November 15, 2002
Now that a Canadian multinational has been convicted of bribery, there’s hope it will.
Dear Friend of Probe International,
History has just been made.
In the tiny country of Lesotho in southern Africa, a Canadian multinational – Acres International – has been convicted of bribing a public official to win a dam megaproject contract. Trials of 11 other multinationals involved in the same dam project are also underway or being prepared.
The trials, which involve a Who’s Who of the world’s engineering giants, represent the biggest corruption cases in the world today, and they also represent the biggest ray of hope for Third World development in decades.
Many if not most Third World megaprojects exist because western corporations have bribed officials into approving uneconomic, unsustainable projects. As the Lesotho trials revealed, “the scale of the bribery is related to the scale of the project” and projects balloon in size strictly to increase the take and to increase company profits. In other words, without the engine of corruption, many of the Third World’s worst economic and environmental nightmares would never have occurred. Without corruption, future Third World projects would tend to be based on need, not greed.
Thanks to the work of Probe International and our sister organizations around the world, Third World corruption is no longer considered acceptable by Canada and other western nations, many of which even treated bribes as legitimate tax deductible expenses. Bribery is now illegal and international development agencies such as the World Bank have pledged to blacklist corrupt companies from future development contracts. The World Bank, in fact, is now investigating Acres’ activities in Lesotho, with an eye to barring it from receiving future World Bank contracts. Corrupt companies now realize that their corrupt practices can not only lead to fines and jail terms, they could also lead to bankruptcy.
But at the same time, much work remains to be done. Although the World Bank and some western countries claim to be serious about blacklisting corrupt companies, already they are backsliding on their commitments. The Canadian International Development Agency, which has funded Acres’ projects to the tune of over $100 million, has no plans to disqualify Acres. Similarly, Export Development Canada says it will continue to subsidize bribers, as long as they promise to reform.
This position from our government agencies is unconscionable. Acres and other companies are entitled to fair trials and they are entitled to appeal their convictions (as Acres is doing). But penalties for corrupt companies and their officials must be meaningful – and that means jail, fines, and being barred from future work – if the rule of law is to mean anything.
If you agree with me, and want to help make the Lesotho trials a profound precedent for Third World development, please support us generously at this crucial time, when governments and development agencies need resolve to resist pressure from multinationals to continue with business as usual. With your help, we will continue to work with like-minded organizations throughout the world to press Canada and other western governments to clean up their act. There can be little progress for the world’s poor until corruption is stamped out.
Categories: Campaign Letters