Uganda: Museveni Orders Probe On Chinese Firm
By Felix Osike, 28 September 2012President Yoweri Museveni has ordered an investigation into the national backbone optic fibre project being undertaken by a Chinese firm Huawei Technologies .
In a letter to the Prime Minister Amama Mbabazi dated April 16, Museveni said he had received intelligence information that Huawei used inferior cable type G-652 instead of type G-655 data that Uganda will need to transmit. The President also cited inflated costs.
"Type G-652 cannot handle the volume of data transmitted. Who okayed this in terms of approving the work done?" asked Museveni. The president also said the cables were buried at a shallow depth of 0.9 metres. The recommended standard cable burial depth is about 1.2metres.
"Worst of all, is the overpricing by Huawei Technologies. While MTN did the work for $ 11,000 (sh28m) per kilometer, Huawei did it for $30, 000 (sh75m)," Museveni noted.
Rwanda spent $38m (sh95b) to cover a distance of 2,300km to connect 35 sites. Uganda, on the other hand, will spend over $62m (sh155b) to cover 2,100km.This means Rwanda spent $16,521 (sh41m) per kilometer while the cost to Ugandans is $29,523km (sh75m) per kilometer, which ICT experts say is overly inflated.
The president asked the Auditor General to audit the project, "so that we see what to do."
David Dou, the Huawei public relations manager in Uganda in an e-mail response yesterday said, "As our company policy, we cannot divulge detailed information pertaining contractual agreement we have with our customers and subcontractors."
The Auditor General John Muwanga on Wednesday told the New Vision forensic investigations of the project had started and a report would be ready by mid-October . "We have appointed Ernst and Young to do the forensic audit for us," explained Muwanga . Ernst and Young officials declined to comment when contacted.
Museveni said he had also got intelligence information that there were efforts to steal money from the government by inflating the costs involved in digital migration for broadcasting . "I have been hearing demands for $75m (sh188b) as being necessary figure to achieve this .According to my intelligence information, only $11m (sh28b) is needed," Museveni wrote.
Harris of USA did a similar project in Rwanda for only $12m (sh30b). The president said the Uganda Communications Commission Executive Director Godfrey Mutabaazi had informed him that Uganda does not need to borrow the money from abroad . "Government can do this in phases using its own money," the President explained. Mutabaazi declined to comment when contacted on Wednesday.
In April 2010, New Vision quoting local and international experts published an exclusive story citing flaws in the project. MPs had also pointed out some flaws in the project.
ICT experts had warned then that the project would become a 'white elephant' because of the wrong cable being used.
The National Transmission Backbone Infrastructure and related e-Government Infrastructure is a project funded by a concessional loan from the export/import bank (EXIM) of China. Uganda has to pay back the loan over a period of 20 years.
The Chinese government recommended Huawei Technologies to carry out the implementation.
The project involves building a 2,100 km fibre optic cable network linking 20 major towns, making Internet accessible and affordable to the majority of Ugandans and enabling e- Government.
Questions about the type of cable were raised as far back as June 2009. In a brief to the ICT minister, the Project Implementation Unit recommended a shift from G652 to G655.
More concerns about the type of cable were raised by the parliamentary committee on ICT.
The committee found that the bandwidth per fibre was too small. Bandwidth is the amount of traffic the fibre can carry simultaneously. The G655 has a capacity of transmitting 40 gigabites per second whereas the G652 can only transmit 2.5 GB, upgradable to 10 GB.
Experts say this is insufficient for Uganda's current needs and cannot provide for future growth.
"The G652 cable does not have enough provision for future upgrade path for higher data rates, multiple channels and longer distances," said the ICT committee.
Another concern raised was the number of cores of fibre that has been installed. The cable being laid is only a 24 core fibre whereas experts recommend 96 cores as a minimum to ensure that future growth in data and video usage is not interrupted.
The number of cores determines the number of separate channels. Security sensitive information, for example, is preferably transmitted through a separate channel.
Tagged: Asia, Australia, and Africa, Business, Company, East Africa, External Relations, ICT, Legal Affairs, Uganda
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Saturday 29 September 2012
allAfrica.com: Uganda: Museveni Orders Probe On Chinese Firm
Friday 28 September 2012
The Importance of HR Compliance
Sometimes it is easy to overlook the importance of human resources and compliance issues. In fact, human resource departments face significant enforcement and compliance risks. In addition, the head of human resources is an important partner on compliance. If a company suffers from weak compliance programs, its human resource department is sure to be a liability for the company.
The human resources chief has significant compliance responsibilities both inside and outside its department. Within its department, the human resources chief has to ensure compliance with:
- The Fair Labor Standards Act, which governs minimum wage and overtime pay. These requirements differ in each state but pose significant risks, especially for those companies that have a large wage-based pool of employees. Class action suits are regularly brought against fast-food chains, hospitals and other organizations where significant groups of employees are paid hourly wages. Almost half of all of these class action suits are filed in California where state law is very worker-friendly.
- Federal Civil Rights laws govern the hiring, firing and terms and conditions of employment. In general, these laws prohibit consideration of race, gender, age or other “protected” status when making decisions on hiring or firing or setting any other terms or conditions. Government enforcement at both the federal and state level is aggressive, and private litigation ranging from class actions to individual suits are regularly filed.
- The Family and Medical Leave Act grants certain employees the right to take up to twelve weeks of unpaid leave each year in specific circumstances, and to be reinstated with certain protections after any such leave.
- The Uniform Services Employment and Reemployment Rights Act provides protections for employees who are called to active military duty and protects them when returning to work after completing military service.
- Management of compensation and benefit programs – HR leaders often have to oversee employee compensation and benefit plans that include Employee Retirement Security Act’s reporting, disclosure and fiduciary requirements. The Patient Protection and Affordable Care Act has imposed a number of requirements, and in 2014 a number of new requirements will become effective for companies providing employer-sponsored health benefits.
The human resources chief must hire and retain individuals that are knowledgeable about HR specific laws and are able to create appropriate policies and procedures. Once the policies are established, HR must make sure they are effectively communicated throughout the organization. Also, the chief has to audit its operations to ensure compliance and has to make sure he/she communicates regularly with senior management and the chief compliance officer.
Outside of these core responsibilities, the human resources chief plays an important role in working with the compliance, legal and auditing offices. These responsibilities include:
- Employee Handbook and Procedures – HR should maintain and regularly update an employee manual on procedures. This manual should incorporate policies and procedures governing compliance, including anti-corruption, export control, government contracts and other applicable policies.
- Education and Training – HR should implement education and training programs across the organization and maintain documentation of substance and attendance.
- Auditing — HR should coordinate its internal auditing program with the chief compliance officer for HR responsibilities and documentation.
- Compliance Communications — HR should coordinate with CCO on the design and implementation of comprehensive communications strategy to promote compliance throughout the organization.
- Disciplinary Procedures – HR should work closely with the CCO and general counsel to design and implement an appropriate disciplinary program for employee misconduct.
- Whistleblower Response and Triage Program – HR should coordinate with the CCO and general counsel to develop a whistleblower compliance program to encourage internal reporting and responses to whistleblower complaints, including a triage program.
As you can easily glean from these lists, the human resources chief faces a number of risks within its own office and has a number of important responsibilities for ensuring the company’s compliance. The challenge is to divide the responsibilities among the compliance, auditing, legal and HR offices and ensure that they are coordinating with each other to keep the operation running smoothly.
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About the Author
Michael Volkov is a shareholder at the national law firm of LeClairRyan. His practice focuses on white collar defense, corporate compliance, internal investigations and regulatory enforcement matters, and he is a former federal prosecutor with almost 30 years of experience in a variety of government positions and private practice. He can be reached at michael.volkov@leclairryan.com.
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Friday 21 September 2012
This Is No Time for “Financially Illiterate” Investors
By strange coincidence, the SEC released a new study on financial literacy among retail investors at the same time that it and a host of other market participants are preparing for the launch of new JOBS Act funding mechanisms. We shouldn’t be surprised to find that investors are stupefied by much of what they receive and hear from the investment industry, or that what they want runs crossways with what issuers say they want to provide. What is surprising is that the lessons of just a decade ago about market integrity are so easily cast aside even as investor understanding fades.
The Commission’s study focused on the relationship between investors and intermediaries, be they brokers, investment advisers, or private wealth managers. The study’s primary finding was that investors lack basic financial literacy with “a weak grasp of elementary financial concepts.” The report also notes that investors generally “lack critical knowledge of ways to avoid investment fraud.” (Then again, lots of smart and experienced were taken in by Bernie Madoff.) These failings were most acute among women, African-Americans, Hispanics, the elderly, and the poorly educated.
The best ways to overcome this lack of literacy, SEC staff concluded, is through programs that are meat and potatoes for CFA Institute and its members: research-based, goal-oriented investor education. More problematic for investment professionals steeped in the nuances of investment strategy and products is making the programs accessible, delivered efficiently, and relevant to the target audience. It’s still worth a concerted effort.
Those are longer-term literacy objectives. In the short term, however, investors have to increase their knowledge before investing, and many recognize that they need information about intermediaries and investment products before they invest. Moreover, they recognize that the people they are dealing with often are conflicted; they just don’t know how. Consequently, they view information about conflicts of interest, investment strategy, fees, and disciplinary histories as “absolutely essential,” according to the SEC study.
As for the manner in which these disclosures are presented, investors were more comfortable with summaries of key information akin to the KIID (key investor information document) mandated in the European market. They want tables, charts, graphs, and bullet points rather than long paragraphs written in legalese. And they expressed a desire to be able to access more information via an issuer’s or intermediary’s website to supplement the KIID.
The lack of investor trust in markets has been building for more than a decade now — since the bursting of the tech and telecom bubbles in early 2000. As this study shows, investors are not prepared to make rudimentary investment decisions without assistance.
It thus begs the question of why policy makers in Washington D.C. were in such a hurry to reduce or eliminate many of the protections enacted after 2000 with the recent passage of the JOBS Act. My colleagues and I have written at length in recent months about its potentially pernicious effects, particularly upon unsophisticated retail investors and the elderly.
But many of the same disclosure principles cited by investors in the SEC study should apply regardless of whether investors buy through registered representatives, investment advisers, or crowdfunding portals. Before investing, they need to know whether a company is an operating entity with real products, real customers, and real capital — or a shell company intent on monetizing the [potentially conflicted] interests of insiders. They also will have an interest in knowing whether the principals have ever been sanctioned, censured, or otherwise disciplined by national, state, or foreign regulators before they hand over their hard-earned savings sight unseen.
The key to properly functioning financial markets is for investors to pay attention before and after they invest so that they can hold companies and their boards and managers accountable for their decisions. The Commission’s study suggests that investors have given issuers and the SEC a roadmap for helping achieve this goal. Whether investors pay attention if they get the kind of information they want, and in the manner they want it, is an open question.
Regardless, what the SEC’s latest study shows is that this is no time to be taking down our guard.
Saturday 2 June 2012
The trouble with Africa ...
The trouble with Africa is that ... Africa is no longer in trouble (well, not as bad as it used to be). The problem is that this news seems to have not reached a few people around the world. Jason Russell of KONY 2012 (in)fame recently had a rude awakening to the fact that Africa is no longer the