Nexbis files court case over Maldives contract termination

Nexbis has filed a case with the Maldives Civil Court claiming that the People’s Majlis lacks the jurisdiction to order the government to terminate the IT company’s Border Control System (BCS) contract.

The lawyer representing the Malaysia-based mobile security provider, Ismail Wisham, revealed that the case was filed at Civil Court on Tuesday (December 25).

Wisham also stated that a request had been filed with the court to issue an order that the government delay parliament’s decision to cancel the contract until outstanding several ongoing trials in the country concerning the contract were resolved.

Earlier this week, parliament voted unanimously to instruct the government to terminate the border control project agreement with Nexbis.

All 74 MPs in attendance voted in favour of a Finance Committee recommendation following a probe into the potential financial burden placed on the state as a result of the deal.

Speaking to local media on Tuesday (December 25), Home Minister Dr Mohamed Jameel Ahmed claimed the government would respect parliament’s unanimous decision to halt the BCS project agreement with Nexbis.


Supreme Court precedent in Nexbis case makes ACC meaningless: ACC President

The Supreme Court of the Maldives last Sunday invalidated the a High Court injunction blocking the implementation of a border control system (BCS) in Ibrahim Nasir International Airport by Malaysia-based security solutions firm Nexbis.

The seven member bench of the Supreme Court invalidated the injunction, stating that “the subject of the injunction was not a subject where an injunction can be issued and thereby the bench of the Supreme Court unanimously rule that High Court order is invalid”.

The decisive ruling ends a long-running legal battle involving Department of Immigration, the Anti-Corruption Commission (ACC) and Nexbis. The ACC had alleged there was corruption in the bidding process.

Following the decision, Controller of Immigration Dr Mohamed Ali stated to local media that the system would soon be fully installed.

“A team of Nexbis staff will be coming over by the end of this week. A large portion of the system has already been installed. I hope we would be able to begin using the system very soon,” the controller said.

He reiterated that the immigration department currently uses a very basic application which has many issues and would also expire by the end of the year.

The new system he said would alleviate the existing problem of long queues and other issues, as well as increase the efficiency of the process.

He further said that when they when the system is implemented and begins functioning, biometrics from all departures and arrivals will be recorded. Afterward, “no one will dare to enter the Maldives illegally.”

“No one can stop the project,” he concluded.

State of limbo

Meanwhile, ACC President Hassan Luthfee has expressed concern and frustration over the Supreme Court decision stating that it has put the commission in a state of limbo deprived it of purpose.

“If this institution is simply an investigative body, then there is no purpose for our presence,” he said. “Even the police investigate cases, don’t they? So it is more cost effective for this state to have only the police to investigate cases instead of the ACC,” Luthfee said.

Referring to the ruling, Luthfee said that the ruling meant that the ACC had no power to prevent corruption, even if it was carried out on a large scale.

“In other countries, Anti Corruption Commissions have the powers of investigation, prevention and creating awareness. If an institution responsible for fighting corruption does not have these powers then it is useless,” he said.

Officials investigated were invoking their right to remain silent, Luthfee said, and refusing to take any responsibility.

“When an official chooses to remain silent, what is the purpose of sending such a case to the Prosecutor General? Who will take the responsibility for the damages caused by such actions?” Luthfee questioned.

He added that even if a local island council or a school engages in a activity that involves in corruption, the Supreme Court precedent meant there was nothing that the ACC could do.

“This is just a simple example. To be frank this is the size of the ACC. The Supreme Court should be a court that should assist the independent institutions formed within the constitutional framework of this country,” he added.

Nexbis and ACC at loggerheads

The border control system at Ibrahim Nasir International Airport has been subjected to several allegations of corruption linked to former Controller of Immigration Ilyas Hussain – brother in law of current President Mohamed Waheed Hassan.

Following the presidential elections of 2008, then President Mohamed Nasheed gave Ilyas Hussain the position of Controller of Immigration as a part of coalition agreement with Waheed’s party, at the time Nasheed’s Vice President

However, when the Nexbis case came to light, former President Nasheed removed Ilyas Hussain from the position and put him as the head of the Disaster Management Centre, replacing him with Abdulla Shahid.

Shahid was a vocal opponent of the Nexbis system, alleging that the terms agreed with the company would deprive the Immigration department of significant revenue for comparatively little return.

The former controller at the time expressed concern over both the cost and necessity of the project, calculating that as tourist arrivals continued to grow Nexbis would earn US$200 million in revenue over the project’s 20-year lifespan.

Comparing Nexbis’ earnings to the government’s estimated revenue from the deal of US$10 million, Shahid suggested the government instead maximise its income by operating a system given by a donor country.

“Border control is not something we are unable to comprehend – it is a normal thing all over the world,” Shahid told Minivan News at the time. “There is no stated cost of the equipment Nexbis is installing – we don’t know how much it is costing to install, only how much we have to pay. We need to get everything out in the open.”

Following the controversial transfer of power on February 7, President Waheed returned Ilyas Ibrahim to his former position as the controller of Immigration.

However as the corruption investigation progressed, President Waheed removed Ilyas Hussain from Immigration and installed him as Minister of State for Defence and National Security, Chief of Staff of the President’s Office Dr Mohamed Ali replaced him as Controller of Immigration.

Nexbis and ACC came to loggerheads the day after signing ceremony between Immigration Controller Ilyas Hussein Ibrahim and Nexbis CEO Johan Yong. The ACC opposed and sought and injunction after stating it had received “a serious complaint” regarding the “technical details” of the bid.

In November 2010, nearly a month after the signing of the agreement, shares of Nexbis dropped 6.3 percent on the back of rumours that the project had been suspended.

The speculations lead to Nexbis announcing that it would seek legal redress against parties in the Maldives, claiming that speculation over corruption was “politically motivated” in nature and had “wrought irreparable damage to Nexbis’ reputation and brand name.”

In August 2011 the Malaysian based mobile security system vendor on the local media threatened to take legal action over the stalled border agreement with the government.

In a letter to then Immigration Controller Abdulla Shahid on August 19, Nexbis complained that it had not received a reply from the Immigration Department to its inquiries after the cabinet decided to proceed with the project.

Nexbis stated in its letter that the company had spent “millions of dollars” to purchase equipment and had even paid import duties to the government, noting that the continuing delays were resulting in financial losses.

ACC filed a court case against the Rf500 million (US$39 million) Nexbis system in November 2011, two days after cabinet decided to resume the project.

The ACC in December also forwarded corruption cases against former Immigraiton Controller Ilyas Hussain Ibrahim and Director General of Finance Ministry, Saamee Ageel to the Prosecutor General’s Office (PG), claiming the pair had abused their authority for undue financial gain in awarding the Nexbis project.

On January 2012, the Civil Court ruled that ACC did not have the legal authority to order the Department of Immigration and Emigration to terminate the border control system contracted to Nexbis in November 2010.

Judge Ali Rasheed ruled that the ACC Act clearly allowed the commission to investigate corruption cases, but did not give ACC legal authority to issue an order which can annul a formal agreement signed between one or more parties.

He asserted that it was “unfair” to the contractors if ACC could annul an agreement without the contractors’ say, adding that such a decision violated the protection granted to the contractors under the Maldives Law of Contract.

Nexbis on February 2012, a week after the controversial transfer of power, filed a lawsuit at the Civil Court seeking Rf 669 million (US$43 million) in damages from former Immigration Controller Abdulla Shahid.

According to the lawsuit, Nexbis alleged Shahid refused to proceed with the project despite court approval and spread false information regarding the agreement to the media, tarnishing Nexbis’ global reputation.

Meanwhile, the Immigration department decided to proceed with the stalled border control system.

On April 2012, the ACC appealed the Civil Court’s ruling in the High Court.

The High Court favoured the ACC and issued an injunction, temporarily halting the roll out of the border control system pending the outcome of the ACC’s appeal against a Civil Court ruling that the ACC did not have the authority to halt the project.

Nexbis then filed an appeal at the Supreme Court against the High Court injunction.

The firm had earlier in May stated that despite the legal complications surrounding the deal, the border control project had completed its first phase, with Rf 10 million’s (US$650,000) worth of installation work having been finished.


Government condemns obstruction of ACC investigation, calls on Civil Service Commission to investigate

The government has condemned the obstruction of an Anti-Corruption Commission’s (ACC) investigation into the Immigration department, after immigration staff allegedly locked the investigators in a room, and called on the Civil Service Commission to investigate.

Speaking to Minivan News, President’s Office Spokesperson Abbas Adil Riza said the government believed it is very important for the Civil Service Commission to look into the matter in order to prevent future obstructions to investigations by civil servants.

The offices of the Department of Immigration and Emigration were raided on Thursday by ACC officials with police assistance. The anti-corruption authority seized 75 laptops from the immigration offices, which it alleged had been provided to staff by Nexbis. Immigration staff told local media the laptops were part of the project being rolled out by the security firm.

The ACC accused immigration staff of obstructing and intimidating ACC officials during their investigation of the department, and said it would file a case.

The Nexbis contract – a 20-year Build, Operate and Transfer (BOT) agreement to upgrade the Maldives’ border control security system – was signed with Nexbis during the previous administration by President Mohamed Waheed’s brother in-law Ilyas Hussain Ibrahim, who served as the Controller of Immigration and Emigration at the time.

The day after the concessionaire contract was signed, the ACC announced it had received “a serious complaint” regarding “technical details” of the bid, and issued an injunction pending an investigation into the agreement citing “instances and opportunities” where corruption may have occurred.

The ACC in December 2011 forwarded cases of corruption against Ilyas Hussain Ibrahim and former Director General of Finance Ministry, Saamee Ageel to the Prosecutor General’s Office (PG) .

The ACC alleged the pair had abused their authority for undue financial gain in giving the US$39 million Border Control System project to Malaysia’s Nexbis Limited.

Ilyas was reappointed as the Controller of Immigration and Emigration in February after President Waheed came to power. However, the President on Thursday transferred Ilyas Hussain to the Defense Ministry as the Nexbis case intensified, following the ACC’s raid.

“The President decided to transfer Ilyas as he is under investigation in an alleged corruption case,” confirmed Riza. “It is in the best interest of the situation as his name is everywhere these days.”

The ACC was not responding at time of press.


Border loopholes benefit human traffickers: Immigration Controller

“If one country has a loophole, all countries suffer,” said Immigration Controller Abdulla Shahid, referring to the Maldives’ lack of a border control system amidst rising concerns over human trafficking. “The present border control system is only helping human traffickers.”

Authorities have reported a daily increase in human trafficking to the Maldives, particularly in the case of expatriate workers. The industry has a calculated value of US$123 million, making it the second largest contributor of foreign currency.

“This is a serious issue, there are about 40,000 illegal workers in the Maldives right now,” said Minister of Foreign Affairs Ahmed Naseem. “A border control system would be useful, especially in the future for maintenance. But there is a lot to do within the country as well, and we are currently trying to address these matters.”

The Maldives currently uses an eight year-old, outdated border control system. Plans to upgrade to a modern system have been delayed for over a year on allegations of corruption.

In November 2010, the government approved a Rf500 million (US$39 million) Border Control System by Malaysia’s Nexbis Limited, proposed by the Department of Immigration and Emigration.

Shortly thereafter, the Anti-Corruption Commission (ACC) requested that the agreement be halted due to “a serious public complaint” alleging corrupt dealings. The President upheld the ACC’s request in January 2011, by in May the Cabinet approved the program.

The ACC subsequently renewed its concerns and filed a case at the Civil Court and submitted a report to the Prosecutor General’s (PG) office earlier this month. The report accuses Former Controller Ilyas Hussain Ibrahim and Director General of Finance Ministry, Saamee Aqeel, then head of the Tender Board, for allegedly abusing their authority for undue financial gain.

Nexbis threatened legal action over the delay, citing millions of dollars in losses over equipment already imported to the Maldives. Shahid noted that the equipment is still sitting in Customs.

Immigration matters

Shahid said the public misconception that Immigration is a mundane department doing no-brainer tasks has led to a general misunderstanding of need for a border control system.

“Immigration personnel have to be trained to detect forgery, to profile passengers–we recently had courses for officers on how to detect physical alterations like makeup.

“In general, the public is not aware of the system’s value. It is to everyone’s benefit, even distant countries, to have a strong border control system in the Maldives. Terrorism and human trafficking involve other countries and their borders. If we have good communication, starting at Immigration, and a system, then we have good results.”

Currently a passport check requires an individual to manually scan hundreds of photographs, Shahid said. Without the key components of a modern system – facial recognition, finger-print identification technology, and eye scans – “people who were deported on criminal violations can re-enter the country. If they have a new or fake passport, we rarely detect them with our current system,” Shahid explained.

“A passport is just a piece of paper nowadays. The modern system, with the recognition technology, is almost a 100 percent guarantee of proper identification,” he added.

Nearby Sri Lanka, Thailand and Malaysia have been using modern systems for years.

“I think the proof is strong enough”

Shahid believes that cases against Ibrahim and Aqeel will be difficult to ignore in a court of law.

When the Nexbis system was first considered, a proposal was sent by Immigration to the National Planning Council. According to Shahid’s review of the documents, the final contract drafted deviated significantly from the initial proposal.

“The proposed system could be implemented in six months for US$4-5 million, with the company charging a further US$150-200 thousand per year for maintenance,” he asserted.

“According to this, the Maldives would pay US$8 million in the first year to Nexbis. Over 20 years that would be US$4 million paid annually. That’s fair. But right now the Nexbis plan is one-third of the budget.”

Taxes are also a consideration, particularly given the high numbers of foreigners and expatriates traveling through the Maldives.

“In 2011 we are reaching 1 million foreign arrivals. If we charge US$2 for arrival and US$2 for departure, that’s US$4 per person. Annually, the government would collect US$4 million for Nexbis. It would break even.”

Nexbis proposed these charges as part of its 20-year contract with the government in 2010.

“This means that neither the government nor the Maldivian public have to pay in exchange for a state-of-the-art border security protection,” Nexbis earlier claimed.

Shahid also noted that GMR is expanding Ibrahim Nasir International Airport (INIA) to accommodate 3 million arrivals annually, indicating that revenue will increase.

Nexbis also planned to levy a US$15 fee for expatriate identification cards. With the current 100,000 registered expatriates, Shahid said, the company receives US$1.5 million annually from expatriate cards alone.

“Nexbis will get US$27.5 million in 2025, according to the current statistics,” he said. Calculating for a gradual increase of arrivals over the next 20 years, “the generated revenue could build an airport of GMR’s standards and implement an up-to-date border control system.”

According to Shahid’s calculations, the approximate cost in the first year of installment and operation (US$8 million) of a Nexbis-quality border control system is far lower than the cost proposed in the final contract (US$39 million).

Shahid earlier estimated that maintaining a free system given by a donor country would cost at most several hundred thousand dollars a year, and said he was unsure as to why such an agreement had ever been signed.

“I don’t know much about the details of the ACC’s report,” he concluded. “Since I saw the contract for the Nexbis system, my argument has always been that the amount charged is ridiculous. It should not be done and must be halted. It is wrong.”

Ilyas Hussain Ibrahim declined to comment on the grounds that the issue was “politically risky.”

The Nexbis case is currently the largest corruption case before the courts and PG, the ACC confirmed. While corruption charges are regularly issued in the Maldives, resolution at the PG level is not so common. Speaking to Minivan News on the occasion of International Anti-Corruption Day, ACC President Hassan Luthfee said that of the 16 cases filed with the PG this year, zero have been addressed.

Vice President Muaviz Rasheed today said the ACC had received no information from the PG, but was hoping for the Civil Court’s ruling by the end of this month.

“The Civil Court has not been cooperative with the ACC on all counts, however the hearings ended in late November and we expect a ruling within the month,” Muaviz said.

Banana republic?

Although Shahid is confident in the court, he is unsure when the Maldives will take actual steps towards updating its border control system.

Without local capacity and expertise to produce a state-of-the-art border control system, the Maldives would turn again to the international market. Shahid said there are many options: “we could go anywhere, we could even get it as foreign aid.”

But after the dealing with Nexbis, withstanding international scrutiny could be difficult.

“Nexbis sees the Maldives as a banana republic that it can squeeze money out of,” Shahid observed.

With a score of 2.5 on Transparency International’s Corruption Perception Index and ranking 134th out of 185 countries, the Maldives may not be so inviting to foreign investors.