The article "Big Firms Accused of Bribery in African Dam Project" cites World Bank claims that it had a limited role in the Lesotho Highlands Water Project because it made only a small contribution to the multibillion-dollar financing scheme [Business, Aug. 13]. Nothing could be further from the truth. Not only did the World Bank finance the design of the project; it also is responsible for setting up and coordinating the financing program.

According to a confidential World Bank project document, in 1991 the bank agreed to participate in a trust for offshore lenders "to provide some comfort for lenders who might otherwise be reluctant to assist in the financing." This type of comfort was needed because of the international sanctions then in place against the apartheid regime in South Africa. According to the same document, the World Bank loan for the project went only nominally to Lesotho, a country far too poor to qualify for large loans, while the real borrower was South Africa's apartheid regime. It is unacceptable for the World Bank to claim that it is a passive bystander in the unfolding corruption investigation. Should the corruption allegation be substantiated, the World Bank must debar the companies involved in the bribery from future World Bank-financed activities. It also should launch an investigation into its own role in this controversial project.

Besides serious allegations of corruption, the project, which includes the highest dam in Africa, has caused the vulnerable Highlands population to lose fields, grazing lands and access to fresh water sources. Despite promises, their livelihoods have not been reestablished, and poor people have been pushed closer to the edge in their struggle for survival. Problems of erosion and the downstream effects of massive water diversion will disrupt ecosystems and people's livelihoods. In Lesotho, as in many places, corruption, environmental degradation and increasing poverty have a tendency to go together.


Director, Southern Africa Program

International Rivers Network

Berkeley, Calif.


Senior Environmental Economist

Environmental Defense Fund