Esq mag vol 5 5 by Lere Fashola

Vol. 5 Issue 4

L EGAL PR ACTICE

LEGAL ICON: Hairat Aderinsola Balogun FINANCING AFRICA’S FUTURE: Energy, Transport, Water etc. INVESTMENT PROTECTION IN SOUTHERN AFRICA CALL FOR NOMINATIONS: NIGERIAN LEGAL AWARDS

CHILDREN AND WOMEN IN CONFLICT ZONE

VICTIMS OR ACCOMPLICES?

Malam Yusuf Ali, SAN

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ESQ LEGAL PRACTICE

Inside FINANCING 11-12 AFRICA’S FUTURE: ENERGY, TRANSPORT, WATER ETC. INVESTMENT 14-15 PROTECTION IN SOUTHERN AFRICA PPP - TIME FOR AFRICAN GOVERNMENTS TO LOOK INWARDS

CHILDREN AND WOMEN IN CONFLICT ZONE 40-51 VICTIMS OR ACCOMPLICES?

– Malam Yusuf Ali, SAN 41-43

LEGAL ICON: HAIRAT ADERINSOLA BALOGUN

GHANA LOOKS BOLDLY TOWARDS THE SEA SOUTH AFRICA MOVES A STEP

30 CLOSER TO SHALE GAS 4 ESQ LEGAL PRACTICE

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Malam Yusuf Ali, SAN

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ESQ LEGAL PRACTICE

Inside A SCRAMBLE FOR POWER – THE NIGERIAN ENERGY CRISIS 34 EXPLAINED DUE DILIGENCE IN MERGERS AND 38 ACQUISITIONS APPEAL COURT ORDERS PARTIES TO HONOUR ARBITRATION AGREEMENT 39

ALIGNING JUSTICE REFORM WITH ECONOMIC GROWTH

76-79

– Oyinkansola Badejo-Okusanya

44-45 INTERVIEW: KARIM ANJARWALLA 70-75 MOZAMBIQUE’S NEW MINING

LAW AND THE KEY CHANGES IT INTRODUCES

80-81 WHY NIGERIA’S PLANS FOR A DREAM ELDORADO CITY ARE NOT RADICAL ENOUGH

6 ESQ LEGAL PRACTICE

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LEOPOLDO

ESSESA Mba

contributors

Specializes in Business Organizations Law with a focus on common law, civil law & OHADA commercial law. His practice include litigation, Oil and Gas, Labour, Immigration, Compliance, dispute resolution strategies, including assessment of claims and potential litigation risks, and represent leading international companies in state courts and arbitration proceedings on a wide range of legal disputes. His areas of practice include but not limited to: a) Legal assistance and manage of the compliance of major Oil & Gas companies in diverse legal areas of law including taxation, Ohada business laws and corporate and labor law as well as administrative regulations in Equatorial Guinea; b) Advising government agencies on Local content regulations and advising companies on compliance; c) Assistance in court to oil & gas companies in lawsuits on labor issues; d) Assistance to companies rendering services in the oil & gas sector before administrative agencies.

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KELLE

GAGNÉ

Kelle Gagné, with 14 years of experience, is a foreign legal counsel, admitted in New York, at ENSafrica in the banking and finance department. She specialises in cross-border structured finance transactions and regularly advises financial institutions on derivatives, securities lending and repo transactions, and related collateral issues. She has also worked on a range of securities regulatory, finance and insolvency matters in the US. She has acted for local and international banks, asset managers and financial advisors in complex structured finance transactions. In addition, she has worked closely with the South African Securities Lending Association (SASLA) and several securities lending industry participants on regulatory and other legal matters relating to securities lending and prime broking. Kelle’s experience includes drafting and negotiating all aspects of International Swaps and Derivatives Association (ISDA) documentation, the Global Master Securities Lending Agreement (GMSLA) and the Global Master Repurchase Agreement (GMRA).

CLINTON

van LOGGERENBERG Clinton van Loggerenberg has 20 years of working experience. He is a director at ENSafrica in the banking and finance department. He specialises in banking, derivatives, capital markets, finance, structured finance, collective investment schemes, financial markets, exchange control and regulatory work. He has acted for a number of local and international banks in establishing operations in South Africa, as well as bank mergers and acquisitions. He was lead South African counsel when Barclays Plc acquired a majority stake in Absa Capital Limited, at the time, the largest foreign direct investment into South Africa (deal value at the time was approximately ZAR 33 billion).

LEG AL PR ACTICE

Publisher Lere Fashola Business Director Funmi Ekibolaji Advisory Board Olurotimi Akeredolu SAN Gbenga Oyebode MFR Kayode Sofola SAN Prof Mrs Yinka Omorogbe Kofo Dosekun Soji Awogbade Dr. Bayo Adaralegbe Editorial Consultant Seun Abimbola Head of Legal Services Adekemi Edema Asst Editors Toju Falere Ben Oritsemisan Umuteme James Alabi Finance Officer Oyindamola Olaosebikan Subscription Manager Tayo Gabriel IT Hassan Maude Graphics ESQ Creative Studio Photography ESQ Studio Programme Officer Funmi Ekibolaji Advert & Subscription Enquiries 08035269055 advert@esqlaw.net subscription@esqlaw.net Website esqlaw.net esqseminars.net Published by Legal Blitz Plot 2, Ayodele Fanoiki Magodo GRA Phase 1 Isheri, Lagos Nigeria Comments, advice and other enquiries to editor@esqlaw.net

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Editorial

Territorial Law, Conflict and the challenges of Africa’s Growth

frica is gradually entering a new phase in her developmental voyage and her history is beginning to assume an evolving status with the influx of foreign investment partnerships and interests. However, these developments are accompanied by their correspondingly attendant challenges of making the continent open to further deterioration of challenges of insecurity, vulnerability, risks, compromise, conflicting legal and political frameworks, especially as it concerns their contact with the visitors’. Of utmost concern is the level of insecurity and vulnerability of its citizens. Nigeria naturally shares in these overwhelming continental debacles. In fact, the 2015 Global Overview of the Internal Displacement Monitoring Centre reports that Nigeria is among the five countries that contribute to 60% of the internal displaced persons globally. In specific terms, the United Nations Resident Coordinator in

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Nigeria Mr Daouda Toure during the celebration of the 2015 World Humanitarian Day announced that about 1.5 million people are internally displaced. This is an outrageously incredible figure for a country that prides itself as the continent’s economic giant and whose significant role and contribution to peace keeping in the world cannot be overemphasized. Admittedly, this is part of the challenges the new government of the country must face. A novel and strategic approach must be employed not only to end insurgency, terrorism and insecurity but to also ensure that the welfare and safety of defenseless children and women in these zones are adequately and properly addressed. The resolve by the new Nigeria government to tackle the insurrection should be accompanied by a corresponding approach towards catering for these internally displaced persons. Similarly, the justice system plays a vital role in putting in place the legal framework necessary to In this edition, the ESQ Legal Practice

Magazine x-rays the significance and impact of the ‘CHANGE’ for which every Nigeria clamours and the expectations of Nigerians in this ‘changing environment.’ The change is sweeping the whole of Africa both economically and politically. Contributions and perspectives of legal practitioners and other professionals and economic periti to the whole gamut of concern for economic resurgence in African and particularly in Nigeria, are not farfetched. Views of contributors in this edition take a panoramic survey of what potentials lie ahead of the continent in this changing environment. South Africa, Tunisia, Ghana and other African countries are making huge strides to expand their economic and infrastructural bases, especially in the area of energy, transport, water, citizens’ welfare, etc in defiance of the low status of the continent in terms of level of productivity, investment protection, and competitive market in all sectors of their economy. Hence, Africa must look inwards to find lasting solution to her burdening problems. This is the focus of Mallam Tunde Ayeni SAN in this edition as he x-rays the importance of addressing the fate of people who are everyday confronted with the reality of life-threatening situations and death threats. A number of Nigerians including armed men are dangerously in conflict zones and unsafe havens where their safety cannot be guaranteed and welfare shortchanged. Also essential to this is the role of international community to contribute more resources, step up their support and restore the livelihood of these vulnerable people. Oyinkansola

Badejo-Okusanya puts in perspectives the important, urgency and necessity of judicial and justice reforms in the Nigeria legal system. The status quo needs to be reviewed to meet global bets practices and cater for the need of citizens, particularly the vulnerable. Oyinjkasola Badejo-Okusanya juxtaposes the overwhelming challenges ahead of the present government and the Nigerian justice system. Attracting foreing investors into Africa requires a whole of openeness and friendliness of domestic investment promotion acts an regulations. Karim Anjarwalla makes a case for tax relief for investors, incentivizing investment regulations, tariff harmonization, among othes. These measures for him serve as lubricants for legal reforms and promotion of free trade among African countries and investors. All of this points to the fact that investment-friendly domestic acts and regulations constitute a great deal to motivate investors to choose to put their money in doing business. Corollary to this would be fast economy growth, strong political and economic partnerships among Africa nations, among others. Interestingly, while the process of actualizing this edition was on, news reached that one of the alltime partners and friends of the ESQ Legal Practice Magazine had been appointed the Group Managing Director of the state owned Nigerian National Petroleum Corporation, in person of Dr Emmanuel Ibe Ikachukwu. The editorial crew of the Magazine congratulates him on this well-deserved service-bound position, as Nigerians expect more reforms in the oil and gas sector of the Nigerian economy. ESQ LEGAL PRACTICE

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Article

FINANCING AFRICA’S FUTURE: Energy, Transport, Water etc. Infrastructure & Growth Today, African countries exhibit the lowest level of productivity and are among the least competitive economies in the world. Empirical evidence has shown that there is a positive relationship between infrastructure investments and economic growth. Productivity growth – and thus increasing competitiveness, is higher in countries with an adequate supply of infrastructure services.

nergy, water, sanitation, telecoms and transport have long being identified as the major infrastructure setback to the continent. Energy supply continues to be Africa’s largest infrastructure challenge with 30 countries experiencing frequent power outages with just over a third of Africa’s population having access to electricity. Roads constitute 90% of Africa’s urban transportation. Poor infrastructure is costing each member counw w w.esqlaw.net

try’s growth to reduce by a 2 percentage point each year and cut productivity by as much as 40%. According to the World Bank, about $93 billion is needed annually to be able to fund Africa’s infrastructure for the next 10 years which is about 15% of the region’s GDP. About $60 billion of this would go to funding of new projects and the rest would go into the maintenance of the existing ones. Given the substantial amount involved, gov-

ernments will need to be innovative in the search for sustainable approaches to infrastructure development as well as financing. The private sector will need to play an increasingly important role. Governments will do well to create conditions where private-sector engagement is encouraged, probably through public-private partnerships (PPPs). The infrastructure challenge facing the African continent is seen manifested in various forms ranging from region to region. According to a development research brief by the African Development Bank (AfDB), in 2009, less than 10% (in 10 countries) and less than 50% (in 33 countries) of roads in Africa are paved; 40% of the population lacks access

to safe water; and 60% of the population lacks basic sanitation. Only 30% of the rural population in SubSaharan Africa has access to all-season roads. Transport costs in Africa are among the highest in the world; only 30% of African population has access to electricity; Africa has the lowest telephone penetration – 14% (the world average is 52%). Africa has the lowest Internet penetration – 3% (the world average is 14%). Inefficiencies Africa’s infrastructure is fraught with inefficiencies. These inefficiencies vary from country to country. It is observed that some countries are spending more resources than needed in some sectors of infrastructure. This excess expenditure ESQ LEGAL PRACTICE 11

Article is estimated by the World Bank to cost US$3.3 billion yearly. Another source of inefficiency lies in the execution of infrastructure budget. It is estimated that African countries are executing only about two-thirds of the budget allocated to public investment in infrastructure. This means that public investments could, in theory, increase by 30% without any increase in spending, simply by addressing the institutional bottlenecks that inhibit capital budget execution. Lack of proper maintenance and rehabilitation of Africa’s infrastructure It is estimated that on average, about 30% of Africa’s infrastructure needs rehabilitation. Africa’s power and water utilities also face operational difficulties such as distribution losses, under collection of revenues and over staffing. To release the potential of Africa therefore, requires the need to reduce the cost of doing business across borders. This means major investments in transport infrastructure including roads, ports, internal container depots, inland waterways and railways are needed as well as increases in energy pro-

duction capacity. The strides being made by national governments, regional and continental bodies in transforming Africa to a modern and growth-induced economy will be a positive step for global prosperity. Infrastructure plays a pointed, often decisive role in determining the overall productivity and development of a country’s economy, as well as the quality of life of its citizens. Infrastructure development supports various kinds of economic activity, including an input into production and also raises the marginal product of other capital used in the production process. In fact, high cost of transport, energy and internet access is a major economic growth deflator and is partly associated with Africa’s continued economic marginalization. Evidence collected by the World Bank’s Africa Infrastructure Country Diagnostic, for example, has shown that improvements in transport, energy and communications infrastructure have contributed substantially more to African per capita growth over the past decade than structural policies. In terms of access to water and sanitation improve-

ments, there is a global goal of halving the proportion of people without sustainable access to safe drinking water and basic sanitation by 2015. While this may be met, at current rates, Africa will achieve the targets only in 2040 with some of the poorer countries not meeting them before 2050. Only 60% of Africans have access to improved sources of drinking water and more than half still do not have access to improved sanitation facilities [APR Report 2010]. Lack of adequate infrastructure has raised the transaction costs of business in most African economies. Today, African countries exhibit the lowest levels of productivity and are among the least competitive economies in the world. Empirical research has shown that there is a positive relationship between infrastructure investment and economic growth. Productivity growth—and thus increasing competitiveness—is higher in countries with an adequate supply of infrastructure services. With adequate infrastructure, African firms could achieve productivity gains of up to 40%. There is therefore the need for strategic partnerships for development of infrastructure to help raise capital, accelerate project delivery, reduce operating costs and improve maintenance. Such infrastructure will enable Africa to compete effectively, tap into regional markets and benefit from globalization through investment and trade. Infrastructure is also important for the promotion of inclusive and sustainable growth, especially rural infrastructure—notably feeder roads that connect rural communities to national markets—enable individuals, households, communities, and small businesses to embark on income-generating activities. Financing the future For Africa to achieve the possibility of ensuring efficient trade among countries and for it to run smoothly, viable infrastructures should be in place, such as transportation systems and means of

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communication. Infrastructure that is sufficient and works properly is crucial for Africa’s economic integration. African economies can begin the process of deep integration if infrastructure networks are designed in such a way as to link production centres and distribution hubs across the continent, as the networks of developed economies do. Financing infrastructure in Africa requires more innovative approaches. Amongst them is what is termed infrastructure indexed bonds. This is a mechanism for attracting financial capital for infrastructure through the issuance of infrastructure of indexed-bonds. These bonds could be raised on global financial markets and the receipts from their sale targeted solely to the development of Africa’s infrastructure. Risk mitigating mechanism: This means that the proposed mechanism for financing infrastructure should be backed by risk mitigating instruments. This could be achieved through the establishment of an African Investment Guarantee mechanism. Such a mechanism would help overcome current difficulties in attracting finance from traditional capital markets, including private equity funds, venture capital and hedge funds. Mobilization of resources through existing bilateral partnerships and the rest of the world to gain political commitments and support of partners is required to provide resources for infrastructure investment in Africa. Article by Ashley ThompsonMacCarthy Head, Foreign Exchange and Equities Trading ashley.thompson-maccarthy@ obsach.com www.obsach.com Paul Frimpong, Ch.E. Chartered Economist (Ch.E.), Founder of Young Professional Economists Network (YPEN) and the President of Economic Business Group (A business intelligence company) For: OBSIDIAN ARCHENAR w w w.esqlaw.net

FULL SERVICE ALTERNATIVE DISPUTE RESOLUTION CENTRE EFFECTIVE AND EFFICIENT PRAGMATIC APPROACH TO DISPUTE MANAGEMENT MODEL SHORT FORM AND LONG FORM DISPUTE RESOLUTION CLAUSES NEW RULES ON INTERNATIONAL ARBITRATION LAUNCHING AUTUMN 2015

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ESQ LEGAL PRACTICE 13

Article

Investment protection in Southern Africa As the African continent continues to be a magnet for foreign investment, WilmerHaleâ&#x20AC;&#x2122;s John Pierce and Marija Scekic expand on the investment protection mechanisms available to investors in the region, and ask if the scope of protection is reliable enough.

ccording to the World Investment Report 2014, published by the United Nations Conference on Trade and Development (UNCTAD), foreign investment flows into Africa increased by over 4% in 2013, complemented by growing intra-African capital flows. The overall increase in foreign investment was mostly driven by investment in Southern Africa, where investment inflows almost doubled in 2013. Increases in foreign investment in Southern Africa are likely to be followed by greater numbers of investment disputes. In turn, foreign investors considering investments in Africa are likely to carefully consider the available investment protection mechanisms prior to investing.

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This article focuses on the investment protection mechanisms available to investors in certain Southern African countries, all of which are members of the Southern African Development Community (SADC): Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe (Southern African countries). These mechanisms include bilateral investment treaties (BITs) as well as the investor protection procedures available within the SADC and the Common Market for East and Southern Africa (COMESA). Additional protections may also be established as part of the new Free Trade Area

for COMESA, the East African Community (EAC) and the SADC which is currently under negotiation. BILATERAL INVESTMENT TREATIES The Southern African countries have entered into numerous BITs which provide a number of guarantees to foreign investors, including fair and equitable treatment and protection from nationalisation and expropriation. Perhaps, most importantly, BITs include investment protection mechanisms that allow the investors, whose rights under the BIT have been violated, to submit their claims to international arbitration, often under the auspices of the International Center for the Settlement of Investment Disputes

(ICSID), rather than resorting to local courts. In total, the 15 Southern African countries have signed 258 BITs. While that number appears significant, 140 of those BITs (54% of the total) are either not in force or have been terminated, according to UNCTAD data on international investment agreements. Most Southern African countries have signed and ratified the Washington Convention on the Settlement of Investment Disputes (ICSID Convention); Angola and South Africa are the exceptions. According to the ICSID caseload statistics 2015, 16% of all cases registered under the ICSID Convention and Additional Facility Rules involved countries from sub-Saharan Africa. It appears that the outcomes of ICSID arbitrations involving African countries are not substantially different from the outcome of investment disputes in other parts of the world. As other commentators have noted, this w w w.esqlaw.net

indicates that Africa is not more dangerous than any other region in the world when it comes to foreign investment. THE SOUTHERN AFRICAN DEVELOPMENT COMMUNITY The SADC, established in 1992, is an inter-governmental organisation whose aim is “to achieve development, peace and security, and economic growth, to alleviate poverty, enhance the standard and quality of life of the peoples of Southern Africa, and support the socially disadvantaged through regional integration”. The SADC countries, pursuing their mutual objectives, have concluded 27 protocols, including the SADC Protocol on Finance and Investment (Investment Protocol). The Investment Protocol, which entered into force in April 2010, prohibits nationalisation and expropriation of property, and guarantees fair and equitable treatment to investors. The Investment Protocol also provides that an investor and a state party may submit a dispute to international arbitration in one of three ways: arbitration before the SADC Tribunal, ICSID arbitration, and ad hoc arbitration under the UNCITRAL Arbitration Rules. The SADC Tribunal was esw w w.esqlaw.net

tablished in March 2003 and has jurisdiction over all disputes, and all applications referred to it in accordance with the SADC Treaty and Protocols, which relate to the interpretation and application of the SADC Treaty; the interpretation, application or validity of the protocols, all subsidiary instruments adopted within the framework of the Community, and acts of the institutions of the Community; and all matters specifically provided for in any other agreements that member states may conclude among themselves or within the community and which confer jurisdiction on the Tribunal. Under the SADC Tribunal Protocol, any natural or legal person has standing to bring claims against a SADC member state, including against its own state. Prior to 2010, the SADC Tribunal had decided 21 cases and played an important role in the protection of investments and human rights in Southern Africa. In the wake of several judgments against Zimbabwe, however, the leaders of the SADC suspended the Tribunal at the 2010 SADC Summit of Heads of State and Government (SADC Summit). At the August 2012 SADC Summit, the SADC leadership decided to maintain the suspension of

the SADC Tribunal and negotiate a new Tribunal Protocol that would limit the SADC Tribunal’s jurisdiction to disputes between the member states (thus eliminating jurisdiction over human rights cases and investor-state disputes). This decision was widely viewed as a step back in the protection of investments, human rights and the rule of law in Southern Africa. At the SADC Summit in August 2014, nine leaders of SADC states signed on to the new Tribunal Protocol. Before the Tribunal’s jurisdiction can be changed, however, 10 of the SADC countries would have to sign and ratify the new protocol. In an effort to preserve the Tribunal’s power to hear human rights cases and cases brought by individuals, a petition has been initiated with the aim of dissuading the SADC states from ratifying the new Tribunal Protocol. In August 2015, the SADC leaders will meet at their annual Summit in Botswana to consider the future role of the SADC Tribunal. Even without the SADC Tribunal, investors who have an ‘admitted’ investment in an SADC state may resort to arbitration under one of the two remaining dispute resolution mechanisms in the Investment Protocol, provided that they have complied with the requirement to exhaust local remedies and six months have passed since the SADC state was notified of the claim. Unlike most BITs, the Investment Protocol does not define an investor as a party that has made an investment in the territory of the other party, and therefore it appears to allow all investors (whether from an SADC country or from any other country) to bring claims against any SADC state (including their own) in an international arbitration. THE COMMON MARKET FOR EAST AND SOUTHERN AFRICA (COMESA) In addition to belonging to the SADC, some Southern African countries are also members of COMESA. These include the Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Seychelles, Swaziland, Zambia and Zimbabwe. COMESA is an organisation of 19 African countries that have agreed to cooperate in developing their natural and human resources. COMESA has a wide-ranging series of objectives which include the promotion and protection of investments. The COMESA investment protection regime arises un-

Article

der two different instruments: the COMESA Treaty and the Investment Agreement for the COMESA Common Investment Area (CCIA Agreement). Under the COMESA Treaty, member states are obliged, inter alia, to accord fair and equitable treatment to private investors, create a predictable, transparent and secure investment climate, and refrain from nationalising or expropriating private investments. The COMESA Treaty established the COMESA Court of Justice for the purpose of ensuring adherence to law in the interpretation and application of the Treaty. The court has jurisdiction over claims brought by individuals against a member state, but only upon exhaustion of local remedies in the national courts or tribunals of the member state. The CCIA Agreement is a comprehensive instrument that seeks to promote a stable investment environment, promote cross-border investments and protect investment. The CCIA Agreement offers a choice of dispute settlement mechanisms. A COMESA investor may submit its claim to the competent court of the member state in whose territory the investment has been made, to the COMESA Court of Justice under the COMESA Treaty, or to international arbitration under the ICSID Convention, the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules, or, provided both parties to the dispute agree, any other arbitration rules. The CCIA Agreement requires ratification by six member states and has not yet entered into force. FREE TRADE AREA FOR COMESA, EAC AND THE SADC Negotiations for the establishment of the Free Trade Area for COMESA, the East African Community (EAC) and the SADC are currently underway. The Free Trade Area involves 26 countries with a combined population of over 527 million and combined GDP of USD 1.1 trillion. According to the 2014 COMESA Investment Report, the treaty for the Free Trade Area will include an investment chapter, setting out the treaty’s scope of coverage as to investments and investors, the treaty’s substantive standards of protection (e.g. national treatment, most-favoured-nation treatment, fair and equitable treatment, et cetera) and its procedural protections – specifically, investor-state dispute resolution mechanisms. ESQ LEGAL PRACTICE 15

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PPP - Time for African Governments to Look Inwards P ublic Private Partnerships (PPP) offer an alternative route for governments to develop infrastructure, not least to ease the burden on public funds. In a continent where little personal taxation system is in place, and even if there was, it is simply unenforceable for the vast majority of the population as they live below the poverty index. A partnership with private companies is an ideal way to fund much needed infrastructure. The first P in this acronym however is proving problematic. The well documented issues around corruption, project delays and incomplete government run projects (despite many successfully completed projects) continues to act as a barrier for funding from investors especially in private equity circles. Ghana alone recently announced that they require $1.5bn a year for the 10 years to fulfil its current infrastructure project require-

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ments. This figure will only increase within that period as ongoing development, increasing population and a fast growing middle class put greater demand on existing infrastructure. The story is the same across much of the continent. Perhaps an option would be for the government to start looking inwards. Each country has a population who can all contribute something of varying levels to the development of its country through taxation and pension funds. Admittedly, this will require a lot of education of the masses to illustrate the benefits, an efficient means of collection from all, and the government will have to be transparent about how these funds are been dispersed. This would not only be a positive step forward in building trust amongst the populous about what the governments are actually doing with the countries’ funds, as well as

going some way to eroding the mentality that self-interest is par for the course in politics, but clearly illustrate to external investors that there is a commitment to transparency and accountability. Botswana is a much-ignored example of successfully looking inwards. Only now are they developing their PPP framework. All infrastructure projects have been 100% government funded which, unfortunately, had left them vulnerable on a couple of occasions, but they have quickly learned from these experiences, iterated how project development works and continued relentlessly. They have even successfully completed a couple of PPP projects and are using the learnings from these to design their PPP framework to ensure efficient and timely completion of projects. In Sub-Saharan Africa, Botswana is the least corrupt country in the Corruption Index, the no. 1 country for Corporate

Governance according to Standard and Poor, ranked 5th in the World Bank’s Ease of Doing Business chart, and have per capita GDF of $7,315 (higher than South Africa). Botswana has done as much as it can to de-risk PPP projects as an opportunity for investors. Their entry in these partnerships will be keenly observed. If they do prove successful (and there is no reason to doubt this), theirs should be a template for many others to follow. Admittedly, they have diamonds as their chief commodity product but even they have a diversification programme. Much of the Sub-Saharan countries are endowed with natural resources that could do for them what diamonds have done for Botswana. All eyes are on Botswana. Article by Emem Usanga, CEO & Co-Founder, InvestWell emem@investwellafrica.com rita@investwellafrica.com www.investwellafrica.com w w w.esqlaw.net

Article International: Flying the flag Topics: Law firm & practice management, Law Society activity

rospecting for overseas business is a long-term project, the Law Society’s international marketplace conference heard. Jonathan Rayner reports. Here is the bad news. No matter how proud you are of your firm’s brand or how many years you have spent honing it, there is no guarantee that it will travel well to foreign jurisdictions, the Law Society’s international marketplace conference hears. Paul Hopkins, international services partner at national firm Geldards, confides: ‘We have offices in Nottingham, Derby and Cardiff. Unfortunately, to many of our American colleagues, Nottingham equates with Robin Hood, Derby with a horse race and Cardiff with a seaside town near San Diego, California.’ Advertisement Speaker after speaker at the conference stresses that seeking fresh opportunities overseas is a long-term project. It takes time, resources, planning and commitment. Or as one senior marketing director advised Clare Murray, managing partner of niche London employment and partnership firm CM Murray: ‘There will be plenty of time to sleep when you are 90. In the meantime, you shouldn’t ever want to go to bed, even after five networking drinks receptions and two dinners on the same evening.’ Happily, there are bodies out there that can help you snatch 40 winks while still prospecting for business. There is the Law Society, for example, as well as the International Bar Association (IBA), American Bar Association (ABA), Union Internationale des Avocats (UIA) and UK Trade & Investment (UKTI). There are smaller networking groups, too, ones that often focus on specific areas of the law. And then there is social media. ‘These are all good ways of developing your visibility,’ James Hickey, CEO of international law and accountancy firms support group Alliott, says. The conference, attended by 116 delegates from 22 countries,

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starts with a panel discussion: How can your firm go global? Andrew Chalkley, CEO and partner of Reading firm Boyes Turner, describes the firm’s international business as ‘fostering targeted relationships across borders to develop and enhance the service we can provide to clients in the UK and internationally’. At its core, he says, is the forging of ‘close collaborative relationships with like-minded firms in other jurisdictions’, allowing Boyes Turner, on behalf of its clients, to project-manage transactions and control costs in other countries. He gives the example of working with a large Polish law firm to acquire a business within Poland for a US client based in Chicago. Murray describes her employment firm as ‘super-niche, competing against huge firms with enormous budgets and regiments of lawyers’. It is ‘too small to find the time to pitch’ for contracts, she says, ‘and works entirely through referrals’. Murray says much of her firm’s marketing activity is focused on international conferences, simply ‘being there and

making relationships’ through involvement with the various panels and sub-committees. All lawyers from the moment they join the firm are expected to work hard at networking to build relationships and generate referrals. ‘When we interview prospective employees, we ask ourselves if we could put them on a plane to New York next week. Do they have the engagement and cultural empathy that is the hallmark of the firm?’ In return, says Murray, working for the firm can be exhilarating. ‘If the choice is between Croydon employment tribunal and Los Angeles, which would you choose?’ she asks. ‘But it’s a long game. Creating and mentoring practice builders is not something you can dip in and out of. It’s a long-term investment.’ The panel discussion chair, City firm Berwin Leighton Paisner senior partner Harold Paisner, voices what he considers a ‘controversial’ observation. ‘The whole concept of going global is dated,’ he says. ‘Few firms are truly global, but are focused in specific areas where there is profitable work to suit their special skills.’

He instances magic circle firm Linklaters, which divested itself of most of its eastern European offices because there was insufficient ‘serious work’ for the firm in those regions. Most of these firms now come under the banner of independent international firm Kinstellar, which is an anagram of Linklaters. Rob Millard, a partner and law firm strategy and management consultant at Møller PSF Group, says that firms generally make three mistakes when expanding internationally. ‘The office you open in another jurisdiction will never become a smaller version of the mother ship,’ he says. ‘Each market is different and you should adapt to achieve your objective at the best price. Don’t open a full-blooded office if an alliance with a local firm would do the job.’ The second common mistake is to assume that a ‘strategic alliance will naturally happen’. On the contrary, ‘there is much work to be done to align systems and practices across the firm’, Millard says. Third, firms often fail to measure the performance of particular offices rigorously ESQ LEGAL PRACTICE 17

Article

enough. An overseas office might be undervalued because it is not obviously profitable, he says, but what if it is providing the rest of the firm with work? Elizabeth Fehnrich, an international trade adviser at UKTI, tells the conference that her organisation can advise and support firms wishing to go global in several ways. It offers one-to-one mentoring programmes and seminars to help firms understand what strategies to adopt. It organises trade missions. And it facilitates access to British embassy staff in target countries, who can provide a shortlist of local firms of interest. ‘Sign up for our business opportunities and events alert,’ Fehnrich says. ‘It could be of real value to your firm, or even your clients.’ The next panel discussion, chaired by Christina Blacklaws of Kent firm Cripps, focuses on ‘developing your international strategy’. Blacklaws starts the debate by asking about the importance of joining or forming a network and also wonders aloud whether, once a firm is a member of a network, clients may have the perception that they are being ‘sold on’. David Patient, managing partner of City firm Travers Smith, talks of the firm’s ‘independent approach’ to international work. ‘We have 320 lawyers, all based

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in London apart from three – who work from our Paris office and practise only English law. We have no plans to open more offices overseas, but are going to continue advising our clients through carefully chosen best-inclass firms worldwide. We have a horses-for-courses approach, with price, location and expertise paramount. Travers Smith is the legal quarterback that runs the deal and organises the team – and whose lawyers travel to all corners of the globe with clients.’ Geldards’ Hopkins tells the conference that his firm belongs to the International Business Law Consortium and to the Germanybased DIRO network, both of which allow the firm to benefit from the expertise of lawyers in all the major jurisdictions. The result is a thriving international practice, but, he stresses, it is still important to get ‘buy-in from the firm’s partners because otherwise it’s just Hopkins off on another jolly’. Alliotts’ Hickey says the network, which is active in 70 countries worldwide, help firms become the ‘go-to firm’ in their area of practice. ‘We also try to bring them new business through our strategic partnerships with banks, GC forums and other influential bodies. It is all about focus and alignment.’ Global firm Eversheds partner

and chair of international Alan Murphy says: ‘When collaborating with overseas firms, culture is all important: if we can’t work with a firm as a trusted partner in an international team, then the relationship is a non-starter.’ Eversheds has 55 offices in 33 jurisdictions. The third panel discussion, chaired by British Spanish Law Association chairman Alberto Perez Cedillo, considers ‘making the most of international organisations’. He says joining a large association such as the IBA can be ‘overwhelming… a little like marriage’. You need a business plan, he says, to take full advantage of what can be an expensive relationship. Adam Farlow, City firm Baker & McKenzie partner and an officer of the ABA’s international section, tells the conference that the ABA is not just about networking, referrals, newsletters, projects and international legal exchanges. ‘It is also fun,’ he says. ‘You see a lot of smiles at the conferences. The gruff types who would rather be back at the office are back at the office. You can relax a little.’ He adds: ‘The key words are: “I’m happy to take that on.” If you show willingness, you will soon be fully involved.’ Stephen Denyer, the Law Society’s head of City and international, agrees: ‘Giving your time as a

volunteer will win you approval. But don’t be overly competitive by trying to stuff the panels with your own firm’s partners. Don’t claim to be an expert when you are not. And never take on work that you can’t complete on time.’ City firm Fox Williams partner Mark Watson recommends membership of the UIA. ‘It is the oldest worldwide legal organisation. It promotes professional development and supports lawyers globally who are being persecuted for doing their jobs. The conferences are very valuable, but don’t send all 5,000 delegates a copy of your firm’s brochure. Try something memorable and more personal.’ IBA president and Debevoise partner David Rivkin notes that its annual conference is attended by around 6,000 lawyers from up to 172 member countries. ‘You should have in mind what you want to achieve before going to the meeting,’ he advises. ‘There are 70 committees handling different areas of the law, some of which you might find more useful to attend than some of the plenary meetings.’ Volunteering to make yourself useful will also get you noticed, he adds. Jonathan Rayner is Gazette staff writer w w w.esqlaw.net

Article

Ghana looks boldly towards the sea G

hana’s vision of a commercial port to match the country’s ambition as a regional trading centre takes a step forward. As regular Africa-watchers realise, one key shortfall which prevents African nations being able to achieve the full benefit of their commercial potential is a lack of suitable infrastructure. Readers of ALB’s sister publication, the Global Legal Insight title on Energy, will be familiar with the particular difficulties faced by businesses in that sector, for example; oil and gas producers need investment in the land and sea transport sector sufficient able to service that sector’s needs upstream and downstream, across both Anglophone and Francophone West Africa, such as in the Ivory Coast, for example. While both Ivory Coast and Ghana have been in dispute over their maritime borders recently, a dispute which is ongoing, Ghana has been taking steps to ensure that should its potential maritime reach increase, it has a port capable of reaping any rewards. Asian-led law firm, King & Wood Mallesons recently advised on the GBP 1.5 billion expansion of Ghana’s Tema Port, poised to become one of West Africa’s largest and most modern seaports, having worked with Meridian Port Services (MPS) on the billiondollar expansion of Ghana’s busiest port terminal. MPS is owned by a consortium of shareholders, among which is the Bolloré Group, a French conglomerate, one of the 500 largest companies in the world and Africa’s biggest ports

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and logistics operator. Tema is the most important entry port in Ghana, handling around 70% of total maritime cargo to and from the country, and the expansion project brings its capacity from 1 million 20-foot equivalent containers (TEUs) to 3.5 million TEUs, all designed to 2015 standards. According to data from the Ghana Ports and Harbours Authority (GPHA), total cargo traffic at the port had risen by 31% between 2008 and 2012, from 8,727,049 tonnes to 11,451,005 tonnes, in part due to an increase in economic activity, as annual GDP growth averaged around 8% over the period, before the global financial crisis hit. Political instability in neighbouring Cote d’Ivoire during 2010-11 saw the diversion of some Abidjan-bound trans-shipment traffic to Ghana, with cargo shipments at Tema growing by a quarter between 2010 and 2011. The expansion plans include the development of a deep water quay and an access channel able to accommodate larger vessels now entering the West African trade lanes. The award of the contract followed an extensive bidding process which had harvested seven bids, including one from a Ghanaian company, which was ultimately unsuccessful. The shortlisted bids came following a competitive tender issued by the GPHA in March 2013 for the project, which included detailed engineering financial, and construction criteria. Local Ghanaian media reported that bid values received

ranged from USD 489 million to over USD 2 billion, depending on a phasing arrangement selected by the bidder as the expansion works were planned in five phases. The project was completed by the signing of an amendment to an existing concession agreement on Friday 12 June between MPS and the GPHA. The signing ceremony was attended by the minister of transport, Mrs Dzifa Aku Attivor, the GPHA’s director general, Richard A. Y. Anamoo, alongside Bolloré Africa logistics managing director Philippe Labonne, along with lead partner at King & Wood Mallesons, Richard Mugni. The GPHA, the public agency in charge of the Ports and Harbours in Ghana, represented itself during the negotiations. Mugni, an energy and infrastructure partner, said: “This

project marks a significant and historical turning point for Ghana as a real economic force for both West Africa and the sub-Saharan region as a whole. We are very proud to have assisted MPS and the Bolloré Group in bringing about this transformational infrastructure project to support Ghana’s commercial growth and we look forward to providing further support on the development of the project, which will create a world class infrastructure.” The King & Wood Mallesons cross-border team advised on all aspects of the infrastructure project including negotiating the terms and conditions of the port extension with the Ghanaian government. The full team was led by Paris partner Mugni, assisted by associate Raphaël Sofferand Paris partner Olivier Vermeulen for the financing. ESQ LEGAL PRACTICE 19

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News

Cliffe Dekker Hofmeyr acted as legal counsel for Busamed in relation to debt funding of two private hospitals

ashudu Junior Mphafudi, and Preshan Singh-Dhulam, directors in the Finance and Banking practice at Cliffe Dekker Hofmeyr, acted as legal counsel to Busamed in relation to the debt funding provided by Standard Bank of South Africa Limited and FutureGrowth Asset Management, for both the Busamed Paardevlie Private Hospital (100 bed facility) and the Busamed Modderforntein Private Hospital (170 Acute Facility and 50 beds Sub-Acute facility). Busamed Holdings (Proprietary) Limited (Busamed), is one of South Africa’s first black owned healthcare groups. Busamed has obtained hospital licences to develop four private hospitals in Johannesburg, Western Cape, Bloemfontein and Harrismith. The private hospital group is led by Dr Diliza Mji, a medical surgeon with more than 30 years of medical practice experience. He is also the former chairman of the Industrial Development Corporation of South Africa Limited and a non-

executive director of Telkom SOC Limited. Accordingly to Dr Mji, what sets Busamed apart from the other black owned private hospital groups is that fact that, “Busamed identifies a suitable land for development, rezones the land, obtains the required licence, provides its own required equity into the projects, and commissions and operates its own hospitals”. Busamed opened their first hospital in Strand in the Western Cape and, in the process, created over 300 permanent jobs (approximately 400 were created during the construction stage). It is Busamed’s intention to establish its own nursing school, which will ensure a supply of high skilled, locally trained nurses for the various hospitals within the group. “Traditionally, the financing of hospitals in South Africa has been based on Public Private Partnership (PPP) arrangements or corporate financed by the healthcare groups. Busamed private hospitals are the first project financed, private sector

hospital developments in South Africa. The funding of this new entrant to the market by Standard Bank and the various development finance institutions has demonstrated that private banks and development finance institutions can bridge the gap and make it possible for projects of these nature to be co-financed, despite these institutions having divergent interests,” explains Mashudu Junior Mphafudi, Director, Finance and Banking practice, Cliffe Dekker Hofmeyr.

“It is important to note that, in order for the development finance institutions (DFIs) to facilitate access to the market, and particularly the much required finance for potential industrialists, the tendency to use similar financial terms as those employed by commercial banks does not necessary yield positive results, as the mandate of the DFI is not limited to achieving the commercial return on their investments,” he adds.

FSC issues competency standards for collective investment scheme managers in Mauritius

Louise Campion

n October 2014, the Mauritius Financial Services Commission (FSC) issued competency standards setting out the minimum technical skills and know-how expected from its licensees, which includes entities licenced as collective investment

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scheme managers (CIS Managers). The standards are part of the FSC’s drive to develop a more robust regulatory framework in Mauritius. The FSC had initially granted an exemption from complying with the standards to CIS Managers managing professional or expert collective investment schemes in Mauritius. This exemption was repealed in June 2015 and now all CIS Managers will be required to designate at least one person as a designated officer (Officer) of that CIS Manager who must be approved by the FSC. In addition to a requirement for an Officer to possess minimum technical skills, the standards also introduce a requirement for Officers to main-

tain their minimum technical competencies through continuing professional development (CPD). No guidelines as to the content of the CPDs have been published, but the standards set out the minimum number of hours of CPD that must be completed per year. In the case of a CIS Manager, a minimum of 15 hours of CPD must be completed by the Officer each year. The standards provide that the technical competencies required for the Officer are an advanced knowledge of the following: • general principals of securities; • securities products; • general principals of fund management and fund management products; and • regulatory framework

for securities activities in Mauritius. The Officer will be able to demonstrate that they meet the minimum competencies if he/ she can show that they possess a minimum degree with an emphasis on finance, capital markets, financial services, business administration or financial planning from a recognised institution and can demonstrate that they have at least four years’ experience in the investment industry. The standards contain a grandfathering provision, however, this does not apply to CIS Managers. Licensees holding a CIS Manager licence have until 1 January 2016 to (i) appoint at least one Officer who must be approved by the FSC and (ii) to comply with the standards. ESQ LEGAL PRACTICE 21

News

Things to know about foreign companies as external companies in South Africa

1. Foreign companies with business or non-profit activities in South Africa may be required to register with the Companies and Intellectual Properties Commission (CIPC) as an external company. Section 23 of the Companies Act 2008 provides that a foreign company must register within 20 business days of first beginning to “conduct business” in South Africa. 2. A company will be considered to be conducting business in South Africa if it is: • either a party to one or more employment contracts within South Africa; or • engaging in conduct or has engaged in a pattern of activities within South Africa over a period of at least six months that would lead a person to conclude reasonably that the company intends to engage continually in business activities in South Africa. 3. A company will not be considered to be conducting business in South Africa if it merely engages in certain limited activities such as holding shareholder or board meetings in South Africa or otherwise conducting any of the company’s internal affairs

within South Africa, having a South African bank account, creating, acquiring, securing or collecting any debt or acquiring or securing a property interest in South Africa. 4. The external company is not a new legal entity separate from the foreign company. The foreign company remains one and the same legal entity, registered in South Africa and in its place of incorporation. There will not be a separate board of directors in South Africa nor will it have a separate existence from its foreign operations. Should the registered external company be sued, the foreign company itself will be sued. 5. The external company’s liability is therefore not limited to its South African operations. Should the external company become insolvent the entire estate of the external company (including its overseas assets) will be susceptible to creditors. 6. If an external company has failed to register within three months after commencing its activities in South Africa, the CIPC may issue a compliance notice requiring the foreign company to register or if it fails to do so within the time prescribed, cease

to carrying on its business or activities in South Africa. 7. If the foreign company operates as an external company in South Africa and at all times retains its effective management offshore, it will remain a non-resident in South Africa for income tax purposes. As a result, its income will only attract tax if the originating cause of the income is considered to be in South Africa, subject to any double taxation agreement between South Africa and the country in which the foreign company is incorporated. 8. An external company must obtain exchange control approval before it remits funds out of South Africa to any non resident or obtains funding from a non resident, depending on the terms. 9. A registered external company must continuously maintain at least one office in South Africa. 10. An external company will also be required to comply with ongoing administrative requirements set out in the Companies Act including filing annual returns and notifying the CIPC of changes to the company for example the composition of its board.

Charles Ancer

Emma Forbes

Norton Rose Fulbright advises on US$15 million lending facility to finance African agricultural enterprises Key industry sectors

Sheldon Elefant

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Financial institutions Global legal practice Norton Rose Fulbright has advised UK-based social impact investor AgDevCo and KfW, the German development bank, on the establishment of an investment holding company, The Lending for African Farming Company (LAFCo), in Mauritius. LAFCo provides reliable access to finance small-tomedium-sized African farming enterprises operating anywhere in Africa. Their aim is to fill a critical financing gap in the agricultural sector and support the equi-

table and inclusive growth of the sector. It also offers flexible working capital loans to agricultural enterprises that purchase crops from smallholder farmers, or that provide them with essential inputs, such as seeds and fertilizers, to boost their yields. The company’s capital structure features a blend of public, philanthropic and private capital with an anchor investment by KfW, using funds from the German government, and additional investment by AgDevCo. Norton Rose Fulbright’s investment funds lawyers in South Africa, Louise Cam-

pion and Lance Roderick, advised on the English law aspects of the structuring of LAFCo while the Mauritius law aspects were dealt with by BLC Chambers. United States tax and regulatory advice were provided by the practice’s lawyers, Sheldon Elefant (New York) and Rich Fagerer (Munich), respectively. The South African investment funds team has been ranked a tier 1 practice for the last four years by Legal 500 with clients rating their service as “miles ahead of the rest” and “brilliant”. w w w.esqlaw.net

News

Brown Rudnick in emerging markets hire

hilip Rogers moves from Clyde & Co to US law firm as head of corporate for emerging markets. Africa will be on his mind going forward. Brown Rudnick, has made a key corporate hire in attracting Clyde & Co’s head of corporate, Philip Rogers, to join the firm’s London office, where he will be tasked with leading the firm’s emerging markets practice. He has extensive experience in Africa, predominantly in the French-speaking jurisdictions. Rogers’ experience in crossborder business transactions will help boost the firm’s London office, especially in handling mandates for complex cross-border M&A, IPOs and joint ventures. With a practice focused on government and large multinational clients in the natural resources, commodities and transportation sectors, alongside experience in high-growth technology and life sciences markets, he comes with a track record in having executed a number of deals in French-

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speaking Africa, among other popular emerging market destinations. Alongside Rogers’ arrival, Brown Rudnick also recently hired two restructuring partners in the firm’s Paris office, Didier Bruère-Dawson and David Malamed, from De Gaulle Fleurance & Associates to bolster that offering. The trio of corporate lawyers leaves the firm particularly well positioned to handle transactional and dispute matters in Francophone jurisdictions. Joe Ryan, chairman of the firm said, in a statement: “Philip will further strengthen our ability to offer clients exceptional cross-border capability in both transactions and disputes. His experience working across European, Middle Eastern and African jurisdictions fits well with the strategic focus of our existing international disputes team, offering strong synergies with our Paris and London teams, which continue to be core areas of growth for us.” His words were echoed by Mark Dorff, head of the inter-

national corporate practice said: “This is another significant step forward for the practice as we develop a global boutique firm geared to our clients’ needs and perfectly placed to attract high-calibre lawyers. Philip brings a wealth of cross-border transactions experience, and adds a valuable dimension to our global corporate team.” For his part, Rogers said: “Brown Rudnick provides the perfect platform for me to continue growing a leading cross-border transactional practice with a particular emphasis

on emerging markets. There is not only geographic complementarity but also deep sector overlap, providing clients across the globe with important additional resources.” Clyde & Co declined to comment further other than noting Rogers’ announced exit, but the departure will come as a blow to the firm’s ambitions to reach beyond its hinterlands in its traditional sectors of insurance, commodities, and shipping, towards a more mainstream corporate offering.

ESQ LEGAL PRACTICE 23

News

Tunisia: Relaunched arbitration centre hopes to be a realistic challenger

Those considering the use of alternative dispute resolution centres in North Africa would do well to consider Tunisia as a potential venue for hearing such claims.

unisia has had an arbitration centre since 1993 but allegations of nepotism and its association with the previous regime, overturned in the 2010-2011 ‘Jasmine Revolution’ which launched the Arab Spring, have affected its development. Now revived as a private institution, with the encouragement of the state, by the Tunis Bar and a number of senior lawyers, the Centre de Conciliation et d’Arbitrage de Tunis (CCAT) could emerge as a possible contender to CIMAC. Salah Dakhlaoui, founder and partner at Dakhlaoui Avocats, in Tunis, and CCAT director, makes no secret of the Tunisian centre’s ambitions: “We are in a better position than Morocco to develop the regional market, with strong political links and trade flows between Tunisia and Algeria, not to mention the opening towards Libya and Egypt.” “Just as Casablanca is planning on being a platform to West and Sub-Saha-

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ran Africa, Tunisia can play the same part in relation to the Arab-African world, and even southern Europe,” he says. Dakhlaoui adds that the new, democratically elected government offers the prospect of “enormous potential”. Already he says, his firm, which is Bird & Bird’s local partner, has seen a rise in enquiries. Dakhlaoui’s enthusiasm is not wholly shared by Sami Mahbouli, founder and partner at Mahbouli Law Firm. Mahbouli acknowledges the uncomfortable predicament in which the CCAT found itself before the revolution. However, he says, its activity is “well below expectations” and “it does not have sufficient human and financial resources”. In contrast, he continues, “Casablanca has become an important business centre where a lot of Tunisian companies have placed their trust, so the fact that the city would become home to an international arbitration centre can only

be a positive move. “The Moroccan judicial system is complex, and customary law still plays an important part, so having an alternative will be extremely useful.” INVESTOR STATE ARBITRATION Tunisia recently hosted the International Court of Arbitration’s annual North African dispute resolution conference on 14 May 2015, sponsored by Vannin Capital, a third party funder. Vannin’s presence in Tunisia, and support for the region as a source of potential claims, indicates the continuing commercial interest in North African arbitral concerns. The conference was organised by the ICC International Court of Arbitration, in partnership with ICC Tunisia and the Tunis Bar Association, and focused on the ICC’s experience in managing arbitration cases that involve a state entity, including investment-state arbitration. ICC support for the event suggests the Court is keen to compete

with Tunisia’s home-grown institutions for work that might normally have been referred to Paris Yasmin Mohammad, senior counsel at Vannin Capital, spoke at the conference. Ahead of her presentation, she told CDR: ““As awareness of third party funding in international investment arbitration increases dramatically, the ICA conference presents a perfect opportunity to present the benefits of its use to an international audience.” The conference also featured a round table forum on investment treaty arbitration, a subject whose controversies CDR has featured recently. Mohammad said that third party funders had a part to play in that debate, by “complementing the aim of investment treaties to protect those that need protection, the investors, not the contracting states. Its use can level the playing field between all participants, irrespective of their backgrounds and financial position.”

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Things Keeping Law Firm Management Awake at Night

e worry that we can’t see or predict the future, yet the future we imagine reflects our past. Consider however, the things that we could not envision just 10 years ago—Wi-Fi, flavored vodka, latte addictions, foreign outsourcing and the related rapid decline of American core manufacturing, and the ubiquitous Wal-Mart. We have been rocketed out of our 90s complacency and self-absorption with new and very real anxieties. Law firms are not immune from the new economy, facing both similar and some unique challenges. Clearly, not every firm will succeed. Look at the American Lawyer 100 twenty years ago and look at it now. Firms changed. The market place has changed; your firm either has

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to adapt to these new realities or experience the unfortunate consequences. Companies more frequently get acquired or fail. Law firms don’t. Unsuccessful law firms just don’t become or remain successful law firms. Your fear is not becoming the next Brobeck, Arter & Hadden, or Althemier and Gray. Your fear is becoming a low growth, non-differentiated practice, competing for clients on price and competing for partners on compensation. Here are eight things keeping law firm management up at night: 1. Foreign Outsourcing . Only a few years ago, no one seriously considered outsourcing professional services to Asia. After all, NAFTA was expected only

to affect manufacturing. Now, our calls to help desks, service questions, and billing inquires are routinely and proficiently handled in India. Do you still believe law firms needn’t worry? Just this year, major law firms outsourced not only IT and word processing, but also “routine trust and estates administrative work.” What differentiates value-add legal work from routine work? If trust and estates administration can be done in India why not all second and third shift word processing? India’s day is our night; the work can be done at one third the cost while we sleep. Envision, then, the future of legal research for mo-

tions, memorandum and pleadings? What about the first draft of merger agreements, loan documentation and much contract work? There is no reason it can’t be sourced offshore. Rather, ask why a client would pay $300/hour for a first or second year associate’s work when the same product can be produced in India for $30/hour. 2.

Price competition. Until now, major law firms have been relatively price insensitive. Managing partners are reassured by the role legal audit firms play to scrutinize hours and fees that have already been scrubbed by the practitioners. My response: “you ain’t seen nothing w w w.esqlaw.net

Article their shareholders, (actually securities analysts, but that is another story) are expected to reduce expenses every year in excess of 10 percent. While security analysts can’t exert similar pressure on law firms, their clients will, with increased attention to embedded overhead. Clients will pay for legal services, not for related corporate overhead. Law firm management has historically been reluctant to make the kinds of decisive changes required to operate more efficiently. Like many other service industries, the successful firm is one that can successfully grow the top line while controlling costs. These costs reduction expectations are accompanied by a drive for increased quality. Institutional clients continue to seek quality by limiting the number of “vendors” with whom they do business. Are you prepared to compete?

yet.” In-house legal departments, under intense cost reduction mandates, are one restructure away from pricing all services competitively (with the only exception, the infrequent “bet the company” type of litigation or regulatory matters). To those non-believers, consider your medical insurance. Your doctor now reduces every procedure to a code, which is paid at a standard rate by the insurer. The same insurance company will force its attorneys to compete in the same way. How will this affect your future practice returns and partner remuneration? 3.

orty something partners. F Major law firms remained relatively constant in size during the 1970s and early 1980s. The economic recovery of the Reagan years permitted the explosive law firm growth evidenced from 1983 through 1989. Associate hiring more than tripled during this period. Many of these associates became partners in the early 1990s following the first Bush recession and prior to the tech implosion of 1999. These attorneys are now in their mid 40s, and at a career stage where they expect to have more management and strategic authority within their firms. How can you satisfy all of these competing career ambitions? Obviously, not everyone can be managing partner. Many firms use the Practice Group head title to placate these upwardly aspiring partners. While a solution, these same practice group managers seek more authority and control over firm governance, finances and growth strategies, entrenching practice groups silos and potentially negatively impacting firm cohesiveness. How will you respond to those partners and the groups they now control? Reduced cost and increased quality . Most major firms service the institutional market. These public companies, accountable to

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Corporate merger activity . Institutional law firms love mergers. Mega mergers mean mega fees. But what happens after the dust settles? Someone was bought, someone was sold; and there is no reason for multiple “primary” counsels. In addition, mergers require synergies: both revenue growth and cost reduction strategies. And from first hand experience, it is far easier to cut costs than increase revenue. So, after the one-time merger fees are forgotten, in house legal departments are held to pre-merger budgets. And now, these budgets are inclusive of internal and external legal costs. It is no longer possible for legal officers to justify cutting internal fees by 15 percent only to increase external fees by 20 percent. What would you imagine goes first: The in-house legal department or the mandate to reduce outside counsel expenses? How do you respond when your clients are acquired? Insourcing legal work . Everyone wants in and

everyone wants out. Ask any of your clients. Their HR people are deluged by associates who want to go in-house in order to seek stability, security, a better quality of life, and advancement opportunities (see 3 above). Yet, in general, in house lawyers are poor managers. Recognizing this lack of management acumen, legal departments staffing is kept at a minimum. When in house legal departments obtain experienced business managers and operate more like their staff line unit peers, more work will be insourced. Consider this: How many corporate HR departments and finance departments outsource their primary functions to outside vendors. Excluding major litigation, estimates are that over 30 percent of the work done by outside lawyers could easily be performed by inside counsel. Have you analyzed your clients’ engagements and considered what work could be in sourced? Does your firm have a compelling reason why its work should continue? 7.

Associate Costs . Associates will always want more money. The number of additional hours they can bill, however, is limited. Similarly, while opportunities for the top law school grads have increased, the number of top law students from tier one schools is static. Wage pressure

across all professions--investment banking, consulting, finance and law-declined with the recent recession. As the economy continues to improve, there will be competing opportunities for the best associates out of law schools. Firms will have to seek out, through compensation or other means (generally that means other forms of compensation) to attract the best. Since a two-tiered entry-level class is unrealistic (Harvard grads get $x, State School grads get $y), associate compensation and retention, particularly at the junior level will become more important. If the cost of training an associate reaches $250,000 how will you protect this investment? 8.

Practice Group Defection. Until recently, partner defections were limited and not terribly disruptive. If dissatisfied, a partner may convince a few associates and a partner or two to join him. Today, given the predominance of mega practice groups within institutional firms, entire practice groups can be at risk. Rarely too, are departing practice groups unsuccessful. Client defections, decreased morale and loyalty among remaining partners, and “the grass must be greener” mentality remain after the defections. How are you going to keep all of the practice group leaders happy?

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Article

Make Referral Marketing Work for You By Eric Dewey

“R

eferral marketing is a structured and systematic process to maximize word-of-mouth potential,” according to Wikipedia. “Referral marketing does this by encouraging, informing, promoting and rewarding customers and contacts to think and talk as much as possible about their supplier, their company, product and service, and the value and benefit the supplier brings to them and people they know. Referral marketing takes word-of-mouth from the spontaneous situation to one where maximum referrals are generated.” A study conducted by the Goethe University Frankfurt and the University of Pennsylvania on referral programs and client value found that referred clients were more profitable and more loyal than normal clients. Referred clients had a higher contribution margin, a higher retention rate, and were more valuable in both the short and long run. But none of us in the legal services arena

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About the Author Eric Dewey, a 25-year veteran of marketing and business development, is the chief marketing and practice administration officer for Coblentz Patch Duffy and Bass LLP, and the principal of Group Dewey Consulting. His prior legal experience includes chief marketing executive roles at two Am Law 200 law firms and the largest plaintiffs’ securities class action firm in the U.S. He can be reached at ericgdewey@gmail.com. needed a study to tell us about the value of referral marketing. Referrals are the most cost-effective and most productive marketing that can be done by an attorney. But to exploit the promise of referral marketing, you must be organized and diligent in managing your referral network. WHO IS YOUR REFERRAL NETWORK? Depending upon your practice, your network of referrers can range from existing and past clients, alumni of the firm, law school buddies and other attorneys in the firm to bankers, accountants, consultants and other professional business service providers. It can also include

people you know through your church, the gym, poker buddies, children’s play groups and any other group of people with whom you have periodic contact. The fact is that, while some people are in a better position to refer others to your legal services, you cannot anticipate where your next case or matter is going to arise. We live in a hyperconnected world. Thanks to LinkedIn and other Internet phenomena, you are likely less than four degrees removed from any of your prized target client contacts. Adopting a referral philosophy of business development means that everyone you run into, and all those they know, should be cultivated for potential referrals, whether online or

offline. So, how do you do this? MAP, MANAGE AND MOTIVATE The first step is to map your existing network of contacts. Take some time to write down all those people that you know in the various activities and travels of your life. This includes professional and personal contacts. Record where they work, their title and contact information. If possible, note relationships and associations of each (secretaries, bosses, consultants, bankers, accountants, etc.) of which you are aware. Also note if they have special subject area knowledge or access to unique resources. Once you have this list compiled, study it for the relationships that may lead to important introductions. Also look for relationships that you want to learn more about and the resources your contacts may have available for you to leverage. What you will find is a list of contacts that represent a rich environment for networking and connecting people together. This is the essence of rainmaking. w w w.esqlaw.net

Article MANAGE YOUR NETWORK OF REFERRALS Your brain does not have unlimited memory space. An organized referral process will pay the greatest dividends in new clients if it is written down and the information in the list consistently updated and maintained. Get organized by loading all your contacts and their information into a database. A specialized client relationship management system works best, but you can start by simply using Excel or Word. Be sure, however, to include fields to capture the important information you need for client relationship management, such as other company personnel (secretary, boss, etc.), family and personal interests information, special dates and a narrative field to record the main topics of each conversation. A system integrated with your calendar system, which can pin a reminder to follow up on a future date, is preferable and will save you time and improve the ease of executing your referral program. I advise classifying those contacts into one of three tiers of referrers: high potential, moderate potential and low potential. The tiers will guide you in prioritizing the amount of time and investment to develop the relationship, as well as guide your referral development strategy. You’ll have to make the call based on your practice, but generally highpotential referrers are clients and other attorneys who have direct experience with your work, and who trust and respect you as a legal practitioner. Moderate-potential referrers include other professionals such as bankers, accountants, consultants and the like who may not use your services but are respected and have knowledge of your reputation. A referral or endorsement from these persons is fueled by the weight of their own reputation. Low-potential referrers are all those others that you captured in mapping your referral network, but who do not rise to the moderate level. This last group is still important, as they may know someone who needs your service. And a thorough mapping exercise should have teased out some of the relationships and given you some ideas of which contacts you want to pursue for introductions. w w w.esqlaw.net

MOTIVATING OTHERS TO REFER Now that you have your network mapped out and stored in a manageable database, it’s time to motivate others to refer you work. There are two ways to encourage referrals: directly, by asking for them, and indirectly, by creating an environment that encourages referrals. You should develop a strategy that helps you facilitate both direct and indirect referrals. Direct referral strategies. Direct referrals are developed from those contacts with whom you have the most comfort and agreement that you will share referral opportunities. These include partners in your firm, networking group participants, long-standing client contacts and the like. Indirect referral strategies are those put in place to encourage referrals but without specifically asking for them. Compelling others to put their own reputations at risk in order to help you is not an easy task. There’s little reward and reputational risk. So the key to direct referrals is to make it as easy as possible for others to refer clients to you. To do this, they must clearly understand the solutions you provide. The solution should be narrowly focused, clear and memorable. No one wants to guess how you can help others. Write a “bullet referral script.” Make it short, clear, compelling and memorable. The goal is to end up with a sentence or two that makes it clear the type of clients you can help and the solutions you provide. In developing your referral script, write out the aspects of your practice that you believe set yourself apart, the types of clients that would benefit from your services and the value of the solution you provide. Then edit it down until you arrive at a very concise and memorable description of what you do. While this may sound like an “elevator speech,” the difference is that the bullet referral script is written specifically for an audience of people who have substantial knowledge of your industry and service. Whereas an elevator speech is a broadcast of your skills to an unqualified audience, the bullet referral script is a focused script for a specific audience and specific use. One trick to narrow the focus of your bullet referral script is to write it as if it were being tweeted. That means that you have to write a pithy and memorable descrip-

tion of your practice in 140 characters or less. For example, I’m very good at looking at the marketing of a law practice and focusing on the activities that produce the greatest results, often saving my clients money while improving their marketing effectiveness. A tweet-ready referral script for my practice might read like this: “A fraction of the action gets traction. Eric is best at distilling down the marketing strategies that produce the best results.” This script is memorable (a rhyme like “a fraction of the action gets traction” is easily recalled and is interesting and thought-provoking). It identifies the types of clients who could use my services (those spending too much on marketing or who are unclear as to which marketing strategies are producing the best results). It also implies the value of the solution (improved effectiveness and efficiency). And it distinguishes my practice through the imagery of a chemist distilling the most potent marketing concoction. Use your bullet script to educate your high-potential referral contacts who understand the game of referrals and are open to being educated about your practice. Meet with them for lunch or during social or professional events, and work your bullet script into the conversation. You can also add it to the back of your business card, letterhead or client communications for future reference. When working with clients, plant the seed early on in the honeymoon phase of the relationship—when things are going well—and explain that you would appreciate referrals if the client is comfortable making them down the road. You can do this simply by saying to your client, “As we work together over time, it is my intention that you will find me a valuable resource and exceptional business partner. I hope you’ll be comfortable enough with me to share my name and your experience with others who would benefit from my services.” Indirect referral strategies. Encouraging referrals indirectly is often more comfortable for many attorneys, though often less effective. There are some things that you can do to assure a higher level of success in generating these referrals. Three, in particular, are worthy of note. The first is the subject of several articles in this issue and centers

on the power of giving your time, knowledge and experience to help others. What I have found over my more than 25 years in business development is that great rainmakers give little pieces of themselves, often to complete strangers. They do favors, share their knowledge and experience, make introductions, reach out to their network for advice for someone else and help people accomplish small things professionally and in their personal lives. They do more than “work” their network for referrals; they actively seek out ways to do “favors” for others, a process I refer to as “favorking.” What sets the top rainmakers apart is that the best of them do this favorking without the expectation of reciprocity. They do not expect to be paid back or that there’s a return favor in the jar with their name on it. They don’t even hint at reciprocity. They actively look for ways to help others: small, subtle, thoughtful ways to make someone’s life a little easier. They have a unique perspective and a deep genuine belief that helping others is its own reward. And it shows. They are brokers of the services of their peers and networks, and by giving away their knowledge, contacts, time and thoughtfulness, they are perceived as being a tremendous resource. And that reputation fuels their success as rainmakers. A second way to encourage referrals without directly asking for them is to use the “net promoter survey.” This single-question survey not only implies the importance of making referrals but reveals how your clients feel about the work you do for them. The one question is this: On a scale of one to five, how likely are you to refer me to your closest friends and peers? It is best followed by an open narrative field in which the client can elaborate if necessary. Some companies pepper this question throughout their client communications materials and at every client touch point. Lastly, give referrals in order to receive. Be proactive in referring the work of your colleagues and clients. Great rainmakers know whom to call on to get things done for others. That means they must be brokers of the services of others. And, to be a broker, you have to know a few key facts about your colleague’s practice or business. Focus on five to 10 attorney practices that you want ESQ LEGAL PRACTICE 29

Article

South Africa moves a step closer to Shale Gas

n 3 June 2015, the South African Government gazetted the final regulations for the exploration and production of oil, gas and hydraulic fracturing. The publication of the regulation means that the Jacob Zuma led government can now process applications to explore for shale gas. The country is estimated to have 390 trillion cubic feet (Tcf) of technically recoverable shale gas resources, making it world’s eighth-largest holder of technically recoverable shale gas resources. South Africa’s shale gas resources are located in the Karoo basin, with 211 Tcf located in the Whitehill formation, 96 Tcf located in the Prince Albert formation and 82 Tcf in the Collingham formation. South Africa’s main energy resource base has always been coal. Approximately 77 percent of its primary energy needs are provided by coal, with the electricity sector accounting for over half of this consumption. This is unlikely to change significantly in the next two decades owing to the relative lack of suitable alternatives to coal as an energy source. Many of the deposits can be exploited at extremely favourable costs and, as a result, a large coal-mining industry has developed. Currently, more than 85% of South Africa’s installed electricity capacity is coalfired power stations. However, the development of a shale gas industry could result in the reduction of domestic coal consumption, allowing for a greater focus upon gas-fired power

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plants. According to the South African Government, just 30 Tcf of shale gas will enough to meet half of the country’s current electricity generation requirement for more than 20 years. In 2013, South Africa consumed a total of 173 Bcf of gas and imported 132 Bcf from Mozambique via pipelines. Shale gas production can greatly assist the nation in reducing its dependence upon gas imports, creating a greater security of supply. Furthermore, it can assist in reducing the nation’s carbon emissions as it is currently Africa’s largest carbon emitter, accounting for 40% of emissions in Africa and the 13th largest emitter in the world. Although the South African Government has started to move forward with the creation of a shale industry, challenges still lie ahead. The biggest challenge is that it is unknown whether the shale gas is commercially viable. Until operators begin exploratory drilling, commercial uncertainties remain and this will potentially bar some companies from entering the shale market until they are certain that they will make commercial gains. It is estimated that it will take investing companies about three years of exploration to determine if the Karoo reserves are commercially viable. Nonetheless, risk averse investors are interested it undertaking arly exploration. One such company that is seeking to undertake shale gas activity is Falcon Oil & Gas, a Dublin based exploration company. Falcon, listed in London’s

AIM, is aiming to begin talks with the South African Government in September or October for a three or five year exploration license. Falcon expects to receive final approvals by the end of 2015. It is likely that Falcon will seek out a farm-out deal with a larger operator to fund drilling in return for a stake in the licence. Chevron is currently being touted as a strong candidate as the two companies have had an exclusive five year agreement since 2012 to jointly seek out unconventional exploration opportunities in the Karoo basin. Shell has also sought an exploration license in the Karoo basin. Although the super major has recently stated that it is placing shale activity in South Africa on hold due to low oil

prices and licensing delays, it is still pursuing an exploration license. Shell has not fully exited and it is likely that it will pursue shale activity should it prove to be commercially attractive. The South African Government has taken the first steps towards creating a new shale gas industry. The next steps are to issue exploration licenses and for operating companies to start exploratory activity. A shale gas industry will ensure that the country is able to deliver cost effective energy supply and reduce their carbon footprint. Even a moderate shale gas resource potential will help diversify South Africa’s energy mix and can only be viewed as a positive step. Article by Masood Ayoub Director, Sarwarzad Energy E: masood@sarwarzad.com

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Article

Bringing Industry to Mbini

Equatorial Guinea’s government is establishing the framework for a new industrial city at Mbini. The Centurion African Knowledge Series takes a look at how Central Africa’s newest economic zone will work. Cristina Sánchez Cosme Senior Associate Lawyer

he government of Equatorial Guinea is applying an industrial city model to secure foreign investment and diversify the country’s economy. Through a special economic zone, single administrative agency and attractive terms for companies at the Industrial City of Mbini (ICM), the Ministry of Mines, Industry and Energy (MMIE) aims to attract investors and grow Equatorial Guinea’s industrial base. Incentives and structure The industrial city will have its own investment regulations. A multi-departmental management agency administering the entire city will create a one-stop shop for investors. To incentivize new industries to setup operations at Mbini, special sanctions will be given for labour requirements, customs and taxation. These breaks are designed as a progressive scheme, with more generous relief at the beginning of operations, and as time passes the exemption percentages will decrease until they reach a point where they are equal to the prerogatives of the current applicable laws and regulations. Within the city a special economic zone will handle imports and exports of products and materials. The government also wants to give special consideration to small and medium-sized businesses, so there will also be allocated zones for these companies. The core concept is to create a secure environment for international and domestic investors with the target of jobs creation in Equatorial Guinea and a reduction of the economy’s reliance on oil and gas revenue. This project presents an excellent opportunity for the country to broaden its economic base if it is carried out correctly.

The agency managing the industrial city will be an arm of the industry department in the MMIE, but it will consist of individuals from several governmental ministries to fulfil the notion of a one-stop shop. The agency will be the authority that approves investment applications and issues operational permits for the city and special economic zone, and it will ascertain how regulations are applied to different sectors. Investors will be able to submit their applications to the agency and receive all the necessary licenses and permits from the relevant government departments within a short time. At present, establishing a business in Equatorial Guinea can take from six to 18 months. Much of this time is taken by having to get the approval of many different governmental bodies. Investors that struggle with the time and difficulty of registering a company today should be more comfortable with the process and certainty of investing in the ICM. Target industries The industrial city model has not been as successful as anticipated in other countries in the region, for example Angola and Gabon. The main difficulty

is always attracting the right investors. For Mbini, the government is actively reaching out to companies from heavy industry to high-tech. The target industries are technology (such as industrial electrical equipment), automotive, healthcare, pharmaceuticals, textiles, agro-industrial, foodstuff and refining raw materials (such as lumber, mineral resources and oil and gas), among others. Later on, the ICM will host banks, hotels and a conference centre to offer resident companies all the facilities they may need. The location has been established and basic electricity and water infrastructure is already in place. The plan is to develop Mbini in phases instead of developing all zones within the industrial city at once. The government will rely heavily on investors contributing to the construction of infrastructure. On April 30, 2015 at the Equatorial Guinea-Asia Economic Forum in China, the MMIE and China Dalian International Cooperation (Group) Holdings signed a memorandum of understanding (MoU) that will establish a path of collaboration between the two entities and aims to achieve consensus on the preliminary

technical studies to develop the industrial city. Incidentally, and as part of a development plan in the energy sector, the MMIE signed a second MoU with China Machinery Engineering Corporation. The purpose of that document is to engage in talks in reference to technical and financial feasibility studies of a new streetlight factory and lighting accessories for the Industrial City of Mbini. Legal and timeframe Centurion has worked directly with the MMIE to establish a legal framework as part of the overall roadmap for the project. This involved ensuring the framework was in line with the constitution and legislation system of Equatorial Guinea. The framework is being reviewed by the MMIE and is expected to be approved within the first half of 2015 before it is submitted to parliament, with a decree anticipated to be passed before the end of 2015. In advance of a decree being passed, the MMIE is already working to attract investors and has signed joint venture agreements with some companies. Ideally, the first residents of the Industrial City of Mbini will begin operations by 2016.

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Article

Local Content and the Petroleum Industry

Equatorial Guinea has laid the legal foundations for local content. In our latest African Knowledge Series feature, we explore the impact of the regulations on the oil and gas business. Estela M. Nse Mansogo, Associate Lawyer

ocal content regulations have been in place for a long time and have made a positive impact on the people of Equatorial Guinea. My experience testifies to this success. I work for Centurion Law Group, which sent me out of the country to learn English and improve my knowledge of the oil and gas industry, which positively affected my career. Local content regulations have given other Equatoguineans the same opportunities and allowed them to compete better with their international counterparts. In the past it was solely foreign workers that held skilled positions in oil and gas. Today the government is implementing legislation to ensure that locals are provided with training and play a more significant role in the sector. This is a general trend in Africa, and especially in large petroleum producing markets like Nigeria and Angola. Legal basis The Ministry of Mines, Industry and Energy, in compliance with the Hydrocarbons Law, amended the National Content Regulation in September last year (Ministerial Order 1/2014). The main purpose of the regulation is to further boost the economy and ensure an acceptable participation from national, regional and African companies in the oil and gas industry of Equatorial Guinea. The law now obliges companies to hire locally whenever possible. It also pushes for contracting of local

businesses and their inclusion in the overall industry supply chain. If a skillset is not available in the national labor pool, then the job is open for non-national applicants, with other African citizens given preference. National benefit The government sees local content development as critical to economic growth. The National Content Regulation provides benefits such as the development of the capacity of Equatoguinean citizens, leading to greater national employment in the oil and gas sector as well as greater participation of national companies in the oil and gas sector through joint ventures with foreign companies. Nationals benefit from the skills and employment opportunities provided by the oil and gas industry but, additionally, those workers’ salaries are paid and spent in the country. Energy firms also benefit, as they do not have to provide the high salaries, accom-

modation costs and travel expenses associated with foreign workers. Enforcement As a result of continuous breaches of the local content requirements of the Hydrocarbons Law, the government wanted this National Content Regulation to demonstrate the great importance of the mandate and demand exact compliance with the many rules and regulations established for this purpose. The 2014 regulation reinforces the national content aspect of Equatorial Guinea’s 2006 Hydrocarbons Law, as previous legislation consisted of only a few paragraphs in an article. The prosperity of the energy sector will have no long-lasting benefit to the country if companies do not fulfill their local employment quotas. Up to now, there was no specific law that required companies to follow strict parameters. The government now has a solid set of guidelines that it can implement. The major task and concern of the government should be the enforcement of regulation. Companies can be fined for violations, their contracts can be rescinded and the government can stipulate that the costs will not be recoverable. Room for improvement As this is a newly created regulation, it is too early to discuss its effectiveness. There is always room

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for improvement, but I believe that before improving deficiencies, we must demand the full enforcement of foreign companies that are active in Equatorial Guinea before we make further analysis. The government understands that not all the skills and expertise that are needed in the sector are currently available in the country. This is why the authorities insist on companies providing training for local employees and local businesses. The government also understands that it will take several years for locals to attain the level of expertise where they can take over from their expatriate counterparts. Most local companies are not at the level of their international competition but they have improved greatly. Their experience and general skill levels have increased. By partnering with local firms, employing and training Equatoguineans and instructing local suppliers on international best practices, international companies have brought a wealth of knowledge to Equatorial Guinea. Local content rules have made a big impact on Equatorial Guinea’s joint venture companies, with benefits for both the national and international parties. Local companies gain investment, growth opportunities and expertise and eventually, are in a position to lead projects and run operations independently. w w w.esqlaw.net

Article

Doing Business in the OHADA Zone

In the first article of Centurion’s African Knowledge Series, and in the run-up to the Africa Oil & Gas Legal Summit 2015, we look at how the OHADA laws make doing business in Africa better. Leopoldo Jeremias Essesa Mba Ada, Associate Lawyer

ost Sub-Saharan African countries inherited their laws from former colonizers – like France, Portugal, Spain and the UK. This led to a segmented legal system that has curtailed cooperation between African nations. In 1993, 14 African heads of state came together to standardize business activities in their countries and adopted a single legal code under the Organization for the Harmonization of Business Law in Africa (OHADA) treaty. The organization now has 17 members, with the Democratic Republic of Congo the most recent to join. The first thing that every investor entering a new market wants to know is, “If I invest in this country, are my rights being protected?” Therefore, the first thing an investor must establish is judicial stability. OHADA provides this judicial stability that countries with inherited laws are unable to provide. Uniform Acts Outside of OHADA members, most African countries have business laws that are often complex and out-dated because they have been inherited, for example, Nigeria’s Companies and Allied Matters Act. These systems can create legal barriers to entry for new investors that the government has to intervene to amend. However, an amended law might be a contradiction to another law, and so on. In contrast, OHADA laws, applied through a system of Uniform Acts, respond to the current economic reality of the member countries and make doing business more straightforward. Uniform Acts cover a spectrum of business matters, including Uniform Acts Organizing Securities, Arbitration, Commercial Companies and Groups of Economic Interest, simplified recovery measures of debts, Accounting, Transport and secured transacw w w.esqlaw.net

tions, and are applied across all member countries. In 2014, the OHADA Council of Ministers adopted a Revised Uniform Act on Commercial Companies and Economic Interest Groups, and there are proposals to adopt Uniform Acts for labour law and banking. Happier investors The OHADA laws have been responsible for a noticeable increase in trade – not solely within the OHADA member area, but also outside. The resulting influx of foreign direct investment into the OHADA region once the treaty was adopted is proof of companies’ increased sense of security. Judicial stability is the most important issue for these investors, especially in the areas of Africa that have traditionally been considered high risk by the World Bank’s Doing Business report. Countries that have signed up to the OHADA treaty have started to see a turnaround in investor sentiment. The Democratic Republic of Congo is in the process of adopting the OHADA treaty, and this has resulted in greater confidence to invest in the country than before. The treaty can be particularly beneficial to countries that have experienced political instability in the past and suffer from a negative public perception.

Common Court of Justice and Arbitration, headquartered in Abidjan, Côte d’Ivoire, or through national courts. The Uniform Act on Arbitration governs any arbitration proceedings in an OHADA member state, and the arbitration centre in Abidjan takes precedence over member states’ courts. Companies may choose to arbitrate elsewhere, such as the International Chamber of Commerce in France or the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington DC. In most major cases, companies tend to go for arbitration because parties have more control of the dispute and greater discretion. “The resulting influx of foreign direct investment into the OHADA region once the treaty was adopted is proof of companies’ increased sense of security.” Most countries may not easily waive their sovereignty in their national or international legalisation system. However, given that OHADA is a treaty, and the treaty supersedes national laws, any judgement that does not comply with OHADA laws will be void and unenforceable. Investors must take OHADA laws into consideration before they consider national laws. This way, companies have a solid understanding of managing and arbitrating a dispute.

Arbitrating disputes Companies can arbitrate a dispute through the OHADA

Trial and error In order to test the waters in an OHADA market, it is possible for

a company to set up as branch or representative office. A branch office can work in the market for up to two years to see if it is advantageous to continue investing within the region. After this period the company can decide to establish itself in the country or not. The advantage of a branch office is that it does not have the same level of tax and obligations as fully established company. The recently revised OHADA Unified Act on commercial companies has also introduced the possibility of establishing a representative office. This works in much the same way as a branch office, but with even fewer obligations. These unique structures allow investors to mitigate the risk involved with any new investment. Lost in translation OHADA regulations make business law very clear because the Uniform Acts are simple and easy to understand. However, problems arise in the fact that the Uniform Acts are in French so they must be translated in some cases. This can be an issue in countries like Equatorial Guinea and Guinea Bissau, where the national languages are Spanish and Portuguese respectively. Legal terms have to be very precise, so translation can be complicated and nuanced. This is why it is important to have law firms with experience in these areas. The OHADA treaty states that in the case of any dispute in interpretation, the French version prevails.

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Article

A scramble for power – the Nigerian energy crisis explained By Natasha Mellersh

frica’s most populous country is in the midst of an energy crisis, the cause of which is a combination of multiple problems relating to policy, infrastructure and difficulties in raising capital. Even though Nigeria has some of the largest oil and gas reserves in the world – as well as being Africa’s largest oil producer, it is currently in the midst of an energy crisis. Degenerating infrastructure and a legacy of lack of investment have hindered growth and development in Africa’s most populous nation. The absence of a strong and functioning power sector has left the population with an expensive and unreliable source of power. Temitayo Olarewaju, associate at ǼLEX in Nigeria,explains that the main cause of the energy crisis is the failure by successive governments – until recently – to make and sustain necessary investments in the electricity sector. She notes that in “rare instances, where government invested in the sector, no proper planning was done”. This was evident in the National Integrated Power Project – where gas powered plants were constructed with no clear plan on how to procure gas that will fuel them. Olarewaju states: “Although, the recent privatisation of the generation and distribution companies has resulted in minimal improvement, most power plants in Nigeria are currently operating below their name plate capacity.” Key difficulties Lack of infrastructure remains a key issue says Mutiat Adeyemo, also an associate in ǼLEX’s Lagos office. “Due to the failure to make necessary capital expenditure in the generation, transmission and distribution sectors over the years, inevitably, available machinery fell into disrepair.” She points out that the failure to invest has also “resulted in insufficient infrastructure across the value chain, such as lack of metering equipment to monitor consumption and aid tariff collection, and to reduce technical and

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commercial losses, and lack of critical machinery for generation and transmission”. Another important problem to consider are tariffs – the Multi Year Tariff Order (MYTO) issued by Nigerian Electricity Regulatory Commission (NERC) regulate the tariff chargeable for electricity supplied. “Although, NERC is of the view that MYTO is cost reflective and enables adequate return on investment, investors have argued that this is not the case. The perception of investors that MYTO is not cost reflective has stalled critical investment that could improve generation, transmission and distribution of power,” says Adeyemo. Ultimately the issue is fuel supply. She points out that one of the main reasons for unstable fuel supply to power plants is that the price of gas to be supplied to power plants is regulated by the government and, until recently, is valued at a much lower price than can be obtained in the free market. This removes the incentive for gas suppliers to make the necessary investment to supply adequate gas to the power plants. Another key problem is the lack of local technological capability and the issue of illegal connections – pipelines transporting gas to power plants are frequently tapped into or vandalised, which hinders the regular supply of gas. Off the grid Only about 40% of Nigerians are connected to the national grid, but Olarewaju points out that even those who are connected to the grid have access to power less than half of the time. Nigeria’s per capita electricity consumption is one of the lowest in the world – at 149 kWh per capita for a population of about 170 million, about 7% of Brazil’s and 3% of South Africa’s. In addition, she says, a large proportion of the Nigerian population live in rural areas, where most of the villages are not connected to the grid due to lack of infrastructure. Olarewaju tells ALB: “The major problem caused by the use of generators (diesel and petrol) is pollution. This is especially so in

low income areas of major Nigerian cities, where overpopulation has caused people and families to co-exist in cramped spaces. In fact, there have been incidents of death as a result of exposure to carbon monoxide emissions from generators.” While generators are expensive, Nigerians will spend between five and 10 times more on generators compared to, for example, Europeans using grid-generated electricity, “it has become a necessity” she states. “The reliance on self-generation via diesel powered generators by businesses has resulted in the increase of the price of goods and services. This is because, typically, self-generation accounts for about 40% of the recurrent expenditure of most businesses.” Transforming the power sector “The Nigerian energy sector is currently undergoing ‘transformation’ from a government controlled monopoly to a privately owned and fully competitive electricity market,” says Adeyemo. The enactment of the Electric Power Sector Reform Act kickstarted this process in 2005. The Act provided for the formation of companies to take over the functions of the former National Electric Power Authority – to ultimately privatise the power sector. Adeyemo notes that the Act seeks to “encourage competition and efficiency in the sector” through privatisation, adding that so far, several “energy generation companies and all distribution companies have been privatised”. The National Integrated Power Project (NIPP) was created as a

public sector funded initiative to add significant generation capacity. As part of the project 10 power plants with an aggregate capacity of 5,455 MW have been constructed – these are now in the process of being sold to private sector investors. Last year, the World Bank, in conjunction with the US government, announced its commitment of USD 5 billion for energy projects in six African countries, including Nigeria. The World Bank is also working with Nigeria to attract a USD 100 million clean technology fund to boost the country’s renewable energy sector, while a number of private companies are benefiting from government support and incentives to procure solutions to the current gas supply shortage. According to Adeyemo, the main obstacles in resolving this crisis are: raising capital to finance the necessary investment required, the development of an attractive regulatory framework and incentives, as well as uncertainty regarding the outcome of the Petroleum Industry Bill. “It is likely to be a lengthy process, considering the decades of neglect the power sector has been subjected to,” says Adeyemo. She adds: “Though Nigeria has abundant fossil fuel, this has not alleviated or prevented the current energy crises. Consequently, the government and the private sector must realise that capital investment with adequate planning is required to increase capacity. It is hoped that the current reforms in the sector would yield positive results.” w w w.esqlaw.net

Article

Kelle Gagné

kgagne@ENSafrica.com

OTC derivative participants: Take note!

n 5 June 2015 Treasury released the second draft of the regulations relating to OTC derivatives under the Financial Markets Act, 2012 (the “Draft Regulations”). At the same time, the FSB released a number of draft notices, including a notice relating to margin for non-centrally cleared OTC derivatives (the “Draft Margin Notice”). A stated aim of the new regulatory regime for OTC derivatives is to reduce the systemic risk associated with derivatives. The deadline for comment on the various documents was 6 July 2015. A number of key concerns with the Draft Regulations and Draft Margin Notice are highlighted below. Corporates and non-bank participants should note: The Draft Regulations and Draft Margin Notice do not exclude transactions among w w w.esqlaw.net

affiliates from the need to centrally clear or post margin for OTC derivatives. As a result, a central treasury company of a group could find itself being required to become an authorised OTC derivatives provider in South Africa and/or exchanging margin with its South African affiliates. Comparable legislation in other jurisdictions either excludes such intra-group transactions or provides for a process to apply to the relevant regulator for the exemption of such transactions from central clearing and/or margin requirements, on the basis that transactions among affiliates are not generally for investment or speculation, and therefore pose little or no systemic risk. Banks and financial institutions should note: The Draft Margin Notice

requires authorised OTC derivative providers to exchange margin with all entities with whom it concludes OTC derivatives, including both counterparties and clients as defined in the Draft Regulations. One result is that a financial institution (such as a bank) could find itself posting margin to corporate clients – or even individual clients – with no infrastructure for receiving or holding margin. Other jurisdictions do not require margin to be exchanged with small non-financial counterparties, and there is a strong view that requiring unsophisticated parties to receive and hold margin is unlikely to decrease systemic risk – and may even increase it. All OTC derivative market participants should note: The Draft Margin Notice prohibits any re-use (re-hy-

Clinton van Loggerenberg

cvanloggerenberg@ENSafrica.com

pothecation) of initial margin collected in respect of non-centrally cleared OTC derivative transactions. Generally, however, such initial margin is used to establish the receiving party’s hedge to the margined OTC derivative and is used with the posting party’s consent. South African regulators should perhaps follow other jurisdictions’ legislation in allowing such re-use, subject to certain conditions, including that the posting party must consent to the re-use. Regulation of OTC derivatives in South Africa will soon be a reality, and users of derivatives in South Africa, or with South African counterparties, are urged to consider the effect of the new regulations on their business.

ESQ LEGAL PRACTICE 35

Article

Services regulation needed to boost stifled service sector T he potential for major services growth in Africa needs to be unlocked through policy leverages and a continental free trade agreement. A recent report by the United Nations Conference on Trade and Development (UNCTAD) stated that Africa’s latent service capacity is stifled by regulatory and policy shortcomings, meaning services are unable to sufficiently supply other sectors of the burgeoning continent. Clear and consistent infrastructure policy in areas such as water and sanitation is crucial in achieving the UN’s sustainable development goals of 2016-2030, the report claimed. Policy and the provision it affects directly impact access, affordability, investment requirements and quality control. UNCTAD Secretary General Mukhisa Kituyi commented in a statement: “Africa accounts for 15% of the world’s population but only 2.2% of global services exports, indicating tremendous untapped potential for the sector.” He added: “The Economic Development in Africa Report 2015 underscores the need for African countries

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to tackle various regulatory and policy shortcomings, which explain these inefficiencies and impede Africa’s capacity to fully capitalize on the potential of its services sector.” Road freight failings are a particular growth hindrance. The report claims that Africa has the most expensive and lowest quality road transport worldwide; with users in Africa in 2012 facing transport costs of 7.7%, more than double the world average. This has the knockon effect of reducing the amount African countries can benefit from world trade growth. 74% of the continent’s population has no electricity. The unreliability and inconsistency of the energy supply means it fails to meet rising demand, in-turn making it difficult to secure investment and deliver large capital projects. The cost of closing the energy gap was estimated to be USD 93 billion annually. The report identifies core problems in how high development costs are unaffordable for capital-lacking regulatory bodies; and that African regulatory bodies are in an early stage of development, have modest

budgets and lack qualified staff. However, many African services have achieved relative success. Examples include the financial and banking services industries of countries such as Mauritius and Nigeria; the commercial and cargo air transport industry in Ethiopia, Kenya and South Africa; the telecommunications services of Egypt and the port services industries of Djibouti and Kenya. For example, Ethiopian airlines grew between 20 and 25% annually since 2005. It reported a net income of USD 228 million in 2013–2014. During 2009-2012 Africa’s services sector drove GDP growth in 30 of 54 countries, but grew 0.8% less than the 5.4% average of the developing world over the same period. Overall 45 African countries saw a rise in services output, with 30 of these experiencing a contraction in manufacturing. CONTINENTAL FREE TRADE AGREEMENT To ensure policy consistency throughout Africa a continent-wide policy that aligns regional and national strategy was promoted by

the report to boost economic productivity and reduce poverty. Many national development plans fail to link existing regional service regulation plans. For example, Burkina Faso has become a leading exporter in cultural services, while Kenya and Senegal are leaders in business process outsourcing – but the sectors are not sufficiently integrated in line with the countries’ WTO commitments. The report spotlighted financial services as a particular area requiring improvement, for they also fail to effectively link existing protocols on national and regional levels. Such a move would enable free movement of capital and therefore make financial market integration a reality. The failures have occurred within Arab Maghreb Union, the East African Community, the Economic Community of West African States and the Southern African Development Community. Kituyi said: “Africa must bridge the policy disconnect of services trade in order to unlock the sector’s potential for the continent’s economic transformation.” w w w.esqlaw.net

ENSafrica lawyer goes above and beyond to save a young girl

Wil Huang

il Huang, a senior transactions and projects manager in ENSafrica’s China practice group, didn’t spare a second before jumping into a Shanghai river to save the life of a young girl. While others stood by and watched the girl struggling in the murky water, Wil – dressed in his business suit – didn’t think twice and jumped in to save the girl, who was close to drowning. The rescue happened on 11 June, when Wil was on tour in Shanghai on the invi-

tation of the China Law Society. While cruising down the Huangpu River, the boat in which he was travelling was alerted to the girl’s dilemma by a large crowd onshore. The first mate repeatedly tried to throw the life buoy to the girl, but struggled to reach her. Upon realising that the girl was unable to swim towards the boat and was sinking below the surface, Wil jumped in and pulled the life buoy over her. With the assistance of his fellow travellers, Wil managed to save the girl.

Article

The traumatised child, who was in shock, was unable to say anything after her traumatic experience. She was later treated by paramedics and taken to the hospital, but was expected to make a full recovery. We are incredibly proud of Wil, who demonstrated strength of character in the face of danger, and his actions reveal how ENSafrica’s team members care. Wil, we are honoured that you are part of the ENSafrica family!

whuang@ENSafrica.com

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ESQ LEGAL PRACTICE 37

Article

Due diligence in Mergers and Acquisitions

s the largest economy in West Africa, Nigeria offers high potential returns for investors. The past 10 years have seen a huge increase in investment activities. Thus, the Nigerian business environment is no stranger to Mergers and Acquisitions.

Legal and regulatory framework Business combinations in Nigeria are generally subject to approval of the Securities and Exchange Commission (SEC). The principal laws dealing with Mergers and Acquisitions are: • the Investments and Securities Act 2007; • the SEC rules and regulations made pursuant to the Investments and Securities Act; • the Companies and Allied Matters Act 2004; and • the Companies Income Tax Act 2004. • Certain industries are also governed by additional industry-specific laws (and applicable regulatory authorities), such as: • in the banking industry, the Banks and Other Financial Institutions Act; • in the power industry,

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the Electric Power Sector Reform Act 2005; and in the telecoms industry, the Nigerian Telecommunications Act.

Due diligence in mergers and acquisitions A due diligence exercise is a necessity for any business combination and it is prudent to perform due diligence before the execution of any merger or acquisition. It is a process of investigating and evaluating the prospective purchase or merger by obtaining financial, legal, intellectual property and other material information. The other party should make most of the information available, but a prudent company should ensure that it obtains independent information. The aims of due diligence include to: • determine the veracity and accuracy of information disclosed by the merging, selling or buying company; • have adequate information to aid in negotiating price concessions; • uncover hidden competitive threats or liabilities; • provide an accurate assess-

ment of the merging, selling or buying company; • develop an appropriate strategy for the merger or acquisition; and • aid in allocating risks in regards to representations and warranties. Due diligence is usually initiated before a preliminary contract is executed but after the parties’ tentative agreement is embodied in a letter of intent and the parties have executed confidentiality agreements in respect of the information exchanged or discovered during the process. Due diligence should be carried out on two platforms: financial and strategic due diligence and legal due diligence. Information sought from legal due diligence activities includes: • the capital structure, including the shareholding pattern; • applicable terms of any shareholders’ agreements, particularly in relation to any pre-emptive rights; • pending judgments, injunctions or orders for and against the company; • pending or threatened litigation, claims or other

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disputes; pending or threatened governmental or regulatory proceedings, inquiries or investigations; tax compliance status; intellectual property and related rights; subsisting contractual obligations; management and employee matters; and any liens and encumbrances on the assets of the company.

Comment The importance of due diligence cannot be over-emphasised. Properly conducted due diligence by experts in the jurisdiction of the acquired entity with particular knowledge of and insight into the business environment of the jurisdiction can minimise the various risks associated with purchasing or merging with an existing business. For further information on this topic please contact Funmilayo Odude at TRLPLAW by telephone (+234 1 816 3135) or email (funmi.odude@trlplaw.com). The TRLPLAW website can be accessed at www. trlplaw.com.

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ESQ Law Report

Article

Dorothy Ufot & Co

Legal Practitioners, Investiment Consultants & Arbitrators

Appeal Court orders parties to honour arbitration agreement action in court with respect to any matter which is the subject of an arbitration agreement, any party to the agreement may at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings apply to the court to stay the proceedings.”

In Williams v Williams(1) the Lagos Court of Appeal recently ordered the parties to honour their arbitration agreement. Facts The appeal was filed against a ruling of the High Court of Lagos State Probate Division which dismissed the appellants’ application for stay of proceedings pending arbitration. Based on the available evidence, there was general acceptance that the parties’ deceased father had revoked his will before his death. A dispute arose as to the disposition of the deceased man’s estate and the parties entered into a family agreement (dated November 23 2005) in respect of the disposition of the estate. The family agreement made reference to arbitration with regards to all disputes under the agreement. Subsequently, the first and second respondents discovered a holographic will made by their deceased father and lodged it with the Lagos State High Court Registry. The appellant and the third respondent filed a motion to stay the proceedings while the dispute was referred to arbitration. The respondents argued that the discovery of the holographic will rescinded the family agreement containing the arbitration clause and that the parties had mistakenly believed that the deceased died intestate. The trial court refused the stay w w w.esqlaw.net

of proceedings, holding that the arbitral clause in the family agreement did not extend to all disputes arising from the estate of the deceased, but rather covered only disputes arising from the family agreement. The appellant appealed. The Lagos Court of Appeal had to decide whether the arbitral clause covered all disputes arising from the estate of the deceased in order to grant a stay of proceedings pending arbitration. The arbitration clause provided that: “All disputes under this agreement shall be settled amicably failing which they shall be settled by a sole arbitrator appointed by all the parties under the Arbitration and Conciliation Act, 1990 Cap. 19 Laws of the Federation of Nigeria.(2) In the absence of concurrence by the parties on a sole arbitrator shall be appointed by the Chief Judge of Lagos State.” Relevant legislation The appeal court considered Sections 2 and 5(1) of the Arbitration and Conciliation Act (Cap 19, Laws of the Federation of Nigeria, 1990). Section 2 of the Arbitration Act provides: “Unless a contrary intention is expressed therein; an arbitration agreement shall be irrevocable except by an agreement of the parties or by leave of the court or a Judge.” Section 5 of the Arbitration Act provides that: “If any party to an arbitration agreement commences any

Decision In allowing the appeal and setting aside the high court’s ruling, the appeal court held as follows: • The holographic will was discovered subsequent to the formalisation of the family agreement with no fault attributed to the parties. • The proper construction of the family agreement revealed that it declared and acknowledged the property that constituted the estate of the parties’ deceased father, including his real estate and personal property. • The intent and purport of the family agreement signed by all of the parties was to provide for a mode of sharing and distributing the real and personal property of the deceased. • The family agreement contained an agreed formula for the sharing and distribution of the estate. The holographic will, if proved, related to the same estate, although it provided for a different mode of sharing the estate. • Under Section 2 of the act an arbitration clause is binding on the parties and is irrevocable, such that any dispute arising from the arbitration agreement must be settled by the arbitral tribunal, unless the parties have agreed to revoke it. In the case at hand there was nothing before the court to show that the parties had

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agreed to rescind the family agreement. The family agreement meant exactly what it stated: that all disputes arising from the mode of sharing and distribution of the estate of the deceased should be settled by arbitration in accordance with the arbitration clause. The parties had to honour their agreement. All further proceedings in the court were stayed in favour of arbitration based on the family agreement and Section 5 of the act.

Comment The court held that the family agreement was unequivocal and related to all disputes arising from the mode of sharing the estate and personal property of the deceased. Where the parties have voluntarily and willingly entered into an agreement, that agreement must be honoured. The Lagos Court of Appeal was right to order the parties to honour their arbitration agreement by staying proceedings and referring the dispute to arbitration. In light of the newly discovered holographic will, it was for the arbitral tribunal to rule on the main dispute – that is, the applicable mode of sharing and distributing the deceased’s estate. For further information on this topic please contact Rosaline Eshett at Dorothy Ufot & Co by telephone (+234 1 463 1723) or email (roseline.eshett@dorothyufotandco.com). The Dorothy Ufot & Co website can be accessed at www.dorothyufotandco.com. Contributed by Dorothy Ufot & Co Endnotes (1) [2014] 15 NWLR (Part 1430) 213. (2) The arbitration law in the arbitration clause should have been cited as the Arbitration and Conciliation Act, Cap A18 Laws of the Federation of Nigeria, 2004 (the law in force when the parties entered into the agreement).

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Legal Icon

HAIRAT ADERINSOLA BALOGUN

“T

o serve in Truth and Justice.” This is the caption-title of the law memoirs or auto biography of Mrs Hairat Aderinsola Balogun. Indeed, the caption servire in veritate et iustitia appropriately depicts in truth, in theory and in praxis the entire person of the legal icon. Any other description is literally a footnote to the caption, for that is what Mrs Hairat stands for. Exposing further the matchless serviceoriented qualities of Mrs Balogun, the outside back cover précis reads: ‘To serve in Truth and Justice tells the remarkable life story of Mrs Hairat Aderinsola Balogun (nee Alatishe)… She spent many years serving her continent as the OAU observer to the Lockerbie trials; serving her nation as pioneer staff of the Anti-corruption commission among other political appointments; serving her State as the first female Attorney-General of Lagos State; serving her profession as a SecretaryGeneral of the Nigerian Bar Association, Council member of the International Bar Association, ad Chairperson of the Body of Benchers, amongst other legal bodies; and serving her society as a member of humanitarian and social organization such as Soroptimist International and Rotary Club.’ ON WHICH SOIL DID SHE SPROUT? The little known seed that burgeoned to a renowned and often sought-after fruit was planted on a relatively fertile land, a land in which truly milk and honey abundantly flowed. It was a dry land that survived its seeds under endearing heat and little rain. Hairat is the proverbial little seed whose fruits w w w.esqlaw.net

are multipurpose and the rejected stone that later became a great cornerstone. It is indeed a marvel to humanity and a breath catch to the legal profession. Born under relatively loving conditions, having being brought to life by a 19 year old lady and cared for by a grandmother who desirously awaited the coming into life of a child, regardless of gender, that would be become her ‘second child.’ The joy and anticipation of having a grandchild overwhelmed the grandmother, and inspired her to quickly take the 10lbs weighed Hairat to her village after just ten days on the planet earth, in order to ‘cook’ her very well and give her all the necessary care and attention she needed. Indeed, Hairat was properly nurtured and abundantly cosseted by her grandmother, although this did not alter her possession and exhibition of sound home training. In fact, she was skilled in artwork such as sowing and knitting and household chores. Hairat hailed from a royal patrilineage in the Badewa family at Ososa, and popular Ideyin and Porogun, all from Ijebu-Ode, Ogun State. His maternalineage could be traced also to Ijebu-Ode and Oru-Ijebu. She only had a taste of elementary education on the soil that grew her at St Saviour and Christ Church Porogun before jetting out to a far-away England at a tender age of twelve. Her dream of intermittent return home was realized but its joy shattered by the passing on into glory of her loving and caring grandmother. A number of persons left no rod unscarred to ensure that the early life and memory of Hairat were not only loving but also forward-looking. Among these were her grand-

mother, Madam Bintu Bolaji (nee Role), a wealthy textile trader, through whom Hairat acquired manners and characters, had a full taste of interesting and loveable childhood, learnt a lot of trade and craft, and grew in domestic chores; there was Mrs May K French, her guardian in Hindhead Surrey, through whom Hairat experienced fun-filled teens typical of every British child; Ronke and Pamela Patrick, Hairat’s friends, with whom she understood the meaning and significance of friendship; Mr and Mrs Eddie Young, a young couple with whom she stayed at South Norwood at her first digs; and Professor Ade Elebute, through whom her desire to study law was reassured and reignited. In fact, Professor Ade Elebute

was quoted to have described Hairat as truth and servicepersonified. He said: “Truth is extremely a difficult thing to define but when you see it demonstrated by a person you recognize it.” FATE, DESIRE AND LAW For those who think that fate is not connected and tied to volition, the life of Hairat would and should set a rethink, send the in naivity packing, and clear the naivety. That she desired law is probably destined but becoming a lawyer is a consequence of desire and doggedness. Her will to study law was first and foremost a function of the imprint made on her by the non grata appearance she made at the Traffic Court Yaba, having being taken there by one Mr Dayo ESQ LEGAL PRACTICE 41

Legal Icon Sonuga, a relative. Later that year, Hairat went back to London to study Law at Gibson and Weldon, and the Inns of Court School of Law─ LINCOLN’s INN. She was admitted to study law at Lincoln’s Inn and after completing her studies between October 1960 and December 1962, Hairat was called to Bar at the age of 21 on the 5th February 1963, with forty other law graduates among who was Kenneth Oladipo Longe. She got her first point of call at Chris Ogunbanjo & Co where she was engaged in litigation, drafting of letters, Agreement of Bills and Charges, and art of financial management. Her desire for greater exploits led her to taking a very ‘thoughtless’ decision of willingly sacrificing ‘something’ for nothing by resigning from the aforesaid firm. Days after this somewhat ‘senseless’ choice, Hairat was jobless and almost penniless. But fate smiled on her pitiable state one day when, on a search for an independent legal practice of that which fate had prepared and desire had achieved, for her─ law, she got an office at 27/29 Martins Street Lagos Island, not commodious though, that was available for lease. Having rented the office at £400 per annum, with an option of installment payment method, legal work properly began for Hairat at Alatishe, Balogun & Co, the maiden name for the present day Libra Law Office. Herein, Hairat legal practice rose from arid grass to humid grace. The guiding principle at Libra Law Office can be subsumed in Hairat’s submission that “a good lawyer should judge success by the rate of satisfaction of clients in the cases handled or briefs treated.” Her joining the International Federation of Women Lawyers about 1972 was a blessing for both the organization and her professional life. She was an integral part of the team in numerous national and international recommendations that reflected in Labour Act and children and women’s rights. As a member of the Nigerian Bar Association, Hairat was actively involved in both physical and mental

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activities of the association, having being elected its General Secretary in August 1981. She was made Attorney General and Commissioner for Justice to the Lagos State Government two years after his dutiful service to the NBA by the then Military Governor of Lagos State Group Captain Gbolahan Mudasiru. During this service, Hairat made some laudable judicial reforms, among which are unification of the posts of Permanent Secretary and Solicitor General (before this reform, the post had been split to provide jobs for political supporters), passage of the first Environmental Sanitation Edict in Nigeria, passage of Illegal Markets (Prohibition) Edict, Creation

of two new divisions in the Ministry of Justice, Initiation of a Memorandum on the Establishment of a Day Care Centre within the secretariat complex, Inauguration of Prison Visits and the Holding of Meeting Sessions by the State Advisory Council on the Prerogative of Mercy in the Prison Yards at Apapa, etc. Later in 1987, her relentless service was again spotted by the Babangida-led military rule as she was appointed member of the Transition to Civil Rule Tribunal. During this short dint, some principle of personal integrity was put to the test by the chairman of the Tribunal, and the immediate response to this temptation was a total rebuff through resignation from the

Committee. She refused a compromise of her integrity, principles, and truthfulness. She was called upon by President Olusegun Obasanjo to act in the capacity of a UN observer at the Scottish Courts in Netherlands. She was actively involved in the court sessions PROFESSIONAL MEMBERSHIP AND ACHIEVEMENTS Mrs Hairat Aderinsola Balogun (nee Alatishe)Officer of the Order of the Niger, Barrister-at-Law of the Honourable Society of Lincoln’s Inn, Life Bencher, Nigeria, and Member of the Chartered Institute of Arbitrators. She spent two years serving Africa as the OAU observer w w w.esqlaw.net

Legal Icon

to the Lockerbie trials in the Scottish Court at Camp Zeist, Netherlands and the Scottish Courts in Edinburgh; serving Nigeria as pioneer staff of the Anti-corruption commission among other political appointments; serving Lagos State as the first female Attorney-General; serving her profession as a SecretaryGeneral of the Nigerian Bar Association, Council member of the International Bar Association, and Chairperson of the Body of Benchers, amongst other legal bodies; and serving her society as a member of humanitarian and social organizations such as Soroptimist International and the Rotary Club of Lagos. As a legal practitioner in private practice she has inspired many men and women through personal example of successfully using judicial means to take on the establishment to protect her own rights, and the rights of those without a voice. She also embodies the decorum required in the legal profession, and the saying that “you do not need a title to be a leader.” She published a national research book entitled Women in the Law in 2009 documenting the motivations, experiences, and challenges of Women Lawyers in Nigeria. She is currently the Senior Partner in Libra Law Office of 15B Idejo Street, Victoria Island, Lagos Nigeria. Qualified as a Barrister in 1963 in the United Kingdom and w w w.esqlaw.net

specializes in Commercial Law, Litigation and Arbitration. She has held several positions and is still in active legal practice while she also serves the legal profession as a Life Bencher. She was called to the Bar at Lincoln’s Inn on February 5, 1963. Attended Nigerian Law School (April to July 1963). Practised in the Chambers of Chief Chris Ogunbanjo till 1967. Senior Partner in Libra Law Office with co-partners Osahon Idemudia and Afolabi Balogun, Associate – Mrs. Modupe Sasore, Chartered Arbitrator and Accredited Mediator. There are 11 Lawyers in chambers. Hairat Ade Balogun is a former Attorney General and Commissioner for Justice of Lagos State (Jan 1984 to Sept 1986), a Legal Practitioner, a Notary Public, a Life Bencher for services to the Legal Profession. She is a former Chairman of the Body of Benchers, former General Secretary of the Nigerian Bar Association (1981 – 1983), former Part-time Lecturer/Examiner Nigerian Law School on Ethics and Law Office Management, former Council Member of the International Bar Association (IBA), former Assessor to the Disciplinary Tribunal of Institute of Chartered Accountants of Nigeria (ICAN), Associate Member of the American Bar Association, Fellow of the American Bar Foundation, Member of the Chartered Institute of Arbitration, UK, former

Executive Member, Independent Corrupt Practices and Other Related Offences Commission, UN Appointed Observer for OAU and NAM at the Lockerbie Trial in the Scottish Court in the Netherlands, Member and President Elect, Rotary Club of Lagos (District 9110), a Paul Harris Fellow and member and chair of Club and District Committees. Soroptimist and Life Member – International Federation of Women Lawyers (FIDA). Life Mem-

ber Nigeria Society for the Handicapped. She is also life member of the International Women’s Society (IWS). She is widely traveled at home (having been to all the States in Nigeria and Abuja) and to several foreign countries. Her interests are Appreciation of the Arts, Music (Jazz, Highlife and Classical), Reading (Fiction and Non Fiction) and Swimming. She has authored two books: ‘Women in the Law,’ 2009 and ‘To Serve in Truth and Justice,’ 2010. ESQ LEGAL PRACTICE 43

The Stars of Africa

INTERVIEW: KARIM ANJARWALLA

hat sort of legal and contractual challenges do firms face in cross-border deals in East Africa? KARIM ANJARWALLA: The foremost challenge faced in closing cross-border deals is the competition regulations promulgated under the Common Market for Eastern and Southern Africa (COMESA) Treaty. COMESA is a regional trade bloc of African countries brought together to promote regional trade and development among other broad objectives. COMESA has recently begun to regulate competition concerns between member

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Investment Promotion Act No. 6 of 2004 incentivises foreign investment in Kenya by allowing investors who propose to invest a minimum amount of $100,000 to benefit from an investment certificate which facilitates the issuance of all necessary licences and permits required for the investor’s operations. Further incentives could be offered by way of specific tax relief for investment in specific sectors or through limited reductions on withholding tax and value-added tax (VAT). The biggest concern relates to the administration of taxation. Investors can face delays in obtaining refunds of VAT, while withholding taxes and Customs clearance can take time with goods subject to a multiplicity of inspections. It would open up opportunities if Kenya were to increase its double-tax agreements. Additionally, tariffs should also be harmonised among the East African Community, COMESA and Southern African Development Community to create a tripartite free trade agreement covering 26 countries.

states, including for deals between member states and non-member states. The time and fees required to comply provide an ongoing challenge especially for smaller transactions – merger filing fees are up to a maximum of $500,000 and the commission can take up to 120 days to analyse merger notifications. Another difficulty faced in regional deals is the lack of harmonisation in legal regimes. What reforms might best improve the attractiveness of Kenya’s legal code to foreign investors? ANJARWALLA: The

What are the strengths and weaknesses of the existing frameworks for new extractive industries? ANJARWALLA: The extractive industry is becoming a major area of growth in Kenya making up around 3.2% of the country’s economy and creating some 11,000 jobs. The legislative framework includes the Constitution of Kenya, the Mining Act, the Trading in Unwrought Precious Metals Act and the Diamond Industry Protection Act, while a new Mining Bill before parliament seeks to overhaul the extractive sector replacing all of these acts. The extraction

of oil and gas is covered by the Petroleum (Exploration and Production) Act. The legislative framework has weaknesses, chief of which is the fact that it is outdated and in need of reform. For instance, the current Mining Act has an uncertain licensing regime with little standardisation across different categories of rights, licences and mining leases. Special licences and leases that permitted exemptions from the Mining Act and applicable regulations were granted at the discretion of the commissioner of mines and geology, with little oversight, prescribed procedure or coordination with other government agencies. The Act did not adequately deal with land rights vis-à- vis mineral rights, and prospecting rights and licences granted in respect of land remain subject to multiple consents and regulatory hurdles. On the upside, the draft Mining Bill 2013 does provide some relief to the confusion of the current legislation by way of streamlining the process of granting licences and approvals with forms, timelines, procedures and consents for application for licences being standardised. Similarly, the bill proposes an expansion of licence categories to cater for large and small-scale operations while extending the life of mining licences to 25 years. The Mining Bill establishes a National Mining Corporation to simplify the government’s participation and holding of carried equity in firms engaging in mining activities. In addition, the Mining Bill proposes the establishment of a Minerals Commodity Exchange to develop a market for trading in minerals and futures. w w w.esqlaw.net

BACKGROUND Karim Anjarwalla heads the Corporate and Commercial Department at Anjarwalla & Khanna. He has wide-ranging experience advising domestic, regional and international clients on M&A, joint ventures, private equity investments, IT and telecommunications. Karim also advises foreign clients investing in Kenya. Karim has participated in various legal and business forums both locally and internationally and has recently been: • Chairperson of the panel on, “Private Equity: Africa Private Equity and Specialised Funds” at the 2010 Canadian Council on Africa business investment forum; • A panelist at the 2010 Harvard Africa Law and Development Conference on a panel entitled “Business in Africa: Navigating the Legal Environmental and the Financial Crisis Africa‘s Development”; • A panelist at the 17th Annual Wharton African Business Forum, 2009 on “The State of Private Equity Investing in Africa”; • A speaker at the 16th Commonwealth Law Conference, 2009 in Hong Kong presenting a paper titled “A Legal Perspective on Private Equity in sub-Saharan Africa”; • A panelist on “Innovative Financing in Africa” during the London Business School’s 8th Annual Africa Day Conference, 2009; and • A speaker at the “Sourcing International Capital for Africa” conference held in Nairobi and organised by ALN, the London Stock Exchange and SJ Berwin LLP, a leading City of London law firm, 2009.

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MEMBERSHIP IN PROFESSIONAL SOCIETIES • East African Law Society • • Law Society of England and Wales • Law Society of Kenya • New York State Bar Association • Africa Venture Capital Association (AVCA) Legal & Regulatory Committee • PROFESSIONAL QUALIFICATIONS • 1997 Postgraduate Diploma in Law, Kenya School of Law • 1993 Law Practice Course, College of Law, London • 1992 B.A. (Law and Politics), Honours , University of Durham, England CAREER SUMMARY • 2004 – Date Partner, Anjarwalla & Khanna Advocates • 2000 – 2004 Partner, Kapila Anjarwalla & Khanna Advocates • 1997 – 2000 Partner, Anjarwalla Abdulhussein & Co. Advocates • 1993 – 1995 Trainee Solicitor, SNR Denton (then Denton Hall), London

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AWARDS & ACCOLADES • Karim has over fifteen (15) years practice experience and has been ranked first in Kenya by various Legal Guides including Chambers Global, Legal 500, IFLR1000 and PLC Which • Lawyer? • “It doesn’t matter where he is, he gets back to you. A very smart guy, able to give you legal advise that’s spot-on and nuanced by practicality”– Chambers Global 2014. • Karim is “a trailblazer who is able to create innovative solutions to problems” – Chambers Global 2011. • ‘Has a range of useful commercial knowledge beyond the legal sphere’ – Chambers Global 2010. • TOP MATTERS • Acting for SABMiller International, the world’s second largest beverages company on the disposal of twenty per cent (20%) shareholding by its subsidiary, SABMiller Africa, in Kenya Breweries – Diageo Plc’s unit in Kenya. This was part of an w w w.esqlaw.net

The Stars of Africa

agreement to end cross-shareholdings in each other’s operations and to allow SABMiller to enter the Kenyan market. Acting as local counsel for Helios Investment Partners (Africa focused private investment fund) and Vitol Group (one of the largest global energy traders) on the acquisition of the Royal Dutch/Shell’s downstream operations in Kenya, Botswana and Mauritius. Advising and negotiating with the Government of the Republic of Kenya, Kenya Railways Corporation and the Government of the Republic of Uganda and preparing the restructuring and amending deeds relating to the Kenya-Uganda Railway concession. Acting as local counsel in Kenya (and also co-ordinating the transaction in Tanzania, Uganda and Zambia) for Bharti Airtel Limited, the largest cellular service provider in India, on its acquisition of Zain Africa’s assets, across fifteen (15) African countries. Providing and co-ordinating corporate and investment advice in fifteen (15) countries in Africa to Tech Mahindra, a leading communications service provider which has been contracted by Bharti Airtel to provide to Bharti Airtel business process outsourcing and telecommunications services in respect of its operations in various African countries. Advising Essar Communications Holdings Limited, a subsidiary of Essar Global Limited, on its acquisition of a forty nine per cent (49%) stake in Econet Wireless International, Kenya’s fourth mobile licensee, and the rollout by Econet Wireless Kenya Limited (now Essar Telecom Kenya Limited). Acting for Essar Overseas Energy Limited, a subsidiary of Essar Global Limited on its acquisition of a fifty per cent (50%) stake in Kenya Petroleum Refineries Limited (“KPRL”) from The Shell Petroleum Company Limited, Chevron Global Energy Inc. and BP Plc. Acting for Apollo Investments Limited which is the holding company for seven (7) subsidiaries including APA Insurance Limited (a leading general insurance business in Kenya) and Apollo Life Assurance Limited, in relation to the subscription for shares by LeapFrog Financial Inclusion Fund (an international insurance sector private equity fund). Acting for DEG and Proparco in an equity investment in I&M Bank Limited, one of Kenya’s leading privately held commercial banks. Including drafting and negotiating Share Subscription Agreement and Shareholders Agreement. Acting for Actae Development, the developer of a high-end housing estate and hotel-type holiday homes known as Lantana in Diana along the Kenya coast on all its contractual arrangements in respect of the development and sale of 47 holiday homes comprising of villas, bungalows, apartments, restaurant, business centre and ancillary facilities, including advising on the structuring of the sales and the rental-pool scheme for the holiday homes for the purchasers, drafting and negotiating the project documents, assisting in negotiations with financers. Acting for Sun N’ Sand Beach Hotel, being one of the preeminent hotels in Kikambala, Kenya which is undertaking the development of luxury residential apartments with an option for purchasers to be part of a rental pool for purposes of offering hotel type services, commercial centre and related amenities. Involved in the formulation of the management structure and currently working on the legal documentation being the agreement for lease, lease, management agreement and related documents. Advising the developer of the Sankara hotel in Westlands, Nairobi. Including advising on the implementation of management contract scheme for their various hotel units, and advising on the various management options available, drafting and negotiating the terms of the management agreement and advising in connection with tax advisors on tax efficient management structures. ESQ LEGAL PRACTICE 45

CHILDREN AND WOMEN IN CONFLICT ZONE Yusuf Ali SAN

4 6 EESSQQ LLEEGGAALL PPRRAACCTTI ICCEE

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he insurgency in Nigeria has raised lots of concern on the future of Nigeria’s unity, what has been the effect of this on the legal profession in Nigeria? It is unfortunate that Nigeria got to this impasse. Probably, if the former president, Goodluck Jonathan, and his government had been more proactive and sensitive, this problem wouldn’t have festered. Apparently, he and his advisers thought it was a small fry in the pan but it has turned out to be a very serious issue. Ordinarily, it shouldn’t have had anything to do with our unity but because Nigeria is a polarized society, people tend to forget that when you have problems of this nature, the resultant effect is indiscriminate. Those who plant bombs don’t determine whether somebody is a Christian or a Muslim, a Northerner or a Southerner, when you throw a bomb inside a market, it could be just anybody. But unfortunately, we have this parochial attitude in this country, if somebody bombs a church, it is seen immediately as a war against Christians, when nobody has been able to identify those behind it except those who claim to be representatives of something. Nobody has been arrested and his faith ascertained, for example, or his tribe. So, I think the name calling has contributed. Asides from that, because it is a strange thing to us as a nation, Nigeria was caught hands down. So our reaction period was too slow in coming. But having said that, the effect on the legal community is undoubted. The core areas where insurgency is very prominent, Borno, Yobe, Adamawa and to some extent, Bauchi. We’ve had lawyers killed as a result of this insurgency. Some had been maimed and some seriously injured. Many lost their properties to the insurgency, because this issue had some up at the NBA-NEC meetings where we had to be raising money for some of our colleagues who are victims. Importantly, a lot of the lawyers in this conflict zones have relocated. Their practices have been disrupted, their social lives disrupted, their well-being disrupted, the schooling of their children disrupted, everything that has to do with them is in turmoil. We have also had courts closed in some of these areas because of all this uncertainty of security. So, undoubtedly, the legal profession in Nigeria has suffered its own due in these insurgency issues and it is only hoped that very soon we will get over this unfortunate aspect of our national life.

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Interview In every conflict situation, women and children as well as other vulnerable people are always the victims, how will you access the role of Nigerian government in watering down the sufferings of these class of people Well, it is undoubted that in every society, you have people we call the weak people, women, children, the elderly, the physically challenged are some of those people and the conflict in the North-Eastern part of Nigeria is not an exception. You will find that most of the people in the internally displaced people’s camps are women and children, old people, people with physical disabilities and so on and so forth. So, that is to be expected. Men generally are assumed, and in most cases they live up to that by taking care of themselves in conflict situations even though you get more men killed in conflict situations like you have in this insurgency because men usually are the ones in the forefront on either side. Those who are promoting insurgency and those who are defending against insurgency usually are men and from all accounts, when these insurgents reach any particular village or place, they go after the men and kill as many as they can. In Nigeria, we have the National Emergency Management Agency (NEMA), but because Nigeria never really had emergencies before, our state of preparedness is a bit low. Since after the Nigeria civil war in 1971, we have not had any national emergency as big as this insurgency, so, our ability to respond is a bit low. Also the facilities that we have are not anywhere near enough. While the government is trying, I want to appeal to all the tiers of government, Federal, State and Local government that we should, in setting up camps for these IDPs, ensure that they are not taken too far away from their homes. What am I saying, these incidents of having to take IDPs from the North to Anambra or Benin for example, why don’t we look for areas in Sokoto, Zamfara or Kebbi. Those environments are very close to the environments they are used to and to my mind, it will be easier to set up camps in those places. Of course, when you set up these camps, you must address the basic needs of those who will be there like the education of the children and the hygienic situation in these camps so that they will be able to have some level of decent living. I think the government should try more and I believe that they can

still try more. When there is a will there is a way. How will you access the legal framework for families in conflict zones in Nigeria Like I said before, we just had general laws, since we never had all this kinds of things, of course, we are not in a war so you cannot call in aid the rules of war properly. What we have is insurgency by some people whom we assume are Nigerians, trying to vent whatever they have on the people. Even in spite of that, the basic rules of rule of law, observance of human rights are still extant and should be obeyed and observed. It is not part of our law that if you suspect that a son is an insurgent, you go and arrest or detain the father or the mother or the wife or the children. So this

case should not be an exception. All these are in our laws and you will appreciate that, recently, Amnesty International came out and said the Nigerian Armed Forces committed a lot of human rights abuses and so on and so forth. While I am not holding forth for the Nigerian Armed Forces, when you have conflicts of this nature, and this has been demonstrated by the various allegations made against American troops, in all the places they are all over the world, not all of them will be able to observe and behave as if we are in a rational situation. So in judging the situation in the Armed Forces, vis-à-vis the observance of human rights, we have to situate it in the perimeters of the conflict situation. But it is good that attention should be called to abuses of human rights because, especially for vulnerable people, people who had ESQ LEGAL PRACTICE 47

Interview

no hands in the conflict. Their rights should be observed and maintained. So for me, I don’t think we need any special laws, I think we have adequate laws, including constitutional guarantees of rights, which we can use to address the issues of the families in the conflict zone. In the case of child suicide bomber Zahra’u Babangida, a fourteen year old whose parents volunteered her to Boko Haram terrorist group, can she be called a victim or a perpetrator? Well, luckily you have put the age. This is one age that you hardly can hold an individual responsible legally. Under the Section 27, the interpretation section of the Child Rights Act, a child is defined as someone under the age of 18. This is an underage person and you want to ask, did the parents know exactly what they were volunteering the child for? Were they induced? Were they cajoled? Were they intimidated? So, we need to do proper investigations, so that other parents don’t fall into the same thing. I was just reading recently, somebody sent something to me on the internet that some of these insurgents have devised new methods of recruiting children without their knowing. Children will be told, ‘please take

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this nylon bag, go and give it to the man over there’ and they will give them money so the children would think they were running normal errands for adults. So in that posting, we were being warned to warn our children not to accept polythene bags or such other items from people, even at the prompting of an adult or upon being offered money. Some children are being used in that way without their knowledge. So it is not impossible that the parents of this suicide bomber, given their background may not have known that what the child was being sent to do would end up, even in killing the child. So, for me, we need to do proper investigation, we should not rush into judgment in situations like this, we should look at all the critical factors and determine if the parents were ignorant and so on and so forth. That then calls on us to mount massive education for parents, not only in those areas but all over Nigeria. If it is because money, we should address the issue of poverty. After all, some parents sell their children because of poverty. If it is because they believe in the doctrine of the insurgents, then they have to be debriefed. So, we should not just take it on the face value and then jump into conclusions. So, for me, we should not pass any judgment until we are sure of what led them to do what

they did. That’s what I am saying and I think that’s very important, because in this country, we don’t like to do rigorous intellectual exertion when there is a problem, to try to get to the root. We just like to treat matters on the surface thinking that the matter is gone, whereas it’s going to rear its head tomorrow. So, that is what I think. What is your view of the legal framework of international conventions against terrorism and it’s domestication in Nigeria? Well, Nigeria is a signatory to most of United Nations’ Conventions including the ones on terrorism. But as you know, under our constitution, until a particular convention is domesticated by our National Assembly, it is not binding. I am aware that most, if not all the ones on terrorism, have been domesticated in this country. In a view to implement the provisions of the UN Terrorism Instruments and to establish jurisdiction over terrorism offences, the Federal Republic of Nigeria enacted into law, the Terrorism (Prevention) Act: in 201I. The Terrorism Act already in its Section 9 creates the offence of international terrorism in tandem with the Convention for the Suppression of Terrorist Bombings while its Section 11 criminalizes the offence of hostage

taking in line with the Convention against the Taking of Hostages. The current administration has adopted a new National Counter-Terrorism Strategy, aimed at combating terrorism and the financing of Terrorism and fully implementing provisions of the United Nations, International and other Regional Terrorism Instruments. So for me, those conventions are adequate and they enable our government to take all the necessary legal steps to ensure that terrorist organizations are dealt with according to the law of the land. All these conventions entitle Nigeria to ask for outside help to combat insurgency and terrorism and the government is already taking advantage of that. You will recall that our President is billed to go to the United States and the issue of terrorism and insurgency, we are told, is top on the agenda of the President’s discussion with the American President. So we are taking advantage of all these multilateral conventions on terrorism and others. You will also recall that when the Vice President went to Borno, it was said that all the States directly affected by terrorism should submit a list of all the losses in terms of material things and that this bill will be sent to the European Union to assist us in addressing them in terms of provision of finance. Also, in April w w w.esqlaw.net

Interview 2015, the European Union (EU) announced a grant of $325 million, to support children who have been affected by the Boko Haram insurgency in Borno State. So, I can tell you that we are benefitting from some of these combinations which is what has entitled us to the aids and to pass on the liability from all these conflicts to other countries. Is the justice system adequate to try cases of terrorism in Nigeria? I want to think it is, because terrorism is just another crime like armed robbery or murder and we have a judiciary that has well trained people and I am aware that not quite long ago, I think the National Judicial Institute had a training program on terrorism for judges and I think it should be an ongoing thing. They should not stop at that. Many more of such seminars should be organized for the members of the judiciary, especially the high court judges because trial for terrorism under our laws is in the High Court. I think quite honestly that they should be better equipped and we should find a way of fat tracking trials for terrorism. I am happy to know that the former Chief Justice of Nigeria did a practice direction to aid the issue of fast tracking of trial of people accused of terrorism and corruption. So the judiciary is already upping the ante in terms of that. I believe that our judiciary is prepared and ready. It’s been over a decade of the promotion of human rights in Africa, what lessons have we learnt in Africa and what should be the next right agenda? Well, I think the awareness of the ordinary citizens about their rights under our laws is coming more and more to the fore. More and more people are now aware that they have certain rights that are fundamental under the laws. More and more people now know that if agents of government do something, they can be challenged in the courts of law. So, there is greater awareness. Although we haven’t gotten there, we still have to do more advocacy for people to become more aware and over this period there have been more and more Non-governmental organizations whose focus have been the issue of fundamental human rights and I think this is helping to drive the awareness of our people. Over this time as well, new rules on the enforcement of rights have been promulgated in our country to replace the 1979 Fundamental w w w.esqlaw.net

Rights Enforcement Rules. This has addressed the lapses of the old rules. I believe quite honestly that we are moving in the right direction and that in the last one decade, we have learnt lessons that human right have become universal and that new crimes are being created like crimes against humanity. Leaders now know that if you do something that promotes genocide for example, and you are the President of a country, you can be sure that the international community will come after you. If you promote any economic agenda that leads to death of citizens, you can be held accountable under the rules of international human rights. So I think there are a lot of things to be learnt there. Well, there are other agenda that I think we should set up as right agenda. I believe quite honestly that the right to education should be fundamental, right to a minimum standard of life should be fundamental. Right to medication should be fundamental and right to jobs of people who have had some level of training by going to a tertiary institution should be a duty on the state to provide jobs for people who are graduates or provide the enabling environment. These are some of the right that I think should be promoted to join the other rights that are already in Chapter Four of our constitution as fundamental rights. So, it shouldn’t be an optional thing for government, for example, to provide access to healthcare for its citizens. It shouldn’t be an optional thing for government to provide education. It should be compulsory. After all the duty of any good government is to promote the happiness of majority of the citizens. So, I quite honestly believe that these are some of the rights that should be promoted to rank as fundamental human rights. How will you access the future of international criminal justice in Africa? Well, I want to think that the whole of Africa should try to go the way of the European Union, we should promote, not only economic integration, we should promote legal integration in Africa, especially criminal justice integration. The countries that have advances criminal justice systems in Africa, like Nigeria, South Africa, Ghana and Egypt should be at the forefront to push for this agenda. I believe that the future of international criminal justice system is very bright because the world is becoming more and more a global village and like I said earlier, states can no more hide under the doctrine of national sovereignty to perpetrate crimes

against the citizens and believe that the international community will not ask questions. So, in as far as that goes, we now know that sovereignty is not a magic wand. You will see that just in recent times, a court in South Africa gave a restraining order against the President of Sudan. Of course, I have my issues about the competence of the domestic court in a country to give a binding order against the President of another country; it tells you now dynamically the issues are coming on. So I believe that there is a bright future for international criminal justice system in Africa, because the world is becoming a global village and because of the awareness that sovereignty cannot be used anymore as a shield to protect criminals, be they leaders or followers in any country. There has been another push for regional integration in Africa, what will be the implication of regional integration on the legal profession in Nigeria? Globalization has its own attractions but you will pay a price for it. If there is integration in Africa for

example, it makes legal practice seamless. Nigeria has a strategic advantage because of the advanced nature of our legal system. We have come a long way. Our legal system is more than a 100 years old and Nigeria has been a net exporter of judicial officers to other countries since independence. I believe many Nigerian legal practitioners get invited to international tribunals. Nigeria has been lucky to produce the President of the International Court of Justice in the Hague twice. So, I think we are right there. So if there is socio-economic integration in Nigeria, for example, we stand to gain. The only challenge is that the legal profession must be preparing for such eventuality in terms of training and focus. One of the ways we can get there is by starting from now to promote mega partnerships that will be able to rival and compete with some of the big legal firm partnerships in other parts of the world. So if we start now, we will be able to have strategic advantage and if the integration eventually comes, it will be an advantage but if we do not prepare, we may find that in spite of our numbers, we will be at

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the bottom of it all because South Africa is right there breathing down our neck as well as Egypt.

such that people will be deterred and discouraged from being corrupt. A situation where an official who has stolen so much billions is given a slap on the wrist, will not discourage The Buhari administration specifi- would-be corrupt individuals and cally made the fight against corrup- the right signal will not be sent. So, I tion not just a campaign slogan but believe quite honestly, that the death the crux of the administration. As a penalty should be considered for major stakeholder, what advice do official corruption which is the bane you have for the government in scal- of our development as a nation. ing the hurdles posed by our laws in Nigeria? When there is a will, there is a way. The only area of our anti-corAfrican government continues to ruption law that we have to tinker see the ICC as a tool of oppression with is the punishment sections of created by the West against African those laws. Like I have always advo- leaders, what are your view of Africa cated, a terrible disease needs radical and the complementarily principle treatment. Corruption has virtually of the ICC? brought this country to its knees and You see, there are two ways of that is stating the obvious. Therefore, looking at the issue. You can look at some of us believe that we should it from the point of view of imperialadopt what China does. In China, ism or form the point of view of the a finding of guilt in a corruption weaknesses in most of the judicial case carries the maximum sentence systems in African countries. Let available and Nigeria should not be me take the latter. If you just look at an exception. Having said that, we it plainly from the very weak legal should not make the punishment framework of most of the African for corruption as cosmetic, as they countries, the International Criminal are now. We should, through the Court will look very attractive sentencing system, demonstrate because in most of these African to those who are corrupt that they countries, things hardly happens are not going to have it easy under legally to those who are in power or the law and the sentences must be their cronies. So, there is the attraction of something external to bring them

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to account because in most African countries, we have very weak institutions, even where they exists. Look at the police for example, in most African countries, the police forces are not seen as a force that should be loyal to the government and not the people in government. So, in most cases, the officers are usually loyal to those who are in power, it therefore becomes virtually impossible for them to be able to proceed against people in government. Whereas, in other countries that have strong institutions, the police forces in those countries act far and above the people in power. If there is a compliant against a minister, for example, in those countries, the police will not consider your status before they move against you, whereas that is not the case in most African countries, if not all. So, if you look at that argument, you will support the institution of ICC. But if you look at it for example, the United States of America for example will not allow its citizens to be tried by any other court or tribunal except its own domestic courts and when you are talking about equality of states, you will want to come up with the argument that what is good for the goose is sauce for the gander. America, no matter how powerful it is, is just one country. If her own citizens will not be subject to the rules of international tribunal and courts, why should the citizens of other countries be subject to it? Especially African countries that are seen as weak by other countries and given the history of colonialism and imperialism in Africa, those who argue that ICC should not be the path also have their own point. But I think that we can have a marriage of the two points of view. We could say, look, for an offence against humanity, it should be the ICC, all other offences should be the concern of the domestic courts of the different countries. For offences if official countries of people in power, especially those who head theses governments, because of the lack of fiber, moral backbone of our own institutions, if you find that the former president of Nigeria, for example is corrupt, may be ICC could have ago. But then it is something that you have to balance between those who see ICC as an imperialist institution vis-à-vis the reality of our situation in Africa that we have very weak institutions, even where they exist. As a member of the NBA disciplinary committee, how will you access the role of regulators in growing and facilitating the legal

profession in the 21st century? Well, let me first of all correct something, the disciplinary procedure for lawyers in Nigeria is dual, that is there are two bodies that are responsible. One deals with the preliminary issues and the other deals with the trial. The Nigerian Bar Association has disciplinary committees all over Nigeria. The job of those committees is just investigative, when there is a complaint against a legal practitioner, and the complaint comes to the NBA, such complaints are sent to the committees and the committees in turn invite the lawyers involved with the complainant. It is the outcome of these committees that come before the legal Practitioners’ Disciplinary Committee. The Legal Practitioners’ Disciplinary Committee is not an arm of the Nigerian Bar Association. It is a statutory committee of the Nigerian Body of Benchers. I am not a member of the NBA disciplinary committee but a member of the LPDC which is a tribunal set up under the law to look at cases of lawyers against whom the NBA disciplinary committee has found a prima facie case. The cases are sent to the LPDC for trial. As a member of that noble body, which is responsible to the Body of Benchers and not the NBA, I can tell you that since the LPDC was reconstitutes about two years ago, and from the feedback, the current LPDC is on the correct path to bring sanity, decency and professionalism back to the legal profession in Nigeria. The reason is not far-fetched, in fact among lawyers now, the fear of LPDC is the beginning of professional wisdom. I can tell you, in the last two years, almost 20 lawyers have been derobed, some had been sanctioned by way of suspension for five years or thereabout. One or two have been warned. The seriousness of the LPDC has rubbed off on discipline in the profession. For me, once the regulators of the profession, be it legal or whatever, take their matter and mandate serious, it will impact positively on the attitude of professionals, especially lawyers, to know that the days of impunity, the days of ‘I can do anything and nothing will happen’ are gone for good, and for me, that is the critical thing that should happen. If I want to extend that, that should be what should happen to our anti-corruption legislations as well. The observance of those laws will promote a better society for us. After all, Nigeria is not having the problem of shortage of laws in virtually all aspects of crime, corruption and all, what has been lacking is the will to enforce those laws and the fact that the LPDC w w w.esqlaw.net

Interview now is enforcing the rules of professional ethics for lawyers in Nigeria, the result is becoming obvious. I can assure that if the LPDC goes on this way for the next two, three years, the legal profession will be properly sanitized. In the development of international commercial arbitration in Africa, what should Nigerian lawyers be concerned about? Our concern as Nigerian lawyers is to ensure that the mega law firms that are from outside of Nigeria will not take over the totality of the market of commercial arbitration in Nigeria s they are doing currently. I am happy to note that a lot of people are now showing interest in ADR mechanism generally which include arbitration, mediation, negotiation, conciliation, good offices and others. For me, one of the things we must learn to do is that all the major arbitration contracts in Nigeria should be domesticated in Nigeria. That is, the seat of the arbitral tribunals that will be created by virtue of agreements entered in Nigeria should be in Nigeria and the laws that should govern these contracts should be Nigerian laws. A situation where our own NNPC will enter into an agreement and the seat of arbitration is in Paris or London or New York or Luxembourg or Vienna, should not be the case. When you take arbitration to those places, the first choice of arbitrators will be people who are not Nigerians and Nigeria has also produced world class arbitrators in commercial arbitration. In any event, if the seat of arbitration is not in Nigeria and the Nigerian arbitrators are not patronized, how will they be able to develop the skills necessary to join the rest of the world in international commercial arbitration? So we should not make Singapore, for example, the seat of our arbitration in Nigeria. Let’s come here and develop our own institutions especially arbitral institutions, so that we can also compete with others and Nigerian arbitrators should also do world outreach. We should not limit ourselves to our country, we should extend our tentacles to other parts of Africa so that we will also take advantage of the arbitral globalization is also in vogue. Recently, a section of the media reported that the current administration may not use the EFCC and the ICPC in its fight against corruption. Do you agree with w w w.esqlaw.net

this strategy or will you propose a contrary approach to fighting corruption? Well, that was just media report, there is no way the current government, given the legal framework that we have today, will fight corruption today without the EFCC, ICPC, DSS and the Code of Conduct Bureau. Having said that, the world has moved from just arresting a public official that is corrupt and jailing him. The world has moved to reparation, how do you get back what has been stolen, and I think that is the challenge for this government. They may have to sponsor a law that will make the principles of tracing possible and will protect whistle blowers. The totality of all the hullabaloo and the criticisms that follow the issue of plea bargaining will have to be revisited. For me, what is important at this stage is, if X had stolen N10 billion, there should be something in our law that allows us, after tracing the N10 billion, to require him to forfeit the money to the state in exchange for minimal punishment. I do not advocate that once people return money, they can go home free. No! consequences must follow. If an individual admits stealing from the state, he should still be charged to court, plead guilty and given a minimal sentence. The stigma of being a convict is enough even if he is not spending 100 years in prison. He may be sent to prison for a month but the state has its money back in its coffers. We seem to forget one thing, those who get involved in corruption at high level of governance are every sophisticated people. If we rely on prosecution alone, many of them will go away scot free. One, the capacity of the anti-corruption bodies to do investigation is seriously limited, except we are deceiving ourselves. In terms of personnel and the requisite experience, they are not there. Then for the prosecution itself, when you prosecute a criminal offence, you are not the judge, you may or may not win, so if you take an individual to court that he has enriched himself to the tune of N10 million, and for whatever reason you are unable to prove it, he goes away with the loot, once he is discharged and acquitted. So because of the uncertainty of criminal trial, not only in Nigeria alone, but in every part of the world, am not localizing it now, there is uncertainty of criminal trial because you cannot know the outcome. With the best of the prosecution’s ability, the man also has the resources to retain

the best of lawyers to defend him. So because of all these uncertainties, we may be better off to have this kind of system in place where we negotiate, the man surrenders 99% if whatever he has stolen, he is given minimal sentence and then the money comes back to the purse for the government to use for positive and purposeful things. So, I believe quite honestly that, other than that, we should strengthen the EFCC and ICPC and the Code of Conduct. Let’s look at the laws, for the Code of Conduct for example, it is simple thing. The issue of asset declaration should be public. What do I mean? I am not saying that the President should come and say that this is my assets. But it should be public in the sense that once he submits the form, it can be published automatically without anybody having to ask for it, without having to invoke the Freedom of Information Act. Anybody can just ask for it and it should be provided without any conditions attached except for maybe the payment of a token as administrative charges to make photocopies. Also newspapers should be able to have access to it to publish it without any precondition. That is what I mean by public. So once you remove the element of the declaration having to be kept as a secret with the Code of Conduct Bureau, then that is public declaration of assets. You may go further to just require the President, Vice President, Governor, Deputy Governor, principal Officers of the legislative houses to declare their worth in summary without going into details which will be with the CCB. The summary should be in the public domain. I think that will assist us. This year, the Nigerian Bar Association annual conference will be focusing on ‘Lawyers and National development’, how will you access the role of Nigerian lawyers to nation development in Nigeria. The issue of Nigeria is like the issue of the lawyers. Since the first lawyer in Nigeria, Christopher Sapara Williams, lawyers have played very prominent roles. During the struggle for independence for example, many of the nationalists were lawyers, Obafemi Awolowo, Akintola Williams and a host of others and since independence, lawyers have played very prominent roles in governance. Under our constitution, the chief law officer in the country must be lawyer, the Attorney-General and Minister of Justice and for the states, the Attorney-Generals and Commis-

sioners for Justice must be lawyers. Once you become an AttorneyGeneral, you are the leader of the Bar. The Federal Attorney-General is the leader of the Bar in Nigeria, for example, that is why statutorily, he is the leader of the Bar Council, which is the body that makes and reviews rules of professional ethics and so on and so forth. So, once you become Attorney-General in a state, you are the leader of the bar in the state and that is why it is very important, in appointing AttorneyGenerals, we should put men who have strong pedigrees. People who will not, because of the allure of office, compromise the principle of the rule of law, observance of fundamental rights of the citizens, people who will be able to stand right and address the President and Governors, as the case may be, on the correct position of the laws of the country. People who are not looking for the offices to become relevant in Nigeria or the society, should be the people to become Attorney-General, either Federal or State. They should not be people who now see the office as a springboard to get known professionally. They should be people who are fulfilled professionally, people who can look at the President in the face and say ‘Mr President, if you disagree with what I have just said, without superior legal opinion on the other side, you just want to do what you want because of political expediency, then I will leave your government’. People who will add value to the moral fibre and the ethics of the profession, people who will be mentors to other lawyers, whom other lawyers will look up to and say ‘this is the ideal type of human being that should be the Attorney-General’. People who will not sell the office of AttorneyGeneral, people that will command the greatest respect among their peers. So, this is one way we can act as agents in national development. Another area is to ensure that we put our best on the bench. The bench should not be seen as a promotional cadre. ‘Oh! Once am a Chief Magistrate, I must be CR, once am a CR, I must be a judgeor once am in the high court and it is the turn of my zone, I must go to the court of appeal’, ‘Oh, once am in the court of appeal and am the most senior from my zone, I must get to the supreme court.’ It shouldn’t be that. It should be merit based and that is the only way we will have judges who we will be proud of. Nigerian judges are trying, but we could do better. There is always room for improvement because it is a human institution anyway. ESQ LEGAL PRACTICE 51

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Technology

By George E. Leloudis George E. Leloudis is the executive director of Woods Rogers PLC in Roanoke, Va. As a certified public accountant and certified legal manager, he has more than 10 years of leadership and management experience within the professional services arena. his column may be more a review of strategy than product. With Microsoft’s recent 30 percent price cut on its Surface RT tablet, the company is trying to better position its device in the tablet marketplace. I selected the Surface for this review before the price drop because I thought it was a worthy contender. Only time will tell if Microsoft’s strategy sparks more interest in the Surface line or if it merely helps the company to sell off inventory of an unwanted product.

UNDER THE SURFACE Before gazing into the techno crystal ball to predict Surface’s success or demise, let’s look at the device as it stands today. The Surface RT was released in late 2012, and the newer Surface Pro was released in early 2013. The RT, as indicated w w w.esqlaw.net

Microsoft Surface Tablet:

Quiet Boom or Loud Bust? by its name, runs Windows RT operating system on an ARM processor, typical of mobile devices. The Pro runs Windows 8 on an Intel processor, which makes it more comparable to a laptop than most tablets. The Pro supports traditional x86 applications while the RT depends on apps purchased through the Windows Store. Currently, many of today’s popular apps are not available for the RT model. However, the RT comes loaded with Microsoft Office Home and Student 2013, which includes Word, Excel, PowerPoint and OneNote. With the release of the Windows 8.1 RT upgrade, Outlook 2013 is added to the suite. This can be seen as an advantage over the Pro model because it is sold with only a onemonth trial subscription to Office 365. The Surface RT, which I tested for this column, is offered in 32GB and 64GB models. Out of the box, the two models offer 15GB

and 45GB, respectively, of space for user content. Storage can be expanded using the built-in microSD card slot. The RT was designed to work with SkyDrive, Microsoft’s cloud-based file management offering. SkyDrive comes preinstalled on the device, and the service is fully integrated with the Office suite programs. Users who create a Windows account are provided with 7GB of free storage. An additional 50GB can be purchased for an annual fee of $25, making SkyDrive

a competitively priced alternative to Google Drive and Dropbox. Besides its SkyDrive integration, the Surface RT affords users the ability to manage files via a built-in, full-size USB 2.0 drive. Aesthetically, the Surface gives its main competitor, the iPad, a run for its money. The device’s dark titanium-colored VaporMg casing looks sleek and feels solid. The Surface RT is the same thickness as the iPad but is slightly narrower and longer, and it is ESQ LEGAL PRACTICE 53

Technology a bit heavier at 1.5 pounds versus the iPad’s 1.33 pounds. As with the iPad, the Surface RT’s glass front extends to the edge of the device. The built-in kickstand appears to be part of the casing when closed and provides steady support for the unit when extended. The slightly slanted sides of the Surface sport a power button, volume control, headphone jack, HD video out port, two microphones, stereo speakers and the cover port. Using the magnetized cover port, users can attach the Touch or Type covers. The Touch cover features a smooth, pressuresensitive keyboard, and the Type cover has a traditional mechanical keyboard. I selected the Type cover for my review and found it

comfortable to use and very responsive. Both lightweight covers feature a trackpad, a row of function keys, media controls and Windows shortcut keys. With the Type cover attached and the kickstand extended, the Surface provides a true laptop-type experience. Unlike keyboards I’ve used with my iPad, I rarely had to remove my hands from the keyboard to make an on-screen gesture. The only drawback I found with the Type cover is that it is easy to inadvertently press keys when the cover is folded around behind the screen. From a performance standpoint, I found the Surface RT to be adequately powered and very responsive to touch-screen and keyboard commands. The unit’s 1366-by-768-pixel screen delivers crisp, clean images with brilliant colors. When attached to my HD television, the device performed reasonably well while playing a movie streamed from Netflix. The onboard speakers are respectable but seemed light on rich tones. For listening in large rooms and presen-

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tations, I recommend using a Bluetooth-enabled external speaker. I found it very easy to pair my Bose SoundLink. Love/Hate Relationship Since the launch of Windows 8, I’ve heard col-

leagues in the IT world predict it will be the next Vista. In other words, shortlived. Perhaps this view has dampened interest in the Surface. Questions surrounding Microsoft’s commitment to the RT operating system may also be a factor in weak initial sales. The risk of betting on RT’s longevity was lessened by the Surface RT’s new price points—$349 for the 32GB model and $449 for the 64GB unit. I didn’t fully appreciate the Windows 8’s modern interface until I test-drove the Surface RT. It was obvious that Microsoft designed the operating system with a touch screen in mind. As you likely have seen in Microsoft’s advertising, the Surface’s operating system supports a level of multitasking to be envied by iPad users. Using simple on-screen gestures, users can “snap” an open app to the left or right, allowing the simultaneous use of a second app. For example, I worked on a spreadsheet

while monitoring my email inbox. With the Type cover, I used the Alt+Tab keys to scroll through numerous open apps, just as I do on my desktop. Printing from the Surface also surpasses the capabilities of its competitors. I connected to my wireless-enabled HP printer in a matter of seconds. One print feature I was excited to see was the Send to OneNote 2013 driver. For years I’ve wanted the ability to use OneNote on a tablet and have the changes synced with my desktop. Lacking a solid app for iPad, I had to transition to Evernote. With OneNote 2013 on a Surface RT, the recently upgraded OneNote app on my iPhone, OneNote 2010 on my desktop and my SkyDrive account, I could have a robust note taking experience—taking full advantage of OneNote’s broad integrations.

Fortune Teller Change comes extremely fast in the tech world, and sometimes it’s hard to see what’s around the corner. From a sales standpoint, Microsoft’s Surface tablet got off on a bad foot. Many industry watchers are already predicting the device’s demise, painting the recent price cut as a sign of surrender. It’s difficult to know what Microsoft has in store for future releases of the device or its RT operating system. But after experiencing the Surface RT’s tight integration with the apps that I use on a daily basis, I’d be willing take a risk on the device— especially at the new price point. My prediction for the device’s future? Sales increase, app developers get on board and grow the Windows Store, and the person next to you at a future meeting will be bragging about his or her Surface tablet.

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Article Part 1: The pitfalls of crossborder service arrangements - what you need to know Lavina Daya

ith the increasing focus on crossborder payments in the context of profit shifting, management services in general, have recently become a main focus area of the South African Revenue Service (“SARS”) due to the substantial amounts of money flowing from South Africa on an annual basis as payments for management and related fees. In this regard, the Davis Tax Committee, in analysing the impact of Base Erosion and Profit Shifting (“BEPS”) on South Africa, reviewed data obtained from the South African Reserve Bank (“SARB”) which shows that for the calendar years 2008 to 2011 nearly 50% of all non-goods payments flowing out of South African related to legal, accounting and management consulting fees. This article sets out a brief summary of the various issues which need to be considered in the context of management services which have been relevant for many of our multi-national clients. This article has been split in two parts. Part 1 will deal with the recent developments in the context of cross border service arrangements, including the requirement for nonresidents to register for income tax in South Africa, as well as the withholding tax on service fees which comes into effect on 1 January 2016. Part 2 will deal with transfer pricing and exchange control considerations in relation to cross border service arrangements. w w w.esqlaw.net

Requirements for a nonresident service provider to register and submit income tax returns In terms of the notice issued by the Commissioner in relation to the 2014 year of assessment (“2014 Notice”), non-resident companies are required to submit an income tax return if, inter alia, they derive service income from a source in South Africa. It is important to understand that the ultimate objective of the registration requirement is for SARS to be able to identify non-resident service providers that earn service income from a South African source that is either not protected from South African tax as a result of a double tax agreement or where such income may be attributed to a permanent establishment (“PE”) of such non-resident service provider in South Africa. Although the Income Tax Act No 58 of 1962 (“Act”) contains a definition of “source” in respect of certain forms of income, it does not specifically address the

source of service income and therefore it is necessary to consider the common law source principles as distilled from case law. South African case law indicates that the source (originating cause) of income received for services rendered are the services themselves. The source of such income is located at the place where these services are provided. In the context of services, the “activities test” is generally applied to determine the source of the income, i.e. the place where the services are rendered prima facie constitutes the source of the income. Should a non-resident group entity render services to the local entity from outside of South Africa, the service income derived therefrom should not be regarded as being sourced in South Africa and accordingly there should be no obligation for such nonresident entity to register and submit an income tax return. However, the position may be different if, for example these services are

rendered in South Africa or partly in South Africa. Should this be the case, it may then give rise to South African sourced income, triggering an obligation for such non-resident group entity to register for income tax in South Africa. Withholding tax on service fees The withholding tax on service fees comes into effect on 1 January 2016 and will be levied at a rate of 15 per cent in respect of the amount of any service fee that is paid by any person to or for the benefit of any foreign person to the extent that the amount is regarded as having been received or accrued to that foreign person from a source within South Africa. Should a local company receive, inter alia, management services from a nonresident group entity, the withholding tax on service fees may apply to payments to the non-resident group entity for such management services to the extent that the amount is regarded as ESQ LEGAL PRACTICE 55

Article having been received or accrued to the non-resident entity from a source within South Africa. This would be the case where, for example, the non-resident group entity sends individuals to South Africa to render management or consulting services to the local entity. This would result in the local entity having an obligation to withhold the withholding tax and to pay such amounts over to SARS. In addition it will have a compliance obligation in terms of rendering a return to SARS in respect thereof. It is noted that failure to withhold or pay these taxes to SARS could result in the person that is required to withhold the tax (i.e. the local entity receiving the management services) being personally liable for the tax. In addition penalties may be levied in certain instances for the failure to withhold or correctly withhold. The position, may be different in a scenario, where the non-resident entity provides the management services from outside of South Africa. In this case, the source of such income should not be regarded as being in South Africa and accordingly the withholding tax provisions should therefore not apply. As such no withholding obligations would be placed on the local entity receiving the management services. At this stage it is unclear how the withholding tax on service fees would apply to service income from multiple sources (for example in a scenario where management services may be partly rendered from South Africa and partly from outside of South Africa). Furthermore, the definition of services fees currently refers to amounts received or accrued in respect of technical services, managerial services and consultancy services, but no guidance has been provided by SARS on what type of services would fall under these sub-categories, e.g. what would constitute services of a technical nature? It is noted in the 2015 Budget Speech read by the Minister of Finance on 25

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February 2015 that it is proposed that the provisions dealing with the withholding tax on services be reviewed to clarify definitions and remove any anomalies. Given the above statements in the Budget Speech and also the fact that no specific guidance or declarations has been released by SARS on the withholding tax on service fees to date, we expect to see amendments to the these provisions which are already contained in the Act in sections 51A to 51H of the Act. Reportable Arrangements A further issue to consider, is whether service arrangements constitute a “reportable arrangement” in terms of the Tax Administration Act No 28 of 2011 (“TAA”). The TAA provides that an arrangement may constitute a “reportable arrangement” in two scenarios, one of which is if the arrangement is listed in section 35(2). Section 35(2) provides that an “arrangement” is a “reportable arrangement” if the Commissioner has listed the “arrangement” in a public notice. It is noted that in the context of services fees, SARS issued a Draft Notice on Reportable Arrangements (“Draft Notice”), in 2014. The Draft Notice set out certain arrangements which SARS identified to have certain characteristics that

may lead to an undue tax benefit and therefore will be regarded as a “reportable arrangement”, triggering a duty to disclose such arrangement to SARS. Most relevantly the following was set out in the Draft Notice to be a reportable arrangement: “any arrangement in terms of which fees that are payable or may become payable, on or after the date of publication on this notice, by a person that is a resident to a person that is not a resident with regard to services rendered to that resident in the Republic, exceed or are reasonably expected to exceed R5 million”. Further to the Draft Notice, a public notice (“the Notice”) was issued in the Government Gazette on 16 March 2015 in terms of which the Commissioner for the South African Revenue Service (“SARS”) lists various arrangements as “reportable arrangements” in terms of section 35(2) of the TAA. We note that the Notice no longer list arrangements in terms of which fees are payable by a person that is resident for services rendered to a non-resident which exceeds R5 million as set out above. Accordingly, at this stage the abovementioned service arrangements should not be regarded as a reportable arrangement in terms of section 35(2) of the

TAA. Conclusion It is important that taxpayers be aware of the above mentioned considerations in respect of cross-border service arrangements. We note that the requirements for non-residents to register for income tax in South Africa as well as the applicability of the withholding tax on service fees is only relevant to the extent that the service income, derived by such non-resident, is regarded as being from a South African source. Should the non-resident service provider derive service income which is not from a source in South Africa, then the requirement to register for income tax in South Africa, as well as any withholding tax on service fees, should not be applicable. We recommend that taxpayers who pay, inter alia, service fees to non resident service providers, perform a detailed analysis regarding the source as such service income in order to, inter alia, establish their obligations in respect of the withholding tax on service fees. Similarly the non resident service provider should analyse the source of any service income derived in respect of the provision of services to a South African taxpayer in order to consider its obligations to register for income tax in South Africa as set out above. w w w.esqlaw.net

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ESQ LEGAL PRACTICE 57

Article Measuring Law Firm’s Risk Management:

Smart Firms Do It Before A Claim Occurs, Others May Do It After (Editor’s Note: This article was authored by Tom Berman, President of Thomas Berman & Associates in San Francisco. He is an expert and frequently writes and lectures on topics relating to professional risk management. Tom can be reached at 415/861.6032.)

erious claims against a law firm may have a devastating effect, going far beyond the actual dollars involved. The impact includes large amounts of time lost, deteriorating relationships between and among partners, and, in many cases, repercussions within the firms’ client community. The impact on the fabric of the Partnership itself is a case in point. It is not at all unusual for the Partner most involved with the matter which led to the claim to leave the firm entirely. In our Risk Reviews we have found that in almost 65% of those matters involving serious claims, the Partner most involved with the case which led to the claim had actually left the firm within 18 months of the issue having arisen. Clearly, the impact goes far beyond the financial side. Our observations of law firms which have suffered serious losses indicates that the impact of these losses have to be carefully considered in ways separate and distinct from dollar damages. Not at all unlike a patient who has experienced a serious trauma, law firms tend to want to immediately forget about their professional liability problems. It’s very much a case of “denial” in the classic sense. The firm wants to pretend that the matter never arose even though the repercussions are still very much in evidence. You could make the argument that the partner involved in the matter, as a continuing reminder of these difficulties, is almost “cast out” from the Partnership. In this way, the firm enables itself to believe that the departing Partner was actually the concern; not the real problem which is the way that the firm handles its business on a continuing basis.

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The only way that a firm, once it’s experienced a serious claim, can avoid costly mistakes in the future is by analyzing and coming to grips with what has happened in the past. That’s why an objective review performed by a third party can be so helpful. It allows the law firm to focus on the details of the occurrence and hopefully learn from it. This kind of review assists the firm in not only dealing realistically with its problems but, even more importantly, developing and implementing a strategy to see to it that the problems do not recur. There are some Practice Standards or “Rules of the Road” to use in order to measure the ability of a law firm to manage itself effectively. These are standards which we have developed to create measurable objectives. It allows us to review a firm and report on the ability of the firm to handle its affairs in a professional and risk adverse manner. In part they include: • Partnership or Shareholders Agreement; • Overall Management Structure; • Mechanics of the Practice; • Financial Management; • Case Acceptance Principles; • Conflicts and Ethics Considerations. The Partnership Agreement A Partnership or Shareholder Agreement should help to translate overall firm philosophy into day to day policy and then provide the wherewithal to see that the policy is carried out. The Agreement should have provisions setting out duties and responsibilities of the Partners. It should set out a basic compensation scheme which provides for

compensation to those Partners who are responsible for not just the billable hours but also for doing other things important to the overall health of the firm; things like training associates and supervising staff. These may not make money in and of themselves but they help provide a setting in which money can be made. In the long run, particularly in a Risk Avoidance context, they are just as important as billing. It is just this simple: law firms which have a clearly defined structure with duties and responsibilities set out, do not have the claims problems of firms which do not have such a structure. Overall Management Structure The general structure of the firm, whether or not it has a Managing Partner, an Executive Committee, etc., should be delineated in the Partnership Agreement or Shareholder Agreement. An analysis of this structure as it functions on a day to day basis determines the firm’s capability to develop policy, translate that policy into a plan of action and then carry it out. Firms that have an effective Management Structure are less likely to have claims, not because they have better lawyers, but because they have created policies which are well considered and

then carried through. Mechanics of The Practice The translatable goals of the Partners, affected by the then- created structure of management nets the Mechanics of the Practice. This encompasses the system design for the day to day firm activity. It also includes the hiring of staff to carry out those Partnercreated objectives. A firm which sets goals for itself including the rewarding of Partners for doing not strictly billable work, will avoid many claims situations. Financial Management Adequate Financial Management in a law firm means that the firm has accurately anticipated its financial requirements by profit planning and budgeting. The quality of its Financial Management affects the way that the firm makes decisions. Cases in which there appears to be a conflict, may not be handled properly if a firm is suffering from cash shortages. Risks are taken to which claims are very often the inevitable result. A law firm which is well managed financially may be able to withstand the difficulties which ensue if there is a major claim. Firms that are not well managed financially do not survive for very long in their present form. w w w.esqlaw.net

L E G A L P R AC T I C E

In-House School Training

17th-18th Novermber, 2015

Venue: LCCI Building; 10, Nurudeen Street, Alausa-Ikeja, Lagos

For registration, course content and other enquiries, please call, FUNMI: 0816.930.9575, ADEKEMI: 0701.671.4842, or send an e-mail to: training@esqlaw.net.

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Â ESQ LEGAL PRACTICE 59

NOMINATIONS OPEN FOR NIGERIAN LEGAL AWARDS

NIGERIAN

LEGAL AWARDS 6 0 E S Q L E G A L P R A C T I C E

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ABOUT THE ESQ NIGERIAN LEGAL AWARDS

NIGERIAN

LEGAL AWARDS

The ESQ Nigerian Legal Awards sets out to recognise the important contribution the legal business community makes to the development of the Nigerian economy. The award will honour outstanding law firms and legal professionals in Nigeria and in the diaspora. The Award reflects pre-eminence in key transactions, practice areas, and achieve¬ments over the last eighteen (18) months, including notable work, strategic growth, excellence in client service, and contribution to the legal profession. The award is based on the legal deals or unique contribution to legal business in Nigeria within a period of twelve to eighteen months. The 2014 edition of the award enjoyed the sponsorship of Forte Oil Plc, MTN, Grace InfoTech Limited (Publishers of Law Pavilion), CleanBubble Drycleaners and Asiri Ewa. Over seventy deals were reviewed by the judges last year and the law firms, Templars, Banwo & Ighodalo, Odun¬jinrin & Adefulu, Sefton Fross, Alliance Law Firm, Paul Usoro & Co, Aluko & Oyebode and Kola Awodehin won different categories of the Deal based awards, with Aluko and Oye¬bode winning the much coveted Law Firm of the Year Award. His Excellency, Governor Babatunde Raji Fashola, Aare Afe Babalola, Mrs. Funke Adekoya SAN, Mr. Wale Tinubu, Chief J.K Gadzama SAN, Mrs. Funke Aboyade and the Coun¬cil Members of the Section on Business Law also won the Editor’s Merit Award Categories for their achievements and contributions to legal practice. The awards will be presented at a formal glittering and memorable ceremony holding in Lagos on 18th Septem¬ber 2015. The ceremony will be hosted by some leading entertainers in Nigeria.

ENDORSEMENT The ESQ Nigerian Legal Awards repre¬sent the most esteemed category of Legal Awards in the history of the Nigerian Legal business. It is organised by Legal Blitz Limited; Publishers of Esq Legal Practice Magazine, and has been endorsed by the Nigerian Bar Association, the British Nigerian Law Forum, and the Nigerian Lawyers Association (US).

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ESQ LEGAL PRACTICE 61

NOMINATIONS, SELECTION AND CRITERIA WHO CAN BE NOMINATED AND WHO CAN NOMINATE? Any Nigerian lawyer may be nominated for the Award. An interstate lawyer can be nominated if he or she has sufficient nexus with the Nigerian Legal System. All Nigerian Lawyers or Lawyers of Nigerian Descent practicing outside Nigeria may also be nominated as well as International Law Firms with significant nexus with Nigeria. See categories of the Awards for details. On the other hand, the Corporate Counsel Award Categories are open only to General Counsel and in-house legal teams of organisations registered in Nigeria, under the Companies and Allied Matters Act (CAMA). See categories of the Awards for details. TIME COVERED BY THE AWARD The time period covered by entries should be the past 12-18 months. Law firms and in-house legal departments can only submit one entry for each category. All enquiries about the award can be sent to awards@ esqlaw.net HOW WILL NOMINATIONS BE MADE? All submissions must be sent electronically to awards@ esqlaw.net. HOW WILL NOMINATIONS AND DATA BE GATHERED. Law firms will be requested to www.nigerianlegalawards. Com, fill nomination forms and submit same with

WHO ARE THE

their deal sheets for a period not exceeding 12 - 18 months. This document will be submitted electronically Interested in-house teams must visit www.nigerianlegalawards. com, complete an entry form and submit it online. Submissions from in-house teams should chart the teamâ&#x20AC;&#x2122;s progress over the course of the year (January 2014- June 2015) There is a mandatory requirement of a 500-word covering statement, which indicates reasons they should win any specific category. This 500-word document is the most important document, as the judges will use it to assess the law firms being nominated. This year, while the award will consider a particular landmark transaction, the judges will take cognisance of the track record of the firm in the particular practice area for a period of not less than 5 years. The 500 word document represents the entry and it must reflect on how the firm/organisation meets all the criteria set for the particular category of the award.

JUDGES?

To shore up the credibility of this award, we have carefully appointed seasoned General Counsel and Business Leaders with vast experience in their chosen sectors who will be appraising the various nominations and select the winners. The Panel of Judges for the Practice Based Deals Category will be chaired by Dr Adesegun Akin-Olugbade, OON, Executive Director/General Counsel, Africa Finance Corporation. Other members of this panel include; Mr Dapo Otunla, General Counsel, Notore Chemicals and Industries Ltd; Mrs Ngozi Okonkwo, Chief Legal Officer, OANDO Plc; Ms Tinuade Awe, Head of Legal and Regulatory Division, Nigerian Stock Exchange; Ms. Nankunda Katangaza, Former Head of International Policy, Law Society of England and Wales; Mrs Toyin Sanni, MD/CEO, UBA Capital and Chairperson of the Capital Market Operators; Mrs Nike Laoye, Chief Legal Counsel, Eco Bank Plc and winner of the Legal Team (Financial Services) at the maiden edition ; Prof (Mrs) Yinka Omorogbe, Former General Counsel of NNPC; Mr Dayo Okusami, Executive Director/General Counsel, Zircon Nigeria Limited; Mrs. Helen Anatogu, Former Corporate Attorney West Africa, Microsoft Corporation Mrs. Chioma Madubuko, General Counsel, DANGOTE Industries; Dr. Mark Ighiehon, Fellow, Aberdeen University Centre for Energy Law; Ms Nike Olafimihan, General Counsel/ Company Secretary, Shell E & P, Nigeria; Ms Rotimi Oghenerume, General Manager, Commercial Legal, 6 2Â E S Q L E G A L P R A C T I C E

MTN; Mrs Kemi Shaba, Legal Manager, Multichoice Nigeria; Mr Babatunde Akinyanju, Former Chairman, British Nigerian Law Forum, UK; Ms Remi Aiyela, Publisher, NOG Intelligence Mr. Ned Mojuetan; Mrs Abimbola Izu, Legal Adviser/ Company Secretary, Skye Bank Plc; Dr. Mirian Kachikwu, General Counsel, Seplat Petroleum Development Company Plc; Dr. Jumoke Oduwole, Legal Consultant and Lecturer, Commercial Law, University of Lagos; Mrs. Fola Akande, Company Secretary/Chief Counsel (West Africa), Cadbury Nig. Plc; Mr. Adeyemi Johnson, CEO Open Spaces Compliance, UK Mr. Osilama M. Otu, Company Secretary/Legal Adviser, Zenith Bank Plc. Ms. Ibiyemi Solanke, Legal Counsel, Orange UK. JUDGES FOR CORPORATE COUNSEL AWARDS The Panel of Judges for the Corporate Counsel Awards Category is chaired by Mr. Gbenga Oyebode MFR of Aluko and Oyebode. Other judges include Senator Udoma Udo Udoma of Udo Udoma and Belo-Osagie, Dr. Nechi Ezeakor of El-Value Advisory (Former General Counsel of Fin Bank Plc), Mr. Asue Ighodalo of Banwo and Ighodalo, Dr. Gbolahan Elias SAN of G. Elias (Barristers and Solicitors), Dr. Konyinsola Ajayi SAN of Olaniwun Ajayi LP and Mr. George Utomi of George Utomi and Partners, among others.

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Meet the Judges for the practice Based Award for Law Firms

Adesegun Akin-Olugbade OON, Executive Director & General Counsel, African Finance Corporation

Adenike Laoye, Chief Legal Counsel, Eco Bank Limited

Abimbola Izu, Executive Director/Legal Adviser &

Michael Otu, General

Company Secretary, Skye Bank Plc

Counsel, Zenith Bank Plc

Akinleye Olagbende,

Babatunde Akinyanju,

Chioma Madubuko,

Nankunda Katangaza, Former

Marian Kachikwu, Company

Dayo Okusami, Executive Direc-

Ngozi Okonkwo, Chief

Yinka Omorogbe, Former

Adeyemi Johnson, CEO,

Remi Aiyela, Editor-in-Chief,

General Counsel Forte Oil

Secretary /General Counsel, SEPLAT Petroleum Development Company Plc

Open Spaces Compliance

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Former Chairman, BritishNigeria Law Forum

tor/ General Counsel, Zircon Marine Services Ltd

NOG Intelligence

Company Secretary & Legal Adviser, Dangote Industries

Legal Officer, Oando Plc

Jumoke Oduwole, Legal Consultant and Lecturer, University of Lagos

Head International Policy, Law Society of England and Wales

General Counsel, NNPC

Toyin Sanni, CEO, UBA Capital

Eyitemi Ned Mojuetan

Stephen Blundell, Redstone Consultants

Dapo Otunla, General

Counsel, Notore Chemical Industries Limited

Â ESQ LEGAL PRACTICE 63

Judges For Corporate In-House Counsel Award

Gbenga Oyebode MFR,

Managing Partner, Aluko Oyebode

Koyinsola Ajayi SAN, Managing Partner, Olaniwun Ajayi LP

Senator Udoma Udo Udoma, Partner, Udo Udoma &

Olasupo Shasore SAN,

Yinka Omorogbe, Former

Adeyemi Johnson, CEO, Open

Belo- Osagie

General Counsel, NNPC

Partner, Ajumogobia & Okeke

Spaces Compliance

WHAT WILL THE JUDGES DO?

Gbolahan Elias SAN, Principal

Asue Ighodalo, Partner, Banwo

George Etomi, Principal Partner,

Jumoke Oduwole, Legal

Babatunde Akinyanju, British-Nigeria Law Forum

Toyin Sanni, CEO, UBA Capital

Partner, G. Elias (Barristers & Associates)

Consultant and Lecturer, University of Lagos

Nechi Ezeako, Principal

Consultant, El-Value Consultants

Remi Aiyela, Editor-in-Chief, NOG Intelligence

and Ighodalo

Nankunda Katangaza, Former Head International Policy, Law Society of England and Wales

Funke Adekoya SAN, Partner AELEX

George Etomi & Partners

Stephen Blundell, Redstone Consultants

Israel Aye, Managing Partner, Sterling Partnership

• Judges will be given a score sheet that lists the criteria and invites them to mark each entry against them. • There will also be a day conference where judges are expected to meet and debate who should win and why. • This panel will shortlist three deals under each category. • The shortlisted contenders in each category will be announced on the award website. • The final decision is made by the judges when they meet, and their decision will be final. • We believe this exercise will help to ensure all the judges approach the process in a consistent manner. 6 4 E S Q L E G A L P R A C T I C E

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WHAT WILL THE JUDGES LOOK FOR? The panel of judges will be looking for entries which showcase the firm’s distinction in each category and consistency in providing excellent service in that category, while focusing on a single deal that sets new standards in the delivery of legal services under the various categories and demonstrates the market-leading position and considerable value to the needs of commerce, good governance and economic well-being of the nation. Key factors in selecting the winners for the Practiced Based Awards will be evidence of: - Market Context - History of the Client Relationship - Technical Innovation - Innovation in Client Service - Innovation in pricing - Measurable Outcomes - Any Additional Relevant Information Nominees should stand out from their colleagues and should have made significant impact in relating to the category. Particular note will be made of the nominees’ impact in Nigeria and for Nigeria - ‘Putting Nigeria on the map’. For all awards, achievements outside of the category will be taken into account, including non-legal work, contributions to the community and pro-bono work.

Key factors in selecting the winners for the Corporate Counsel Awards will be evidence of: 1. A case, deal or internal project which demonstrates: a. Excellence in leadership b. Innovation, either in transactional work or regulatory or compliance issues c. Efficient management of external advisers (please detail outside counsel and recent history of panel reviews) d. How the legal function underpins the organisation’s strategy e. How the team has made the legal function integral both to the decision making process of the company and also to the overall company strategy 2. Full details of: a. Who the team reports to b. Organisational structure c. Yearly spend and how it is managed including use of procurement 3. Details of the unique challenges faced by the particular sector in which the team operates, and how these are overcome

PRIZES & BENEFITS WHAT ARE THE BENEFITS OF BEING NOMINATED? - Recognition in front of peers and industry leaders - An endorsement of personal/firm achievements - A competitive and marketable edge that can generate new business - A way to boost team morale - An opportunity to take pride in personal/firm achievements. WHAT HAPPENS AFTER NOMINATIONS HAVE BEEN MADE? We will take steps to verify the authenticity of the various nominations. Please note that during this exercise, clients or their in-house counsel may be contacted. We therefore advise all entrants to kindly ensure the details they are sending are true and verifiable in order to avoid any embarrassment this exercise may cause. Timetable for the Award will be announced later. 1. June 29th, 2015: Opening of nominations for the Legal Awards. 2. July 31st, 2015: Deadline for submission of entries for the w w w.esqlaw.net

Legal Awards 3. August 3rd 2015: Judges Evaluation Begins 4. Between September 1st - 11th, 2015: Judges Conference 5. September 18th, 2015: Awards nite (Awards Presentation, dinner & entertainment) PLEASE NOTE: That there is no payment attached to nominations for any of the categories. The decision of the judges are final and no discussion will be entered into. Only nominations received before the deadline will be reviewed. WHEN WILL THE SHORTLIST BE ANNOUNCED? Short-listed nominees will be informed in writing after the votes by the judges have been collated. WHEN IS THE AWARD TAKING PLACE? The Awards ceremony will take place on Friday 18th of September, 2015 in Lagos. ESQ LEGAL PRACTICE 65

GENERAL POINTS TO NOTE 1. All nominations will be submitted online. 2. Nominators will be asked to provide supporting documentation: 3. Which must be in the form of a 500 word profile encapsulating why the nominee should win the award? 4. Nominees are also expected to list other law firms that worked on the deals enetered. Please e-mail your submission to awards@esqlaw.net Please send only one submission per category per e-mail (multiple e-mails are allowed) Please mark the subject line of your e-mail as follows: ESQ Awards/Category/Firm Name e.g. ESQ Legal Awards /real estate/Lere Fashola & Co LLP

AWARD CATEGORIES PRACTICE BASED PRACTICE BASED AWARD Section: Deals - Banking &Finance Team of the Year - Capital Market Team of the Year - Mergers &Acquisition Team of the Year - Corporate Restructuring Team of the Year - Intellectual Property Team of the Year - Oil and Gas Team of the Year - Private Equity Team of the Year - Power Team of the Year - Project Finance Team of the Year - Telecommunication Team of the Year - Dispute Resolution Team of the Year - Real Estate Team of the Year SECTION: GENERAL AWARD - Young Lawyer of the Year - CSR Law Firm of the Year - Deal Maker of the Year - Law Firm of the Year - Diaspora Lawyer Award CORPORATE COUNSEL AWARDS 1 General Counsel of the Year 2. In- House Team of the Year i. Oil and Gas sector ii. Power sector iii. Investments Banking Sector iv. Banking Sector v. Capital Market Sector vi. Manufacturing Sector vii. Telecommunication sector viii. Infrastructure and Construction Sector ix. Information Technology x. Pharmaceuticals Sector xi. Insurance Sector xii. Maritime/Shipping Sector

6 6Â E S Q L E G A L P R A C T I C E

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ESQ LEGAL PRACTICE 67

Female Genital Mutilation Isn’t Just an African Problem I

n honor of the 20th anniversary of the now-classic gender-equality document, the Beijing Declaration and Platform for Action , and of the current meeting of the U.N. Commission on the Status of Women, UN Women has released a summary review [pdf] of the status of women since Beijing hosted the Fourth World Conference on Women. One of the areas it covers is female genital mutilation (FGM), which, the report explains, occurs as a result of “gender inequality and discriminatory, social, cultural and religious norms.” Although FGM has declined proportionally in the 29 African countries where it is most frequently practiced, the total number of cases may still be increasing due to population growth. And in the United States, too, FGM is on the rise. A Population Reference Bureau report released in February attributes the rise in U.S. risk to the increase in immigrants from countries where the practice remains prevalent. Last month, the Zero Tolerance for Female Genital Mutilation (FGM) Act of 2015 was introduced by U.S. Reps. Sheila Jackson Lee (D-TX) and Joseph Crowley (D-NY). The new legislation calls for a multi-agency plan to prevent FGM. While many in the United States may think this is something happening in the far reaches of the world, it is a real and present danger for nearly half a million girls and women in the United States. Unless we move now to stop it in our own backyard, we are inadvertently supporting a form of culture-sanctioned child abuse. Female genital mutilation is the partial or total removal of the external genitals of girls and women for cultural or other nonmedical reasons. The procedure is widely recognized as a violation of human rights and is almost always carried out on minors between infancy and age 15. The U.N. recognizes that FGM represents “persistent discrimination against and a

6 8 E S Q L E G A L P R A C T I C E

violation of the rights of the girl child.” FGM has been illegal in the U.S. since 1996. In 2013, President Obama signed a travel provision into law, making it illegal to “knowingly transport a girl out of the U.S. for the purpose of inflicting FGM.” Twenty-three states [pdf] have laws against the practice. Twenty-seven still don’t. Many of us know what FGM is, but most of us lack an awareness of what our country or state is or isn’t doing to protect girls who live here. It’s time we find out. My home state, Massachusetts, is where girls are at the 12th highest risk for FGM, based on calculations made by the Population Reference Bureau [pdf]. Boston has the 10th highest risk for metropolitan areas [pdf] in the United States. The Population Reference Bureau report released this month attributes a rise in U.S. risk to the increase in the number of immigrants from countries where the practice is prevalent. Massachusetts lawmakers have recently joined the crusade to end this violence against girls by introducing a bill to criminalize FGM within the state and to ban out-of-state travel to have the ritual done. This out-of-state travel is why girls in MA are at risk—because their families have them leave the U.S. for “vacation cutting.” As Massachusetts state Rep. Sarah Peake told the State House News Service, They’re sending their daughters back to their home countries, and it’s not just for a visit with grandma and grandpa, but to have this disfiguring and brutal procedure done. To be sure, there are those who support FGM, touting religious beliefs or cultural norms and health benefits, but according to the World Health Organization, “no religious scripts prescribe the practice” and there are no health benefits. There are myths that a woman will be healthier, cleaner or more attractive to her spouse after mutilation. Some cultures believe it preserves a girl’s virginity and prevents promiscuity

after marriage. In many communities, a girl is deemed unfit for marriage unless she has been cut. According to the World Health Organization, FGM “can cause severe bleeding and problems urinating, cysts, infections, infertility as well as complication in childbirth and increased risk of newborn deaths,” not to mention lifelong trauma. It is generally performed without anesthetic. In extreme cases, called, “infibulations,” the clitoris is removed and the vagina is sewn up leaving a small opening for urination and menstruation. Some girls even die. If this isn’t child abuse, then I’m not sure what is. Though most African countries have banned the practice, it is ingrained in some cultures, and is often carried out by women. By supporting female genital mutilation, family harbors the big, bad wolf. FGM is a misunderstood part of a patriarchal structure that undermines children’s rights. Enforcing the law is critical, but education for communities and families is just as important. In Massachusetts, February 1 through February 7 is now FGM Awareness Week. The new Zero Tolerance for Female Genital Mutilation Act and the Massachusetts bill both call for public awareness campaigns. The Massachusetts bill includes law enforcement trainings, education to communities and support for victims. Families need to understand that FGM serves no medical purpose; the

true aim is to control a girl’s sexuality, make her “marriage material,” and keep her “honorable.” U.N. Women reports that in order to stop FGM we must “confront and address the social norms and stereotypes that perpetuate gender inequality, discrimination, and violence against women and girls.” Contact your U.S. legislators and encourage them to support H.R. 783, The Zero Tolerance for Female Genital Mutilation Act. If you are a Massachusetts resident, you can contact your local legislators and ask them to support H.D. 1765 to criminalize FGM and increase awareness of the health risks, emotional trauma and criminal penalties. To learn more about the fight to end Female Genital Mutilation, check out the United Nations Population Fund, SafeHands for Mothers, Equality Now and Massachusetts Citizens for Children (MassKids). Five hundred thousand girls and women should not be forced to be cut, regardless of tradition. “No FGM” symbol from Flickr user Blatant World under license from Creative Commons 2.0 Madeline Smola is a writer, awardwinning abuse-prevention advocate, playwright, a Heroine of the Massachusetts Commission on the Status of Women and a child-abuse survivor. She is working on a memoir about her experiences as a daughter struggling to understand painful dysfunction and overcome fear.

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ESQ LEGAL PRACTICE 69

Article the coal from the Tete Province, Vale has opted to develop a new corridor that includes the building and rehabilitation of a railway line (from Moatize to Nacala) and a new coal terminal at Nacala. Other alternatives to the existing Sena-Beira Line (on which an expansion is also planned) are also under discussion. In particular, another railway corridor and associated port (from Moatize to Macuse) is being designed by the consortium Thai Moçambique Logística, which recently announced this as being a “low cost logistics solution” to transport coal located in Moatize.

Mozambique’s new Mining Law and the Key changes it introduces Mozambique’s mining sector, particularly its substantial unexploited coal deposits in the central province of Tete, has recently attracted significant attention from international mining companies. Recognizing this potential, a new Mining Law (Law No. 20/2014) was published on 18 August. In this briefing we summarize the key changes made to the Mozambican legislative regime by the new Mining Law and discuss its potential impact on investors in the Mining sector.

The Mozambican market Mozambique has vast reserves of untapped coal – the Moatize coal mine in the Tete Province is currently the fourth largest in the world. The World Bank forecasted in its latest report that, by 2032, Mozambique could generate up to $9bn in revenues from its natural resources, in particular coal and gas, as demand from India and China continues to grow.

7 0 E S Q L E G A L P R A C T I C E

Recognising this potential, the Mozambican Parliament approved a new Mining Law (Law No. 20/2014), which was published on 18 August 2014 in Mozambique’s Official Gazette (Boletim da República) (1st Series – No. 66) and entered into force on the same day (new Mining Law), repealing the previous Mining Law (Law No. 14/2002).

In July 2014, after experiencing, among other things, transportation difficulties, Rio Tinto decided to sell the entirety of its coal interests in Mozambique. Despite these difficulties, however, international mining corporations, such as Vale from Brazil and Coal India, are continuing to invest heavily in Mozambique. In order to improve the existing poor infrastructure to unlock

Regulatory institutions Several key bodies are currently responsible for regulating mining activities, namely the Council of Ministers, the Ministry of Mineral Resources (Ministério dos Recursos Minerais) (MIREM) and the National Directorate of Mines (Direcção Nacional de Minas) (NDM). The Council of Ministers, the highest governmental body in Mozambique, includes the president, prime minister and other government ministers and is responsible for creating primary legislation for the mining sector. The Council of Ministers is also Technically responsible for the granting of concessions and mining licenses, the process of which is run by NDM. On a day-to-day basis, the sector is primarily governed by MIREM, which is responsible for overseeing NDM and the new regulatory body, the National Institute of Mines (Instituto Nacional de Minas) (INM). MIREM develops and implements policies relating to the exploration and production of mineral resources, including minerals and metals. NDM was established to manage and oversee Mozambique’s mining sector and is responsible for, among other things: • Developing public policy in respect of the mining sector; • regulating and monitoring the implementation of new mining projects; • managing the day-to-day process for the allocation of concessions and licenses, including overseeing any public procurement process; • monitoring and mitigating the potential social • environmental impacts of mining projects; • Developing and enforcing w w w.esqlaw.net

Article health and safety standards in the mining sector; and promoting the international exportation of minerals and metals from Mozambique. Pursuant to the new Mining Law, the Mineral Resources General Inspection is responsible for overseeing compliance with that law and any other legislation, regulations and national standards governing mining activities. In addition, the new Mining Law provides that a new authority, the High Authority for the Extractive Industry (Alta Autoridade da Indústria Extractiva), will be created to oversee the extractive industry. That said, the new Mining Law is silent as to the powers and role of this High Authority. In particular, it is uncertain as to whether the new authority will be regulatory in nature or will take the role of ombudsman and/or whether its role will conflict or overlap with NDM and/or the Mineral Resources General Inspection. INM was established by the new Mining Law to regulate miningactivities and its primary responsibilities include: • the review, analysis and approval of mining projects, including carrying out technical and economical studies for the opening of new mines, in addition to decommissioning and/or the closure of mines; • minimising the social and environmental impacts of mining projects; • publishing guidelines on public and private sector participation in the mining sector; • proposing new policies to MIREM regarding the development of the mining sector; and • promoting, reviewing and supporting other institutes in relation to mining sector activities, including smallscale mining. The new Mining Law Scope • as per the previous regime, all mineral resources found in the soil and subsoil, inland water, territorial sea and continental shelf within Mozambique are the property of the State. • in addition, the new Mining Law provides that mineral water is expressly included within the scope of the new mining regime. • the new Mining Law clarifies that activities concerning the industrial processing of w w w.esqlaw.net

•

raw materials from mining operations are subject to specific legislation. the new Mining Law expressly excludes oil, natural gas, methane gas and natural gas from its scope. Suchhydrocarbons are governed by the new Petroleum Law.

Local requirements under the new Mining Law, a percentage of revenues generated to the State by mining activities shall be allocated by the State to the development of communities located near mining activities. This percentage will be fixed in each State Budget and will depend upon the expected annual State revenues to be generated via the mining sector. • the new Mining Law provides that in granting rights for mining activities in Mozambique, the State shall always consider the national interests of Mozambique, in particular in relation to the conservation of natural resources, environment, domestic economic activities and food and nutritional

•

needs. The new Mining Law provides that, when mining activities require the relocation of local communities already established in the area of the mining activities, the relevant license holder must pay fair and transparent compensation, the details of which will be established in a memorandum of understanding between the license holder, the State and the community. Where relevant, such memorandums of understanding will be a condition to the allocation of any mining exploration rights. the new Mining Law provides that, unless technical evidence confirms that mineral reserves exist in the area, any relocation of local communities must be temporary only. further, the new Mining Law provides that ongoing dialoguesshould be maintained between license interest holders and local communities. Pursuant to the new Mining

Law, the Mozambique Government is required to create mechanisms which promote local investment in mining projects. • under the new Mining Law, preference should be given to goods and services purchased or obtained from Mozambican individuals or entities. Further, the new Mining Law requires that goods or services, the value of which exceeds a Particular amount (to be determined in subsequent regulations), must be purchased by way of a public tender. Such public tenders must be published in widely read newspapers in Mozambique and on the website of the relevant interest holder. • In addition, foreign entities that provide services to mining operations in Mozambique are required under the new Mining Law to “associate with” Mozambican entities. Details of how this obligation is to be fulfilled remain unclear and we expect this to be detailed in future regulations and/or secondary legislation. • Pursuant to the new Mining

ESQ LEGAL PRACTICE 71

Article Law, should a rights holder discover that a site is of geological or archaeological importance, it must adopt the necessary measures to preserve such archaeological finds. Upon such a discovery, the rights holder must subsequently request authorization from the competent entity for the proper removal of such discoveries, the mechanics of which are not fully provided within the new Mining Law. • The new Mining Law provides that mining companies must be listed on the Mozambican Stock Exchange (Bolsa de Valores de Moçambique) on terms to be further detailed in regulations. It is uncertain as to whether this refers to a specific percentage of a project SPV, as per similar local content requirements in other jurisdictions, or whether all of the shareholding of the company is to be listed on the Mozambican Stock Exchange. In advance of further clarification being provided in subsequent regulations, it is recommended that potential investors should consult directly with the Mozambican authorities to obtain further guidance. Investment protection •  The Mozambique Investment Law (Law No. 3/93) does not provide protection to investments relating to the mining sector. To rectify this, the new Mining Law expressly provides for the protection of both national and foreign direct investment in the mining sector in respect of the protection of property rights from undue and unfair expropriation. • Provided that it can be valued in monetary terms, foreign and national direct investment protected by the new Mining Law may be in one of the following forms: (a) an amount paid in a freely convertible currency for the acquisition of equity interests in a company incorporated in Mozambique, or of a mining title, provided that the value is paid at a bank registered in Mozambique or into an external account authorised in terms of foreign exchange law; (b) equipment and respective accessories, materials and other imported goods; (c) in the case of national direct investment, infrastructure, instal-

7 2 E S Q L E G A L P R A C T I C E

lations and the transfer of rights relating to land use, concessions, licenses, and other rights of an economic, commercial or technological nature; (d) the transfer or grant, in specific cases and on terms agreed upon and authorized by the relevant Mozambican competent entities, of rights to use patented technologies and registered trademarks on terms to be further detailed in regulations; (e) principal and interest on any loans, previously approved by the Mozambique Central Bank (Banco Central de Moçambique), obtained from the international financial market and applied by way of investment made in Mozambique; and (f) Sums related to the payment of obligations to nonresident entities. • Protections afforded by the new Mining Law include the protection of property rights and activities granted under any mining permits, the protection against undue and unfair expropriation without fair compensation and the protection of the transfer of funds outside of Mozambique. • Although the applicability of these protections extend beyond what is usually offered by way of international treaties, the extent of these protections is somewhat lacking. For example, if justified by public interest and subject to the payment of fair compensation, expropriation is allowed under the new Mining Law in exceptional circumstances. As a result, foreign investors should also consider utilizing protection provided by way of Bilateral Investment Treaties when structuring their investments. Decommissioning • The new Mining Law provides that mining operations may not be closed or abandoned without the prior execution of a rehabilitation and mine closure plan which has been approved by the competent authority. • n certain instances, rights holders may be required to issue performance bonds or other guarantees in respect of decommissioning. Such issue may be called upon if the rights holder does not fulfil its decommissioning obligations.

Liability  the new Mining Law provides that rights holders are required to compensate third parties in respect of any damage to land and property resulting from any mining operations.  The new Mining Law does not clarify whether this only applies in circumstances where the rights holder has acted unlawfully, negligently or below the standards expected of a prudent operator. If not, this rule could constitute a strict liability regime for damages and result in significant liabilities being incurred by rights holders. Transparency • the new Mining Law provides that companies applying for concessions or licences must provide evidence of incorporation and shareholders, including details of relevant shareholdings. Data ownership • the new Mining Law provides that all and any data or information obtained under any license or mining contract shall be deemed to be the property of the State. Details of the terms and conditions in relation to the State’s exercise of its deemed rights over such data and information will be provided in further regulations and/ or secondary legislation. As such, those potential investors considering establishing only exploration operations in Mozambique would need to establish whether this would be commercially acceptable. • further, the new Mining Law provides that the Government shall be responsible for announcements concerning the discovery of mineral resources. As no further details are provided within the new Mining Law in respect of the announcement of discoveries, investors should consider this alongside announcement and disclosure obligations they might have under any relevant market and listing rules. Illegal sale, purchase or transportation of minerals • Any sale, purchase or transportation of mineral products outside of Mozambique without prior authorization or permission or other than

as allowed by law is a criminal act and may be punishable by imprisonment for a period of between 8 and 12 years and might be aggravated when the value of the mineral products is superior to one thousand minimum wages. Use of explosives • The new Mining Law provides that explosives may be used in relation to mining activities in Mozambique, though such usage will be subject to specific Mozambique legislation and regulations and requires obtaining prior authorization from relevant authorities. Traditional purposes • the extraction of resources for use as building materials relating to “traditional purposes” does not require a mining license or any other authorization, provided that such extraction: (a) Is undertaken by a Mozambican citizen in a way that complies with local customs in a land where it is common to carry out such extraction; (b) Is to be used for the construction of housing, warehouses or other facilities; and/or (c) Is for ceramic homemade production. Licensing regime Under the new Mining Law, a prospective investor may obtain the following types of holding licenses: 1. Exploration Licenses (licenças de prospecção e pesquisa) − Exploration Licenses govern any exploration and prospecting activities. Exploration Licenses will be valid for: (a) two (2) years for mineral resources being supplied for the construction industry, renewable once for same period; or (b) five (5) years for other mineral resources, including mineral water, and may be renewed once for an additional three (3) year period. 2. Mining Concessions (concessões mineiras) − Mining Concessions provides the concessionaire (incorporated and registered under Mozambican law) the right to extract, develop and process mineral resources which are discovered under an Exploration License. Mining Concessions will be Valid for a period of 25 years and may be extended by another 25 years. w w w.esqlaw.net

Article 3. Mining Certificates (certificados mineiros) − Mining Certificates govern small-scale mining operations. Mining Certificates are only granted to Mozambican nationals, in addition to legal entities and will be valid for a period of 10 years and may be extended by another 10 years. 4. Mining Treatment Licences (licenças de tratamento mineiro) − In circumstances when the investor does not hold a valid Mining Concession, Mining Certificate or Mining Pass to authorise such activities, Mining Treatment Licences govern the mining processes through which usable ore and derivatives are recovered in valuable mining products by physical treatments. The treatment of radioactive minerals (e.g. uranium) will require further authorisations in accordance with legislation regarding atomic energy and radioactive materials. 5. Mining Processing Licences (licenças de processamento mineiro) − In circumstances when the investor does not hold a valid Mining Concession, Mining Certificate or Mining Pass to authorize such activities, Mining Processing Licenses govern those processes required to achieve ore concentrate by Means of (among others) physical, chemical and metallurgical Treatments. The processing of radioactive minerals (e.g. uranium) will require further authorizations in accordance with legislation regarding atomic energy and radioactive materials. 6. Mining Products Commercialization Licences (licenças de comercialização de produtos minerais) − Mining Products Commercialization Licenses govern the activity of the sale and purchase of mineral products sourced from outside of Mozambique. We note that Mining Products Commercialization Licenses may be awarded to Mozambican nationals in addition to legal entities. 7. Mining Passes (senha mineira) − Mining Passes govern “artisanal” mining operations generally being undertaken by individuals, and allow for the sale of mineral products arising from such small-scale mining activities. We note that Mining Passes may be awarded to Mozambican nationals, in addition to legal entities. Save for Mining Passes and Mining Products Commercialization Licenses, only entities incorporated and registered in accordance with Mozambican w w w.esqlaw.net

law that are able to provide evidence of their technical and financial capacities are eligible for any license under the new Mining Law. As noted above, Mining Passes and Mining Products Commercialization Licenses may also be awarded to Mozambican nationals (i.e. natural persons). The new Mining Law itself does not provide further detail as to the length of validity for Mining Treatment Licenses, Mining Processing Licenses and Mining Products Commercialization Licenses. As such, it is expected that further details regarding these licenses will be provided by way of future regulations or secondary legislation. Mining contracts Pursuant to the new Mining Law, the Government of Mozambique may launch a public tender in respect of entering into public-private undertakings in relation to mining activities with the holder of an Exploration License or a Mining Concession (a Mining Contract). The Mining Contract must contain clauses regarding: (a) the level of participation of the Government of Mozambique in the undertaking;

(b) minimum local content; (c) local employment and training requirements; (d) incentives in relation to increasing the value of the minerals to be extracted; (e) corporate social responsibility requirements; (f) memorandum of understanding between the license holder, the State and the community; (g) disputes resolution mechanics, including provisions relating to the settlement of disputes by way of arbitration; and (h) the way that the communities in the area will be involved inand benefit from the undertaking. The new Mining Law provides that Mining Contracts must be published in the Mozambique’s Official Gazette and are subject to the Administrative Court’s prior approval. It is uncertain as to whether such Mining Contracts will be standardized or whether each Mining Contract can be individually negotiated. As such, potential investors considering entering into a Mining Contract should fully consider the allocation of risk under the proposed Mining Contract. Further, Mining Contracts

awarded by way of public tenders require the payment of an award fee to the Government of Mozambique. As the new Mining Law does not provide any further details regarding such award fees, it is recommended that Investors considering bidding for a Mining Contract under a public tender process should first ascertain the amount of such award fee, in order to be able to properly value the price of their bid. Transfer of rights The transfer of title, rights and obligations under a mining license, whether to an affiliate or a third party, may only take place two years after the commencement of the relevant mining activities authorized by the mining license. Such transfers must be in accordance with Mozambican law and will be subject to the approval of the Government of Mozambique. The new Mining Law expressly provides that indirect transfers of participating interests, titles and/or mining rights, notably by way of change of control of any license holder, shall be considered as a transfer of rights and obligations under a mining license and shall, therefore, require prior governmental approval. ESQ LEGAL PRACTICE 73

Article mining sector to ensure that more qualified workers are attracted to mining operations. The new Mining Law introduces new requirements for mining companies regarding the hiring of workers and employees. Adverts shall be published in newspapers with a wide readership, or through radio, television and the internet, indicating the place of application, required experience and/or qualifications, and details of the publication of results. This requirement, however, does not appear to apply to sub-contractors. Further details on this regime are expected to be provided through subsequent regulations.

Non-compliance with any transfer requirements will result in any such transfers being void and invalid. Such transfers of rights may also be subject to the payment of capital gains tax. As of 1 January 2014, capital gains derived from the sale of shares of a resident company by a non-tax resident are taxable. Further, tax relief depending on the holding period of the shares which was previously available has now been repealed. Environmental impact assessments Under the new Mining Law, mining activities are classified as Category A, Category B and Category C. The new Mining Law indicates that differing levels of environmental impact assessments are required for each classification of mining activities. That said, no further details are provided as to the substantive requirements for each type of environmental impact assessment and how these obligations may be fulfilled.

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Rights acquired under the previous regime It is noted that all rights obtained under concessions entered into under the old Mining Law shall remain valid and unaffected by the new Mining Law. Notwithstanding this, mining licence holders may opt to be fully governed by the new Mining Law, provided that they convey such intention within a period of 12 months from the date of entry into force of the new Mining Law (i.e. by 18 August 2015). State participation Pursuant to the new Mining Law, the State is required to progressively increase its participation in mining projects. Nevertheless, the new Mining Law is unclear as to whether this means that the State shall be a larger participant in mining projects in the future, or whether the State is expected to obtain greater interests in particular projects over time.

Domestic supply obligations Pursuant to the new Mining Law, mineral resources should be used, wherever necessary, as a fuel for electricity generation or as raw materials for the manufacturing industry in Mozambique. This is provided as a general obligation and the new Mining Law does not provide a specific percentage in respect of the minimum requirement of resources to be provided to the domestic market. Further, the new Mining Law does not clarify whether this will be fulfilled by the involvement and activities of the Mozambique Government or whether rights holders must keep this in consideration when marketing minerals extracted in Mozambique. Employment of non-Mozambican nationals Since 7 December 2011, pursuant to Decree No. 63/2011, the criteria for the hiring of foreigners citizens have been adapted for the

Fiscal regime Under the new Mining Law, concessionaires shall pay, along with any relevant specific taxes on petroleum operations: • Income Tax; • Value Added Tax; • Production Tax; • Surface Tax; • Municipal Tax, where applicable; and • any other relevant taxes required by law. On 21 August 2014, the Mozambique Parliament approved the enabling law in respect of the Specific Regime of Taxation and Fiscal Benefits for Mining Operations, which will provide further specifics on relevant taxes relating to the mining sector and will repeal the current regime (Laws No. 11/2007 and No. 13/2007 of 27 June 2007). The Specific Regime of Taxation and Fiscal Benefits for Mining Operations is due to enter into force on 1 January 2015. Conclusion The new Mining Law makes a number of key changes to the mining regime in Mozambique, in particular regarding the licence regime. Nevertheless, many significant uncertainties remain concerning the rules and regulations governing the sector and a number of provisions within the new Mining Law may prove difficult for investors to navigate. That said, it is likely that outstanding uncertainties will be addressed by subsequent regulations and secondary legislation. Given the significant potential of natural resources in Mozambique, the regulatory regime governing its mining sector is expected to continue to develop and mature in the near future. w w w.esqlaw.net

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ESQ LEGAL PRACTICE 75

ALIGNING JUSTICE REFORM WITH ECONOMIC GROWTH – Oyinkansola Badejo-Okusanya

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ell us a bit about your background as a lawyer I was called to the Bar in the year 2002. I decided to go back to school to study law after obtaining my first degree in 1987 because I have always wanted to be a lawyer. It was actually my intention to study law immediately after my first degree but I got caught up in the excitement of working and earning my own money and almost got derailed. Thank God for my mother who was determined that I would read law. She got the form and ensured that I got admitted. My first job was at Olaniwun Ajayi LP. Little did I know when I was applying to join the firm that I was jumping in at the deep end. But I managed to hold my own amongst all the young, first class brains that the firm attracts and it was a blessing because we learnt from one another and it accelerated my development as a lawyer. Working at Olaniwun Ajayi is not for the faint hearted. Luckily I’ve never been faint hearted. From Olaniwun Ajayi I was employed by Mr. Olasupo Shasore, SAN when he was appointed Lagos State Honourable Attorney-General & Commissioner for Justice in 2007. first as his Special Assistant and then later as Senior Special Assistant to the Governor on Justice Sector Reform. Being Snr. Special Assistant to the Governor just meant my status was slightly more elevated and I had a few more perks but for all intents and purposes Mr. Shasore remained my boss. What did the Justice Sector Reform portfolio entail? Oh pretty much everything! No, seriously my mandate was clear. As you may recall the previous Attorney-General, now Vice President of Nigeria, Prof. Yemi Osinbajo, SAN had embarked on an extensive justice sector reform programme starting with the judges of the High Court. He improved their remuneration, developed capacity building programmes and opened up the bench to applicants from the private sector where it had previously been the exclusive preserve of the Ministry of Justice and the Magistracy. Mr. Shasore’s vision was to build on those gains by reforming what he called the first level of justice – the w w w.esqlaw.net

Interview Magistracy. As you may be aware, 60% of citizens’ first contact with the justice system is at the Magistracy level so he thought it needed the kind of attention that the higher bench had received. So that was our first task. He constituted a Magistrate & Justice Sector Reform Committee which was chaired by Mr. Fola Arthur-Worrey that undertook a holistic review of the first level of justice – personnel, infrastructure, legal framework, everything. The recommendations of that committee were then considered by a Technical Reform Committee which Mr. Shasore personally chaired. That committee was the implementing organ of the first committee and gave rise amongst others, to a review of the Civil and Criminal Procedure Rules and the Judicial Service Commission Rules. We put flesh to their recommendations, drafted a new Magistrate Courts Law that was passed in 2009, to show you how fast we worked. The Law included an increase in the jurisdiction of magistrates; not just to expand their scope and improve professionalism and job satisfaction but also to decongest the dockets of the judges. We also embarked on capacity building by sending magistrates on international seminars and conferences and continuing the Judicial Attachment programme started under Professor Osinbajo. This involved taking judges in batches of ten or so to spend a week with their counterparts in the UK in a learning exchange programme. That was my “baby” so to speak and through it I was privileged to forge close bonds with practically all the judges. We constructed new court room buildings, proposed an increase in remuneration and perks for magistrates to make the Magistracy more attractive as a final destination and less of a stop on the way to the higher bench. We introduced verbatim reporting into the judiciary and established a school where volunteers were trained free of charge to develop this new skill. We embarked on Arbitration Law reform, a reform of the regulatory regime for land alienation in Lagos State by

merging various laws into one Lands Registration Law; Trusts Law reform, Probate reform, the Administration of Criminal Justice law reform resulting in the Criminal Law of Lagos State. We developed a framework to stimulate investment in mass water transportation in Lagos State which resulted in the Lagos State Waterways Authority (LASWA) Law. That remains a high point for me because I more or less came up with the first draft single-handedly so every time I have to refer to it I am immensely proud. We undertook a reform of the process of administering physical planning in Lagos State by separating planning functions from building control functions to ensure more effective supervision of physical development in Lagos State. The Urban and Regional Planning Law is now in effect. We drafted the Mortgage and Property Law that give rise to the very successful Lagos Home Ownership Mortgage Scheme (Lagos HOMS) that has changed the face of home ownership in Lagos State, possibly in Nigeria, forever. Incidentally the acronym Lagos HOMS was coined by Mr.

Shasore and I one evening on my balcony at home in Ikeja GRA when he stopped by on his way to catch a flight. We laugh about it all the time. We drafted the Public Finance Management Bill, the Public Procurement Bill and the Audit Bill; all designed to promote accountability and prudence in the management of procurement and public funds. This was in fact Governor Fashola’s idea so all this hullabaloo about mismanagement of public funds is both amazing and amusing to me. People owe themselves a responsibility to be accurately informed. Under the Public Procurement Law there is a framework in place that must be followed even by the Governor. There were many other reforms. The Justice Sector Reform portfolio was a robust and enriching experience. We worked really really hard and fast too, to try and get in as much as possible in four years because Mr. Shasore had always said he only wanted to serve for four years. So we hit the ground running. I think the combination of a lawyer Governor and a reform-oriented AttorneyGeneral was very good for Lagos State. I believe many more benefits will begin to manifest in the fullness of time and I’m glad I was a part of them. You later became

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Interview

the General Counsel to the Governor of Lagos State. How did that happen and what were your key responsibilities? Yes, after the end of the first term of the Fashola Administration, we were all preparing to return to our pre-Government lives. The Attorney-General had made it clear from the about mid-2010 that he was content with serving one term and wanted to return to his firm at the end of it. So we (his three Special Assistants) had also begun to make our plans. I had contacted the Practice Manager at Olaniwun Ajayi and was to resume work on Monday the 1st of August, 2011. But I got a call from the Governor on Sunday afternoon the 10th of July. I remember it well because one, that was the first time that any Governor would call me. And secondly it was the day of that heavy rainfall in Lagos. When I realized it was His Excellency on the phone I nearly fell off my chair in my rush to stand up. You know how it is. Even though he couldn’t see me I

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just couldn’t imagine sitting down talking to him. Till today my husband can tell when I’m talking to the Governor and he teases me endlessly about it. He says my voice changes and I sit up straighter in my chair (yes, I no longer stand up, but please don’t tell him!) And he says every other word is punctuated with “sir”, “sir”. I’ve told him that when he becomes a Governor he will see how I will be treating him too. Until then I’ve told him to leave me alone. Anyway, the Governor called and told me Mr. Shasore had informed him that I was going back to Olaniwun Ajayi but he wanted me to stay and serve another 4 years because he needs people like me in his Administration. And he invited me to meet with him the following day. You cannot imagine how that phone call made me feel. To receive such a validation from no less a person that the Governor himself was the highlight of my 4 years in Government at the time. And I was (and still am) very grate-

ful to Mr. Shasore for making it happen because he created the opportunities for us (his assistants) to work closely for, and be recognised by, the Governor. And he openly gave us credit for the work we did with and for him. Not many bosses are so open-minded or large-hearted. He is both. Shortly after the meeting, during which I discussed some of the work I had been doing as his SSA Justice Sector Reform, I got a call from the Deputy Chief of Staff telling me I had been retained as a Senior Special Assistant and that my portfolio would no longer be Justice Sector Reform but General Counsel to the Governor. It was not a new position, I had a predecessor but he returned to law practice after the first term so the position was vacant. That was how I moved from Ministry of Justice to Lagos House. The General Counsel basically deals with all law-related issues that the Governor refers to the office. Legal correspondence, liaising with law institutions on behalf of the Governor, reviewing Agreements and writing legal opinions on various issues as the Governor directs. That is as far as the job description was concerned. In reality I was involved in so much more. The Governor gave me various tasks to perform from time to time. Some were continuous while some were one offs, like projects. All were challenging. They also became key responsibilities and all of this made for a very interesting job. I worked at a less frenetic pace than at the Ministry of Justice but the sheer variety of my tasks made certain that there was never a dull moment in the Governor’s Office. You mentioned ‘challenging’. The Government of Babatunde Fashola was challenging as well as demanding. And the monumental achievements are obvious for all to see. What specific contributions did your legal services make to the growth and development of the State? I mentioned several of them earlier but I think to talk of my specific contributions to the growth and development of the State would be extremely presumptuous, perhaps even false. Governance is about team work and nobody does teamwork better than BRF. I was a very

small part of a very large whole and my contributions at best can only be described in general terms. I provided support for a number of key policies and developments both as SSA Justice Sector Reform and General Counsel. The reform of the legal framework for Arbitration and ADR in Lagos State was one, as well as the development of the Lagos Court of Arbitration. The development of the Lagos Home Ownership Mortgage Scheme (Lagos HOMS) was another. There were several others, some of which, like I said I have talked about before but to list them all would be immodest. Some I can’t even remember. What I do remember though, is that it is deeply humbling and in some ways exciting, to be a part of an idea that becomes a proposal, that becomes a policy and then is executed. I think anyone who has a sense of history will understand what I mean. You are no doubt one of the faces to which the Nigerian Bar would love to refer. Having worked for the past administration of Lagos State under Governor Babatunde Fashola, what challenges are there in working as a lawyer under Nigeria’s current political environment? Thank you for your kind words, although I’m not entirely sure why I deserve them. As for the challenges of working as a lawyer in this current political environment, in a democratic dispensation, I’m not sure I see challenges. I see opportunities. The opportunity to push the frontiers of the law, to rattle the cage and think outside the box; the opportunity to be innovative in seeking for legal solutions to some of the issues that are responsible for our level of sub-optimal growth as a nation and the opportunity to use the law to solve some of our most pressing developmental and economic problems. Like the development of a lawful and orderly society, because it is beyond cavil that a nation will not thrive without strong institutions built on the precepts of law and order. So if there are any challenges at all, they would be in terms of the capacity and the ability, or the lack thereof, to seize those opportunities. How can you assess the development of Alternative Dispute Resolution (ADR) mechanism w w w.esqlaw.net

Interview in Lagos State? In one word, promising! As I mentioned earlier the Babatunde Raji Fashola Administration undertook a review of the Arbitration and ADR regime in Lagos State that culminated in the passing into law of the Lagos State Arbitration Law and the Lagos Court of Arbitration Law, both of 2009; and the endowment of a purpose-built building to house the Lagos Court of Arbitration International Centre for Arbitration and ADR. That building, the first of its kind in the sub-region was commissioned early in May and it is truly impressive. What is really encouraging is that all the major ADR institutions – the Chartered Institute of Arbitration, the Maritime Arbitrators Association of Nigeria, the Lagos Chamber of Commerce International Arbitration Centre etc. all have offices there. So you can imagine the type of cross-fertilization of ideas that such proximity will provoke. That can only be good for Lagos and by extension, Nigeria. The Arbitration Law, 2009

was essentially drafted by an Arbitration Law Reform Committee set up by the Governor in 2008 that was comprised of distinguished Nigerian Arbitration practitioners. I’m talking of people like Mr. Yemi CandideJohnson SAN who chaired the committee, Mr. Jide Ogundipe, Ms. Jumoke Akinjide, Mrs. Funmi Roberts, Dr. Gbolahan Elias, SAN and Mr. Tunde Fagbohunlu, SAN. Mr. Fagbohunlu had also been a member and worked extensively on a committee set up by Chief Bayo Ojo SAN when he was AttorneyGeneral of the Federation and Minister for Justice to propose amendments to the Arbitration & Conciliation Act of 1988. Our committee also had key members of the Ministry of Justice to ensure institutional buy-in and continuity. The SolicitorGeneral & Permanent Secretary of the Ministry of Justice, Mrs. Olaide Olayinka, as she then was (she left to become a judge of the High Court of Lagos State before the committee finished its work) and Mrs. Funlola Odunlami, the then Director of

Commercial Law, who is now Solicitor-General & Permanent Secretary. Using the ACA as a framework, they scrupulously examined each clause and proposed amendments that reflected the current, and as far as possible future, realities of the practice of domestic and international commercial Arbitration and ADR in Nigeria. The result has been an improvement on the Arbitration & Conciliation Act in many key respects and it is already becoming the default Law for many Arbitral hearings whose seat is Lagos. For instance, under the Lagos State Arbitration Law, the default number of arbitrators is one, as opposed to three under the ACA, which makes for a potentially cheaper process; arbitrators have partial immunity from liability for acts and omissions whereas they have none under the ACA and they have express powers to award interest where no such powers exist under the ACA. For the parties, they are free to choose any procedural Rules they wish, with the default Rules being the LCA Rules and they are able to consolidate proceedings or agree to concurrent hearings with other arbitral proceedings under the Lagos State Arbitration Law. Also third parties can, with the consent of the parties, apply to join proceedings. The ACA has no provisions for third parties joining proceedings or consolidating proceedings or concurrent hearings and domestic arbitral proceedings are governed solely by the Arbitration Rules in the First Schedule to the Act and no other Rules I was privileged to be a part of that process so I know much work went into it. These are some of the legacies of the Fashola Administration to the development of Arbitration and ADR in Lagos State. On a related note, the Chartered Institute of Arbitrators (Nigeria Branch) Annual Conference & Gala Nite which has hitherto always been held in Lagos, is moving to Abuja this year and Port Harcourt next year. I am confident that this will win us more converts across the country and subsequently more evangelists. The development of Arbitration has a strong bearing on economic growth so this is a prospect that should excite us all. How are you able to combine

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public and professional services with private life? Not very well, I’m afraid. I’ve always been a workaholic and I must admit sometimes I don’t know where to draw the line. When my son was younger he was once asked what his mum’s hobby is and he said “playing with her laptop”! I’ve become addicted to that machine and I honestly do not know what I would do without it! I’m fortunate to have a very understanding and encouraging husband but he knows when and how to reign me in when I’m getting carried away with work! At the beginning of June, I was going on my first trip post-Government and I had boasted that I wasn’t going to take my laptop as a mark my new-found freedom. At the last minute I popped it into my hand luggage. My husband just laughed and said he knew I was never going to be able to cope without it. God help me. I’m still a work in progress as far as work-life balance is concerned! Who has been the greatest influence in your career? There’ve been several influences. I sometimes describe myself as a very impressionable person and I like to think of that in a positive way. If I see or hear something I admire in a person, I try to adopt it if I think I will benefit from it. The late Bankole Aluko SAN was one. He was one of my bosses when I worked at Aluko & Oyebode as Practice Manager in the mid-nineties. I loved his courtroom manner and the painstaking attention he paid to any letter he appended his signature to was admirable. It was from him I learnt not to repeat a word in a letter and I still do that till today. Definitely Mr. Olasupo Shasore, SAN. I love his fecundity. I mean he is innovative and highly intellectually productive. I also admire his interest in and knowledge of history, particularly the history of Lagos. And he writes excellently, which I’m constantly aspiring to. Governor Babatunde Fashola, SAN is another influence. I never leave his presence without learning something. I’m not exaggerating. He once told me that if he doesn’t have time to read the paper he makes sure he reads the back age because ESQ LEGAL PRACTICE 79

Article

Why Nigeria’s plans for a dream Eldorado city are not radical enough

igeria’s plans for a new modern city need to be boosted so that they deliver a metropolis like the Al Maryah Island in Abu Dhabi. Shutterstock The government of the state of Lagos – Nigeria’s former capital – has proudly proclaimed it is building a new city that will become the new financial centre of Nigeria, and perhaps West Africa. The scale of the Eko Atlantic project is immense and progress is being achieved

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through a team effort between investors, planners, engineers and contractors. Pitched as Africa’s answer to Dubai, Eko Atlantic is a multibillion dollar residential and business development that is located as an appendage to Victoria Island, and along the renowned Bar Beach shoreline in Lagos. The plan is that it will: • Consist of ten square kilometres (3.86 square miles) of land reclaimed from the Atlantic Ocean;

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Be home to quarter of a million people and employ a further 150,000 people who will commute on daily basis; • Be billed as a 24-hour, green-conscious, worldclass city; and • Attract and retain top multinational corporations. There is no shortage of doubters and critics of the initiative, which is seen as an exercise in runaway neoliberalism by a country

that cannot even ensure 30 days of continuous power supply to its citizens. The truth, however, is that Lagos deserves its dream Eldorado and the economic case for Eko Atlantic is sound. The only problem is that the plans are in fact not radical enough. Our argument is that this project is under-imagined and should be shored up urgently to match other international projects in the fast-developing countries. In particular, we believe a city w w w.esqlaw.net

Article Article

should be created along the lines of Paul Romer’s charter city. These are cities in which the governing system is defined by the city rather than by state, provincial, regional or national laws. This would mean that Eko Atlantic city would operate under high standards of transparency and good governance. Its security would be handled by independent policing standards. This could extend to other aspects of its civil and criminal justice systems. Its sanitary, health, energy supplies, environment and other regulatory rules should be pegged with comparable standards in London, New York, Paris, Dubai and Shanghai. This would ensure that the laws under which the w w w.esqlaw.net

territory operates are, in essence, free of stifling national regulation which has stood in the way of most African cities operating at optimal levels.

close to 18 million residents, presents a further opportunity to rejig plans and boldly move towards chartered city status. Rather than just becoming a financial venture, the Eko Atlantic experiment can be carried further at no extra cost to become the hub to transform good governance in Nigeria and West Africa. Already Lagos is the gold standard for other parts of the Nigerian federation. In 2012, it generated annual revenue of about US$1 billion, dwarfing that of the other 35 federating parts of Nigeria. If Eko Atlantic city is competently handled by world experts in the legal economic and industrial fields, returns to Lagos economy can easily double. Bad systems and rules are the reason most African cities do not attract much-needed international investment at appropriate levels. Bad rules have tied down the development of Lagos along with 1000 other African cities since their independence from colonialism. These include corruption, mismanagement, political interference, unresponsiveness, overbearing religiosity, nepotism, human rights abuses and incompetent presence of the state. Presently, the judiciary, health and administrative systems of most Nigerian cities have severe problems. Lagos is no different even though it is still far ahead of the other 34 states and federal capital territories. Eko Atlantic ought, therefore, to provide a petri dish to run a very new kind of African city.

A model for good governance At the moment, all aspects of the planning and building of the Eko Atlantic city are squarely in the hands of the private sector involving both local and foreign venture capitalists. Those already on board include local and international banks – First Bank, FCMB, Access Bank Plc. and GT Bank in Nigeria, BNP Paribas Fortis and KBC Bank – as well as a growing number of private investors. The recent inauguration of a new governor for Lagos, West Africa’s mega-city with

Constellation of Nigerian politics is aligned Lagos will have to work with the federal government to be able to create a special zone of reform. The arrangements will require further delegation of control to Lagos state, which will in turn give up powers to the regulatory authorities of the chartered Eko Atlantic city. Such arrangements and concessions should be easier now as the constellations have aligned for the first time in Nigerian history. The Lagos state is now run by the same government and

party that rule the country. This arrangement will allow Lagos to make more credible promises to investors across the world. There will be a mutual benefit of exchange in favour of investors, employers, residents, the state and the country. In a depressed international economy, such a city would attract the qualified, the brave and the adventurous from the entire globe. African countries sorely need a skilled workforce from the developed world to fill hi-tech employment and service industries that will fuel growth in the 21st century. There are successful comparable projects across the developing world. The Chinese government, seeing the tremendous success that different rules made of Hong Kong, wisely created special zones offering tax and tariff incentives. There is the phenomenon of medical cities that are scattered in many regions of Saudi Arabia. Dubai is a beacon of success and Abu Dhabi is already closely following these examples with its bold creation of the Abu Dhabi Global Market established on Al Maryah Island. This is the latest United Arab Emirate creation of a financial free zone based on a separate jurisdiction. Honduras is also currently involved in the creation of such highquality, liveable cities. It can be done It is certain that the proposed changes will generate controversy. Nationalist feelings against this proposal may run high. But this problem is not insurmountable. Former US President Ronald Reagan allowed himself the luxury of only one decorative plaque on his desk in the Oval Office as president. It read: It can be done. The current governor of Lagos, Akinwunmi Ambode, will do himself and nearly everyone a great deal of good if he gets himself a similar plaque to remind him of the golden opportunity the Eko Atlantic City represents in his hands. ESQ LEGAL PRACTICE 81

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Photo News

Company Secretary, Oil and Gas Training, recently held at LCCI Centre, Alausa Ikeja Lagos.

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Photo News

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ESQ LEGAL PRACTICE 85

Vol. 5 Issue 4

L E GAL PR ACTICE

CALL FOR NOMINATIONS: NIGERIAN LEGAL AWARDS A SCRAMBLE FOR POWER – THE NIGERIAN ENERGY CRISIS EXPLAINED APPEAL COURT ORDERS PARTIES TO HONOUR ARBITRATION AGREEMENT WHY NIGERIA’S PLANS FOR A DREAM ELDORADO CITY ARE NOT RADICAL ENOUGH

ALIGNING JUSTICE REFORM WITH ECONOMIC GROWTH – Oyinkansola Badejo-Okusanya

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