Canadian Consulting Engineer

Acres convicted of bribery – vows to appeal

Acres International, a large and long-established consulting engineering firm based in Niagara Falls and Oakville,...

September 18, 2002   Canadian Consulting Engineer

Acres International, a large and long-established consulting engineering firm based in Niagara Falls and Oakville, Ontario, has been convicted of two counts of bribing an official in charge of a huge water diversion project in Lesotho, Southern Africa.
The firm says they will appeal the decision, which was announced September 18 in the Lesotho High Court, in Masaru, the country’s capital. Acres said it was “shocked” by the decision, and noted that it sets a dangerous precedent for other engineering companies who do business in developing countries. The case is said to be a landmark case because it is the first time an international company has been convicted of bribery by a foreign country.
The payments in question were made by Acres between 1990 and 1997 into the Swiss bank account of its local agent in Losotho, a Mr. Zaliswonga Bam. Mr. Bam, now deceased, passed on a portion of the money to the former director of the Lesotho Highlands Water Diversion project, Mr. Masupha Sole. Sole, who obtained his engineering degree in Canada at Carleton University, was convicted in June of accepting bribes in return for awarding lucrative contracts, and sentenced to 18 years in jail.
Acres has been involved in the Lesotho water diversion scheme for several years. The project is a 30-year endeavour to divert water and generate electricity for South Africa in return for royalties. Lesotho is an impoverished mountain country of 2 million people.
Acres denies wrongdoing and maintains that it was simply following normal practice and advice from world bodies in employing Bam as its local agent to look after its affairs in a developing country. The company suggests that paying funds into a Swiss bank account for Bam did not raise any red flags because it is a normal practice when dealing with unstable countries. It says no-one in the company had any knowledge that payments were being forwarded on to the water diversion project’s director.
Sentencing of Acres is expected in early October, after which a company spokesperson said that Acres will appeal the decision. Several other large international engineering firms are awaiting trial for similar charges — one is Germany’s Lahmeyer International, and the other France’s Spie Bitignolles.
Probe International, a non-government organization which has been highly critical of Canadian consulting engineers involved in building large dams and water projects in developing countries, questions whether Canadian government agencies like Export Development Canada and Canadian International Development Agency should continue to give financial backing to firms who have been convicted of corruption.
In its upcoming October-November issue, Canadian Consulting Engineer will publish a full statement made by Mr. Oskar Sigvaldason, chairman of Acres International, in which he sets out his firm’s position on the corruption charges.


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