Western firm denies Lesotho bribe

Dams exploit Lesotho's one natural resource: water

The High Court of Lesotho has fined a Canadian engineering firm more than $2m (£1.3m) for bribing the senior official on a water project, in what is seen as a landmark case in Africa.

This is the first time a First World company in the Third World has been convicted of bribing a public official

Judge Mahapela Lehohla

Acres International was found guilty of paying Masupha Sole, the head of the Lesotho Highlands Development Authority, more than $250,000 to win lucrative contracts.

Judge Mahapela Lehohla said it was the first time a Western company had been convicted of bribing a "Third World official" and it would send out a clear message.

The company denies the charge and says it will appeal against the verdict.

Its lawyer said the prosecution in the trial had "become a persecution".

"The prosecution thinks we are guilty and we remain convinced that we are not," said Sytzke Alkema.

Other international firms also face charges of bribing officials in the huge Lesotho water project.

If convicted, they could be excluded from World Bank-funded projects in future.

'No remorse'

Acres International was found guilty on two counts of bribery last month for paying money to Masupha Sole through its agent.

"Heavy sentences are needed when bribery and corruption has been detected," Judge Lehohla said.

"There is a total absence of remorse. All that Acres appears to regret is that it was caught," he said.

Other firms facing charges

ABB (Swi./Swe.)

Bouygues (Fra.)

Spie Batignolles (Fra.)

Dumez (Fra.)

Impregilo (Ita.)

Lahmeyer (Ger.)

Diwi Consulting (Ger.)

ED Zublin (Ger.)

Balfour Beatty (UK)

Masupha Sole was jailed for 18 years in June after being found guilty of taking bribes in connection with the controversial water project.

The project, billed as the biggest construction and engineering scheme in Africa, is intended to generate electricity for Lesotho and supply water to South Africa.

But it has run into opposition because of its potential disruption to local people and wildlife.

The case could have an affect on the way multinationals run their operations in developing countries, where ethical standards have traditionally been downplayed.

If found guilty, the firms face being banned from bidding to take part in projects financed by the World Bank, which is providing much of the funding for the Lesotho scheme.

This would exclude them from a wide range of lucrative construction contracts in the developing world.

Over the past two years, 54 companies have been blacklisted from bidding on Word Bank-funded operations.