Archived press release

AMEC challenged over bribery cover-up at EGM

5 February 2003

AMEC will tomorrow [Wednesday 5 February, 11am] be challenged by Friends of the Earth at an Extraordinary General Meeting (EGM) to explain its failure to disclose risks over a bribery trial. AMEC is holding the EGM to finalise its acquisition of French company SPIE. Shareholders attending the meeting will ask AMEC to come clean about SPIE's trial over bribery allegations on the Lesotho Highlands Water Project [1].

The LHWP has been the subject of ongoing prosecutions for bribery, and Spie Batignolles is the latest company to be put on trial. In September 2002, in a landmark decision, the High Court in Lesotho convicted Canadian company Acres International of paying $266,000 of bribes to Marsupa Sole, the former chief executive of the LHWP. Acres was later fined $1.6m and plans to appeal. Earlier in the year Sole had been sentenced to 18 years in prison for receiving bribes from multinational companies including Acres, Spie Batignolles and Balfour Beatty. In the final judgement of the Sole case, SPIE was named as having "corruptly offered payments" of the equivalent of approximately $119,000 to Sole [2].

After Acres' conviction, Spie Batignolles was the next company in the dock. Its trial was yesterday (Monday 4 February) adjourned until 15 October 2003.

In its circular to shareholders, AMEC has made no mention of SPIE's bribery trial in Lesotho, and implies either that AMEC has no knowledge of the trial, or that the trial will definitely not have a significant effect on SPIE's financial position. It states:

"[t]he members of the SPIE group are not or have not been involved in any legal or arbitration proceedings (and are not aware of any such proceedings which are pending or threatened) which may have a significant effect on the financial position of the SPIE Group"

Friends of the Earth finds it inconceivable that AMEC knew nothing of the trial at the time the circular to shareholders was printed and does not understand how AMEC can make the above assertion in the light of Spie Batignolles' trial.

If SPIE is found guilty, as well as facing potentially heavy fines, it could be disbarred from World Bank contracts [3].

Hannah Griffiths Corporates Campaigner said:

"AMEC's information on its involvement in the Lesotho Highlands Water Project is about as clear as mud - it has been highly selective about what it chooses to tell its shareholders. SPIE must not be allowed to wriggle out of this bribery charge by changing its management and structure. Unacceptable practices like bribery will just continue to be covered up unless governments introduce better laws to force multinational companies like SPIE and AMEC to take full responsibility for their actions and to be transparent in their communications."

Notes

[1] The LHWP involved a series of large dams. It directly affected approximately 27,000 people and displaced hundreds of subsistence farming households, many of which have never been properly compensated.

[2] Count 3 of Sole's charge sheet, incorporated into the judgement (for which a guilty verdict was delivered) states:

"Spie Batignolles corruptly offered payment(s) to the Accused in return for the Accused exercising his influence/powers in his official capacity for the benefit of Spie Batignolles, to wit in return for the Accused using his opportunities or powers as Chief Executive of the LHDA to further the private interests of Spie Batignolles in its involvement in the LHWP, which offer the Accused unlawfully, intentionally and corruptly accepted."

[3] The World Bank has a policy in place of declaring a firm "ineligible" for World Bank contracts, either indefinitely or for a stated period of time, if the Bank determines that the firm has engaged in corrupt or fraudulent practices.

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Published by Friends of the Earth Trust