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Misconduct in a World Bank-financed project in Zambia


 World Bank

Enforcing Accountability: World Bank Debars Alstom Hydro France, Alstom Network Schweiz AG, and their Affiliates

 Press Release No:2012/282/INT

Companies commit to pay $9.5 million in restitution following acknowledgement of misconduct in a World Bank-financed project in Zambia

 

WASHINGTON, February 22, 2012—The World Bank Group today announced the debarment of Alstom Hydro France and Alstom Network Schweiz AG (Switzerland) – in addition to their affiliates – for a period of three years following Alstom’s acknowledgment of misconduct in relation to a Bank-financed hydropower project.

The debarment is part of a Negotiated Resolution Agreement between Alstom and the World Bank which also includes a restitution payment by the two companies totaling approximately $9.5 million. The debarment can be reduced to 21 months – with enhanced oversight – if the companies comply with all conditions of the agreement.

This case demonstrates a clear commitment from the World Bank to ensure development funds reach their intended beneficiaries while setting a high standard for global integrity where project resources may be at stake,” said Leonard McCarthy, World Bank Integrity Vice President. Alstom’s settlement with the Bank is a wake-up call to global companies that are involved in development business that need to ensure their operations with the World Bank are clean. Alstom is a major player in the hydropower sector and their commitment under this agreement is a significant step in deterring the risks of fraud and corruption.

In 2002, Alstom made an improper payment of €110,000, to an entity controlled by a former senior government official for consultancy services in relation to the World Bank-financed Zambia Power Rehabilitation Project. During the debarment period of Alstom Hydro France and Alstom Network Schweiz AG, Alstom SA and its other affiliates are conditionally non-debarred.

Under the Agreement, Alstom SA, Alstom Hydro France, Alstom Network Schweiz AG and their affiliates commit to cooperating with the World Bank’s Integrity Vice Presidency and continuing to improve their internal compliance program. The debarment of Alstom Hydro France and Alstom Network Schweiz qualifies for cross-debarment by other MDBs under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010.

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About The World Bank Integrity Vice Presidency (INT)

The World Bank Integrity Vice Presidency (INT) is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in World Bank projects, capitalizing on the experience of a multilingual and highly specialized team of investigators and forensic accountants.  INT’s work during this fiscal year included:

   62 debarments of firms and individuals for engaging in wrongdoing, whilejointly debarring 14 entities with other Multilateral development Banks

   Based on an INT referral, UK authorities ordered Macmillan Publishers Limited to pay over £11 million. WBG debarred Macmillan for 6 years (2010), for bribery linked to an education project in Sudan.

   The Norwegian Authorities also took prosecutorial action against three former employees of “Norconsult,” based on an INT referral.

   An International Corruption Hunters Alliance brought together 286 senior enforcement and anticorruption officials from 134 countries, to inject momentum into global anti-corruption efforts.

   A cross-debarment agreement among the Multilateral Development Banks, so that companies debarred by the Bank Group can no longer seek business from other multilateral development banks (MDBs), closing a loophole in multilateral development programs

   Cooperation agreements in support of  parallel investigations, asset recovery and information sharing with the UK Serious Fraud Office, the European Anti-Fraud Office, Interpol, the International Criminal Court, USAID, and the Australian Agency for International Development.

   Enhanced preventive training and forensic audits designed to identify and address red flags and integrity controls in World Bank projects. 

Contacts:

In Washington: Dina Elnaggar (202) 4733245, Delnaggar@worldbank.org 

For further information on the World Bank Integrity Vice Presidency, please visit:

www.worldbank.org/integrity

Macmillan Publishers Must Pay $18 Million for Africa Corruption


Macmillan Coffe Morning Event
Image by lewro via Flickr

Bloomberg News

By Lindsay Fortado – Jul 22, 2011 7:16 AM ET

Macmillan Publishers Ltd. was fined 11.3 million pounds ($18.4 million) over possible bribes to win contracts for education materials in Rwanda, Uganda and Zambia.

The book publisher, based in Basingstoke, England, was ordered by a London court to pay the settlement after an internal investigation found evidence its processes for bidding on contracts “were susceptible to improper relationships,” the U.K. Serious Fraud Office said in a statement today.

“It was impossible to be sure that the awards of tenders to the company in the three jurisdictions were not accompanied by a corrupt relationship,” the SFO said. “It was plain that the company may have received revenue that had been derived from unlawful conduct.”

The investigation began after the World Bank Group told the City of London Police that Macmillan tried to pay a bribe to win a contract in Southern Sudan. The police searched premises in December 2009 to gather evidence and Macmillan reported the case to the SFO in March 2010, the prosecutors saidRead more.

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