Africa

World Bank blacklists Canadian MNC

Guardian News Service
The Hindu
July 24, 2004

The World Bank said on Friday that it had blacklisted its first multinational with the debarring of Canadian engineering firm Acres International from new contracts for three years.

The bank said the company was engaged in corrupt activities to influence the Lesotho Highlands development authority, which was responsible for the multibillion-dollar Lesotho Highlands water project.

The project uses dams to provide water to South Africa and electricity to Lesotho.

“This action is part of the Bank’s broad anti-corruption efforts initiated by president James Wolfensohn in 1996,” it said in a statement.

The Lesotho government convicted Acres for bribing Masupha Sole, the former LHDA chief, almost two years ago.

The move to disbar Acres was welcomed by anti-corruption campaigners. “This move is an important signal to show companies the consequences of corruption can be devastating,” said Patricia Adams, a spokesperson for Probe International, an environmental group that monitors Canada’s involvement in foreign aid.

“But we think the Bank has really dragged its heels and only made this decision because of pressure from the US Congress and the general public.”

Damian Milverton, a spokesman for the Bank, said: “We believe we put as much pressure on ourselves as we receive from the outside. We know how corruption takes resources away from those who really need them.”

The Bank is stepping up its anti-corruption efforts and will be hiring more investigators, he said.

Acres said it was “deeply disappointed” by the ruling, saying the events in Lesotho occurred 10 to 15 years ago. “The five-year period over which Acres has responded to these allegations has been very trying for our employees,” it added.

The Bank began its inquiry when Lesotho first charged Acres with corruption but later closed it, saying it did not have sufficient evidence. When Acres was convicted of bribery in 2002 by the high court, the Bank reopened its inquiry.

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