PG201507464
OPEN UNIVERSITY OF
TANZANIA
FACULTY OF LAWS
LLM ICT
MODULE CODE: OLW653
THEME REPORT FOR THEME ONE
Submitted By:
LUSAJO LAZARO MWAISAKA
REG. NO.: PG201507464
DATE: 26 01- 2014
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ELECTRONIC COMMERCE
Over the past four decades in Africa we have witnessed a shift in
ways in which business is conducted and day to day lives are
effected in our communities. As developing countries, we are
experiencing tremendous growth not only in Internet connectivity
but also in the usage of telecommunication infrastructures in
conducting daily activities including business transactions globally.
Although, still in its infancy; electronic commerce (e-commerce) is
the key growth area for information and communication technology
(ICT) in Africa. With all the excitement about the role of technology
in contributing to social change and improved development
outcomes across Africa, it is easy to forget that only 7% of the
continent's inhabitants are online.1 Desperate efforts are needed to
leverage technology in order to help bridge the digital divide.
E-commerce is one of the most visible examples of the way in
which information and communication technologies (ICT) can
contribute to economic growth. It helps countries improve trade
efficiency and facilitates the integration of developing countries into
the global economy. It allows businesses and entrepreneurs to
become more competitive. And it provides jobs, thereby creating
wealth.2 E-commerce in the era we are living in can be considered
a major catalyst for socioeconomic development in developing
countries.
Richard
T.
Wastson
and
others
explain
Electronic
commerce, in a broad sense, is the use of computer networks to
improve organizational performance. Increasing profitability, gaining
market share, improving customer service, and delivering products
faster are some of the organizational performance gains possible
with electronic commerce.3
1
http://www.theguardian.com/global-development-professionals-network/2014/jan/24/digital-divideaccess-to-information-africa
2
3
UNCTAD 2002. Kofi Annan (Former Secretary General of United Nations)
Watson, R.T. et al (2008) Electronic Commerce: The Strategic Perspective (Page 8)
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Thus like any other commercial activity e-commerce involves
suppliers and consumers, provide employment and generate
government revenues in form of taxes. As it is a global marketplace
that all transactions in e-commerce then there is a need for some of
rules and regulations (which are internationally acceptable) to be
put in place to regulate transaction and the modality of conducting
business in the market.
E-COMMERCE A TANZANIA PERSPECTIVE
As part of countries forming the developing world, Tanzania ecommerce environment although still at its infancy, is showing rapid
and promising growth and changing the way business is conducted
with other players globally. In classifying the business it can be
observed that e-commerce in Tanzania. E-commerce has been
classified using a number of frameworks each explaining the
concept from a different perspective; the classification is mainly a
result of volume of transaction and parties to that transaction and it
can be a Business to Business (B2B), Business to Consumer (B2C),
Consumer to Consumer (C2C), Business to Government (B2G),
Consumer to Business (C2B), Government to Consumer (G2C)
e.t.c.4. These types of e-commerce transactions are a possibility in
a developing country like Tanzania provided that the ecosystem to
support this form of business exists.
As e-commerce necessitates the existence of a global market space
then there is a need for international rules and regulations guiding
business operations in ecommerce for a particular country to
conform to globally accepted standard for conducting the same. In
his paper Andrew Mollel pointed out ICT policy-making happens at
the international level through processes like the ITU discussions on
telecommunications policy, UNCITRAL development of model laws,
and WTO negotiations on trade. ICT Policies that are agreed upon in
international, regional, and national institutions can only be
4
Inroduction to E-commerce available at http://www.sxccal.edu/msccs/ecommerce1.pdf
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implemented if there is a clear and comprehensive legal and
regulatory framework at the national level. 5 From this it can be
observed that a country need to have its own legal framework for
governing ICT and E-commerce but for that framework to be feasible
then it has to be derived from international set standards and
embodied on the legal framework at National Level. These policies
need to address among other things cross border issues, rolling out
of Internet infrastructure backbone (SEACOM Fiber Connectivity in
Tanzania), technology trade and investment cooperation.
Efforts has been made by the government of Tanzania in addressing
these issues, in 2003 the adoption of the TCRA Act 12 of 2003 lead
to the formation of Tanzania Communication Regulatory Authority
(TCRA) after dissolving Tanzania Communication Commission and
Tanzania Broadcasting Commission. The formation of TCRA gave
raise to the formulation of the National ICT Policy (2003) and
National Postal Policy (2003). TCRA has been working to in
promoting
of
effective
competition
and
economy
efficiency,
protecting the interest of customers, promoting the availability of
regulated services, licensing and enforcing licence conditions of
broadcasting,
postal
and
Telecommunications
operators,
establishing standards for regulated goods and services and
monitoring the implementation of ICT applications. 6 The Electronic
and Postal Communications Act, 2009 is also among key regulatory
frameworks in Tanzania that facilitate electronic commerce.
The existing laws and regulatory policies in Tanzania provide a
general guidance to e-commerce because there is no specific
legislation to govern electronic transactions. Mikko Vesisenaho in his
dissertation highlighted that An effective ICT legal and regulatory
framework is unique for each country, and must be shaped by the
existing web of legislation, local culture, economics and politics, or
5
Andrew Molel paper on The Legal and Regulatory Framework for ICT in Developing Countries
available at http://cs.joensuu.fi/ipid2008/abstracts/Mollel%20Andrew_ICT4D%20PAPER.pdf
Available on TCRA Website at www/tcra.or.tz
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rather, it must be contextualized. 7 This notion makes it difficult to
developing countries like Tanzania to respond sufficiently to
technological
changes
and
engage
effectively
in
electronic
commerce. The country law and regulations affect the use of
technology in a number of way resulting into ineffective business
transaction
that
has
no
clear
guidelines
and
unwarranted
restrictions thus causing other players in other parts of the global
market space becoming hesitant in conducting business with
partners in Tanzania. We have observed in the shipping of good
regulations on online retail stores like Ebay and Amazon that there
exist policies for some good restricting them to be shipped to
Tanzania and other Africa countries.
Key drivers of e-commerce
include technological factors, political factors, social factors and
economical factors; these factors need to be identified and worked
on to promote e-commerce in Tanzania.
PROBLEMS IN E-COMMERCE
Taking into account the nature of business and transactions in Ecommerce it can be observed that this global market space cover an
array of product and services which are of different nature and type;
subjected
to
virtual
markets
worldwide;
each
with
its
characteristics and restrictions. It follows that deliberate efforts are
needed to be taken in standardizing how players interact in the
market to create a business environment that not only is fair and
open but also with activities that are enforceable by law.
Tanzania legal system is mainly based on common law; Regulatory
efforts to adopt the rapid changes in commercial activities and
revising our laws to put into consideration electronic transactions
such as digital signatures, reforms to contract law (currently
contracts are governed by the Law of Contract Act, 2002), dispute
7
Mikko Vesisenaho, Developing University-Level Introductory ICT Education in Tanzania: A
Contextualized Approach, PhD Dissertation, University of Joensuu, 2007.
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settlement mechanisms and others have not yet been disseminated.
It can be said that our existing commercial laws with regard to ecommerce are obsolete are they were formulated and are still
catering for paper-based and physical transactions only. Some
areas, which have been by the development and use of ecommerce, include:
Contract Laws. As previously stated, we have adopted common
laws and in such instances involving the implementation of
contracts and as such it entails that for contracts send out by postal,
contractual obligation arises on the date the letter of acceptance is
posted.8 There is a slight diversion from the common laws but
however this still posse a challenge for the general conduct of ecommerce where there is a use of e-mail and electronic signatures
in enforcing contracts in real time. Under e-commerce there is an
existence of distance selling contracts (contracts offered by
BeForward.jp which is a leading second hand cars exporter to
Tanzania) raise questions like when an offer can bind the parties?,
When acceptance can be considered effective? In the European
Union they have adopted a directive Direct Selling Directive that
addresses these issues and setting up standard guidelines in ecommerce activities. We need to have a legislation that will ensure
to have offline laws (Sales of goods act 1979,
The Consumer
Protection Act, 1987) that are applicable to the online world.
Consumer
Protection.
The
laws
associated
with
consumer
protection include Consumer Protection (1987), Sale of Good (1979)
and the Supply of Goods (1982) are not applicable in e-commerce.
These laws are antediluvian as they were enacted at a period when
e-commerce was non-existence in Tanzania. The law in Tanzania
does not cover or recognize distance-selling contracts, cyber space
or digital signatures.
View Section 42(2) sub sections (i) and (ii) of the Law of Contract Act 2002 of the United Republic of
Tanzania
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Bank and Financial Institutions Laws. The Bills of Exchange
Ordinance (CAP 215) need to be reviewed and efforts should be
made to enable digital money to replace cheques in Tanzania. We
still have Banks in Tanzania which only use Visa, MasterCard
services for the purpose of drawing money on ATMS other than
those of relevant banks; Banking and Financial Institution Act (1991)
and Bank of Tanzania Act (1995) need to be amended so as to cater
for
online
payment
using
these
services
and
making
the
transactions an effective e-commerce payment system.
Jurisdiction. In e-commerce usually business transactions occurs
with suppliers on one jurisdiction and consumer on another
jurisdiction; both jurisdiction are governed by different legal
framework. Thus when a dispute arise, parties to a dispute can
experience problem as to which law will apply in case of such
dispute or it could be difficult to answer the issue as to where do
things happen online, whose laws apply?, how do you enforce civil
rules or foreign judgment under current laws against a party in ecommerce?9
Also there is an issue of where the domain is registered and where it
is physically operating on, this is important to be regulated in order
to curb cybersquatting offences. We have .tv domains and people
mistake them to mean that is a television but in reality .tv is
the Internet country code top-level domain (ccTLD) for the nation
of Tuvalu. Thus any dispute online using such a domain could be
subjected to regulations of e-commerce in Tuvalu.
CONCLUSION
It can be observed that in the first theme we have studied on the
evolution of e- commerce, the legal framework and problems
associated with carrying out of electronic transactions on a global
9
http://media.mofo.com/files/PrivacyLibrary/3531/TANZANIA-Positionpaperone-COMMERCEadobe.pdf
Page 8
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scale. The theme focused more on the European Perspective of ecommerce and efforts made in encompassing the same to be part
and parcel of the commercial laws of the European Union, I have
deliberately tried to review the them on a more practical
perspective by focusing on Africa citing Tanzania as a case study.
Focusing on Tanzania as a developing country and where ecommerce is still at its infancy, we have learned that the foregoing
discussion has revealed that the use of Electronic commerce and is
growing very fast in the world. Tanzania is making deliberate efforts
in changing and adapting to new laws to cover e-commerce by
reviewing and amending her legislations and orient them to focus
more on online business perspective. However in doing so there is a
need to ensure that the laws to govern and foster e-commerce
should bear in mind customer protection and also focus in boosting
our economy.
REFERENCES
1. http://www.theguardian.com/global-developmentprofessionals-network/2014/jan/24/digital-divide-access-toinformation-africa
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2. UNCTAD 2002. Kofi Annan (Former Secretary General of United
Nations)
3. Watson, R.T. et al (2008) Electronic Commerce: The Strategic
Perspective (Page 8)
4. Inroduction to E-commerce available at
http://www.sxccal.edu/msccs/ecommerce1.pdf
5. Andrew Molel paper on The Legal and Regulatory Framework
for ICT in Developing Countries available at
http://cs.joensuu.fi/ipid2008/abstracts/Mollel
%20Andrew_ICT4D%20PAPER.pdf
6. Available on TCRA Website at www/tcra.or.tz
7. Mikko Vesisenaho, Developing University-Level Introductory
ICT Education in Tanzania: A Contextualized Approach, PhD
Dissertation, University of Joensuu, 2007.
8. http://drps.mzumbe.ac.tz/documents/Mzumbe_Masters_Abstra
ts_LLM_COMMERCIAL_LAW_2012.pdf
9. http://www.tzonline.org/pdf/theTanzaniadevelopmentvision.pdf
10.
The Electronic and Postal Communication Act 2010 at
http://www.researchictafrica.net/countries/tanzania/Electronic_
and_Postal_Communications_Act_no_3_2010.pdf
11.
http://www.mkono.com/pdf/ICLG_Tanzania2014.pdf
12.
National information and Communication Technology
Policy at
http://www.tanzania.go.tz/egov_uploads/documents/Nationa
%20ICT%20Policy%20of%202003_1.pdf
13.
https://www.academia.edu/1489225/Electronic_Contract
s_in_Tanzania_An_Appraisal_of_the_Legal_Framework
