Africa

International construction companies bribe top official

Transparency International
August 9, 1999

BERLIN – International construction companies bribe top official in large dam project for South Africa. Scandal highlights urgency of implementing OECD Convention against international corruption.

The involvement of more than a dozen leading European and North American construction companies in a large-scale corruption scandal in South Africa and Lesotho illustrates the urgency of swift implementation of the landmark OECD Convention against international corruption, Transparency International (TI) has urged. The firms are alleged to have bribed the CEO of the 10 billion Rand Lesotho Highlands Water Project (LHWP) with the sum of 12 million Rand (app. 2 million Euro) during a 10-year period. All the implicated companies are from countries that have recently signed the OECD Convention which makes it a crime to bribe public officials abroad. The companies include Hochtief and Zublin from Germany, the Swiss-Swedish ABB, Impregilo from Italy, Sogreah, Bouygues, Dumez International and Spie Batignole from France, and Acres International from Canada among others.

While the official in question has been charged by the Lesotho government on 29 July on 14 counts of bribery and fraud, Transparency International explains that for too long there has been a tendency to focus solely on the recipient of bribes. “Both bribe payer and recipient are defrauding the public, wasting resources and hindering development,” noted TI Chairman Dr. Peter Eigen. “There is no doubt that the international firms involved deserve censure,” continued Eigen. “Moreover, these will have to deal with the commercial fall-out, as rivals will use the fact that they have been caught bribing as a reason why others should refuse to do business with them. This illustrates the heavy price in the long-term for what was essentially a short-term gain,” Eigen concluded.

The international anti-corruption organisation urges the authorities in Southern Africa to seek the co-operation of the judicial authorities in Europe and North America in prosecuting the companies involved. Dr. Eigen stressed “We are also pleased that the South African government intends to acceed to the OECD Convention so that it can play a significant role in extending the scope of the Convention and help protect itself and other countries in Africa and elsewhere from similar incidents.”

Background information: The Lesotho Highlands Water Project is aimed at securing the water supplies of the Johannesburg region, South Africa’s economic heartland. What makes the LHWP bribery case particularly sensitive is the fact that South Africa is the official host of this year’s International Anti-Corruption Conference scheduled to take place in Durban from10 to 15 October. Another delicate issue is the involvement of the World Bank in the project through a US$ 150 m grant. According to the World Bank procurement guidelines firms “engaged in corrupt or fraudulent practices in competing for, or in executing, a bank-financed contract” will be “ineligible, either indefinitely or for a stated period of time, to be awarded a bank-financed contract.”

For further information or interviews, please contact: Mr. Carel Mohn, Press Officer, at the TI International Secretariat at tel. +49-30-343 8200 or Mr. Jeremy Pope, Executive Director, at our London office at tel. +44-171-610 1400

For further information on the LHWP: visit the Website of the International Rivers Network at http://www.irn.org

About Transparency International:
Transparency International was founded in 1993. It is the only global non- governmental and not-for-profit organisation devoted solely to containing corruption and increasing government accountability. There are currently more than 60 National Chapters in all continents. TI’s International Secretariat is in Berlin, Germany.

Lori Pottinger, Director, Southern Africa Program, and Editor, World Rivers Review International Rivers Network 1847 Berkeley Way, Berkeley, California 94703, USA Tel. (510) 848 1155 Fax (510) 848 1008 http://www.irn.org

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