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

Scandal Highlights Urgency of Implementing OECD Convention Against International Corruption

Issued by Transparency International Secretariat



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: .(JavaScript must be enabled to view this email address)


Mr Jeremy Pope, Executive Director
at our London office
Tel.: +44-171-610 1400
email: .(JavaScript must be enabled to view this email address)

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

Latest

Support Transparency International

The theme for the 18th edition of the International Anti-Corruption Conference (IACC) is announced

Building on the priorities set out in the Panama Declaration, the 18th IACC in Denmark from 22 to 24 October 2018 will move the pledge of acting together now to concrete action.

A new home for our corruption research

Transparency International is excited to announce the launch of the Knowledge Hub, a dedicated online space for our research.

Pardon me? Presidential clemency and impunity for grand corruption

Recent events in Brazil and Peru have shone a spotlight on the issue of presidential pardons in cases of grand corruption. Read more to find out the best practices that legislators can use to ensure that pardons are not abused for political purposes.

Stopping Dirty Money: the Global Effective-O-Meter

As of December 2017, global effectiveness at stopping money laundering stands at 32% effectiveness.

Corruption in the USA: The difference a year makes

A new survey by Transparency International shows that the US government has a long way to go to win back citizens’ trust.

Anti-Corruption Day 2017: Empowering citizens’ fight against corruption

The 9 December, is Anti-corruption Day. A key part of Transparency International’s work is to help people hold their governments to account. Have a look at what we've been doing around the world!

Digital Award for Transparency: Honouring digital initiatives to fight corruption

The Digital Award for Transparency awards individuals and civil society organisations who have developed digital technology tools used to fight corruption. The award aims at strengthening and promoting existing initiatives that promote good governance through three categories: Open Data, Citizen Engagement and Anti-Corruption Tools.

Social Media

Follow us on Social Media

Would you like to know more?

Sign up to stay informed about corruption news and our work around the world