John W.H Denton AO is the Secretary General of the International Chamber of Commerce, an organisation which he describes as the world’s largest and most inclusive business organisation. He is also the first Australian to hold office as the Secretary General of ICC. While in Nigeria for the 7th ICC Africa Conference on International Arbitration, he spoke with BusinessDay’s Onyinyechi Ukegbu on issues of access to justice, finance for African SMEs, and the future of the ICC on the continent. Excerpts below.
1. Welcome to Lagos, Nigeria. How has your experience of the conference and Lagos been so far?
It is my second trip to Lagos [and] the streets are quieter. I think that is because everyone has reacted in an interesting way to the announcement of the removal of the subsidy, and there are not as many cars on the road – except for the petrol queues. On Thursday, I went to ring the closing bell at the Nigerian Exchange, and instead of an hour, we arrived in 20 mins. And I’ve got to say Lagos is different.
2. What has changed?
One thing about Lagos and Africa is that the speed of change is quite dramatic, so if you don’t turn up frequently every time you come back you are surprised by how much has changed. For instance, the digitalisation of the Nigerian Stock Exchange and the young entrepreneurs, who on their own, are creating augmented reality tools to improve efficiency for professional services.
Speaking with ICC Nigeria and watching how proud they are of the next generation and how keen they are to encourage the prospects of their future is quite inspiring.
3. A key focus of your administration was to ensure that dominant voices in the ICC are more inclusive of the global south. What did the ICC do to achieve this?
First of all, we had to be present in the global south. We were, but what I have done and what I have been keen to help people understand is that we must be present in more of the global south. Now, when I look at the 170+ countries in which the ICC is present, we can say, with confidence, that over 70% of the presence of the ICC is in the global south. Also, I have started a whole process with small island states. If we want to be relevant in the 21st Century and achieve the outcomes we want, we must have legitimacy and be trusted. We are the only group that can bring this inclusiveness into the United Nations, into multilateral and regional fora, and even at the local government level, and this gives us real authority to argue the case for change because we are representative of an inclusive view of economic development.
4. I must say you have given me a reason to move to an Island. How significant is the role of the ICC Africa Court of Arbitration towards this goal?
The whole purpose of the ICC is to enable businesses to achieve peace, prosperity and opportunity for all. One of the issues we saw as an inhibition for businesses was the lack of access to a justice system that was reliable. Businesses were discovering that they would be in court in situations where they couldn’t rely on the rule of law in some states, so we introduced private arbitration as a solution and made that an accredited tool at the UN level through the New York Convention.
Access to justice was critical to enabling business. In Africa, economic analysis has shown that where there is limited access to justice, economic development suffers because it is harder to attract investment. Also, it is harder to have trading across borders with international contracts because they don’t have confidence in the legal system.
We have been a critical part of improving the prospects for investments. If you look at the caseload of the ICC Africa Court of Arbitration, they include three critical sectors – energy, infrastructure and construction. States are also bringing matters before us, and when you look at the data, we have the highest percentage of States as parties in Africa. Now, we are moving our focus to other sectors which will be important for the African Continental Free Trade Area.
I genuinely believe that an inhibitor of SMEs and what stands in the way of many entrepreneurs developing their ideas is uncertainty about where they can get access to justice that is affordable. In this centennial year, we are focused on developing new tools that can help us provide that through the ICC.
5. Speaking of providing access to private justice to SMEs in Africa, do you have an outlook for the next 5-10 years?
Well, our commitment is to ensure that any business that seeks access to justice can utilise some form of tool, forum or resolution process that the ICC has created.
6. Notable businessmen in Nigeria have said that access to various forms of finance is key to supporting the entrepreneurial aspirations of young Africans. You mentioned that the ICC would be interested in such support for Africans working with tech, AI and augmented reality. Could you speak more about this?
There are a couple of things we are going to do. Firstly, one of the big issues for SMEs is access to trade finance; it is particularly hard in Africa because the cost and availability are low. So, we are working practically to create new FinTech tools that support access to trade finance by relying on the ability to access electronic invoicing. We are piloting one at the moment in Ecuador, and that was successful. Now we intend to pilot the market test in Mexico, and once we have proof-pointed all that, it will be very applicable to the African situation. We intend to pull that together to create a marketplace that financiers will bid to get access to, and that will [in turn] lower the cost to make it more available.
The other tool we are building is called Trade Flow Capital for instances where a deal is made with commodities. Because of the time between putting commodities on a vessel and getting to the destination, issues around when the contract passes over, and when a party should get paid, there is an enormous delay. We worked out a way to expedite that by taking on the execution risk for SMEs for delivering the commodity, and we make certain that the money is available at the point rather than at the end. We have not done that with SMEs but we have proved that in other markets, so we are looking at that, at the moment.
We are also creating a Merchants of Peace Fund that will have about 500 million Euros, as the core purse of the fund eventually for projects we can invest in with other groups. Access to technology and similar areas are very much in the goals of the ICC, and we are establishing the fund with the goal to maintain functional market economies.
7. The ICC clocked 100 this year. In that time, there has been significant growth in arbitration practice in Africa, with the Nigerian chapter representing the fastest-growing chapter on the continent. What plans or initiatives does the ICC have to support that growth?
We will put in more resources. Our strategic plan around arbitration in Africa builds on the success of ICC Nigeria and the courts of arbitration. We have been bringing more and more African practitioners into the court itself. So 1 in 4 court members are actually of African origin. We have the same thing on the ICC executive board, and there are more Africans on that board, as well. Also, we ran our first court session ever from Africa from Nigeria on May 31st. So the prominence of the Nigerian practice and the ICC, and the confidence that has been built by the combination of the two, are part of the strategic opportunities we are building for the future.
8. From your opening remarks, you know quite a bit about Nigerian music. What songs would you dance to at the ICC Africa Conference Gala?
Rema is my favourite. One of my kids danced non-stop to his music, and I loved his video. I think that is where you would find me.
9. From your vantage point as the Secretary General of the ICC, any final words for Nigerian entrepreneurs?
One of the most exciting things about Nigerian entrepreneurs is how indefatigable they are. The fact that they just keep going is pretty extraordinary. So, just keep going; you are changing this place. You won’t see it today because you are in the trenches fighting, but when someone like me has a look, [we see] things are changing here, and I reckon that if we can work together, the world will benefit from the dividends.
10. When would we have the pleasure of hosting you in Nigeria again?
As soon as I can get through the airport!