Two of the three debarments are part of negotiated resolution agreements in the wake of the companies’ acknowledgment of misconduct
WASHINGTON, December 13, 2011 —The World Bank Group today announced the debarment of Kellogg Brown & Root Pty Ltd (KBR Pty) for a period of two years with conditional release following an investigation by the Bank’s Integrity Vice Presidency (INT) into violations of the Consultant’s Guidelines under a Bank-financed water supply project in Vietnam. KBR Pty, an Australian subsidiary of KBR, Inc., misrepresented the availability of key consultants during contract negotiation and execution, which resulted in KBR Pty being awarded the contract and led to delays in contract execution.
Under the terms of the agreement KBR Inc. will also implement remedial measures to its corporate compliance program to comply with the World Bank Compliance standards.
“This settlement shows the Bank’s work on integrity is resilient while we support companies to clean up their operations and therefore enforcing international compliance standards,” said Leonard McCarthy, Integrity Vice President at the World Bank.
This settlement follows the debarment of another company, Social and Environmental Development Joint-Stock Company (SECO), and its Managing Director, Mr. Nguyen Xuan Doan, who were also involved in the same sector in Vietnam. SECO engaged in a scheme to defraud the World Bank's client under a Bank-financed water supply project and has been declared ineligible to participate in Bank Group-financed projects for the next five years.
The World Bank also announced the debarment of Indonesian company PT Amythas Experts and Associates for a period of three years for fraudulent practices in relation to a World Bank-financed community development and poverty alleviation project.
“We have to act with ever more vigilance when it comes to rooting out fraud and corruption,” said McCarthy. “This is true for the larger global financial architecture, and without question, the key to the future of international development.”
In addition to the debarment which became effective on December 7, 2011, Amythas Experts will be required to implement a corporate compliance program in line with World Bank standards and meet other conditions as part of the settlement. The period of debarment could be further reduced if the company meets additional conditions of restitution and disclosure.
KBR Pty and PT Amythas Experts and Associates, as well as SECO, cannot be awarded a contract, or otherwise participate in new activities under World Bank Group-financed or executed projects during the debarment period.
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.
About The World Bank Integrity Vice Presidency (INT)
The World Bank Integrity Vice Presidency (INT) is responsible for 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 the last fiscal year included:
- 32 debarments of firms and individuals for engaging in wrongdoing while jointly debarring 37 entities with other Multilateral development Banks
- Based on an INT referral, the UK’s Serious Fraud Office 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 action against three former employees of “Norconsult,” based on an INT referral.
- Cooperation agreements in support of parallel investigations, asset recovery and information sharing with the UK Serious Fraud Office, the European Anti-Fraud Office, the International Criminal Court, USAID, and the Australian Agency for International Development.
- Enhanced preventive training tailored to identifying red flags in projects and forensic accounting.