And Don’t Even Mention the Russians…

Another look at South African economic & fiscal reality

By AAF Guest Contributor James Greener, Ph.D.

Minister Gigaba told us very little that we did not already know about the poor shape of the government’s finances. However, his unusual approach was actually to say as much and while he has been praised mightily for this, the market reaction has been severe. The prices of South African bonds and currency have plummeted. Those among us who over the past few years have been able to send a few sacks of cash to Dubai for safekeeping with our mates are probably feeling very relieved and smug. The frustrating but telling thing, however, is that all the hand-wringing has been directed at the failure of the income side of the budget to live up to expectation. Not very much at all has been said about the expenditure side of the equation. Given that there really are few untapped sources of significant tax revenue left it is obvious that the axe must be taken to the spending.

Some astonishing charts have been published highlighting just how much higher almost all public-sector salaries are, compared to private sector pay. Multiply this by the massive increase in the number of state employees and to the casual observer, not needing to influence voters, it seems obvious what needs to be done. Understandably any threat to their jobs will at the very least prompt massive strike action. And this should be met by the second leg of the program which is to make starting a business and hiring (and firing) staff so much simpler and easier. That is, create a way to soak up the talent and experience that will come onto (and is already unemployed in) the job market. But that’s two impossible things to believe on the day before the Currie Cup final.

The unwelcome consequences of deficits are debt and the cost thereof (aka interest rates). This is where the irritatingly influential ratings agencies pop up to scrounge a living, and so they are back in the news again. These analysts are no better than any others (see next story) yet because of where they work they assume unearned mantles of authority and infallibility. And because the minister offered some home truths they have (way too late) gone all angel of doom on us and are expected to downgrade South Africa yet again. The nation’s debt service cost is approaching panic station levels. It needs more than Gigaba to start talking specifics about what our government is going to do. To stop looting the public purse and dismiss all felons and thieves would be a good start and a way of sending a great message.

News of an interesting competition came to light recently. Four teams of trainee investment analysts drawn from different business schools were each asked to take a close look at a listed company and decide whether to recommend a buy or a sell. Each team approached the task in a different way using both published data and hands-on investigations of the firm’s products and markets. This resulted in the perfect balance of two buy and two sell recommendations. Anyone who thinks that this lack of consensus is a sign that the students clearly have a lot more to learn from their courses, should realise that this is the norm even after graduation. Anything published by a company (which, by the way, they do only because they have to) is very carefully massaged and managed. Obviously while shareholders and creditors need to be kept happy and informed there is a competing desire to keep competitors and the taxman in the dark. Consequently, it is quite understandable that two different teams can draw conflicting conclusions. It’s the old glass half empty versus glass half full story. Oh, the company they analysed? Distribution and Warehouse Network (Dawn).

Events are such that I’ll be wearing my Sharks shirt in Franschhoek in the Western Cape at the time of the Currie Cup final that will be played the Shark Tank here in Durban tomorrow. I have asked my hosts if we will be able to watch at a Sports Pub but they are dubious if I’ll be welcome. But I have every faith in the hospitality of all South Africans even when we hoist the Cup. (Apologies to the WP supporter who was offended last week at the suggestion that the Lions might win their semi) [Editors’ note: The article was originally published on October 27th, 2017]

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Did U.S. Meddle with Zuma Corruption Investigation? There’s a new Sheriff in Town

Ex-Public Protector Criticised for Accepting American & German Funds in Effort to Stamp out Government Fraud

Ms. Thuli Madonsela, her immediate predecessor, has denied the claims: “It’s a lie that we used consultants. It’s a blatant lie that we used USAID money, ever.”  The American government, however, acknowledged quite freely its financial support of the Public Protector’s work.  In the USAID’s own words (PDF):

USAID support was designed in collaboration with GIZ, the Department of Justice, and the Public Protector of South Africa (PPSA), to provide technical assistance to specific areas of the PPSA’s five-year strategic plan, and, through it, assistance to the African Ombudsman and Mediator’s Association (AOMA). The assistance was designed to build the capacity of the PPSA to use its own resources more effectively as it faces the challenges associated with an increase in the number and complexity of complaints investigated by the office. It supports the PPSA with training needs for investigators, specifically in investigation skills, anticorruption and fraud, alternative dispute resolution and report writing, all of which will increase their effectiveness and help to standardize practices across the PPSA. The PPSA has also highlighted a need for training in human resources, and also, assistance with outreach activities to reach rural and marginalized people will be supported to enhance accessibility. Assistance to the AOMA would be beneficial to the stature and respect accorded to the office and will contribute to strengthening good governance and democratic principles around the continent.

Andreas Stargard, an attorney with Pr1merio Africa advisors, points out the glaring questions that arise from the facts known thus far:

The independence of the OPP is at the heart of the agency’s mission.  Foreign funding can be quite innocuous, or it can indeed present a thinly disguised opportunity for another nation to meddle in domestic affairs.

Here, the discrepancy between Ms. Madonsela’s denial and the official USAID release is a bit hard to swallow.  Apparently, PriceWaterhouseCoopers were retained by the Office to help compile the Report on President Zuma’s entanglement with the Gupta family within the narrow 30-day window of time that was available to the Public Protector.  It is not clear to us whether U.S. funding was actually used, but there are good arguments on both sides.

Even more interestingly, the $500,000 total in foreign funding claimed by the media needs to be unpacked in greater detail: the half-million dollar amount was “identified” by USAID in 2015 “in reprogrammed funding to commit to democracy and governance programming.”  Yet, it was (1) made jointly with the German government‘s equivalent of the USAID (GIZ); (2) committed at only the 50% level until now (the final $250,000 tranche was to follow, supposedly, in “mid-2017”); and (3) signed merely on August 19, 2016, purportedly after “several months of program design involving all project stakeholders.”

The new Sheriff in town

The new Sheriff in town

A U.S. embassy spokesperson was quoted by media to say that the money thus far donated via the GIZ collaboration had been widely discussed within government circles.  The former Public Protector’s detractors, however, claim that the U.S.-backed funding renders her office’s independence doubtful, according to one of her critics, the Umkhonto weSizwe Military Veterans Association: “America cannot fund you without putting their interests first.”

Ms. Madonsela’s final Report, has not been released publicly, as both President Jacob Zuma and Cooperative Governance Minister Des van Rooyen applied for and obtained judicial intervention, preliminarily enjoining publication of the so-called #stateCapture Report‚ which was to be released last Friday.  The Gupta family ties certainly may have played a role in the officials’ expressed desire for privacy.

Former public protector Thuli Madonsela says no government institution has received foreign funding directly. (Delwyn Verasamy, M&G)
Former public protector Thuli Madonsela (Delwyn Verasamy, M&G)

Public protector role to be filled by Advocate Mkhwebane

busisiweAdvocate Busisiwe Joyce Mkhwebane was appointed as the new public protector in South Africa — a very important, albeit often sadly emasculated, role.  Adv. Mkhwebane will be replacing outgoing public protector Thuli Madonsela; her seven-year term officially begins on 15th October 2016.

In an informal online survey, Corruption Watch determined that her appointment by President Jacob Zuma was deemed transparent, and an 87% majority of respondents expressed confidence in Mkhwebane’s appointment.  That said, controversy erupted after the country’s Democratic Alliance party claimed that Mkhwebane had been “on the payroll” of the State Security Agency, implying a former role as an intelligence officer for the state.

Caprikat, Foxwhelp & Aurora: The Tip of Africa’s ‘Panama Papers’ Iceberg?

The X, Y and Zumas of the ‘Panama Papers’ leak

By AAT & AAF author, Michael-James Currie.

During the week of 04 April 2016, headlines around the world reported on what may turn out to be one of the most significant developments in the fight to combat the use of offshore accounts for purposes of hiding proceeds derived from various forms of white-collar crime, including fraud, corruption, and tax evasion among others.

The leaked documents — from about 214,000 offshore entities, covering almost 40 years from 1977 up until the spring of 2016 — were obtained from an anonymous source by the respected German daily Süddeutsche Zeitung (“SZ”) and made public through the Washington-based International Consortium of Investigative Journalists (“ICIJ”).

The Panama Papers leak is the second major scandal in recent history, relating to leaked information on individuals’ private bank accounts, following the HSBC Switzerland scandal in 2015. In the HSBC scandal, a number of high-ranking African individuals were identified as having utilised private bank accounts by HSBC’s Switzerland branch. This information came about as a result of a whistleblower HSBC employee (at the time) who leaked confidential information relating to various individuals who allegedly utilised these Swiss accounts for purposes of money laundering and tax evasion.

Inter alia, the following African individuals were identified as a result of the HSBC information leak:

  • Rachid Mohamed Rachid, Egypt
  • Fana Hlongwane, South Africa
  • Jean-Yves Ollivier, South Africa
  • Gad Elmaleh, Morocco
  • Johnson Nduya Muthama, Kenya
  • Belhassen Trabelsi, Tunisia
  • Roger Boka, Zimbabwe
  • Patrick Bédié, Côte d’Ivoire
  • Aziza Kulsum Gulamali, Burundi
  • Abdul-Karim Dan Azoumi, CAR
  • Saïd Ali Coubèche, Djibouti

Kh ZumaThe Panama Papers have now shown, perhaps unsurprisingly, that the Zuma family is also embroiled in this scandal. This time it is President Zuma’s nephew, Khulubuse Zuma, who is identified as being authorised to represent Caprikat Ltd.  Andreas Stargard, a partner at Pr1merio Africa advisors, notes that “Caprikat is no stranger to the white-collar crime news.  Four years ago, the Financial Times ran an investigative report on this offshore entity and its connections to Dan Gertler, an entrepreneur with ties to the Congolese president.  It and other reports detailed how Caprikat (which had been incorporated only months before in 2012 in the BVI) was able to obtain oil blocks 1 & 2 of the ‘Albertine Graben’ in the Western Rift Valley bordering Uganda.”  Stargard notes that Mr. Zuma was also revealed to have ownership stakes in two other offshore companies, Foxwhelp Ltd. and Aurora Empowerment Systems Ltd:

“Taken together, Mr. Zuma’s three companies’ financial interests comprise not only the estimated 2 billion barrels of oil reserves in Lake Albert, but also several gold mines in the South African republic itself, potentially implicating direct political favours from the leadership there, as well as suspicion of any potential influence exerted by President Zuma on Congolese President Joseph Kabila to grant the oil blocks to his nephew’s company in 2012.”

The following passage in relation to Mr. Zuma was posted on The Centre For Public Integrity’s webpage:

“In late summer 2010, as published reports raised questions about the acquisition, British Virgin Islands authorities ordered Mossack Fonseca to provide background information on Zuma, which the law firm had not previously obtained. That same year, Mossack Fonseca decided to end its relationship with the companies.  Zuma and representatives of the companies have rejected allegations of wrongdoing and claimed the oil deals are ‘quite attractive’ to the DRC government.”

Mr. Zuma is, however, just one of a number of hundreds of individuals identified in the Panama Papers, which include individuals from all over the globe. While the papers will no doubt form part of broader investigations, the public outcry has already resulted in Iceland’s Prime Minister, Sigmundur Davíð Gunnlaugsson resigning on Tuesday, 05 April 2016.  John Oxenham, also with Pr1merio, observes that the Panama Papers “truly show the global scale of anti-corruption efforts: this is no longer a question of domestic or even regional enforcement, but one of worldwide dimensions.  The dealings of Mr. Zuma’s companies may simply be the tip of the iceberg.  Associates of Presidents Vladimir Putin (Russia), Nawaz Sharif (Pakistan), Mauricio Macri (Argentina), Petro Porochenko (Ukraine) and others are likewise reportedly implicated by the Papers.”  Time will tell whether there will be more casualties, as politicians around the world, including UK Prime Minister David Cameron, are called on to explain their financial links to Panama.KHZUMA2

The Panama Papers represent no doubt an important breakthrough in the global war on corruption. As David Lewis, Chairperson of Corruption Watch in South Africa said:

Well hopefully it means a number of good things because this is a big revelation and law enforcement authorities will be hard pressed to do so given the scale of the leaks or follow up I guess … looking at critically exposed persons who have been hiding large amounts of assets that vastly exceed the salaries that they earn. So it will aid law enforcement and exposure of people who use these structures to hide illicitly sourced gains. It’s a big deal.”[4]

AfricanAntifraud will keep you posted on all major developments in relation to this story.

 

$1 billion per year lost to corruption: a Nigerian saga

A protester sports an anti-corruption T-shirt in Lagos.

$1 billion per year lost to corruption

Recently, AAF reported on the multi-faceted PR efforts of the new Buhari regime to clean up the soiled image of “corrupt Nigerian politics” — among other things, by staging photo ops with World Bank leaders, charging former government officials with bribery, and moving ahead on basic appointments.

Today, the Guardian reports that the Nigerian Minister for Information, Lai Mohammed, “kicked off a corruption awareness campaign appealing to Nigerians to join the fight,” noting that the previous regime’s embedded corruption had “enriched a small elite but left many Nigerians mired in poverty, despite the country being Africa’s top oil producer and having the continent’s biggest economy.”

AAF spoke with John Oxenham, a legal expert on anti-corruption measures with Africa advisory firm Pr1merio.  Oxenham comments:

“The Buhari administration is finally making good on its promises, it would seem, as it had thus far been slow to implement even the most basic of administrative tasks, such as appointing a proper cabinet.  As previously pointed out on your site, the visit with Ms. Lagarde and her advisors serves to enhance visibility and (hopefully) honest dedication to the anti-corruption efforts.  At Primerio, we work with several foreign private entities that express concern over doing business in Nigera, given its reputation.  While we can advise on compliance and risk-avoidance (keyword FCPA etc.), the Nigerian government’s efforts to stamp out corruption from within are helpful, as well, in developing a more robust foreign-direct-investment climate.”

That said, the Buhari camp must be careful not to create the appearance of using the “war against corruption” as a sham front for silencing the opposition under the guise of rooting out fraud.  “Employing the help of the courts — presumptively more impartial and fair than the political process — is therefore key to the government’s fight against graft in Nigeria,” says Andreas Stargard, also with Primerio.

“The estimated $1 billion per year lost to corrupt dealings over the past 7 years is staggering, especially when taking into account that these are merely the official figures — our Africa economists estimate that the actual loss to corruption amounts to an even larger share of the (significant) Nigerian GDP.”

And so the Nigerian saga continues…

Money laundering, $2bn phantom contracts, and Boko Haram

Nigeria moves on its anti-corruption promises: Former Defence Minister charged

Reuters and BBC have reported that former Nigerian Defence Minister, Bello Haliru Mohammed — a veterinarian by training who served in several ministerial positions, most recently under former President Goodluck Jonathan — has been charged with money laundering and related corruption counts.

He is no stranger to corruption allegations, as a German court named him in a 2007 bribery scandal involving communications company Siemens AG (Siemens was fined €201 million as a result).

Bellohalirumohammed

As AAF reported earlier, just this week, the managing director of the International Monetary Fund, Christine Lagarde, welcomed Nigeria’s anti-corruption campaign which has been significantly pushed by President Buhari, who was elected in May 2015.  The Buhari administration is moving towards developing a strong independent central body to root out wide-spread corruption in one of Africa’s wealthiest countries.

The allegations against Mr. Mohammed (and his son) involve money-laundering charges and criminal breach of trust, relating to at least 300 million naira ($1.5 million) that were meant for spending on defence measures against the threat of Boko Haram spreading its terrorist agenda during the years Mr. Mohammed was Minister.

The Nigerian Economic and Financial Crimes Commission accused the Mohammed duo of colluding with former National Security Adviser Sambo Dasuki, who also served under fmr. President Jonathan and was likewise charged with money laundering and criminal breach of trust last month.  As Reuters reports, “Buhari called for Dasuki’s arrest in November, accusing him of stealing funds through phantom arms contracts …”

Andreas Stargard from Africa advisory firm Pr1merio notes that, “the recent strides in Nigerian anti-corruption efforts coincide with Ms. Lagarde’s visit, and are certainly welcomed by the anti-corruption community as well as international & domestic Nigerian businesses, who have seen their country’s vast natural resources drained — quite literally — by being diverted under corrupt government ‘oversight’ over petroleum and other valuables that make Nigeria the largest economy in sub-Saharan Africa by GDP.”

From Managing Director to President: Get rid of corruption!

IMF’s Lagarde to Nigeria’s Buhari: Country needs to strike balance, yet ensure long-term anticorruption measures

By Michael James Currie.

The managing director of the International Monetary Fund, Christine Lagarde, welcomed Nigeria’s anti-corruption campaign which has been significantly pushed by President Buhari who was elected in May 2015.

The Buhari administration is moving towards developing a strong independent central body to deal with corruption in one of Africa’s wealthiest countries. The task will not be easy as their does appear to be a degree of consensus that the Nigerian judiciary is in itself corrupt and inefficient and cannot meaningfully tackle corruption without substantial reform.

An expert on African anti-corruption measures, Andreas Stargard, with Africa advisory firm Pr1merio, notes:

“The apparent inability by the Buhari administration to make timely ministerial appointments (which were over half a year delayed) and its failure to create a dedicated anti-corruption ministry do not bode well for a solely internally-driven strategy to combat governmental misconduct.  In our view, having Ms. Lagarde and her advisors (as well as privately outsourced firms) looking closely over the shoulder of the current administration would only serve to strengthen any existing anti-corruption efforts underway in Nigeria, and we’re happy to see the meeting took place as a first step in the right direction.”

International Monetary Fund Managing Director Christine Lagarde (R) shakes hands with Nigeria’s President Muhammadu Buhari (L) as Nigeria’s Central Bank Governor Godwin Emefiele (Far Right) and Nigeria’s Vice President Yemi Osinbajo (Far L) look on after their meeting at the Presidential Villa in Abuja, Nigeria January 5, 2016. REUTERS/IMF Staff Photo/Stephen Jaffe/Handout

International Monetary Fund Managing Director Christine Lagarde (R) shakes hands with Nigeria’s President Muhammadu Buhari (L) as Nigeria’s Central Bank Governor Godwin Emefiele (Far Right) and Nigeria’s Vice President Yemi Osinbajo (Far L) look on after their meeting at the Presidential Villa in Abuja, Nigeria January 5, 2016. (c) REUTERS/IMF Staff Photo/Stephen Jaffe/Handout

A further challenge, however, in the fight against corruption is that Nigeria is on the brink of a credit crunch due to the low oil prices which brings about additional considerations that must be taken into account when developing and implementing anti-corruption policies.

One of the Buhari administration’s most dramatic moves in its fight against corruption was to issue a directive (which came into effect in September 2015) that all income generating federal institutions pay their revenues into the central bank as opposed to local banks. This would see an estimated $6.6 billion flow from local banks to the central bank.

Economists had warned that a move such as this may put pressure on the Country’s financial position in the short term given that Nigeria is facing a credit crunch and there is already minimal lending going on.

The IMF has also pointed out that Nigeria is overly reliant on oil and in order to ensure long term stability, anti-corruption measures must be coupled with a move away from relying so heavily on oil.

Nigeria’s fiscal situation must be closely monitored to evaluate the impact of Buhari’s policy changes on the economic landscape in Nigeria, however, it does appear at this stage that the anti-corruption campaign will bring about long terms benefits which outweigh short term fiscal concerns.

‘Omar Dis-Appear’: Legal Effects of Africa’s Withdrawal from the ICC

Omar Dis-Appear‘: The Potential Legal Effects of Africa’s Withdrawal from the International Criminal Court as a Result of the Omar Al-Bashir Debacle

By Rui Lopes — AAT & AAF contributing author (“The Fascinating Story of Thula Madonsela and Being Undermined“)

The mass withdrawal of the Rome Statute by African states leaves most of them with little to no discretion on whether to prosecute omaralbashir31jan11jus cogens crimes envisaged in the courts jurisdiction due to the absence of the complementarity principle, the principle on which the International Criminal Court is based. These States are therefore forced to prosecute these crimes towards the international community in all instances. However, due to the underdeveloped nature of most of these states legal systems, such mainly being the reason for many African states having become signatories to the International Criminal Court in the first place, such States will be unable to prosecute these crimes, thus breaching their obligations erga omnes owed to the international community as a whole.

The International Criminal Court

iccThe International Criminal Court (ICC) was envisaged as being the first permanent international criminal court prosecuting the most serious crimes committed towards the international community. The nature of the ICC is sourced within an international treaty namely the Rome Statute. Treaties are by many academics compared to contracts, which in order to be performable, the contracting parties must consent to the imposition of obligations and must have the requisite intention to be bound by such. In a situation where a party no longer possesses either the intention to fulfil their obligations or in turn no longer intends to be bound by the contract, such a contract cannot continue and must be terminated.

In much the same manner, Article 127(1) of the Rome Statute visualises situations where States no longer wish to remain a party to the treaty. The Article provides that States may, through a written notice to the Secretary General of the United Nations, withdraw from the Statute. Such a withdrawal shall however only take effect one year after the receipt of such notice. 

On closure examination of the Article, such holds the legal implication that the withdrawing State is bound in its entirety to the Rome Statute for one further year after providing its notification of its intention to withdraw. It has in essence added a provisio to the ‘contract’ that even where a party no longer possesses the relevant intention to be bound (animus contrahendi) or where the party no longer intends to fulfil its obligations, the contract continues to persist for a further year. This is furthermore highlighted in Article 127(2), according to which the State is not cleared of any of its obligations that arose whilst a party to the statute nor its cooperation with the ICC in connection to investigations of any proceedings which are uncompleted at the time of the withdrawal.

From a contractual perspective however it seems contra to every rule in contract law to hold that even where a party no longer possesses the relevant intention to be bound by the contract, the contracting party is still bound to the entirety of the contract and if the party refuses to comply with its obligations, the fault lies in the defaulting party which has its own set of consequences. In relation to international law, even though African States may not intend to be bound any longer by the Rome Statute, these African States may be in default if they fail to comply with the Rome Statute. Here the breaches take the form of not complying with the States obligations erga omnes.

Privity of contract, another extremely important principle of contract law, requires that only those parties to the contract are bound to the contract and that obligations may only flow to those who are parties to the contract, no one else. On an inspection of the Rome Statute, the Rome Statute in essence binds those who were never a party to the contract or those who no longer intend to be a party to the contract. This is evident from Article 13(c) of the Statute, holding that prosecutions may be instituted at the instance of the prosecutor of the ICC, irrespective of whether the State is a party to the treaty or not. The prosecutor is required to have a reasonable basis to proceed with the prosecution and be authorised to do so by the Pre-Trial Chamber of the ICC. Thus the ICC is not prevented from having jurisdiction over States, which have withdrawn from the treaty or were never a party to the treaty. In terms of the Rome Statute, privity of contract has gone completely out the window. 

There are some counter-arguments that seem to take the form that such is a requirement in international law due to the jurisdiction of crimes over which the ICC holds, namely jus cogens crimes. However I posit that since international law is a consensual system that requires the consent of State parties, much in the same manner as a contract, it seems irrational for an International Court, whose entire existence is established through a treaty, to have jurisdiction over a state that never firstly possessed or secondly no longer possesses the intention to be bound to the jurisdiction of such a court.

gaza-docket-3-638In relation to the African withdrawal of the ICC, such may have the effect of leading to a potentially large scale institution of prosecutions against many African leaders within the time of their notification to no longer be bound to the Statute, which has already been witnessed and seems to be the main source of discontent by the African Union i.e. an unorthodox targeting of Africans by the ICC, or furthermore that even where the State is effectively no longer a party to the Statute such does not prevent the International Criminal Court from exercising jurisdiction over someone especially considering where such a prosecution or requirement of arrest has been made a resolution by the Security Council of the United Nations in terms of Article 25 of the UN Charter, a resolution that binds all members of the United Nations. 

However, the central legal implication of withdrawing from the treaty arises from an analysis of Article 12(3) of the Statute. Such an Article defines the court’s jurisdiction and states that such a jurisdiction is limited to the crimes of genocide, aggression, war crimes and crimes against humanity. Notably, as previously stated, all these crimes have attained the status of jus cogens, a set of commanding international law standards which no state may deviate or depart from. These standards (jus cogens) impose obligations upon states, called obligations erga omnes. Such obligations are termed obligations erga omnes as the term erga omnes is Latin meaning ‘towards all’ and thus such obligations that arise from jus cogens standards are owed to the international community as a whole. In relation to the crimes over which the ICC has jurisdiction, the obligations erga omnes that couple these jus cogens crimes, can be found in their relative Charters. Within each of these Charters, it imposes obligations on States to prevent and punish such crimes. For example, in terms of the crime of genocide, such a crime has attained the status of jus cogens, and the obligation erga omnes that couples such can be found in the Genocide Convention which requires a state to prevent and punish such a crime of genocide. Therefore a State is bound through their obligations erga omnes, to prevent and punish all such crimes over which the ICC holds jurisdiction, failing of which the state is in breach of these obligations erga omnes.

However according to Article 17(2), the ICC functions on the complementarity principle, which states that the ICC has jurisdiction in instances where the particular state is genuinely unwilling or unable to prosecute such a crime. This effectively provides the state with a “safety net” in the sense that if the state does not want to or is unable to prosecute the crime, due to a lack of the advanced nature of their legal system, that particular state is not said to have breached any obligations erga omnes. It is for this exact reason that many African states have become parties to the Rome Statute in order to prosecute such crimes, as a result of a lack of an advanced legal system present within their countries (although this may not be true for each and every African state). Therefore the ICC has provided these African states with a platform to prosecute such crimes, thus preventing breaches of their obligations erga omnes

The implication of a state withdrawing from the Rome Statue is that such a state is left vulnerable to breaching their obligations erga omnes in terms of these crimes, namely to prevent and punish. No longer does the state have a discretion on whether to prosecute or not, due to a lack of the complementarity principle, and are in all instances bound to prosecute. The failure of a state to prosecute, irrespective of the reason, will be a breach of their obligations erga omnes.

What then would be the repercussions for African states who have breached their obligations erga omnes

Article 40 of the Draft Articles on State Responsibility contemplates serious breaches of obligations under peremptory norms of international law and the wording of such an Article has two requirements that must be fulfilled in order to be utilised, the first is that there must be a breach of international law by not complying with ones international obligations, in the current instance, where African states do not prosecute such jus cogens crimes, this would be sufficient to constitute a breach of international law by not complying with their obligations owed to the international community. Secondly, the breach is required to be serious in nature. In the current instance it is unfathomable that such a breach is not serious in nature. The non-prosecution of jus cogens crimes such as genocide, war crimes or crimes against humanity are inexcusable and may seem to suggest a condonation of such if a state seeks not to prosecute such or where a state fails to prosecute such. Furthermore what is required by the relevant article is that such a failure to comply with ones obligations erga omnes must be gross and irregular i.e. that there is intent present on the part of the state. I therefore posit that such may be seen through African states intention to withdraw from the ICC whilst knowing that their relevant legal systems are unable to handle the prosecution of such crimes. Such actions demonstrate the intention to not prosecute these crimes, as these States knew of their inability to prosecute such crimes and persisted to withdraw from the ICC and thus such can be said to constitute the gross and irregular conduct contemplated in Article 40. 

Article 41 goes on to describe the consequences of a states serious breach of peremptory norms. Such states that all States are under a positive duty to bring an end to the serious breaches contemplated in Article 40. Such an article does not however prescribe what form the duty to bring an end to such must take and will depend on the circumstances but must in any event be lawful. I posit that such may take the form of rendering assistance in terms of the prosecution of such crimes, however such an article can only be said to be applicable ex post facto the failure to prosecute (Such constituting the breach of international law). It might well be for this exact reason that it is possible for the ICC to continue to exercise jurisdiction over such states. 

The question now becomes: Can Africa ever really escape the jurisdiction of the ICC? MapOfAfrica

Since the ICC works on a complementarity principle, the principle that the court will only prosecute the crimes over which it has jurisdiction in those instances where is a state in unwilling or unable to prosecute the crimes, and since it has been established that even after a state is no longer a party to the ICC, the ICC continues to exercise jurisdiction over those states and those crimes, it seems that even when one has withdrawn from the ICC, one has not escaped the jurisdiction of the ICC, which would have been the entire purpose of withdrawing from the Rome Statute. The question for consideration is then whether it will be possible for Africa to ever escape the ICC’s jurisdiction? The answer to such lies in the complimentary principle itself, as if there was an institution which could prosecute all African crimes over which the ICC has jurisdiction, then the court would be unable to prosecute such as the complimentary principle would not enter into effect. Therefore I posit that the only way Africa can ever escape the jurisdiction of the ICC would be to establish an African Criminal Court. 

However, the possible benefits of African States ‘pulling out’ from the ICC are two fold. Firstly it provides states with the motivation required to improve their legal systems to cope with the prosecution of such crimes rather than the reliance on an international court as a “safety net”. Secondly, the possible creation of an African Criminal Court as contemplated above provides a greater legitimacy of that court in the eyes of African states and its establishment allows for a broader jurisdiction over crimes in comparison to the ICC. Despite the presence of such advantages, withdrawing from the ICC seems to be more detrimental than beneficial to these African states considering the possible breaches of their obligations erga omnes

The way forward

I therefore hold that the mass withdrawal of African states from the Rome Statute will lead to a possible multitude of eventual breaches of these States obligations erga omnes as a result of the inability of their legal systems, not necessarily all of them, to handle the prosecution of such crimes. I hope that if African states are destined on withdrawing, the African Union rapidly establishes a similar court to deal with such prosecutions in order to avoid these breaches of obligations erga omnes. A reformulation to the structure of the Rome Statute is also required as it seems to be out of touch with the basic principles of contract law through which many academics compare treaties to.

New cabinet positions announced, but no anti-corruption minister in sight

Key Nigerian ministerial positions announced, with long delay

The swearing-in of Nigeria’s new members of President Muhammadu Buhari’s cabinet took place in his villa in Abuja, notably after an almost six-month delay (hence the popular moniker for the new leader, “Baba Go Slow”).

As Andreas Stargard, a director with African anti-corruption advisors Pr1merio, points out, “[t]he ex-military strongman had thus far only announced one cabinet position, that for the Minister of Oil & Petroleum, naming none other than himself to that post.”  Mr. Stargard added that President Buhari did name a “junior” petroleum minister in yesterday’s announcement, Emmanuel Ibe Kachikwu, who is the head of the state oil firm Nigerian National Petroleum Corporation (image below).  Yet, Stargard says, this must be taken as an administrative, if not symbolic, act, observing that Buhari retained ultimate control over this — the most lucrative and strategically important — petroleum portfolio.

The new ministers are as follows, with the list notably missing any dedicated ministerial position for overseeing the #1 portfolio on which Buhari had grounded his bid for the presidency, namely anti-corruption.  As one might expect, most of his appointees were key supporters of the President’s election campaign.

1. Chris Ngige – (Anambra) – Labour and Employment
2. Kayode Fayemi- (Ekiti) – Minister of Solid Minerals
3. Rotimi Amaechi – (Rivers) – Transport Minister
4. Babatunde Fashola -(Lagos) Minister of Power, Works and Housing
5. Abdulrahman Dambazau- (Kano) Interior Minister
6. Aisha Alhassan – (Taraba) – Minister of Women Affairs
7. Ogbonaya Onu- (Ebonyi) – Minister of Science and Technology
8. Kemi Adeosun – (Ogun) – Minister of Finance
9. Abubakar Malami – (Kebbi) – Minister of Justice
10. Sen Hadi Sirika – (Katsina) State Minister of Aviation
11. Barr. Adebayo Shittu – (Oyo) – Minister of Communication
12. Suleiman Adamu – (Jigawa) Minister of Water Resources
13. Solomon Dalong – (Plateau) – Minister of Youth and Sports
14. Ibe Kachikwu – (Delta) – State Minister of Petroleum
15. Osagie Ehanire – (Edo) State Minister of Health
16. Audu Ogbeh – (Benue) Minister of Agriculture and Rural Development
17. Udo Udo Udoma – (Akwa Ibom) – Budget & National Planning
18. Lai Mohammed – (Kwara) – Minister of Information
19. Amina Mohammed – (Gombe) – Minister of Environment
20. Ibrahim Usman Jibril – (Nasarawa) – State Minister of Environment
21. Hajia Khadija Bukar Ibrahim- (Yobe) State Minister of Foreign Affairs
22. Cladius Omoleye Daramola (Ondo) – State Minister of Niger Delta
23. Prof Anthony Onwuka (Imo) State Minister of Education
24. Geoffrey Onyema (Enugu) – Minister of Foreign Affairs
25. Dan Ali (Zamfara) – Minister of Defence
26. Barr James Ocholi (Kogi) State  Minister of Labour and Employment
27. Zainab Ahmed (Kaduna) State Minister of Budget and National Planning**
28. Okechukwu Enelamah (Abia) – Minister of Industry trade and Investment
29. Muhammadu Bello (Adamawa) – Minister of FCT
30. Mustapha Baba Shehuri (Bornu) – State Minister of Power, Works and Housing
31. Aisha Abubakar (unknown) – State Minister of Industry trade and Investment
32. Heineken Lokpobiri (Bayelsa) – State Minister of Agriculture
33. Adamu Adamu (Bauchi) – Minister of Education
34. Isaac Adewole (Osun) – Minister of Health
35. Abubakar Bawa Bwari (Niger) State Minister of Solid minerals
36. Pastor Usani Uguru (Cross River) – Minister of Niger Delta

Buhari to the rescue: Tackling corruption in Africa’s largest economy

“The wind of change is blowing through this continent…”

Perhaps reminiscent of the “Winds of Change” (the speech delivered in 1960 by British Prime Minister Harold Macmillan to the Parliament of South Africa in Cape Town), the recent address given by new Nigerian President Muhammadu Buhari at the United Nations represents a political milestone in seeking to eradicate corruption in Africa.

The omnipresent malaise of corruption: Buhari to the rescue?

Were $150 billion ‘stolen’ under aegis of President Jonathan?  Having previously attacked his predecessor’s regime from 2010-15, claiming it embezzled this staggering amount from the Nigerian state coffers and the private sector, Buhari already had made his anti-corruption stance a key component of his campaign against Jonathan.  For instance, back in 2011, he “urged President Jonathan to focus on tackling corruption in government instead of removing fuel subsidies.”

During his 2014 campaign, he lamented in his so-called “2015 Manifesto” that “[a]s a nation, we are paralyzed by … endemic institutionalised corruption,” speaks of “hyper-corruption,” and proposes as its solution that: “I, Muhammadu Buhari have now come to the rescue. This is success by design. It will overcome our failure by design matrix.”  Moreover, his 4th campaign promise has been to “Prevent the abuse and misuse of Executive, Legislative and Public offices, through greater accountability, transparency, strict, and implementable anti-corruption laws, through strengthening and sanitising the EFCC and ICPC as independent entities.”

More recently, the President had a slightly more sober message to deliver to the General Assembly in New York City, yet still zeroing in on the same target, namely corruption:

“Let me reaffirm the Nigerian government’s unwavering commitment to fight corruption and illicit financial flows. By any consideration, corruption and cross-border financial crimes are impediments to development, economic growth, and the realisation of the well-being of citizens across the globe.

“Nigeria is ready and willing to partner with international agencies and individual countries on a bilateral basis to confront crimes and corruption.”

Winds of Change?

Buhari took office only in June 2015, but is far from new to politics in Africa’s largest economy — he was Nigeria’s military ruler in the 1980s, was a former Minister for the key portfolio of Petroleum & Natural Resources, and has concomitantly extensive political and strategic leadership experience under his belt.  For him to have chosen the fight against corruption in Nigeria as a key topic in his U.N. speech foreshadows a major initiative, we believe.

Pr1merio co-founding partner, Andreas Stargard, likewise perceives President Buhari’s message to be an important one, especially for international businesses with Nigerian ties:

“Several African, and in particular West African, countries have historically been seen as far too lax on effectively countering corruption and bribery.  This can often have one of two results for international businesses, neither of which is good for the affected African economies, coincidentally: (1) either the foreign corporation weighs the risks and chooses to avoid Africa for fear of involvement in bribery and resulting liability risk, or (2) it actually decides to participate in the corrupt conduct and seeks to benefit from it, paying scant attention to local anti-corruption legislation, and risking FCPA-like prosecutions in its home country.”

Whether or not Buhari’s pronouncements in international diplomacy will have an actual and measurable impact in the short or even medium term remains to be seen.  Bayo Adaralegbe, also a Primerio advisor, agrees that President Buhari’s speech at the U.N. does heralds potential key turn-around point in West-African anti-corruption efforts.  Adaralegbe notes that, unlike his predecessor Goodluck Jonathan, President Buhari is intent on fulfilling his election promises.  Buhari added in his address to the United Nations that:

“In particular, I call upon the global community to urgently redouble efforts towards strengthening the mechanisms for dismantling safe havens for proceeds of corruption and ensuring the return of stolen funds and assets to their countries of origin.”

As recently reported by AAF (e.g., “Just a math issue”: Anti-Corruption Efforts in Kenya take Center-Stage for Obama), many recent African administrations have attempted to bolster — or at least undertake public-relations efforts on behalf of — their enforcement efforts, particularly in recovering funds stolen by previous administrations.  Buhari’s statements are not different in this regard.  

It is of course difficult to gauge whether the messages above will result in substantial enforcement action.  That said, for many doing business in the region it is noteworthy that the message in fact comes from the top, i.e. the sitting President of Africa’s single-largest economy…