The recent decision to launch an audit on Native Lands Trust Board(N.L.T.B), is a mile-stone of sorts; as far as the communal landowners are concerned. This audit of NLTB was seen as a long overdue panacea to their concerns of ancestral land abuse and mismanagement; a factor which inextricably affects landowner's long-term social mobility or the lack thereof.
The opening hand for this audit, was the suspension of NLTB's General Manager and Strategic Manager; both of whom allegedly were intimately involved with creative accounting with a 'wannabe' player in Fiji Telecommunications, Pacific Connex. PIDP article reports on this collusion between NLTB and Pacific Connex.
The decision making for an I.T upgrade is outlined by an 2003 article on NLTB's website.
This is the excerpt:
NLTB ANNOUNCES I.T. CONTRACT
At its meeting on Friday 12th March, the Board of NLTB approved new arrangements for its information technology management. It will use an internationally-recognised software system, SAP.
The NLTB's IT needs will be supplied by PacificConnex (PCX), a joint venture of its subsidiary company, Vanua Development Corporation (VDC). VDC will hold a controlling interest in PacificConnex. Forty nine per cent of its shares are to be held by TUI Management Services. This is the investment company of Mr. Ballu Khan, a Fiji-born businessman, with wide international experience in IT.
This comprehensive statement is issued to clear doubts and misconceptions that may have arisen as a result of recent media coverage on the subject.
Background
* When the current Management of NLTB took office in 2002, one of the biggest issues it faced after having settled into office was that of its information system. Confidentiality, Security and Data Integrity were the initial areas of concern. It quickly became apparent that the development of a fully integrated IT system was to be the Way Forward.
* The local firm of Software Factory Ltd. (SFL) was engaged to perform a review of NLTB's system, and their preliminary findings were submitted on 8th July, 2003. SFL subsequently recommended an IT Roadmap for NLTB which was adopted.
Tender Process
* Once the specifications for the new system had been established, an expression of interest to develop the IT Roadmap was advertised in the three local dailies on 20th to 22nd January, 2004. This attracted 14 individuals and companies, 4 of which were approved to submit proposals:
1. Information Technology Services
2. Software Factory Limited
3. DATEC (Fiji) Limited
4. Tui Consulting
* At its meeting on 25th February 2004, the Board approved in principle the bid by Tui Consulting, Mr. Ballu Khan's main operating company. The Board has since also agreed to Mr. Khan assigning his tender obligations to the PacificConnex joint venture. Details of this joint venture were completed after agreement had been reached in principle on the IT tender by Tui Consulting.
* Price was only one of the considerations in the tender evaluation process. The primary consideration was to develop a fully integrated system. This is of crucial importance as NLTB now looks after around 90% of all land in Fiji, with a current porfolio of 32,000+ leases.
PacificConnex (PCX) Joint Venture
PCX is a major initiative by NLTB, through its wholly owned subsidiary VDC to acquire greater indigenous Fijian involvement in Fiji's developing IT industry. As well as handling the NLTB's requirements, it will be bidding for additional IT work.
Staff of the NLTB's IT division will be transferred to PacificConnex which expects to become a major IT employer. Tui Consulting will provide the company with technical knowledge and skills training. The NLTB will maintain control of board information through its control interest in PCX, by its subsidiary Vanua Development Corporation.
Price & Conditions of Approval
* As earlier announced, the NLTB renegotiated the tender price which has now been reduced from $1.8 million to $1.3 million per year. PCX will provide this service for 12 years. NLTB has the option of withdrawing from the arrangements if specific conditions are not met.
* Our records show that since NLTB's original computerisation in 1975, the cost of providing IT services has totalled $35,357,143, or an average of $1,178,571 per year.
* The cost of the new system to be introduced will therefore cost NLTB an additional $121,429 per year on average. Our assessment is that the benefits that will accrue to NLTB as a result of the upgrade will far outweigh the additional $121,429 per year.
The SAP Solution
* There is no doubt that we have negotiated the best solution for the NLTB. One of the unsuccessful bidders, Software Factory Ltd., wrote to us after being informed of the Board's decision saying "We congratulate you and the Board for deciding to go with SAP. As you are now probably aware, SAP is the number one enterprise-wide financial software solution in the world"
* TUI Consulting specialises in implementing SAP. It has assisted many international companies and organisations improve business opportunities through effective use of SAP. It has won contracts in South East Asia, the Pacific, the US, Canada and Europe.
* SAP applications will be used by PacificConnex in its work for the NLTB. It will allow us to fully integrate our land management data along with our human resource and financial information systems. PacificConnex has the sole rights for the use of the SAP system in Fiji.
Political Influence in the Tender Decision
* The Board rejects totally suggestions that political influence has been a factor in its decision. It is therefore mischievous and uncalled for that political considerations were a factor.
* The issue is obviously now being politicised by some people with a particular agenda. This tender has no connection whatsoever with the SDL Party or the Duavata Initiative Ltd.
* It is insulting and disrespectful to suggest that His Excellency the President, the Honourable Prime Minister and leading chiefs on the Board representing the Fijian landowners, have not followed proper procedures or acted in the best interests of the landowners and the Fijian people.
Conclusion
The commercial decisions the Board has taken will bring major benefits to the landowners and all other stakeholders through more effective information management. The Vanua Development Corporation and its first joint venture in PacificConnex will be working to increase indigenous Fijian participation in the economy.
Mr. Ballu Khan is a respected and successful entrepreneur from Fiji. His personal interest and assistance to education and sports (rugby) in Fiji are there for all to see. We look forward to working with him.
I am leaving at the weekend with Mr. Mojito Mua, the NLTB's Strategic Change Manager, to study a project recently completed by TUI Consulting in Tacoma in Washington State in the US. This US$50 million contract for the Tacoma Municipal Council, was completed by TUI Consulting on time and on budget. It will be a valuable opportunity for Mr. Mua and me to see how the SAP system works. Tacoma is the location of TUI Consulting corporate headquarters.
One media outlet has persistently tried to impute improper motives and unethical practices to NLTB's Board and Management, when in fact there is none.
NLTB defended the U.S trip of NLTB's General Manager, Kalivati Bakani and Strategic Manager, Mojito Mua in a April 2003 correspondence to one of Fiji's dailies. The letter was later posted on NLTB's website.
This is the excerpt of NLTB G.M's communique:
NLTB'S IT UPGRADE
Sir,
This statement is issued in response to queries and comments by the press following the full page advertisement that detailed the finalisation of NLTB's IT contract. This was published in the dailies of 14th & 15th of March. There were also commentaries on the trip undertaken to the US by the General Manager and our Strategic Change Manager, Mr Mua.
* The two previous press releases are circulated as background information.
* US TRIP - This was planned and undertaken only after the Board had given its approval in principle on 25th February 2004.
Benefits of the Trip - It was an opportunity for the General Manager to fully discuss the implementation of SAP by the Tacoma City Council. There were discussions held with two of the nine City Councillors, the current and former City Managers(equivalent of Town Clerk), as well as the Project Director of the SAP Implementation.
What we discovered from these discussions are summarised as follows:
* They undertook an assessment period of two years before approving TUI Consulting to undertake the work for Tacoma City Council. Their assessment included investigation of a considerable number of businesses where SAP had been implemented, within as well as outside of US.
* There were two companies that were finally shortlisted, IBM and TUI Consulting. TUI Consulting was given the USD50m job ahead of IBM.
* They confirmed that the job was finished on time and within budget.
* The major challenge that they highlighted was that inadequate attention was given to the project by certain departments of the municipalities. This meant that some departments missed out on training programs that were conducted by TUI Consulting in regards to SAP. NLTB will ensure that we learn from this experience and avoid making this mistake.
* Our Strategic Change Manager, Mr Mua spent the week in discussions with TUI Consulting experts on the implementation program for NLTB. This included the selection of appropriate skills for our IT upgrade.
* The implementation team is due to arrive soon. This is line with our program to ensure that the system turns live on 1st January 2005. The bid initially put by TUI Consulting was for an implementation period of nine months.
* The launching of Vanua Development Corporation and Pacific Connex will be held during the month of April. At that function, the public and the press will be given an insight into the capabilities of the SAP system that NLTB will be installing.
Whilst a lot of negative publicity emanated from the trip we undertook to the US, it has given us a confirmation that the decision we have taken is the right one and also gave us an insight into the pitfalls to be avoided when the installation of SAP is undertaken.
The outcome of this upgrade will go a long way into ensuring that the indigenous landowners obtain maximum benefits from land which is their basic and sometimes only asset. Whilst we Fijians claim to own 90% of the land in this country, the challenge which NLTB has taken up through Vanua Development Corporation Limited is to convert some of these fixed assets into cash. Only then will landowners be able to achieve the benefits pertaining to ownership of land.
Other stakeholders will also benefit from the new IT system as we expect information regarding leases to be readily available, and a more proactive stance taken in so far as the leasing of land is concerned.
K BAKANI
GENERAL MANAGER
Bakani and Mua, both were sent on a NLTB board of directors approved fact finding mission, regarding the SAP software and headed to Tacoma City Council, a local Government agency in the Washington state area. This article from SAP news confirms the arrangement between Tui Consulting and Tacoma City Council. Albeit with some technical problems surfacing.
However, an article published News Tribune, a Tacoma based news agency revealed another dimension to Tui Consulting's deal with Tacoma, amid controversies of conflict of interest.
This is an excerpt from New Tribune article:
Controversy just seems to follow head of TUI
JASON HAGEY AND KRIS SHERMAN; The News Tribune
Published: February 7th, 2005 12:01
Image[by]
BRUCE KELLMAN/The News Tribune
Besides problems with implementing Tacoma’s system, TUI Consulting CEO Ballu Khan has had problems with a system his company installed in Singapore.
When the City of Tacoma hired TUI Consulting to help install its new computer system, it got a lot more than just a consultant. It also gained a new corporate citizen and a close partner.
The relationship started before the city awarded a contract to TUI to help install SAP computer software across city government. TUI began working on the project before it secured the deal, and then – days before the City Council voted on the contract – announced it was moving its world headquarters from Melbourne, Australia, to Tacoma.
The city’s marketing staff pounced on the June 2002 announcement and touted it as evidence that Tacoma must be doing something right if a respected, international computer company was interested in moving here.
Pleased as they were by the news, though, top city officials – including Tacoma Public Utilities Director Mark Crisson and computer project manager Karen Larkin – said TUI’s decision to move its headquarters to Tacoma had no bearing on the company’s selection as the city’s computer partner.
About six months later, the partnership ran into controversy when Crisson, Corpuz and Larkin accepted a first-class, TUI-paid trip to visit computer-installation sites in Australia and New Zealand.
After the group left and questions of conflict of interest emerged, the Public Utility board voted to pay $24,000 for all of Crisson’s expenses and half of Larkin’s. The city officials say the trip was valuable in learning more about the system.
TUI paid for Corpuz’s tab.
Controversy isn’t new for TUI founder and CEO Ballu Khan. His company is being sued by Singapore’s largest electricity retailer, SP Services, for problems related to TUI’s implementation of a computer system there.
The utility said it encountered large-scale billing problems beginning in January 2000, eventually affecting about 144,000 of the 1.2 million electricity accounts, The Straits Times newspaper in Singapore reported. At one point, the utility had unpaid accounts totaling $800 million, the paper reported.
TUI has denied the claims and filed a countersuit for $3 million, blaming SP Services for the problems.
Then-TUI vice president Rob Jackson said the utility failed to provide proper resources during the project, leading to delays. The utility then ignored repeated warnings about the impact of the delays, Jackson said.
Khan told The News Tribune the Singapore lawsuit is a normal business dispute.
Khan has found controversy in Fiji, too, where he is part of a joint venture to implement SAP software for the government’s Native Land Trust Board. Critics complained the project was too expensive and noted that Khan paid to send two government officials to Tacoma to look at the city’s SAP implementation.
Khan downplayed his involvement in the venture and dismissed the Fiji controversy as “politics.”
Like Crisson and Larkin, Khan denied there was any quid pro quo between locating his company in Tacoma and the city’s awarding him the computer installation contract.
He responded angrily to questions about the move and Ray Corpuz’s role in either the awarding of the city’s contract or working at TUI. After Corpuz was fired as Tacoma city manager, he went to work at TUI.
“We’ve done nothing wrong whatsoever,” Khan said. “I have a business to run. This is not shady.”
Khan said Corpuz had nothing to do with the city’s decision to award the computer contract to TUI Consulting, adding that he didn’t know Corpuz “from a bar of soap” before the contract was awarded.
TUI has offered two accounts of Corpuz’s duties. Corpuz wouldn’t speak with The News Tribune.
But unless he worked directly on the City of Tacoma’s contract, there’s nothing in the city’s ethics code that would prevent Corpuz from taking a job with TUI, said assistant city attorney Steve Victor. And there’s no evidence that Corpuz worked on the Tacoma project for TUI, he said.
State Auditor Brian Sonntag offered no opinion on Corpuz’s work for TUI, but he said, in general, that public officials should think carefully before leaving a government post for a position with a company with which their agency had done business.
Washington law prohibits state workers prohibits such a move for one year, he noted. The law wouldn’t apply to a former city worker like Corpuz.
And even if there’s no prohibition against it, there’s a question of appearance, Sonntag said.
“Government’s credibility with the public is at an all-time low,” he said. “We need to look at these things through the public’s lens.”
Khan couldn’t say when Corpuz quit showing up at the TUI offices, but by last November the relationship had apparently ended, he said.
His account of what Corpuz did for him differs from what a TUI executive told The News Tribune in October 2003.
Jackson, while still vice president, said Corpuz wasn’t on the TUI payroll but was using the space to help coordinate a program to provide underprivileged students with computer skills. Corpuz had a “desk and about three phones,” Jackson said, but “It’s probably better to say he is working with us.”
When asked about Corpuz’s role late last year, Khan, an avid rugby enthusiast, told The News Tribune that Corpuz was actually helping the newly relocated company learn how to become involved in the South Sound rugby scene, schools and charitable causes.
For example, in Fiji, where Khan is from and still does business, a $1,000 donation might seem generous, but in Tacoma it might be viewed as insulting, Khan said.
Now that the company is more established in Tacoma, it no longer needs Corpuz for that kind of help, Khan said.
But it’s also sensing a change in the business environment that might prompt another move, Khan said.
He and his employees share a commitment to their adopted home, Khan said, and they all worked long and hard to make the city’s computer project a success. But criticism of the computer project, especially in the pages of The News Tribune, is souring the business climate, he said.
“I’m not going to sit back and see The News Tribune and the city tarnish my reputation unfairly,” Khan said.
Khan said he welcomes an outside review of the computer system and is eager for the paper to finish investigating it. “We have to get closure on this before it gets ugly and somebody gets hurt,” he told reporters.
Jason Hagey: 253-597-8542
jason.hagey@thenewstribune.com
Kris Sherman: 253-597-8659
kris.sherman@thenewstribune.com
The terms of reference for the NLTB audit was outlined by the interim Minister of Fijian Affairs, published in an article on Fiji Government website. S.i.F.M welcomes such an audit, but remains cautious on the expected outcome; without a surgical overhaul of the entire system of native institutions in Fiji.
This is the excerpt of the NLTB audit news release:
Statement on NLTB issued by the Chairman of NLTB and Minister for Fijian Affairs Ratu Epeli Ganilau
Feb 23, 2007, 10:17
APPOINTMENT OF AUDITORS TO AUDIT mySAP IT SYSTEM
The Board of NLTB at its meeting yesterday approved the selection of the accounting and auditing firm of KPMG to undertake the special audit for the mySAP IT system currently being utilized by NLTB to provide its information system.
KPMG has been advised of the Board’s approval and have started organizing their resources so that they can complete the audit within the timelines set for them by the Board. Their interim report is scheduled to be considered by the Board’s Standing Committee on 30th March. After that review, KPMG is to submit their final report to the Standing Committee for its later consideration by the full NLTB on 26th April, 2007.
Whilst several Chartered Accounting firms were requested to submit tenders for their Expressions of Interests for the special audit, two of them actually submitted their Interests. Appropriate selection procedures were followed culminating in the appointment of KPMG to undertake this assignment.
OPERATIONAL AUDIT OF NLTB
In view of the numerous allegations leveled at the NLTB and its officers, the Board has been informed through its Chairman, who is also the Minister for Fijian Affairs, that the Interim Government through its Anti-Corruption Unit (ACU) will be tasked to carry out an operational audit of NLTB and determine if there have been breaches under the Native Lands Trust Board Act by officers of the Board. The Board would also like to reaffirm its major Stakeholders, the Landowners that any breaches of the trust as stipulated under the Act will be dealt with in accordance with the Law.
NLTB ISSUES APPEARING IN THE PRESS
Several reports have over the recent weeks been appearing in the press relating to alleged commitments of Trust Funds controlled by NLTB and also certain agreements committing the Board in guarantees relating to PCX cannot be commented on by the Board at this juncture in view of the special audit now being undertaken. Suffice to say in the meantime that we do not want to pre-empt the outcome of these issues as KPMG would be covering them in their audit report to us in due course.
VITI LANDOWNERS & RESOURCE OWNERS ASSOCIATION
Also, certain allegations were recently made in the press by the Interim President of the Association against NLTB and it would be premature for us to comment on them whilst the audit is underway. However to allay the fears of Fijian landowners, I would like to categorically state that Trust Funds have not, and will not be used to meet any payments in the event NLTB is at fault in the alleged cases highlighted. The Board’s operational funds from poundage legally deducted under the authority of the Native Lands Trust Act for its operations would be used if NLTB is liable, and not landowners’ trust funds.
NLTB ASSURANCE TO LANDOWNERS AND CLIENTELE
The Board would also like to reassure its clients and the general public that the audits will not affect nor impede the day to day operations of NLTB.
It is envisaged that at the end of the exercise the NLTB will be in a better position to provide efficient service to its clientele and deliver on its primary function, acting in the best interest of the landowners who they are obliged under the Act to represent.
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