Strengthen Asset Recovery Legislation (NG0021)

Brief description:
This commitment is to strengthen Nigerian laws with regards to assets recovery, especially non-conviction-based confiscation powers and unexplained wealth orders; and ensure proper management of assets and proceeds.

General problem:
1. Absence of a comprehensive legislative framework for the management of asset recovery
2. Poor asset recovery management

Specific OGP issue:
Corruption, Opacity in the utilization and management of public resources

Rationale for the commitment:
Asset recovery is an integral part of anti-corruption work. It requires a good legislative framework and proper management of assets and proceeds. Asset recovery and management is a huge challenge in Nigeria. There were reported cases in the past where recovered assets have not been properly managed leading to “looting of looted funds.” This commitment was made in the first NAP. Progress was made such as submission of the Proceeds of the Crime Bill to the National Assembly. But It has not been passed into law. There is the need to continue with the commitment so as to strengthen the legislative framework and improve the management of assets and proceeds.

Main objective:
To enact legislation that would aid asset recovery and ensure proper and transparent management of assets and proceeds

Anticipated impact:
To deter looting of public resources
Easy asset recovery and management

See action plan for milestone activities

7. Strengthen Nigeria’s asset recovery legislation

Main Objective

“To enact legislation that would aid asset recovery and ensure proper and transparent management of assets and proceeds.”

Milestones

1. Federal Ministry of Justice to adopt and deploy guidelines for transparent management of recovered assets pending the enactment of the law
2. Capacity building for Anti-Corruption Agencies and non-state actors to implement non-conviction-based asset forfeiture regime
3. Enactment of Proceeds of Crime Act
4. Deploy a framework for CSO monitoring of the procedure for recovery and utilization of recovered assets
5. Half-yearly publication of reports of the recovered assets and utilization
6. Annual assessment of international anti-corruption asset recovery commitments

Editorial Note: For the complete text of this commitment, please see Nigeria’s action plan at https://www.opengovpartnership.org/documents/nigeria-action-plan-2019-2021/

Commitment Analysis

This commitment is continued from Nigeria’s 2017–2019 national action plan and seeks to strengthen the legislative framework on transparent management of recovered stolen assets. It is one of the five components of Nigeria’s National Anti-Corruption Strategy. ^[108] Some of the commitment’s milestones were already partially implemented under the previous action plan. For example, the Government of Nigeria issued the Asset Tracing, Recovery and Management Regulations in October 2019, ^[109] and the President Advisory Committee Against Corruption (PACAC) issued guidelines on asset management (Milestone 1). ^[110] Additionally, the Asset Management Unit and the Africa Network for Environment and Economic Justice (ANEEJ) held capacity building workshops on the non-conviction-based asset forfeiture regime with 16 government entities (Milestone 2). However, the key milestone on enacting the Proceeds of Crime Act (POCA) was not achieved under the previous action plan and has been carried forward.

Under the current action plan, this commitment includes 6 milestones, three of which were not included in the previous action plan (Milestones 4, 5, 6). The activities continued from the previous action plan are a Federal Ministry of Justice framework for the management of recovered assets, capacity building on the non-conviction-based asset forfeiture regime, and enactment of POCA. This commitment’s new milestones are a framework for CSOs’ monitoring and reports of recovered assets and their usage and an assessment of international anti-corruption asset recovery commitments. The commitment does not clarify what the CSO monitoring framework would entail and which organizations would be involved.

This commitment is relevant to the OGP value of access to information in that it plans to disclose information on recovered assets and their usage. The commitment is also relevant to civic participation, as it entails establishing a CSO framework to monitor the process for recovery and management of stolen assets.

If fully implemented, this commitment could have a transformative potential impact on improving management of recovery of stolen assets, which amount to more than $9 billion USD. ^[111] According to the Civil Society Legislative Advocacy Centre (CISLAC), the enactment of POCA, supported by complementary initiatives such as the release of asset recovery information and enhancing oversight mechanisms by CSOs, would be essential for asset recovery efforts. The Nigerian Senate passed POCA in 2015, ^[112] but enactment has been pending. ^[113] Existing legislation applicable to the forfeiture of proceeds of crime includes the Advance Fee Fraud and Other Fraud-Related Offences Act 2006, the EFCC, and the Advance Fee Fraud and Other Related Offences Act. ^[114] Lack of transparency, reliable data, guidelines on asset recovery management, or a centralized asset recovery management database has hindered the oversight of funds. ^[115] These issues have been enabled by lack of coordination among anti-corruption agencies. ^[116] The enactment of POCA could lead to establishing a regulatory agency to manage recovery of assets and could provide clear guidance on the responsibilities and mandates for relevant agencies. ^[117] Some CSOs believe that establishing this regulatory agency is a critical step ^[118] given that the current decentralized system for asset management is inefficient, ^[119] although others place greater weight on strengthening existing agencies. ^[120]

Asset recovery is a crucial policy area for the fight against corruption in Nigeria. The IRM recommends focusing on the enactment of POCA through concerted political coordination. Capacity building of relevant state institutions has the potential to improve the monitoring of recovered assets.

Commitment 7. Strengthen Nigeria’s asset recovery legislation

● Verifiable: Yes

● Does it have an open government lens? Yes

● Potential Impact: Transformative

● Completion: Substantial

● Did it open government? Marginal

Context and Objectives

The recovery of stolen assets is a central component of the Government of Nigeria’s fight against corruption. [130] The government could gain an estimated 4 trillion Naira (8.6 billion USD) of revenue from the sale of recovered assets. [131] However, asset recovery and management itself became engulfed in controversy, with allegations of recovered loot being re-looted. [132] Therefore, this commitment aimed to ‘enact legislation that would aid asset recovery and ensure proper and transparent management of assets and proceeds.’ [133] Progress on this reform was limited under the previous action plan because the Proceeds of Crime Act (POCA) was pending enactment. [134] Therefore, the commitment was continued and expanded in the third action plan. This commitment was assessed to have a transformative potential to strengthen transparency and civic participation in the management of recovered assets. [135]

Did It Open Government? Marginal

Under this and the previous action plan, the Federal Ministry of Justice (MoJ) has sought to centralize and systematize the management of recovered assets. As reported in the IRM Design Report, the government issued the Asset Tracing, Recovery and Management Regulations in October 2019, and the President Advisory Committee Against Corruption issued guidelines on asset management. [136] In 2020, President Buhari formed an Inter-Ministerial Committee on the Disposal of Federal Government of Nigeria’s Forfeited Assets as an interim measure until a comprehensive legal framework was enacted. [137] The National Assembly has also established an Ad Hoc Committee on Assessment and Status of All Recovered Loots, Movable and Immovable Assets. [138] In May 2022, the Federal High Court nullified the 2019 Asset Tracing, Recovery and Management Regulations (drafting regulations was Milestone 1 of this commitment). The Federal MoJ intended that a central committee be responsible for disposal of recovered assets. However, the Federal High Court’s ruling prevents this course of action. Instead, the agency that recovered the assets would be responsible for their sale. [139]

Importantly, the Government of Nigeria enacted POCA (Recovery and Management) in May 2022 (Milestone 3). This Act makes comprehensive provisions for seizure, confiscation, forfeiture, and management of properties reasonably suspected to have derived from unlawful activities. [140] Consequently, this commitment is evaluated to have reached a substantial level of implementation. POCA is a landmark achievement in the quest for transparency and accountability in the recovery and management of stolen assets. [141] The Act resolved confusion among government agencies regarding how seized assets should be disposed of and calls for relevant agencies to establish asset disposal directorates. CSO Africa Network for Environment and Economic Justice (ANEEJ) is already serving as a civil society observer for the Independent Corrupt Practices & Other Related Offences Commission (ICPC) asset disposal directorate’s procurement process, as provided for under the Public Procurement Act. [142] According to the executive director of CSO Publish What You Pay, civil society now has the legal framework necessary to hold the government to the disclosure of seized assets and proper management and to the prosecution of those found wanting. [143]

The passage of the Act was not smooth sailing. Advocates for the Act had two goals: enact a law and create an agency to oversee asset recovery and management. In an interview with the Director of Journals and Proceedings in the Nigerian Senate Cornelius Ikalume, there were ‘serious concerns on the danger of centralizing the power over asset recovery and management within an agency which will ultimately fall under the control of a Ministry. Thus, it was decided that asset recovery and management be decentralized by allowing each agency involved to set up Asset Recovery Directorates.’ [144] These agencies include the Economic and Financial Crimes Commission, the ICPC, the Nigerian Police Force, and any other organizations as designated by the Attorney General of the Federation. At the time of writing, regulations to guide the implementation of POCA have been drafted and are meant to be instituted before the change of government in May 2023. [145]

POCA’s provisions for transparency and public participation in recovered asset management largely remain to be implemented. In 2020, the MoJ Asset Recovery and Management Unit created a database of recovered assets accessible to select agencies and organizations. [146] The Act’s requirement for a public register promises to significantly increase public information on the seizure and disposal of assets. [147] Until now, information on the value of recovered assets has been provided piecemeal, with individual agencies sporadically releasing statements on particular cases. [148]

IRM did not find evidence of a formal regulation or guidelines established during the implementation period for a CSO monitoring framework (Milestone 4). However, in 2017, the MoJ signed a memorandum of understanding with ANEEJ and other CSOs on civil society participation in monitoring recovered asset management. ANEEJ reports that civil society participation has become standard practice ever since. [149] Civil society has primarily monitored the management of assets recovered internationally, as stipulated by international agreements. [150] There remains an opportunity to further strengthen and standardize civil society’s role in monitoring domestic asset management as anti-corruption and law enforcement agencies establish the asset disposal directorates stipulated under POCA. In regard to capacity-building (Milestone 2), the Asset Management Unit and ANEEJ held capacity-building workshops on the non-conviction-based asset forfeiture regime with 16 government entities prior to the implementation period. In May 2022, ICPC held a one-day training on POCA for Commission officers. [151]

The IRM did not find evidence that the Federal MoJ published progress reports on asset management or international commitments (Milestones 5 and 6). [152] However, in 2018, ANEEJ reported on Nigeria’s international asset management commitments under Global Forum on Asset Recovery and the London Anticorruption Summit and shared a draft with the IRM for an updated 2023 report. ANEEJ has also produced reports in partnership with other organizations on the management of internationally recovered assets, their disposal, and the disbursement of funds to citizens. [153]

POCA has laid the legal framework on which Nigeria can build a strong recovered asset management regime. For Nigerians to benefit from recovered wealth, it is essential that the implementation of the Act addresses persistent challenges. These obstacles include re-looting and mismanagement of recovered assets, slow judicial procedures that lead to assets depreciating in value, and interagency rivalry that inhibits cooperation and information sharing. [154] As the full implications of POCA remain to be seen, this commitment is assessed to have marginally advanced transparency and accountability of asset management by the end of the implementation period. If the Act is fully implemented, this commitment has the potential to achieve significant open government results in the long term. This commitment was not continued in Nigeria’s third OGP action plan.

Looking Ahead

Asset recovery is one of the most controversial elements of anti-corruption campaigns in Nigeria. The passage of POCA into law represents a significant step forward. However, in its present form, the Act makes it difficult to create a one-stop data repository on asset recovery and management. This leaves room for fragmentation, agency turf protection, and the absence of transparency in the process. Civil society needs a strong coalition to campaign for a data hub with involvement of civic actors in the collection, collation, aggregation, and publication of information on recovered assets. Next steps to consider in this reform include:

• Anti-corruption and law enforcement agencies committing to full implementation of POCA, through the establishment of dedicated directorates and guidelines for implementation, as well as the strengthening of government expertise. [155]
• The MoJ’s Asset Recovery and Management Unit creating and maintaining a public central registry of seized and disposed assets.
• Relevant agencies ensuring compliance with the Public Procurement Act to ensure transparency of bidding and auctions in recovered asset management. [156]
• Collaboration between the Asset Recovery and Management Unit and civil society to develop guidelines for civil society monitoring across directorates, with processes to ensure agencies consider and act on civil society findings.
• The cooperation of the Presidential Task Force, House of Representatives Committee, and other relevant anti-corruption bodies on asset management and information sharing. For example, quarterly reports could be made available to the Public Accounts Committees of the National Assembly and records domiciled in the courts and the national database should be published. [157]
• The Government of Nigeria developing a legal framework to ensure proceeds of recovered assets benefit citizens. [158]
• The executive and legislative branches instituting laws to address politically exposed persons’ unexplained wealth and to protect whistleblowers and witnesses. [159]