Corruption goes unpunished

Fraser Reilly-King
Halifax Initiative Press Release
November 5, 2003

Ottawa – Export Development Canada (EDC) will not bar Canadian company Acres International, recently convicted of corruption charges in the Lesotho Highlands Water project, from future contracts, says an October 31st letter to the NGO Working Group on EDC from EDC President Ian Gillespie. EDC was replying to a letter sent by the Working Group following the Acres conviction.

“This is sending the wrong signal to Canadian companies” said Fraser Reilly-King, Coordinator for the NGO Working Group on EDC. “By not properly sanctioning companies convicted of corruption, EDC is essentially saying it will continue to do business with criminals”.

On losing its appeal in the Lesotho courts, Acres was charged with a $2.8 million fine. However, if the company had been convicted in Canada under the Corruption of Foreign Public Officials Act, it would have been subject to criminal charges and up to five years jail time. But at EDC, where Acres is a frequent customer, the crown corporation has said that they are happy with the anti-corruption measures Acres has put in place and are “satisfied that current safeguards, both on our side and on the part of Acres, will assist in detecting corruption”. EDC has not made public its transactions with Acres, nor its method of investigation into past transactions.

“This is the first Canadian company to be convicted outside the country since Canada got serious about corruption”, added Pam Foster, Coordinator of the Halifax Initiative. “But this shows that Canada isn’t serious at all!”

In contrast, the World Bank is conducting a thorough investigation of the charges, with debarment from Bank contracts a possibility if there is sufficient incriminating evidence, as well as opportunities for appeal. The Bank, however, is not expected to reach a decision for some months yet. The Export Credit Guarantee Department in the United Kingdom, EDC’s UK equivalent, has also said that a court conviction for corruption would be a prima facie grounds for refusing cover to a company (whether or not the conviction related to an ECGD backed project).

The NGO Working Group on EDC asked the crown corporation to commit to a thorough investigation of all transactions involving Acres International, and a barring of Acres International from future EDC transactions for a period no less than 5 years.


Categories: Corruption, EDC, Export Credit, News

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