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Lesotho

Lesotho is a mountainous, landlocked country within South Africa and economically dependent on its neighbor.  In the capital of Maseru, only 50% of the population has access to adequate drinking water.  People purchase water from vendors at inflated prices or wait in long queues at public water works. 

The World Bank states that water is Lesotho’s only sustainable natural resource.   In an attempt to reduce Lesotho’s dependency on South Africa and respond to a potential water shortage in Johannesburg, the Lesotho Highlands Water Project (LHWP) was started to turn Lesotho’s water into export revenue.  As six dams costing $8 billion are being built to provide water for Johannesburg, the largest city in the world without a sustainable water supply, Lesotho is heading into a drought that is expected to necessitate food aid for 600,000 to 700,000 people. Forty percent of Lesotho’s water will be diverted to Johannesburg to help quench its water gulping industry.  Farmers displaced by the dams and the residents of townships in South Africa will end up paying disproportionately for the project and see very little of its benefits.

The LHWP was conceived amidst corruption.   Because of international sanctions on the apartheid regime, international financer’s payments for LHWP were rerouted to London.   This was only the tip of the iceberg of corruption.  Acres International and Lahmeyer International, two of the five UK companies contracted to build the dams, have been found guilty by the Lesotho High Court of paying bribes to the former Chief Executive of LHWP in exchange for favorable contract decisions. Altogether the consortium allegedly gave Masupha Sole, the former Chief Executive, over a million pounds in bribes.   The World Bank has not only refused to bar these companies from further contracts but it withdrew promised financial support from public prosecution in Lesotho.

The LHWP is corrupt in more subtle ways as well.   The environmental, social and financial costs of the project are distributed unevenly.   The project was approved on a deeply flawed environmental assessment.  It is expected to have biophysical and social impacts costing between $2.8-4.2 million annually.  Sacred lands have been inundated, endangered species threatened and the Orange River’s downstream ecosystem harmed.  The people displaced by the dam have not yet been properly compensated.  The two dams that have already been started have affected 27,000 people and displaced 2,000.  These people have received only cash compensation in exchange for land and livelihood.  In 2001 2,000 people demonstrated to protest the inadequate compensation and the lack of electricity that was promised a decade before. 

South Africa is responsible for guaranteeing finances for LHWP.   At the start of this project, Kader Asmal, then South Africa’s Minister of the Department of Water and Forestry, refused to let the World Commission on Dams to do a study.  He also rejected demands by activists and citizens from Soweto, Alexandria and Lesotho to encourage demand-side management, which dictates that those who consume most of the water - the users in the mines, factories and affluent suburbs - pay the bill.  This would encourage water conservation that could delay the building of the next dams.  As it stands, water prices in Johannesburg have already increased by 35% since 1990.  In poor townships residents are paying 55% more. 

Ronnie Kastrils, current Minister of the Department of Water and Forestry in South Africa, announced a halt to further dam construction after the second mega dam is completed in 2004.   Environmentalists and activists are hesitant to believe his promise after his rejection of the World Dam Commission’s report and endorsement of the Three Gorges Dam in China.   For those paying the costs of the dams, the question whether or not the displacement, environmental degradation, increased water prices and corruption will actually end, is a dire one.  

In the News:

2004
July 26: Landmark decision: Canadian company debarred

2003
September 8: Bank silent on corporate corruption in Lesotho
August 6: Lesotho: Water Troubles Building Resentment

2002
November 26: Lesotho corruption verdict
September 25: Lesotho water a time bomb
September 18: Canada: Firm Paid Bribes to Win Lesotho Dam Job
March 25: Bank downplays Lesotho dam corruption
Contracts, Concessions and Corruption in the Water Sector

    » cmep | Water | cmep Water | reports | lesotho


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