World Bank Debars SNC-Lavalin Inc. and its Affiliates for 10 years
April 17, 2013
This represents the longest debarment period that has ever been agreed to in a World Bank settlement.
WASHINGTON, April 17, 2013 - The World Bank Group today announced the debarment of SNC-Lavalin Inc. - in addition to over 100 affiliates - for a period of 10 years following the company’s misconduct in relation to the Padma Multipurpose Bridge Project in Bangladesh, as well as misconduct under another Bank-financed project. SNC-Lavalin Inc. is a subsidiary of SNC-Lavalin Group, a Canadian company, and represents more than 60% of its business.
The debarment is part of a Negotiated Resolution Agreement between the World Bank and SNC-Lavalin Group following a World Bank investigation into allegations of bribery schemes involving SNC-Lavalin Inc. and officials in Bangladesh.
While the investigation was ongoing, the World Bank’s Integrity Vice Presidency also learned of misconduct by SNC-Lavalin Inc. in relation to the World Bank-financed Rural Electrification and Transmission project in Cambodia.
The debarment can be reduced to eight years if the companies comply with all conditions of the agreement. The remainder of the SNC-Lavalin Group has been conditionally non-debarred for the same period of time. Under this sanction, the remainder of SNC-Lavalin Group faces debarment if they fail to comply with the terms and conditions of the Agreement.
"This case is testimony to collective action against global corruption,” said Leonard McCarthy, World Bank Integrity Vice President. “Once we had evidence of the company’s misconduct, we referred the matter to the Royal Canadian Mounted Police whilst the World Bank finalized its investigation. Going forward, I hope that SNC-Lavalin’s commitment under this agreement represents meaningful action in deterring the risks of fraud and corruption to development projects.”
SNC-Lavalin’s misconduct involved a conspiracy to pay bribes and misrepresentations when bidding for Bank-financed contracts in violation of the World Bank’s procurement guidelines. Under the Agreement, the SNC-Lavalin Group and its affiliates commit to cooperating with the World Bank’s Integrity Vice Presidency and continuing to improve their internal compliance program. The debarment of SNC-Lavalin Inc. qualifies for cross-debarment by other MDBs under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010.
About the World Bank Integrity Vice Presidency
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.
Key results of INT’s work in FY12-13 include:
- 72 entities sanctioned in FY 13 including settlements where companies are debarred as a default sanction in addition to committing to cooperation with the Integrity Vice Presidency.
- 252 jointly recognized debarments among MDBs that signed the Cross Debarment agreement.
- Building precautions against fraud and corruption in high-risk projects.
- The World Bank introduced its new App to report fraud and corruption allegations relating to its projects. The new App also complements other tools and information resources to support the detection of fraud and corruption red flags. The World Bank Integrity App is available for the IOS platform through the iTunes store.
- Following Alstom’s acknowledgment of misconduct in relation to a Bank-financed hydropower project in Zambia, the World Bank debarred Alstom Hydro France and Alstom Network Schweiz AG (Switzerland) - in addition to their affiliates - for a period of three years as 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 second meeting of the International Corruption Hunters Alliance brought together 175 senior enforcement and anticorruption officials from 6 regions, to inject momentum into global anti-corruption efforts.
- 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, the Australian Agency for International Development, the UN Office for Internal Oversight and several other national authorities.
- Enhanced preventive training and forensic audits designed to identify and address red flags and integrity controls in World Bank-financed projects.