Swaziland
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FIFA’S E100M TENDERS CLASH WITH ESWATINI LAWS

MBABANE – Most of the FIFA financed projects amounting to over E100 million, being undertaken in the country, raise more legal questions than answers.

This is due to the fact that Federation of International Football Association (FIFA) awards the tenders for the construction of turf football fields, particularly, to foreign-based companies. It is said that local companies do not have the expertise to set up the artificial turfs. When engaging local companies to build dressing rooms, grandstands, toilets and other facilities apart from the turf football fields, the project committee under the Eswatini Football Association (EFA) has been, in most cases, preferring the selective tendering process to the open procurement system. It has been established that the open tendering allows for a more competitive bidding process, which can result in lower prices for the project. Secondly, it can help to ensure that the best possible contractor is selected for the job. Thirdly, open tendering can provide greater transparency and accountability throughout the contracting process. The open tendering system is also the preferred procurement method in terms of the country’s Public Procurement Act. The local committee overseeing the FIFA Goal Projects under the chairmanship of Nicodemus ‘Ace’ Mashwama, said the main contractor during construction were foreign companies known as FIFA-preferred producers.

However, the Construction Industry Council (CIC) said its register showed that local companies were the main contractors. Apparently, investigations revealed that EFA is in a dilemma with regard to full compliance with the country’s legislation because the FIFA Goal Projects are governed by Swiss law. The Court of Arbitration for Sports uses Swiss law. Therefore, using the country’s laws to tackle a FIFA issue may be cumbersome as the association may decide to withdraw its aid. In the same vein, FIFA then uses such prerogative under Swiss law to award the tenders without seeking approval from the country’s CIC.

prerogative

It must be mentioned though that the international football mother body’s prerogative calls into question Section 40 and 41 of the Construction Industry Council Act. Section 40 (1) of the Act reads: “A person shall not award a contract for construction works to a foreign company or foreign firm without the approval of the council.” Section 40 (2) provides that where an award for a contract is referred to council for approval and it determines that the construction work to be awarded can be undertaken by an Eswatini company or a Swazi firm, the entity (council) shall not endorse its approval. If that is the case, the person shall not award the contract to the foreign company or foreign firm. On the other hand, Section 41 (1) provides that a person shall not award a contract for any construction works to a foreign company or foreign firm unless the foreign company or foreign firm undertakes the construction in partnership or jointly with a company from Eswatini.

Mashwama, who chairs the project committee, told Times SUNDAY that foreign companies, as engaged by FIFA, were actually the main contractors. “The foreign companies are called FIFA-preferred producers,” he said. For instance, he said a company from the Netherlands set up the turf football field at Mkhuzweni, where a technical centre was under construction. He said there was one Eswatini company which set up a turf football field in contravention of FIFA standards. This did not go down well with soccer’s world governing body. The former Mbabane Highlanders and Sihlangu striker said most of the artificial turfs were set up by foreign entities engaged by the international football association. He mentioned that prequalification for tendering was not done at the EFA as some people might assume. “We are not involved,” he said.

tendering

He pointed out that the bids were also done by FIFA. Asked why they preferred the selective tendering during engagement of local companies to do earth work, build toilets, dressing rooms and other facilities, Mashwama said they did not have sufficient capacity to handle lots of potential bids. He said they hired a consultant to look for suitable contractors that could provide quality service to the nation. He said the selective tendering was a legal procurement method. It has been established that Mashwama’s committee takes a shortlist of three local companies to the EFA to select the best bidder for the construction of other facilities apart from the artificial turf. He said another assignment they carried out as the recipient was to provide security on project site, receive and facilitate entry of imported building material.

Frederick Mngomezulu, the Chief Executive Officer (CEO) of EFA, said it was true that all the processes were handled by FIFA. He said they followed the country’s procurement laws when projects were financed by EFA. However, he said they had no control over FIFA money. “We have no choice but to abide by FIFA because the projects are not financed with donor funds. This is money for FIFA, which channels it directly to the project,” Mngomezulu explained. Maqhawe Mnisi, the Chief Executive Officer (CEO) of the CIC said the public enterprise was aware that there were artificial football turfs projects that had been undertaken. Mnisi said these projects were registered with council by local contractors as the main contractors. He said they were registered with the council by local contractors as main contractors in the projects. The CEO explained that the CIC Act  provided for instances, where joint partnerships with foreign company were imminent. He said it was upon the procuring entities involved in the projects to ensure that where foreign contractors were engaged, the entities should align with Sections 40 and 41 of the CIC Act. Mnisi assured them that the council would engage the relevant stakeholders in these projects to ensure full compliance with the CIC Act.

undertaken

He revealed that the Mkhuzweni Technical Centre was undertaken by Hancy Construction as the main contractor, while KaLanga Technical Centre was done by Homeboyz Construction. He said the Lobamba Technical Centre was done by Construction Associates and King Sobhuza II Memorial Stadium was done by a joint venture between Kapson and Greenfields. He said the CIC Act stipulates measures to be taken in instances where non-compliance has been found. Reacting to a question on the Swiss law, which governs the projects, Mnisi insisted that the law required that any person intending to award works to a foreign company or firm should first seek approval with the council. “Regarding the above, the council would need to engage the relevant parties to deal with the matter in its entirety,” the CIC CEO said.

According to the FIFA rules on the projects, the member associations submit a completed application form with all the required information and listed supporting documents, which may vary depending on the type of project. It is stated that the FIFA general secretariat is entitled to request additional information or documents for any project application at any time. The project must contribute to the achievement of the specific objective(s) of the member association concerned as established in the finalised contract of agreed objectives. In addition, the purpose of the project application, and the corresponding amount of the project funds being requested, must already be approved by the executive committee of the member association concerned. Such approval must be noted in the relevant meeting minutes and shall be provided to the FIFA general secretariat as part of the supporting documents with each project application.

It is stated that such approval shall also be communicated to the congress or general assembly of the member association concerned at the earliest opportunity to do so. The proof of such communication (such as meeting minutes or any form of official correspondence) shall also be provided by the member association to the FIFA general secretariat by a mutually agreed date. Where a member association uses funds allocated for specific projects to improve or build new football infrastructure for its direct benefit or for the benefit of another entity (e.g. regional associations or clubs), the member association shall also provide, as part of the supporting documents, the FIFA general secretariat with the relevant national land registry certificate.

agreements

This may also include extract confirming that the member association or the other entity is the owner of the land or the agreements confirming the donation, transfer or other form of provision to, or use of land by, the member association. Where applicable, the project shall be implemented by the member association with the assistance of any other relevant parties (such as companies, manufacturers, contractors, suppliers and consultants).  The FIFA general secretariat shall take the necessary measures to release the required funds directly to the member association in accordance with the defined financial conditions. In the event that the contracts with the parties concerned are signed directly by FIFA (e.g. for a project for an artificial turf pitch), the international football association says it would do the following:
* FIFA shall sign a declaration with the parties concerned, stipulating that they undertake to indemnify FIFA and to hold FIFA harmless from any complaints, claims, demands for damages and interest or liability related to the implementation of the project;
* FIFA shall pay the instalments directly to the contracting parties in accordance with the terms of the above-mentioned contracts and a tender process shall be conducted for any contract involving a financial obligation for FIFA of US$300 000 (E5.4 million) or more.

The consultant that is being engaged by the local project committee to look for the suitable contractors had not responded to questionnaires sent to it a week ago. Most of the companies that are listed as main contractors referred enquiries to the client (EFA) or FIFA. Isaac Magagula, the CIC Normalisation Committee, advised EFA to opt for the open tender system. “There is nothing much to say except to advise them to consider the open tender. It’s a transparent one. The selective tender may cause some problems in future as people start to suspect anything even if the selective tendering was done appropriately,” Magagula advised.  The Times of Eswatini Sports Desk recently reported that the projects amounted to E106 860 354.16 in total. It was reported that EFA decided to prioritise the construction of the four technical centres over a full stadium facility. Approved by the FIFA Congress for the 2015-2018 budget cycle, the FIFA Forward Development Programme provided each member association with E78 million in development funding every four years. On an annual basis, each member association was entitled to E19.5 million, while E11.7 million was allocated to tailor-made projects such as pitches, youth competitions, and women’s football development.

implementation

The remaining E7.8 million was then allocated for ongoing operational costs, including administration and governance, implementation of compliance requirements, and the hiring of administration staff, among other needs. According to the media reports, the local projects would need about E9 360 000 extra for the installation of an artificial turf. In 2016, FIFA then introduced FIFA Forward, a new development programme offering structured, actionable, tailor-made solutions designed to meet the specific needs of each and every member association, and football participants around the world.