Of all the continents, Africa is said to be the most fascinating and promising; but she also poses the greatest challenges. Africa is the 21st century’s land of opportunities. And, as the missing link in the global economy, Africa now stands at the cornerstone of economic development and opportunity. For newcomers to the scene, Africa is now “in play” and has long generated some of the highest returns on deployed capital. With 20 percent of the world’s total landmass, a population of 900 million (14 percent of the world’s total) and a galaxy of mineral resources, the continent has been appropriately dubbed a “sleeping beauty.”
While the continent is very attractive, it also has been marred by corruption and is associated with numerous U.S. FCPA enforcement actions. The combination of cultural, historical, economic and social factors in sub-Saharan Africa has continued to create a “perfect storm” for FCPA violations. Of the 10 countries considered most corrupt in the world, six are within the SSA, according to Transparency International. Many pending FCPA investigations by U.S. DOJ/SEC reportedly involve SSA.
Corruption has long been a part of the playing field in the SSA, much to the detriment of the continent. Corruption ranges from high-level political graft, or mega bribes, on the scale of millions of dollars - to low-level or petty bribes to police officers or customs officials. A 2002 African Union study estimated that corruption costs the continent roughly $150 billion a year.
Corruption creates many forms of injustice and negatively impacts almost every aspect of daily life in the SSA. It undermines political institutions, weakens accountability of government, erodes economic growth, discourages foreign investment, and reduces resources for public services. Long-term sustainable socio-economic development requires democratic governance rooted in the rule of law. Reforms in SSA require both cultural and systematic change in the delivery of justice.
Judicial corruption is the “queen mother” and the most sordid of all corrupt behavior inflicted on the SSA populace. Judicial corruption involves the use of public authority for the private benefit of judges, court personnel, and other justice-sector personnel that result in improper and unfair delivery of judicial decisions, such as bribery.
The U.S. Congress enacted the Federal Corrupt Practices Act in 1977. That act was in response to an SEC investigation that uncovered illegal payments by certain U.S. companies to foreign government officials. Those illegal payments were being made to gain an unfair advantage over competing entities for winning contracts in foreign countries. The FCPA was designed to level the playing field. It also was intended to globally portray American businesses as global players who were fair, transparent and able to win contracts, based on merit rather than through corruption. The consequences of FCPA violations are draconian, both in terms of fines and criminal penalties. Now, more than ever, enforcement of the FCPA is a top priority of the U.S. DOJ/SEC.
Small private-sector firms, including SBAIC members, bring unique resources, know-how, and solutions to international development. Their toolbox includes a range of niche services, driven by innovative tools and resources that enhance effectiveness. IP/AQS focuses on rule of law and anti-corruption, justice-sector reform, democratic governance and civil society building. We have the cultural skill sets, continental perspective, regional vision and country-by-country, socio-cultural fluency to affectively execute development projects in SSA.
One example of this was the June 25-30, 2012 IP/AQS and Lex Training exercise. That event, held in collaboration with the Inter-Governmental Action Group Against Money Laundering in West Africa, organized a CLE/study tour on improving judges’ skills and knowledge of various economic and financial crimes. Forty-five judges from West Africa attended the weeklong program. That educational effort included learning more about the dynamics, changing scenarios, and technologies in fighting economic and financial crimes. Other issues were: corruption in the judiciary, overview of global initiatives in money laundering and terrorist financing.
Judicial corruption can be substantially reduced in SSA. A Checklist of best practices for effectively reducing corruption in the judiciary of African nations is beyond the scope of this article, but may be found at: https://www.americanbar.org/publications/international_law_news/2013/summer/the_rule_of_law_judicial_corruption_need_for_drastic_judicial_reform_sub_saharan_africas_nation.html and http://archive.constantcontact.com/fs150/1101942392112/archive/1124687469188.html. And tips for reducing risks and exposure under the FCPA in SSA can be found at: http://archive.constantcontact.com/fs086/1101942392112/archive/1102838330132.html.
Background about the author: IP/AQS principal, Herbert A. Igbanugo, Esq. is an international lawyer, with deep subject matter expertise in the FCPA. Firm Director of SSA Operations, Idika U. Onyukwu, is a 20-year veteran of the U.S. State DOS/USAID/US Embassy [Nigeria] and served as Publications/Communications Specialist under nine U.S. Ambassadors and five USAID Country Directors in Nigeria. See: http://www.afriquestrategies.com/ and www.igbanugolaw.com.