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dam-l World Bank skirts corruption on LHWP/LS



The following is a press statement on the recent corruption surrounding the Lesotho Highlands Water Project, the subject of past listserv items. This scandal implicates a dozen of the world's largest dam building companies, and WBank guidelines state that companies that violate their guidelines can be blacklisted. 

But it appears from the statement below and other conversations with legal counsel at the Bank that they will let these companies off the hook, by saying  that these bribes were on  components of the project financed by the Bank (the Bank's work on this project includes  design and construction supervision, project management, human resource development, "sound financial management"; and oversight of social and environmental impacts.)  One would think all of this would neatly fit under "sound financial management," but perhaps not.
LP
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South Africa Resident Mission
Pretoria, South Africa

July 30, 1999

PRESS STATEMENT: LESOTHO HIGHLANDS WATER PROJECT

The World Bank has taken note of the recent charges against the former Chief Executive of the LHDA. The World Bank in general views corruption as a serious detriment to development and welcomes any efforts taken to rest corruption in any form. 

We commend the Governments of Lesotho and South Africa and the LHDA for the steps taken to work together in bringing this matter before teh court of Lesotho. We eagerly await the outcome of the court case, at which point the World Bank will decide on further steps. We willconduct an internal investigation to ensure that the Bank policies and procedures have been followed on the components of the project that have been financed by the World Bank.

We are willing to provide assistance to the repective governments in their further investigations of the allegations where necessary.

The issue is not only about addressing the problems of corruption in a transparent way in general, but it is also a [sic] issue of ensuring the efficient management of the Lesotho Highlands Water Project because of its developmental impact in the region.

Signed,

Junaid Ahmad
Deputy Resident Representative

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      Lori Pottinger, Director, Southern Africa Program, 
        and Editor, World Rivers Review
           International Rivers Network
              1847 Berkeley Way, Berkeley, California 94703, USA
                  Tel. (510) 848 1155   Fax (510) 848 1008
                        http://www.irn.org
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