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Lesotho Dam : Corruption Case

On the 23rd July 2004 the World Bank announced that it had blacklisted Canadian engineering groups Acres International for a period of three years for corruption in a Bank-financed dam project in Lesotho. This is the first time a major multinational company has been debarred from tendering from World Bank projects.

This followed its conviction of on 17th September 2002, by the Lesotho High Court of paying bribes to win contracts on a multi-billion dollar dam project. Acres was charged with paying nearly $266,000 to Mr. Masupha Sole, the former chief executive of the Lesotho Highlands Water Project.

Acres' defense was 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.

The World Bank's policy on corruption states that it will debar any firm guilty of corruption on a Bank-financed contract. Initially the World Bank claimed there was "insufficient evidence" to blacklist Acres but was forced to look again at the issue.

Earlier in May 2002, the former Chief Executive of the Lesotho Highlands Water Authority was found guilty by the Lesotho High Court on 13 counts of bribery.

Sole was convicted on 11 counts of bribery and two of fraud for accepting about �3m in bribes over more than a decade from an array of European, Canadian and South African firms in return for contracts worth hundreds of millions of pounds.

The judge, Brendon Cullinan, said he was satisfied that Sole, who was responsible for awarding government contracts to build the dams, accepted payments from foreign contractors through intermediaries in return for "furthering their private interests".

When Sole's trial began last June, the prosecution said that as the chief executive of the Lesotho Highlands Development Authority he was at the centre of a web of corruption. Bribery became a standard business practice as he handed out contracts to build dams to supply water and electricity to neighbouring South Africa.

The prosecution said that Sole maintained at least three Swiss bank accounts into which bribes were paid in sterling, French francs, German marks and dollars. Payments by particular consortiums coincided with the awarding of contracts to those companies. According to the charges on which Sole was convicted, the biggest payments were made by the Lesotho Highlands Project Consortium, which was headed by the French company Spie Batignolles and included Balfour Beatty as a partner. The prosecution said that it deposited more than �1m in Sole's accounts over three years.

Sole was also convicted of accepting about �250,000 from another consortium, Highlands Water Venture, which has two British partners - Kier International and Stirling International.

Another conviction related to the payment of �51,478 by the British firm Sir Alexander Gibb.

The prosecutor, Guido Penzhorn, said that the judgment mounted to a damning verdict not only against Sole but the companies involved. "For Mr Sole to have accepted bribes, someone had to pay them. The court found that Highlands Water and all these other companies paid the bribes," he said.

The Lesotho government has been widely praised for pursuing the case. The trial is being closely followed by observers around the world. It has implications far and beyond the borders of Lesotho as its outcome will test the political will of OECD governments - now bound by the OECD Convention - and international organisations such as the World Bank who so far have failed to demonstrate that they truly aim to hold companies that bribe to account.

Observers have expressed concerns that the other companies may escape judgment as the Lesotho Attorney General may run out of funding to finance its case.

The following lists all references contained in our database that are relevant to this briefing
Press Release [6/4/1998] 'EIB finance for the Lesotho Highlands Water Project' : [Source ID = 4188]

Business Day [8/17/1999] 'CORRUPTION MUST BE FOUGHT IN NORTH AND SOUTH' : [Source ID = 4528]

Africa News Service [11/15/1999] ' UNIONS, GREEN AND AID GROUPS CALL FOR WB ACTION' : [Source ID = 4529]

The Independent [6/14/2000] 'UK FIRMS `PAID A POUNDS 1.2M BRIBE TO GET DAM CONTRACT'' : [Source ID = 4743]

Financial Times [6/5/2000] 'Building companies face corruption trial in Lesotho' : [Source ID = 5209]

Business Report [6/17/2001] 'R `0.4m Bribery Trail led to Sole Court Told' by Clive Rubin: [Source ID = 5643]

Business Day/All Africa Global Media via COMTEX [6/28/2001] 'World Bank to Black-List Corrupt Companies' by Bonile Ngqiyaza: [Source ID = 5831]

IRN Press Release [11/29/2001] 'Defence Asks for Re-Opening of Its Case' by South African Press Association (Johannesburg): [Source ID = 6199]

The Sunday Times (South Africa) [12/9/2001] 'SA and kingdom on collision course with World Bank' by Simon Zwane: [Source ID = 6217]

Sent by Email [5/28/2002] '' by Andrew Macoun of the World Bank: [Source ID = 6688]

 [5/26/2002] 'Trial exposes corrupt clique - Kasrils' by Lloyd Coutts: [Source ID = 6689] [5/27/2002] 'Acres' reputation at risk in African bribery trial' by KAREN MacGREGOR AND JOHN SAUNDERS: [Source ID = 6690]

Financial Times [5/24/2002] 'Weak approach to combating corruption' by Ryan Hoover: [Source ID = 6691]

Financial Post [5/22/2002] 'Former CEO of US$8B African water project convicted Canadian company denied links to bribery scandal' by Garry Marr: [Source ID = 6692]

International River Network [5/22/2002] 'SA hails bribery conviction' by International Rivers Network: [Source ID = 6693]

Guardian [5/21/2002] 'UK firms named in Lesotho bribery verdict Dam project chief given millions to place contracts companies gave millions to dam project official' by Chris McGreal in Johannesburg: [Source ID = 6694]

Business Day (Johannesburg) [5/21/2002] 'Water Project Boss Convicted of Bribery Lesotho dam official guilty of graft' by Jonathan Katzenellenbogen And Sapa: [Source ID = 6695]

Channel 4 [5/20/2002] 'Bribe exposure' by Jonathan Rugman: [Source ID = 6696]

Financial Times [5/21/2002] 'Former Lesotho executive guilty' by James Lamon: [Source ID = 6697]

 [5/20/2002] 'Corporate bribery verdict in Lesotho' by BBC: [Source ID = 6698]

The Guardian [7/6/2002] 'Blacklisting threat to UK firm in dam cash scandal: Balfour Beatty among consortium named in bribery judgment as two year African corruption trial ends in jail for Lesotho chief executive' by The Guardian: [Source ID = 6700]

IVO Group [1/20/2002] 'Trying holidays for Maseru corruption accused' : [Source ID = 6701]

 [5/19/2002] 'Judgment in Lesotho dam bribery case postponed' by Lloyd Coutts: [Source ID = 6702]

 [5/20/2002] 'Ex-Highlands CE guilty of bribery' : [Source ID = 6703]

 [3/19/2002] 'World Bank Undermines the Fight Against Corruption: The Lesotho Case' by Korinna Horta: [Source ID = 6704]

 [2/19/2002] 'Maseru Bribery: Canadian Firm Charged' : [Source ID = 6705]

 [9/8/2002] 'Canadian company awaits bribery verdict' by Lloyd Coutts: [Source ID = 7127]

International Rivers Network Press Release [9/17/2002] 'Canadian Engineering Firm Found Guilty of Bribery in Lesotho Company May Face Disbarment by World Bank' by IRN: [Source ID = 7174]

Toronto Star [9/17/2002] 'Acres International convicted of bribery' : [Source ID = 7176]

Acres International Press Release [9/17/2002] 'Acres International to Appeal Lesotho Court Decision' : [Source ID = 7177]

Probe International Press Release [9/17/2002] 'Canadian engineering multinational convicted of bribery in Africa' : [Source ID = 7178]

Halifax Initiative Press Release [9/17/2002] 'CANADIAN COMPANY FOUND GUILTY OF CORRUPTION IN AFRICA' : [Source ID = 7179]

Globe and Mail (Canada) [9/18/2002] 'Acres Int'l convicted in African bribery case: Engineering firm shocked; plans appeal' by KAREN MACGREGOR: [Source ID = 7180]

The Guardian [9/19/2002] 'Canadian firm found guilty of Lesotho dam bribery' by David Pallister: [Source ID = 7187]

Probe International Press Release [10/1/2002] 'Canadian engineering multinational to be sentenced today in world's largest corruption case' by Probe International: [Source ID = 7274]

International Rivers Network [9/25/2002] 'Lesotho Water a Time Bomb' by Ryan Hoover: [Source ID = 7275]

odious debts web site [] 'IN THE HIGH COURT OF LESOTHO In the matter between REX v ACRES INTERNATIONAL LIMITED JUDGMENT' by Hon. Mr Justice M L Lehohla: [Source ID = 7330]

Toronto Star [10/12/2002] 'Bribery case could cost Acres plenty' by Melissa Leong: [Source ID = 7359]

The Globe and Mail [10/28/2002] 'Acres faces fine for bribe to CEO' by KAREN MacGREGOR: [Source ID = 7385]

 [10/28/2002] 'Bribes cost company R22.5m' by SAPA: [Source ID = 7387]

BBC News [10/29/2002] 'Bribery firm protests its innocence' by BBC News Business: [Source ID = 7402]

World Bank Dev News [10/29/2002] 'Firm Faces Fine for Bribery in Lesotho as UN Prepares Convention on Corruption' by World Bank: [Source ID = 7403]

Financial Times [10/29/2002] 'Canadian company fined in Lesotho' by James Lamont: [Source ID = 7405]

Toronto Star [10/28/2002] 'Lesotho court fines Acres Oakville firm hit with $3.5 million bribery penalty' by Madhavi Acharya-Tom Yew: [Source ID = 7406]

The Globe and Mail [10/29/2002] 'Acres fined $3.4-million for bribing project's CEO' by Karen MacGregor and John Saunders: [Source ID = 7407]

SAPA [10/29/2002] 'Kasrils welcomes bribery sentence' by SAPA: [Source ID = 7408]

The Guardian [10/29/2002] 'Canadian company fined �1.6m for Lesotho bribes' by David Pallister:,3604,821132,00.html [Source ID = 7409]

SAPA [10/28/2002] 'Court sends clear message' :,3604,821132,00.html [Source ID = 7410]

Acres International Press Release [10/28/2002] 'Acres International to Appeal Lesotho Court Sentence' by Acres International: [Source ID = 7411]

The Globe and Mail [10/28/2002] 'Acres vows appeal' by Terry Weber: [Source ID = 7412]

As it Happens (Canadian news) [9/19/2002] 'Interview with World Bank on Acres' : [Source ID = 7413]

Financial Times [9/24/2002] ' Respect due to Lesotho's judiciary' by Ryan Hoover: [Source ID = 7414]

 [9/24/2002] 'Engineering firm found guilty of bribery in Lesotho International' by Water Power and Dam Constructio: [Source ID = 7415]

BBC News [12/11/2002] 'Lesotho court suspends bribery fine' by BBC News: [Source ID = 7494]

European Investment Bank [11/26/2002] 'Lesotho Highlands Water Project' by European Investment Bank: [Source ID = 7515]

Global Water Report [10/4/2002] 'Corruption highlighted by Lesotho verdict' by Global Water Report: [Source ID = 7521]

International Rivers Network [12/18/2002] 'Bribery case: Application dismissed' by International Rivers Network: [Source ID = 7531]

International Rivers Network [12/19/2002] 'Lesotho in bid to stamp-out corruption' by Ryan Hoover: [Source ID = 7547]

New African [12/1/2002] 'Government cracks down on Western corruption' : [Source ID = 7559]

World Markets Analysis [10/29/2002] 'Canadian Firm Receives Record Fine for Bribery' : [Source ID = 7566]

Africa News [9/21/2002] 'Uganda; Another Bujagali Firm Cited in Bribery Scandal' : [Source ID = 7572]

The Guardian [2/6/2003] 'Bribery row mars Amec's ballot win' by Terry Macalister:,12651,886948,00.html [Source ID = 7618]

 [12/19/2001] 'Internal Email 10' by Antonio Tricarico:,12651,886948,00.html [Source ID = 7749]

 [8/1/2002] 'Unsustainable South Africa Environment, Development and Social Protest' by Patrick Bond:,12651,886948,00.html [Source ID = 7756]

ilisu dam campaign web site (accessed 17/03/2002) [12/1/2002] 'CANADIAN COMPANY FOUND GUILTY OF BRIBERY IN UK-SUPPORTED DAM PROJECT' by Nick Hildyard: [Source ID = 7832]

The Guardian [6/13/2003] 'African conduit guilty in Lesotho bribe trial' by David Pallister: [Source ID = 7990]

AFRICA ENERGY INTELLIGENCE N� 349 [7/2/2003] 'LAHMEYER INTERNATIONAL Sentenced in Lesotho' : [Source ID = 8038]

 [8/28/2003] 'Lesotho to prosecute third company for bribery' by SABCNews:,2172,64791,00.html [Source ID = 8209]

Sabcnews [8/27/2003] '15 companies to be prosecuted for Lesotho bribery scam' :,2172,64733,00.html [Source ID = 8210]

BBC [8/27/2003] 'Lesotho fines second firm for bribery' : [Source ID = 8211]

South African Press Association [8/26/2003] 'GERMAN FIRM FINED R10,6M FOR BRIBERY' : [Source ID = 8212]

National Post [8/23/2003] 'Acres' partners in crime. Was our federal government determined to see justice prevail? Just the opposite' by Lawrence Solomon: [Source ID = 8214]

Business Day [8/25/2003] 'Lesotho sends a strong message on corruption: Another eight firms face charges' by Linda Ensor: [Source ID = 8215]

 [] 'Electrical company charged' :,6119,2-11-1447_1458949,00.html [Source ID = 8597]

World Markets Research Centre [2/26/2004] 'French Electrical Firm Found Guilty of Bribery by Lesotho Court' by Gus Selassie:,6119,2-11-1447_1458949,00.html [Source ID = 8624]

South African Press Association [2/25/2004] ' GLOBAL COMPANY FINED R10-M FOR LESOTHO BRIBERY' :,6119,2-11-1447_1458949,00.html [Source ID = 8628]

 [] 'Project: Corporate Counsel; Cutting Out The Middleman?' by Control Risks Group:,6119,2-11-1447_1458949,00.html [Source ID = 8652]

Business Report [3/21/2004] 'Crooked company snubs Lesotho' by Wiseman Khuzwayo: [Source ID = 8768]

Odious Debts [3/23/2004] 'Activists Prod World Bank on Canadian Corruption Case' by Emad Mekay: [Source ID = 8774]

 [6/4/2003] 'EU public hearing on corrupt Lesotho dams project' : [Source ID = 8794]

Sunday Times, Zambia [4/11/2004] 'Stop bribing poor nations, judges demand' by Carmel Rickard: [Source ID = 8815]

Business Report [4/11/2004] 'Lesotho judge ups fine for dam bribery' by Wiseman Khuzwayo: [Source ID = 8816]

Globe and Mail [4/13/2004] 'German firm faces possible blacklisting: World Bank ponders sanctions against Lahmeyer in Lesotho corruption case' by JOHN SAUNDERS: [Source ID = 8817]

Friends of the Earth [2/4/2004] 'AMEC challenged over bribery cover-up at EGM' : [Source ID = 8837]

Sunday Times [4/18/2002] 'Lesotho Shames SA With Its Resolve to Stamp Out Bribery' by Carmel Rickard: [Source ID = 8840]

Washington Post [5/13/2004] 'World Bank Corruption May Top $100B Says Senator' by Carol Giacomo: [Source ID = 8932]

Reuters alert [5/12/2004] 'World Bank defends anti-corruption strategy' : [Source ID = 8933]

 [2/26/2004] 'French Electrical Firm Found Guilty of Bribery by Lesotho Court' by Gus Selassie: [Source ID = 8976]

World Markets Research Limited; [11/12/2003] 'French Electrical Company Faces Graft Charges in Lesotho' by Gus Selassie: [Source ID = 8979]

National Post [4/23/2003] 'Acres' partners in crime: Was our federal government determined to see justice prevail? Just the opposite' by Lawrence Solomon: [Source ID = 8981]

Agence France Presse [8/15/2003] 'Canadian firm loses appeal against Lesotho bribery conviction' : [Source ID = 8982]

World Markets Research Limited World Markets Research Limited [6/18/2003] 'Court Finds German Firm Guilty of Graft in Multi-Billion Dollar Lesotho Water Project Case' : [Source ID = 8983]

Agence France Presse [6/17/2003] 'German company convicted of bribery in Lesotho water project' : [Source ID = 8984]

New African [12/1/2002] 'Government cracks down on Western corruption:' : [Source ID = 8985]

International Enforcement Law Reporter [] ' Lesotho Court Convicts Canadian Company of Bribery' by Bruce Zagaris: [Source ID = 8986]

Guardian Weekly [10/2/2002] 'Canada firm guilty of Lesotho dam bribery' by David Pallister: [Source ID = 8987]

National Post [6/27/2002] 'The Canadian connection' by Patricia Adams: [Source ID = 8989]

National Post [4/27/2004] 'Martin's problem: Corruption at home and abroad: The Prime Minister says he is fighting corruption, but he is merely keeping the lid on scandals. The Acres bribery case is one that could blow up' by Lawrence Solomon: [Source ID = 9040]

IPS-Inter Press Service [3/23/2004] 'WORLD BANK PRESSED ON CANADIAN CORRUPTION CASE' by Emad Mekay: [Source ID = 9048]

Odious Debts [5/25/2004] 'Statement by Patricia Adams to the US Senate Committee on Foreign Relations by Patricia Adams, Executive Director, Probe International' by Patricia Adams: [Source ID = 9076]

M2 PRESSWIRE [4/13/2004] 'World Bank statement on Lesotho Court of Appeals ruling' :,,contentMDK:20191132~menuPK:356035~pagePK:141137~piPK:141127~theSitePK:356029,00.html [Source ID = 9242]

World Markets Analysis [4/13/2004] 'World Bank Comes Under Pressure to Impose Sanctions on Firms Found Guilty of Bribery in Lesotho Water Project' by Gus Selassie:,,contentMDK:20191132~menuPK:356035~pagePK:141137~piPK:141127~theSitePK:356029,00.html [Source ID = 9243]

The Guardian [4/16/2004] 'World Bank corruption inquiry may blacklist firm' by David Pallister:,3604,1169970,00.html [Source ID = 9244]

Canadian Press Newswire [3/15/2004] 'Engineering firm Acres faces possible World Bank sanction over Lesotho woes' by John Saunders:,3604,1169970,00.html [Source ID = 9245]

CIOB [4/2/2004] 'Lesotho remains firm against corruption despite lack of funding help from EU or World Bank' : [Source ID = 11695]

CIOB [8/2/2004] 'U.S. Senate corruption inquiry demands tougher measures to stop misuse of development funds' : [Source ID = 11696]

CIOB [8/2/2004] 'U.S. Senate inquiry told, it takes real not token resolve to deal with corruption' : [Source ID = 11697]

CIOB [7/27/2004] 'World Bank gives Acres three-year debarment as company sells out to Canadian partner' : [Source ID = 11698]

The Globe and Mail [9/24/2004] 'Acres and acres of graft' by Eric Reguly: [Source ID = 12412] [9/10/2004] 'Lesotho ''Will Continue to Fight Graft''' : [Source ID = 12644]

20/09/2004 [9/20/2002] 'South Africa; Lesotho Shows the World that it Will Not Put up with Bribery' : [Source ID = 12697]

Business Day [11/17/1999] 'IF HE GIVES NOD TO DIRTY DOZEN: World Bank meets today on Lesotho water project' by David Letsie, Patrick Bond: [Source ID = 12700]

The Washington Post The Washington Post [8/23/2004] 'Corruption and the World Bank' by Lori Pottinger: [Source ID = 12702]

The Washington Post [9/13/1999] 'Big Firms Accused of Bribery in African Dam Project' by Paul Blustein: [Source ID = 12703]

Financial Times [7/21/2004] 'World Bank to face fresh pressure to stamp out graft' : [Source ID = 12790]


UNICORN is a Global Unions Anti-corruption Network. It is supported by the international trade union bodies: the TUAC (Trade Union Advisory Committee to the OECD); Public Services International (PSI); and the International Confederation of Free Trade Unions (ICFTU).

UNICORN is financed by the Foundation Open Society Institute