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"Human Development Report 2006: Water crisis worse than war
Corruption: The World Bank suspends Lahmeyer
Asia on track for Millennium Goals
12/2006
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[ Corruption ]
The World Bank suspends Lahmeyer
The World Bank has excluded Lahmeyer International, a German engineering company, from World Bank contracts for seven years because of corruption in connection with the Lesotho Highlands Water Project. Lahmeyer is the first German company affected by this kind of sanction. Three years ago, a court in Lesotho had fined Lahmeyer, along with several other international companies, for bribing the LHWP project manager (see D+C/E+Z 10/2003, p. 358). In a first investigation in 2001, the World Bank had been unable to find enough grounds for suspending Lahmeyer. However, the bank resumed proceedings in August 2005 after a court of appeal had confirmed the Lesotho verdict. The company can reduce the World Bank ban to three years, by implementing an ethics programme and enforcing effective anti-corruption measures.
According to media reports, Henning Nothdurft, Lahmeyer’s managing director, said World Bank conditions would be quickly met. Nothdurft estimated that World Bank projects amount to five to ten percent of Lahmeyer’s turnover. He also expressed understanding for the sanctions, admitting Lahmeyer had made mistakes. After Lahmeyer’s conviction in 2003, former managing director Rainer Bothe had belittled the evidence as inconclusive.
Environmental pressure groups welcomed the World Bank’s decision, but complained that it came very late. According to a statement by the International Rivers Network and Environmental Defense, two non-governmental groups, Lahmeyer acquired 18 new World Bank contracts to the tune of almost $15 million since the company was first convicted in Lesotho three years ago, with four of these projects assigned in the past year alone, after the World Bank had re-started investigations. (ell)
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