Three weeks ago in Malawi’s National Assembly, the Member of Parliament for Thyolo, Thava Lifred Nawena, reportedly claimed that a top government official’s child had received MWK 40m (approx. USD 121,500) from the managers of Paladin Africa Ltd., Kayelekera, a few days earlier. Paladin responded to the accusations and said they were unfounded and that bribery is a breach of company policy. No-one is investigating further.

Mining in Malawi has observed that only two online news sites (Nyasa Times and Malawi Voice) ran the story, while several others re-posted the articles. This is a surprisingly low number and it raises some questions about how corruption and rumours are dealt with in the mining sector, which will be discussed at the end of this post.

Firstly, below, we have collated all the reported information we can find on the allegation made by the MP and the company’s response.

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Nawena, who has been described in the media as an outspoken and controversial MP, claims he has copies from an unnamed commercial bank of the details of the recipient’s bank account and the transaction made by Paladin. Nawena was reported by Nyasa Times as exclaiming in parliament,

Kayelekera is supposed to be a national asset but it is benefiting only few individuals. Just imagine over K40 million into a son’s account. […] If you [MPs] want to hear more on what am saying about Kayelekera ask them (ministers). […] Why are we not interested in Kayelekera? Kayelekera could easily change the picture of our nation but we are not interested

Nawena also reminded the MPs of the role he believes Bingu wa Mutharika, the former president, played in the mining sector.

It is high time Malawians resurrect from sleep…we are sleeping two [sic] much, yesterday it was Bingu (pocketing the money) through his Australia account and now Bingu is no more where is the money going?

Nawena further alluded to a discussion on the need for the Government of Malawi to renegotiate the Mining Development Agreement with Paladin that came to a head a year ago with comments made by the Governor of the Reserve Bank of Malawi, Perks Ligoya. Ligoya commented on Capital Radio Malawi’s Straight Talk programme that Malawi “made mistakes” in negotiating the agreement with Paladin; he later apologised for these remarks. Similarly to the sentiments Ligoya shared on air in November 2011, Nawena attacked the agreement and Paladin in the most recent sitting of parliament.

When you go into a contract and you see that it is not beneficial you revisit, not what the people of Paladin are saying in refusing to review the contract. […] There is this foolish white man (name withheld) who says the contract cannot be changed. Who told him a contract made cannot be revised?

Five days later, on the 27 November 2012, Nyasa Times reported that Paladin had dismissed claims made by Nawena. Greg Walker, Paladin Energy Ltd.’s General Manager for International Affairs, was reported to have emphasised that

Paladin has not and will not make payments to politicians and/or donations to political parties - directly or indirectly. […] It would be in breach of our Corporate Policy with regard to political donations and our Anti-Bribery and Corruption Policy and procedures.

Walker also noted that no evidence is available because he claims the allegations are unfounded and he further challenged anyone with any evidence to use the appropriate channels for investigation (Malawi’s Anti-Corruption Bureau or the Australian Federal Policy). He argued that such unfounded allegations do not promote a good investment environment for potential foreign investors and companies.

I do not know how Malawi expects to attract the further significant inflows of Foreign Direct Investment (FDI) when it treats the one Company which has invested here in such a shabby fashion.

As Nyasa Times indicated, Rick Crabb, the Chairman of Paladin Energy Ltd, highlighted the challenges the company faces with “spurious unfounded allegations” at Paladin’s Annual General Meeting in November 2012. An electronic copy of the address is available on Paladin’s website.

Accountability and transparency are important parts of our sustainability principles. Unfortunately we must spend a great deal of time dealing with spurious unfounded allegations made in purported news sites usually by people who are anti-mining, anti-uranium or are pushing some other vested interest. I wish to assure shareholders and other stakeholders including the people of Namibia and Malawi that our Company takes its responsibilities seriously. The good governance policies explained in the Annual Report and on the website are actively enforced.[Mining in Malawi’s emphasis]

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Since the end of November 2012, no online media house or blogger has followed-up these allegations. Either Nawena, an elected representative, or Paladin, one of the largest foreign investors, is misrepresenting the truth and it is in the interests of Malawians that the allegations are followed up. (Editors’ Comment: if you have information to suggest otherwise, please contact Mining in Malawi directly).

This is not the first time allegations have been brought against Paladin and the comments made in response to the online news reports reveal a number of rumours and allegations that users continue to spread and make about the company. Following Nawena’s outcry in parliament, the allegations have seemingly been laid to rest through the silence and neglect of elected representatives and the media. It again appears that the appropriate channels to address such allegations, should they be true, have not been followed.

To report the alleged incident, which can be categorised as corruption under the Malawi Corrupt Practices Act (1995) (“a. the offering, giving, receiving, obtaining or soliciting of any advantage to influence the action of any public officer or any official or any other person in the discharge of the duties of that public officer, of official or other person”), Nawena should have followed the procedures outlined by the Anti-Corruption Bureau:

How to Report

(i) Ascertain the identity and address of the person offering the bribes.

(ii) Identify the reason for which the bribe is being offered.

(iii) Do not accept the bribe or indicate definite acceptance of the bribe at this stage.

(iv) If it is possible to do so without creating suspicion, arrange for a witness to be present during the incident.

(v) As soon as possible after the person has gone, make a written record of what took place, with particular reference to the conversation in direct speech, as far as it may be recalled. Include the date and time during which the incident took place, sign the record, and enter the date and time when it was written.

(vi) Get in touch with an officer of the ACB as soon as possible and in any case within twenty-four (24) hours of the event.

(vii) Cooperate with the ACC Officer in the next stages of investigations of the incident.

What to Report

i. Suspected or actual cases of corruption in form of bribes, be it in cash or in kind, either asked, promised or given.
ii. Suspected or actual cases of abuse of authority of office either for personal gain or for the gain of other people.
iii. Suspected or actual cases of disregard of Tender Procedures, fraud, embezzlement and misappropriation of public funds.

Means of Reporting

You can call the ACB as soon as you can on the following Toll Free number: 113

Please note that you are free to report anonymously i.e. without disclosing your identity. Make sure to include as much detail as possible to assist the Bureau in following up on your matter or concern.

Depending on your location and facilities available to you, you may wish to report to the Commission using the following methods: telephone, fax, in person i.e. personally visiting the ACB Offices, email, letter or online.

Once you have made a report, the ACB will investigate your matter and give you feedback on the outcome of your complaint within a reasonable period of time.

Nawena, as an MP, should set a precedent before making allegations publicly. Now that allegations have been made public, the National Assembly has a responsibility to see that the case is investigated and the media should continue to monitor this story to ensure the investigation is rigorous. Without further investigation, these allegations are groundless.

Our nation’s leaders cannot be allowed to make claims about individuals or organisations without being called to present evidence or to retract their statements if proved false. The media is also culpable where it continues to fuel the rumour around operations and agreements in the mining sector without improved analysis to inform the public. As we have commented before, the media tends to cover, often sensationalist, current affairs linked to disputes, allegations and tension between actors in the sector; we are yet to see investigative journalist that aids in verifying claims.

The ability of Malawi’s governance structures and watchdogs (such as the media) to ensure transparency and the beneficial impact of the mining sector to the nation is compromised every time a politician, a member of a civil society organisation, or a business leader makes a claim without ensuring the investigation of the alleged incident of corruption. This is because it becomes increasingly difficult -and unwise- to believe the people who cry “corruption” or foul-play but do not act on these words through investigation.

Update 31 January 2013:  MP Nawena may not have taken his allegations to the Anti-Corruption Bureau, but Paladin did. Read our post “Paladin Approach By Third Party For A “Gift” For Malawi’s Vice President” for further information.