French giant fined for bribery

The World Bank has slapped a hefty $9.5-million fine on the Alstom corporation, a major French engineering company involved in the South African nuclear industry, and blacklisted two of its subsidiaries after it admitted to bribing a senior Zambian government official.

The corporation was also fined by Swiss authorities last year after being implicated in bribery scandals in three other countries.

The World Bank fine was imposed after Alstom admitted to an ‘improper payment” of €110000 to the official for ‘consultancy services” when the company submitted a bid to perform bank-funded rehabilitation work on hydropower systems at Victoria Falls.

The bribe was paid in 2002, just two years after France outlawed the payment of bribes to officials in ­foreign countries
An Alstom subsidiary provides services for the Koeberg nuclear power station and is a potential player in South Africa’s procurement of new nuclear generating capacity.

Alstom also won the multibillion-rand turbine contracts for the coal-fired power stations, Medupi in Limpopo and Kusile in Mpumalanga, which are under construction.

The World Bank probe into Alstom was spearheaded by its integrity vice-president, former South African Scorpions boss Leonard McCarthy.

Alstom spokesperson Isabelle Tourancheau referred the Mail & Guardian to the World Bank’s official announcement and said the company ‘had no further comment”.

The Zambia Electricity Supply Corporation signed a $45-million contract with Alstom Hydro France in April 2002. The tender was issued in 1999. The World Bank’s $9.5-million fine represents just over 20% of the contract value. The project was completed in July 2008 at a cost of $51-million.

The World Bank declined to name the official who allegedly received the bribe, saying that disclosure could ‘jeopardise the security of witnesses”.

However, a spokesperson said that the bank has informed the Zambian government of the case and has left it to them ‘to determine whether or not national legislations have been violated and for them to take subsequent follow-up action”. Zambia’s Anti-Corruption Commission confirmed it was investigating but declined to name the former official.

Two Alstom subsidiaries — Alstom Hydro France and Alstom Network Schweiz AG — have been ‘debarred”, or blacklisted, from participating in World Bank-funded projects for a period of three years.

Worse still, they have been ‘cross-debarred” by a range of other multinational development banks that mutually recognise the World Bank’s blacklist.

Parent company Alstom did not escape unscathed. It has been ‘conditionally non-debarred” — a sanction applied to parent companies that were not directly engaged but whose ‘systemic failure to supervise made the misconduct possible”.

This is not the first time Alstom and its subsidiaries have been implicated in a bribery scandal.

In November last year Alstom was ordered by Switzerland’s attorney general to pay €31-million for negligently failing to stop bribery by some of its employees, according to a Financial Times report.

In three cases, involving contracts in Latvia, Malaysia and Tunisia, Alstom was found to have used ‘consultants who used some of the money for illegal purposes, whether to influence the award of contracts or to pay kickbacks to employees”.

The Swiss attorney general said a two-year investigation had not found criminal wrongdoing by the French company and a Swiss affiliate, which ‘as far as can be ascertained” did not know about the bribes.

But it accused Alstom of ‘failing to meet the standards for an international group employing more than 75000 people”, sanctioning the group for ‘corporate negligence”.

Alstom is part of a ‘French family” of independent but associated energy-generation and transmission companies that are expected to bid to construct as many as six new nuclear power stations in South Africa, according to a well placed ‘family” source. Other ‘family members” include nuclear technology provider Areva and electricity utility Électricité de France.

Alstom is a non-nuclear systems technology provider which specialises in the supply of so-called ‘secondary” components such as turbines and generators. Company spokesperson Patrick Bessy said it was ‘too early” to say whether it will participate in a French bid.

Last week the M&G reported that South Africa had asked Électricité de France to bid together with the China Guangdong Nuclear Power Group.

The department of energy — which is still finalising the parameters of the contract — immediately denied having issued the endorsement.

But a senior executive associated with the French bid but not directly with Électricité de France, and who spoke to the M&G on condition of anonymity, explained that the department’s responsibility was to formulate policy. A directive to the French and the Chinese to bid together would come ‘from the top”.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


READ IT IN FULL: Ramaphosa’s address on the extension of...

This is the full address given by President Cyril Ramaphosa on April 9

Meet the doctor leading Africa’s fight to contain the coronavirus...

Dr Matshidiso Moeti’s father helped to eliminate smallpox. Now she’s leading Africa’s efforts against the coronavirus

Stella set to retain her perks

Communication minister will keep Cabinet perks during her two months of special leave

Covid-19 grounds Nigeria’s medical tourists

The country’s elites, including the president, travelled abroad for treatment but now they must use the country’s neglected health system

Press Releases

Rahima Moosa Hospital nursing college introduces no-touch facial recognition access system

The new system allows the hospital to enrol people’s faces immediately, using artificial intelligence, and integrates easily with existing access control infrastructure, including card readers and biometrics

Everyone’s talking about it. Even Kentucky

Earlier this year South African fried chicken fast-food chain, Chicken Licken®, launched a campaign for their wallet-friendly EasyBucks® meals, based on the idea of ‘Everyone’s talking about it.’

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world