Understanding the Purpose and Implementation of Escrow Account
By
Bolaji Owasanoye and Yu Yongding
“Escrow Accounts, managed by Regional Development Banks, should be used to manage frozen/seized assets until they can be legally returned”
INTRODUCTION
Financial integrity would require effective mechanisms to secure the recovery and return of assets considered to be of illicit origin. This can serve both as a mechanism for justice and a deterrent against future crimes by demonstrating that perpetrators will not be able to enjoy the proceeds of their crimes.
However, cooperation on confiscating and returning the proceeds of corruption and other financial crimes is not effective. Despite the entry into force of the UN Convention Against Corruption (UNCAC) more than 15 years ago, the known volume of asset returns accounts for only a tiny fraction of the proceeds of corruption and financial crime laundered worldwide.
Authorities in requested jurisdictions are sometimes not provided with adequate resources, financial, technical and human, to follow up on incoming requests in a timely fashion and carry out their responsibilities in accordance with the Convention.
This is compounded by the fact that the jurisdictions where stolen assets are hidden, often developed countries, may not be responsive to requests for legal assistance. This part of the asset recovery equation has not been adequately addressed.
The result of these constraints is that the whole asset recovery process remains extremely burdensome and lengthy for requesting countries that saw their resources drained. In the meantime, confiscated assets often remain in the possession of either financial institutions, which continue to unduly benefit from the assets, or requested States that manage them for many years. Asset management, particularly of financial assets, can remain with a financial institution that enabled the wrongdoing in the first place. Fees for the management of the assets may continue to be earned by the holder. Requesting states also lose a substantial part of the money to administrative fees taken by the requested state.
IMPLEMENTATION
Escrow account purpose:
The main purpose of the escrow account is to provide an alternative institutional arrangement for the management of assets, removing them from the control of the financial institutions that may have been complicit in their transfer. Implementation of this proposal can also reduce the administrative fees charged by requested States. The regional development banks, as publicly owned financial institutions, can provide asset management services at lower cost.
A number of cases show that many years had elapsed after requests for legal assistance before assets were transferred to the requesting State. Several major legal hurdles had to be crossed, including presenting evidence that the assets were the product of embezzlement, diversion of public property, and plundering of the public treasury.
Sometimes, the request for return may be challenged by the suspect especially where civil forfeiture or non-conviction bases asset forfeiture mechanism has been adopted by either the requesting or requested state. For example, the return of the third batch of assets related to former Nigerian President Sani Abacha, requested from the United States and other involved countries, was delayed for many years by legal challenges launched in the United States by attorneys acting for the former President and his associates and for other professional service providers claiming a share of the assets. The escrow is therefore suggested as a credible third-party legal instrument to manage the funds pending the determination of the rightful or legal owner.
The Panel notes that the political economy of a country matters, and that the influence of powerful sectoral interests is important. They can both influence the cooperation of the government on specific asset recovery cases (e.g. some 1MDB cases) as well as the overall level of public resources and attention provided to regulation, supervision, enforcement, and international cooperation. Reducing the incentives to hold assets matters broadly. By having a policy to remove assets from the control of financial institutions which profit by holding them, and to place them with a neutral third party, the use of escrow accounts can disincentivize efforts to thwart prosecution or prevent the return of assets.
Management of the frozen/seized assets through the escrow accounts can also help ensure that the assets do not depreciate in value, which could occur if held in requested States. The development banks’ treasury departments ensure its upkeep and its efficient disposal, and most importantly maintain public trust in law enforcement and institutions of justice. Particularly, to ensure justice for the victim state, these assets need to retain as much value as possible to ensure the process of asset recovery is worthwhile warranting the oftentimes complex and expensive process.
Legal authority and legal requirements:
Effective establishment and use of the escrow account depends on the voluntary agreement by Member States on the use of this instrument as an alternative institutional arrangement for asset management. This will require that the requested State agree to a memorandum of understanding (MOU), or escrow agreement, with the development bank as a neutral third party (depositary or an escrow agent) with no claim on the asset.
Involving the requesting State to also be part to the escrow agreement would be highly desirable. The MOU should specify the conditions of the deposit, the fees to be charged and the conditions that would trigger delivery of the assets and to whom they should be delivered.
Procedures at MDBs:
Regional development banks are ideal candidates to host the escrow accounts for the management of the frozen/seized assets. Regional development banks such as the African Development Bank Group, Asian Development Bank and Inter-American Development Bank-IDB may be better placed to respond to requesting countries’ needs and desires on how to make use of the escrow accounts. They are neutral parties in the case. They also already have well developed treasury departments with professional staff skilled in handling asset management because of their stewardship of donor funds provided for a variety of projects.
While development banks do not generally aim to turn trust funds or other assets managed into profit centres, should the management of the assets result in above expected gains, they can be remitted alongside the main asset to the State or party determined to be the proper owner. Alternatively, they can be retained by the regional development bank for investment in their other operations aimed at promoting sustainable development.
PROPOSED SOLUTION
Although it is critical to ensure due process throughout the asset recovery process, it is equally important to recognise that requesting jurisdictions face huge and asymmetrical burden of proof and the critical need to explore new approaches to challenge this unfair situation and enhance asset recovery process. The difficulties arising out of the recovery of assets is duly acknowledged by the FACTI Panel Recommendation 5A, which proposes the creation of a multilateral mediation mechanism.
In addition, the FACTI Panel addressed the asset management challenge. The Panel report calls for the use of escrow accounts managed by regional development banks that will serve as custodians of the assets determined to be of illicit origin. These assets should be held at the behest of requesting States and with the cooperation of requested States. By using escrow accounts, some value may be added to funds that are subject to protracted negotiations, and the requesting State may get more than the face value at the end of the process. Furthermore, administrative fees charged by requested states can be paid from proceeds of investment and the value addition.
LOOKING FORWARD
Countries can take action on this proposal of their own accord, though internationally agreed frameworks can be helpful in encouraging adoption. The most appropriate international venue to deal with the putting in place of an escrow policy for the handling of frozen/seized assets is the Conference of State Parties of the UNCAC.
The provisions of the UNCAC provide the legal framework into which policies to use escrow accounts can be integrated (See UNCAC Chapter V, Articles 51-59 dealing with asset recovery).
*Prof Bolaji Owasanoye, SAN, the Chairman of Nigeria’s Independent Corrupt Practices and Other Related Offences Commission (ICPC) and Yu Yongding, an academician of the Chinese Academy of Social Sciences and a member of the Advisory Committee of the National Development and Reform Committee of the People’s Republic of China since 2004, wrote this implementation notes for the United Nation’s High Level Panel, Financial Accountability Transparency and Integrity (FACTI)
Establishment, Achievements and Challenges of Anti-corruption and Transparency Units (ACTU) in Ministries, Departments and Agencies of Governments
Written by Femi Lionel Gold
Efforts of anti-Corruption agencies to diminish corruption in Nigeria is usually associated with some common rhetoric, such as “Fighting’’, ‘’Combating”, ‘’the war against’’, ‘’the battle against’’ or cancerous. The use of these words invokes pictures of an enemy that can either be defeated, surgically removed or treated with drugs. Together, these images suggest that corruption can be eliminated.
The truth, however, is that corruption can never be completely eradicated anywhere in the world, simply because it is a complex and pigheaded crime that has an astonishing ability to resist some of the toughest punitive measures that may be deployed against it. Nevertheless, experience in other climes has shown that a combination of different strategies can help to effectively reduce the scourge to the barest minimum.
The experience of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) in dealing with the pervasive nature of the vice has led to its realisation that one way to effectively stem the tide of corruption is through a collective approach and involvement of the people.
Consequently, ICPC has established the Anti-Corruption and Transparency Units (ACTUs) in Ministries, Departments and Agencies (MDAs) of government as one its strategies to take the fight against corruption closer to the doorsteps of the public servants. Membership of the units are drawn from within staff of each organisation.The need to collaborate with these officials arose from the Commission’s belief that those working directly in the operation of organisations should have a better understanding and ability to identify causes and fertilising agents of corruption within their organisations.
ACTU was therefore created to serve as an extension of ICPC in the MDAs through an approval by government, vide the Head of the Civil Service of the Federation circular reference no. OHCSF/MSO/192/94 dated 2nd October 2001. The underlying reason for the establishment of the unit was to complement and strengthen the efforts of the Commission in the areas of monitoring, reporting and preventing corruption in the MDAs.
The units, deriving from Section 6 (b)-(d) of the Corrupt Practices and Other Related Offences Act 2000, is empowered to examine and review corruption-prone systems, practices and procedures, enlist the support of other public officers in fighting corruption, develop a code of ethics for staff within MDAs and ensure strict compliance with same; and conduct regular anti-corruption sensitisation.
Currently established in over 440 MDAs, ACTUs have in the past 19 years, made remarkable impact on the anti-corruption crusade in many ways: they have introduced some level of accountability in the manner public officials do business, and they constantly demand probity from public office holders, especially in the allocation and utilisation of public resources. They are also in the forefront of ensuring that those entrusted with public offices give account of their stewardship. In this regard for instance, many ACTUs have produced and launched a code of ethics and corruption prevention guide for staff of their organisations.
ACTU Members, Federal Ministry of Industry, Trade and Investments
The units are key agents helping to achieve the corruption prevention mandate of ICPC as system studies and reviews conducted by ACTUs have led MDAs to identify corruption vulnerabilities within their system and recommendations that have helped to block such loopholes. A few examples here will suffice: when the ACTU of National Health Insurance Scheme (NHIS) state offices of Lagos, Edo, Kaduna and Kwara conducted such reviews, it identified corruption-prone procedures and submitted a report to ICPC with relevant recommendations to guarantee blockage of such procedures.
Some ACTUs have also been very effective in the areas of undertaking preliminary investigation of petitions either written by staff of their organisations or transferred to them by ICPC. Some successful investigations carried out by ACTUs are those of University of Calabar on employment racketeering, Federal Polytechnic Nekede on allegation of extortion via text message by an academic staff of the Polytechnic.
In 2015, the ACTU of Ken Saro Wiwa Polytechnic, Bori, Rivers State investigated a case of staff overpayment of salaries. The unit interviewed 38 members of staff in connection with the case involving N34, 329,906.37. At the end of the investigation, a total number of 27 staff of the institution were found culpable: the two who manipulated the payment records were recommended for dismissal, while the rest were recommended to either serve suspension and make a refund or have their appointment terminated and as well as equally refund the overpaid amount. The unit also recommended that the institution’s payroll system be overhauled to block the loopholes identified by the ACTU in the course of its investigation.
In a letter sent to the institution by ICPC, dated 22nd January, 2016 and signed by the Head of Investigation, demanding to know if the school had acted on the recommendations of the ACTU, it says, ‘’The Commission is interested in the recent investigation activities carried out by Anti-corruption and Transparency Unit (ACTU) of your Polytechnic regarding the overpayment of Thirty-Eight (38) staff to the tune of N34, 329,906.37’’.
Continuing, the letter said, ‘‘In view of the above and pursuant to Section 28 (1) of the Corrupt Practices and Other Related Offences Act, 2000, you are required to confirm to this Commission, the implementation of its recommendations…and provide documentary evidence of same’’.
Responding to the Commission’s enquiry through a letter dated 23rd March, 2017, the Registrar of the polytechnic, said, ‘’We can confirm that the management in its commitment to work with this honourable Commission has since implemented the recommendations of the report forwarded by the Anti-Corruption and Transparency Unit (ACTU)…all recommendations on system upgrade to revamp the payroll system and block loopholes identified in the course of the investigation have been implemented’’.
ACTU sensitising members of staff
A few years back also, investigation and recommendations of ACTU of a federal Polytechnic led to 25 lecturers being demoted by the management of the school due to their involvement in corrupt practices. Through activities of ACTU of the institution, cases of illegal sales of academic literature, gratification and sexual harassment in the school have been minimised.
At another Federal University of Technology, activities of ACTU caused management to rusticate over 500 students over their involvement in various offences prohibited by the school.
The units have also made a lot of impact through recommendations proffered to management and ICPC, leading to offenders being punished, and full-blown investigation carried out by the Commission.
ACTUs in MDAs have also been effectively involved in monitoring and evaluation of budget implementation with a view to guaranteeing compliance with due process and guidelines. Through such monitoring, an ACTU of one of the key government agency was able to discover purchase of a second-hand Toyota Camry Car in place of a brand new model at a budgeted sum of N11 million. Many examples abound here.
As a way of encouraging and increasing the volume of corruption reportage, some ACTUs have designed and placed suggestion boxes in strategic locations within their respective MDAs, including hosting of websites to make reportage of corruption issues easier. Examples are the Ministry of Education, Ministry of Trade and Investments, Nigeria Deposit Insurance Company, to mention but a few.
Roll-up banner produced and displayed by ACTU
Inclusion of ACTU members in relevant committees as observers to procurement processes have put the management of MDAs on their toes. The aim of their inclusion in committees is to ensure that proper procedures are being followed in carrying out stipulated procedures and to prevent corruption.
Finally, ACTUs are constantly educating and enlightening the staff of their MDAs through sensitisation and awareness workshops, stickers/posters, T-shirts with inscription of anti-corruption slogans.
These are just a few examples of the many activities of ACTUs albeit in the face of worrisome challenges. In many organisations, rather than being given support, the units, are perceived to be spies who report on the activities of the chief executives and other staff. They are generally under-funded, apparently to weaken them and thereby prevent them from being effective.
Other challenges faced by ACTU members are the fear of loss of jobs, fear of danger to self and family, and apathy to duties by some of them as generally obtain in the public sector.
In order to allay the fears of chief executives and management staff of MDAs, the duties of the units have been expanded to cover other areas beyond just monitoring and reporting of corruption issues. In this regard, an Ethics and Compliance Scorecard has been introduced to expand the work of ACTU in line with international best practices for entrenching organisational core values to drive institutional mandates, and promote effective service delivery. The rationale for the additional functions is that promoting accountability entails much more than preventing corruption. It entails repositioning the organisation to imbibe a wide range of accountability systems and preventive mechanisms, such as ethics and compliance.
Since a huge percentage of Nigeria’s annual budgets is allocated to MDAs annually, the Anti-corruption and Transparency Units are important tools in ensuring transparency and accountability in the ways monies are expended.
ACTU members, policy makers, chief executives of MDAs and indeed every Nigerian should collaborate with the ACTUs to promote and sustain the noble ideals on which the unit were established.
ACTU members must continue to serve as advocates for greater support for the work and effective operation of MDAs, in words and conduct, demonstrate zero-tolerance for corruption and professional misconduct. They must exemplify compliance with due process and organisational value to promote the ethics and compliance agenda, especially in view of the unfortunate instances of alleged lack of integrity on the part of some ACTU members.
To ensure that the units are active, ICPC in 2020 introduced the ACTU Effectiveness Index as a way of monitoring how the ACTUs are performing with a view to strengthening them and making them relevant in their respective MDAs.
Managements on their parts must ensure the selection of the right calibre of staff into relevant positions involving integrity issues and ACTU; and above all, provide a first line budget for the successful operation of the units.
Femi Lionel Gold is Chief Superintendent, Public Enlightenment and Education Department of the Independent Corrupt Practices and Other Related Offences Commission (ICPC)
The Impact of System Review and Risk Assessment in the Prevention of Corruption
Written by Abbia Udofia
Any discussion on corruption normally whips up emotions, anticipation, irritation, sadness, and compunctions. The corruption question and its impacts continue to dominate family discourse, community consultations, village square chats, places of worship, cabinet meetings, parliamentary sessions, national conferences and seminars. Sadly, only a sizeable few of such conversations proffer suggestions on how to prevent it.
Corruption is an irrational behaviour with grave costs on the individual, people and government and undermines every aspect of development, mostly the political and socio-economic growth of society. It is ubiquitous, irrespective of region, culture, tribe and religion. Corruption and governance are perceived to be innately fused both receiving continual adhesion from each other.
When systemic and prevalent, corruption guides public policies, determine state contracts, forge appointments, sway discretions and judgements, establish projects, launch programmes and obliterate sanctions. The most efficient way of controlling or checking corruption, as several authorities have suggested, is to strengthen vulnerable systems, procedures, processes and flush out sleazy practices. This includes suggestions that institutions should be reviewed constantly along with officials manning them.
Notwithstanding where systems are strong or impervious, corrupt officials create and instigate weaknesses and opportunities for abuse and corruption. This highlights the essence for continuous system review and audit to ensure that particular processes and procedures are not broken by officers overseeing them.
Preventing Corruption
Anti-corruption literature and policies are replete with strategies to combat corruption. Approaches recommend employing culture as a purveyor to control corruption; increasing controls by audits and performance bench marking; institutional reforms enhancing transparency and accountability; strengthening anticorruption agencies and effective investigation and prosecution. Despite the colossal literature from academics, policy makers and civil society, corruption remains effervescent.
Enforcement against corruption takes place after the commission of the crime and with dire costs of the corrupt act on the society particularly the poor. The costs of enforcement and recovery are colossal, and criminal elements are compromising law enforcement efforts; this insight impels the imperative of building formidable systems that envision preventing corruption with irrepressible structures that hold off intensities and vagaries of corruption.
Short or long term, preventing corruption saves time, expenses and strains of enforcement; prevention is sustainable as it thrives on civil vigilance and support. Prevention corresponds and complements enforcement.
The United Nations Convention Against Corruption in 2003 specifically demands that states put up adequate statutory policies and programmes to prevent corruption (Chapter 2) and also fight corruption through criminalization and enforcement measures (Chapter 3). Rightly as the Independent Corrupt Practices and Other Related Commission (ICPC) has emphasized in several fora, it is imperative to maintain a balance between prevention and enforcement and not discard one for the other.
Preventive Tools
One peculiar aspect of the ICPC Establishment Act – a legislation that predates the United Nations Convention Against Corruption (2003), is the patent provisions on preventive measures against corruption. Though section 6(a) of ICPC Establishment Act provides for enforcement, section 6(b) – (d) provides for the examination and study of systems, procedures, and practices that may be permitting corruption, and advice government and officials to review such skewed systems, procedures, and practices. ICPC employs this provision as authority to identify and detoxify crooked public systems and procedures with advisories to relevant and concerned public agencies and officials realizing that these weak systems are cesspools for corruption.
These tools include the System Study and Review (SSR), Corruption Risk Assessment (CRA), Ethics and Compliance Scorecard (ECS), Corruption Monitoring and Evaluation (CME) etc. These tools have become the cornerstones of the Commission’s operations and have helped to check fraud and theft of public funds and reduce opacity and shaded practices as public systems are opened up for public scrutiny.
The focus here, however, is on two of ICPC’S preventive tools – the System Study and Review (SSR) and the Corruption Risk Assessment (CRA) under sections 6 (b) – (d) of ICPC Establishment Act.
System Study and Review
Systems study as the name implies inquire into government systems, practices and procedures to identify vulnerabilities permitting corruption and advise a review. It may be profound as procurement in huge projects covering construction of dams, stadia, and social investment programme, while also assessing granular and isolated issues as discretionary powers, poor record keeping, assets regularity, personnel appointments and promotions, etc. This tool is mostly compelled by reports, complaints and realities of broken public systems demanding the Commission’s intervention.
Since 2003, the ICPC has deployed the SSR in numerous public ministries and parastatals. Agencies are selected not in particular order but may include fallouts from findings made from investigation conducted, reports from the media, petitions and complaints from the public and the Commission’s direct intelligence reports.
Methodology adopted may require public hearing to gather opinion, concerns, complaints and suggestions; training sessions may be conducted to sensitize staff, stakeholders and the public on the assignments to prompt and elicit their submissions.
Objectives of the study would include but not limited to identifying vulnerable areas, which make the institution susceptible to corrupt tendencies; design and facilitate implementation of corruption controlling recommendations; empower staff against corruption; promote awareness on the essence and functions of Anti-corruption and Transparency Units (ACTUs).
Also, the System Study and Review on Capital and Personnel Budget Implementation, conducted in 201 Ministries Departments and Agencies in 2019 made several disclosures among other infractions that include appropriation of funds in excess of actual personnel cost suggestive of inflation of nominal roll; use of pension and health insurance budgets for unrelated payments. Others include failure to remit deducted taxes, Virement, and use of capital project funds for overhead costs or agency’s running costs.
System study presents the institution with reports of its weaknesses and vulnerabilities militating against effectiveness and productivity and recommends actions to stem the drift.
Corruption Risk Assessment
Risk assessment comes in a variety of forms – financial, cultural, environmental, forensic, health, criminal justice etc. Almost every form of human endeavour has some form of risk assessment or the other. The common decimal of these consist of – identifying risks that may be injurious to the institution or its personnel; detect object or subject that may cause the risk; assess the risks and determine action to take; review the risk assessment and ensure implementation of suggestions.
This analytical and diagnostic tool focuses on potential for risks and not the perception, existence or extent of corruption. It is disposed to evaluating likelihood of corruption occurring and the impact this would have on an institution should it occur. However, the fact that a threat exists may not warrant the conclusion that the organization is at risk.
A risk assessment identifies immanent threats and determines whether those threats actually relates to the organization, its operations, management and existence and mainly, if it could be detrimental to the organization. Indeed, as President Muhammad Buhari noted, “Corruption Risk Assessment… places a premium on prevention as an effective complement to enforcement in the war against corruption.”
Appreciating the crucial nature of corruption risk assessment in the fight against corruption, ICPC with the support of donor agencies at various times trained 69 and later 42 assessors drawn from the Commission, civil society organizations and other anti-corruption agencies.
The methodology of corruption assessment include identifying risks, listing the risk factors and schemes; collection of data, identifying risks specific to the agency, rating probability and potential impact of each corruption scheme, presenting mitigating actions, controls and processes, calculating residual or unforeseen risks and response plans.
Corruption risk assessment has also been conducted on Lagos and Abuja airports and in some cases with assistance and collaboration from international and local agencies like United Nations Development Programme, United Nations Office on Drugs and Crime, European Union, British Council, Bureau of Public Procurement and TUGAR.
The reports on Education, Health and Water Resources Sector listed weighty issues, such as management malfeasance; ethical dilemma by officers on difference between gift and gratification; non-compliance and adherence to laws; abuse of rules and procedures of procurement, and more.
Other issues identified include, politically motivated appointments that create incompetence and inefficiency; absence of Standard Operating Procedures and manuals to guide operations; absence of complaint, redress or sanctions mechanism; failure to sanction or prosecute officers indicted for criminal offences, etc.
Findings from the Abuja and Lagos airports assessment report indicated general tolerance and permission of touting which create serious security risks to the airports and travelers; security agency officials influence posting to the two airports; undue interference and abuse of protocol by senior security personnel to facilitate passengers’ passage; over population of security officers and check desks causing unwarranted delays; brazen offer of money by passengers to security officials for one favour or the other; corruption at the two airports also aggravated by poor automaton and computerization, and so on.
Assessment has also been made on e-platforms covering public sector payments such as the Treasury Single Account, Integrated Payroll and Personnel Information System, Government Integrated Financial Management System etc. The Commission has through these tools improved service delivery and instilled some accountability and ethical discipline in most reviewed ministries, departments and agencies.
Impact of System Study and Risk Assessment
SSR and CRA tools have instigated tremendous improvements and progress in government institutions and escalated this in the nation. Through systems reviews, most MDAs visited have corrected systems hitherto crooked or with exposures to pathogens of corruption and unethical practices. Peripheral and opaque systems and processes are opened up for public scrutiny thereby speeding up service delivery. Reports also indicate that transparency, integrity and efficiency are enhanced in public systems and practices as records and processes are up for checks.
Where records were not kept or transactions made hand to hand, the studies have directed and insisted on computerized flies, electronic and automated payment systems to check theft and leakages of government funds and revenue.
System studies and reviews have helped to recover billions of public funds fraudulently diverted from government projects and converted to private purses and use. This intervention hampers impunity and the twisted conception that public office thieves could evade punishment whatever the felony.
The constant visitations through system studies are impelling government agencies to their responsibilities. Officials are conscious of conducting themselves ethically and not abusing their offices. The University System Study Review principally has improved tertiary education management and administration in Nigeria. The morphology and structures of the institutions that were studied have been improved, admission and evaluation processes also enhanced, sexual and ineffable harassment of students by lecturers greatly reduced if not diminishing. ICPC is prosecuting a number of university teachers for this criminal act and primitivism.
The reports of corruption risk assessment, on the other hand, have ensured that infrastructure and facilities are enhanced as shown in the airports and seaports. E-payment platforms are being introduced and touting drastically reduced as security is upgraded. Funds recovered from these studies are ploughed back to government treasury to boost public expenditure and projects.
Importantly, system reviews and risk assessments have checked the monumental attrition and erosion of public office ethics and accountability, and have exposed felonies being committed in public offices. Much consideration is presently being accorded these tools as more officers are being investigated and prosecuted from the outcomes of the deployments.
Conclusion
Approaches like the system study and risk assessment are helpful in checking corruption in government and private organizations. As reports of the deployment indicate, the fight against corruption can only be successful and sustainable with a combination of enforcement and preventive approaches. Undeniably, it is beneficial to prevent than pursue curative or therapeutic measures after the harm.
Reports of the deployments have been commendable, and serving the nation, government, and people more effectively. ICPC is following up on its advisories and assessment reports to ensure that observed unethical and corrupt practices do not persist in MDAs that have been studied, assessed and reviewed.
Abbia Udofia is a Director and Head of System Study and Review (SSR) Department of the Independent Corrupt Practices and Other Related Offences Commission (ICPC)
ICPC: STEADILY WINNING THE WAR AGAINST CORRUPTION
Written by Femi Lionel Gold
Twenty years ago, the Independent Corrupt Practices and Other Related Offences Commission (ICPC) was born. Prior to setting up the Commission, corruption had given Nigeria and Nigerians a terribly bad image in the eyes of the international community. It therefore became imperative that something drastic had to be done to arrest the rot. This informed the establishment of ICPC to tackle corruption head-on.
Soon after its creation, the National Assembly enacted the Corrupt Practices and Other Related Offences Act, 2003 to repeal the Corrupt Practices and Other Related Offences Act, 2000, which established ICPC. However, the process was truncated by the judgement of the Federal High Court where it held that the steps taken by the lawmakers in passing the Bill were in violation of a court Order, and by the refusal of President Olusegun Obasanjo to assent to the bill.
From its establishment, the Commission has had four Governing Boards and chairmen. The pioneer Board was headed by Honourable Justice Mustapha Akanbi from 2000 – 2005, the second Board was led by Honourable Justice Emmanuel Olayinka Ayoola from 2000 – 2005, the third was by Mr. Ekpo Nta from 2012 – 2017; while the 4th Board, inaugurated in 2019, is headed by Prof. Bolaji Owasanoye.
The formation of ICPC brought a fresh and decisive perspective to the fight against corruption in the form of a holistic approach encompassing Enforcement, Prevention, Education and Public Mobilisation. While enforcement is directed at sanctioning corrupt individuals, prevention is for overall system change along with an enduring re-orientation of the citizenry.
Within its three-fold mandate, the Commission has since its establishment recorded a number of achievements. It has received cumulatively 19,381 petitions, successfully investigated over 5,000 of the petitions and prosecuted almost 1,000 and secured convictions in about 20% of the cases over the years.
On assets recovery, movable and immovable assets worth billions of naira have been recovered. It has also recovered assets in terms of cash, houses, plots of land and vehicles, wrongly appropriated by public officers worth N125 billion, and secured 81 convictions in courts.
ICPC is currently prosecuting some category of high profile individuals; they include a former Governor, a retired Court of Appeal judge, Director-General of a government agency, among others.
The Commission has conducted System Study and Reviews on 47 Ministries, Departments and Agencies (MDAs) of government, and Corruption Risk Assessments (CRAs) in different key sectors of the economy including transport, education, health and the e-government system.
In 2019, System Study and Review of Personnel Cost and the Capital Expenditure of 201 MDAs was conducted. As a result, ICPC restrained a total of N41.98b from misapplication.
In continuation of the review exercise, the Commission extended the review to Personnel Cost of 51 government hospitals and medical centres. The sum of N228.2m misappropriated by public servants in some of the health facilities is currently under investigation.
The Commission is currently focusing on activities that (1) strengthen government’s desire to eradicate corruption in revenue and expenditure (2) take development closer to the people by diminishing poverty, and (3) ensure value for money in the implementation of publicly funded projects, escalate asset recovery, and reduce retail corruption as the everyday experience of ordinary people.
One key initiative of ICPC in ensuring that government gets value in the execution of public projects, and improved delivery of social welfare services to Nigerians is the Constituency/Executive Projects Tracking exercise.
Ambulances recovered during projects tracking exercise in Edo State
Recovered Tractors in Bauchi State
Successes of the exercise included the recoveries of tractors, ambulances, dialysis machines and other hospital equipment from sponsors of the projects. The achievements of the exercise also included the recovery of huge sums of money, hundreds of tricycles, grinding machines, tractors, ambulances and other empowerment items from the project sponsors.
In addition, the exercise forced over 300 contractors who hitherto had abandoned projects to return to site to complete them.
More so, ICPC is the secretariat for the inter-agency committee on Illicit Financial Flows (IFFs) in Nigeria through which measures to stem IFFs are frequently discussed, and has also established Tax Fraud and Illicit Financial Flows Group in the Commission to prevent and prosecute offenders of tax evasion, and recover proceeds from such crimes as part of its preventive initiative.
On values re-orientation, ICPC, in Collaboration with the Nigerian Educational Research and Development Council (NERDC) has developed the National Values Curriculum (NVC), which infused anti-corruption values into subjects at Basic 1-9, Post Basic (Senior Secondary School 1-3) and Colleges of Education Minimum Standards. It also established Anti-corruption Clubs and Vanguards in secondary schools and tertiary institutions across the country in a bid to provide a moral compass for students and young adults.
Troubled by dwindling moral values among Nigerians, ICPC, in collaboration with OSGF and NOA has produced the National Ethics and Integrity Policy to restore the nation’s traditional core values of honesty, transparency, accountability and respect for the rule of law. The policy was adopted by the Federal Executive Council in August 2020, and launched by President Muhammadu Buhari in September of the same year.
ICPC is also collaborating with Office of the Auditor-General of the Federation, Federal Inland Revenue Service (FIRS) National Social Investment Office (NSIO) Federal Road Safety Commission (FRSC), Asset Management Corporation of Nigeria (AMCON), Nigerian Television Authority (NTA), Presidential Enabling Business Environment Council (PEBEC) to mention but a few, in tackling corruption.
Some ongoing initiatives under these collaborations include the tracking of Conditional Cash Transfer, Home Grown School Feeding Programmes of NSIO, and regular joint enforcement actions with FRSC and DSS to reduce retail corruption on the roads.
Furthermore, ICPC has established Anti-Corruption and Transparency Units (ACTUs) in 449 Ministries, Departments and Agencies (MDAs) to complement and strengthen the efforts of the Commission in preventing corruption. One key benefit of ACTUs is increased capacity to efficiently assess corruption vulnerabilities in the MDAs.
ICPC has also engaged citizens at grassroots level in the budgetary process in Local Government Areas, as well as established the Anti-corruption Academy of Nigeria (ACAN). In 2019, the regional body, ECOWAS, adopted the Academy as its centre of excellence for anti-corruption training.
The ICPC, under the leadership of Prof Owasanoye, is indeed, taking steps to improve on the standards and direction for the Commission’s greater accomplishments in its fight against corruption. ICPC has set itself apart with many innovations, which continue to have positive impact on the anti-corruption campaign. The Commission’s robust expertise and strategies in discharging its mandate provide solid evidence that the effort to reduce corruption in the Nigerian society is right on course. With strong political will from the government at all levels, ICPC assures Nigerians of its commitment to an unrelenting pursuit of its mandate.
Femi Lionel Gold is Chief Superintendent, Public Enlightenment and Education Department of the Independent Corrupt Practices and Other Related Offences Commission (ICPC)
CAPACITY BUILDING EFFORTS OF THE ANTI-CORRUPTION ACADEMY OF NIGERIA (ACAN)
By Mark Faison
Professor Olatunde Babawale, Provost, ACAN
The Anti-Corruption Academy of Nigeria (ACAN) is the research and training arm of the Independent Corrupt Practices and Other Related Offences Commission (ICPC). The Academy was established to facilitate the effective implementation of the Commission’s functions as encapsulated in Section 6 (a – f) of the Corrupt Practices and Other Related Offences Act 2000, which empowers the Commission to carry out enforcement, prevention and enlightenment functions.
In line with the foregoing, the Academy equips ICPC staff with necessary skills and knowledge that would enable them to perform at required levels. The Academy is also designed to provide training for public and private sector workers on accountability, transparency, integrity, ethics and issues relating to corrupt practices.
The establishment of the Academy is based on the Commission’s determination to fulfil its enlightenment and education functions in a systematic and sustainable manner, to achieve long term impact in the war against corruption. It is also partly in fulfilment of Nigeria’s commitment to regional and global resolutions such as the African Union Convention on Preventing and Combatting Corruption (AUCPACC) and the United Nations Convention Against Corruption (UNCAC) respectively.
ACAN is located in a serene environment in Keffi, Nasarawa State, 46 Kilometres from Abuja city centre. The academy, which lies adjacent to the National Youth Service Corps Orientation Camp, Keffi, commenced activities in the current location in November 2014 with Prof. Sola Akinrinade as its pioneer Provost. He maintained this position until December 2020, and the current Provost, Prof. Tunde Babawale, assumed office in January 2021.
The Academy’s philosophy is that corruption and related crimes can be controlled through a system of robust training and re-training, geared towards sound policy formulation, operational efficiency, good management culture, behaviour, and communication skills that are required to drive a corruption-free society.
As part of its key objectives, the Academy seeks to provide world-class law enforcement and anti-corruption education, bridge the gap between knowledge and practice through academic research and professional policy analysis; serve as a platform for dialogue, networking and cooperation in crimes management and control; and become a think-tank for policy formulation and implementation in the law enforcement and anti-corruption sector.
ACAN is being developed as a last-stop institution for training of high-calibre anti-corruption professionals such as compliance officers, investigators, administrators, and general integrity practitioners by offering programmes at postgraduate levels.
In the delivery of these training programmes, highly qualified and skilful resource persons are drawn from the Academy, ICPC Headquarters, the academia, and from professionals in various fields.
The Academy, in view of realities of an ICT age, has developed an online platform for e-delivery of the contents of courses to participants. This is expected to provide an effective means of communication for the teaching and learning process. Apart from its 250-capacity digital classroom, all the learning centres of the Academy are equipped with e-learning facilities, including full multimedia learning systems.
ACAN Admin. block
Besides its research and training functions, the Academy organises annual Anti-Corruption Lectures, hosts thematic Anti-Corruption Conferences and bi-annual Policy Dialogues. The Academy also produces the Nigerian Journal of Anti-Corruption Studies.
ACAN is progressively evolving into a model anti-corruption resource development centre in the African region, which was duly recognised by President Muhammadu Buhari, at the Opening Session of the Corruption Risk Assessment Training for Heads of Anti-Corruption Agencies in the African Union on 10 December, 2018 at the State House Banquet Hall, Abuja.
President Muhammadu Buhari with ICPC & ACAN Management and the international participants at the AU CRA training
The Academy is also strategic to the successful implementation of the National Anti-Corruption Strategy (NACS), 2017 – 2021, particularly in developing capacity at the national and sub-national levels and relating to the activities outlined for ICPC in the NACS implementation plan.
Since the new vision for the Academy was set in late 2014, ACAN has built capacity in anti-corruption and deployed knowledge driven research in several interventionist activities, some of which are:
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- Training/Capacity Building Programmes for ICPC staff: Trainings on law enforcement, corruption prevention and anti-corruption education, including refresher courses are regularly being organised for Commission’s staff. 26 staff trainings had been conducted as at March 2020 with 1,437 participants in attendance.
- Open Training Programmes: The Academy conducts open training programmes on topical issues bordering on ethics, integrity, transparency, accountability and anti-corruption. These trainings are aimed at building the institutional capacity of organizations to develop responses to corruption. ACAN’s flagship Leadership programmes – Anti-Corruption Leadership Course and Senior Executive Course in Organisational Integrity Management that commenced since 2016 are testaments to the Academy’s commitment to developing a crop of leaders to champion the anti-corruption war in their respective agencies. So far, 1,933 participants have been trained.
- Bespoke Programmes: Tailored capacity building programmes give room for organisation-specific trainings, affording them the opportunity to develop specific responses to their anti-corruption and related needs. Thirteen (13) agencies have so far benefited from the bespoke programme with 1,638 participants trained.
- Trainings for Anti-Corruption and Transparency Units (ACTUs): ACTUs are established to serve as the eyes and ears of the ICPC in MDAs. They assist their respective organisations to tackle corruption internally and to entrench institutional integrity. To effectively carry out their assignments, trainings are organized twice yearly for ACTU members. Ten training programmes have been organised for ACTUs from 2015 to date with an attendance of 1,789 participants.
- Certificate Programmes: The Academy’s certificate programmes are designed to build the capacity of anti-corruption practitioners and others to better understand the intricacies of corruption and the array of responses to tackling the menace. ACAN has held three editions of the Certificate Course in Corruption Prevention – 2018, 2019 and 2021 with 97 participants. Certificate courses in Ethics and Compliance, Corruption Investigation and Intelligence have also commenced.
- State Anti-Corruption Summits: To take the fight against corruption down to the sub-national levels – a key outcome required by the National Anti-Corruption Strategy (NACS), the Academy has convened State Anti-Corruption Summits in eight states namely, Bauchi, Plateau, Abia, Akwa Ibom, Delta, Bayelsa, Ebonyi and Cross River, in collaboration with an NGO, Foundation for Transparency and Accountability. A total of 2,847 participants were at these summits.
- Anti-Corruption, Ethics and Integrity Training in Local Government Administration: The local governments are directly responsible for bringing government’s presence and initiatives to the local communities. Since corruption cases are manifest at this level, Integrity training programmes are conducted for Chairmen and Secretaries of Local Government Service Commissions as well as the principal officers of local government councils to enhance transparency and accountability in local government administration. 1,970 principal officers in Abia, Ebonyi, Bauchi, Yobe, Akwa Ibom, Enugu as well as the 6 Area councils in the Federal Capital Territory have been trained by the Academy.
- Specialised Programmes and Sponsored Programmes: Sponsored/funded Programmes carried out in this category include a UNDP-sponsored training on Grant and Project Management for CSOs; UNDP-sponsored Corruption Risk Assessment training for staff of Anti-Corruption Agencies and Civil Society Organisations; and UNODC-sponsored Corruption Risk Assessment of Nigeria’s e-Governance System. Specialised trainings executed are Gender Sensitive Early Warning and Early Response (EWER) and Peace Architecture, and EWER Implementation and Strategy Planning for Plateau State Peacebuilding Agency; Adamawa and Gombe States Commands of the Nigerian Security and Civil Defence Corps, and State Emergency Management Authorities, SEMA, of Adamawa and Gombe States. A total of 318 participants have been trained in this category.
- International Trainings: Besides the progressive value-addition of ACAN to the public and private sector in Nigeria, the Academy had a unique opportunity of training the leadership of Anti-Corruption Agencies in the African Union (AU) on corruption prevention, using the Corruption Risk Assessment (CRA) methodology for improved systems and processes of their MDAs. With support from the Office of the Secretary to the Government of the Federation, the training had the honour of been declared open by the President of Nigeria, Muhammadu Buhari, and was attended by 39 participants from 26 African countries.
The Academy also facilitated an ECOWAS-sponsored training for the Network of Anti-Corruption Institutions in West Africa (NACIWA) with 30 participants in attendance.
The number of participants so far trained at ACAN’s programmes since its establishment stands at 12,000.
Mark Faison is Chief Superintendent in the Anti-Corruption Academy of Nigeria (ACAN), the training arm of the Independent Corrupt Practices and Other Related Offences Commission (ICPC)
ICPC: Taking development to communities through Constituency and Executive Projects Implementation
Written by Jimoh Oladapo Sulahiman
‘Start with the end in mind’. Steven Covey.
When the Honorable Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Professor Bolaji Owansoye, SAN, and the board decided to institute a novel initiative of ensuring accountability and transparency in the implementation of Zonal Intervention Projects (ZIP), they already had in their minds, the achievable outcomes. The initiative was instituted with particular attention on federal government’s funded projects in the education, water resources, agriculture, power and health sectors, starting from 2015 appropriations. The outcome of the tracking exercises were quite revealing, mainly due to ICPC’s doggedness to engender good governance and accountability in the implementation of government projects.
The novel initiative called Constituency and Executive Projects Tracking Group (CEPTG) is, broadly speaking, to facilitate good governance, transparency and accountability through proper implementation of government projects across the country, in line with the Commission’s preventive and enforcement mandates.
Therefore, a compass that encapsulates planning, projections, and the empaneling of a team of expert trackers to achieve the set goals that will impact on the well-being of the people was designed. A steering committee to pre-select projects for tracking was set up by ICPC for easy coordination and quick results. The committee is composed of professional bodies, relevant government ministries and departments, and non-state actors, notable civil society organizations, grassroots community development associations, investigative journalists, as well as the mainstream media.
The specific objectives of the initiative included but not limited to: investigation of fraudulent procurement practices in the award of contracts for constituency/executive projects; monitoring the implementation of the projects from inception to completion; and making recoveries on projects/contracts confirmed to have been inflated or in which contractors under-performed or did not perform at all, among others.
So far, two phases of the tracking exercise have been conducted in 28 states while preparation for the commencement of the third phase is in top gear. The outcome of the phase one tracking exercise in terms of awareness created, recoveries made, and the impacts on Nigerians, generated so much public goodwill and reactions such that the Commission decided to upscale the phase two tracking exercise. Thus, the scope was widened to include projects that were being executed by the executive arm of government. The inclusion of executive projects significantly raised the number of projects selected for tracking to 822, cutting across 16 states of the federation.
The outcome of the tracking exercises were positive with regards to the Commission’s desire to engender value for money in government projects implementation and sustaining impactful governance within the local level. It afforded the people at the grassroots opportunity to demand accountability and transparency in governance. Other key performance indicators of the initiative included provision of physical infrastructure, such as primary school classroom blocks, primary health care facilities, boreholes, market stalls for the communities, empowerment of the constituencies as well as the recoveries of billions of funds, hitherto mismanaged into government coffers.
Aside the diverted funds, which were recovered or completed projects hitherto abandoned by contractors, the outcome of phase one was a mix bag of revelations. The tracking exercise revealed lots of mismanagement of funds and the non or shoddy execution of projects that would have had greater impacts on the lives and well-being of the people if they were executed to specifications. Out of 524 projects under the first phase, 195 were education projects, while 46 were from the health sector. The implication of diversion or mismanagement of public funds meant for development purposes is that communities are being short-changed and unable to access life’s changing social services, thereby deepening poverty level, increased diseases, heightened ignorance, spiraled criminality and social unrest in the society.
Part of the success recorded by the Commission in the healthcare delivery system through the tracking activities was that contractors quickly revisited abandoned or poorly executed projects, thereby achieving improvement in the healthcare delivery capacity of the affected hospitals and the communities.
In addition, findings under the phase two exercise revealed that there were projects sited on private properties of the sponsors or their cronies – breaching Procurement Act 2007, using personal companies to execute government projects, passing off or round tripping of projects, converting projects vehicles to personal property, and lack of needs assessment before projects are sited.
Furthermore, the exercise uncovered lack of synergy between outgoing and incoming legislators, such that projects initiated by the former are abandoned by the later. Another shoddy dealing uncovered was collusion between sponsors’ aides and contractors to defraud Nigeria and contract over-invoicing.
Other key findings of the second phase exercise was that despite the annual appropriation of N100 billion for constituency projects, some projects were duplicated in the mandate budgets of some Ministries, Departments and Agencies (MDAs) as constituency projects. This, did not only fuels corruption, but it also distorts national planning, leading to poor and inefficient budget performance.
Phase 2: Cumulative Savings for Government
It is gratifying to note that not all findings were negative. Several projects were found to have been well executed to approved specifications. Regarding procedural and process improvement, some agencies hitherto indicted in phase one, had since improved on their processes by designing measures that ensured better transparency in the implementation of projects.
As government funds and assets are being recovered, and contractors are moving back to sites through the Constituency and Executive Projects Tracking initiative, the general public is assured that the Commission will not rest on its laurel until the objectives of the exercise of improved service delivery to the people, value for money in the implementation of government projects, and improved opportunities to attain Sustainable Development Goals(SDG), were achieved. While the Commission continues to track government projects across the nation, all lawful measures will be employed to punish infractions discovered.
Jimoh Oladapo Sulahiman is an Assistant Commissioner, Executive Projects, Independent Corrupt Practices and Other Related Offences Commission (ICPC)