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dam-l WBank PR on LHWP corruption/LS


LESOTHO HIGHLANDS WATER PROJECT
FINANCIERS MEET TO EXCHANGE INFORMATION

      Washington, November 16, 1999: Financiers of the Lesotho Highlands
Water Project (LHWP) met in Pretoria today in connection with the ongoing
investigation of corruption charges against the former chief executive of
the Lesotho Highlands Development Authority. Participants of the meeting
included senior officials of the Government of Lesothoówhich leads the
investigationóthe Government of South Africa, and representatives of the
various financial institutions supporting the project. The primary
objectives of the meeting were to enable all parties to assess the status
of the investigation, to exchange information on each group's
anticorruption policies and to agree on further support for the
investigation being conducted by the Government of Lesotho.. Todayís
meeting follows an earlier briefing convened by the project authorities in
June 1999.

      The information sharing exercise by financiers about their respective
anticorruption policies was motivated by the World Bankís commitment to
fighting corruption. As the Lesotho Highlands Water Project is a large
program financed by several official lenders, the World Bank will continue
to facilitate the exchange of pertinent information among the various
partners on project-related contracts which they are implementing
separately. This will enable the financiers to take appropriate action
under their own laws or policy guidelines and be informed of action being
taken by others.

      For its part, the World Bank is currently conducting its own
investigation , and will act in accordance with its operational policy on
corruption. The Bank will be guided by whether there are proven
improprieties on contracts that it has been financing. While it is still
premature to surmise what kind of action would be taken, debarment, or
declaring a firm or individual ineligible to be awarded any Bank-financed
contracts is the ultimate penalty for a firm implicated along such lines.
The Bank has increasingly taken such action against firms that engage in
corrupt or fraudulent practices during the procurement or execution of
Bank-financed contracts. Since its procedures were revised in January 1998,
the Bank has debarred 12 firms and 2 individuals from further contracts
financed by the Bank.

       The World Bank remains deeply committed to helping countries in
Africa and elsewhere fight corruption in all its forms. This commitment
extends well beyond its financial involvement in a project. Corruption
hurts the poor most of allówhether it involves official aid, private
investment, or the use of taxpayers' own money in developing countries.

-###-
Media Contacts: In Washington  Richard Uku  1 202  473-3432
                           : In Pretoria Happy Nkhoma  27 12  342-3111
To obtain project documents please contact the World Bankís Infoshop at
tel: (202) 458-5454, fax: (202) 522-1500, email: pic@worldbank.org

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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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