Global Policy Forum

The Lesotho High Court today convicted Acres International, a Canadian engineering consulting firm, of paying bribes to win contracts on a multi-billion dollar dam project, backed by the World Bank. The Lesotho Highlands Water Project has been controversial since its proposal, for its negative social and environmental impacts. "The guilty verdict in Lesotho raises serious questions about how contracts for these mega-projects get awarded," said Pam Foster, Coordinator of the Halifax Initiative. "Acres should be barred from receiving any financial support from public institutions such as the World Bank and Export Development Canada".

Acres have worked on several controversial World Bank-funded dams. They are currently involved in the Bujagali Dam in Uganda and Nam Theun 2 Dam in Laos, both of which are set to receive World Bank funding. Bank support for the Bujagali Dam, however, is on hold as a corruption investigation is underway. "We expect the Bank to disbar Acres now that they have been found guilty of corruption on a World Bank contract. Anything less than disbarment would undermine not only the World Bank's own corruption policy, but also its poverty alleviation objectives," said Ryan Hoover of International Rivers Network.

It is unknown, how much if any support, Acres has received from EDC. EDC has refused to date to disclose information about its past clients. "EDC needs to be proactive in weeding out bribe-givers from its list of clients", says Joan Kuyek of MiningWatch Canada. "The public needs assurances that EDC is not going to support Canadian companies that have been convicted of corruption."

The World Bank has stated that corruption is the 'single greatest obstacle to economic and social development.' The case is an embarrassment to the Bank because its responsibilities on the LHWP included financial oversight of the project, yet it apparently was unaware of the bribery until the middle of 1999. An internal investigation completed earlier this year concluded that there was insufficient evidence to punish Acres for corruption in Lesotho.

Mr. Masupha Sole, the former chief executive, has already been convicted of 13 counts of bribery and sentenced to 18 years in prison for taking more than $2 million in bribes from intermediaries representing 12 of the world's largest construction firms over a ten-year period. Acres was the first of the implicated companies to be prosecuted in the lengthy trial, which began in 1999.

Acres had been charged with paying nearly $266,000 to the former chief executive of the Lesotho Highlands Water Project - Mr. Musapha Ephraim Sole. Acres' had argued that they were not responsible for the payments to Mr. Sole as these were made via an intermediary through a "representation agreement." Chief Justice Lehohla described this arrangement as a deliberate strategy to cover up the bribe payments.

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