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Namibia: Procurement Bill Sparks Heated Debate


AllAfrica.com

By Tonateni Shidhudhu

October 3rd, 2013

Windhoek — The Public Procurement Bill that is currently being debated in the National Assembly is likely to be rejected, following strong criticism by several MPs on both sides of the house.

Debate resumed on Tuesday on the proposed law. Lawmakers are unhappy with the way the Bill was drafted, arguing that the role of government and that of new institutions to be created under the proposed law is not clear, and that the Bill has the potential to disadvantage businesses that are run by black Namibians. The debate was delayed last week, when lawmakers requested a workshop on the Bill to get a clear understanding of what the proposed legislation entails.

Swapo Party MP Kazenambo Kazenambo criticized the Bill calling on the Finance Minister

Saara Kuugongelwa-Amadhila to refer it back to the drafters. “I don’t see how the Ministry of Finance as an entity and other ministries are involved in the procurement system. I don’t understand the role of the Procurement Policy Office, there are so many offices and it is not clear who is supervising who, [since] the functions and powers of these offices are overlapping,” he said.

Kazenambo wants the finance minister to clarify the role of the institutions that are provided for in the Bill and how they differ from one another and also questioned the status of the Central Procurement Board and whether it is going to function as a parastatal or under which category of governance it would be placed.

If the Bill is passed, it will create a Central Procurement Board (CPB) to replace the current Tender Board that has had its fair share of controversy over the years. Kazenambo also queried why CPB members are given unlimited powers, especially that of extracting information about anyone bidding for a public tender, including their financial records. “I am seeing scandals coming, we live in this country as business [people], we are subjected to harassment and discrimination and sometimes just because you are black, people question from where you got the money,” he said. In terms of the Bill the Procurement Policy Office wil have the responsibility of advising the minister on policies, guidelines, standards and manuals required to maintain an internationally competitive public procurement system in Namibia. The office will also be responsible for recommending thresholds, disqualifying, debarring and suspending suppliers and conducting investigations where necessary.

This, according to Kazenambo, if not handled properly, has the potential to discriminate against locally manufactured products, especially those from businesses that are run by black Namibians. He made it clear that he is not in support of the current format of the Bill and walked out of parliament following his contribution, returning only later.

Swapo Party Chief Whip Professor Peter Katjavivi said while the Bill appears to be a tool of empowerment for disadvantaged communities, particularly women and young people, there are still issues that need to be clarified or rectified. He warned against the bureaucratic delays that may occur due to the various structures provided for under the proposed law. “The multiplicity of entities within the Bill creates a worry over bureaucratic delays. If you have the Procurement Policy Office, the Central Procurement Board, the Procurement Committee, the Procurement Management Units and Bid Evaluation Committee, probably we do not need the bid evaluation committees, because procurement committees can as well evaluate bids,” argued Katjavivi.

Lawmakers also feel that not enough public consultation took place with stakeholders to enable them to provide their inputs. Swanu president Usutuaije Maamberua said although a few meetings were held during the drafting of the Bill, there is a need for broader consultation. He was also dissatisfied that the Bill aims to provide preferential treatment to bidders from the previously disadvantaged communities only, saying 23 years after independence the nation should move on and look at the burning social question of poverty based on a broader perspective. He said it is a pity that there appears to be class discrimination in Namibia in terms of the manner in which the economy is structured, which also needs to be addressed in the Bill. “What about a poor white person, if they fall under the lower class? I am proposing that we should not only look at the previously disadvantaged communities, but all people in the lower income categories irrespective of colour.”

Maamberua who is the chairperson of the Parliamentary Standing Committee on Public Accounts is also a former permanent secretary in the Ministry of Finance. He questioned why the Bill is silent on the disposal of government assets, which is a function of the Tender Board. “The [proposed] Board (Central Procurement Board) does not have that function, which is a serious omission,” he observed and further pointed out that the Bill appears to be repealing only the current Tender Board Act 16 of 1996, but not other related Acts such as the Regional Councils Act, which also deals with public procurement.”

Presidential Affairs Minister Dr Albert Kawana adjourned the debate to next week Tuesday. Kawana is expected to offer guidance to parliament on the way forward on the contentious Bill. If the National Assembly is still divided, MPs will have to vote on whether to accept the Bill as it is or to reject it and to send it back to the finance ministry for amendment.

New Reports Measuring Gender, Trade, and Public Procurement Policy


AllAfrica.com

25 SEPTEMBER 2013

PRESS RELEASE

The World Bank and Commonwealth Secretariat launched two new publications this week centering on women in business.

‘Women, Business and the Law 2014’ measures how national laws, regulations and institutions differentiate between women and men in ways that may affect women’s capacity to work or set up and run businesses.

The report was launched by the World Bank and International Finance Corporation (IFC) at the Commonwealth Secretariat’s headquarters in London on Tuesday, 24 September.

Dr Augusto Lopez-Claros, Director of Global Indicators and Analysis at the World Bank and IFC said: “In 79 countries the law restricts the types of jobs that women can do. These jobs are often in industries that are higher paying and that creates a pay gap. In the twenty-first century many of these restrictions no longer make sense.”

The Secretariat also presented ‘Gender, Trade and Public Procurement Policy‘, which focuses on how policies for procuring goods and services for government departments can be used effectively to enhance business opportunities for women.

The procurement market often makes up to 10-15% of the GDP of developed countries and can amount for as much as 30-40% of GDP of developing countries. The report looks at how public procurement policies can be used as a tool to open up the market to Small and Medium-sized Enterprises (SMEs), including women’s businesses, which are often in the informal sector.

It includes case studies and lessons from four Commonwealth countries: Australia, India, Jamaica and Kenya.

Interim Director in charge of Gender, Health and Education at the Secretariat, Esther Eghobamien said: “The research has demonstrated the impact of public procurement policy as a vehicle for enhancing opportunities for SMEs and women-owned business. Any growth in that sector will translate into real gains for women living below the poverty line.”

Guinea: Steinmetz $9 Billion Fortune at Risk in Soros-Backed Probe


Bloomberg.com

By Matthew Campbell, Jesse Riseborough & Franz Wild – May 9, 2013

Lansana Conte, the former dictator of Guinea, once held sway over an asset that mining companies craved: the world’s largest undeveloped iron ore deposit, valued today at as much as $50 billion.

BSG Resources Ltd., the diamond producer controlled by Israeli billionaire Beny Steinmetz, was among those firms that came calling starting in 2005. The perks allegedly offered: A gift of a $60,000 diamond-studded gold watch and the promise of a $2.5 million commission to Conte’s wife if BSGR got the mining license. In 2008, BSGR was awarded the license.

Today Conte is dead, three people are under arrest and Steinmetz’s $8.9 billion fortune is threatened. U.S. prosecutors are probing whether a man linked to BSGR paid Guinean officials as much as $12 million in bribes for obtaining mining rights to a portion of the site. Citing similar suspicions, the new Guinean government has said it might strip Steinmetz’s company of the license — putting at risk a $2 billion payment he’s due and the reputation of a key figure in the global trade in high-end diamonds.

“As a scion from a notable traditional diamond family, he grew up knowing that what makes a man is his reputation,” said Chaim Even-Zohar, the author of “The Steinmetz Diamond Story,” a book on the billionaire’s business. “My guess would be that he is deeply hurt.”

Payoff Report

The allegations of payoffs are detailed in a 28-page report, obtained by Bloomberg, prepared by U.S. law firm DLA Piper. The firm was hired by Guinea at the recommendation of hedge fund billionaire George Soros, 82, who’s advising the government through his foundations. Soros, who regularly backs young democratic governments in eastern Europe and Africa, funded the initial DLA Piper investigation, said a person familiar with the matter who asked not to be identified discussing a private issue. His aim was to provide legal counsel to the government that could match the resources of big mining companies, the person said.

Steinmetz and BSGR, based in Guernsey, deny wrongdoing in Guinea and describe themselves as victims of a conspiracy by current Guinea President Alpha Conde and Soros to revoke the firm’s mining license.

BSGR “became the victim of numerous extortion attempts by individuals who were seeking economic gains,” it said today in an e-mailed statement. “The modus operandi of these attempts involved at times the use of forged documentation, blackmail and harassment. BSGR is confident that its activities and position in Guinea will be fully vindicated.”

Better Terms

The 57-year-old Steinmetz’s troubles show the high stakes for resource firms as increasingly assertive African countries, backed by Western donors and governments, re-open mining contracts to hunt for past impropriety and win better terms for citizens. The probes have slowed development of the Guinea site, known as Simandou, whose mining rights are also held by companies including Rio Tinto Group (RIO) and Vale SA. The mountain-top site contains an estimated 26.5 billion metric tons of iron ore resources, said Paul Gait, a mining analyst at Sanford C. Bernstein Ltd. in London.

“This is the most prospective, highest-grade deposit of as yet undeveloped iron ore in the world,” Gait said.

Born in Israel, Steinmetz grew up in the family diamond business, Steinmetz Diamond Group, founded by his father in 1940. The closely held company specializes in the largest and most valuable stones, among them the 203-carat Millennium Star Diamond unveiled by De Beers SA to mark the year 2000. New York-based Tiffany & Co. (TIF) loaned BSGR $50 million in 2011 to expand a mine in Sierra Leone. Steinmetz also supplies diamonds to New York-based Sotheby’s Holdings Inc. for the auction house’s product line.

‘Hard-Nosed’

The diamond group is valued at about $3 billion, accounting for the biggest portion of Steinmetz’s wealth, according to the Bloomberg Billionaires Index. The family’s other interests include mining, oil, gas and real estate.

“In business he is very hard-nosed, maybe bordering on the ruthless — but always legitimate and fair,” said Even-Zohar of Steinmetz, whom he counts as a “good friend.”

The Simandou controversy traces back to 1997, when London-based Rio Tinto was granted a government license to explore the iron ore mine. In 2008, a few months before he died, Conte stripped Rio of half its license, claiming that it wasn’t developing the site quickly enough. The government then awarded it to BSGR for free, which is typical in the industry. The company began spending $160 million preparing the remote site for mining.

Vale Stake

After 18 months, in 2010, BSGR agreed to sell 51 percent of the stake to Brazil’s Vale for $2.5 billion. Vale paid $500 million upfront and the two firms set up a joint venture to develop the site. The remaining $2 billion has not been paid.

“It was an extraordinary deal given its scale,” said John Meyer, an analyst with London-based SP Angel Corporate Finance LLP.

Vale has said it’s not implicated in the investigations.

New York grand jury started its probe earlier this year into whether BSGR violated the Foreign Corrupt Practices Act by delivering bribes, according to prosecutors. The law bars companies with American links from engaging in bribery abroad. A portion of the alleged payments were sent to the U.S., prosecutors said.

On April 25 the grand jury indicted Frederic Cilins, a French citizen, on charges of witness tampering and obstructing the Guinea investigation. Cilins was described by Guinean Justice Minister Christian Sow as an “agent” of BSGR.

Widow Informant

In March he had met in Jacksonville, Florida, with a woman who was wearing a wire, and offered her more than $1 million in exchange for help burning documents related to the BSGR deal, according to the federal complaint.

The woman was Mamadie Toure, a widow of former president Conte who turned FBI informant in the hopes of reducing her own charges, according to a person familiar with the investigation.

The DLA Piper report described Cilins as an intermediary for payments from BSGR to Conte’s wives and for “gifts” to members of the president’s family and government officials. Cilins denies wrongdoing. BSGR today said it sought to work with Cilins and two other men, through a company called Pentler Holdings, from 2006 because BSGR lacked a “permanent presence in Guinea.”

Pentler took a 17.7 percent stake in BSGR’s Guinea unit in March 2006 before it was bought out by BSGR two years later, which is when the arrangement with Cilins ended.

In U.S. federal prosecutions, lower-ranking defendants are often offered lighter sentences in exchange for agreeing to testify against figures more central to alleged crimes.

License Review

The Guinean government began reviewing the Simandou license soon after Alpha Conde took office in 2010 as the country’s first freely elected president. Based on the DLA Piper report and its own investigation, the government last month arrested two BSGR employees in connection with the probe: Ibrahima Sory Toure, Mamadie Toure’s brother who was director of external relations, and Issaga Bangoura, a security official. Both men have denied wrongdoing.

BSGR has fought back vigorously. It’s taken aim at Soros, Conde and Rio Tinto, which it says established a “covert special project group dedicated to committing espionage” and harassed its workers by buzzing them with low-flying helicopters.

Public Relations

BSGR has also sued its former public relations adviser, FTI Consulting, accusing it of abetting a “smear campaign” directed by Soros. Soros is “determined to ensure” that the mining license “was withdrawn/canceled” by the government of Guinea, according to the lawsuit. It cited alleged comments by FTI executives that Soros had a “personal obsession” about BSGR.

Soros rejects the claim that he engaged in a smear campaign and that he conspired to strip Steinmetz’s license, a spokesman for Soros Fund Management LLC said in an e-mailed statement.

FTI and Mark Malloch-Brown, its chairman for Europe, the Middle East and Africa, deny working against BSGR and said they will contest the claim. Rio Tinto declined to comment.

Conde, who took office promising to root out corruption, has attracted significant foreign backers. Soros’s Revenue Watch Institute, an offshoot of his Open Society Foundations, advised Conde on a new mining code and anti-corruption measures, the person familiar with his activities said. Global Witness, an anti-corruption group whose advisory board includes Soros’s son Alexander and which he funds, chronicles alleged wrongdoing in Guinea.

‘Personal Relationship’

And former British Prime Minister Tony Blair established a relationship with Conde through his African Governance Initiative, which set up an office in Conakry, Guinea’s capital, to assist his presidency. Conde last year secured $2.1 billion in debt relief from the International Monetary Fund and World Bank, a recognition of his move to civilian rule.

“The personal relationship between Mr. Soros, Mr. Blair, and Mr. Conde is really important, and has an impact in terms of reassuring leaders that we are going in the right direction,” Guinean Finance Minister Kerfalla Yansane said by phone. “At this juncture we need big support to challenge these companies, who can hire lawyers and PR firms and have resources we don’t.”

Guinea isn’t the only African state where deals with middlemen have led to controversy for international mining groups. Eurasian Natural Resources Corp., a London-based, Kazakh-backed mining firm, is being probed by U.K. prosecutors into allegations it paid bribes to win business in Kazakhstan and Africa. The company said on April 25 that it is cooperating with authorities. And countries including Ghana and Zambia are driving a harder bargain with mining firms, reviewing taxation and state-ownership clauses.

High Stakes

The stakes for getting Simandou mined are high for Guinea, whose population is about 11 million. It ranks 178th out of 187 nations on the UN Human Development Index, which measures indicators of poverty and health.

“The economic growth profile of the country is expected to completely be changed” by the mine, Yansane said.

Rio Tinto CEO Sam Walsh has said the company, which says it has spent $2.3 billion at the site, is committed to developing its portion of Simandou. It predicted production would start in 2015.

BSGR has also said it’s committed to developing Simandou, and remaining in Guinea despite the corruption allegations.

The government realizes the Steinmetz controversy may spook the investors it needs to raiseliving standards, Yansane said. For that reason, “We want this problem resolved as quickly as possible,” he said. “We don’t want the name of the country to be on the front page of newspapers all the time.”

To contact the reporters on this story: Matthew Campbell in London atmcampbell39@bloomberg.net; Jesse Riseborough in London at jriseborough@bloomberg.net; Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editors responsible for this story: Jacqueline Simmons atjackiem@bloomberg.net; John Viljoen at jviljoen@bloomberg.net

Nigeria: Ibori Admits looting $250 million


The News

February 27th, 2012

The money laundering trial of James Onanefe Ibori, former governor of Nigeria’s oil rich Delta state, took a dramatic turn in a London Court today, when he pleaded guilty to the 10 point charge.

Ibori who was arrested in Dubai by the London Metropolitan police in 2010 has been standing trial since then and speculations that he had struck a plea bargaining with the prosecutors were debunked by the dramatic twist the case took today.

Here is how the AFP captured the trial today at the Southwark Court:

A former Nigerian state governor pleaded guilty in a British court on Monday to siphoning off $250 million of Nigerian state funds which he spent on luxury houses, cars and a private jet, police said.

James Ibori, who was governor of Nigeria’s oil-rich Delta State between 1999 and 2007, admitted ten offences relating to conspiracy to launder funds, money laundering and one count of obtaining a money transfer by deception and fraud.

In a boost for the fight against corruption in Africa’s most populous nation, the 49-year-old was remanded in custody following the hearing at a London Southwark Crown court, and will be sentenced at a later date.

The Metropolitan Police said that during his two terms as governor in Nigeria, Ibori “systematically stole funds from the public purse, secreting them in bank accounts across the world”.

His methods included the inflation of state contracts, kickbacks and the straight lift of cash from the state accounts by unscrupulous employees in his inner circle,” it said in a statement.

Ibori, who lived in Britain in the 1980s, came to the attention of the authorities here in 2005 and two years later a London court froze his British assets, estimated at £35 million (now $55 million, 41 million euros).

Despite earning less than $25,000 a year as governor, his portfolio included a £2.2 million house in the upmarket London district of Hampstead and a £3.2 million mansion in Johannesburg’s wealthy Sandton district in South Africa.

He owned a $20 million jet and a fleet of armoured Range Rovers and spent money on fees for exclusive British boarding schools and expensive hotels.

Ibori was first arrested by Nigeria’s anti-corruption agency, the Economic Financial Crimes Commission (EFCC), in December 2007, after losing immunity after leaving office.

Two years later, a court in his home town of Asaba dismissed 170 charges of corruption against him, citing a lack of evidence.

But the case was reopened in April 2010, prompting Ibori to flee to Dubai. He was arrested there and a year later was extradited to Britain for trial.

Ibori’s wife Theresa, his sister Christine Ibori-Ibie and his mistress Udoamaka Oniugbo are currently each serving five-year sentences in British prisons, while a number of his associates have also been jailed, police said.

Britain’s International Development Secretary Andrew Mitchell, whose department funded the investigation by the Metropolitan Police’s Proceeds of Corruption Unit, welcomed Monday’s guilty pleas.

“James Ibori’s crimes have had a devastating effect on the lives of his fellow Nigerians — the very people he was once elected to serve,” he said.

“The millions he stole were meant to help them, but they were left to struggle in poverty as he lived in luxury.”

The Met’s corruption unit is a specialist team that investigates the activities of foreign officials who seek to launder stolen assets in Britain.

Police Detective Inspector Paul Whatmore said: “We will now be actively seeking the confiscation of all of his stolen assets so they can be repatriated for the benefit of the people of Delta State.”

Nigeria, Africa’s largest oil producer, is regularly ranked among the most corrupt countries in the world…Read more.

Macmillan Publishers Must Pay $18 Million for Africa Corruption


Macmillan Coffe Morning Event
Image by lewro via Flickr

Bloomberg News

By Lindsay Fortado – Jul 22, 2011 7:16 AM ET

Macmillan Publishers Ltd. was fined 11.3 million pounds ($18.4 million) over possible bribes to win contracts for education materials in Rwanda, Uganda and Zambia.

The book publisher, based in Basingstoke, England, was ordered by a London court to pay the settlement after an internal investigation found evidence its processes for bidding on contracts “were susceptible to improper relationships,” the U.K. Serious Fraud Office said in a statement today.

“It was impossible to be sure that the awards of tenders to the company in the three jurisdictions were not accompanied by a corrupt relationship,” the SFO said. “It was plain that the company may have received revenue that had been derived from unlawful conduct.”

The investigation began after the World Bank Group told the City of London Police that Macmillan tried to pay a bribe to win a contract in Southern Sudan. The police searched premises in December 2009 to gather evidence and Macmillan reported the case to the SFO in March 2010, the prosecutors saidRead more.

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