Company sues government over corruption

A new way of fighting back against alleged government corruption is being tested by a Kenyan registered company, Coastal Aquaculture (CA), which is suing the government for US $1 billion in damages and loss of earnings, according to a ‘Financial Times’ report cited on the World Bank web site [http://www.worldbank.org/developmentnews/] on Wednesday. For the first time, a company was seeking damages from a government at the international court established in Lusaka in 1994 by the Common Market for Eastern and Southern Africa (COMESA), the paper reported. CA was suing the government for US $1 billion, alleging that members of President Daniel arap Moi’s family and senior government officials were beneficiaries of an illegal land reallocation scheme which scuppered the company’s plans for shrimp-farm and tourism projects, it said. The backers of the action believed that even if it did not succeed, the procedure could deter African governments and individuals from corrupt behaviour by providing a forum for allegations of corruption to be aired, it added.

The government’s attempts at expropriation (of land for CA’s projects) were ostensibly based on environmental concerns, but (the land) was subsequently used, with government approval, by US marines for military exercises using live ammunition, according to the report. Later, the Kenyan government had reallocated the land to 40 private companies and individuals, with documents submitted to Kenyan courts showing that many of these companies were controlled by leading Kenyans. “The government of Kenya has continued to frustrate Coastal Aquaculture’s implementation of the two projects,” the company said, adding that the use of the COMESA court “shows that legal action can be taken by private companies against allegedly corrupt administrations within COMESA”. The court could award damages (which might then be met from government property outside Kenya), act as an arbitrator, or provide a forum for an out-of-court settlement, according to the ‘Financial Times’.