WRITTEN QUESTION P-3211/02 by Antonio Di Pietro (ELDR) to the Commission. Corruption in Lesotho.
Date: 2002-11-05
Institutions: European Parliament, Provisional data
Subjects: EU aid, Lesotho, award of contract, corruption, criminal law, financial aid, fraud, hydraulic works, legal expenses

C 137 E/174

Official Journal of the European Union

EN

12.6.2003

the Commission can approve aid of up to 100 % of the losses caused by a natural disaster. In accordance
with Council Regulation (EC) No 659/1999 (3), the Commission must reach an initial decision on notified
State aid within 2 months of receipt of the notification, although in practice the Commission will aim to
approve this type of aid more quickly.

(1) COM(2002) 514 final, on 18 September 2002.
(2) Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund,

OJ L 311, 14.11.2002, p. 3.

(3) OJ L 83, 27.3.1999, p. 1.

(2003/C 137 E/198)

WRITTEN QUESTION P-3211/02

by Antonio Di Pietro (ELDR) to the Commission

(5 November 2002)

Subject: Corruption in Lesotho

On 17 September of this year the High Court in Lesotho convicted Acres International, a large Canadian
engineering firm, of paying bribes in order to win contracts put out to tender at international level in
connection with the Lesotho Highlands Water Project (LHWP), and on 28 October it imposed a fine of
Maloti 22 058 091, the equivalent of USD 2,1 million.

Many other companies based in EU Member States are accused of corruption in connection with the
Lesotho project, and the German Lahmeyer International company is currently on trial. The European
Investment Bank (EIB) and the European Development Fund (EDF) were involved in financing the project
with grants and loans to the tune of EUR 122,5 million and EUR 59,8 million respectively. Export credit
agencies from four EU Member States are also involved in financing the project.

According to the World Bank, on 16 November 1999 representatives of the EIB and the EU took part in a
meeting of project donors in Pretoria to discuss the implications of the corruption case in Lesotho.
According to a report published in the respected South African Business Day newspaper on
30 November 1999, the EU had pledged to provide representatives of the Lesotho government with
financial assistance to cover the costs of the trial.

In view of the historic precedent set by the Lesotho government in the fight against corruption at
international level and the exemplary conviction of Acres International,

(cid:1) Does the Commission intend to honour the promise of financial support for the government of

Lesotho to enable the corruption case to be carried to its conclusion in the High Court?

(cid:1) Does the Commission intend to check whether the EDF and the EIB showed due diligence in relation

to the grants and loans granted in connection with the Lesotho Highlands Water Project?

(cid:1) Does the Commission intend to make every effort to ensure that companies found guilty of corruption
are excluded from any future projects financed by development assistance and Member States’ export
credit agencies or with funds from EU institutions?

Answer given by Mr Nielson on behalf of the Commission

(7 January 2003)

The case, to which the Honourable Member refers, concerns a large construction project in Lesotho which
was co-financed by the European Development Fund (EDF) together with several other international
donors.

The question regarding the possible reactions of the export credit agencies of the Member States and
regarding eventual sanctions taken by the European Investment Bank is outside the scope of
the
Commission’s competencies.

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Official Journal of the European Union

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Since the questions refer to ongoing criminal court cases, the issue should be considered carefully with due
regard for the right of defence of the companies and persons involved and the presumption of innocence.

The Honourable Member refers to a promise which the Commission should have made to finance the
costs of the Lesotho court case. For this, the Honourable Member bases himself on an article published in
a South African newspaper.

The Commission can not confirm that any such promise was ever made.

In addition, the present case is pending before a criminal court handled by the Public prosecutor. It would
seem to be falling outside the EDF’s mandate to finance a particular criminal law suit against particular
individual companies.

With regard to the specific company to which the Honourable Member refers, the Commission should
further point out that the contracts awarded to this company were not financed by the EDF, but by other
donors.

In the first part of 2000, the Commission engaged independent auditors to examine whether EDF funds
had been misused. They were asked to analyse whether the awarding of the contracts, riders, variation,
orders, etc had been executed properly, or might have been biased to favour certain contractors.

The general conclusion from this audit was that it was not possible to demonstrate that there had been a
direct misuse of EDF funds. The audit revealed that even if there had been any misuse, for the EDF such a
misuse was not likely to be large; since the EDF funding was topped at a fixed amount, the principal victim
of any misuse seemed to be the Government of Lesotho, who had to finance any expenditure not covered
by the donors.

The European Anti-fraud Office (OLAF), is fully informed about this case.

The general conditions for contracts financed by the European Development Fund entitle the contracting
authority to terminate the ongoing contract in which corruption is detected and to recover any contractual
loss it has suffered. Since within the framework of the European Development Fund, the Commission is
only acting as donor, such a decision formally belongs to the contracting authority of the Beneficiary State.

Moreover, the procurement rules foreseen in the different external aid instruments of the Union, impose
that natural or legal persons which have been convicted for corruption by a final judgement, are excluded
from future invitations to tender or from future contracts.

For the contracts concluded for the Commission’s own benefit, similar rules are laid down in the
Procurement directives.

The Union procurement rules for external aid provide that before a contract can be concluded, a tenderer
must submit satisfactory evidence that he is not in a situation of ineligibility. Therefore, if a natural or legal
person is convicted for corruptive practices by a final judgement, the tenderer will not be able to produce
such a certificate and will automatically be excluded from participation in Community financed contracts.

(2003/C 137 E/199)

WRITTEN QUESTION P-3215/02

by Patricia McKenna (Verts/ALE) to the Commission

(6 November 2002)

Subject: Indiscriminate use of poisonous spray (malathion) in the citrus-growing areas of the Valencia

Region

Since July 2002 the citrus-growing districts of the Valencia Region, which in practice cover all the land at
an altitude of less than 300 metres (La Ribera Alta, La Ribera Baja, La Foia de Buñol, La Costera, La Safor,
La Canal, L’Horta, El Camp de Morvedre, La Marína, La Plana, etc.) and are precisely where most of the
population live, are being sprayed from the air with malathion. The fields are sprayed quite
indiscriminately, without regard for other crops growing between them, such as vegetables and rice,