Why we’re concerned about FG preventing looting, losing cases abroad — CISLAC

Charges NASS to make Public Procurement Law effective

Calls on Buhari to resubmit Proceeds of Crime Bill for passage

Why we’re concerned about FG preventing looting, losing cases abroad — CISLAC

By Gabriel Ewepu – Abuja

The Civil Society Legislative Advocacy Centre, CISLAC, Wednesday, expressed concern about Federal Government preventing looting of public funds and losing cases abroad.

Stating its position on the ongoing case on the Process and Industrial Development, P&ID, registered in the British Virgin Islands, which it signed a contract in 2010 with the Ministry of Petroleum Resources, and after three years the company initiated international arbitration, alleging that Nigeria had not performed its obligations under the contract and seeking damages for lost profits, and said “No real work has ever been concluded under this contract.”

Speaking on the case and other issues on corruption during a press conference, the Executive Director, CISLAC, Auwal Musa Rafsanjani, also lamented that Nigerian public officials who supposed to protect the interest of Nigeria unfortunately connived with foreign companies to loot Nigeria.

According to Rafsanjani despite a number of ‘red flags’ of corruption relating to the contract since 2010, successive Nigerian governments did not raise the issue of corruption in its defence in the international arbitration.

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He said: “The current global economic recession is likely to harm Nigeria in an unprecedented way. While the Nigerian Government cannot influence the slump of the prices of natural commodities, it is responsible for the continuous disappearing of Nigerian illicit funds abroad.

“A case in point is the Process and Industrial Development (P&ID), a company founded by two Irishmen, registered in the British Virgin Islands. The company signed a contract in 2010 with the Nigerian Ministry of Petroleum Resources. Less than three (3) years after the contract was signed, P&ID initiated international arbitration, alleging that Nigeria had not performed its obligations under the contract and seeking damages for lost profits. No real work has ever been concluded under this contract.

“Due to the unprecedented damage to Nigeria, President Buhari singled out this case in his speech at the UN General Assembly last year when he acknowledged suspected ‘international scam.’ CISLAC has been investigating this case of enormous corruption and mismanagement.

“Despite a number of ‘red flags’ of corruption relating to the contract since 2010, successive Nigerian governments did not raise the issue of corruption in its defence in the international arbitration. The international tribunal based in the UK concluded that Nigeria had repudiated the contract. It awarded P&ID USD 6.6 billion in damages plus interest of 7% per year, even though neither party had taken steps to perform their obligations under the contract.

“In response, P&ID commenced proceedings in English courts in 2018 to enforce the award. Nigeria has now belatedly raised allegations of corruption in its attempt to avoid enforcement of the award in English courts. It alleges a long-running corrupt conspiracy in which associates of P&ID paid bribes to Ministry of Petroleum Resources officials to obtain the contract.”

He further stated that a number of Red Flags which indicate how the Nigerian public pays the price for potential corruption and incompetency have been identified by CISLAC.

“While we take no position on the case, we note a number of Red Flags which indicate how the Nigerian public pays the price for potential corruption and incompetency:

“Red flag 1: ‘Off-shore’ companies and lack of transparency in procurement; According to P&ID’s own account, the contract was based on an unsolicited proposal presented to the Nigerian Government by P&ID. This proposal was accepted by the Government in 2010. The full terms of multi-billion contract have never been made public. From the extracts of the contract that are annexed to the UK judicial decisions of the arbitration tribunal, there are questions about whether the contract contains the technical specificity and detail that one would expect of a contract genuinely intended to govern the development and operation of a multi-billion dollar gas facility over several decades.

“Red flag 2: Doubts about whether the arbitration was contested by the Nigerian Government – incompetency or corruption? The P&ID case has become ‘political’ in Nigeria. With allegations that the acting head of EFCC has not pursued the case timely and with required competency. However, despite enough time and opportunities provided by the UK-based tribunal, Nigeria’s lawyers, intentionally or out of incompetency, failed repeatedly to file expert evidence on jurisdictional issues of Nigerian law.

“As a consequence, the Government of Nigeria appears to have failed to challenge any of the significant claims made in the statement of P&ID. Nigeria only called a single, ineffectual witness (Mr Ikechukwu Oguine) in the merits phase of the proceedings. Certainly, the tribunal was unimpressed by the expert evidence. Our research shows that the Government of Nigeria failed to cross-examine P&ID’s witnesses on key aspects of their evidence.

“Red flag 3: Questions about Nigeria’s delays in raising its suspicions of corruption; Nigeria changed its solicitors three times during the course of the proceedings, (first represented by Ajumogobia & Okeke, then Twenty Marina Solicitors LLP, then B. Ayorinde & Co, Adebayo Chambers). Nigeria’s allegation that the arbitration with P&ID was a ‘sham’ is based on the allegation of corruption on the part of the lawyers representing Nigeria in that proceeding. Defending the legal proceedings was initially the responsibility of the allegedly corrupt Ministry of Petroleum Resources. However, the Ministry of Justice assumed control of the defense at the ‘damages phase,’ taking over from the Ministry of Petroleum in January 2017.

“This timeline raises serious questions about why the issue of corruption was not raised earlier and, in particular, why Nigeria did not initiate proceedings to set aside the award in English courts on the basis of the alleged corruption within 28 days of the Final Award. The EFCC was called to investigate the P&ID contract only in June 2018 until July 2019, with an investigation formally opened in August 2018; too late in the proceedings.

“Same public officials consciously delayed such a case involving corruption and allowed the matter was awarded. Something is wrong or they allowed foreign interest to overrun national interest. There is a need to rebrand our public officials to be patriotic.”

The organization also stated its expectations on the ongoing P&ID case and asserted that “Institutional controls to prevent the conclusion of contracts like the P&ID; From the evidence available to us, it seems that no proper planning and tender process was conducted in a multi-billion-dollar deal. It is evident that the commercial terms of the agreement represented a catastrophic value for money from a Nigerian perspective.

“If Nigeria had had a clearer and more robust set of laws and processes around public procurement, such a deal would have never happened! Public procurement laws and procedures need to be upgraded, made unconditionally public, and be rigorously enforced!

“We have been talking about Public Procurement Law but people don’t have interest in it because of personal interest. Jonathan-led administration including the Buhari-led administration doesn’t have an interest in the Public Procurement Law.

“The National Assembly supposed to oversight on this issue, and they have not raised alarm. It shows something is wrong. National Assembly has to make the Executive and other Nigerians obey the Public Procurement Act. This is a failure on part of the National Assembly and should wake-up for Nigeria not to be short-changed.”

The organization further stated that “Clear and a binding legal requirement to publish contracts in the resource sector; This case has been possible only because Nigerian public contracts, especially those in the resource sector, are shrouded in secrecy. Government officials who decide about the fate of our economy do so without any accountability.

“Corruption thrives in secrecy. Unless all government contracts, especially those concerning the oil sector, are made public, we will continue to lose billions of dollars monthly due to corruption, incompetency, and international scams.

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“While the P&ID scandal is only one case, it shows how Nigerians lose billions of dollars abroad due to the lack of legal and policy framework preventing corruption in public procurement, shocking lack of oversight of public funds, and the general lack of law enforcement.

“In this connection, I commend the announcement made by the Ministry of Justice last week about the establishment of the Database on a recovered asset and the Central Criminal Justice Information System. This long-overdue action shall contribute to the transparency and re-looting of the recovered assets, which we have been advocating for since the 2017 Global Forum for Asset Recovery through numerous international and national advocacy events and research and policy papers.

“Recovering assets and money are not only fighting corruption but having a central data bank of recovered assets.”

The organization also challenged President Muhammadu Buhari and the Minister of Justice and Attorney General of the Federation, Abubakar Malami, to clarify the database is publicly accessible to all stakeholders including ordinary citizens; the database includes domestically recovered assets where risks of mismanagement and re-looting have been far greater compared to international recoveries and; how the numerous agencies with the mandate to recover assets will comply in the continued absence of the Proceeds of Crime Bill?

“This is one bill we have been pushing but unfortunately it has not been assented to. We hope this bill is resubmitted by the President.

“Only these steps can ensure that all the agencies that recovered assets harmonize their procedures while regularly updating the data. The management of these assets must be entrusted to people with integrity to prevent public officials from using these assets for their political objectives and personal enrichment.

“We hope that they won’t use recovered assets for the 2023 political campaign. Let me reiterate that Nigeria will continue suffering from international scams and enormous wealth disappearing abroad if no effective prevention is put in place to reduce illicit financial outflows, which disappear in places like London, Dubai, British Virgin Islands, and other tax havens.

“This week the enormous leak of the 2, 100 Suspicious Transaction Reports (STRs), so-called FinCEN Files, shows how UK and US banks launder proceeds of corruption and organized crime while knowing that this is illegal.”

He also alleged that past leaks showed that many Nigerian politicians are flagged in these leaks as prominent ‘customers’ buying luxurious houses, yachts, and other luxuries for money stolen from Nigerian citizens.

“This case once again shows that we recover only an insignificant fraction of assets while we continue losing billions. It must be noted that ‘enablers’ such as prominent international lawyers, banks, tax advisers and others, are just as criminal as those that commit the stealing and have to be made accountable.

“Let me conclude by assuring the Nigerian public that we will keep holding the corrupt officials accountable for the lack of prevention of corruption, money laundering and illicit financial flows along with their Nigerian and international enablers”, he stated.


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