FG ‘ll end corruption in govt contracts – AGF

The Attorney General of the Federation and Minister of Justice, Mr Lateef Fagbemi, says Federal Government has put in place measures to deter corruption in negotiation and execution of contracts.

Fagbemi said this in Abuja at the senstitisation workshop on the revised guidelines on negotiation and drafting agreements by government parties to prevent corruption, Illicit Financial Flows (IFFs) and ensure sustainable development, organised by ICPC.

“The government has taken measures aimed at ensuring that all contracts within Federal Executive Council’s threshold are properly vetted.

“As we have discovered that a major source of drain on our national purse is the increasing utilization of litigation and arbitration.

“This is sometimes funded by litigation sharks, to foist contracts and agreements that were ab initio procured through bribery and corruption on Nigeria.

”One thing is however clear, there can be no sustainable development without stemming corruption and IFFs,” he said.

He said that government was working toward promoting more effective and transparent management of public resources as well as well-functioning institutions to combat IFFs.

He said that key to fighting corruption and IFFs was the methodology of approach.

“Experience has, however, shown that law and order approach alone is not sustainable. Effectiveness and efficiency require a nuance combination or well-tailored mixture of governance reforms, prevention and sanctions.

“It is estimated that Nigeria loses an average of 1-18 billion dollars annually to illicit financial flows, more than 60 per cent of which is due to commercial IFFs which would be largely prevented with capable negotiation, drafting transparency and patriotic zeal.

“Consequently, the methodology adopted with this workshop is a preventive effort aimed at enlightening key stakeholders charged with the responsibility of negotiating contracts on behalf of Government in the contents of the Revised Guidelines.

“This would hopefully deter corruption in negotiation and execution of Government contracts, which is part of the Federal Government’s Ministerial deliverables on Improved Governance for Effective Service Delivery,” he said.

He said that the Ministry of Justice was committed to supporting initiatives undertaken by MDAs which were aimed at engendering transparency, efficiency and preventing corruption.

“Equally at the ministerial level, the ministry has developed policy documents and specific mechanisms to ensure transparency and reduce incidence of bad judgment awards.

“This always arise from poor drafting or drafting of Federal Government Contracts with malaise intention against the country and its citizenry, particularly as it relates to contracts within the threshold of the Federal Executive Council,” he said.

The Chairman of ICPC, Prof Bolaji Owasanoye, said that contractors had been using different tactics to steal government fund through capital flight and other forms of Illicit Financial Flows.

He said they included lack of provisions for periodic review of long-term contracts, grant of licenses and waivers.

He stated that the choice of laws and the seat of arbitration had often worked to the disadvantage of the nation hence the need for the guidelines.

On his part, the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele in a paper titled: “Avoiding Tax Defaults and Capital Flights in Commercial Agreements” suggested the way forward to addressing some of the issues encouraging capital flights in commercial agreements.

Oyedele recommended the standardisation of approach using templates and approved checklists constantly reviewed and updated.

He proffered other solutions to include the involvement of specialists and subject matter experts, tax impact assessment and simulation, caps and sunset clauses.

Others, he said, were check local requirements and compliance with counterparty’s jurisdiction, use of clauses in agreements to safeguard national interest, inclusion of local content in projects execution to limit capital flights amongst others.

The workshop featured a panel of discussion on issues around negotiating agreements in the oil and gas, solid minerals, trade and investment and environment standards contracts.