Namibia’s National Society for Human Rights (NSHR) is deeply alarmed by credible allegations of systematic arbitrary deprivation of liberty taking place in the mountain Kingdom of Lesotho. According to the Lesotho Council of NGOs (Lecongo) the situation directly results both from unlawful actions by law enforcement officials and systematic interference in the affairs of the judiciary.

The former top Lesotho official on the Highlands Water Commission, now an influential adviser on water matters with The New Partnership for Africa’s Development, has been charged with bribery involving over R1-million. This is the latest in a series of bribery and corruption trials connected to lucrative contracts around the Lesotho Highlands water scheme and the building of the Katse Dam.

The termination of the Multi-Fibre Arrangement (MFA) on 1 January 2005 has had a devastating impact on the fragile, emerging, textile economies of many African countries. In Lesotho, for example, in the period between January and June 2005 at least 10 textile factories shut down, leaving over 13,000 people jobless, a huge figure for that small country of some 2.2 million inhabitants (and where the textile industry employed some 54,000 people before the ending of the MFA). Daniel Maraisane, the General Secretary of the Lesotho Clothing and Allied Workers' Union (LECAWU), has been leading the trade union struggle for over 20 years. He discusses the impact of the ending of quotas on Lesotho's workers and gives some insights into the role of trade unions in Africa.

The African kingdom of Lesotho, a nation afflicted by one of the worlds worst AIDS pandemics, is to become the first country in the world to offer HIV tests to its entire population. Its ministers and public health officials will announce a 12 million (7 million) programme this week to test the 1.9 million people living in the mountainous enclave within South Africa for the human immunodeficiency virus. In a groundbreaking move for African healthcare, King Letsie III of Lesotho is likely to become the first monarch to take the test publicly.

The government of Lesotho is to offer free HIV testing to all its citizens in a bid to reverse the spread of Aids. In what is believed to be the first programme of its kind in the world, every villager in the tiny, mountainous kingdom will be offered a test. Under the scheme, local leaders will be consulted on how best to offer HIV tests to everyone.

The Media Institute of Southern Africa (MISA) Lesotho has acted decisively to ensure that public and private media have equal access to public information about the upcoming Commonwealth Speakers' Conference in Lesotho starting on 2 November 2005. On 31 October, media houses in Maseru - which include the Lesotho Defence Force Public Relations Office, the South African Broadcasting Corporation (SABC), Southern African Press Association (SAPA) and Agence France-Presse (AFP) - were refused information at the National Assembly of the Kingdom of Lesotho about the Commonwealth Speakers' Conference. The reason given by the authorities was that the information would first be transmitted to the government-owned and controlled Radio Lesotho before being transmitted to the independent media.

Lesotho's vast, controversial highlands water transfer scheme to South Africa took a step forward on Sept. 22 when ministers from both governments ratified the appointment of consultants to plan the next phase. While people displaced by the first phase agitate for compensation in the Lesotho capital, Maseru, the plan is facing tough competition from other water resources in South Africa. The phase two plan calls for the new 155-m-high Mashai dam and upgrading of the first phase Muela hydropower plant. And it includes 101 kilometers of new transfer tunnels to the Vaal River. But now that the demand for electricity is on the rise again, the next phase could be changed to emphasize generating capacity, says Peter Pyke, chief engineer in charge of analyzing options at South Africa's Dept. of Water Affairs and Forestry (DWAF) in Pretoria.

In September, while the World Bank and International Monetary Fund prepared for meetings in Washington, 500 people marched in Maseru, Lesotho to protest the effect of the Lesotho Highlands Water Project (LHWP) on their livelihoods. One of the World Bank’s biggest projects in Africa, the LHWP pipes scarce water to South Africa and has been touted as a major development boost for the tiny mountain kingdom. But while South Africa benefits from the water, the project has been dogged by controversy, including the displacement of thousands of people. Now there is the possibility that new phases of the dam development could cause further hardship. Pambazuka News interviewed Jacob Lenka of the Lesotho NGO Transformation Resource Centre, which works with affected communities to enable them to express their needs and monitors the resettlement process.

PAMBAZUKA NEWS: What exactly is the plight of those people who have been displaced by the Lesotho Highlands Water Project (LHWP)? How many people are involved?

JACOB LENKA: The plight of the Lesotho communities affected by LHWP is that they were not sufficiently consulted when the Project began. Of critical importance is that the communities were not compensated with land for land, they only received cash compensation. These communities are used to production from the soil. They were not again told about their rights vis-a-vis the Project; their right to water and development. The phase 1A has affected about 27,000 people while phase1B has displaced about 370 households, excluding those other people who have been affected in different ways than by displacement.

PAMBAZUKA NEWS: Apparently part of the development treaty was that people displaced by the project should be taken care of and that "the standard of living of all people affected by the implementation of Phase 1B should not be compromised and where possible improved'”. Why hasn't this been met? Who is responsible for the failure?

JACOB LENKA: Yes, the following articles within the Treaty talk about the improved standard of life for the affected: article 7(para.18); article 15 and LHDA order of 1986, section 44(2). Yes, the communities have been compensated for the property lost to the project, but as said above compensation was not sufficient. The have not been compensated with land, and they do not have rights to water and development, at least, these communities have not been made aware of these rights. After resettlement they can no longer send their children to school; they cannot feed and send their children to clinics; they were able to do these things before resettlement. This is real poverty and disempowerment. They also have not been trained and provided with sustainable training that would help them beyond compensation. The compensation that comes to them often comes late.

PAMBAZUKA NEWS: What is public sentiment in Lesotho about the LHWP? How do people feel about water being sold to South Africa while they suffer from drought and food shortages? And what is the level of awareness about those who have been displaced and their plight?

JACOB LENKA: Many people here are farmers. They will certainly want to have water for food production as well as water for drinking. Studies show that Lesotho will be water stressed in the next 25 years. Communities want water for irrigation. They want phase 2 to include component of development through water on the Lesotho side.

PAMBAZUKA NEWS: More dams are going to be built as part of the project. What is the anticipated effect of any new dams on resident communities?

JACOB LENKA: The level of awareness amongst the affected communities is high. They have already formed their own civic organization; it is called Survivors of Lesotho Dams (SOLD). However, this level of consciousness does not translate into stoppage of the building of more them in Lesotho. The advice of the communities already affected to those who would be affected by phase 2 is that the latter should demand all compensation and resettlement packages before work starts, because once the work has started, the many promises are lost; the authorities often renege on these promises.

PAMBAZUKA NEWS: What lessons does the Lesotho Highlands Water Project hold for the rest of Africa?

JACOB LENKA: TRC is working on a booklet with partners. The booklet will reflect the experiences of TRC field workers as they were monitoring the Project. These experiences will be lessons for affected communities world-wide, the dam financiers and the NGOs. One lesson that Lesotho has stolen the show about is the prosecution of international companies that were involved in corruption in the Lesotho dams. Perhaps this will be a lesson for Africa in terms of what a small state can do to the giants.

* Interview conducted by email. Please send comments to [email protected]

As the world's financial leaders gathered in Washington for the annual meetings of the World Bank (Sept. 24-25), help for Africa was high on the agenda. But the Bank's biggest dam project in Africa, the Lesotho Highlands Water Project (LHWP) – sold as a way of pulling Lesotho out of poverty while supplying water to South Africa – is, according to the Bank itself, failing those who sacrificed everything for the project. Poverty is increasing in communities directly affected by the scheme's dams, and project-affected people are resorting to marching in the streets of Lesotho's capital to call attention to their plight.

Pact Inc., with funding from the U.S. Government through the USAID Regional HIV/AIDS Office (RHAP) in South Africa, is pleased to announce the availability of funds to strengthen the civil sector response to the HIV/AIDS epidemic in Lesotho. Pact Inc. will make funds available for HIV/AIDS projects in Lesotho and to assist with providing capacity-building to the civil sector and participating organizations.

More than 90 percent of the votes have been counted in Lesotho's local government election and the ruling party is set for victory, the Independent Electoral Commission (IEC) said on Tuesday. IEC spokesman Rethabile Pholo gave no breakdown of voting patterns and said more results were expected on Wednesday. "The results from 124 of the 129 councils have already been determined, and we can say that the ruling party [Lesotho Congress for Democracy] has so far been on top. We are awaiting the outcome of the remaining five councils and then we will release a statement explaining the results in detail," Pholo told IRIN.

The director of an international company that took part in the construction of the Lesotho Highlands water project is to be charged with paying a R1 million bribe to a top water commission official. Raymond Stock, a Lahmeyer International director, allegedly paid the money during the period of 1996-99 to Reatile Mochebelele, the then head of the Lesotho Highlands Water Commission.

Lesotho's government aims to give women full legal equality and property rights within a year in one of the handful of African states where women remain legally inferior to men. Women in the mountainous kingdom - one of the world's poorest countries and entirely circled by South Africa - can vote, work and hold public office, but they are legally minors, subordinate to their husbands or fathers.

The preliminary findings of a study on child domestic workers in Lesotho, forced onto the job market by poverty and HIV/AIDS, has uncovered the sometimes "highly abusive nature" of their relationship with employers. Commissioned by the UN Children's Fund (UNICEF), in collaboration with the Ministry of Gender Youth Sport and Recreation, the survey "revealed the serious challenges imposed upon children, as they become more and more reliant on various forms of labour to sustain their poverty- and HIV/AIDS-stricken families," a UNICEF statement said.

An estimated 15% of infants in Lesotho are born HIV-positive or contract the virus soon after birth, according to a report released on Wednesday by the Lesotho government and UNICEF, the SAPA/Business Day reports. The report, which is a mid-term review of the government and UNICEF's 2002-2007 joint program, also said that an infant born to an HIV-positive woman in Lesotho has a 25% to 35% chance of contracting HIV during delivery or through breastfeeding.

Italy's biggest construction company, Impregilo, has been hauled before the Lesotho High Court as authorities launched their sixth corruption prosecution relating to the multibillion-dollar Lesotho Highlands Water Project. And as if taking on one corporate giant was not enough, the latest court indictment also links multinational giant Fiat, through its shareholding, to bribery claims.

Starting in the year 2000, free primary education has been rolled out each year in Lesotho and it is starting to revolutionize the country’s youth. At school, children are taught life skills and HIV/AIDS education and are given two meals a day through the World Food Programme’s school-feeding programme. At the Katlehong primary school, in Thaba Tseka, the schoolyard is jam-packed with over 150 chattering children, girls and boys, small and big. All of them had lost one or both parents to HIV/AIDS. Many of the children are heading households themselves.

Since February, Lesotho is in a state of emergency due to three years of drought, hunger and a dramatic increase in HIV/Aids cases. On the other, surprising side, however, Lesotho is experiencing an economic growth well above the African average. For several years, the deepening of the country's humanitarian crisis has been paralleled by a strong GDP growth.

In 1986, The Lesotho Highlands Water Project (LHWP) was set up between the governments of Lesotho and South Africa as a multi-billion rand infrastructure project designed to control the flow of the Senqu/Orange river and in doing so provide water for the people of Gauteng province, and electricity and money for the people of Lesotho.

Corruption concerns first surfaced in 1993 when a civil government was elected in Lesotho. The government commissioned an audit of both of the parastatal bodies which shared responsibility for the project. The audit revealed obvious and substantial administrative irregularities within the Lesotho Highlands Development Authority (LHDA). After an audit of its chief executive officer, Masupha Ephraim Sole, Sole was then subjected to a disciplinary enquiry, and subsequently he was dismissed.

The investigations had revealed that Sole was clearly living far beyond his means: his housing, cars, holiday arrangements, and instances of nepotism were the obvious indicators. Civil proceedings were instituted to recoup the funds which had been misappropriated by Sole. Civil proceedings began in 1996 and produced evidence of bank accounts that included accounts with the Union Bank of Switzerland.

In August 1997, the Lesotho government applied to the Swiss court for disclosure of a number of Swiss bank accounts, including those belonging to Sole. The application was resisted by a number of the contractors/consultants working on the LHWP, but in early 1999, bank records were handed over. Those which belonged to Sole indicated that he had received millions of maloti for which he offered no explanation. Civil proceedings concluded in October 1999, with judgment given against Sole for the sum of 8.9 million maloti. His appeal, in April 2001, failed.

The bank records obtained from Switzerland indicated that throughout the lifetime of the project, Sole, using ‘middlemen’ or intermediaries, had indirectly received vast sums of money from certain companies and consortia who had been awarded contracts in the project. The patterns, size and timing of the payments gave rise to the notion that bribery had taken place on a massive scale.

The Lesotho government now decided to prosecute Sole as well as many of the corporations and members of consortia who had made secret payments into various Swiss bank accounts, together with the intermediaries who acted as conduits. In December 1999, 19 defendants were charged with bribery. Sole also faced charges of fraud and perjury. Seven of the defendants failed to attend this initial hearing.

By February 2001, the landscape had altered substantially. The court had ruled that the defendants should not be tried together, and a long programme of trials of individual defendants began with that of Masupha Ephraim Sole, on 11th June 2001. He was charged with 16 counts of bribery and two of fraud. During his trial, Sole chose not to give evidence. Evidence which had been gathered for the civil proceedings was now used to show that he had lied repeatedly in denying the existence of any accounts in Zurich. Such accounts existed, and showed a complex pattern of payments which had been made indirectly to him by a very large number of the contractors and consultants at work on the LHWP.

In a comprehensive judgment, finding Sole guilty as charged, Acting Judge Cullinan, a former Chief Justice of Lesotho, observed that the patterns of payments which had emerged during the trial had arisen from transactions which ‘inextricably bound together’ the defendant consultants/contractors, the intermediaries, and Sole himself. Sole was subsequently imprisoned, for eighteen years, reduced on appeal to fifteen.

The trial of Acres International, the Canadian engineering company, now followed. Prior to the criminal proceedings, the World Bank had begun debarment proceedings against Acres and Lahmeyer, a German engineering consulting firm, both of which had received funding from the Bank for the contracts. It is worth noting that the evidence of secret payments into numbered Swiss accounts was not deemed to amount to sufficient grounds for the debarment of the companies at that stage. Acres continued to apply for, and receive, funding for projects from the Bank. However, the Bank reserved its position, saying that it would reopen debarment proceedings if new evidence against Acres were to emerge from the criminal proceedings.

It was alleged that Acres had made payments to Sole through the offices of Zaliswonga Bam, one of three intermediaries originally identified. Bam had died of a heart attack in 1999. Although he was, at the relevant time, working for a housing association in Botswana, Bam and his wife had numbered Swiss bank accounts into which money was put by Acres amongst others and a proportion of which was then placed in one of Sole's many accounts.

Acres had to accept that it had made payments to Bam; the company argued that such payments were customary practice, and had been made pursuant to the ‘representation agreement’ it had made with Bam for services rendered by him to the company in his capacity as its agent or representative. With little evidence to substantiate their case, Acres argued that Bam had performed such services, that payment of such sums of money was commonplace in such circumstances, that nothing adverse should be inferred from the fact that the payments were made in such secrecy, and that in any event, the company had had no idea whatsoever that Bam was making payments to Sole.

The company comprehensively failed to convince the judge of the virtue of these arguments. In a colourful and literary judgment, Judge Lehohla concluded that in the light of the established relationship between Acres and the LHDA, Acres’ personnel were so embedded in the LHDA that there was simply no need for a ‘representative’. Bam's ‘representative’ status with Acres was not public knowledge, neither was it generally known that Bam was on the payroll of other companies working on the LHWP. The judge could see no evidence to show what services Bam performed, nor why he performed them, particularly in the light of the work he was doing at the material time. The judge concluded that the representation agreement was a sham, that Acres had benefited from bribing Sole, to the detriment of its competitors, and that the company was therefore guilty as charged.

Acres was convicted, and sentenced to a fine of CAD3.8M. The company refused to accept the ruling of the court, suggesting that the Judge had not been up to the job, that the trial had been unfair, and that this error would be corrected in the Appeal Court. Acres then lost its appeal. At the time of writing, the company, pleading poverty, has paid a little under half of the fine which was imposed upon it by the Court of Appeal.

After the appeal hearing, debarment proceedings were recommenced by the World Bank and in August 2004 the Sanctions Committee debarred Acres from applying to the Bank for financial support for a period of three years. Shortly before the Sanctions Committee gave its ruling, the company was bought by a larger corporation, Hatch. The implications for Hatch's dealings with the World Bank remain unknown.

A trial against Lahmeyer followed the same pattern as the Acres' proceedings, as did the appeal; and it is anticipated that a similar pattern of events will flow in the debarment proceedings with the World Bank, although one cannot predict the view of the Sanctions Committee. Proceedings have now been instituted against Impregilo, an Italian company, with the first hearing timetabled for October 2004. Evidence is now being gathered against others.

Conclusions

Whilst these trials have earned Lesotho a unique place in legal history, it has been an expensive business. At an international level, many have expressed their admiration for the determination which the Attorney General has shown in proceeding with these difficult cases, and for the tenacity of purpose in the prosecutors, without whose sustained efforts the trials would simply not have been possible. No financial support for these trials has been forthcoming from outside the country. Many institutions and governments promised financial support at the outset of the trials, but none has yet been forthcoming. A conclusion drawn by some in Lesotho is that institutional support for a prosecution may be lacking from a country where the defendant company is registered, and where there may be a corresponding conflict of political interest.

Many of the legal aspects of corruption have now been thoroughly and recently tested in the Lesotho courts. In particular, there is now clear, developed common law jurisprudence on the questions of jurisdiction (where the matters can be tried) and citation (with regards whether a company has a legal personality). In addition, the definition of bribery has been further refined to ensure that equal resonance accrues to the two parts of the offence - netting both the bribee and the briber.

From the perspective of the international community, these trials pose challenges to Parties to the OECD Convention on Combating Bribery about the ways in which corruption is detected and punished in different parts of the world. Canadian lawyers have expressed doubt as to whether Acres would have been prosecuted in Canada. The high moral tone taken throughout by Acres, which has, throughout, been disinclined publicly to express remorse for its actions, might have deterred a decision to prosecute. Lahmeyer could not be prosecuted under the provisions of German criminal law in any event, since corporate offences are dealt with under administrative law only, punishable by means of fines.

With regards the international financial institutions, Judge Steyn gave the clearest indication of the Court's view of their role in his ruling in the Lahmeyer appeal:

‘…that it will revisit its practices and procedures in general, but for present purposes, more particularly the practice of the employment of representatives who can play the obfuscating role played so frequently in this mammoth project. But also, that it will be firm and resolute in enforcing its disciplinary proceedings on any agency, company, individual or institution who participates in the practice of bribing those employed on development projects.’

In terms of the Acres debarment, the company has been debarred for three years. The period of debarment is shorter than it might have been, because the Sanctions Committee took into account the fine which had already been imposed by the Lesotho courts, and the fact that those who had been responsible for the bribery no longer worked for the company. The Bank has conducted its own inquiry into corporate corruption in Lesotho: its procedures are not vulnerable to judicial scrutiny. However, the trials in Lesotho have been subject to such scrutiny at every turn; they have effectively provided the World Bank with the materials used in its debarment proceedings. The decision of the World Bank to debar Acres has been heralded as a clear indication from the Bank that it means business, in excising corruption from its lending practices. Responses to the debarment of Acres have yet to emerge from other IFIs. There can be no doubt that mutual debarment could become an ultimate deterrent to a company considering the bribery of a foreign public official.

* Fiona Darroch is a barrister at law, in practice at Hailsham Chambers, London. Part of her practice is in international environmental and human rights issues, and she has been following and writing on the Lesotho corruption trials for two years.
* A group of lawyers based in Durban and Roma have begun an initiative which will assist people in the region of the Lesotho Highlands Water Project who have been displaced by the project and who are still suffering the ill-effects. For further information please email Nikki Evans at [email][email protected]

* Please send comments to [email protected]

On 18 August 2004, the "Mirror" newspaper, a weekly English tabloid, was served with a rescission order providing for the return of all its computer equipment by the sheriff of Lesotho's High Court. This follows the seizure of the newspaper's computer equipment after being served with a writ of execution in a civil defamation case.