How Tanzania was short changed in Stanbic bribery payback

stanbic bank tanzania

 The recent UK’s first Deferred Prosecution Agreement (DPA) centred on the 12bn/- (USD 6 million) Stanbic Bank bribe scandal has been faulted for short-changing Tanzania in terms of the compensation awarded.

 

 

The UK’s Corruption Watch has also criticised the DPA and Serious Fraud Office (SFO) for not charging Standard Bank officials involved in the lucrative fundraising deal from the government.

 

So far no legal action has also been taken against the local wheeler-dealers of the US$600 million private bond placement and officials of Stanbic Bank behind the whole bribery scam.

 

“If DPAs are to act as a serious deterrent to bribery and economic crime, and to garner public confidence, they cannot be a means for individuals to be let off accountability for their actions or for companies to escape the full harm of their wrongdoing,” the British anti-corruption watchdog said in a statement.

 

It called on Serious Fraud Office and the judiciary to consider seriously if the precedents set in this DPA will genuinely deter wrongdoing and let the real victims of corruption, in this case the Tanzanian people, see justice.

 

“Relatively low financial penalties that do not reflect adequate compensation or disgorgement of profits, Standard Bank agreed to pay $6 million compensation to Tanzania based on the calculated harm to the country. But compensation may have been well over ten times higher, possibly as high as $80 million - if the full harm to Tanzania had been taken into account,” Corruption Watch argued.

 

The activist organisation further argued that the DPA did also not address the issue of profits to be disgorged by the Bank which were set at $8.4 million did not take into account revenue streams made by the Bank on the transaction (which could have been up to $10 million) nor the market advantage achieved by the Bank as a result of the wrongdoing.

 

DPAs were introduced in the US to give the most vulnerable in society a second chance by allowing them to prove good behaviour rather than be prosecuted. They have been increasingly used in the US over the past decade to give that second chance to the most powerful in society: corporations.

 

It is for this latter purpose that they have been introduced into the UK. 

 

Given that they represent a form of justice reserved for society’s most powerful actors and the potential for public perception that corporations are as a result above the law, accountability in how DPAs are used is essential.

 

The UK’s first DPA is likely to set the tone both of future DPAs and for how enforcement of the UK’s Bribery Act will develop over the next few years. 

 

“While the Serious Fraud Office (SFO) clearly sought to allay some of the criticisms of DPAs, namely by ensuring there is no tax deductibility for the financial penalties, no immunity from prosecution clauses, and by providing extensive detail of the alleged wrongdoing, the UK’s first DPA has set some worryingly low standards in many key areas.

 

The anti-corruption watchdog further noted that at individual accountability level, the ruling means that no single individual in the UK has been held to account either by Standard Bank or the SFO for their failure to prevent the alleged bribery. 

 

“This is particularly surprising given the high level of control and approval by UK individuals for the transaction. These individuals still operate at senior levels within the financial industry. At the very least, those UK individuals involved in the failing to prevent the alleged wrongdoing should be investigated by the Financial Conduct Authority with a view to removing their ‘approved person’ status,” Corruption Watch argued.

 

The UK watchdog also noted that reliance on a company’s internal investigation as the ruling states and almost complete reliance on the internal investigation of the company by the SFO means that neither the court nor the public will ever truly know whether the full extent of the wrongdoing was unearthed, or whether there were systemic problems within the Bank rather than this being an isolated incident.

 

The UK Serious Fraud Office’s first DPA with Standard Bank PLC was approved by Lord Justice Leveson on 30th November, 2015. The agreement was also the first enforcement action that the SFO has taken under Section 7 ‘failure to prevent’ offence of the Bribery Act.

 

The DPA relates to charges, now suspended, that Standard Bank failed to prevent its Tanzanian subsidiary, Stanbic Tanzania and its top executives from paying bribes to senior government officials to secure the Tanzanian government’s mandate to raise $600 million of sovereign debt financing in the form of a bond. 

 

The bribes consisted of a $6 million fee paid by Stanbic to a local agent, Enterprise Growth Market Advisors Ltd (EGMA), paid out of international investors’ money raised by Standard Bank for the Tanzanian government. 

 

EGMA, according to the agreed facts, provided no real services in return for its $6 million fee. Its chairman at the time, Harry Kitillya, was Commissioner of the Tanzania Revenue Authority, which was responsible for advising the government on financing needs. Standard Bank was required to pay £21.3 million in financial penalties (including £3.9 million compensation to Tanzania). A key factor behind Standard’s eligibility for a DPA was the fact that it self-reported the alleged misconduct within days of being alerted by Stanbic Tanzania employees, and cooperated with the SFO.

 

The SFO approached the Tanzanian anti-corruption authorities, the Prevention of Crime and Corruption Bureau (PCCB) to check whether it had any objections to the SFO going ahead with resolving the investigation into Standard Bank with a DPA before the final approval hearing.

Fastjet to launch daily flights to Zanzibar

Fastjet   will launch daily flights to Zanzibar from Dar es Salaam on January 11 next year in response to strong passenger and tour operator demand from local and regional market.

 

The Dar-Zanzibar flight will also be connecting to Johannesburg in South Africa as previous routes were restricted to Tuesday’s and Thursdays of every week. 

 

 Fastjet General Manager, Jimmy Kibati said the tickets for the new route are on sale immediately, with one way fares from Dar es Salaam to cost from Sh22,000.

 

“The fares from Zanzibar will start at as low as Sh22,000, making a return flight to the Spice Islands from Dar es Salaam at only Sh70, 000 including all airport and government taxes” he said.

 

 Fastjet had previously partnered with Dar es Salaam based Coastal Aviation to fly passengers to Zanzibar, but flights were restricted to daylight flight, and involved transfers and luggage collection on the ground in Dar es Salaam. 

 

 “Fastjet passengers wanting to fly to Zanzibar will now have a choice of departure days,” he said. 

 

With Fastjet’s cheapest fares almost half the price of existing lowest fares, he said the airline expects more passengers on its flights to the archipelagos.

We have surplus gas, say TPDC

 

Speaking at a news conference in Dar es Salaam, TPDC Managing Director Dr James Mataragio said gas production was currently above the required rate per day. According to him, there is a surplus of 94 million standard cubic feet (mmscfd) produced daily, after completion of the work on the laying of the gas pipeline.

The pipeline begins its route from Madimba village in Mtwara Rural District and Songo Songo in Kilwa District to Dar es Salaam. Dr Mataragio said after putting up turbines and a gas pipeline in Madimba and Songosongo, Tanzania is currently able to produce enough gas per day, with the figure likely to increase as need arises.

According to him, Songo Songo has the capacity to produce 140mmscfd per day, with the new pipeline planned to have the capacity to transport 784 cubic feet of gas per day, which are likely to increase up to 1002 cubic feet per day.

The Madimba turbines have the capacity to produce 210mmcfd of gas per day, according to the TPDC boss, which translates into 350mmcfd per day. On improvements in supply since the use of natural gas started, electricity production has reached 700mw, equivalent to 70 per cent of the total electricity in the national grid.

Dr Mataragio described the achievement as a major developmental revolution, given that the same amount of electricity has for many years been produced through hydropower. Last week, Tanzania Electric Supply Company (TANESCO) Managing Director Mr Felchesmi Mramba said from September 17 this year when the government started using natural gas from Mtwara, electricity production has increased from 260mw to 540mw.

This, according to him, is an increase of 300mw, which has contributed to stabilising electricity distribution in the country, adding that another 130mw is expected from natural gas sources between now and January 2016 that will take the total to 700mw going into the national grid.

The country’s current demand for electricity is 720mw per day The low cost gas power generation would be extended to industrial and other users, raising Tanzania’s competitiveness and growth prospects.

Dr Mataragio took a swipe at some people who have been insisting that the gas pipeline was like a white elephant -- and that it would not benefit Tanzanians. “If today we decide to scrap the gas pipeline, the country will sink into total darkness,’’ he noted.

At the same time, the national oil company is currently undertaking the grand fertiliser project which will be accomplished after 40 months.

The project is being undertaken with Ferostaal Industrial Projects GmbH of Germany and other associates from Pakistan and Denmark, according to TPDC Managing Director.

“We have already signed a Joint Venture Agreement in the project which expects to spend 2 billion US dollars -- and the project expects to produce 3,850 tonnes of fertiliser per day,’’ he said.

TPDC is also undertaking other projects for supplying natural gas in Mtwara, Lindi and Dr es Salaam regions. They aim at supplying gas for domestic consumption and vehicles.

Ludewa, Masasi polls postponed

 

That was revealed by the Chairman of the National Electoral Commission (NEC), Judge Damian Lubuva, when addressing journalists and politicians in Arusha, at the threshold of the Parliamentary Elections which took place here.

In Ludewa, the polls were postponed following the death of the Chama Cha Mapinduzi (CCM) candidate, Mr Deo Haule Filikunjombe who died in helicopter crash during campaigns while in Masasi the death of Emmanuel Makaidi who vied for the seat via National League for Democracy (NLD) caused the elections to be delayed.

The Chairman of the Alliance for Change and Transparency (ACT) Wazalendo’s Youth Wing Chapter for Arusha, Mr Kessy Augustino, lamented before the Chairman of the National Electoral Commission (NEC) Justice Lubuva, that other parties are sending short text messages in bulks to persuade the people of Arusha to vote for them though they were not allowed to do so.

Short messages are currently being pushed to local residents here, cajoling, begging and even forcing people to vote for particular residents, something which has raised concern among voters as well as some candidates and party leaders.

Judge Lubuva has directed the Regional Electoral Coordinator, Mr Richard Kwitega, to follow up with the Tanzania Communications Regulatory Authority (TCRA) so that the authority should move in to stop such messages.

Many of the messages are pushed to handsets without owners’ consent and sometimes dispatched to them during voting day when all forms of campaigns are prohibited.

Dons find First Speech inspiring

In the speech, Dr Magufuli mentioned tax collection by the Tanzania Revenue Authority (TRA), electricity and water shortages; and lack of structural support for farmers as among the most pressing challenges.

Addressing academicians when officiating discussions on the president’s speech at the University of Dar es Salaam, the Minister for Information, Culture, Arts and Sports, Mr Nape Nnauye, said it was a guidance towards solutions to challenges facing Tanzanians. “It is important for youth in this country to understand that they must be part of the transformation.

We must get away from the usual applauding and start building a culture of listening, analyzing and providing recommendations and way forward to build a better Tanzania,” he explained.

The debate was organised by the Tanzania Higher Learning Institutions Students’ Organisation (TAHLISO). Mr Nnauye noted that the president’s speech came at a time when Tanzanians were facing a lot of challenges, thereby providing the beginning of seeking answers to the challenges “and most so at a time when there are a lot of complaints on corruption and bureaucracy in the government’’.

He assured the public that Dr Magufuli’s speech was the beginning of major transformations in the government and the country in general. “I believe if everything contained in the speech will be well implemented, we will make major positive strides in development,” he pointed out.

The minister, however, stressed the need for academicians to also discuss ways to have these transformation included in the country’s system so that they can be sustained, further pointing out that where and when possible, the system must be pressed to accept such transformations.

Citing an example, Mr Nnauye said previously, the Controller and Auditor General’s (CAG) reports were presented to the president but during former President Jakaya Kikwete’s administration, a law was enacted to allow the reports to be presented and discussed in parliament. “President Kikwete has left office but these reports will continue to be discussed.

This is a good example of what I’m trying to say here. We must discuss these transformations contained in the president’s speech and be incorporated into the system. I assure you we will witness the good outcome from these,” he said.

Dr John Jingu from the Department of Political Science and Public Administration at the University of Dar es Salaam, told the audience that the speech illustrated a committed leader, willing to fight and address public plight.

Dr Jingu noted that what was contained in the president’s speech, including industrialising Tanzania, can be done if everyone would play his/her part, including creating a conducive working environment for the public sector.

Dr Honest Ngowi of Mzumbe University, said Dr Magufuli had started implementing what is contained in his speech to the House, citing collection of revenue as one of the examples. He, however, noted that implementation of the speech and transformations desired were the responsibility of everyone, especially the people -- and not Dr Magufuli alone.

Veteran diplomat, political strategist and regional commissioner, Ambassador Christopher Liundi, explained that the president’s speech provided the country’s development direction through fighting corruption within the government.

Ambassador Liundi stated that Dr Magufuli was the kind of president that many countries longed for with many waiting for centuries; citing the likes of the First President of the United States, George Washington. “Tanzania is very lucky to get such a president in such a short time, a president who is patriotic, has the interests of the public -- most so those in the lower levels, at heart.

He is a blessing indeed from God,” Ambassador Liundi stressed. He said the president’s acts on what he says, citing among others fighting graft and cutting costs by providing a lean cabinet of hardworking young ministers.

He stressed, however, that the ministers should now take the president’s mantle and follow on his footsteps. “We want to see the ministers follow his footsteps. And I am happy to note that they are indeed doing so. We all must give the president and his cabinet time, give him cooperation and accept the transformations that are coming,” he added.

The Kinondoni District Commissioner, Mr Paul Makonda, speaking in his capacity as a former president of the Tanzania Higher Learning Institutions Student’s Organisation (TAHLISO), said much as Tanzanians welcomed the transformations, they should also accept the fact that as the government is fighting graft, close family members could be affected in one way or another.

“Corruption had become part of our lives such that when the government started taking steps to fight and end graft, many were shocked. We must accept that as the government intends to end corruption, family members will be affected. But all this is for the good of the country,” he noted.

Most of the participants, mostly students, hailed Dr Magufuli’s speech and performance but advised him to overhaul some government institutions such as Higher Education Students Loan Board (HESLB) and Prevention and Combating of Corruption Bureau (PCCB).

In summing up, Dr Ayoub Rioba, who was the debate’s moderator, said: “Dr Magufuli is committed to implementing what is contained in his inaugural speech -- and his track record is a good testimony’’.

The don added that the president has the public interests at heart, is courageous and a patriotic leader who has instilled a sense of patriotism among Tanzanians within the short period he has been in office.

Ardhi female students impress

The Vice-Chancellor, Professor Idrissa Mshoro, made the revelation in Dar es Salaam when awarding prizes to the students, who through hard work and dedication have accomplished so much in their academic endeavour.

“Basing on the total number of enrolled students in the 2014/15 academic year at ARU, the total number of students recognised today indicates that 4.5 per cent of female students have been awarded for academic excellence, compared to 2.8 per cent of male students,” he said.

A total of 126 students were awarded. He said the result defies the perception that female students are not good in science and engineering-related field studies. He called on the public, among others, to ignore the perception and provide support to girl children to ensure they love and take science subjects.

The Deputy Vice-Chancellor for Academic Affairs, Prof Gabriel Kassenga, said the prizes awarded to the best performing students would help prompt the students to attain greater heights in their academic as well as professional pursuits.

The prizes, including financial and material, including certificates, were offered through the generous support of various sponsors, who teamed up at the university to recognise the effort of the outstanding students from various programmes.

On the other hand, the students have called on the government and the varsity’s administration to set up better plans that would help see the students acquire various academic facilities for field studies.

“One of the challenges that we have always encountered is inadequate facilities for field studies to enable us acquire enough exposure for our education,” said a student, Ringo Chongo.

Meanwhile, the university is today expected to conduct its nineth graduation ceremony. According to the vice-chancellor, the event will be held at the Diamond Jubilee Hall in Dar es Salaam.

Mkapa advocates rule of law

Africa can only develop if it manages to fight poverty with zeal and vigor while promoting good governance and the rule of law.

The statement was made by the former President Benjamini Mkapa at a two-day National Rule of Law stakeholders’ forum that was organised by the International Development Law Organization (IDLO) over the weekend in Dar es Salaam.

The former president described the rule of law as a guiding necessary in creating wealth and sharing the benefits to society. 

“It is further envisaged that the society will be empowered with capacity to hold their leaders accountable, promote good governance, reward good performance and curb corruption,” he told the gathering.

“There is limited institutional capacity to ensure full accountability from both government and the citizen,” he admitted.

“The governments are also constrained by pre-established and widely accepted sets of rules of political engagement,” he added noting that the forum would empower the public such that the citizenry understands their share of responsibility and demand for government compliance to the principles of due process.

He further pointed out the main challenge in the endeavour to strengthen the rule of law is limited due to meager resources for legal reform.

“So African countries seek support from development partners but unfortunately, most of this support for rule of law reform has been coming with agendas that take little account of the local context,” he said.

“Too often, the result has been technical solutions that fail to match local needs...” he said emphasizing that “...it is crucial for legal reform processes be country driven.”

He went on to cite that Many facets of the rule of law form essential components of sustainable development.

“This was evident to me when in 2002 I was appointed, together with the President of Finland, to Chair the World Commission on the Social Dimension of Globalisation...this conviction, grew even further after my joining the UN Commission on Legal Empowerment of the Poor in 2006...one of the highlights of the Commission’s work was the issue of rule of law and good governance,” he detailed.

“After three years of intensive research and consultations, we proposed strategies for creating inclusive development initiatives that would empower those living in poverty through increased protections and rights,” he said.

“In our final 2008 Report entitled Making the Law Work for everyone, we argued that as many as 4 billion people worldwide are robbed of the chance to better their lives and climb out of poverty, because they are excluded from the rule of law,” the former president concluded.

SOURCE: GUARDIAN ON SUNDAY