a borrower can borrow money from a bank. The borrowing is not free. Indeed the system could not operate on the basis of free lending. The bank will charge an administrative cost or a bank charge. The amount charged is not called 'interest' but it is fair and reasonable in the circumstances of the lending transaction. Even if this administrative cost or bank charge were called 'interest' that would not necessarily amount to Riba/usury, so long as the amount were not excessive or exploitative. Terminology is not important. What matters is the substance of the transaction containing the charge. Those who support the second view would cite verse 130 of chapter 3 of the Holy Koran stating "O you who believe! Eat not Riba (usury) doubled and multiplied but fear Allah that you may be successful". This verse seems to suggest that if the amount of interest charged on the lending is double or multiple amount of the capital lent then that is excessive/exploitative and is forbidden.

In view of the fact that there are two possible answers (as to what is Riba/usury) the question is which of these answers is more viable in terms of Islamic theology. It is submitted that the overall Islamic jurisprudence as contained in the teachings of the Holy Koran and Hadith as a whole ought to determine the issue. Social and economic justice between the rich and the poor [as demonstrated by the requirement to pay zakat (compulsory charity) and the emphasis on voluntary charity] is at the heart of Islamic values. Historically economic exploitation of the poor by the rich has been a dominant feature of every society. Riba/usury has been the chief instrument of such exploitation. Therefore it is not surprising to see that Islam prohibits the use of Riba/usury as it enables the lender to double, treble, quadruple and multiply the amount of capital lent by way of charging the borrower with excessive/exploitative amounts of interest. This indicates that the second answer to the question as to the meaning of Riba/usury is more viable in Islamic jurisprudence.

 

Mines and Minerals: Oil and Gas – A Federal or Provincial Subject?

 

In order to make an appropriate recommendation for the proposed federation of Sudan on this matter, it is necessary to refer to the position in other federations.  In India, taxes on mineral rights form part of the provincial subject (technically known as ‘State’) but the federal parliament may impose limitations on mineral development. (Schedule VII, List II, Item 50 of the Constitution).  Furthermore, the federal parliament may legislate on any provincial subject, including gas and oil on the ground that it is in the national interest to do so (Article 249).

 

In Germany this is a concurrent subject on which both the federal and the state (technically known as ‘Land’) parliament can exercise jurisdiction [The Constitution (‘Grundgesetz) Article 74(1)].  Under Article 72(2) the federal parliament may exercise its concurrent jurisdiction where there is a ‘need’ for such legislation.  In other words, the federal parliament may annex this provincial jurisdiction to its own on the ground that there is a ‘need’ for such an action.  Article 3 states that federal legislation shall override provincial law in all cases where the latter cannot be reconciled with the former.  Thus Article 3 contains the doctrine of federal supremacy, which is to be found in all the leading federations, including Australia (e.g. Section 109, the Commonwealth of Australia Constitution Act 1900) and the USA (Article VI of US Constitution).  The relevant principle has been variously described as ‘paramountcy’, ‘covering’, ‘occupied field’ or ‘the pre-emption and supersession doctrine’.  (M A Fazal, Federal Constitution for the United Kingdom – An Alternative to Devolution, pp. 39-40.)

 

The position with regard to mines and minerals in Canada is as follows: “Mineral rights vested in the Crown in the right of Canada including those situated in [federally administered] territories and off-shore, underlying Canada’s continental margins, as well as those underlying certain federally owned lands within the provinces.”

 

“The Supreme Court of Canada in its opinion of November 1967 stated that between Canada and the province of British Columbia, Canada has proprietary rights in, and legislative jurisdiction over ‘lands including the mineral and other natural resources of the sea bed and subsoil seaward from the ordinary low water mark on the coast of the mainland and the several islands of British Columbia outside the harbours, bays estuaries, and other similar inland waters to the outer limit of the territorial sea of Canada, as defined in the Territorial Sea and Fishing Zones Act’.  The Court also stated that the federal government has legislative jurisdiction ‘in respect of the mineral and other natural resources of the seabed and subsoil beyond that part of the territorial sea of Canada… to a depth of 200 metres or beyond that limit, to where the depth of the superjacent waters admits of the exploitations of the mineral and other natural resources of the said area’ [the Supreme Court expressed its opinion in Reference Re Ownership of Offshore Mineral Rights (1968) 65 DLR 353 (2d)].”

 

“In general all Crown mineral lands lying within the boundaries of the seven provinces (with the exception of those within the Indian reserves, national parks and other lands which are under the jurisdiction of the federal government) are administered by the respective provincial governments.” (M A Fazal, A Federal Constitution for the United Kingdom – An Alternative to Devolution, p. 151)

 

This position is broadly similar to that in the United States.  However, owing to a number of provisions of the US constitution, the federal jurisdiction over oil and gas has been considerably enhanced.

 

A] The Supremacy Clause of Article VI of the Constitution. It states that the federal constitution and the laws enacted by the federal parliament (Congress) in pursuance of the constitution “shall be the supreme law of the land”.  The Supremacy Clause invalidates all states laws (i.e. the provincial laws) that conflict or interfere with an act of Congress: Rose v Arkansas State Police 479 US 1 (1986).  The same applies to the federal government’s regulations promulgated pursuant to Congressional legislation: Capital Cities Cable Inc. v Crisp 469 US 691 (1984).  This is known as the ‘doctrine of pre-emption’.  It would enable the federal government and parliament to assume jurisdiction to the extent that is considered by them to be appropriate. 

 

B] The Commerce Clause. Article I, Section VII, Subsection 3 of the US Constitution provides that Congress shall have power to “regulate commerce with foreign nations and among several states”.  Even in the absence of any pre-emptive legislation which comes under the Supremacy clause (as mentioned above), the Commerce Clause bars state regulation that unduly burdens interstate commerce.  The Commerce Clause acts as an implied restraint on state regulatory powers which must give way before the superior authority of Congress to legislate on matters involving interstate commerce: United Building and Construction Trades of Camden Council and Vicinity v Mayor and Council of Camden 465 US 208 (1984).  Thus “Mines and mills, factories and – all engaged in production rather than commerce in the literal sense are brought within the sweep of the Commerce Clause provided only that they exert some effect on interstate commerce” [Bernard Schwartz, Constitutional Law (Macmillan, 1972) p 98].

 

Therefore the Commerce Clause provides another plank for the federal jurisdiction over oil and gas.  In recognition of the Commerce Clause, the US Supreme Court has declared that a state (i.e. a province) cannot make the payment of licence tax or the securing of a licence a condition to carry on interstate commerce (e.g. to undertake exploration of oil and marketing of it) and cannot tax the privilege of carrying on interstate trade: Pacific Tel & Tel Co. v Tax Comm 297 US 403 (1936).  Neither states nor a sub-division thereof can enforce any licence enactment, the effect of which is to embarrass commercial communication between different states, or to discriminate against the products of another state within the US or of a foreign country. (Volume 51, American Jurisprudence, 2nd ed (1968) p. 28).

 

C] The US Bill of Rights: The Equal Protection Clause (the 5th and 14th Amendment).  Up to a point, the US Supreme Court has been prepared to recognise the right of the states (the provinces) in exploiting their own natural resources (e.g. oil and gas) and in protecting the interests of the in-state business corporations, even though their operations might result in some incidental burdens on interstate-commerce.  North-West Central Pipeline Corporation v State Corporation Comm of Kansas 489 US 493 (1989).  By contrast, judicial review of plainly discriminatory state legislation and/or regulation is nearly always fatal.  Indeed, the Supreme Court has stated that “if a restriction on commerce is discriminatory, it is virtually per se invalid”: Oregon Waste Sys. Inc. v Department of Environment Quality 511 US 93, 99 (1994).

 

US Distribution of Jurisdiction over Oil and Gas

 

The above discourse shows that in the USA the Federal Government and the states (the provinces) have a parallel jurisdiction over oil and gas, but that, for the reasons states above, the federal authority on the matter has been strengthened.  Considerations of natural conservation and environmental protection have contributed to this trend.  The jurisdiction over offshore oil and gas belongs to the federal government.  The relevant federal statutes authorises the granting of oil and gas leases on the submerged lands of the outer continental shelf (the Outer Continental Shelf Act: 93 USC ss. 1331 et seq).  The federal government exercises similar jurisdiction over federal lands.  The federal statute (the Mineral Leasing Act of 1970) governs the issue of permits for exploration and of leases for production for federally owned oil and gas resources.  The states (provinces) exercise similar jurisdiction over state lands.  Insofar as the right to regulate the gas and oil industry is based upon their welfare power (technically known as the ‘police power’ in US law), it is vested primarily in the states.  Under the view that production is essentially a mining operation, this phase of the business cannot be governed by federal law, even though it is shipped into interstate or foreign commerce.  However, the state operations will be subject to various constitutional provisions, as discussed above.  (See volume 38, American Jurisprudence, 2nd ed., pp. 620-621, 725-727, 735-737 and 742-743.)

 

It is submitted that the distribution of jurisdiction over oil, gas and other minerals between the federal government and the provinces in our proposed federation of Sudan ought to follow the US model. 

 

Civil Service

 

It is necessary to deal with the question of civil service under the proposed federal structure.  This issue has its origin in the days before the independence of Sudan in 1956.  Although Sudan achieved independence without conflict, it inherited many of the current problems from the Anglo-Egyptian Condominium.  Chief among these was the question of the status of the civil service.  The residents of the three southern provinces of Al Istiwai, Bahr al Ghazal and Aali an Nil resented the replacement of British administrators in the south with northern Sudanese.  Under the proposed federal constitution, each of the federating units (to be called the ‘provinces’ under our proposal) would have its own civil service to administer the functions assigned to the provinces.  The provincial civil service will be open only to the residents of the respective provinces, irrespective of race, colour, religion and language.  The federal civil service, including the defence services, would however be open to the residents of all the provinces, strictly on merits.  Therefore, each provincial civil service will comprise its own residents.

 

President and Prime Ministers

 

If the presidential system of government, as it prevails in the USA, is adopted in Sudan, it is envisaged that the president would be the effective holder of power in the proposed federation of Sudan at the federal level.  In this case, it is recommended that the offices of the president and vice-president ought to rotate between the northerners and southerners.  Thus, if the president is elected from the north for one term, the vice-president should be elected from the south for the same term.  The following term, their respective roles should be reversed.  That is to say, the president should be from the south and the vice-president should be elected from the north.

 

If the system of government adopted is one of a parliamentary system, as exists in Britain, the prime minister would be the holder of real power at the federal level.  In such a case, it is recommended that the offices of the prime minister and the president (the ceremonial head of state) should alternate between the northerners and the southerners.  In other words, if the prime minister is elected from the north, the president should be from the south for one term.  For the following term, the prime minister should be from the south and the president from the north.  The choice for these officers to be made by parliament would, therefore, have to be limited in the terms as indicated above.

 

Recommendation for the Proposed Federation of Sudan

In view of the pronounced demand of the parties to the conflict in Sudan, viz. the demands of the southerners for the maximum of autonomy, democracy and constitutionalism, and those of the northerners for a resolution of these issues within the framework of one country, it is submitted that the federal model constructed in a book of this author entitled ‘A Federal Constitution for the United Kingdom – An Alternative to Devolution’ (Dartmouth/Ashgate 1997) be adopted as a basis for a federal solution to this conflict. 

 

The model seeks to provide for the maximum of autonomy for the federating units, adequate resources for the centre as well as the provinces to meet their constitutional functions and responsibilities, a role in foreign affairs for the provinces, including, where appropriate, individual membership of the United Nations and other international organisations.  The proposed system contains the provisions of ‘regional equalisation’ between the federating provinces, designed to ensure a uniform standard of living throughout the territories of the federation, coupled with ‘vertical’ and ‘horizontal’ fiscal equalisation between the different levels of government.

 

The provisions of composition, powers and functions of the upper house of the federal parliament are so designed as to provide a meaningful share of power at the centre for the federating provinces.  The details of these schemes are set out below.

 

The Upper House of the Proposed Federal/Confederal Parliament

 

Introductory

 

The strategy behind this model for the upper house is two-fold.  First, the countries constituting the proposed federation ought to retain much of their current independence at the state level.  Secondly, they should all have a meaningful share of power at the centre.  This objective is the guiding consideration behind the formulation of the detailed proposals for (a) composition, (b) powers and (c) for devising machinery for the resolution of deadlocks/disputes between the lower and the upper houses of the confederal/federal parliament.  A federation normally comprises large and small states, the latter being apprehensive of domination by the former.  As a consequence, the second chamber is so designed as to be able to protect the interest of the weaker states as against the stronger states.

Composition of the Upper House

The question of composition involves two issues, viz. (1) distribution of seats i.e. how many seats each of the territories comprising the federation ought to have in the upper house of the federal parliament. (2) Representation of the territorial units in the upper chamber.  On the first point, since some states are likely to be more populous than others, a compromise is called for.  Thus the US model gives two seats in the Senate to each State in the USA irrespective of population so that small states are not swamped in a parliament elected on the basis of population.  In Germany, on the other hand, the compromise formula gives neither equal representation to states, nor is it strictly based on population.  Thus Art.  51 of the German Constitution provides,

 

“(1) The Bundesrat [the upper house] consists of members of the Länder [states] governments which appoint and recall them.  Other members of such governments may act as substitutes.”

(2) Each Land has at least three votes; Länder with more than two million inhabitants have four, Länder with more than seven million inhabitants six votes.

(3) Each Land may delegate as many members as it has votes.  The votes of each Land may be cast only as block vote and only by members present or their substitutes.”

The effect of the Art. 51 formula might be that larger states are under-represented (e.g. the state of North Rhine Westphalia have almost thirty times the population of Bremen, but has only double the number of Bundesrat seats), but it provides a strong voice for the small states or under-populated areas.  Therefore, the German model is recommended for adoption for the proposed federation.  However, weighted voting for the countries constituting the federation (as distinct from the federating units such as the states in India) might deserve consideration. 

In the European Union the Council of Ministers is represented by the Member States on the basis of weighted voting.  Where the Council is required to act by qualified majority voting, the votes of its members are weighted as follows:

Belgium           

5

Denmark                     

3

Germany                     

10

Greece            

5

Spain               

8

France             

10

Ireland             

3

Italy     

10

Luxembourg    

2

Netherlands

5

Austria

4

Portugal           

5

Finland

3

Sweden

4

United Kingdom

10

 

(EU Treaty, Art 205(2))

 

Representation in the European Parliament is weighted as follows:

 

Belgium           

25

Denmark                     

16

Germany                     

99

Greece            

25

Spain               

64

France             

87

Ireland             

15

Italy     

87

Luxembourg    

6

Netherlands

31

Austria

21

Portugal           

25

Finland

16

Sweden

22

United Kingdom

87

(EU Treaty, Art 190(2))

 

In our model, the Council of Ministers and the European Parliament of the European Union ought to be perceived as comparable to the upper and lower houses of the proposed federation.

On the second issue the territorial representation of the federating units in the upper chamber may be achieved through either  (a) governments of the states e.g. through appointment by the state governments as in Germany or (b) state assemblies as in India or (c) the people i.e. direct election as in the USA or Switzerland. Election of the upper house by the state assemblies or by the voters might make the chamber democratically accountable but the elected members have no automatic connection with the state government of the area they represent; nor do they provide any meaningful link between the upper house of the federal parliament and the respective state assemblies.

We have stated at the outset that our guiding consideration is to ensure that the countries constituting the proposed federation must have a meaningful share of power at the centre. This consideration dictates that we should adopt the German model i.e. representation of state governments to constitute the upper house. The German Parliament is the only example in the world where the upper house is entirely composed of members of the government of the federating states. The German Bundesrat is said “to be closest comparator to the European Council of Ministers. There are considerable advantages associated with such a system:[a] It creates a real institutional link between the states and the centre…[b] It makes intergovernmental relations transparent …[c] It genuinely binds regional and national concerns together. Because state governments can scrutinise national policy  and because they bring their own policy concerns to the table, this fosters a better understanding between the states and the centre and allows joint strategies to be developed. It may even result in territorial governments being prepared to effectively ‘pool’ their powers to legislate upwards – since they have an opportunity through the upper house to influence national legislation” [Meg Russell Representing the Nations & Regions in a New Upper House (1999,The Constitutional Unit , UCL,) p.13 ].

However, we are not advocating a wholesale adoption of the practices and procedure  of the German Bundesrat (i.e. the upper house) . It has been said that “the German Bundesrat is not a parliamentary chamber in the usual sense of the term.  It meets only once every six weeks, for a session which generally lasts around half a day.  There are no lengthy debates in plenary sessions, with much negotiation going on in committee.  Instead plenary sessions, which are generally poorly attended, are quick and efficient events where positions negotiated in committee are formally voted on. Meanwhile the committees themselves are attended almost exclusively by civil servants, who deputise for ministers” (Meg Russell, op. cit. 13-14).

We envisage the upper house of the proposed federation to be a full scale legislative chamber.

 

Powers of the Upper House

In true federal systems (as opposed to quasi-federal ones) the upper chamber tends to be more powerful. Thus in the USA bills are introduced in either house but the Senate can amend or veto any legislation including financial legislation (although finance bills have to be introduced in the lower house). Constitutional amendments have to be passed by a 2/3 majority in both houses. In addition the Senate has powers to approve executive appointments, ratify treaties, declare war etc.

 

In Germany  the upper house has the opportunity to see and comment on all the bills before their introduction in the lower house. Constitutional amendments have to be passed by a 2/3 majority in both houses of the federal parliament.

 

The upper house of the federal parliament in Germany has an absolute veto on all bills affecting the jurisdiction of the states – around 60 per cent of bills. This is because the states administer most federal laws. One commentator has said “ The German Bundesrat is successful at binding the states and the national parliament together because of the particular nature of  German federalism . Whilst most policy is decided in outline at national level ,the implementation of  this policy and consideration of its detail ,goes on in the Länder (i.e. the states). The Länder are the mechanism for implementation of government policy  and thus central to decision-making. This is reflected in their powers in the Bundesrat ,where they have an absolute veto on all bills affecting their work –around 60 per cent of legislation. This includes most financial legislation. The existence of two categories of legislation in Germany and the power of the Bundesrat veto over one of them, further strengthens the institution and the links between national and state levels. If the powers of the Bundesrat were not so considerable ,it would not be able to maintain the involvement of senior government ministers from the Länder. This would not be  feasible if, for example, the upper house had only the power to delay legislation … If a chamber is to function effectively as a territorial upper house …it must be given some genuine powers over territorial issues [i.e. issues affecting the states] (Meg Russell, op. cit. 14)

In Germany the upper house is decisive on European matters affecting the states in addition to its role in electing the judges of the federal Constitutional Court and for ‘state of defence’. The above consideration ought to be borne in mind in prescribing the powers of the upper house in our proposed federation.

 

Resolution of Disputes between the Upper and Lower Houses

In devising an appropriate procedure/machinery to resolve disputes between the houses of parliament we will be guided by our starting premises viz. 1. that the countries constituting the proposed federation ought to be able to safeguard their allocated sphere of  independence/ autonomy and 2. that they should have a real share of power at the centre. The possible options for such procedure/machinery are as follows.

A.  The ‘suspensive veto’ as exercised by the British House of Lords.  It merely interposes a delay between the introduction of a bill and its final passage into law. Ultimately the will of the House of Commons which is elected on the basis of population prevails. In the context of our proposed federal framework this will not provide the necessary checks and balance as envisaged. Therefore this option is ruled out.

B. The endless shuttle of bills between the two houses as experienced in Australia. This is also unsatisfactory. The process could only end by dissolving both houses of parliament.

C. Joint sitting of two houses of parliament. This is used in India. The objection to this device in a federal context is that under this procedure the will of the lower house which is generally elected on the basis of population will prevail as its members are likely to be more numerous. Under this system the smaller states cannot possibly safeguard their position against the more populous states.

D. Joint  committee of both houses of parliament. This procedure is used in Germany and the USA. It is thought to be more productive than other devices. “Taking discussion off the floor of the house is likely to create a more constructive and less confrontational atmosphere in which to negotiate” [Meg Russell, Second Chambers: Resolving Deadlock  (The Constitution Unit, UCL, 1999) p. 5 ].  However, as Meg Russell states in the paper cited here adoption of this device calls for  consideration of the following questions.

1. Who can call the joint committee?

In Germany the request will generally come from the upper house if they receive a bill they cannot agree with. However, the request may also come from the lower house or government  in response to an upper house veto. Whoever requests all the parties are bound to co-operate. The German procedure is to be recommended as it provides the opportunity to all the parties involved to initiate the process.  

2. Who are the members of the joint committee?

In Germany the upper house is composed of the members of the states. One member from each of the 16 states is represented on the committee. These will be senior members of the state governments. Considering the fact that the consent of the upper house is required to a bill where the state jurisdiction is involved (and Bundesrat will have a veto over such a bill) this is a satisfactory way of  safeguarding the states’ interests even at the committee stage of a bill and is therefore recommended.

3.                  Ad hoc or permanent committee

In Germany a permanent committee is set up at the start of each parliamentary session, comprising of senior figures (as in the USA). Because it consists of senior figures  its recommendations are likely to be weighty  and therefore acceptable. Being a permanent committee its members are likely to develop trust and co-operation (which is less likely on ad hoc committees). For this reason permanent committee is recommended.  

4. What can the joint committee discuss?

In the USA the committee is limited to the specific clauses of the bill which are in dispute. In Germany the committee’s remit is somewhat wider. It is restricted only to matters which are specified in the motion to convene it. This might permit the committee to add a new clause not previously covered by bill. The German Constitutional Court ruled in 1986 that this was permissible but that it was ‘close to the limit of  the legally acceptable’. Nonetheless the German procedure provides for flexibility and is recommended.  

5. How is the joint committee decision taken?

In the USA the groups representing the two houses vote as blocks with one vote each, agreement depending on a majority among representatives of each house. The decision is very often a compromise between the parties.

In Germany the decision is taken by a majority of votes of committee members. Here the decision is a compromise among the states.  In the joint committee the states have one representative each but in the upper house the states have different number of votes. The committee has to take this fact into account.

On our approach it is the interests of the states rather than of the parties that matter most and consequently the decisions have to reflect a compromise among the states. For this reason the German model is recommended.

6. Can joint committee proposals be amended by the house?

In the USA and Germany the committees’ proposals may not be amended by either house when they are discussed in the house, unless the committee itself recommends otherwise.  It is submitted that this position is preferable in the interest of the integrity and status of the committee.

7. Who has the last word?

In Germany there are two classes of bills – (1) The upper house has a veto on bills that affect the jurisdiction of the states. (2) On the remaining bills the lower house has the last word.  On a bill that is subject to veto by the upper house, once the committee has been called (a committee may be called on any bill where the houses disagree either by the lower house or by the federal government or by the upper house), its recommendations must be accepted or else the bill dies. 

In the USA all legislation must be agreed by both houses.  The recommendations of the joint committees are subject to the same rule.  Failure to agree results in the death of the bill or in another committee being called. 

It is submitted that the German procedure of joint committee (in which each of the sixteen states are represented by one vote) provides a far more effective voice for the states and is recommended for adoption.

Overall the objectives of maximum independence/autonomy for the countries joining the federation and their having a significant share of power at the centre are better served by the adoption of the German model for the upper house than any other in existence.  For this reason, the German model is recommended for adoption subject to the modifications noted above. 

 

Machinery and Model for the Removal of Regional Disparity

Maintenance of integrity and unity of a federation requires measures to maintain a comparable standard of living, employment opportunities and economic development throughout the country.  Relative backwardness of some states compared with others tend to set in process disintegrating forces.  This is why Pakistan was dismembered owing to the fact that East Pakistan was perceived to be at a disadvantage economically.  This is also recognised by the European Union where Art 158 of the Treaty provides,

“In order to provide overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion.  In particular, the Community shall aim at reducing disparities between the levels of development of the various regions and backwardness of the least favoured regions or islands including rural areas.”

Art. 263 has established the Committee of the Regions where the Member States are represented as follows: 

 

Belgium           

12

Denmark                     

9

Germany                     

24

Greece            

12

Spain               

21

France             

24

Ireland             

9

Italy     

24

Luxembourg    

6

Netherlands

12

Austria

12

Portugal           

12

Finland

9

Sweden

12

United Kingdom

24

             

Art. 265 has imposed a mandatory duty on the Council of Minister and the European Commission to consult the committee of the Regions “where the Treaty provides and in all other cases”.

 

Model for Development of Regional Parity

In his answer to the questionnaire (q. 5.6.) issued by the Commission on Centre-State Relations in India as to whether a special federal fund for ensuring ‘faster development in economically backward areas relative to other developed areas of the country’ is necessary, this author suggested a model for development in the following terms:

“I have indicated … that such a fund is clearly necessary in the case of India.  It could be funded by taxes on petrol, gas or other forms of energy, or alternatively on consumption of good and services.  The Finance Commission is not the appropriate body to administer such a fund which would involve regional planning.  It has got to be the planning commission acting in collaboration with the state governments concerned.  The strategy would be first to develop the economic infrastructure.  When that is done, a balanced development – balanced between the urban and rural sectors – would be aimed at.  This would be an all-round development of the villages involving an integration of trade, industry and agriculture coupled with the restoration of ecological balance and afforestation as a part of soil and environmental conservation measures.  Elimination of the distinction between the town and the villages in terms of amenities and economic activities ought to be set as the objectives.  It is submitted that each Thana [the size of a police area in the British- ruled Bengal] should be taken as a unit of development.  This model roughly corresponds to, but is not identical with the commune system in China.  It is designed to prevent drift to the cities and deprivation of rural areas.”

 

“The upsurge in the Third World urban population has overwhelmed resources.  Sprawling slums, massive traffic jams, chronic unemployment, breakdown of essential services etc. are causing communal tensions (as happened in Bombay and Hydrabad in 1984).  In 1984 the population of Delhi, Karachi and Calcutta is estimated to be 7 million, 7 million and 11 million respectively.  By the year 2025, the population projection of these cities is expected to be 20-30 million each.  The development that I am advocating here i.e. a balanced development between the rural and urban sectors is designed to stop the drift to the towns and avoid the urban explosion.”

 

[M A Fazal, A Federal Constitution for the United Kingdom – An Alternative to Devolution (1997, Dartmouth/Ashgate) pp. 256-257]

It is submitted that appropriate machinery and model for the removal of regional disparity is crucial to ensure the success of the proposed federation.

 

Equalisation in the Proposed Federation

 

The model for our proposed federation is one of maximum decentralisation. It is likely that regional disparities among its constituent units of such a federation would be significant. As stated above, marked regional disparities among the constituent units are fatal to the integrity of a federation. The states will compete with each other in order to attract business and industry. To be able to do that successfully they must have the necessary infrastructure and be in a position to supply quality services. This calls for the incorporation of the appropriate equalising mechanism.

The equalising principles devised to cement the unity of a federation are of two types:
1. Regional Equalisation designed to achieve broadly uniform economic development and uniform standard of living throughout the territories of a federation; and
2. Fiscal Equalisation.

Article 104a (4) of the German Constitution reflects the concept of the first type by stating that the Federation may grant the Länder (the States) financial assistance for particularly important investments by the Länder or communes or association of communes, provided that such investments are necessary to avert a disturbance of the overall economic equilibrium or to equalise differences of economic capacities within the federal territory or to promote economic growth.

 

Regional Equalisation.

The principles of regional equalisation are embodied in the provisions of the Treaty of the European Union. Thus Articles 2 and 3 of the Treaty state that one of its tasks is to "promote throughout the Community a harmonious, balanced and sustainable development of economic activities, a high level of employment and of social cohesion, […] the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States". Title XVII of the Treaty headed: Economic and Social Cohesion develops this concept further. Thus Article 158 states that "[i]n order to promote its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion. In particular, the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions or islands, including the rural areas".

In addition to permitting Member states of the Union to grant aids to achieve regional parity under Article 87 [see for instance, Preussent Elektra v. Schleswag (2001) All E.R. (EC) 330 containing a ruling of the European Court of Justice on the interpretation of Article 87] the Treaty provides by Article 159.

“Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in 158. The formulation and implementation of the Community's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 158 and shall contribute to their achievement. The Community shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and the other existing financial instruments.”

Article 160 states that "[t]he European Regional Development Fund is intended to help redress the main regional imbalances in the Community through participation in the development and structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions”.

Article 161 authorised the setting up of a Cohesion Fund to provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure.

Therefore the measures to deal with regional disparities are undertaken at two levels:
1. The EU financial assistance provided via the Structural Funds and 2. Regional aids granted at national levels by the national governments in conformity with the law of the European Union. The reform of the Structural Funds in 1988 gave rise to four Funds: the European Regional Development Fund ( ERDT) to finance infrastructure, productive investment to create jobs, local development projects and assistance to small and medium-sized firms, the European Social Fund (ESF), to help the workforce adapt to changes in the labour market and help the unemployed and other disadvantaged groups to get back to work, in particular by funding training and recruitment schemes, the European Agricultural Guidance and Guarantee Fund (EAGGF) to finance rural development measures and assistance to farmers, mainly in regions whose development is lagging behind, but also under the common agricultural policy of the EU and the Financial Instrument for Fisheries Guidance (FIFG) to finance structural reform in the fisheries sector. Further EU assistance is provided by other institutions such as the European Investment Bank.

The Structural Funds are used to provide the EU financial assistance to regions and groups in need of assistance. They are based on the following seven objectives set out in the "Framework" Regulation 2052/88 [substantially amended by Regulation 2081/93 and by the decision of the Council of the European Union of 1 January 1995 adjusting instruments concerning the accession of the new Member States to the EU: (1995) O.J. L1/1. The latter added Objective No.6]:

Objective 1 - To assist regions whose development is lagging behind.

Objective 2 - to revitalise regions affected by serious industrial decline,

Objective 3 - to combat long term un-employment,

Objective 4 - to integrate young people in the labour,

Objective 5a - to adjust agricultural schemes,

Objective 5b - to develop rural areas,

Objective 6 - to promote the development and structural adjustment of regions with an extremely low population density.

As a result of the EU Regional Equalisation Policy, average per capita income in the three least prosperous countries (Greece, Portugal and Spain) increased from 68% of the Community average to 79% in 1999.

Therefore I would recommend the incorporation of the EU objectives into the laws and the constitution of the proposed federation with the emphasis on the overall uniform economic development of its constituent units and the aim of realising uniform standard of living throughout all the territories.


Fiscal Equalisation

The principle of fiscal equalisation seeks to deal with two types of fiscal imbalances (i.e. the gap between the revenue capacity and the expenditure responsibility): 1. Vertical Fiscal Imbalance and 2. Horizontal Fiscal Imbalance. Vertical fiscal imbalance is said to arise where the revenue capacity of a level of government cannot match its expenditure responsibilities. Generally vertical fiscal imbalance is in favour of the federal government and against the state or regional government (as in Australia). Indeed it is unwise and can be dangerous to invest the centre with too many constitutional responsibilities and too few taxes and resources. This is what was done in Germany under the Weimar Constitution with disastrous consequences. The federal government was forced to cover its budget deficit by issuing debts resulting in hyper-inflation. That in turn caused the rise of the Third Reich which brought about the Second World War [Carsten Hefeker," The Agony of Central Power: Fiscal Federalism in the German Reich" (2001) 5 European Review of Economic History 119-142]. It is equally undesirable to endow regional/state governments with power to issue debt without appropriate constitutional safeguards.

Horizontal fiscal imbalance arises among the constituent units of a federation because of (a) differences in the costs of providing equivalent services in the individual states and (b) differences in their capacities to raise their own-source revenues.

The statement of the principle of fiscal equalisation adopted by the Commonwealth Grants Commission in Australia [an independent body established in 1933 that advises the federal government on (i) fiscal equalisation and (ii) distribution of funds for programme to assist the indigenous population - Commonwealth Grants Commission -Annual Report : 2000-01, p.7 ] is that,

"State governments should receive funding from the Commonwealth (i.e. the Federation) such that if each made the same effort to raise revenue from its own sources and operated at the same level of efficiency, each would have the capacity to provide services at the same standard" [Commonwealth Grants Commission, Report on General Grants Relativities 1999, Volume 1, Main Report, p.4].

The principle is intended to ensure that each State Government has the financial capacity to provide the same level of service to its residents. In using the principle to calculate relativities the Commission takes into account differences among the States in (i) their per capita capacities to raise revenues; (ii) the per capita amount they would spend if they were to provide the average level of services; and (iii) their per capita receipts of SPPs [ Specific Purpose Payments-40% of the total federal transfers to the States in 2001: Commonwealth Grants Commission : Report on State Revenue Sharing Relativities: 2002 Update, p.5].

The methods used to calculate these differences involve (1) the preparation of the FINANCIAL STANDARDS (the per capita average of total State expenditure or revenue for each function), (2) the STANDARD BUDGET (the collection of all the expenditure and revenue categories and then calculating (i) for each State service, the per capita expenditure each State would require if it were to provide the average level of service and (ii) for each source of State revenue, the per capita revenue each State would raise if it applied the Australian average revenue raising effort to its revenue base; (3) EXPENDITURE ASSESSMENT methods (to adjust the standard expenditures to allow for influences beyond the control of individual States that require a State to spend more or less per capita than others to provide the average standard of service to arrive at the state's cost of service provision. The influences thus recognised would relate to characteristics of State population or physical and economic environment because these would influence the State's costs in providing services.) (4) REVENUE ASSESSMENT methods (to take account of the influences beyond a State's control that would result in it raising more (or less) revenue per capita than other States if it applied Australian average rates of tax to its tax bases. Tax bases are generally measured using the value of transactions in each State that would be taxed under the average tax policy).

A State's per capita requirement for a share of the pool of funds available for distribution in each assessment year is then calculated as follows:

  • An equal per capita share of the pool plus adjustments for;
  • the effect of assessed influences on demand for and cost of providing services - expenditure needs;
  • the effect of assessed influences on revenue capacities - revenue needs;
  • the specific purpose payments (SPPs) it has available to fund its expenditure requirements

 

(5) CALCULATION OF PER CAPITA RELATIVITIES i.e. the measures of relative needs used to distribute the GST (Goods and Services Tax) and HCG (Health Care Grants). The final phase of the process is to use the assessments for the past five years to calculate per capita relativities to apply in the future. Each State's relativity is the average of its per capita requirements for a share of the pool in each of the five past years.

In 2001-02, about $2150 million (equivalent to 6% of the total GST/HCG pool and budget balancing assistance) was required to bring the financial capacities of those States with below average capacities up to the average (to meet their aggregate needs) [Commonwealth Grants Commission: Report on State Revenue Sharing Relativities 2002 Update, pp.4 - 7].

On 1 July 2000 major reforms reflecting the Inter-governmental Agreement on the reform of the Commonwealth-State Relations (IGA 1999) came into force: A New Tax System (Commonwealth-State Financial Arrangements) Act 1999. Under this provision the Commonwealth introduced a broad-based consumption tax called the Goods and Services Tax (GST). The 1999 Agreement specifies that the distribution of the GST revenue among the States will be based on horizontal equalisation principles - per capita relativities recommended by the Commonwealth Grant Commission as explained above. It also commits the Commonwealth to provide additional assistance (known as ' budget balancing assistance') during the transitional years prior to the abolition of some State taxes and imposition of additional expenditure responsibilities on the States (to ensure that no State will be worse off than it would have been, had the tax reforms not been implemented).

 

Horizontal Equalisation

 

The States' revenue capacity can vary significantly, thereby affecting their capacity to provide services of the national average. The principle of horizontal equalisation seeks to remedy this defect. Thus Mitchell Sharp, the federal finance minister of Canada said in 1966

"The fiscal arrangements should, through a system of equalisation grants, enable each province to provide an adequate level of public services without resort to rates of taxation substantially higher than those of other provinces" [ Canada, Federal-Provincial Tax Structure Committee, Proceedings of a meeting held in Ottawa, September 14-15,1966 (Ottawa, Queen's Printer,1966), 14].

The above statement was explained as follows: It would provide that any province in which average provincial tax rates (not its own tax rates) would yield less revenue per capita than the yield in Canada as a whole would be entitled to an equalisation payment. However, changes in energy supplies and values in the 1970s and 1980s resulted in the sudden shift in the relative positions of provinces in Canada that produced oil and provinces that consumed it. This had effect on the equalisation formula. The automatic response of the equalisation formula to the increases in provincial oil revenues was to increase the entitlements of the recipient provinces. Thus the federal government faced the prospect that one of its major spending programmes would escalate uncontrollably [David B.Perry, Financing the Canadian Federation, 1867 to 1995: Setting the Stage for Change (Canadian Tax Foundation, 1997),,pp.124 and 133.]. This called for a review of the equalisation formula in the light of developments.

In Australia the Intergovernmental Agreement (signed on 1 July 1999) provides that the interstate distribution of the GST will be based on per capita relativities determined by the Commonwealth Grants Commission. At the first meeting of the Ministerial Council for Commonwealth-State Financial Relations (established under the IGA 1999) held on 30 March 2001, New South Wales and Victoria complained that they received much less than equal per capita share of funding under the HFE (Horizontal Fiscal Equalisation) relativities determined by the CGC. The problem is that while vertical imbalance is reduced significantly (in the absence of equalisation arrangements) by equal per capita payments to the States or payments in proportion to the tax collected in each State, horizontal equalisation is achieved best by payments or grants that take accounts of differences in costs of providing services and revenue capacities. However, payments or grants to the States on the latter basis would result in unequal per capita amounts. Nonetheless formula-based approaches implemented by an independent institution are preferable to political negotiations as mechanism for the equalisation process.

Elaborate equalisation mechanism exists also in the German federal system. In view of the fact that income taxes are shared between the federal and state governments in fixed proportion (50% going to the federation and 50% to the states) the vertical fiscal balance is achieved in Germany mainly by varying the V.A.T. This is done by federal legislation which requires the consent of the Bundesrat (the upper house of the German Parliament: Article 106 of the Constitution). Vertical equalisation was last revised in 1992 when the Eastern states were included in intergovernmental fiscal arrangements (taking effect in 1996). As a result, the states' shares of the V.A.T. have increased reflecting the need of the Eastern states to reach parity with their Western counterparts. At present the federal share of the V.A.T. stands at 50.5 percent.

Horizontal fiscal balance is achieved in three steps.

1. The regional apportionment of the V.A.T. Three quarters of the states' shares are apportioned on the basis of population. Another quarter is reserved for the states considered to be "financially weak". They receive supplementary transfers from the V.A.T. to bring their fiscal potential to per capita up to 92 percent of the average.

2. An interregional redistribution scheme. The 'rich' states compensate the 'poor' states through financial transfers. This is also done on the basis of federal legislation which requires the consent of the Bundesrat, "due account being taken of the financial capacity" (i.e. the taxable capacity) of the states and not of the specific burdens (Article 107(2) of the German Constitution (Grundgesetz). The German Constitutional Court in its ruling of 11 November 1999 emphasised that the Constitution requires the federal Parliament to take measures to equalise the differences in the financial capacity of the states. This refers to actual financial resources and not to a relationship between revenue and specific expenditure needs. It is different from the equalisation practices of Australia. The interstate equalising transfer is unique to Germany and does not exist anywhere in the Commonwealth or elsewhere.

3. Supplementary Grants. Thus Article 107(2) of the German Constitution states that the above mentioned federal statute may also provide for grants to be made by the Federation from federal funds to financially weak Länder in order to complement the coverage of their general financial requirements. Such transfers have been widely used after unification of Germany. In particular "gap filling" grants have been introduced that guarantee at least 99.5 percent of the average fiscal capacity for all states. Furthermore, nine states out of sixteen receive federal grants to relieve the costs of "political management" and the new Eastern states (as well as some Western counterparts) receive federal grants in compensation for "special burdens" [Paul Bernd Spahn," The German Constitutional Court takes on the principle of 'solidarity' ( Federations, vol.1, number 1, March 2001)].

The German equalisation system seeks to achieve what is known in Europe as "interregional solidarity". However, recently it has come under criticism from some of the rich states. Thus in the above mentioned case of 1999 three Southern states (Baden-Wurttemberg, Bavaria and Hessen) mounted a challenge before the Federal Constitutional Court against the system of intergovernmental fiscal arrangements. They complained that it redistributes wealth to an excessive degree and creates negative incentives. In fact they wanted to replace it with 'competitive federalism'. Up to a point the challenge succeeded. The Court was particularly critical of the federal equalising grants. At present these have a strong equalising effect (99.5% of the state average for all states). As a result the federal government will have to reduce the number of grants as well as their magnitude.

On horizontal equalisation according to the Court, the Constitution mandates that population be adopted as the sole criterion for distributing resources among the states as opposed to an approach based on needs as in Australia. I have some sympathy with this approach of the Federal Constitutional Court. It is much more difficult to establish objective "needs criteria" than population as a criterion even among entities with comparable responsibilities at sub-national levels, let alone those between governments at national and sub-national levels where there may not always be comparable responsibilities. As for instance, defence is a major national responsibility but it is absent at sub-national levels.

On vertical equalisation the Court ruled that the Constitution demands a definition of 'necessary expenditures' at each level of government and 'a fair compensation' among jurisdictions on the basis of objective statistical data and medium term planning. The Court criticised the existing practice of weighting population as a method to express burdens in the case of the city states. The Court called for a scientific procedure of balancing, based on accurate data. However, the federal government wants to retain the weighting in the case of the city states (such as Berlin). There are some positive elements in the ruling of the Court. However, it will require a fundamental review of the existing German equalisation law.

Meanwhile political pressures are also building up for the introduction of competitive rather than co-financing federalism in Germany. Under the Solidarity Pact 11 signed on 23 June 2001 between the Federation and the States the financial support for East German Länder will end in 2019. Moreover, the reform of the German system of co-financing as a whole has been scheduled for 2004, the year of the next European Intergovernmental Conference which will decide upon a delimitation of powers within the European Union. Within the European legal framework Länder and regions have become competitors in attracting investments. The national state such Germany is losing its capacity to protect those Länder which are less successful. Therefore, the progress of European integration is pushing federal reform in Germany forward.

However, the system of fiscal equalisation has its rationale. Its rationality lies in the maintenance of uniformity of living conditions and the provision of comparable public services throughout the territories of the federation. Any departure from the equalisation principle will carry with it the risk of disturbing the social cohesion and solidarity and a threat to the integrity of the country. Therefore the decision-makers would be well-advised to bear this warning in mind.

India

There are two financial institutions in India which were designed primarily to deal with the issue of vertical fiscal imbalance between the centre (technically known as the Union) and the States, and, to a lesser extent, with that of the horizontal fiscal imbalance. The first is the quinquennial Finance Commission set up under the Constitution (Article 280). The task of the Finance Commission is to make recommendations to the Union Government on the following: (1) the distribution of the net proceeds of the specified taxes (income tax, federal excise tax etc.) between the Union and the States; (2) the principles governing the Union grants-in-aid to the various States (the resource poor States); (3) the transfer to the States needed to supplement the resources of the Panchayats (local rural self-government institutions) and the Municipalities (urban local self-government institutions). Up to 1978 the two criteria used as the basis of distribution were the contribution of each State to revenues (between 10 and 20 percent) and population (80 and 90 percent). Since then two further criteria have been added. These are the per capita income of each State (adopted in 1978) and a complex of backwardness including population of scheduled castes and tribes and the number of agricultural labourers (introduced in 1989). At the time of the Tenth Finance Commission covering the period 1995-2000 formula for distribution of the States' share of income taxes were as follows: 20% according to population, 60% on the basis of per capita income, 5% in relation to economic and rural infrastructure needs and 10% in relation to tax effort. Somewhat similar complex formula was also prescribed for distribution of the States' share of the federal excise duties. Thus population as the dominant criterion for distribution of resources has been somewhat downgraded.

Another financial institution is the Planning Commission, an agency of the federal government which recommends assistance to the States by way of grants and loans in support of various schemes coming under the Five Year Plan Programmes for poverty alleviation, employment generation and specific development projects. The Planning Commission acts on criteria such as 'special category States' (all the seven States in the Northeast), non-special category States, population, poor per capital income of States, distance factors and fiscal performance (tax effort, fiscal management, fulfilment of national objectives and special problems). These two financial institutions operating independently of each other are said to have undermined the overall coherence of equalisation efforts in India [Bhattacharyya, "Federalism, Decentralisation and State-Building in India: Aspects of Centre-State Fiscal Relations" in R Bird and T Stauffer, eds. Intergovernmental Fiscal Relations in Fragmented Societies (Bale, Helbing and Lichtenbahn, 2001) pp.247-317].

Neither regional equalisation, nor the principle of horizontal fiscal equalisation has played a major part in the programme and activities of the Indian Finance Commission and the Planning Commission.


United Kingdom

There is no formal system of explicit equalisation in the United Kingdom either of resources or of needs of the type available in Australia and Germany. However, a formula-driven pattern of resource distribution appeared with the emergence of the administrative territorial division of the United Kingdom. It first appeared in 1888 when Sir George Goschen applied a formula (which came to be known as Goschen Formula) to Scotland. It became necessary after Scotland had acquired a territorial administration with the creation of the Scottish Office in 1885. The Scottish Office had the responsibility to distribute central government grant to local authorities in Scotland. The formula was extended to Ireland in 1888. Wales was at that time deemed to be part of England but its administration was transferred to the Wales Office in 1964.

The Goschen Formula decreed that proceeds of the wheel tax, horse tax and half the revenue from probate should be allocated to England, Scotland and Ireland in the ratios 80, 11 and 9 respectively. This formula was not based on population, nor on needs but on the contribution each country made to probate duty revenues. It was not an equalising formula but simply a device to recycle some taxes back to the territory where they were collected. The formula continued to operate till 1958 when it was abandoned. Thereafter funding for the Scottish, Welsh and Northern Ireland Offices became the subject of annual negotiation between the three territorial Secretaries and the Treasury at Westminster.

The practice continued until 1978 when Barnett Formula was introduced in the anticipation of Scottish devolution. Notwithstanding the fact that devolution did not materialise at the time it has continued since then [McCrone, G. (1999) 'Scotland's Public Finances from Goschen to Barnett' (Fraser of Allander Institute Quarterly Economic Commentary, vol.24. No.2)]. The Barnett Formula operates only on increments, not on the base, allocating to each devolved territory a population based percentage of the increase in comparable expenditure in England. Thus for any spending programme, where there is a territorial responsibility such as education, any increase to English budget results in an automatic increase to Scotland, Wales and Northern Ireland's budgets. For every £1 per head extra spent on England, £1 per head extra should also go to each of the devolved territories. The population of each devolved territory is expressed as a fraction of England's population and not as a fraction of total UK population. It does not affect all public spending in the devolved territories. For example, in 1998-99, £25.7bn was identified by the Treasury as the total sum spent in Scotland. Of this only £15.6bn was in the block of spending controlled by the Scottish Executive. Most of the remaining £10.1bn was social security spending which comes directly from the central government. The Barnet Formula operates only on the devolved subjects and not on subjects reserved to Westminster. Even within the Scottish Executive budget about 14% of spending budget is not covered by the Barnett Formula. This is mainly on agriculture and is determined by the EU decisions. Neither does the Barnett Formula determine the overall levels of spending in Scotland, Wales and Northern Ireland. It only determines the changes made to the overall spending totals. If there is no increase in the English spending programme, the devolved territories receive no increase. If there is a reduction, the devolved territories also have their spending reduced [Twigger, R. (1998) The Barnett Formula, House of Commons Library Research Paper 98/8]. The Barnett Formula is not based on any assessment of needs for public spending but on population. In fact both the assessment of needs and basing spending programmes on it are not easy. For instance, the British Treasury conducted a study in 1976-78 in anticipation of devolution in Scotland and then discovered that the figures of actual spending in Scotland and Northern Ireland were considerably higher than those based on needs. Implementation of the needs-based figures would have involved significant cuts in the spending programmes for Scotland and Northern Ireland. Any such cuts could have provoked a political reaction from those territories. For this reason the needs-based figures were not implemented. The Barnett Formula seems to be unique in the developed world. There is no country other than the UK that allocates resources at a sub-national level using a formula based on changes rather than levels of spending in relation to assessed need [David Bell and Alex Christie, "Finance - The Barnett Formula: No Body's Child ?" in Alan Trench (ed) The State of the Nations 2001 (The Constitution Unit, ULC (2001) p. 139)]. Therefore we might conclude by saying that the Barnett Formula does not offer any lesson for a solution to the questions of (a) regional equalisation, or of (b) horizontal fiscal imbalance in the broad sense. It is of limited value as a prescription for bringing about uniform standard of living throughout the territories of the proposed federation.

 

Equalisation Machinery

The question of status and standing of the machinery making the equalisation decisions is of utmost importance to its success. In most Commonwealth federations the actual determination of financial equalisation is made by the federal government but it is based on the recommendations of an expert commission as in Australia, India and South Africa or upon an intergovernmental council as in Pakistan and Malaysia. In all these cases the recommending expert institution is an advisory body. The extent to which its recommendations are accepted by the federal government has varied between these countries. In Australia and India the advice of the expert body on equalisation has invariably been accepted by the decision-making body while in South Africa the federal government has emphasised that the expert body (the Financial and Fiscal Commission set up under ss. 220 and 221 of the Constitution) is merely an advisory body and that it is the federal Minister and Department of Finance that exercise the real decision-making power. Furthermore, this is done overtly [Watts, R L, Comparing Federal Systems (1999, 2nd ed., Montreal and Kingston: McGill -Queen's University Press)]. It is thought that the success of fiscal equalisation in Australia is due to the fact that the Commonwealth Grants Commission is de facto, if not de jure the decision-making body on the matter.

I have addressed myself to this issue in the following terms:

"The need for such a body in a federal system arises from the fact that the federal government being itself an interested party could not be made the arbiter over allocation of resources between the Centre and the Regions. To ensure the autonomy of the Regions an independent body is called for. This raises the question as to the nature of the body. Should it consist of the negotiating parties or should it be an impartial body; should it be a permanent body or should it be an ad hoc body set up periodically; should it act in an advisory capacity or should it be an adjudicatory body with power to make binding decisions? If permanent, should it have a specialist staff and a permanent secretariat? Should it be able to act by a majority decision or need it follow the rule of unanimity?"

"The inter-governmental financial institution proposed has a major role to play in our federal scheme. It would periodically review the tax-sharing arrangement between the Centre and the Regions and consider its adjustments, allocate shares of taxes between the two, allocate the shares of regional taxes among the states, decide on applications for borrowing by the states and administer an ambitious programme for equalisation […] to remove regional disparities between the states involving billions of pounds. It would have power to take economic decisions of immense importance, power of conciliation and adjudication over conflicting claims and authority to offer economic advice to governments at the central and regional levels. To be effective, such a body has to be impartial standing apart from and above all the interested parties. The atmosphere in the meeting of the bargaining body is inconsistent with the functions contemplated in this proposal. The atmosphere of a bargaining meeting is dominated by political stress and strain, groupings and alliances, the strongest tending to have the last word. The experience of the Australian Grants' Commission shows that impartiality and independence are essential to earn public confidence which is sine qua non for its success. From this it follows that the composition of the body cannot be entrusted to one of the interested parties. Following the precedent of S.32 of the Government of Ireland Act 1920 the Joint Exchequer Board of the United Kingdom federal system should consist of a member nominated by each federating unit, one member nominated by the federal government and the chairman appointed by the Monarch not on the basis of ministerial advice of the federal government but having regard to his expertise in Treasury affairs, impartiality (as between different governments) and independent judgment. Such a body ought to be constituted on a permanent basis. A permanent body will have the advantage of gaining expertise and consistency which an ad hoc body will lack. The drawback from these bodies suffered in most of the new federations (by contrast with the Australian Grants' Commission) was the lack of continuity, each body being appointed afresh at the time of each review. An ad hoc body is appropriate for functions of an ad hoc nature, but not for the nature of functions envisaged in this proposal for the Joint Exchequer Board. It follows that the Joint Exchequer Board ought to have the power to make decisions of a binding nature and not of advisory nature. The foundation of this proposal is the division of powers and functions between the Centre and the Regions with the Joint Exchequer Board acting as a third party allocating resources and adjudicating between them. If this body were to act in an advisory capacity only and the decision-making powers were to belong to the Centre the system would cease to be federal".

"S. 32(5) of the Government of Ireland Act 1920 empowered the Joint Exchequer Board to act by majority decision. It is submitted that the rule of majority decision is a sound one . If the rule of unanimity were to apply and the members could exercise a veto on decisions of the Joint Exchequer Board on which would depend the budgets of the federal and state governments the whole system would become unworkable. However, it is extremely vital that the Chairman of the Board be impartial….[T]o make the Joint Exchequer Board less political and more independent the costs of the Board (including salaries of the members and staff) should be charged on the federal Consolidated Fund. The Constitution will ensure that these could be increased but not reduced by the federal parliament." [M A Fazal, A Federal Constitution for the United Kingdom - An Alternative to Devolution (1997) pp. 107-109].

The case for an independent and impartial decision-making equalising machinery as opposed to a merely an advisory body cannot be too strongly emphasised.

 

Conclusions on Equalisation

Appropriate provisions of equalisation are crucial to the success of our proposed federation. However, mere fiscal equalisation of the vertical type is not sufficient for the purpose. Horizontal equalisation is vital to ensure both the revenue capacities and funding for the expenditure needs of all the states of the proposed federation. Even achievement of vertical and horizontal fiscal balance on its own might not be able to ensure uniform standard of living conditions and the same level of prosperity throughout the territories of the federation. This will call for what I have labelled as 'regional equalisation' to establish broadly uniform levels of economic development among all the states of the federation. This, in turn, calls for the establishment of an independent financial institution entrusted with the task of allocating resources between the federation and the states and between the states inter se to bring about the goal of equalisation. In most Commonwealth federations the financial institution in question acts in an advisory capacity, the final decision on the matter being vested in the federal government. My own preference would be to vest the equalisation decision-making power (as distinct from its being merely a recommendation) in the financial institution itself. The relevant measures ought to be embodied in the federal constitution giving the institution the appropriate status and independent authority to take the necessary measures to bring up the relatively backward regions to the common level of economic growth and performance. It is hoped that the equalisation measures recommended here will lay the foundation of a durable and successful federation, sine qua non, for the preservation of peace and security in this region.

 

Summary of the Recommendations

 

  1. It is recommended that the parties to the conflict in Sudan agree to the federal solution to the problem.  That is to say, different regions of the country including the southern provinces will have maximum autonomy under the proposed federal constitution within the framework of one country.  The constituent units of the federation are to be called ‘provinces’.  The precise number of the provinces and their boundaries are to be negotiated and agreed between the parties.
    THIS WILL REQUIRE A ROUNDTABLE CONFERENCE OF ALL THE PARTIES TO THE CONFLICT IN SUDAN TO DISCUSS THE FUTURE OF THE COUNTRY AS A WHOLE. TALKS BETWEEN THE GOVERNMENT AND ONE OR TWO PARTIES, INVOLVING ONE OR MORE SPECIFIC REGIONS ( SUCH AS SOUTHERN SUDAN ALONE) WOULD NOT BE APPROPRIATE FOR THE PURPOSE OF FINDING A FEDERAL SOLUTION TO THE PROBLEM.

    The dangers of adopting a partial solution as opposed to a comprehensive settlement are becoming apparent.Over the past two years Sudan has settled one long-brewing rebel conflict in the south only to see a new one arise in the wetern province of Darfur. Now another new conflict has started in the eastern Red Sea State ( in June 2005). Heavy fighting was reported around the town of Tokar,half way between Port Sudan and the Eritrean border. The Eastern Front created in February 2005 by eastern Sudan's two main dissident factions, the Beja Congress and Free Lions launched the first military operation against the government on 19 th June 2005 near Tokar. John Garang, the SPLM/A leader who signed a peace deal with the government in January 2005 was reported to have sympathised with the Darfur and the eastern Sudan question on the ground that the inhabitants of those regions complain of marginalisation by the central government. The fighting has sparked fears that a new Darfur-type of conflict will open up amid peace talks in Nigeria involving the government and the western rebels in Darfur and the implementation of the Khartoum-SPLM/A agreement under which an interim constitution was adopted in the summer of 2005.

    The interim constitution ( which was designed to implement the north-south agreement) allocates 52% of government and parliament posts to the ruling National Congress Party, 28% to SPLM, 20% to northern and southern opposition parties but none to those in other parts of the country including the east and the west which are in a state of rebellion.
    This is incompatible with the federal principle under which every province of the country will be represented in the institutions of the central government as well as having its own self- government. The wealth sharing agreement providing inter alia that 50% of the oil revenue produced in Southern Sudan will be allocated to the Government of Southern Sudan might be inconsistent with the regional equalisation principle enunciated by this author. CONSEQUENTLY ADOPTION OF THE FAZAL PROPOSAL FOR A FEDERAL CONSTITUTION WILL REQUIRE RE-NEGOTIATION OF SOME OF THE PROVISIONS OF THE 2004 AGREEMENT ON WEALTH SHARING.

    This proposal is one of a comprehensive settlement of the conflict as opposed to a partial settlement that has been negotiated recently (in 2004) between the Government of Sudan and the leading rebel group in the south of the country. It might appear that the negotiation made some progress. However, the conflict in the western part of Sudan (the Darfur conflict) with its humanitarian catastrophe demonstrates that no progress is possible without a comprehensive settlement involving all the parties to the dispute.
    The Darfur conflict is essentially a tribal one – mainly between the nomadic tribes who need to move from one area to another with their cattle during the dry season in search of grass and water and the settled tribes in the specific regions. The Fazal Proposal envisages a permanent settlement of the nomadic tribes by way of ‘equalisation’ among the different provinces of the proposed federation and uniform standard of living throughout the country. This is likely to involve the development of industry, agriculture, soil conservation, afforestation etc of the desert/arid regions (cf. the website article of the author of the Fazal Proposal entitled “How to Avoid Nuclear War between India and Pakistan”) through the utilisation of water resources available during the rainy season. HOWEVER, TRANSITIONAL PROVISIONS HAVE TO BE MADE FOR THE NOMADIC TRIBES ON THE “RESERVED LANDS” TO BE PREPARED FOR GRAZING THEIR CATTLE DURING THE DRY SEASONS PENDING THEIR PERMANENT SETTLEMENT IN THE AREAS HABITUALLY SUITED TO THEIR LIVING. If the proposed reserved areas were to cross the boundaries of one province into another then the areas concerned would have to be designated “federal reserved areas” and would come under the federal jurisdiction.

    However, it should be emphasised that the transitional provision for the nomadic tribes for grazing their cattle is dsesigned only for the dry season of the year and not for their permanent settlement on the reserved lands for the whole year. This is to avoid disturbing the tribal/electoral composition of the population of the areas concerned . Otherwise the resident tribes of the localities might find themselves to be in a minority in their respective areas for the purposes of their electoral representation on the relevant governing bodies.

    These recommendations for resolution of the Darfur conflict would be equally relevant to the countries situated along the southern edge of Sahara desert. In all these countries including NIGERIA the nomadic tribes from the north move south during the dry season in search of water and grass for their cattle on to the lands of the settled tribes . As a result tribal conflicts develop. Therefore greening of the desert ,afforestation,soil conservation and development of agriculture,industry etc.in the desert/semi-desert areas would provide for an environment for the permanent settlement of the nomadic tribes in the long run.However, transitional arrangements would have to be made for 'reserved lands' where the nomadic tribes would be able to graze their cattle during the dry season pending their permanent settlement as contemplated in the greening of the desert. The same recommendations might be valid for the eastern, northern and the western edges of Sahara desert.
    Eventually the whole of Sahara desert could be planned for 'greening' by way of afforestation, soil conservation, development of agriculture ( adopting modern methos of farming), industry etc.This is likely to require irrigation and a sub-continental approach involving collaboration among the countries concerned i.e.concerted actions for greening the desert by all the countries around Sahara. Such a transformation of the landscape could bring about a climatic change and rainfall in the area.

    GLOBAL DIMMING:
    Scientists looking at five decades of sunlight measurements have reached the disturbing conclusion that the amount of solar energy reaching the Earth's surface has been gradually declining. Dimming appears to be caused by air pollution. Burning of coal, oil and wood, whether in cars, power stations or cooking fires produces not only visible carbon dioxide (the principal greenhouse gas responsible for global warming) but also tiny airborne particles of soot, ash, sulphur compounds and other pollutants.
    The visible air pollution reflects sunlight back into space, preventing it from reaching the Earth's surface. Furtheremore, the pollution changes the optical properties of clouds. Because the particles seed the water droplets, polluted clouds contain a larger number of droplets than unpolluted clouds. This makes them more reflective than they would otherwise be, again reflecting the Sun's rays back into space. Scientists are now worried that dimming, by cooling the air over the sub-tropical parts of the worlds such as Ethiopia and sub-Saharan Africa caused drought which claimed millions of lives in the 1970s and 1980s. This phenomenon was repeated again in 2005 affecting Ethiopia and sub Saharan countries such as Niger, Mali, Mauritania and the neighbouring countries.
    Normally the hot air over these areas attracts wet air from the tropical parts of Africa and brings about rainfall. However, cooling of atmosphere in these areas through industrial pollution in Europe and North America prevents this happening thereby disturbing the usual pattern of rainfall resulting in drought and famine. [The source of this information was made available in the BBC's Horizon programmes broadcast in the United Kingdom on 13 and 15 January 2005]. A nuclear war, global or local, which can produce a large amount of soot in the atmosphere (which could linger in the upper atmosphere for up to a decade) will have similar effects in cooling the air by several degrees centirigrade. This is liable to affect the world climate with consequences for food production.


    This is the reason why this author has serious reservations about the proposal to cool the atmosphere above the earth. Currently the scientists are trying to devise various means of cooling the air in order to deal with the consequences of global warming. One of such consequences has been the damage to the tropical forests due to the appearance of insects in the trees. The scientists ought to develop appropriate treatment for the trees against such pests and diseases rather than cooling the earth's atmosphere.


    Greening of the Sahara Desert (which is likely to discharge moisture into the atmosphere and bring about rainfall in the area) might be the only way to deal with the consequences of global climatic change resulting in drought and famine in the sub-Saharan countries of Africa.
    Trees absorb carbon dioxide from the air. Consequently greening of the desert by way of afforestation is likely to have the effect of reducing the carbon level of the atmosphere. Therefore afforestation of deserts in the northern and southern hemispheres of this planet could play an important part in achieving the objective of reducing the overall level of carbon dioxide emissions.

  2. The current militias are to be integrated into a federal defence force, the provinces retaining their own police force for law and order purposes only.  Private militias are to be disbanded, disarmed and banned.

  3. The federal model to be adopted should be based on the one constructed in the work of Dr M A Fazal (A Federal Constitution to the United Kingdom – An Alternative to Devolution [Dartmouth/Ashgate 1997]) providing for [A] the maximum of autonomy of the provinces consistent with the federal structure; [B] a role in foreign affairs for the provinces; and [C] regional parity among the provinces ensuring a uniform standard of living throughout the territories of the federation.

  4. The Sharia law will apply to Muslims only and not to non-Muslims, irrespective of provinces where the person or persons concerned might be resident.  Both the provincial and federal courts will administer the Sharia law throughout the federation. 

  5. The jurisdiction over the mines and minerals including oil and gas will be divided between the federal government and the provinces following the model of the USA, as set out above (i.e. the federal government having an exclusive jurisdiction over offshore oil and gas and having a parallel jurisdiction over the in-land ones with the provinces). The federal government and the provinces would be free to develop administrative collaboration/cooperation on the issue (e.g. oil and gas), not excluding the possibility of further sharing of the income therefrom. 

  6. Whilst the federal civil services will be open to all Sudanese strictly on merits, the provincial civil service will be staffed solely by residents in the province.  This will be the only exception to the principle of non-discrimination to be embodied in the federal constitution.

  7. The offices of the president and vice-president should rotate between a northerner and a southerner if the US model of presidential system is adopted in Sudan.  Alternatively, if the British system of parliamentary government is chosen, then the office of the prime minister and that of the president should similarly rotate between a northerner and a southerner. 

    [It is thought that a non-Muslim head of state would be unacceptable to the Muslims of Sudan. This is said to be the legacy of Mahdi who rose against Egyptian misgovernment in 1883 and proclaimed himself to be the Khalifa. An examination of this issue is called for. In the context of the proposed federal constitution for Sudan, two models of government fall to be considered, viz. the US model and the British model. The US model with the president as the holder of real power in the federal government and a vice-president who steps in as the president in case the president dies or becomes incapable of performing his duties. Very often the speaker of parliament plays this role of the president in waiting. Occasionally the chief justice of the supreme court is also assigned this role, as in Bangladesh. The US President is both the ceremonial head of state (i.e. the titular or constitutional head of state) and the holder of real power. In this respect, the president is comparable to the holder of office of Khalifa in Islamic history. If the Muslim Sudan finds it unacceptable to have a non-Muslim president who assumes both the roles i.e. that of a ceremonial head of state and a president who exercises real power in the country, then they ought to consider the British model of government for adoption in Sudan. Under the latter model, the office of the constitutional and ceremonial head of state (who exercises no real power in the state) and that of the holders of effective power are vested in two different persons i.e. the monarch or a president, and the prime minister.

    Since the Government of Sudan is negotiating the question of power-sharing with the SPLA, presumably it is not opposed to sharing the powers of the effective holder of power i.e. those of the prime minister sharing some of his power with a deputy prime minister. On this basis the ceremonial or constitutional head of state who exercises no real power i.e. the president could be a Muslim. The prime minister, the holder of real power in the state, would be a Muslim. However, he would share some of his powers with a deputy prime minister who could be a non-Muslim from the south. The powers exercised by the current Deputy Prime Minister of the United Kingdom provide an illustration of this approach and could be instructive for the purpose of finding a solution to the problem in Sudan.

    The Office of the Deputy Prime Minister was created in the United Kingdom as a central government department in its own right in May 2002 and key responsibilities for regional and local government, fire, housing and regeneration were placed within its jurisdiction.
    ]

  8. The Human Rights provisions including a non-discrimination clause (prohibiting discrimination on the grounds of race, colour, language and religion, but excepting the provincial civil service and the rotating offices of the president, vice-president/prime minister-president) shall form part of the federal constitution. 

  9. The issue of power sharing is dealt with by the provisions of this proposal [A] providing for the rotation of the offices of the president/vice-president or of prime minister/president; [B] a meaningful share of power for the provinces via the composition and powers of the upper house of the federal parliaments; and [C] by the participation of the residents in each province in the provincial civil service.  Other services, federal and provincial, ought to be open to all Sudanese strictly on merits. 

  10. The question of wealth-sharing is dealt with in this proposal [A] by the provisions of distribution of jurisdiction over mines and minerals, including in particular oil and gas between the federal government and the provinces; and [B] by the requirement of regional equalisation between the provinces coupled with ‘vertical’ and ‘horizontal’ equalisation.

 

According to the joint communiqué issued on the First Session of the Political Committee Task Force on Sudan of the Intergovernmental Authority on Development (IGAD) dated 20th July 2002, the Government of the Sudan and the Sudanese People’s Liberation Movement/Army (SPLM/A) perceived the outstanding issues to be [A] the issues of state and religion, [B] self-determination for the people of south Sudan, [C] power-sharing, [D] wealth-sharing and [E] Human Rights.  It is submitted that these issues have been adequately dealt with under this proposal and that the people of south Sudan should opt for this federal solution to the problem.

 

The solution, as proposed here, calls for public discussion and consideration by the appropriate authorities.

This document may be referred to as the ‘Fazal Proposal for a Federal Solution to the Conflict in Sudan’.

 

 

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