July 23, 2004
Washington: The World Bank on Friday said it blacklisted Canadian engineering groups Acres International for three years for corruption in a massive bank-financed dam project that will transfer water from Lesotho to South Africa.
Acres, bought in June by design firm Hatch of Mississauga, Ontario, will be barred from receiving any new bank-financed contracts for the next three years.
Acres is the largest companies to be sanctioned by the World Bank, which is under pressure by shareholders like the United States to root out misuse of money it spends for global development projects in poor countries.
Acres has already been prosecuted in the tiny African kingdom for bribing Masupha Sole, the former chief executive of the Lesotho Highlands Development Authority, who was convicted in 2002 of corruption and sentenced to 15 years in jail.
The bank’s move does not affect existing bank contracts with Acres, which includes projects in the West Bank and Gaza, Ghana, Ethiopia and Tanzania worth around $2.3 million.
“The World Bank’s sanctions committee found that Acres engaged in corrupt activities for the purpose of influencing the decision making of the then chief executive of the Lesotho Highlands Development Authority, the implementation agency of the LHWP,” the bank said in a statement.
Acres said in reaction it was “deeply disappointed” at the World Bank’s decision.
“The events in Lesotho occurred 10 to 15 years ago,” and Acres has responded to these allegations over a five year period, the company said in reaction.
“We have already moved on by implementing corporate compliance measures that include strict guidelines about those with whom Acres will work and how Acres engages and supervises contractors, employees and representatives,” it added.
The bank said Acres won significant contracts for technical work for the $8 billion Lesotho Highlands project in 1987 and 1991.
The project, the result of an agreement signed in 1986 with South Africa, will redirect Lesotho’s abundant water resources to South Africa’s industrial heartland in Gauteng province through an elaborate network of dams.