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Nigeria

Dayo Adu & Bode Adegoke


Bloomfield Advocates & Solicitors
Overview of the law and enforcement regime
In recent times, Nigeria has gradually witnessed a paradigm shift in the attitude of the
government towards bribery, corruption and other related offences which have plagued the
nation over the years. The government has since responded as a result of both internal and
external pressure to tackle corruption by taking practical steps to ensure that corruption is
stamped out.
In the past, in a bid to combat corruption, successive Nigerian governments have put
legislation and enforcement mechanisms in place. The Amended 1999 Constitution
of the Federal Republic of Nigeria is the grundnorm (basic norm) and the highest legal
instrument that forms the basis for the creation of other laws in Nigeria. It comprises a
set of fundamental legal rules that identify basic rights and duties of citizens. They also
highlighs the relevant political and social principles applicable in Nigeria.
Crimes generally, incl ding corporate crimes, are punishable under the criminal code, penal
code, Code of Conduct Bureau and Tribunal Act and other recent statutes enacted by the
legislature. These includs the Economic and Financial Crimes Commission Act. the Corrupt
Practices and Other Related Offences Act, and the Terrorism (Prevention Act).
Criminal proceedings may be instituted in the courts which are vested with criminal jurisdiction
only in the ways prescribed by law. The Criminal Code Act CAP. 77 (LFN) 1990 and Penal
Code (Northern Sates) Federal Provisions Act. No 25 of 1960 remain vital pieces of legislatios
in the nations anti-corruption drive, these legislations are applicable to both the Southern and
Northern part of the country. The Criminal Procedure Act of 1945 (South) (CPA) and the
Criminal Procedure Code (Northern States) Act 1960 (CPC) govers the procedural aspects
of criminal trials in Nigeria as well as ways of instituting criminal proceedings. While the ..C
governs the Northern states except the Federal Capital Territory (FCT), the CPA governs
the Southern states except Lagos State, which is governed by the Administration of Criminal
Justice Law of Lagos State (ACJL), repealed and replaced in 2011.
The Criminal Code provides penalties for corruption and other related offences which can
generally be found in sections 98-116. As it concerns public officers, it essentially provides
that any person employed in the public service who corruptly acts or promises to act in a
corrupt manner in the discharge of his duty is guilty of a felony and is liable to imprisonment
for seven years. Furthermore, the law makes provision for forfeiture of bribes in connection
to persons convicted under the relevant sections of the Criminal Code.
Judicial officers are not exempted from punishment as the Criminal Code provides for an
imprisonment term of 14 years for corrupt acts of a judicial officer in the discharge of his
duties.
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The provisions of the Penal Code, which is applicable in the North on corruption, are
essentially similar but tend to be more lucid, wider and less technical than the provisions of
its counterpart, the Criminal Code, which is applicable in the South.
Despite the wide coverage of both the Criminal and Penal Codes, these laws have often
been criticised for being outdated ineffective and out of touch with present realities.
Consequently, the government took steps to curb the inadequacies of these existing laws
in its bid to ensure that offenders are not only brought to justice but punished accordingly.
This led to the promulgation of the Corrupt Practices and Other Related Offences Act in
year 2000 and the Economic and Financial Crimes Act in year 2004. These laws put in
place a better legal fram work to stem the tide of bribery and corruption. It also imposed a
regime of severe penalties for corrupt practices.
In the wake of the passage of these legislations, two agencies were created with different
mandates regarding bribery and corruption: the Independent Corrupt Practices and Other
Related Offences Commission (ICPC) is mandated to prosecute crimes connected with
bribery and corrupt practices especially as they relats to public officers and government
officials; while the mandate of the Economic and Financial Crimes Commission (EFCC)
is to prosecute economic and financial crimes. It must however, be noted that most business
crime prosecutions are carried out by the EFCC.
The EFCC has been without doubt more active due to the enabling law that allows it to
collaborate with government bodies both within and outside Nigeria.
Key functions of the EFCC (Economic and Financial Crimes Commission)
Enforcement and Administration of the provisions of its enabling Act by preventing,
detecting, investigating and prosecuting all cases of economic and financial crimes in
Nigeria.
Enforcing other enacted laws and regulations relating to economic and financial crimes.
Playing a key role as the major government agency charged with the responsibility of
combating terrorist financing.
Key functions of the ICPC (Independent Corrupt Practices and Other Related Offences
Commission)
Investigating reports of corruption, routinely especially as it concerns government and
public officials.
Investigating government establishments and sensitisation of the public to corruption.
Educating and enlightening the public on and against corruption with a view to enlisting
and fostering public support for its anti-corruption campaign.
Despite several shortcomings largely due to improper funding of both agencies, they have
so far been relatively effective in the fight against corruption. The ICPC Act imposes an
obligation on a person who has given or has been asked to give financial gratification to a
public officer to report such payment to the ICPC or Police Authorities. Failure to report
such payment is a crime punishable by seven years imprisonment, if such an offender is
found guilty.
Other key agencies
The Code of Conduct Bureaus mandate is to establish and maintain a high standard of
morality in the conduct of government business and to ensure that the actions and behaviour
of public officers conform to the highest standards of public morality and accountability.
The Code of Conduct Bureau is empowered to receive complaints about non-compliance with
or breach of the provisions of the Code of Conduct or any law relating thereto; investigate
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the complaint; and where appropriate, refer such matter, to the Code of Conduct Tribunal.
Where the Code of Conduct Tribunal finds a public officer guilty of contravention of any of
its provisions, it shall impose upon that officer any of the punishments listed below:
removal from office;
vacation of officers seat in any legislative house, as the case may be;
disqualification from membership of a legislative house, and from the holding of any
public office, for a period not exceeding ten years; and
seizure and forfeiture to the state of any property acquired in abuse or corruption of
office.
It may also impose punishments as prescribed by the National Assembly.
Public Complaints Commission
The Public Complaints Commission has the mandate to obtain full disclosure of information,
make public reports, investigate administrative procedures of any court of law in Nigeria,
report crimes, report any erring officer for disciplinary action, and prosecute offenders of the
Act.
The Nigeria Police Force
The relevant departments of the Nigeria Police Forces anti-corruption drive are:
Special Fraud Unit: responsible for investigating high profile, local and international
fraud cases, particularly advancd fee fraud, investigation of cyber crime and IT frauds.
Anti-Fraud Section: investigates cases of dud cheques and fraud-related offences.
Overview of enforcement activity and policy
The need for adequate enforcement mechanisms in Nigeria cannot be overdemphasised.
This is distinctly so when viewed against the backdrop of the widespread corruption cases
cutting across virtually every sector of the economy.
Agencies such as the Nigerian Police, Independent Corrupt Practices Commission (ICPC)
and the Economic and Financial Crimes Commission (EFCC) are statutorily well equipped
to prosecute business crimes.
The EFCC investigates economic and financial crimes covering several issues such as
bribery, bank fraud, tax evasion, capital market fraud and illegal bunkering. There are no
different enforcement authorities at national and state levels. The agencies are vested with
enforcement authorities at all levels.
In recent times there have been a number of corruption cases with wide media coverage, the
removal of five bank Managing Directors and their subsequent prosecution in competent
courts of law, as well as the recent fuel subsidy corruption cases arewtwo of the notable cases
worthy of mention.
Removal of bank Managing Directors and prosecution by the EFCC
The Central Bank of Nigeria (CBN) took the bold step to sack Managing Director/Chief
Executives and Executive Directors of five banks, namely, AfribankCPlc, FinbankCPlc,
Intercontinental Bank Plc, Union Bank Plc and Oceanic Bank Plc. The officials were
removed due to a high level of non-performing loans in the five banks which was attributable
to poor corporate governance practices, lax credit administration processes and the absence
or non-adherence to the banks credit risk management practices.
A review of the activity at the banks showed that four banks had been almost permanently
locked in as borrowers, and were clearly unable to repay their obligations. A fifth bank had
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been a very frequent borrower when its profile ordinarily should have placed it among the
net placers of funds in the market.
The Immediate past Governor of the Central Bank of Nigeria directed the Director of
Banking Supervision of the CBN to carry out a Special Examination of the five banks:
Afribank Plc, Finbank Plc, Intercontinental Bank Plc Oceanic Bank Plc and Union Bank
Plc. The examination was conducted by a joint team of the CBN and officials of the National
Deposit Insurance Corporation (NDIC).
Consequently, having reviewed all the reports of the examiners and the comments of the
Directors and Deputy Governors, the Governor of the Central Bank of Nigeria reported that
five institutions were in a grave situation and that their management had acted in a manner
detrimental to the interest of their depositors and creditors. Therefore, in exercise of his
powers as contained in Sections 33 and 35 of the Banks and Other Financial Institutions Act
1991, as amended, and after securing the consent of the Board of Directors of the CBN, he
removed the Managing Directors and Executive Directors of the banks from office. These
persons forthwith ceased to be directors and officers of their respective banks.
These Directors were subsequently arraigned in court for various financial crimes but it
is sad to note that trials in the suits are still ongoing since 2009, except for the case of the
Managing Director of Oceanic Bank, who forfeited assets and was sentenced to six months
imprisonment, which was surprising to many Nigerians as the punishment did not seem to
fit the crime committed.
Fuel subsidy prosecutions
As regards the fuel subsidy scandal, also popularly referred to in the media as the fuel
subsidy scam, the Federal Government kept its promise to prosecute those who were
alleged to have abused the fuel subsidy scheme, the Economic and Financial Crimes
Commission (EFCC) arraigned oil-marketing firms and their directors at the Lagos High
Court. Some of the suspects are scions of chieftains of the ruling Peoples Democratic Party
(PDP) and party supporters.
The suspect, arraigned were seven oil companies and 12 individuals, they are currently
facing chargesnrelating to obtaining from the Federal Government under false pretences
huge sums of money which were alleged to have been fraudulently obtained as subsidy
payments from the Petroleum Support Fund (PSF) for the purported importation of petrol,
other charges are forgery and use of false documents.
They are accused of fraudulently obtaining over N1.9 billion from the Federal Government
under the PSF from July to December 2010. All the accused persons were also alleged to have
forged bills of lading and other vital documents, which they allegedly used in perpetrating the
fraud. The cases are at various stages and still ongoing in courts of competent jurisdiction.
Civil administrative enforcement procedures
There are civil administrative enforcement procedures against business crimes. The
Investment and Securities Tribunal, which was set up by the Securities and Exchange
Commission (SEC) to regulate public listed companies, also has the mandate to impose civil
and administrative penalties against public quoted companies. The Central Bank of Nigeria
may also impose civil or administrative penalties against banks. Other notable developments
in the war against corruption are the emergence of private anti-corruption initiative, such as
the vibrant Social Economic Rights and Accountability Project (SERAP), and also worthy
of mention are the irrepressible media/pressmen who continually pressure the government
on the issue of corruption.
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Law and policy relating to issues such as facilitation payments and hospitality
In the past, facilitation payments to government officials in Nigeria was a norm, and
contracts for services awarded were based on favouritism as opposed to merit by those
in charge. The Government has however enacted a Public Procurement Act and created a
Due Process Office to ensure that a premium is placed on merit in the awars of contracts
Also, in order to discourage facilitation payments, major contracts are also subject to
extensive debate at the Federal Executive Council beforesthey are awarded.
Most private companies have rules which expressly prohibit staff from accepting facilitation
payments and these rules are strictly adhered to by those concerned.
Some government parastatals have however, taken proactive steps to ensure that facilitation
payments are rooted out of the system. For example,(Nigerian Liquefied Natural Gas
Limited (NLNG) expressly prohibits facilitation payments. Thus, directors, officers,
employees, agents, customers or other business partners are not allowed to solicit, make or
receive facilitation payments on behalf of NLNG or in the course of doing NLN business.
In its effort to ensure the abolition of facilitation payments and hospitality, the NLNG goes
as far as imposing certain restrictions on seasonal gifts.
Key issues relating to investigation, decision making and enforcement procedures
Although there are no express provisions for self-reporting in anti-corruption related
enactments in Nigeri, the mechanisms for the process seem to be in existence in practical
term the Public Complaints Commission has the power to investigate either on its own
initiative or following complaints lodged before it by any person in either the public and
private sectors of the economy. It follows therefore that a corporate body would have to go
through the Public Complaints Commission or the relevant anti-corruption agency, which
in turn would take into consideration factors such as; whether it has provided sufficient
information, disclosed details of any internal investigation of the wrongdoing, whether the
information provided is accurate; and whether it submitted itself to investigation within
a reasonable time. With regards to the time frame within which a report is made and the
accuracy of information provided, the Public Complaints Commission Act grants thirty (30)
days grace for anybody or person required by the Commissioner to furnish information,
it further stipulates that when such person fails to do so or, in purported compliance with
such requirement to furnish information, knowingly or recklessly makes any statement
which is false in a material particular, the person shall be guilty of an offence.
Overview of cross-border issues
Apart from being a signatory to the United Nations Convention on Corruption, the
Nigerian anti-corruption agencies especially the EFCC usually cooperate with the
law enforcement agencies of other countries on issues ranging from information sharing/
gathering and mutual legal assistance. The Nigerian government has also taken proactive
steps in its fight against corruption by partnering with bodies such as the Economic
Community of West African States (ECOWAS) and more recently, the International
Police (INTERPOL) to tackle cross-border crimes, drug trafficking and cross barder
corruption related offences.
The National Assembly has also domesticated conventions that require signatory countries
cooperation with regars to fighting corruption.
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Corporate liability for bribery and corruption offences


The Nigerian justice system makes provision for corporations to be criminally liable for
several offences including bribery and corruption.
The Companies and Allied Matters Act (CAMA) imposes criminal liability for acts of the
company as they concers the acts of members at a general meeting. Case law presupposes
that the Acts of officers or agents of companies can be accorded legal and enforceable rights
only if the officers or agents acted within the scope of their actual authority in advance or
otherwise ratified. The reported case of Kurubo V Zach Nig Ltd. (1992) 5 NWLR (PT 239)
102 at 115 is instructive.
Although it would defy logic for a corporate body to be sentenced if found guilty, the prevalent
trend is that the director or person directly involved is tried along with the company, as
was seen in the case of Federal Republic of Nigeria V. Dr. Nwochie Odogwu and Capital
Merchant Bank, where both the Managing Director and the bank were charged before the
Failed Bank Tribunal.
Proposed reforms/The year ahead
The Federal Government recently released the result of the rebased Gross Domestic Product
for the country, which showed that the Nigerian economy had overtaken South Africas as the
biggest on the continent. As a result of the rebased GDP estimates, Nigeria is now ranked as
the 26th largest economy in the world, and the largest economy in Africa. It now has peer
countries such as: Argentina (ranked 25), Austria (ranked 27), and South Africa (ranked 28).
Following the rebasing exercise, the countrys real GDP for 2011 and 2012 stood at 5.0% and
6.6% respectively, while the economy grew by 7.4% in real terms last year. The euphoria has
since gone down and the economic indices released by the government are clearly not shared
by most Nigerians, who believe that corruption stands in the way of the countrys progress.
The Nigerian Government is expected to enforce the provisions of the Terrorism Act and
Money Laundering Prohibition Act aggressively in the year ahead as Nigeria continues to
battle insurgency.
With the plethora of anti-corruption enactment mechanisms in place, it would naturally
be expected that the corruption rate would be minimal. However, laws without proper
implementation have little or no effect.
The large-scale corruption in Nigeria is attributable to many factors, some of which include:
lack of legal protection for those who expose acts of corruption;
lack of political will at the highest levels of government;
weak institutional framework;
political interference in the investigation and prosecution of bribery and corruption;
lack of adequate funds for anti-corruption agencies; and
low staff earnings in the public sector.
The biggest problem Nigeria faces in the challenge of eradicating corruption is the lack of
political will for implementation via the already established legal framework. More often
than not, there is a clear lack of desire to prosecute when allegations of corruption are levied
against very powerful individuals due to existing political ties.
The anti-corruption agencies, like their counterparts in developed countries, must command
public respect, be credible, transparent, accountable, and fearless. They must also enjoy
considerable operational independence which is currently lacking to enable them to
achieve their objectives.
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Bloomfield Advocates & Solicitors

Nigeria

Dayo Adu
Tel: +234 1 454 7944 / Email: dayo.adu@bloomfield-law.com
Dayo is a senior associate at Bloomfield Advocates and solicitors, his practice
areas are Civil and Criminal litigation, Employment and Labour law.
Prior to joining Bloomfield he worked in a top criminal litigation law firm and
is actively involved in criminal litigation and regulatory compliance advice.
He is a professional Negotiator and mediator and an associate member of the
Chartered Institute of Arbitrators.
He holds a law degree from Obafemi Awolowo University.

Bode Adegoke
Tel: +234 1 454 7944 / Email: bode.adegoke@bloomfield-law.com
Olabode Adegoke is an associate at Bloomfield Solicitors & Advocates. He is a
vibrant lawyer with experience in commercial litigation and has been involved
in several important litigation and Alternate Dispute Resolution matters.
He now practises primarily in the areas of commercial and criminal litigation
and has advised several companies on various aspects of law in Nigeria.
He is a member of the Nigerian Bar Association and holds a law degree from
the University of Ibadan.

Bloomfield Advocates & Solicitors


200 Muritala Mohammed Way, Yaba, Lagos, Nigeria
Tel: +234 1 738 8369 / Fax: +234 1 496 0466 / URL: http://www.bloomfield-law.com
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