• (a) (i) that it was not necessary to prove the preciseterms of a covert corrupt agreement;
• (ii) that it was not necessary to prove whether the terms of the corrupt agreement were in fact observed namely whether or not the bribee had exercised or performed in favour of the briber, it being sufficient that the parties entered into the agreement;
• (iii) that if the “paper trail” is uncovered, revealing a pattern of payments, in circumstances where the briber stood to gain from a corrupt agreement, that usually led to an inference of such agreement, namely guilt;
• (iv) that “representative agreements” with (intermediary) third parties might well in all circumstances, be revealed in their true colours;
• (b) and most importantly resolved the difficulty of pursuing covert corrupt agreements and payments, which had possibly (in the case of the agreements) and clearly (in the case of the payments) been effected overseas.

The High Court and thereafter the Court of Appeal, assumed jurisdiction in the matter, on the basis that the crimes involved had impacted upon Lesotho.

All of such issues, and many more were resolved in the Courts of a very small Mountain Kingdom. I respectfully observe, however that the area of the kingdom in no way qualifies the importance of the issues arising in its Superior Courts. Such area does qualify, however, the ability of the kingdom to sustain the heavy financial burden inherent in the protracted litigation involved.

Lesotho then requires the financial support of the world’s banking institutions. Such institutions must surely be seen to be just as determined as Lesotho to stamp out corruption. If Lesotho is not given such support, it creates the world-wide impression that corruption, once again, has won the day, and remains at its endemic best the key to a life of ease and material success. Had Lesotho been favoured with financial assistance that a plethora of well-placed institutions and organisations who promised such assistance from the word go as well as heaping praise on Lesotho for the stance she undertook to prosecute corruption cases, she would have achieved far more success in this endeavour.

I wish seriously to solicit support by the senior management of the Bank on the following issues:

•  Lesotho’s need for donor’s community support;
•  Lesotho’s long standing commitment to overhaul extensively its law and justice institutions;
•  Lesotho’s request for the Bank to take a lead role in coordinating support from the donor community to maximize efficiency by helping Lesotho to press ahead with a holistic reform of its law and justice sector; and
• Lesotho’s request for accessing the Bank’s resources through long distance learning technology.
  I should also emphasize the hope placed by African jurists in the Coalition of African Jurists (CAJ) as a networking institution being established to empower African jurists across the continent to become active promoters and defenders of the rule of law and justice for all in the respective countries. I still remember how warmly this notion of CAJ and all it stood for were received in Abuja, Nigeria in February 2003.

Lesotho’s need for donor community’s support: as a developing country, Lesotho is confronted with two major challenges, i.e., (i) a limited natural resources base and (ii) serious implementation capacity constraints. Keenly aware of these challenges, the authorities are seeking external support from the donor community to complement the meager share of national resources being currently allocated for recurrent costs and investment expenditures for the law and justice sector.

Lest there be unnecessary misunderstanding I wish to point out why Lesotho’s expectations of financial support by the World Bank in the prosecution of bribery cases were keyed up and not out of place.

It is a matter of record that on 17th November 1999, at 10:30 a.m. a meeting was held at Sheraton Hotel, Pretoria in South Africa on what was hailed by the World Bank’s press release as “LESOTHO HIGHLANDS WATER PROJECT FINANCIERS MEET TO EXCHANGE INFORMATION”

Present at that meeting were representatives of fifteen organizations including the World Bank Group, World Bank Group Legal Advisors, Lesotho Government, Lesotho Government’s Legal Advisors, South African Government’s Department of Water Affairs and Forestry, Banque Nationale de Paris, British High Commission, Lesotho, Development Bank South Africa, European Investment Bank, European Union, Lesotho Highlands and Development Authority, Lesotho Highland Commission etc.

The press release above stated in paragraph 4 that “The World Bank remains deeply committed to helping countries in Africa and elsewhere fight corruption in all its forms. This commitment extends well beyond its financial involvement in a project…………”

When the question of funding came up and the Lesotho Attorney General raised his concerns about the financial ruin that this country would suffer in view of the financial war of attrition held in store for it by a battery of lawyers for the corporations accused, the World Bank’s representative for Southern Africa is quoted verbatim as having said to Mr. Maema KC the Attorney General and Mr Penzhorn SC the Prosecution Leader “I want the Attorney General to know that the World Bank has deep pockets.” In plain English, the words quoted and taken in the context in which they were uttered mean a firm commitment to help financially. Indeed, if a gang leader during an otherwise harmless attack by his followers on their unarmed victims were to shout to his followers, “there are the necks so are the knives.” To anyone who is sensible in hearing those words it could not avail the gang leader any escape from liability for instigating the stabbing that followed, on the ground that when he uttered those words, he did not authorise his followers to stab their victims on the necks.

Newspapers and television in countries such as the United Kingdom and the Republic of South Africa, have been critical of the role played by financial institutions in the matter of the Lesotho corruption trials. It seems that such institutions are not necessarily impressed with the convictions recorded in the High Court of Lesotho, and require to conduct their own investigations. That seems to over-look the confirmation of such convictions by a Full Bench of the Court of Appeal of Lesotho. It also over-looks the fact that one accused, an intermediary, and another accused, a giant French corporation, have both pleaded guilty and been sentenced. I am constrained to say that if the corporations convicted in the Lesotho corruption trials continue to receive the endorsement of the world’s financial institutions, the effect of such endorsement will be to send a message to the world of commerce and industry that the old order has not really changed and that corruption happily continues to reign supreme.

The firm stand that Lesotho has taken against prevalence of corruption in her midst leaves no doubt.

The success in achieving this goal has been facilitated by the political will to prosecute cases bearing this particular brand of criminality. The courts in turn on careful consideration of evidence placed before them secured convictions and imposed what they considered to be proper sentences consisting of jail terms or fines.

This was manifested in the high profile cases involving big multinational corporations engaged as contractors or consultants in the massive construction of the Katse Dam under the Lesotho Highlands Water Project created under a Treaty between the Republic of South Africa and the Kingdom of Lesotho. In terms of this Treaty South Africa is to be supplied with water for her needs in the running of various industries situated in the heartland of that country as well as for ordinary slaking the collective thirst of its vast population. Lesotho in turn is to benefit from the hydro-power provided by the project.

It soon emerged that the practice of these multinational corporations was not above board. By means of what are called representative agreements they would engage a local agent ostensibly to perform various services in the country where the contract is sought. Such services range between keeping an ear to the ground on behalf of the corporation regarding the political temperature of the country where the contract is sought and securing offices for the contractor/consultant.

Included among these services is also the obligation to secure the contract coupled to a stipulation that unless the contract is obtained the agent will not be paid. The Court in the case involving the Chief Executive Officer Mr Sole of the Lesotho Highland Development Authority (LHDA) considered such an agreement, particularly where the agent seeks to secure the contract outside the normal bidding process, to be one that has bribery written all over it.

Most significantly two of the trials in the High Court were completed and convictions secured before the denunciations by Mr Bush President of the United States against worldwide corruption by multinational corporations were expressed. By that time in Lesotho vigorous effort to stamp out corporate and other forms of corruption had long been par for the course.

In fact during a visit by President Thabo Mbeki of South Africa to perform an official function with the King of Lesotho of co-inaugurating Phase 1B of the Lesotho Highlands Water Project he is recorded as having said:

“We therefore thank the government of Lesotho for the sterling work which has been done over the past seven years, to confront the malpractices that were uncovered in this project, resulting in successful prosecution of the culprits.

What came out during the judicial processes was that agents of some companies from developed countries were prime movers in spreading the cancer of corruption by enticing officials with huge amounts of money to afford them special favours.

These unfortunate developments have fostered a closer relationship between the prosecuting and law enforcement agencies of Lesotho, the European Union and South Africa. This co-operation also extends to international development agencies such as the World Bank and the European Investment Bank. The manner in which the Lesotho authorities have handled this project has ensured increased investor confidence in present and future major development programmes that are undertaken in this part of the world. We hope that all countries and multilateral institutions such as the World Bank will use the experience accumulated during the long judicial process that took place in this country, to enforce compliance with their own procedures to prevent corruption and bring to book those that engage in corrupt practices.”

Any attempt on my part to seek to improve on the clear and well-articulated statement expressed in the form of hope by the South African President would amount to a high form of imprudence and worthless pomp denounced by Salisbury in King John IV ii as follows:

“To be possess’d with double pomp,
To guard a title that was rich before,
To gild refined gold, to paint the lily,
To throw a perfume on the violet,
To smooth the ice, or add another hue
Unto the rainbow, or with a taper light
To seek the beauteous eye of heaven to garnish,
Is wasteful and ridiculous excess.”

In the Lahmeyer case (unreported) at page 64, in regard to ill-use being made of representative agreements the Lesotho Court of Appeal said:

“One of the devices employed in various cases that served before this Court was the use of representative agreements. They were used extensively as mechanisms through which payments intended as bribes were clothed with contractual respectability. They were in fact, in all cases brought before us, used as cloaks to disguise and obfuscate the money trail. It required intensive research, expensive court procedures across international boundaries and tiresome time-consuming efforts to obtain the necessary information to unravel the complex evidential strands required to determine and thus to provide the necessary evidence. Above all it required political will and the provision of the necessary resources. To their credit the Lesotho authorities did this in full measure. They should be commended for their resolve.”

In sharing the sentiments expressed by President Mbeki above the Lesotho Court of Appeal in the case cited earlier further said:

“The cynical act of bribing officials with large sums of money with the object of obtaining contracts and when necessary variation orders to such contracts, violated the trust reposed in them by all parties involved. In the end, and as a matter of fact, the outcomes were that the bribes were actually paid by LHDA, the international funders and donors.”

It would be worth noting that on the opening day of the trial preceding subsequent separation of trials seven accused did not submit to the jurisdiction of the court and did not attend the trial. Numerous incriminatory aspects were canvassed in all the trials to date. One outstanding feature is that despite alleged obligation of an intermediary to make his best endeavours to secure contracts for his Principal, the thirteen companies involved were nonetheless content to share the services of effectively two such intermediaries, i.e., a married couple and the Frenchman who opened Swiss Bank accounts for the LHDA’s Chief Executive Officer. Michael du Plooy, who pleaded guilty represented but one Principal i.e. one of the accused companies whose trial is in the pipeline. All of this points inevitably to the falsity of the so-called representative agreements. It also makes a mockery of the corporations’ avowed policy against conflict of interests which is necessarily compromised or indeed breached if two or more corporations are served by one and the same intermediary for execution of similar contracts.

There is an exception of one of the companies which made its first payment to the Chief Executive Officer by means of a direct payment, that is, without the assistance of an intermediary and doing him many favours such as paying for his tickets and hotel bills in Moscow as well as entering into unauthorised negotiations with him in Paris.

So far only three corruption cases involving the LHWP out of five have reached the Court of Appeal stage where the convictions were confirmed except with regard to some of the counts; barring which the prosecutions were on the whole a thumping success. The other two cases were finally dealt with in the High Court before which the culprits pleaded guilty and were sentenced. The real break-through having come when Spie Batignolles on 24th February this year pleaded guilty to sixteen counts of bribery involving Millions of Maluti (the Lesotho Currency equivalent of the South African Rand which presently equals about $US 6.53). By agreement with the prosecution Spie Batignolles was fined M10 Million. The break-through was precipitated by a ruling rejecting the claim that the company which had come into the shoes of Spie Batignolles was in fact a different entity from the suspect and had nothing to do with acts allegedly committed by the culprit as set out in the indictment. Clear indication that the Court would have no difficulty lifting the corporate veil brought about that change of heart on the part of the applicant who had moved an application in support of the initial stance it had adopted. In the result true justice was served and enabled to hold sway.

Lesotho’s commitment to overhaul its law and justice sector: for more than a decade, Lesotho has been requesting the Bank to support its efforts to revamp its law and justice sector. Over the last couple of years, Lesotho has faced increased budget pressure resulting from the allocation of substantial public funding required to prosecute numerous cases of fraud and corruption associated with execution of the Lesotho Highlands Water Project. In response to these repeated requests, the Bank decided to respond in a progressive manner. The first phase of the Bank’s response has been to proceed with a comprehensive law and justice sector assessment study (LJSA) which is currently under preparation. The first identification mission for the LJSA was carried out in June 2003; it was followed by a preparation mission held in March 2004. As a result of the March 2004 mission, Lesotho has established a law and justice reform working group (LJRWG) which has been tasked with the responsibility to ensure that the LJSA is fully owned by Lesotho and is prepared in a transparent and fully participatory manner. As of now, 14 Basotho legal experts are developing thematic papers expected to serve as the backbone of the LJSA; preliminary draft papers are to be delivered to the LJRWG by June 30, 2004 for peer review and internal discussion. The authorities have scheduled a national seminar through which the LJSA will be reviewed and endorsed by a cross section of all relevant stakeholders by the end of November 2004; this strategy is designed to ensure that the ambitious law and justice reform program that the authorities are committed to embark upon will be perceived by the Basotho nation as a truly national crusade to foster the rule of law and to promote equitable dispensation of justice for all across the Basotho land.

I would strongly urge the audience to pay special attention to the note of special appeal struck by the Lesotho Courts as encapsulated by the Court of Appeal at its most recent sitting in regard to Lahmayer above as follows:

[64] “ …………… it is also incumbent on the international community and particularly the funding agencies to revisit those practices and procedures it has in place and to use those sanctions it has the power to impose whenever contraventions of the kind proved in respect of this project occur………..

[65] This Court trusts that the funding agencies will have regard to the above comments; that it (sic) 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 frequently, in this mammoth project. But also, that it [World Bank/Donors] 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 project.”

May I point out that while it is normally difficult to establish who of the parties involved initiated the corrupt transaction in bribery there seems to be a perception in the first world that in the context of construction contracts in the third world the initiative comes from the bribe taker rather than the bribe giver. The sort of thing passing off or being considered superficially in African context as “the Africa problem”. This has however not been in evidence in the completed Lesotho prosecutions. The evidence has shown that the LHDA Chief Executive Officer’s first Swiss accounts were opened for him by the intermediary acting on behalf of French Contractors. What then followed were contractors/consultants entering into so-called “representative agreements” with intermediaries in terms of which these intermediaries would perform certain “services” for them in Lesotho. Once these agreements were in place funds were then transferred to the intermediaries and in turn to the Chief Executive Officer’s Account in a patterned proportion of 40% by 60% the bigger share being thus transferred while the lesser remained in the intermediaries’ accounts all of which were kept in Swiss Banks. Quite clearly then the initiative came from the briber and not the bribee.

Request for the Bank to play a lead role as a catalyst for development of Lesotho’s law and justice sector: Lesotho recognizes that over the last decade, and particularly since the Bank adopted the Comprehensive Development Framework approach, the Bank has become a depository of global knowledge in the field of law and justice sector development operations. Indeed, among development aid organizations, the Bank is uniquely positioned to provide an array of seasoned lawyers specializing in designing and supervising implementation of law and justice sector development operations across the developing world. Based on this comparative advantage, the authorities are confident that their ambitious law and justice sector development program would stand a better chance to succeed if the Bank takes the lead to coordinate donor community’s intervention with a view to preventing costly duplications or gross under funding for critical parts of the law and justice sector which will compromise the success of the reform program if they are left out unattended.

Access to global knowledge through distance learning technology: Lesotho’s judiciary is lagging far behind other African countries with respect to information technology and internet connectivity. The widening digital gap is a serious constraint to enhancing capacity and productivity for the law and justice sector. The authorities would welcome Bank support for establishing a suitable distance-learning center in Maseru.

Coalition of African Jurists: in February 2003, the Chief Justice along with a delegation from Lesotho comprising the Attorney General and the Deputy Minister of Justice attended the First All-Africa Conference on Law, Justice and Development in Abuja. According to the resolution adopted at the conclusion of that conference, the Second All-Africa Conference on Law, Justice and Development was to be held in February 2004 in Algiers, Algeria. I will convey to Management the strong desire by African stakeholders to see further Bank support for this promising initiative which was perceived in Abuja as a powerful tool for promoting and sustaining the rule of law and equal justice for all across Africa.

Government’s request for Bank lending: in May 2004, the Minister of Finance sent a letter to the Regional Vice-President for Africa (RVP) requesting specifically two types of interventions: (i) an IDF Grant to enhance capacity in the judiciary; and (ii) a sectoral adjustment operation which could provide budgetary support to alleviate the pressure brought on the national budget by the burden resulting from prosecution of fraud and corruption cases associated with the Lesotho Highlands Water Project. I wish to take this opportunity to reiterate the importance we attach to this request, and hope that the Bank will treat it as such.

Before concluding, I should stress the importance of the need on the part of the financial institutions and the donor community to learn to pay attention to the needs of the donee communities as articulated by the latter instead of prescribing to these developing countries what in the view of the donors such needs are. I hope, therefore, that everybody has now understood that the areas that I have asked the World Bank to focus its attention on by way of assistance to Lesotho’s judicial sector are areas which I have identified and hopefully will receive your support if the scourge of corruption is to be stamped out from Lesotho.

Allow me finally to conclude by saying that I have brought with me some of the relevant judgements and rulings made in the Lesotho Courts including an address I was called upon recently to deliver in Zambia by the head of the Judiciary there. Hopefully they will help fill up the many gaps which could not be covered in this paper.

Thank you for your attention.