World Bank Sanctions Three Companies for Fraudulent and Corrupt Misconduct Related To Some of Its Projects

July 29, 2014

WASHINGTON, July 29, 2014— The World Bank Group announced the debarment of two Dutch firms and two of their executives involved in misconduct relating to two projects in Iraq as well as a Cambodian firm involved in misconduct relating to projects in Cambodia.

C.D.W Construction Co., Ltd (C.D.W Construction) was debarred for three years for engaging in fraudulent practices under the Cambodia Ketsana Emergency Reconstruction and Rehabilitation Project.  An investigation conducted by the Integrity Vice Presidency (INT) revealed C.D.W Construction submitted fraudulent financial reports and a false statement of construction turnover in its bid in connection with the procurement process.

Earlier this month, the World Bank Group also debarred two Dutch firms and two of their executives operating in Iraq for four years for corrupt practices under the Iraq Emergency Health Rehabilitation and Iraq Emergency Disabilities Projects. Evidence gathered by INT revealed Development and Relief Corporation International B.V (DRC International) paid an agent a 15% commission on two contracts intended as bribe payments in exchange for contract awards.

The World Bank Group also debarred Development and Relief Corporation B.V. (DRC) -- a sister firm of DRC International -- for three years for engaging in fraudulent practices under the same projects.  DRC failed to disclose the full size of its agent commissions in its bids for other project-financed contracts. 

The debarment of the two Dutch companies represents an extension of existing debarments already imposed on the same entities and individuals for similar misconduct in other countries. 

Managing fraud and corruption risks through corporate compliance and preventive work in development projects is a priority particularly in conflict-affected situations where needs for services and infrastructure cannot be excused or delayed.  These decisions by the Sanctions Board reaffirm the Bank’s commitment to maintaining a strong focus on the impact of the development dollar on behalf of beneficiaries and shareholders,“ said Leonard McCarthy, World Bank Integrity Vice President.

The debarment of these companies qualifies for cross-debarment by other multilateral development banks under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010.

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