SIX months after receiving a petition over a controversial contract that involves a $2,000 resident permit issued to expatriates visiting Nigeria for work-related activities, the office of the Attorney General of the Federation (AGF) is yet to act.
The AGF’s feet dragging over the ill-considered agreement the federal government had signed with the Continental Transfer Technique Limited (CONTEC) has led to loss of revenue to Nigeria.
In August last year, Muhammed Babandede, the immediate past NIS Comptroller-General petitioned the AGF and Ministry of Justice, requesting the office of the chief legal officer to wade into the alleged fraudulent agreement the Federal Ministry of Interior signed with CONTECC on a strategic partnership where the private company was to function as a technical partner for the production of the Combined Expatriate Residence Permit and Alien Card (CERPAC).
CONTEC is owned by Irish-Indian businessman, Benoy Berry, an ally of the former president, Olusegun Obasanjo. The firm was registered in Nigeria on July 26, 1984, as a warehouse of data of foreigners living in Nigeria. Its mandate was “to provide new and highly secure documents for the identification of foreign residents,” and maintain “the central database of all foreign national movements into and out of the country, flagging undesirable aliens and maintaining security in the country.”
But the officials of the NIS and other security-minded bureaucrats found the agreement injudicious, saying it infringes on the Immigration Act.
The Service has raised concerns over a possible data breach of the foreigners, and expressed frustration over outsourcing the production of resident permits at huge revenue loss to the nation. The former immigration boss insisted that the NIS has capacity to solely produce CERPAC.
For that reason, it submitted a petition to the office of the attorney general for the review of the contract, but nothing appeared to have been done.
On February 18, The ICIR contacted Umar Gwandu, Special Assistant to the President in the Office of the AGF, seeking an update about NIS’s petition. Gwandu asked this reporter to send him questions. When the questions were sent, he replied with a terse response: ‘received’. And no additional information was given.
On February 24, a reminder was sent to him but he did not reply. On March 1, another reminder was sent for the third time in two months. Then, he said the matter was still under review.
“The action of the attorney-general of the federation and minister of justice, and by extension, the federal government of Nigeria is always guided by holistic appreciation of the law and public interest in analysing the situation at hand. The office of the attorney-general of the federation and minister of justice will consider the essence of time, as per taking decision is concerned,” he said.
Last year, Babandede raised an alarm about how the firm sought to seize the Nigerian National Petroleum Corporation (NNPC) building over the controversial contract. He stressed the need for the government to reconsider its decision.
“We can do without them. This job (issuing resident permit), we can do it. It is not rocket science,” he stressed.
While speaking before the joint committee on finance and national planning, he said: “Nobody should defend CONTEC as a company to do business in Nigeria. This is a company that took us to court, this is a company that wanted to seize our property, including our mission and NNPC building. Two thousand dollars for a resident permit, we can make that resident permit with $500, $1,500 can go to the federal government, we ‘throw away’ the company, and the government will make more money,”
In 2019, the Economic and Financial Crimes Commission (EFCC) probed N72.07 billion realised by the firm over Nigeria’s resident permits issued to foreigners, and accused the company of underpayment of taxes – Withholding Tax, and Value Added Tax (VAT).
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What is CERPAC?
CERPAC is a compulsory document required by foreigners to live and work in Nigeria. Though students and missionaries have been excluded from the levy increase, it is believed that the increase would discourage the influx of expatriates from coming to Nigeria to work.
It is renewable annually, or biennial depending on the validity given period. Stakeholders have decried the fee increase which most people considered as too sudden.
But with the $2, 000 levy, industries which require services of foreign nationals might be forced to consider local experts.
More so, if experts must be engaged by interested firms, it also implies such experts might have a short stay in the country due to the cost, hence, firms are made to do technological transfer to the locals.
Indirectly, the process would boost local capacity and knowledge base while over-reliance on expatriates would reduce.
Background on CONTEC
According to a legal document submitted to England and Wales High Court (Commercial Court) in November 2009, the agreement between CONTEC and the Federal Ministry of Internal Affairs was signed on May 25, 1999.
It was renewed under the leadership of Abdurahman Dambazau, a former minister in charge of the internal affairs ministry, now known as interior ministry.
Based on the pact, CONTEC is to produce and supply electronic residence cards for the ministry. And this card is to be used by the NIS. As such, NIS is the implementing partner for the project.
In December 2018, the residence permit fee was increased by 100 per cent after CONTEC wrote to the interior ministry, asking for an upward review of the fee from $1,000 to $2,000. The firm argued it was expanding its offices across the country to facilitate easy registration for the permit.
But in its reply, in a letter dated December 13, 2018, with a reference number FMI/PSO/012/1/15, the ministry approved the request.
The $2,000 levy is to remain till 2021, while the NIS would continue to be the implementing partner.
“I am directed to acknowledge the receipt of your letter of 11th December 2018 on the above subject and inform you that the Honourable Minister has approved the review of CERPAC fees from $1000 to $2000 with immediate effect. This review does not, however, affect missionaries/students CERPAC fees,” the letter read in part.
“With this approval, there will be no further review of CERPAC fees until after three years from the period the implementation of the new CERPAC fee comes into effect.”
The letter addressed to the firm’s Chairman, was reportedly signed by Dr. M.B Umar, a former Permanent Secretary of the interior ministry on behalf of Dambazzau.
Since the upward review of the fee, the NIS, lawmakers and Nigerians have kicked against the contract.
“Some companies bring in labourers in their hundreds and register them as experts/professionals but pay them as labourers while they remit most of the money to their countries,” the former minister asserted while justifying the increase. “Many of them do not employ Nigerians to mix so that our people take up management positions after some time.”
Babandede though supported the increased levy, queried the rationality of the agreement, insisting that the Immigration Service has the capacity to produce the permit at a lower cost.
Falana files lawsuit, says contract contravenes Immigration Act, Order 5
In March 2019 Femi Falana, Human Rights Lawyer took the Interior ministry and CONTEC to court, describing the agreement as illegal and fraudulent.
Besides, Falana questioned the constitutionality of the CERPAC contract and the sudden increase of resident permit fee from $1,000 to $2,000. He argued it is the statutory responsibility of NIS to determine and collect CERPAC fee payable by all expatriates, rather than outsourcing the contract to CONTEC.
He sought a restraining order and court injunction suspending the company from further carrying out the duty but the NIS.
In November 2019, Judge Rilwanu Aikawa, Lagos Division of the Federal High Court nullified the $2,000 upward increase. He also described the contract as unconstitutional.
“While Section 102 of the Immigration Act provides for private sector participation in the development and provision of infrastructure, there is no provision as far as I can discern which allows for the participation of the private sector in the collection of residence permit or visa fees,” Aikawa said in his verdict.
“Any law, a statute or provision thereof that runs riot and violent to the provision of the Constitution or is in conflict with the Constitutional is null and void to the extent of the inconsistency,” Aikawa insisted.
January last year, the federal government approached the appeal court and sought to set aside the judgement secured by Falana. Besides, they argued that Falana was not an expatriate and was not engaged by any expatriate to challenge the resident permit levy.
Ahead of the outcome from the appeal court, the minister of interior and NIS, in a different application sought a stay of execution. Nevertheless, the CONTEC agreement also negates Executive Order 5 which discourages foreigners from executing services that could be provided locally by Nigerians. Executive order five is to promote local contents.