Letters to the editor: Weak approach to combating corruption

Financial Times (UK): Editorial
May 24, 2002

From Mr. Ryan Hoover.

Sir, James Lamont notes that if some big construction companies were found guilty of paying bribes to a Lesotho executive on a World Bank-financed dam project, “they could be barred from World Bank-financed projects” (report, May 21). Indeed, the World Bank should bar these companies. Unfortunately, despite its stated belief that corruption undermines development, the Bank has until now refused to consider barring convicted companies unless they misused World Bank funds in particular. This is the strictest possible interpretation of its anti-corruption policy and appears to be an attempt to protect some of its most important contractors rather than a genuine effort to root out corruption.

The Bank recently revealed that its own internal investigation found no evidence that warranted barring the implicated companies from future projects. This may undermine the ongoing trial in Lesotho, allowing the accused companies to claim in court that the Bank has absolved them of wrongdoing. Not everyone escaped Bank sanction, however. It did bar a Panama-based intermediary accused of channelling the companies’ funds to the Lesotho official.

Punishing these companies’ agents instead of the companies themselves is a scandalously weak approach to combating corruption on its projects. It appears to be time for an independent investigation into the performance of the World Bank in its scrutiny responsibilities.

Ryan Hoover, International Rivers Network, Berkeley, CA 94703, US

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