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dam-l Guardian article - ECGD and Lesotho corruption charges/LS


Dear Friends,

Please find below an article that appeared in The Guardian on the bribery
charges against UK companies involved in the Lesotho Highlands Proeject,
which was backed by the UK Export Credits Guarantees Department. The ECGD
recently denied to a parliamentary select committee that the firmjs were
being prosecuted. This led to a formal complaint being lodged by The Corner
House, as reported in the article. One of the firms, Balfour Beatty, is
currently seeking an ECGD credit for the Ilisu dam in Turkey.

             British firms on bribery charges
            £1.2m allegedly paid to head of dam project in Lesotho
            David Hencke, Westminster Correspondent
            Thursday February 17, 2000
            Three British companies are to be prosecuted next May in the
world's biggest case of alleged overseas aid bribery, involving a £1bn
            project funded by taxpayers from Britain, France, Canada,
Germany,  Italy and Sweden.
            The prosecution involving a hydro-electric dam project in
Lesotho in southern Africa follows the arrest of its chief executive after
            allegations that he accepted £1.2m in bribes over a decade from
            firms building the scheme.
            One British company, Gibb Ltd - formerly Sir Alexander Gibb and
            Partners - based in Reading, has been charged with bribery and
            corruption. Two others, Balfour Beatty and Kier International,
have been charged as members of two consortiums, the Lesotho
Highlands Project Contractors and the Highlands Water Venture, which built
the scheme.
            All three companies strenuously deny the charges. A spokesman
for Balfour Beatty said yesterday that the lead finance company in
its  consortiums was run by the French company, Spie Batignolles. "We
and  all the contractors in the consortium on the scheme strenuously
deny  any involvement in this. As far as we are concerned all the
            procedures were rigorously applied."
            The allegations come at an embarrassing time for the British
            government because Tony Blair has backed an application for a
£200m  export guarantee from Balfour Beatty to head the consortium to
build the controversial Ilisu dam in Turkey. This is opposed by the
Arab  League, human rights groups and environmentalists, as well as
three  cabinet colleagues. Balfour Beatty was also named last week by
the  department of environment as part of a consortium for
reconstruction
            contracts after the Turkish earthquakes last year.
            Sixteen bribery and corruption charges have been laid against
the companies in the court action which followed the seizure of
Swiss  bank records.
            These were handed over to Lesotho's director of public
prosecutions by the Swiss authorities to pursue criminal charges against
Masupha Sole, former chief executive officer of the project.
            The companies charged are Acrtes International (Canadian); Coyne
et Bellier, Sogreah, Spie Batignolles and Dumez International (all
            French); ABB and Lahmeyer International (German); Abb (Swedish);
            Universal Development Corporation and Electro Power Corporation
            (Panamanian); Associated Consultants and Project Managers
(Lesotho)  and Sir Alexander Gibb and Partners (British).
            Highland Water Venture and Lesotho Highlands Project Contractors
            were also charged. They include British firms.
            The World Bank, which has a £100m stake in the project, and the
            European Union have agreed to part-finance the prosecution of
the  companies - which face being barred from World Bank projects if
            found guilty.
            Charges against Mr Sole alleged he took bribes in French francs,
            Canadian dollars, deutschmarks and South African rand.
            The disclosure of the charges against the companies yesterday
was an  embarrassment to Vivien Brown, chief executive of the department
of trade and industry's export credit guarantee department, which
            underwrote the British companies behind the project.
            Only last week Mr Brown denied to MPs on the Commons
international
            development select committee that the companies had been charged
at  all. He told Piara Khabra, Labour MP for Ealing, Southall: "It
is  not true that Balfour Beatty have been prosecuted.
            "There are inquiries which are being undertaken by the Lesotho
            authorities at present into the way in which business was procured."

            A formal complaint has been made by the environmental expert
Nick Hildyard to the international development committee about the
            misleading evidence given by ECGD to MPs.
            Ann Clwyd, Labour MP for Cynon Valley, described the situation
as   "very disturbing".


            Guardian Unlimited © Guardian Newspapers Limited 2000

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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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