Acres’ Lesotho woes continue

John Saunders
The Globe and Mail (Canada)
March 16, 2004

Acres International Ltd., already convicted in an African bribery case, could be barred from World Bank-financed projects for corruption, the bank confirmed yesterday. It would be the first major international engineering firm to suffer that shame.

The Washington-based development agency disclosed four things: Its investigations unit reopened a probe of Acres’ conduct after the Oakville, Ont.-based firm was found guilty in 2002 of bribing the former head of a bank-assisted water project in the impoverished mountain kingdom of Lesotho.

That probe, which examined evidence from the Lesotho trial, is now complete. The investigations unit has sent undisclosed recommendations to the bank’s sanctions committee, which can impose penalties ranging from a reprimand to temporary or permanent debarment. The sanctions committee, to which Acres can make written or oral arguments, has sent the company a notice that its debarment case has been reopened.

With assets of $230-billion (U.S), the World Bank is a giant among development agencies and a major indirect employer of engineers. It posts the names of many barred firms and individuals on its Web site, but none as prominent as Acres so far.

Acres president Tony Hylton said it was too soon to guess what the committee’s decision will be.

“The company’s gone through an awful lot over the last couple of years with the Lesotho incident and what we’re looking to do is co-operate as fully as we possibly can with the World Bank and try to move forward and get this behind us as soon as possible,” he said.

Acres did about $21-million worth of work on the Lesotho project and was found guilty on two bribery counts involving about $680,000 (Canadian) paid into the Swiss bank accounts of a local agent and his wife. Much of the money ended up in the hands of project chief Masupha Sole, who was jailed for 18 years for accepting the equivalent of $1.5-million in bribes from various contractors and consultants, some of whom also have been convicted.

In an appeal last year, Acres won a reversal of its conviction on one count involving about $180,000 and saw its fine reduced to $2.8-million from $4.2-million. The company had protested its innocence and suggested the Lesotho court was unfit to handle such a complex case.

“We think that findings were somewhat flawed,” Mr. Hylton said yesterday, “but we’ve nevertheless agreed to pay the fine as part of our commitment to being a good corporate citizen. We just want to move on with it. We’ve paid a heavy price and what we’re trying to do is take an industry lead in promoting honest and ethical business practices.” Acres has put in place a new “business integrity management system,” he said.

Damian Milverton, a World Bank communications officer, said it is unclear how quickly the sanctions committee will reach a decision but the investigators’ recommendations will remain secret in the meantime.

“The investigations unit looks at the evidence and it then basically formulates a view on that evidence and recommends to the sanctions committee what should be done next. . . . If this were a court process, the investigations unit would be the prosecutors and the sanctions committee would be the judge.”

Categories: Africa, Lesotho, Odious Debts

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