Chairman Senate Committee on Environment and Ecology, Senator Bukola Saraki, yesterday berated oil companies operating in the country for hiding under weak laws to dodge compensation arising from oil spillages.
The former Governor of Kwara State, who spoke at an interactive session with stakeholders, Non-Governmental Organisations (NGOs) and environmental activists in Abuja lamented that 50 per cent of oil spills results from corrosion of oil infrastructure.
He said this was against the claim by oil companies that 70 per cent of oil spills are caused by sabotage.
Mr Saraki added that the purpose of the meeting was meant to get the input of the stakeholders to the National Oil Spill Detection and Response Agency (NOSDRA) Act 2006 amendment Bill 2012 which has scaled second reading before its final passage into law by the Senate.
He said: “The attitude of the average spiller to compensation is that of unwanted irritation because the extant framework for compensation for oil spillage under the Oil Pipelines Act is weak, ambiguous and ineffectual.
“Responsible parties for oil spills have continued to hide under this ambiguity to escape liability.
“Instead of receiving adequate compensation, in most cases (if the people even get what is derogatorily termed palliative), they would rather give a few monies to angry youths, settle loud chiefs and pay no attention to the very weak and voiceless in these communities; whose farms and livelihood receive the heaviest hit by the spill.”
Category: Business
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Spills: ‘Oil firms evade compensation’
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‘Ringfencing ‘ll hit large offices market’
Government plans to force banks to ringfence their retail businesses from riskier investment banking units might prove “a drag” on the London office market, according to the chief executive of property company Hammerson.
David Atkins according to The Telegraph said the move would potentially limit the market for large headquarter prelets to the banking sector if operations were split.
Under Mr Atkins’s leadership, Hammerson has sold off its London office portfolio to focus on prime shopping centres, retail parks and upmarket designer outlets. “It wasn’t really a call on London offices, although I think there is more of a risk there than many commentators think,” he said.
Although the banking reforms might create demand for smaller lettings, he said many developments are reliant on a large prelet to kickstart a scheme. “It could be a drag on the City in the years to come,” he added.
Hammerson pressed ahead with its focus on retail last week after it bought The Junction Unit Trust portfolio of four retail parks for £254.5million, including the Thurrock Shopping Park at Lakeside.
The FTSE company is also locked in a battle with Westfield for dominance of a retail scheme in south London. Both companies are hoping to secure the right to develop the Whitgift shopping centre in Croydon, an area considered ideal for the UK’s next super-mall because of its transport links and proximity to central London.
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NAICOM to check false declaration of accounts
The National Insurance Commission (NAICOM) is to start the validation of debts often believed to be overstated in the accounts of insurance firms to ascertain their authenticity, a source has said.
NAICOM’s Deputy Commissioner Finance and Administration George Onekhena, who confirmed this, said the commission was poised to remove fictitious items from insurers’ books.
He noted that the commission has received reports from the Nigerian Council of Registered Insurance Brokers (NCRIB) indicating that some debts in the books of underwriters are cooked.
On steps to be taken by NAICOM, Onekhena said the commission has come up with some strategies one of which is the “No Premium No Cover” policy. This, he said, will stem the claims of withholding or unpaid premium often reported by underwriters.
He said: “NAICOM would soon commence the validation of debts in the books of companies to ascertain the true position of the debts. “2012 is a year of reality; we are going to remove everything that is fictitious in companies’ books,” he said.
Though some people believe that the “No premium No Cover policy” would not work, he said the commission would work and that they were going to adhere to the policy to wipe debts off the books of underwriters.
He noted that the commission would continue to engage underwriters to ensure that they nip in the bud the challenges that they are having on the cleaning of their books for effective transition to International Financial Reporting Standard.
He said many firms have been sanctioned for infraction, adding that while the commission disciplines firms, it would also ensure that the industry is protected.
Meanwhile, as part of measures aimed at sanitising the accounting systems of insurance firms, the National Insurance Commission (NAICOM) has warned auditors of underwriting and broking firms, that henceforth they would be liable for approving falsified financial accounts.
Onekhena, who disclosed this during a seminar organised by the Commission for external auditors to insurance and broking firms in Lagos, said auditors would be held liable for their opinion in the financial books of insurance operators in this International Financial Reporting Standard (IFRS) dispensation, adding that any auditor that approved a falsified account would be reported to the Financial Reporting Council (FRC).
He urged auditors to clear grey areas with their clients before approving their accounts. He told the auditors to esteem integrity, noting that it is better not to have a job, than having one that would tarnish their image.
He urged the auditors to report to NAICOM any challenge they observed in executing their responsibility.
He said: “We are going to hold auditors responsible for their opinion in the financial accounts of companies. We would profile auditors with issues on their practice and report them to the Financial Reporting Council (FRC). Auditors should note that their responsibilities have increased in the current dispensation.
“We do not want to make a mess of the International Financial Reporting Standard (IFRS) by next year; that is why we are investing in training and capacity building of operators and auditors.”
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Why retirees fail to get benefits early
A fund manager, Mishahu Yola, has given reasons some retirees fail to get their benefits after putting in the required number of years in public service or private sector.
Yola, who is the Managing Director/Chief Executive Officer of Legacy Pension Managers Limited, spoke at a workshop organised by National Pension Commission (PenCom) on “The role of pension operators in the provision of efficient customer service delivery,” in Abuja.
He said the previous scheme, which was operated on ‘pay as you go basis,’ “was not fully funded. The old retirement scheme, because of how it was run, created huge deficits totalling over N2 trillion or 25 per cent of the GDP.”
He added that as a result, “retired workers were not paid as and when due.
“Different regulators managed different schemes, complicating the entire process with many offices supervising retirement benefits of different organisations in the public service, creating confusion in the system,” Yola said.
To arrest the trend, he said the government brought the Pension Reform Act, 2004 into force.
Comparing the Act to the discarded NSITF scheme, Yola said while the discarded scheme was not fully funded, the new scheme is, as fund is set aside to meet future retirement benefits from the outset.
Hesaid while the former scheme was on a ‘pay as you go basis, the current scheme is contributory as both the employer and employees contribute 7.5 per cent each to the retirement scheme.
He said: “But even with the fact that the current scheme is fully funded, some retirees still do not access their retirement benefits on time,” stating that the factors vary from the individual, the Pension Fund Administrators and the employers.
For the individuals, he said, the challenges range from providing invalid contact address after retirement, late verification/enrolment with PenCom by Federal Government employees, providing conflicting documentation at PenCom verification/enrolment exercise, such as retiree’s name with PFA being different from the name on the nominal payroll of the Ministry, Department and Agency (MDA).
Others include date of birth being at variance with retirement age, date of first appointment at variance with length of service, lack of or delay in submission of complete documentation and delay in payment of outstanding remittances of employees by employers.
He listed other challenges to include, lack of reconciliation between the retiree and the Retirement Saving Administrators (RSA), adding that excesses or shortfalls must be ascertained before commencement of administration.
Other causes as enumerated by the guest lecturer include: delay by the employer in providing the confirmation of the status of past service benefits (private sector/ self funded institutions); withholding the issuance of retirement letter by employer, lack of agreement between retiree and PFA on amount of lump sum and programmed withdrawal, as well as untimely submission of Letter of Administration in cases of death benefit and conflicting next of kins in cases of death benefit.
To remedy the situation and avoid delays in the payment of benefits, Yola said: “Valid contact details, closer coordination and cooperation between employers and employees to facilitate timely remittance of accrued benefits by private employers are needed.”
He also stated that remittance of retirement bonds/accrued rights before due date of retirement by employers must be done, saying this will ensure that payment of monthly pension would commence immediately after the first month of retirement.
He also said PFAs must maintain cordial working relationship with concerned Human Resource and pension desk officers of employers to garner information as it concerns retirees and deceased employees.
PFAs should employ effective resources in educating retirees and serving employees on the processes and procedures for processing benefits.
PFAs should institute internal processes and mechanism to improve and enhance speedy payment of benefits, he stated.
He called for early release of accrued benefits and contributions by government and private organisations and urged retirees, deceased beneficiaries and PFAs to ensure that accurate and proper documents are presented for processing of benefits for payment.
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Operators consider financial accountability support
A partnership between the International Federation of Accountants (IFA) and the Chartered Institute of Public Finance and Accountancy (CIPFA) is in the offing to assist private and public sector operators achieve highest level of accountability.
Through this, operators would be taken through the rudiments of financial accountability on international best practices to foster growth.
The Executive Director, Finance and Resources, CIPFA, Mike Suarez, who spoke at the 42nd Annual Conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja, said the development would help private and public sector operators to improve financial accountability and corporate governance practices.
Suarez, in his paper entitled: Financial reporting and value creation in the public sector: Issues, challenges and prospects, said an international good governance framework would evolve through the partnership.
He said the framework would help in guiding and addressing issues relating to financial reporting, malpractices and corporate governance in Nigeria among other countries on its watchlists.
He said the framework would be dominated by issues such as strong commitment to integrity and ethical values; openness and stakeholders engagement; defining outcomes in terms of sustainable economic, social and environmental benefits.
He listed others to include determining and delivering output and transfers to optimise the achievement of intended incomes; and developing the capacity of the organisation and the capability of its leadership and the individuals within it.
Others are managing performance and risks through robust control and strong public financial management; and implementing good practices in transparency and reporting to deliver affective accountability.
He said governments, international organisations and financial operators need to come together to address weaknesses inherent in financial reporting and corporate governance practices, adding that the organisation has earlier partnered with ICAN on the issue.
Also, a Director, Lagos Business School (LBS), Prof Pat Utomi, urged the private an public sector to play crucial roles in the area of nation building. He said transparency, accountability and service delivery are required to achieve the goals of nation building.
He said operators must adhere to the best practices of corporate governance to achieve success for themselves and the economy in particular. He added that there a lot of intermediation in the banking industry, and that entrepreneurs depend on the sector to record growth.
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‘Board review’ll check executive recklessness’
Review of banks’ board of directors’role will help check executive recklessness and bring lasting stability to the banking sector, the Central Bank of Nigeria (CBN) has said.
CBN Director, Banking Supervision, Agnes Martins, disclosed this at a meeting for banks’directors in Lagos.
She said the role of the board of directors has come under increased scrutiny in the aftermath of the global market crisis and that lax board governance was a major corporate governance issue that fuelled the crisis.
According to her, stakeholders are demanding reforms that would enable directors to discharge their responsibilities more effectively while being held accountable for their actions and for inactions.
She explained that the role of bank’s boards is increasingly subject to public scrutiny, adding that the pressures on and responsibilities of bank directors have also increased.
She said boards are expected to ensure compliance with complex and stringent reporting and regulatory requirements, safeguard their bank’s businesses against excessive risk and hold managers to performance targets to satisfy the demands of the market for improved returns.
“The responsibility for the way in which a bank’s business is conducted lies with its board of directors. The board sets the strategic direction, appoints management, establishes operational policies and most importantly, takes responsibility for the soundness and profitability of the bank. It is answerable to depositors and shareholders for the lawful, informed, efficient and competent administration of the institution,” she said.
According to her, while the board usually delegates the daily running of the institution to management, it retains the responsibility for the consequences of unsound and imprudent policies and practices concerning lending, investing, protection against fraud, among other things.
However, she explained that the board is not in a position to guarantee a bank’s success, but must oversee the institution to ensure that it operates in a safe and sound manner and complies with applicable laws and regulations.
“The board must establish an appropriate corporate culture and set the “tone at the top”, hire and retain competent management, stay informed about the institution’s operating environment, and ensure that a suitable risk management system that is commensurate with its size and complexity of operation is in place. It also must oversee the bank’s business performance,” she said.
Martins reiterated the need for the board and senior management to establish culture by upholding corporate integrity and enforcing zero tolerance for compromised ethics. She said directors should understand that their actions and those of management reflect their attitudes about commitment to integrity, honesty, and ethical conduct.
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Parents urged on benefits of life insurance
Studies have shown that many parents do not have adequate life insurance coverage, a reality that has drawn the attention of World Financial Group.
While it might seem reasonable to assume that becoming a parent would be enough to trigger a person’s interest in life insurance, a recent MetLife study found that this is not always the case.
The study found that most individuals consider life insurance when they get married, but do not reconsider it, or purchase it in greater amounts when they become parents.
As a result, many parents either do not have life insurance, or they have it in inadequate amounts. This study was analysed in a recent U.S. News and World Report story. The story has won the attention of World Financial Group.
World Financial Group is a company that provides a variety of financial services to individuals and businesses across the United States and Canada.
These services include retirement planning and small business advisory services, but also life insurance. WFG is passionate about life insurance, and maintains that every family should at least give it its due consideration.
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NEXIM mulls ECOWAS shipping to boost trade
The Nigerian Export and Import Bank (NEXIM) is facilitating the establishment of a regional shipping line that will boost trade flows within the Economic Community of West African States (ECOWAS) sub-region, its Managing Director, Robert Ungwaga Orya, has said.
He said this at the investiture and induction of the Chartered Institute of Bankers of Nigeria (CIBN), while fielding questions from reporters. He said there are huge potential in the sub-region that needed to be harnessed. He regretted that West Africa has the highest transport and logistics cost.
NEXIM Bank with the mandate of diversifying the external sector of the economy away from the mono-product of oil, has taken several steps as an export credit agency to deepen trade.
According to Orya, who was presented with Honorary Fellowship of the Chartered Institute of Bankers of Nigeria (CIBN), one of such steps is the discovery that trade in the West African sub-region was not growing.
He identified the movement of goods within the ECOWAS sub- region as part of the challenge, due to lack of efficient sea going vessels. He said Nigerians are not actively participating in the maritime business. According to him, until this is reversed, foreigners will continue to exploit Nigerians.
“Our exporters will not be able to enhance the volume of non-oil trade flows. So, what NEXIM has done is to find a way of facilitating the setting up of a regional maritime shipping line to be run by the private sector, because it is the private sector that is actually trading,” Orya stated.
According to him, “If you have to move goods from Lagos to Tema port in Ghana by truck, with all the multiple check points, all the harassments from security agencies, lack of road infrastructure, it will take you like six days. But if you want to move you goods from Lagos to the same Tema port in Ghana, it will take you like 60 days. This is because they will first take our goods to Europe and then do transshipment.”
He regretted that under that scenario, if a N500 million loan, for instance, is given to a producer who produces 20 containers, before getting products to final consumers, all realisable profits would have been eaten up. The tonnages of goods in the past decades have moved from 4.7 to 13.2 million tones, but nothing has been done to improve the road infrastructure.
“We believe that for us to have a safe and sound banking environment we need to have professionalism and the CIBN are doing quite a lot in this direction. They are ensuring that members of the institute apply ethics and professionalism in running the banks. He said the recognition by CBN was a great exposure.
“It is an exciting moment for me and I want to say that it will spur me to build capacity of the younger bankers. I think we need to leave a legacy. It will spur me to do more in capacity building to ensure that professionals who will take after us are well equipped,” he stated.
Though the CIBN has come up with an Act, the NEXIM boss wants the institute to step up enforcement of the Act. However, he believes the enforcement of the Act requires collective effort. The success of NEXIM in the past few years has been meteoric. NEXIM, under the leadership of Orya, has seen a rapid and sustained transformation that has changed the fortunes of the bank since 2009.
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Surge in MfBs fraudulent e-mails, says CBN
•Customers get N4.3b refund
FRAUDULENT e-mails in the microfinance bank sector have been on the increase, the Central Bank of Nigeria (CBN) has said.
The apex bank said the sector recorded and processed 10,845 e-mails on various financial crimes.
The crimes, which include cheques knitting, forging of banks’rubber stamps, letter headed papers, and signatures of the managing directors of the over 700 microfinance banks were committed in the past few years.
Other Financial Supervisory Institutions Department, CBN Examiner, Mr David Adelana, disclosed this during a conference organised by the National Association of Microfinance Banks (Southwest Zone) in Lagos.
He said the crimes were mainly advanced fee fraud.
He delivered a paper entitled: Frauds and forgeries in microfinance banks: causes, detection and control.
Adelana said the number of fraudulent cases reported against the banks fell by 3,433 from 5,960 in 2010 to 2,527 in 2011. He said the number of complacent cases recorded and treated was 1,526 in 2010 as against 1,800 in 2011.
He said the refund to customers was N4.3billion in 2011, as against N2.2billion in 2011, adding that the apex bank has put in place institutional frameworks to check sharp practices in the industry.
He divided the perpetrators of the criminal activities into three groups, namely internal, external and mixed. He said the internal group relates to the financial crimes committed by the staff of the banks, while the external group has to do with non-staff of the banks, while the mixed group includes the staff and non-staff of the banks.
According to him, CBN has organised capacity building programmes for the management of the banks to prevent undue exposure to risks. He said the banks have been directed to provide measures that would prevent poor management of funds and further check unwholesome practices.
He said: “We have said it times without number that banks must tightening control on dormant accounts. Dormant accounts should be transferred to the table of the managing directors of the banks, and not information and technology (IT) among other ordinary members of staff to prevent manipulation. To ensure firm control of dormant accounts, the managing directors and the IT section should be allowed to have access to dormant accounts in the banks.”
On cheques knitting, Adelaja said its becoming harder for fraudsters to succeed because the system of transactions has improved considerably.
“Cheques knitting cannot fly again because the system has gone 3+3 and 3+2 transactions. Based on this, it would become difficult to manipulate the transaction process and made away with the bank’s money,” he added.
Also, the Chairman, National Association of Microfinance Banks (NAMBs), Mr Olufemi Babajide, said the association was aware of sharp practices people were committing in the name of the banks. He said cases abound where people forged the signatures of the managing directors, the logos, letter-headed papers among other documents of the banks to get visas.
“On the issue of people approaching embassies with forged documents of the banks to get visas or conduct any other transactions, we made our positions known on it. What we agreed is that the statements that are being taken to the embassies must bear the original signatures of the managing directors of the banks. The names of the MDs must be handwritten. We have advised the embassies, among other agencies to confirm the identity of any statement brought to them in the name of MFBs,“ he said.
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IMF warns African oil producers to avoid ‘white elephants’
The International Monetary Fund has urged African oil and gas producing nations to direct their revenue in infrastructure and education rather than on “white elephants”.
According to Reuters reports, exploration in east and southern Africa has been high in recent months as a result of big oil and gas discoveries in Tanzania, Mozambique, Kenya and other regional countries.
Antoinette Sayeh, the IMF’s director for Africa, said yesterday the oil and gas sector does not create as many jobs as other sectors of the economy, but if the revenues were directed to education and transport links they would help create jobs.
Sayeh said nations could set up sovereign wealth funds to invest for future generations and to provide cash, which could be used to help their economies navigate times of volatility in the global economy.
“It is not enough just to maximise your revenues and then to spend them on white elephants, you have to really be using them wisely and leaving some of the wealth for future generations as well,” she said. Sayeh said the IMF is advising Mozambique, Tanzania and Niger to help them boost revenues from oil and gas exports.
The Washington-based agency projected in its Regional Economic Outlook launched in Japan earlier this month that Sub-Saharan Africa will grow by 5.25 per cent this year and next, driven by robust domestic demand, investments and newly-found natural resources.
Despite this forecast, there are concerns that although some of the world’s fastest growing economies are African, the rapid growth rates have failed the inclusion test due to lack of jobs especially among young people.
The IMF has predicted inflation in the region would fall to 8 percent at the end of this year from 10 percent in the same time last year, before falling further to seven per cent in 2013.