Mark Thomas reveals shady business in Africa

Mark Thomas
New Statesman
September 16, 2002

Open letter to Baroness Symons of Vernham Dean, minister for trade:

Dear Baroness,

Please forgive my lack of etiquette but I am uncertain how to address you formally – whether I should call you ‘your grace’, ‘your ladyship’, ‘your noble loveliness to whom God has given the best genes’ or ‘your political appointedness’. As a politician, you will be used to worse. Indeed, the nicest thing to be said of your job description is that, in certain gay circles, ‘minister for trade’ has an entirely different meaning. Having got the obligatory cheap insults out of the way, we can get on with the expensive insults – which seems a strikingly appropriate way to describe your work at the Export Credits Guarantee Department (ECGD). One big expensive insult. Your department’s role sounds innocuous enough: providing insurance for British businesses exporting goods and services. In the event of non-payment, the ECGD makes sure that the companies and the banks get their money. Obviously, there is the small quibble of why the ECGD uses our tax money to arm dictators, fuel conflicts, back projects that displace thousands of people (often creating the very asylum-seekers who will be vilified by another branch of government on arriving here), create developing-world debt, destroy the environment and lead to the wholesale abuse of human rights. All of which is hardly the run-of-the-mill, workaday image of insurance brokers, whom you normally associate with commuting, bad breath and drunken renditions of Abba songs at the office Christmas karaoke party.

Servicing the needs of big business is your main concern. Trifling matters such as fighting bribery and corruption remain trifling. Nowhere is this more evident than in Lesotho, where British companies involved in projects supported by the ECGD are embroiled in a corruption scandal. Your department provided GBP66m of loan guarantees for five companies working on the Lesotho Highlands Water Project – including Balfour Beatty, Keir International and Stirling International.

In 1995, the attorney general’s office in Lesotho began to investigate Masupha Sole, the government’s chief executive for the project. It found that Sole had received around GBP2m in bribes, via middlemen, from multinationals working on the project, and took him to court. Earlier this year, he was sentenced to 18 years in prison for corruption.

Most of the multinationals admit to paying money to agents or middlemen, who in turn paid Sole. Though much of the money was paid into Swiss bank accounts, at a time when it was illegal for Basotho to have bank accounts outside the country (and despite one of the ‘local agents’ being based in Panama), no alarm bells rang for the companies, which maintain their innocence. At Sole’s trial, Justice Brendon Cullinan concluded that the money had been paid as bribes.

Over the past year, the Lesotho authorities have started to prosecute the companies, beginning with Canada’s Acres International. Given that Lesotho is one of the poorest countries in the world, with unemployment between 40 and 50 per cent, these court cases are remarkable and unique. Lesotho is taking on companies that are richer and more powerful than the nation itself. The CEOs of some of the companies earn in the region of GBP500,000 a year in pay, share options and bonuses. In the five minutes they spend urinating on any given workday, the CEOs will earn more than a Mosotho worker gets paid in a month.

As I write, the verdict on Acres is due to be delivered. If Acres is found guilty, it will not only mark a new phase in the struggle against multinational corruption, it will also fire a warning shot to Balfour Beatty, Sir Alexander Gibb & Partners and Keir, all part of the consortiums that the attorney general’s office has been investigating. However, dear Baroness, there are questions for you to answer. When I asked the ECGD, a few years ago, what steps had been taken to investigate allegations of bribery, I was told that one company in the Lesotho case had ‘assured us they have got a clean pair of hands’. In short, the ECGD asked the company if it was guilty. I accept that all are innocent until proven otherwise, but this hardly counts as a rigorous investigation. We wouldn’t expect the police to pack up their files and shut down their incident rooms every time a suspected criminal said: ‘Not me, guv.’

So Baroness, is it true that the ECGD cannot make public its procedures to deal with allegations of corruption and bribery? Is it because you don’t have any procedures? Can it be that a government department with a budget of GBP3.3bn a year, dealing with some highly corrupt countries, doesn’t have procedures to examine allegations of bribery? If the answer to any of these questions is ‘yes’, why are you still in a job?

Hoping all is well with you – Mark

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