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4.1 Rule of Law
4.2 Enforcement of Contracts
4.3 Commercial Dispute Resolution
In-Country Assessment Information

Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default

 

4.1 Rule of Law

Core Question:  Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime? No – Very Weak, law enforcement is weak and vulnerable to political influence.

 

Impartiality

4.1.1   What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Very Weak – Percentile Ranking – 13.1 Trend ↓

Source: Governance Matters, World Bank – www.govindicators.org

 

Judiciary

4.1.2   Can members of the judiciary be held accountable for their actions? No – Score 28 out of 100 – Very Weak

 Source: Global Integrity Report – http://report.globalintegrity.org/Burundi/2007   

 

Costs of Crime

4.1.3   What are the business costs of crime and violence? High costs – Ranking 125th out of 142 – Score 3.4 out of 7, Very Weak

Source: The Global Competitiveness Report 2012-2013, World Economic Forum
http://www.weforum.org/issues/global-competitiveness

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4.2 Enforcement of Contracts

 

Core Question: Are systems in place for timely and efficient enforcement of contracts?
Commercial – No – Very Weak
Residential –  No – Unknown

 

4.2.1 – Judicial Enforcement

Commercial – Very Weak – Ranking 172nd out of 183 Trend ↓

4.2.1.1          What is the number of procedures involved in resolving a commercial dispute? 44

4.2.1.2          What is the time between the filing of a lawsuit and resolution in judicial enforcements? 832 days

4.2.1.3           What is the cost of judicial enforcements as a percentage of debt value? 38.6%

Residential – Unknown – assumed no practice

Survey Questions

SQ 10  What is the time between notice of intent to foreclose and loan collection in judicial enforcements? Unknown  

SQ 11  What is the cost of judicial enforcements as a percentage of property value? Unknown

 

4.2.2 – Summary Proceedings

SQ 12  Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders? Unknown

SQ 13  What is the cost of summary proceeding if available to lenders as a percentage of property value? Unknown

 

4.2.3 – Power-of-Sale

SQ 14  Power-of-sale agreements give creditors to power to sell properties after notice to the borrower without court intervention. What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders? Unknown

SQ 15  What is the cost of power-of-sale agreements if available to lenders as a percentage of property value? Unknown

Source – Financing Homes 2008, World Bank and International Housing Finance Corporation http://www.cipe.org/sites/default/files/publication-docs/Financing%20Homes%202008.pdf
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4.3 Commercial Dispute Resolution

 

Core Question: Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay? No – Very Weak, business law and administrative regulations need to be clarified to improve the business climate.

 

Survey Questions

Commercial Courts

SQ 16  Do specialized commercial courts exist for the handling of property disputes and foreclosures? No – Very Weak, the only commercial court is in the capital, but it lacks adequate facilities, equipment and capacity.

Source: Breaking the Cycle: A Strategy for Conflict-Sensitive Rural Grown in Burundi, World Bank http://go.worldbank.org/YLXQGOE2M0

 

Alternative Dispute Resolution

SQ 17  Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes? Yes – Weak, a government tribunal recognizes international arbitration.

 

Commercial Treaties

SQ 18  What bilateral, regional and international commercial treaties exist concerning business between countries?  Weak, however, in November 2012 the United States signed a Commercial Dialogue with the EAC so that it would promot more trade and investment in key sectors.

Source: U.S. State Department Investment Climate:  http://www.state.gov/e/eb/rls/othr/ics/2013/204613.htm

 

 

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In-Country Assessment (as of 2008)

 

 

FQ 7. To what extent do practitioners report contracts as enforceable?

Distrust in the judicial system in Burundi is profound and widespread, and justice is viewed by most Burundians and external observers as the most corrupt branch of government. The formal judicial system is perceived as neither impartial nor efficient. Many citizens have lost confidence in the system’s ability to provide even basic protection, and assume that the courts have always promoted the interests of the powerful.

Several major factors can be identified that feed the current distrust in the judicial system—impunity, corruption of justice personnel, lack of independence, complexity and length of procedures, and the unresolved status of the traditional justice system (Bashingantahe).

Impunity in Burundi presents two different aspects: (a) impunity for those crimes committed during armed conflict; and (b) impunity for crimes of corruption and other crimes. In the absence of rule of law, aggrieved parties often seek justice and redress by their own means, a phenomenon more dangerous due to the presence of small arms.

The traditional justice system is closer to local communities than formal law, however, it has lost some of its legitimacy due to the politicization over the last decades. Also, because of widespread poverty in the country, the poor can no longer afford the traditional in-kind offering (local beer) that is necessary to have one’s case heard, and allegations of corruption of the ‘wise men’ are becoming more common. Furthermore, the boundaries between the traditional and the modern systems of justice have become blurred as the Bashingantahe have stepped in to arbitrate conflicts that are expected to be treated by the official justice system.

In spite of the widely-held view that justice has failed in Burundi, little has been done until now to remedy the situation. The Government has yet to organize a thorough stocktaking exercise (États Généraux de la Justice), and only a few tentative steps, like the on-going reform of the Penal Code, have been taken toward identification and implementation of necessary reforms. The Government has taken some initiatives to combat corruption such as the creation of an anti-corruption brigade and the transformation of the Inspection des Finances into an Inspection Générale de l’État. A more systemic effort is required because establishing the rule of law and credible institutions of justice are essential requirements for a durable peace in Burundi, as well as for providing the necessary institutional framework for socioeconomic development and growth.

Source: Breaking the Cycle: A Strategy for Conflict-Sensitive Rural Grown in Burundi, World Bank (2008) http://go.worldbank.org/YLXQGOE2M0