Talks on Namibia Graft Probe

A Chinese firm may seal a new deal in Africa despite corruption allegations.
2009-10-16
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Chinese President Hu Jintao and Namibian President Hifikepunye Pohamba wave to a welcoming crowd upon the Chinese leader's arrival in Windhoek, Namibia, Jan. 5, 2007.
Chinese President Hu Jintao and Namibian President Hifikepunye Pohamba wave to a welcoming crowd upon the Chinese leader's arrival in Windhoek, Namibia, Jan. 5, 2007.
AFP

ACCRA, GhanaNamibian officials say they are re-opening negotiations for a loan and technology import contract with China's Nuctech despite a corruption scandal surrounding the deal.

"The purchase contract with Nuctech Scanners is still intact, and we are proceeding with it," an official at the Namibian Ministry of Finance said.

"We are proceeding with our civil and criminal procedures in the court, and we still hope that we can reach an agreement on re-negotiating the contract with Nuctech," the official said.

The official added that Beijing-based Nuctech, a high-tech firm run until last year by the son of Chinese president Hu Jintao, had agreed to hold discussions on the contract after a silence of several months.

In July, Chinese authorities censored online news reports linking Hu's son Hu Haifeng, 38, to the corruption probe.

Hu Haifeng left Nuctech to take up a post as Communist Party secretary of Nuctech's state-owned parent company.

Namibia's Anti Corruption Commission (ACC) has called on Hu Haifeng, who headed state-controlled Chinese security equipment provider Nuctech until last year, to assist in the investigation into the disappearance of millions of U.S. dollars linked to a government supply contract in Namibia.

Sensitive topic

China's ruling Communist Party is increasingly sensitive, amid widespread public anger over official corruption, about links between top-level leaders and graft allegations.

Two Namibians and a Chinese national were arrested in Namibia in July, as part of a probe into bribery allegations around an X-ray security scanner supply contract and loan deal inked during Hu Jintao's 2007 to Namibia.

Nuctech representative Yang Fan and two Namibians, Teckla Lameck and Jerobeam Mokaxwa, were arrested after Namibia's ACC said they had taken money from a U.S. $12.8 million down payment on security scanning equipment.

Their arrest was followed swiftly by the suspension of the country's defense force chief amid allegations that he too was linked to the Nuctech case.

African presence

China is rapidly building strong economic and diplomatic ties among African countries, which will help ensure future energy security for its booming economy, markets for its goods, and a place to invest its capital.

"It is not unusual. Similar deals have happened to European companies as well," said Chris Alden, an expert on Sino-African relations and professor at the London School of Economics.

"When the Chinese come to Africa, they should act differently, make themselves aware of the law, and be prepared to abide by local laws."

According to international corruption watchdog Transparency International, China may be lowering standards to increase its presence in oil- and resource-rich African countries amid skyrocketing energy demand.

"Chinese companies are ... more inclined to pay bribes" than firms from other countries, said Francois Valerian, who heads the private-sector program at Transparency International.

The organization has ranked China the 21st out of 22 countries measured in terms of the prevalence of corruption.

"It is a matter of concern to us," Valerian said.

"As globalization brings more competition to Africa ... China has certainly emerged to become a economic power."

"That should not lower transparency standards," Valerian added.

While the UK Serious Fraud Office recently prosecuted a construction company over a corruption case in Ghana, China has rarely brought corruption cases against its companies trading overseas.

World Bank ban

In January, the World Bank banned four Chinese companies from competing for its projects, citing evidence of bid-rigging for projects in the Philippines.

Two of the companies are still considered by Beijing to be approved foreign-aid contractors, according to the Chinese Ministry of Commerce Web site.

And there are signs that diplomatic ties between China and Namibia may be warming in the wake of the scandal.

Former Namibian president Sam Nujoma went to Beijing for the celebration of the 60th anniversary of People’s Republic of China on Oct. 1, and met influential Politburo member Li Changchun, who said China would explore ways to further cooperation with Namibia.

Original reporting by Yang Hongxin for RFA's Cantonese service. Written for the Web in English by Luisetta Mudie. Edited by Sarah Jackson-Han.

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