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International Construction Companies Bribe Top Official in Large Dam Project for South Africa

Scandal Highlights Urgency of Implementing OECD Convention Against International Corruption

The involvement of more than a dozen leading European and North American construction companies in a large-scale corruption scandal in South Africa and Lesotho illustrates the urgency of swift implementation of the landmark OECD Convention against international corruption, Transparency International (TI) has urged. The firms are alleged to have bribed the CEO of the 10 billion Rand Lesotho Highlands Water Project (LHWP) with the sum of 12 million Rand (approx. 2 million Euro) during a 10-year period. All the implicated companies are from countries that have recently signed the OECD Convention which makes it a crime to bribe public officials abroad. The companies include Hochtief and Züblin from Germany, the Swiss-Swedish ABB, Impregilo from Italy, Sogreah, Bouygues, Dumez International and Spie Batignolles from France, and Acres International from Canada among others.

While the official in question has been charged by the Lesotho government on 29 July on 14 counts of bribery and fraud, Transparency International explains that for too long there has been a tendency to focus solely on the recipient of bribes. "Both bribe payer and recipient are defrauding the public, wasting resources and hindering development," noted TI Chairman Dr Peter Eigen. "There is no doubt that the international firms involved deserve censure," continued Eigen. "Moreover, these will have to deal with the commercial fall-out, as rivals will use the fact that they have been caught bribing as a reason why others should refuse to do business with them. This illustrates the heavy price in the long-term for what was essentially a short-term gain," Eigen concluded.

The international anti-corruption organisation urges the authorities in Southern Africa to seek the co-operation of the judicial authorities in Europe and North America in prosecuting the companies involved. Dr Eigen stressed "We are also pleased that the South African government intends to accede to the OECD Convention so that it can play a significant role in extending the scope of the Convention and help protect itself and other countries in Africa and elsewhere from similar incidents."

Background information:

The Lesotho Highlands Water Project is aimed at securing the water supplies of the Johannesburg region, South Africa's economic heartland. What makes the LHWP bribery case particularly sensitive is the fact that South Africa is the official host of this year's International Anti-Corruption Conference scheduled to take place in Durban from10 to 15 October. Another delicate issue is the involvement of the World Bank in the project through a US$150 m grant. According to the World Bank procurement guidelines, firms "engaged in corrupt or fraudulent practices in competing for, or in executing, a bank-financed contract" will be "ineligible, either indefinitely or for a stated period of time, to be awarded a bank-financed contract."


For any press enquiries please contact

Mr Jeff Lovitt, Head of Public Relations
at the TI International Secretariat
Tel.: +49-30-343 8200
email: press@transparency.org


Mr Jeremy Pope, Executive Director
at our London office
Tel.: +44-171-610 1400
email: pope@transparency.org

For further information on the LHWP:
visit the Website of the International Rivers Network at http://www.irn.org