September 17, 2002
In a landmark decision that has sweeping implications for Third World development, engineering multinational Acres International has been convicted in Lesotho of bribing a local official to secure contracts on a multibillion dollar dam scheme.
Toronto: In a landmark decision that has sweeping implications for Third World development, engineering multinational Acres International of Oakville, Ontario has been convicted by the Lesotho High Court in southern Africa on two counts of bribing a local official to secure contracts on a multibillion dollar dam scheme. Earlier this year, the recipient of the bribes, Lesotho’s Masupha Sole, was also convicted.
Acres was accused of paying some US$260,000 to Mr. Sole, the former Chief Executive of Lesotho’s Highland Development Authority, through an agent, to secure contracts in an US$8-billion dam building scheme. Acres’ defense was that they had no knowledge that their agent, with whom they had a “representative agreement,” was passing on money to Mr. Sole. Chief Justice Mahapaela Lehohla described this as a strategy to cover up the bribe payments.
Acres is expected to appeal the decision. Sentencing will occur on Oct. 7 or 8.
“Prime Minister Chretien has been urging African nations to rid themselves of corruption, in order to become attractive to Western investment,” said Patricia Adams of Probe International, an organization that has monitored the activities of Acres and other engineering firms for more than 20 years.
“Lesotho has just done that. It has shown that it takes corruption seriously by convicting its own corrupt officials as well as the corrupt briber. Now it is up to Canada to show it wasn’t paying lip service to getting rid of corruption.”
Probe International demands that western countries and their development agencies, such as the World Bank, follow through on their promises to crack down on corrupt corporations. In the U.S., which has the toughest anti- corruption laws, a person or firm found in violation of the Foreign Corrupt Practices Act may be barred from doing business with the Federal government. The World Bank has a new policy in place of declaring a firm “ineligible,” either indefinitely or for a stated period of time, for Bank-financed contracts if the Bank determines that the firm has engaged in corrupt or fraudulent practices in competing for, or in executing, a Bank-financed contract. Canada, however, has no such policy in place to show that it takes corruption seriously.
“If western governments get tough with convicted bribers, multinational firms will get the message that corruption is costly, and that will spell the end of corruption on Third World development projects. If western governments don’t get tough, corruption will continue to thrive. We in the West will be seen as hypocrites who preach clean government to the Third World while tolerating corruption among our own corporations,” says Ms. Adams.
The Canadian government, which financed part of Acres’ work on the Lesotho project, has refused to say what action it would take against a convicted company. Export Development Canada has explained that if a convicted company reformed, EDC would continue to back that company with tax-payer financed loans and insurance.
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For more information, CONTACT:
Patricia Adams, Executive Director, Probe International
Tel.: 1 (416) 964-9223 (ext. 227)