Reblog from Segalink.com 2nd April, 2017: Unbundling the Immigration Sector ‘Scam’

The news about an alleged ePassport scam resonated across the media space from CIRCA 26th of March 2017.

The Tribune of the 26th of March reported as follows;

THE Senate Ad Hoc Committee on Alleged Misuse, Under Remittance, and Other Fraudulent Activities in the Collection, Remittance and Expenditure of Internally Generated Revenue by MDAs has invited the Attorney-General of the Federation, the Accountant-General of the Federation, the Minister of Interior and four private companies to appear before it on 6th April, 2017 to shed light on the multi-billion naira E-Passport production and other immigration-related issues that the companies perform on behalf of the Nigeria Immigration Service (NIS) in a public private partnership (PPP) arrangement over the years.

The companies, Contec Nigeria Ltd, Greater Washington Nigeria Ltd, Newwork Solution and Investment Ltd and Iris Smart Technologies, working on E-passport production, Expatriate Residence Permit and Alien Card and related immigration issues, all had contractual agreements to perform some revenue-generating service on behalf of the Nigerian Immigration Service with the companies allegedly withholding a hefty percentage of revenue that would have accrued to the Federal Government.

At a sitting of the Committee, Senator Solomon Adeola (APC, Lagos West), who is the chairman of the committee, invited the various public officials and corporate organizations following the presentation made by the Comptroller-General of NIS, Mr. Mohammed Babandede, on the revenue profile of the service and how various revenues generated, running into billions in naira and dollars, were shared by the companies, NIS and the Federal Government.

The chairman of the Ad Hoc committee confirmed from the CG of Immigration, Babandede, “the NIS at this point can now undertake the services provided by these companies, as a way of increasing revenue accruing to the government.

“I am at loss why huge part of revenue generated by NIS continued to be paid to private firms in the name of PPP that should actually be based on Build Operate and Transfer (BOT). We cannot be denying Nigerian people of benefits that would accrue to them through increased revenue to government coffers instead of huge earnings for private concerns,” Senator Adeola stated.

Earlier in his presentation the CG of Immigration disclosed that the reasons for entering PPP arrangement at the time the government did was attributed to inadequate funding and late release of budgeted sums, multiple acquisition of travel documents and poor revenue generation adding that private partners provide all the funding while money realized in course of issuing facilities is shared with government in order to allow private partners recoup their investment.

Mr. Babandede said that for the period of investigation by the Senate between 2012 -2016 total remittance to Federal Government stood at over N17 billion and over $112million adding that

“revenue accruing to government has increased almost a hundred fold since the introduction of these (PPP) agreements”

Based on the above report and several other versions, it is timely and highly welcome that the National Assembly is looking into this at this point and I’m rest assured that a lot will be revealed from the findings. It is instructive to note however, that when the Honorable Minister (Lt. General A. Dambazzau) assumed office, one of the first things he did was to set up a committee to scrutinize all the PPPs, he reminded members of the committee of its core objectives, which include guiding federal government and indeed the Interior ministry on the appropriate ways of actualizing the objectives for which PPP was set up.

The Committee has six weeks to complete its assignment. Mrs. Morayo Alimi (Director, Planning, Research and Statistics) was its chairperson while Mr. Bola Odugbesan, (Legal Adviser in the Ministry) served as secretary, but unfortunately, the findings were never made public and I will humbly advise that the Honourable minister make this happen as soon as possible. This will help clarify the nebulous aspects of these issues, to avoid unjust and uninformed generalization, as per the systemic physiology of the various PPP arrangements that may have added integrity to the ease of doing business in Nigeria, in alignment with Mr President’s Change Agenda.

HISTORICAL CONTEXT

Permit me to briefly take you on a journey into where we used to be, before the ePassport scheme.

The Machine Readable Passport, MRP, used by Nigerians, before the advent of the Olusegun Obasanjo administration was produced locally by the Nigerian Security Printing and Minting PLC, popularly called MINT. The MINT is the Nigerian Government’s official currency and other security documents printer but the NIS stopped to issue the MRPs to Nigerians after the launch of the e-passport in 2007.

Many maladies afflicted the old passport scheme of this era ranging from; lack of competence of MINT, duplicity of applicants and officials, multiple Identities via center hopping by applicants, and lack of quality control, which may be responsible for the variation in outlook of the Nigerian passport then. There were cases where no four passports are uniform thus leading to embarrassment of our citizens by foreign immigration authorities on suspicion of fake travel documents.

In 2003, (20th February to be precise), President Obasanjo took a 5-day Visit to South East Asian Countries of Singapore and Malaysia and a month after, the Presidential team led by H.E. Dr. Mohammed Shata (Minister of Internal Affairs) took a study tour of the Malaysia ePassport Model, upon which the adoption of the ePassport technology was recommended (March 2003).

By May 2003, the Federal Executive Council approved (EC 2003 (14)) which comprise of main agreement, provision of technology; systems, equipment and devices, application software, wafers, laminates, VPN & AFIS.

March 2005, there was an independent objective process (Procurement Act) through which certain players were shortlisted by the Government and capacities scrutinized, where the best bidder got the job. The International tender for manufacture of booklets and embedding of chip as at the time featured; G&D Germany, De la Rue, United Kingdom, Nigeria Security Printing and Minting, Nigeria (MINT), Iris Smart Technologies Limited (ISTL), Nigeria, Francois-Charles Oberthur, France and Sandas, Chile. Out of which, Iris Smart Technologies Limited, Nigeria (ISTL) was adjudged technically competent and most price competitive.

By May 2005, there was ministerial visit to Malaysia (IRIS Corporation, PKN) by the Honorable Minister of Internal Affairs H.E. Dr. Iyorchia Ayu.

IRIS Corporation Berhad is a global solutions provider with core expertise in digital identity, business, farming and environmental solutions. Incorporated in 1994, IRIS is the first company in Asia to set up fully integrated manufacturing facilities for Contact and Contactless Smart Cards, Contactless Document Inserts and assembled Module in Tapes and Reels.

IRIS pioneered the world’s first electronic passport and national multi-application smart card with the implementation of the Malaysian Electronic Passport in March 1998 and MyKAD — the Malaysian Government Multi Purpose Card in April 2001. These technologies are deployed in many countries across the Asia, Middle East and Africa regions.

On the 31st of August 2005, the erstwhile forgery hub in Oluwole, Lagos, was raided and surprisingly security materials were recovered including 10,000 blank British Airways tickets, over 40,000 Nigerian Passports, including official ones, were recovered during the recent raid on Oluwole, a notorious area in Lagos Island noted for document forgery and counterfeiting according to the Acting Inspector General of Police (IGP), Mr. Sunday Ehindero, then as reported by This Day.

The very first FEC approval for the manufacture and supply of 3 Million booklets and embedding of Chip was granted with a subsequent approval for the production of additional 6 Million booklets.

It must be noted however that since inception of the ePassport scheme, there had never been a situation of scarcity, breach, quality control issues or any systemic failure that hindered the operations of the ePassport scheme resulting from ISTL.

Thus, in 2015, FEC approval was granted for production of a further 10 Million Booklets followed by ISTL’s decision on Local manufacturing Facility.

CURRENT REALITIES (Where are we now?)

From the historical context we know for certain that ISTL is an indigenous Nigerian wholly owned company that is run by Nigerians, with customized solutions to Nigeria and a licensing base from Malaysia, (IRIS Corporation, Berhad of Malaysia, from which it bought the ePassport Technology from, since it is the best in the world).

The nature of our polity in this part of the world, which reset systems after each administration may have been responsible for the recent susurrus and hostile environment ISTL may have found itself even with an credibly healthy and functional running PPP arrangement with the Federal Government of Nigeria.

People with certain affiliations believe there is an opportunity to scuttle this arrangement, which has since become a significant source of revenue for the Federal Government despite the fact that the PPP arrangement had the partner funding the entire project without financial burdens on the Federal Government. As a country we have ceased to be a subject of ridicule based on the initiation of the ePassport scheme, which has literally placed us on the global map of innovative and quality best practices.

These interests without a proper grounding of what the ePassport scheme entails see it primitively from the perspective of a print job, based on their experience with the pre-Obasanjo era, where our (MRP) passport can hardly compete with the pirated works of Oluwole. The media wars and rumors may not be far from the machinations of those who aspire to take the job from the current establishment, not because it is not working but simply because they believe they can, having lost out initially based on their lack of competence and hence, driven by the need to regain control.

If not for the intervention of the Honorable Minister and the new leadership at Nigeria Immigration Service, things would have turned out for the worse within the Ministry of Interior. These leaders must not allow their ranks be broken, so as not to allow the country suffer more than necessary through no fault of the partner.

i. Database:

As naively publicized the database of the ePassport scheme is not in the custody of foreigners as purported. ISTL is an indigenous firm, owned and run wholly by Nigerians. Their database is located in a secured environment with access and overriding control by the relevant authorities. There is a pyramid of authorization that allows people to do certain things in the database in order to maintain the integrity and system of the whole.

ii. Scarcity:

The current scarcity being experienced has nothing to do with the competence or the efficiency of the solution provider as deduced. It was caused by a deliberate attempt to get the solution provider to be in breach, so that the government can cancel the PPP arrangement to favor the pressuring interests. It begs the question “What has really changed before the past 18months on the part of the service provider (partner ISTL)?

Let’s unpack the mystery here while simultaneously examining the faulty narrative floating about the media. Some would argue “There is No Reason Whatsoever To Print Nigerian Passport Abroad” but this only reflect the depth of naivety of what the ePassport scheme is all about as different from the Passport Booklet itself (which I will delve in shortly). They also allude to the fact that if passports were made in Nigeria, there won’t be need for Forex and shortage will not have been experienced.

The above allusions, however nifty it may sound are nothing but misinformation. One must then ask what exactly is an ePassport Scheme?

ePassport Scheme:

The ePassport Scheme is 80% Technology Driven (comprising of 40% ePassport Management System, 40% Decentralized Integration System) and 20% Booklet Production.

Unpacking of an ePassport:

The ePassport is not just a print job of booklet stitched together with a thread. It is an electronic device.

70% of the components of the ePassport is imported and only made by 3 firms in the world. One of which is NXP in Holland, responsible for supplying over 90 countries in the world. These components can’t be made in Nigeria. They will still have to be procured and imported with Forex. These are the backbone of the device we call ePassport today (Write once, Read many). Talking about the paper inside (Booklet), this is also not just any paper but a security paper. Do we still have a functional paper mill in Nigeria? We clearly don’t anymore. The lowest grade is newsprint, which we don’t produce, not to mention the highest grade, which is the security paper.

Look at your passport and the embedded inscriptions. The thread used to stitch the passport is customized. When viewed under UV light you will see the green and white. We don’t have a thread making capability in Nigeria. So what is there in the passport that we can do here via the pseudo available capacities? What most of them can attempt is to print, and from the quality of their prints I’ve seen, they will most certainly drag us back to the days of international harassment and forgery.

When you extrapolate the printing aspect of the ePassport in the overall it is under 1%. If we unpack the component of the ePassport scheme 80% of it is technology (management system and the decentralized integrated system) 20% is booklet. If you unpack the booklet even the 20% nearly 70% of it is the Wafer, Laminate 15%, others material, printing is just 13%. So printing as a percentage of the whole is insignificant.

So the values add of local security printers i.e. MINT (who was reported to have been edged out against National interest) is less than 1%. Why the fuss? One may wonder.

Chips- An establishment/Interest boasted about planting a chip manufacturing Plant, which is a $3bn investment. The spectrometer alone that is used to check/assess the purity of the silicon used is over $200Million. These are just wild assumption revealing the dearth of understanding of what the current scheme is about as well as as the associated capital outlay required to venture into local production (even for the 1% printing aspect). The world has left the MRP scheme and an ultimatum has been issues by ICAO (International Civil Aviation Organization) on phasing it out completely.

Look at the number of countries buying from NXP (Brazil, Canada, China, France, Germany, South Korea, Nigeria, Turkey, United Kingdom and USA). It’s like buying a Cow just to drink a cup of milk a day?! Penny-wise pound foolish, but global best practices are highly recommended as we are currently doing.

FORWARD TRAJECTORY: (How do we forestall a recurrence of Scarcity?)

Today we hear that the foreign reserve is being used to prop up the Naira to which ISTL contributes immensely. This begs the question, “Why is Emefiele not supporting or interested a project with National Security implication and revenue generation?”

Though, it is worthy of note that the CBN Governor is the Chairman of Nigeria Security Printing and Minting, (MINT), who online reports have described as being edged out of the ePassport scheme (and probably seeking means to regain control by all means)…The conspiracy is obvious but let’s continue…

If indeed the Buhari Administration is keen on revenue generation, should they need to be convinced that this kind of partnership ought to be strengthened? Note also that the ease of doing business in Nigeria hinges on the ePassport scheme, which is one of the most functional critical component of the change mantra. Rocking that boat can only bring chaos and collapse of all the gains made thus far.

Are we going back to where we are running from? Where our passport is seen as subpar to International best practices and quality just to appease some vested interests? Contrary to the Presidential mandate, that stipulates that data must be collated and harmonized?

ISTL is a providential/fated appendage whose work has been made much more difficult in an already hostile economic environment.

• the ePassport approval process was designed to eliminate human intervention
• The framework must insulate sourcing of FX for ePassport project from intervention of officials.
• Framework to sell FX to solution provider; Up to 75% of the preceding year’s FX revenue from ePassport project per annum.
• So far, according to my fidings, the ePassport scheme is a success story
• - ICAO endorsement
• Nigerian membership of ICAO technical committee
• Technology PPP
• Cumulative Gross revenue generated as at 31st December 2015; from my understanding is at N63.3Billion while foreign revenue from the ePassport is at $97.4M

So, there is no BOT here and there is no income being withheld by ISTL on behalf of Government. The citizens of Nigeria that requires ePassport have no business with Contec Nigeria Ltd, Greater Washington Nigeria Ltd, Newwork Solution and Investment Ltd…so citizens, there is no scam under the passport scheme as far as ISTL services are concerned and the scarcity as we speak has been resolved with the supplies already on the way which is going to be a surplus from my findings.

The deficit was about 100,000 Booklets globally and by Monday the 3rd of April through the second week of April 150,000 Booklets would have circulated to rehydrate the system even with a surplus as gathered from credible sources.

The attempt to frustrate a local entity with an ongoing PPP arrangement by some interests frustrated their access to Forex thus forcing them to source for funds at the BDC with loses on each ePassport produced. These are the questions we need to focus on…who are the enemies of Nigeria and why are they trying to kill our very best for personal interest?

Our ePassport is a National Asset, that accords Credibility and Integrity to Nigeria’s travel document and by extension enhances our International image. It demands genuine requirement for FX and we have clearly seen the implication of frustration of access of same on delivery which has never happened before until recently.

We urge the Government to establish a permanent framework for the ePassport scheme and aid the introduction of auxiliary services for increased revenue generation.