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Sub-Saharan Africa

Gabon risk report

Updated:

Corruption in Gabon presents an obstacle for companies operating or planning to invest in the country. President Ali Bongo's government has engaged in curbing corruption, and breaking with patterns of patronage, clientelism and systemic corruption, which flourished under the former regime of Omar Bongo. Some successes have been recorded; nonetheless, some corruption investigations have been politically motivated. Corruption is still rampant in several sector of the economy, particularly with public procurement in the extractive industries. The Gabonese government has set up a strong anti-corruption legal framework, which mainly consists of the Penal Code (in French), under which passive and active bribery, gifts, embezzlement and other corruption offences are criminalized in the public sector. Enforcement has been moderate and bribery is a widespread practice.

Judicial system High risk

Corruption is a moderate to high risk for companies. Bribes and irregular payments are often exchanged in order to obtain favorable court decisions (GCR 2015-2016). The courts are believed to be susceptible to political interference (HRR 2015), which in turn has created uncertainty around fair treatment and sanctity of contracts (ICS 2016). Business executives find the judiciary to be moderately efficient in handling dispute settlements and challenging government regulations (GCR 2015-2016). Foreign court and international arbitration decisions are accepted in Gabon; however, enforcement can prove to be difficult (KPMG 2012). Enforcing contracts is time-consuming in Gabon, taking over a thousand days, compared to 653 which is the average in its neighboring countries (DB 2016).

Gabon is a member of the International Centre for Settlement of Investment Disputes (ICSID) and is a signatory to the New York Convention 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Police Moderate risk

Businesses face a moderate risk when dealing with the security apparatus. Reportedly, police officers supplement their salaries by extorting bribes from drivers while checking vehicle registration and identity papers (HRR 2015). Impunity is widespread among officers, despite the government establishing mechanisms to punish abuse and corruption (HRR 2014). The government introduced a behavior code for the security forces in 2013 (HRR 2014). Businesses perceive the police to be moderately reliable in protecting them from crime and enforcing order in Gabon (GCR 2015-2016).

Public services Moderate risk

The public services sector carries a moderate corruption risk for business. Bribes and irregular payments are at times exchanged to obtain public utilities (GCR 2015-2016). Companies report that the Gabonese bureaucracy can be opaque, and difficult to navigate (KPMG 2012). Government regulations are perceived as burdensome, and inefficient government bureaucracy is a competitive disadvantage for investment (GCR 2015-2016). Almost half of Gabonese citizens have paid a bribe in order to obtain water or sanitation services in 2015 (Afrobarometer, Mar. 2016).

According to Gabonese law, private enterprises do not have a disadvantage when applying for public services and licenses; nonetheless, in practice, state-owned companies are granted priority (KPMG 2012). Starting a business is time-consuming, yet remarkably cheaper than the regional average. It requiring 15.1% of income per capita (DB 2016).

Land administration Very low risk

Property rights are recognized under Gabonese law, and the land registry is believed to be fairly reliable (ICS 2016). Expropriations do not pose a threat to business, and when carried out, appropriate compensation follows (KPMG 2012). Registering property in Gabon takes almost double the time compared to the regional average, and is a time consuming process (DB 2016).

Ali Bongo's government have conducted raids on corrupt officials, and cracked down on systemic corruption. During March 2011, the whole civil servant's staff of the Ministry of Housing was dismissed due to corruption (KPMG 2012). The government has also sought to increase oversight over infrastructure projects (KPMG 2012).

Tax administration Very low risk

There is a low risk of corruption for businesses when dealing with the tax administration. Irregular payments are seldom exchanged when meeting with tax officials (GCR 2015-2016). Tax law is reportedly transparent, and consistent with international norms (KPMG 2012). Paying taxes in Gabon is more time consuming than the regional average, taking 488 hours per year (DB 2016).

Customs administration High risk

The customs administration presents business with a moderate to high risk of corruption. Transparency at the border is moderate (GETR 2014), and bribes are often exchanged when dealing with imports and exports (GCR 2015-2016). However, there is a higher risk of corruption for businesses when dealing with importing as compared to exporting (GETR 2014). Customs regulations can be inconsistent (KPMG 2012). Trading across borders in Gabon is generally less time-consuming, yet costlier than the regional average (DB 2016).

Public procurement Very high risk

The public procurement sector carries a high risk of corruption for business. Public funds are often diverted to companies or individuals due to corruption (GCR 2015-2016). Likewise, many perceive that favoritism frequently interferes with procurement officials' decisions when awarding contracts (GCR 2015-2016). Public tenders are not regularly publicized, and the contract terms can lack transparency (GOV.UK, Nov. 2014). Non-French firms may find it difficult to compete for contracts, due to the country’s long standing ties with France, despite the government's efforts to diversify foreign investment (KPMG 2012). The government has established the Agence de régulation des marchés publics (ARMP), a public procurement oversight body, to ensure compliance and integrity of the biding process. However, the body is heavily politicized (GI 2014). According to the law, businesses guilty of corruption are banned from participating in future bids; however, in practice the regulation is often violated (GI 2014).

The French judiciary has launched an investigation involving the Gabonese President’s chief of staff, for allegedly taking a bribe from the French company Marck. This company manufactured military uniforms in return for securing a public contract. The chief of staff, Maixent Accrombessi, was detained by the police, yet later released on the grounds of diplomatic immunity. Marck chairman, Philippe Belin, is formally placed under investigation. There was no further information on the case at the time of review (Reuters, Aug. 2015).

In another case, French courts have launched an investigation into the assets of former President Bongo, and his family in France. They ordered the seizure of three properties in the region of Paris, in September 2015. One of the properties, Villa Suzette was valued at EUR 450,000. Approximately fifteen luxury vehicles belonging to the Bongo family had already been seized in early 2015. The incident has become known as ‘the ill-gotten assets’ affair (les bien mal acquis), and it was triggered by a complaint submitted by Transparency International. Alleging that President Bongo had embezzled substantial sums of public oil revenues to his benefit, and to that of his family (Le Figaro, Sep. 2015).

Natural resources Very high risk

Companies contend with a high risk of corruption when dealing with the Gabonese extractive industries. Gabon has vast oil, manganese and timber resources; however, contracting and licensing processes lack transparency (Natural Resource Governance Institute, Mar. 2014).

The government has made efforts to promote transparency within extractive industries through the initiation of public-private partnerships (KPMG 2012). Additionally, the government reformed and finalized its oil and mining codes in 2014. That same year, the government started, yet again, the process to join the Extractive Industries Transparency Initiative (EITI). This was after it had failed to submit the required reports during its first application for membership (ICS 2016). The Gabon Oil Company and the Gabon Equatorial Mining Company were established to control corruption in the extractive industries, and recruitment within both entities gathered well-accomplished staff (ICS 2014). Nonetheless, three years after their establishment in 2011, their role is still unclear (ICS 2014).

Legislation

Gabon has established a comprehensive legal framework to fight corruption, yet enforcement remains moderate and official impunity is a problem. The Gabonese Penal Code (in French) criminalizes abuse of office, embezzlement, passive and active bribery, trading in influence, extortion, offering or accepting gifts, and other undue advantages. These provisions apply to the public sector, while private sector corruption is criminalized whenever a given company is related to a public entity. For instance, the provision of services or public funding. Provisions for public officials found guilty of soliciting or accepting bribes include: prison sentences ranging between two and ten years, and a fine of CGA five million. Government officials, executive level civil servants, and civil servants responsible for managing budgets are subject to financial disclosure laws, and the majority of officials have complied, yet some have tried to withhold information (HRR 2015). Whistleblowers are not protected under Gabonese law (GI 2014). Ali Bongo’s government launched several anti-corruption reforms including: stripping ministers of responsibilities if involved in corruption investigations, auditing all government ministries, and identifying 'slush' funds (KPMG 2012). An ethics code for government officials was also introduced (KPMG 2012). The government has also actively requested the expertise of international organizations to audit procurement processes, and provide the government with recommendations as to how to enhance transparency and attract foreign investors (ICS 2016). The government of Gabon has ratified the UN Convention against Corruption.

The government launched an investigation in 2014, into the alleged corruption of the former regime of Omar Bongo, which reportedly targeted critics of the current regime, and in mid-2014, minister Jeannot Kalima was arrested for alleged misappropriation of public funds (FitW 2015). Julien Nkoghé Békalé, former Minister of Agriculture, was subject to an investigation launched by the Commission Nationale de Lutte Contre l'Enrichissement Illicite (CNLCEI) for the alleged embezzlement of CFA 500 million in 2013 (GI 2014). The investigation led to the freeze of the minister’s assets, yet no other steps were taken (GI 2014). Up until 2013, the CNLCEI investigated 90 cases, yet failed to make any arrests, reflecting both the lack of independence of the commission, and the immunity of government officials, often referred to as the ‘untouchables’ (GI 2014).

Civil society

Freedoms of speech and press are guaranteed under Gabon's constitution, yet these rights have been curtailed in practice (FotP 2015). The country's main media outlets are owned by the government (BBC News, Dec. 2015). In late 2013, a dozen policemen stormed the offices of the news outlet, L'Union to prevent it from publishing pieces on the alleged misappropriation of public funds by members of the Gabonese military (GI 2014). There are no laws providing for access to government information (HRR 2015). In practice there is no censorship of the internet by the government, citizens' internet penetration; however, is very low (HRR 2015). The media environment in Gabon is considered 'not free' (FotP 2015).

Freedom of assembly is provided under Gabon's laws, and the government generally respect these rights (HRR 2015). Nonetheless, there are reports that some NGOs did not submit requests to holds public meetings, as they expected these them to be denied (HRR 2015). NGOs in Gabon are not numerous; however, those that exist play an active role (FitW 2015). Civil society organizations' role in fighting corruption in Gabon is limited (KPMG 2012).

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