World Bank debars three contractors

The World Bank has banned three contractors from working on projects it finances for periods of up to five years after uncovering separate incidents of fraud and misrepresentation on projects in Vietnam and Indonesia.

Following investigations by the World Bank's Integrity Vice Presidency (INT), US contractor Kellogg, Brown & Root (KBR) has been banned for two years for misrepresentation, while Social and Environmental Development Joint-Stock Company (SECO) and its managing director have been debarred for five years over fraud allegations, and PT Amythas Experts & Associates faces a three year ban, also for fraudulent practices.

KBR was sanctioned because its Australian subsidiary misrepresented the availability of key consultants during contract negotiations to win a Bank-financed water supply project in Vietnam.

The sanction will also see KBR implement "remedial measures" to bring its corporate compliance programme in line with the World Bank's compliance standards.

Meanwhile, SECO and its managing director Nguyen Xuan Doan were also involved in Vietnam's water sector and were barred after engaging in a scheme to defraud a World Bank client in a separate water supply project.

And PT Amythas Experts & Associates was banned for fraudulent practices in relation to a World Bank-financed community development and poverty alleviation project in Indonesia.

The company will also be required to implement a corporate compliance programme in line with World Bank standards, and could see its period of debarment reduced if it meets additional conditions.

Vigilance

Leonard McCarthy, integrity vice president at the World Bank said the sanctions demonstrated that the Bank's work on integrity was resilient.

"We have to act with ever more vigilance when it comes to rooting out fraud and corruption. This is true for the larger global financial architecture, and without question, the key to the future of international development," Mr McCarthy said.

All three companies are eligible for cross debarment under the April 2010 Agreement for Mutual Enforcement of Debarment Decisions entered into by the African Development Bank Group, Asian Development Bank, the European Bank for Reconstruction and Development, the World Bank Group and the Inter-American Development Bank Group.