Acres loses appeal on bribery charge in Lesotho
Canadian engineering firm convicted of bribing top official has fine reduced
By KAREN MacGREGOR
Special to The Globe and Mail
Monday, August 18, 2003 - Page B3
DURBAN -- Canadian engineering firm Acres International Ltd. lost an appeal against conviction on a charge of bribery in a high-profile corruption case in Lesotho on Friday -- but won its fight against a second graft conviction and had a whopping fine of $4.2-million reduced to $2.8-million.
The Oakville, Ont., firm -- the first of three multinationals charged with bribing a top official to win lucrative contracts in the $3.3-billion Lesotho Highlands Water Project, which delivers water to Lesotho and South Africa -- was convicted last year of two counts of corruption.
It was the first conviction by a developing country of a bribe-giving western company.
Acres was found guilty of paying $681,424 over seven years in the 1990s into Swiss bank accounts of its Lesotho representative, the late Zalisiwonga Bam, and his wife Margaret, who siphoned most of the money to Masuphe Sole, then the chief executive officer of the dam project. Last June, Mr. Sole was jailed for 18 years for accepting $1.5-million in bribes from a dozen multinationals.
Germany's Lahmeyer International GmbH and France's Spie Batignolles are also in the dock.
Acres has claimed innocence, saying it was "completely unaware" that money legitimately paid to its agent, a respected engineer, would end up in Mr. Sole's hands. It paid Mr. Bam 3.6 per cent of what its contract was worth, "in line with international practice."
The company has said its contracts were properly approved, that the same charges were dismissed by a World Bank investigation, and that it was "praised for its work and completed its contracts on time and under budget, during a volatile and politically unstable period."
The Canadian company, which believed the Lesotho High Court was not equipped to deal with such a complex case, had hoped that the Court of Appeal -- which also comprises South African judges -- would exonerate it of bribery for work contracts worth $21-million.
But on Friday three justices -- Court of Appeal President Jan Steyn, Michael Ramodibedi and Chris Plewman -- found that Acres knowingly paid roughly $500,000 to Mr. Sole via Mr. Bam.
They said the prosecution had failed to prove that a further $180,000 paid into Margaret Bam's Swiss bank account had been intended to bribe Mr. Sole or indeed had ever been paid to the jailed official. It was for this reason that the $4.2-million fine was slashed to $2.8-million.
During sentencing of Acres in the High Court last September, the mountain kingdom's chief justice slammed the Canadian company for contempt of Lesotho's justice system and apparent "total lack of remorse."
On Friday, Judge Jan Steyn said Acres, "motivated by greed," had exploited a World Bank-funded scheme intended to help the southern African country's economic development.
Patricia Adams, executive director of Toronto-based Probe International, which has monitored the case, said it is now "up to the World Bank and western nations, such as Canada, to act on the Lesotho decision by enforcing their own anti-corruption codes."
She wants the World Bank to ban Acres from future bank contracts or risk sending a signal that multinational corporate officials can bribe Third World officials with impunity and that African countries that attempt to curb corruption are wasting their time.
"Corruption will thrive with renewed vigour if the World Bank backs away from its policy," she said.