BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Monday, 28 October, 2002, 17:05 GMT
Western firm fined for African bribery
Katse Dam
Dams exploit Lesotho's one natural resource: water
A Canadian transnational corporation has been hit with a multimillion-dollar fine for bribing its way into a lucrative World Bank-funded African dam project.

Acres International is one of more than a dozen Western firms accused of bribing the former chief executive of the Lesotho Highlands Development Authority to win business.


This is the first time a first world company operating in the third world has been convicted of bribing a public official

Judge Mahapela Lehohla

It is the first to be convicted and sentenced, and now faces a fine of 22m maloti ($2.2m; ).

The case marks the first time that bribe-givers, as well as takers, have found themselves in the dock in a high-profile international project.

But despite the judgement, pressure on the World Bank from its major shareholders - the Western countries from which most major multinationals stem - means that Acres could still keep bidding for Bank-funded contracts.

'Staggering amounts'

Acres - which is trying to appeal, and says the bribes were paid by a middleman without its knowledge - is not alone in being accused of buying access to LHWP contracts.

The accused
France:
Bouygues, Spie Batignolles, Dumez International
UK:
Balfour Beatty, Keir International, Stirling International
South Africa:
Concor, Group Five
Italy:
Impregilo
Germany:
Hochtief, Lahweyer International, Diwi Consulting, ED Zublin
Switzerland/Sweden:
ABB
Others on the list and still facing trial include the UK's Keir International, Stirling International and Balfour Beatty, Italy's Impregilo, beleaguered Swiss-Swedish group ABB and France's Bouygues and Spie Batignolles.

Announcing his sentence, the judge in the case, Mahapela Lehohla, made it clear he wanted to set an example.

"The court wants to send a clear message that companies wanting contracts should not even think of taking a risk in trying to bribe officials," he said.

"This is the first time a first world company operating in the third world has been convicted of bribing a public official. The amount is staggering... and great harm has been done to Lesotho."

Named and shamed?

In theory, Acres ought now to be blacklisted by the World Bank, campaigners say.

There are 54 companies on the Bank's list of those deemed unfit to bid on its projects.

But some fear that Acres could be let off.

One former World Bank senior official, who now works in the anti-corruption field, told BBC News Online that none of the companies on the list are major multinationals.

The Bank, he said, has taken a very narrow definition of its rules. Only if the bribery charges related directly to a portion of the overall project funded by the Bank can companies be blacklisted.

"It would raise grave questions about the seriousness of the Bank's blacklist policy if Acres weren't now listed," he said.

The Bank's spokeswoman, Caroline Anstey, told BBC News Online that the Bank will now examine the trial transcripts to see if it should reopen its earlier investigation into LHWP.

In February, she said, the Bank concluded it only had enough evidence to blacklist one individual and three minor companies.

"We are dependent on asking for papers," she said. "But criminal prosecutions can subpoena evidence, so they may have come up with information to which we didn't have access."

In jail

The LHWP official involved, Masupha Ephraim Sole, has already been convicted for his part in the scandal, and is facing 18 years in jail.

The court found that he had taken bribes amounting to millions of dollars from 14 international firms.

The project is meant to provide power to the poverty-stricken Southern African mountain kingdom.

But it has been opposed by campaigners who allege the project is both ecologically unsound, and is being conducted on terms unfair to the Basotho people.

See also:

20 May 02 | Business
15 Mar 02 | Business
04 Apr 01 | Politics
10 Dec 99 | From Our Own Correspondent
15 May 99 | Africa
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes