Tag: nexbis

Nexbis signals willingness to negotiate border control agreement

Mobile security system vendor Nexbis, which is behind the stalled build, operate and transfer agreement to upgrade the Maldives’ immigration system, has issued a statement welcoming the government’s decision to proceed with the project and said it is willing to negotiate the terms of the contract.

The upgrade was stalled earlier this year when the Anti-Corruption Commission (ACC) expressed concerns about the deal, claiming that there were “opportunities for corruption” during the bidding process.

“A number of further gross inaccuracies continue to be perpetrated, whether intentionally or through ignorance, particularly regarding the cost of the contract,” Nexbis said in its statement.

“Despite sensationalist claims in the media regarding [the tender process], the terms agreed to by the parties, or the suitability of the system being provided, Nexbis will be delivering a state-of-the-art, flexible and cost-effective security solution.”

Under the 20 year agreement, Nexbis levies a fee of US$2 from arriving and departing passengers in exchange for installing, maintaining and upgrading its immigration system, and a fee of US$15 for every work permit card.

“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 claimed.

The company said that “although the bid proposed a fee to be applied to all travellers including Maldivians”, the company waived the charges for Maldivians “as a goodwill gesture.”

“In addition Nexbis is providing a five percent revenue share to the government should passenger numbers grow. In stark contrast to some of the other bids, we have not requested a guaranteed minimum volume of passengers. Essentially the company must bear the cost risk should the number of visitors to the Maldives drop as has previously occurred during the tsunami and financial crisis.”

Immigration Controller Abdulla Shahid has expressed concern over both the cost and necessity of the project, calculating that with continued growth in tourist numbers Nexbis would be earning US$200 million in revenue over the 20 year lifespan of the agreement.

At five percent, royalties to the government would come to US$10 million, Shahid said, when there was little reason for the government not be earning the revenue itself 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.

“There is no costing 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.”

Nexbis meanwhile argues that “reasonable persons will likely realise that once the hidden costs after are taken into account and adjusted for inflation, the benefits and efficiencies of the Nexbis system will far outweigh the risk, inadequacies and uncertainties of any such alleged cheaper system.”

“This frees up the [Department of Immigration] from managing systems and securing the budget year in, year out to ensure the system is maintained. This will prevent interruption of service and avoid potential corruption as there will no longer be a need to purchase equipment every year.”

Shahid however estimates 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.

“Airport charges are calculated based on government expenditure – such as the cost of the immigration counters. The US$18 collected as an airport tax is included in the ticket, and in the end [under this agreement] the amount for immigration will be going to Nexbis,” he said.

He further noted that despite Nexbis offering not to charge Maldivians for use of the service as a “goodwill gesture”, there was no mention in the contract that Maldivians would have to pay at the border: “the contract says every foreigner,” he said.

Shahid would not comment on the specifics of the pending negotiations with Nexbis, but said that the Immigration Department had the government’s full support in the matter.

Nexbis meanwhile said it had agreed to review the government’s additional requirements, “and have expressed our willingness to accommodate any such changes within commercially viable terms.”

“We have this requires some changes to the solution we ultimately provide, then it is within the scope of our agreement to accommodate these changes,” the company said.

Meanwhile, an ongoing police investigation into labour trafficking in the Maldives last week uncovered an industry worth an estimated US$123 million, eclipsing fishing (US$46 million in 2007) as the second greatest contributor of foreign currency to the Maldivian economy after tourism.

Police discovered several thousand passports confiscated from expatriate workers during a recent raid of 18 ‘paper companies’, created to fraudulently apply for work permit quotas. The imported workers, many of them illiterate and from rural Bangladesh, are then typically employed for a pittance under substandard conditions or else simply abandoned at the airport after having paid up to US$2000 to bogus recruitment agencies.

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Cabinet decision not a green light for Nexbis project, says Immigration Controller

Cabinet’s decision last week to review the stalled Nexbis project did not necessarily mean it was going ahead, said Immigration Controller Abdulla Shahid today.

The Build, Operate and Transfer (BOT) agreement with the Malaysian-based mobile security solutions provider was to upgrade border security in the Maldives and facilitate the identification and tracking of expatriate workers without the use of potentially-forged paper documents.

However the day after the October 2010 signing of the concessionaire contract, the Anti-Corruption Commission (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.

Nexbis shares immediately plunged 6.3 percent on the back of the ACC’s announcement. The company subsequently issued a statement claiming that speculation over corruption was “politically motivated” and had “wrought irreparable damage to Nexbis’ reputation and brand name.”

“Nexbis’ shareholders own and manage multi-trillion dollar assets globally and will not jeopardise their reputation for an investment return,” the company said at the time.

Shahid said today that following the Cabinet decision the Immigration Department would be “looking into the ACC’s concerns and negotiating with Nexbis.”

“Cabinet did not say the project would proceed, but have announced that it would be reviewed. The ACC’s initial position was that the project would be re-tendered with the consent of Cabinet.”

Shahid acknowledge threats of legal action from Nexbis, but observed there was “nothing we can do on this issue – it was the ACC that intervened.”

He predicted that it would be “some time” before the review was completed.

Local media has claimed that key technical components, such as facial recognition, were missing from the project.

Minivan News is currently seeking comment from Nexbis.

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Cabinet moves ahead with Nexbis border control deal despite ACC objections

The Maldivian cabinet has reportedly decided to move ahead with implementing a border control system designed by Malaysia-based Nexbis after overruling concerns raised by the Anti-Corruption Commission that halted the deal earlier in the year.

Press Secretary for the President Mohamed Zuhair told newspaper Haveeru today that after two weeks of discussions, the cabinet had decided to move ahead with the Nexbis agreement originally signed back in October 2010. Zuhair was unavailable for comment on the decision when contacted by Minivan News.

The Nexbis deal had been bought to a halt soon after being signed as the ACC ordered a halt on a contract between the Department of Immigration and the Malaysia based mobile security firm over claims that were instances where corruption may have occurred. The ACC order was upheld by President Mohamed Nasheed in January, who requested that the Department of Immigration and Emigration adhere to the ACC’s guidance until it rules over the next step for the project

The ACC’s claims were vehemently denied by Nexbis, which announced days later that it was consider taking legal action against unspecified parties in the country that it alleged had “wrought irreparable damage to [the company’s] reputation and brand name” alleging attempts to halt the deal were “politically motivated” in nature.

According to Haveeru, ACC Deputy Commissioner Muawwiz Rasheed claimed following the cabinet’s decision today that only a Maldivian court could invalidate the decision to halt the project – even one with the reported support of the country’s executive arm.

“It’s mandatory for the department to follow our orders. The investigation is ongoing,” he was quoted as saying in the paper.

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Nexbis to seek legal redress for “irreparable damage to reputation and brand name”

Mobile security solutions vendor Nexbis has announced it will be taking legal action 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.”

“Although we understand that the recent media frenzy and speculation of corruption are politically motivated in nature and not directly related to Nexbis, it has had an indirect impact on our reputation and brand name,” the company said in a statement provided to Minivan News.

“Nexbis’ shareholders own and manage multi-trillion dollar assets globally and will not jeopardise their reputation for an investment return,” the company stated.

The Malaysian-based technology firm signed a concessionaire contract with the Department of Immigration in October 2010, to install an advanced border control system that is had said would collect and store biometric data on expatriate workers and eliminate abuse of (easily forged) paper documentation.

The government has struggled to tackle the problem of foreign worker exploitation. There are believed to be 100,000 foreign workers in the country – almost a third of the country’s total population – but no data is available on how many are illegal.

International agencies have taken a dim view of the problem, most notably the US State Department, which last year placed the Maldives on its tier two watch-list for human trafficking. Minivan News reported in August 2010 that the exploitation of Bangladeshi workers alone was an industry was worth at least US$43.8 million a year, rivaling fishing as a source of foreign exchange.

Following the signing ceremony with Nexbis, the Anti-Corruption Commission (ACC) announced it had received “a serious complaint” regarding “technical details” of the bid, and issued an injunction pending an investigation into the agreement.

“On the very day we signed the contract, barely hours, maybe minutes later, the ACC had drafted a letter saying there were suspicions of corruption involved with the decision,” Minivan News was told by an Immigration Department source, who asked not to be identified.

Nexbis shares immediately dropped 6.3 percent on the back of the ACC’s announcement.

Last week, facing political pressure ahead of the local council elections, President Mohamed Nasheed upheld the ACC’s request that the roll-out of the technology be postponed.

The ‘stop-work’ order amounts to an indefinite hold on the project, with little optimism for a quick outcome. The ACC has not completed an investigation since 2008.

In its statement, Nexbis noted that the system and related technologies to be installed in the Maldives “have been implemented in over 100 locations worldwide including the Americas, Europe and Asia and comply with ICAO (International Civil Aviation Organisation) and other international standards.

“Nexbis is an international company with strict internal policies that conform to International Anti-Corruption laws and strictly enforce the policy. All Nexbis staff have strict government security clearance to carry out national security projects.”

The company stated that it was invited along with other Malaysian companies to invest in the Maldives during a government road show, and was shortlisted for the Immigration Border Control System (MIBCS) tender after making an expression of interest in February 2010, together with several other companies.

“Subsequent to that, Nexbis together with the other shortlisted companies were invited to respond to the RFP (request for proposal),” the company stated. “Nexbis followed the strict and transparent submission and evaluation process requirement of the government of Maldives and emerged as the successful bidder for the project in a public opening of the bid together with all the other bidders.”

Those bidders, Nexbis said, were informed that they would be subject to both a technical evaluation by the Immigration Department and an independent financial evaluation by both the Ministry of Finance and the Tender Board.

“The contract negotiations involved lawyers from the Attorney General’s office, Immigration, as well as the Ministry of Finance prior to a unanimous conclusion by all parties and final sign off by the Attorney General’s office of the Government of Maldives,” Nexbis stated.

On October 17, 2010, Nexbis signed a concession agreement with the Department of Immigration to implement an Immigration Border Control System (MIBCS) under a BOT (Build, Operate and Transfer) arrangement. This allowed the system to be installed at no upfront cost to the government, while Nexbis would levy a fee on work visas issued over the lifespan of the agreement.

The concessionaire contract, Nexbis noted, “is legally binding and Nexbis will exhaust all avenues to ensure that its interest is protected in this matter.”

“Nexbis’ international lawyers have been building a libel and defamation case since the media frenzy to enable legal proceedings against certain individuals and institutions that have wrought irreparable damage to Nexbis’ reputation and brand name,” the company stated.

“In addition, we will be suing for compensation for collateral and consequential damages that arise as a result of direct or indirect implied allegations by individuals or institutions. We have gathered significant and indisputable information to mount a successful case and will be taking action.”

Mohamed Zuhair, Press Secretary for President Mohamed Nasheed, said “I agree that this is a negative development, and that Nexbis should consider going to court seeking redress [for the] delays.”

“The ACC has only said that there were ‘instances and opportunities’ where corruption could have occurred, but said they were not sure if it did happen and issued an injunction.”

The President, Zuhair emphasised, had “simply stated that he will cooperate with the ACC”, and “has not insinuated that corruption is involved [in the Nexbis deal].”

He added that the country’s independent institutions – and its judiciary – had been formed during an opposition majority.

“For all the government’s good intentions, the independent institutions have yet to do anything to accelerate the government’s efforts to provide prosperity for the public,” he claimed.

Zuhair pressed for patience, noting that “it is difficult for the government at the timebeing, during local council elections. These are problems not unique to the Maldives, and foreign investors should take heart in the democratic process we have brought in. On a good day, the ACC is in favour of foreign investment.”

He acknowledged the scope of the problem that the agreement was intended to address.

“Expatriate workers get hit twice – they pay agents in the country of origin, then come and pay an agent here, or even the employer. It is illegal and it has been going on for 30 years – there is now an ingrained culture [in the Maldives] of taking advantage of the hiring of expatriate workers to make money from them.”

“I am confident justice will prevail,” he added.

Minister of Economic Development Mahmoud Razee acknowledged that the situation with Nexbis was “unwelcome”, but said the Ministry “believes investors conduct due diligence on political risks in an emerging democracy with a lot of fluidity.”

“The government of the Maldives will continue to promote democracy and stabilise the economy to attract investors,” he said.

Nexbis appeared less convinced, and warned of potential ramifications to foreign investment in the Maldives should investors become collateral damage in local politicking.

“The ultimate collateral damage will be to the Maldivian public in the long term as international investors will shy away from the country unless commitments made are honored,” the company said.

“A single default in the government’s commitment will have a long and lasting effect including a significant re-rating of the investment risk of the country.”

The Anti-Corruption Commission (ACC) was not returning calls despite numerous attempts over several days.

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President upholds ACC’s postponement of border control shakeup

President Mohamed Nasheed has upheld the decision to postpone the roll-out of a new electronic border control system for the Maldives in accordance with concerns by the Anti-Corruption Commission (ACC) over the project’s selection process.

The President’s Office confirmed to Minivan News that Nasheed has requested that the Department of Immigration and Emigration adhere to the ACC’s guidance until it rules over the next step for the project, with no appeal expected to be heard on the current decision.

Work on the project was suspended soon after being agreed last October, when the ACC raised concerns over allegations of corruption in the decision making process.

The ongoing criticism by the ACC of the Nexbis border control agreement has itself come under fire amidst accusations that it represents a politically-motivated attack on wider government reforms, according to a source within the immigration department.

A spokesperson for the ACC was not available for comment at the time of going to press.

However, the ACC this week sent a confidential letter to Immigration Controller Ilyas Hussain Ibrahim calling for approval from the Maldives Cabinet or National Planning Council (NPC) over concerns regarding corruption within the decision making process for the deal. The letter was also leaked to the press.

Prior to the President’s decision to hold the project, a source within the immigration department told Minivan News that it had remained confident that the project, signed with Malaysia-based Nexbis in October as part of attempts to prevent abuse of the working visa system, would be “greenlit” by either the cabinet or the NPC.

Having already been approved by two independent audits, the source claimed that President Nasheed had also indicated to local media this week that he saw no reason to oppose the existing agreement for the new border control system.

However, the immigration department said that it will comply with the President’s orders and wait for any further decisions by the ACC relating to border control.

Alongside refuting any suggestions that corruption had played a role within the decision to choose Nexbis, the Immigration Department insider claimed that technical criticisms of the system were part of wider political moves to try and disrupt the government’s reform of the border control system.

However, the anti-corruption body is said to have highlighted a number of issues concerning the different models used to identify travel documents such as passports under the visa scheme.

“The ACC does not have the technical background to be able to criticise and understand the [border control] system,” said the immigration department source. “More education is needed [within the commission].”

The Nexbis border control project had aimed to make use of fingerprint and facial recognition devices that according the Department of Immigration could be set up within four to six months as part of the first phase of the project focusing on working visas – essentially matching individuals to records without the requirement for paper documents.

However, the President’s decision means that the work will continue to remain on hold since the signing in October.

“On the very day we signed the contract, barely hours, maybe minutes later, the ACC had drafted a letter saying there was suspicions of corruption involved with the decision,” said the immigration department source, who asked not to be identified. “From that moment, we have stopped work on the system as requested by the ACC.”

When news of the disruption broke in November, shares in Nexbis immediately dropped 6.3 percent. Minivan News has since spoken to other foreign investors in the Maldives who have expressed concern that their share prices were at risk of becoming collateral in local politics.

The injunction issued by the ACC effectively places an indefinite delay on the project. The commission has not finalised an investigation since 2008.

Trafficking concerns

Immigration reforms, of which the Nexbis project was part, were intended in part to address the government’s serious concerns over labour trafficking.

Last year, the Maldives was placed on the US State Department watch list for human trafficking, a crime which may actually narrowly eclipse the fishing industry as the second-largest contributor to the Maldivian economy after tourism, US$43.8 million on paper but potentially reaching up to US$200 million.

The Nexbis system was said to allow the immigration department to store and retrieve the biometric data of expatriates working in the country, effectively circumventing the abuse of paper documentation and curbing the ability of workers – and traffickers – to operate in the country.

“We currently have a large number of illegal expatriates running around the country,” another source at the immigration department told Minivan News back in 2010. “Right now estimate that there are 100,000 foreign workers in the country, but there are no official figures on how many may be illegal.”

Workers were arriving in the country legally “but once in the country they discard the documents and flee to islands, and seek better payment.”

Many companies in the Maldives were benefiting “and facilitating” the problem, the source said, which was impacting those companies “who do operate legally and pay visa fees to the government.”

Ensuring that workers could be accurately identified, even without documentation, was the key benefit of the new system, the source explained.

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Nexbis shares drop after reports of suspension and ACC investigation

Shares in the mobile security firm Nexbis, which won a contract to install a border security system in the Maldives, dropped 6.3 percent on Friday on the back of rumours that the project had been suspended.

The ‘build, operate and transfer’ concession contract covered the design of an electronic border gate system, as well as entry and exit documents, reported CFOworld.

The project was aimed at tackling the rising numbers of foreign nationals working illegally in the country, almost all of whom arrive via Male’ International Airport.

In a statement, Nexbis said it had not been informed of any suspension of its contract with the Maldives Immigration Department and was currently seeking clarification.

The Immigration Department confirmed to Minivan News today that the project had not been suspended.

A source within the department told Minivan News that while Nexbis had not been informed that the project was suspended, “but it hasn’t started rolling yet either, and now we’re waiting for the Anti-Corruption Commission.”

The Nexbis project ran into difficulties immediately after the signing on October 18, when the Anti-Corruption Commission (ACC) alleged it had received “a serious complaint” regarding “technical details” of the bid. The government initially appeared inclined to continue rolling out the project while it was investigated.

Of the current delay, “to my knowledge the ACC can’t give the go ahead because the committee members are not in the country. We are expecting to begin before the holidays,” he said.

“So far it appears to be an internal issue within the immigration department. There is no doubt that the project would close the doors to illegal workers and the hinder profits of those inside the country processing people.”

“There is no balance between the number of expats we having the country running around looking for jobs, and jobs available. That suggests there are people we don’t need in the country who are coming in too easily,” the source said.

Exploitation of foreign workers is epidemic in the Maldives and is the second highest earner of foreign currency after the tourism industry, according to numbers provided by the former High Commissioner for Bangladesh, Dr Selina Mohsin.

Many companies in the Maldives were benefiting “and facilitating” the problem, the source told Minivan News, which was impacting those companies “who do operate legally and pay visa fees to the government.”

The Nexbis system will store biometric data and allow the tracking of workers without relying on paper documents.

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Government proceeds with Nexbis signing despite ACC complaint

The Maldives has signed an agreement with Malaysian-based mobile security solutions vendor Nexbis to supply an advanced border control system for the immigration department.

The Maldives was this year placed on the US State Department watch list for human trafficking, which may narrowly eclipse the fishing industry as the second-largest contributor to the Maldivian economy after tourism.

The new system will allow the immigration department to store and retrieve the biometric data of expatriates working in the country, using fingerprint and facial recognition technology, effectively circumventing the abuse of paper documentation.

“We currently have a large number of illegal expatriates running around the country,” a source at the immigration department told Minivan News. “Right now estimate that there are 100,000 foreign workers in the country, but there are no official figures on how many may be illegal.”

Workers were arriving in the country legally “but once in the country they discard the documents and flee to islands, and seek better payment.”

Many companies in the Maldives were benefiting “and facilitating” the problem, the source said, which was impacting those companies “who do operate legally and pay visa fees to the government.”

Ensuring that workers could be accurately identified, even without documentation, is a key benefit of the new system, the source explained.

“Since people discard documents and flee when police get hold of them, it can be hard to identity who someone is unless he says so himself. Likewise we deport a lot of people, sometimes for serious crimes, who come back in the next day on a new passport. It’s a loophole.”

“Right now were are also seeing a lot of underage domestic workers coming from countries like Nepal, who have passports definitely stating they are over 18. Under 18s are considered minors and can’t work under Maldivian law, but still the trend continues. In many cases these workers are abducted and trafficked, and this new system will help us address that. We’re also trying to get a visa officer stationed in Bangladesh.”

The new technology will allow police and island officials across the Maldives to determine a worker’s identity and visa status using facial recognition software and an authorised mobile phone connected to an immigration server.

“It does not require special gadgets, and will allow people like the island or atoll councillor to get data on a runaway, and see if their visa has expired or is pending,” the source said.

The 20 year contract with Nexbis will not require upfront investment from the government; instead, Minivan News understands that the government will pay Nexbis a US$15 fee for every work permit issued under the new system.

Nexbis did not disclose terms for national security and confidentiality reasons, however the firm said it expects to begin generating revenue from the project this financial year.

The immigration department will retain full control of the system, with technical assistance provided by Nexbis during the first stages of the project.

ACC criticism

Yesterday’s signing ceremony between Immigration Controller Ilyas Hussein Ibrahim and Nexbis CEO Johan Yong ran into opposition from the Anti-Corruption Commission (ACC), which alleged it had received “a serious complaint” regarding “technical details” of the bid.

“We faxed a letter twice and sent another letter to the department at 9.35am after we received a complaint over the bid evaluation process. So we asked to put the signing ceremony on hold as we needed time to investigate the matter,” ACC Deputy Commissioner Muawwiz Rasheed told newspaper Haveeru.

“The law gives us the authority to take actions if our decision is violated. We have to take action if our decision is violated.”

A source within the immigration department confirmed that the ACC had sent a note to the department.

“The bid evaluation went through all the government processes. It was an international bid and included technical and financial evaluations,” the source said. “There were no issues until another independent commission was formed to evaluate some of the bids. This was not done by immigration – all bids were evaluated at the finance ministry by their pool of technical experts.”

The source claimed that there “may have been a few staff within the immigration department who have sent a letter to the ACC using their influence within [the department]. There is some sort of intention to stop the project that could have political motivations behind it.

“When we prosecute court cases and deport people for serious crimes, under the new system they will be unable to return simply by using a new passport. This will benefit police, the ministry of labour, even the tax department. I see the potential for a large improvement.”

Nexbis shares were today trading 1.43 percent higher at $0.071.

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