July 23, 2004
Canadian-based foreign aid watchdog Probe International welcomed the World Bank’s decision today to blacklist Canadian engineering company Acres International from receiving World Bank contracts for the next three years and predicts the Bank’s blacklisting of Acres will lead to more debarments of other companies convicted in the Lesotho corruption trials. Patricia Adams, Probe International’s executive director, said the World Bank debarment had set an important precedent and sent a signal to other companies that corruption can result in punishing fines and loss of major business contracts, leading to bankruptcy or, as in the case of Acres, a takeover by another company.
“As the standard setter for the world’s funding agencies,” Ms Adams said, “a World Bank blacklisting could be the death knell for a corrupt company.
No more effective deterrent exists to corruption in international development projects than a World Bank debarment.”
The Lesotho trials have also exposed the World Bank’s role in the corruption that plagues Third World development.
“For the first time, we have evidence tested in the courts that shows how World Bank funds were used for corrupt purposes,” said Ms. Adams, an economist, who has long followed development projects. She predicts that “Lesotho is just the tip of the iceberg.”
Recent testimony before the U.S. Senate Committee on Foreign Relations headed by Senator Richard Lugar suggests that billions of dollars in World Bank funds have been used for corrupt purposes over the decades. The Senate Committee hearings have shone a spotlight on the anti-corruption guidelines of international funding agencies and their effectiveness at enforcement.
Meanwhile, Ms Adams has taken the Canadian government to task for its continued financial support of Acres International’s overseas activities, funneled through crown agencies such as Export Development Canada and the Canadian International Development Agency.
The World Bank’s blacklisting of Acres, she said, should prompt the relevant engineering regulatory authority in Canada (the Professional Engineers of Ontario) to take action and the Canadian government to follow the World Bank’s lead and sanction Acres at home.
To read Patricia Adams’ statement on corruption in multilateral development banks to the U.S. Senate Committee on Foreign Relations, please see: Statement by Patricia Adams to the US Senate Committee on Foreign Relations
For further information, please CONTACT:
Patricia Adams, Executive Director
Tel. (416) 964-9223, ext. 227