Africa

World Bank puts sanctions on Oakville engineering firm

David Bruser
Toronto Star
July 24, 2004

Two years after a bribery conviction and $3.5 million fine, Oakville-based Acres International Ltd. is still feeling the repercussions of a scandal-ridden African water project as the engineering firm now faces World Bank sanctions.

In an announcement yesterday, the international development and loan institution barred Acres from bidding on any World Bank-funded projects for the next three years.

The bank’s case focused on a massive water project the 80-year-old firm worked on in Lesotho, a small country in southern Africa, starting in the 1980s.

Acres was accused of directing $320,000 (U.S.) to Masupha Ephraim Sole, a Canadian-trained engineer who oversaw the $6 billion Lesotho Highlands Water Project. The money was said to be channeled through Zalisiwonga Bam, a local engineer hired by Acres – a manoeuvre the Lesotho court ruled was a ploy to hide bribes.

Acres, one of 12 international companies accused of paying bribes, received two contracts to work on the project, one for $3.4 million in 1987 and another for $17 million in 1991, according to the World Bank.

After the indictments came down in 1999, the World Bank investigated but did not gather enough evidence to warrant sanctions.

“We can’t issue subpoenas . . . Ultimately, if people don’t wish to co-operate or don’t wish to provide documents, it’s very hard to get those documents,” said World Bank spokesperson Damian Milverton.

But the trial uncovered more evidence and the World Bank re-opened the case. Acres unsuccessfully argued against the proposed sanctions earlier this year, Milverton said, and the company’s only recourse is to appeal directly to the World Bank president.

“Acres International is deeply disappointed at the World Bank’s decision to impose a three-year ineligibility period for bank-financed contracts,” said Acres spokesperson Indira Conroy. “The events in Lesotho occurred 10 to 15 years ago and the five-year period over which Acres has responded to these allegations has been very trying for our employees.

“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.”

The sanctions available to the World Bank ranged from a letter of reprimand to permanent exclusion from World Bank-funded projects. Partly mitigating Acres’ punishment was that the firm had already been fined.

Although Acres has new ownership after a recent merger with engineering firm Hatch of Mississauga, the World Bank says punishment can still be levelled at a subsidiary.

“We do ask how many times you get punished for the same offence,” said John Ritchie, Acres vice-president and compliance officer. “We’re discouraged by it but we just have to move on.”

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