Month: March 2024

By DMLF

The Ethiopian Ministry of Women and Social Affairs(MoWSA), introduced in October 2023 “Alternative Childcare and Support Directive Number 976/2023” (hereafter the Directive). The Directive adds a new form of child care support service, namely residential care. The preamble of the Directive stresses the increasing number of children in Ethiopia facing natural and man-made disasters. As a result there is the need for alternative childcare and support systems. Therefore it became necessary to provide standardized and comprehensive childcare and support for these children. Identifying current alternative support and care mechanisms are found scattered in different documents and legally not binding making implementation difficult. Hence this Directive attempts to gather up scattered child support and care systems into one document and developed a comprehensive directive that encompasses all alternative childcare services in this Directive.

The  Directive sets out and recognizes three sorts of alternative care. The first are family based care namely family preservation and strengthening, reintegration and reunification, kinship care, foster care and adoption. The second type of child care is categorized under community-based care. Last but not least is residential care. Our focus shall be on residential care.

Residential Care is defined as  an establishment founded by a governmental, a non-governmental organization or individuals according to appropriate procedures that provides care in any non-family-based group setting but does not include boarding schools.

All residential care facilities including community integrated childcare facilities must be registered in accordance with government directives contained in the Organizations of Civil Societies Proclamation 1113/2019. The Directive prohibits any organization not to operate as a residential care facility unless it has received prior approval from the MoWSA or the relevant licensing authority to operate a residential care facility.

The objective of residential care is to provide short-term alternative care. The short term support includes catering  for the basic and psychosocial needs (food, shelter clothing, education, sanitation, and health, play and recreation, counseling, emotional needs as well as social interaction) of children in the residential care institutions for their holistic growth and development. In addition to this the residential caregiver shall opt for the child’s reintegration within their family or, where this is not possible or in the best interests of the child, to secure their safe, stable, and nurturing care in an alternative, family-based care arrangement. Residential care shall in no way, irrespective of size, be viewed as a way to fulfill a child’s right to live in a family environment.

Where the reunification of a child with his parent(s) or placement in kinship care is not possible or suitable and in the best interests of the child, another form of alternative family-based care shall be sought. Where appropriate and desirable, such alternatives include foster care, or facilitating local adoption services for children who cannot be raised by their own families. Children aged below three (3) years should not be admitted to residential care facilities in line with international best practice, unless this is strictly temporary with the view to foster care placement or another community-based placement as soon as possible

Moreover, should there be any need, children and young people who have left the residential home should have the opportunity to receive assistance and support after they have left care for up to three years. The residential home must designate a staff member to contact the care leaver at least quarterly to establish whether advice or support is required. The frequency, however, will be determined by the case worker based on the individual needs of a child.The residential home should have an open-door policy. Children and young people who have lived there can always return to the residential home for advice and support, provided it remains operative.

The scope of the Directive extends to apply to all appropriate Federal and city administration Government institutions, charitable organizations, relevant stakeholders, and alternative childcare service providers authorized to provide childcare services as per the requirements of the Federal Government. It is advised based on this Directive, that regions and city administrations adopt or prepare their own contextualized Directive. However, the Directive shall not apply to institutions for child juvenile offenders.

In conclusion, residential care is introduced as a temporary alternative child care and support mechanism. Residential care objectives coincides to certain extent with private or government orphanages. The  Revised Family Code Proclamation No 213/2000 on Article 192 provides that government or private orphanages may give any child under their custody to adopters. In addition to this the orphanage before giving the child for adoption, provides sufficient information to the government organ having authority to follow up the well being of children as to the identity of the child, how the orphanage received him and about the personal, social and economic position of the adopter. Residential care does the same. The Directive seems to purposely ignore the word ‘orphanage’ and also opted to come up with a different term that partly encompasses the task of ‘orphanages’ namely ‘residential care’.

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By Dagnachew Tesfaye, Managing Partner at DMLF

Introduction

The Ethiopian Capital Market Authority (ECMA) has been authorized by Capital Market Proclamation Number 1248/2021 to regulate the capital market in Ethiopia. Accordingly ECMA issued a directive namely Capital Market Service Providers Licencing and Supervision Directive No 980/2024(hereafter the Directive). The Directive became effective in January 2024, as the Directive is registered by the Ministry of Justice and posted on the website of ECMA. The Directive contains 21 Parts with 183 Articles and three schedules. This article shall provide a general view of each Part of the Directive and the schedules attached to the Directive. A brief conclusion shall follow.

The 1st Part of the Directive is about definition of words and terms as well as scope of the Directive. Part 2 covers Licencing of Capital Market Service Providers. There are 15 designated capital market service licenses. These include Service Brokers; Securities Dealers; Security Digital Sub-brokers; Investment Banks; Securities Investment Advisers; Securities Shariah Advisors; Securities Robo Advisers; Collective Investment Scheme Operators; Crowdfunding Intermediaries; Securities Market Makers; Security Custodians; Securities Portfolio Managers; Credit Rating Agencies; Securities Appraisal Firms and Appointed Representatives. When the applicant is a share company or private limited company, such companies need to have a Board of Directors that will be responsible for its governance. There is a fee to be paid to acquire the license as determined by the Fee Directive of ECMA.

Part 3 deals with General Obligations and Responsibilities of the capital market service providers. Among the several obligations and responsibilities, one obligation is to maintain minimum net liquid capital to meet its base and risk requirements.

To deal with contravention of the provisions of the Directive, Part 4 outlined Enforcement and Administrative Measures. Part 5 covers Voluntary Exit from the Market by relinquishing the service license.

Part 6-16  lists eligibility requirements for each  type of  capital market service licenses. Some licenses are open for individuals, limited liability partnerships, limited partnerships, general partnerships, private limited companies or share companies and few others are restricted for only share companies and private limited companies.

Part 17 deals with Minimum Capital Requirements for capital market service providers. To obtain the license to operate as a capital market service provider, the minimum capital in cash has to be deposited in a licensed commercial bank in Ethiopia. The net shareholders’ fund or partners’ fund or net worth has to comply with Schedule 1 of the Directive.

Corporate Governance for Capital Market Service Providers, Competency Framework for Capital Market Service Providers  and Code of Conduct are covered in Part 18-120 respectively. 

Finally Part 21 namely Miscellaneous Provisions contain principles about circulars and notices, inapplicable laws and effective date of the Directive. Schedule 1 is about Minimum Capital Requirements. Schedule 2 deals with Capital Market Service Providers Functions and Competency Requirements and Schedule 3 covers Penalties, Fines and other Enforcement Actions.

Conclusion

The Directive identifies 15 different types of capital market services licenses. The Directive has stipulated the functions, authorized activities, related governance and ethical principles in regulating capital market service providers. The Directive embodies detailed rules on how to obtain a license and responsibilities and obligations of licensed service providers. As the Director General of ECMA said ‘ this Directive is a significant milestone in the development of the capital market in Ethiopia’.

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By Mahlet Mesganaw, Partner at DMLF

The Maritime Code of Ethiopia was promulgated on the 5th of May 1960 by Proclamation No 164/1960. The Preamble of the Maritime Code provides the following: ‘ whereas the development of the ports of our Empire and the expansion of our merchant navy requires a comprehensive maritime code be enacted’ therefore this Maritime Code is proclaimed.

The Maritime Code is divided into 371 Articles in total apportioned into 9 Titles namely: Ships (I); Shipowners, managers and the master (II); Regulation of maritime employment (III). Contracts relating to the use of the ship (IV); Maritime collisions, assistance, and salvage (V); Participation in general average (VI); Insurance (VII); Penal provisions and (VIII); Miscellaneous. 

Under Title I, Ships, there are 7 chapters that deal with Nationality of Ships, Ownership of Ships, Maritime Liens and Mortgage of a Ship, Registration of Ships and of Rights of Rem relating to the Ship and Arrest of a Ship.

Title II is about Shipowners, Managers and the Master. There are two chapters that deal with Liability of Shipowners and Managers, and the Appointment and Duties of the Master.

Title III provides Regulation of Maritime Employment. The seaman includes persons employed or engaged in any capacity on board any ship (except masters, pilots and apprentices duly indentured and registered).

Title IV deals with Contracts Relating to the Use of the Ship. One party may undertake to procure to the other party the possession of a ship for a definite period subject to payment of a rent. So this title deals with the rent, contract of affreightment  and carriage of passengers. 

Title V is focused on Maritime Collisions, Assistance and Salvage at sea. Any collision between ships, the compensation due for damage caused to the ships, or to any property or persons on board thereof, shall be settled in accordance with this Maritime code provisions. Every act of assistance or salvage which has been successful shall give a right to equitable remuneration which shall not exceed the value of the property salvaged.

The next title, Title VI deals with Participation in General Average. There is a general average act when and only when any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure.

Title VII is about Insurance. Any policy of insurance having its principal object to guarantee a maritime risk, including collateral risk, shall be subject to the provisions of this title. This Title is divided into four chapters that deal with contracts of insurance, rights and obligations of the assured and the Underwriter, settlement of damage and period of limitation.

Title VIII focuses on penal provisions. Any person who contravenes the provisions of this code or regulation made there under shall be subject to penalty in the form of fines ranging from Eth $2000-500.

The final Title IX deals with miscellaneous provisions concerning definitions and regulation making power.

Thus, the Maritime Code of Ethiopia with 371 articles, 9 titles still governs the maritime legal relationships of the persons, properties, rights and obligations involved in maritime trade.

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