WASHINGTON, September 18, 2019 — The World Bank today announced the two-year debarment of PT. Suburo Jayana Indah Corp. (Sujainco) in connection with fraud and collusion in the World-Bank-financed Water Resources and Irrigation Sector Management Program (Phase II) in Indonesia. Sujainco is an Indonesian, privately-owned construction company.
The debarment makes Sujainco ineligible to bid on World Bank Group-financed projects. It is part of a settlement agreement under which the company acknowledges responsibility for the underlying sanctionable practices and agrees to meet specified corporate compliance conditions as a condition for release from debarment.
The Water Resources and Irrigation Sector Management Program Phase II project, which closed in 2018, was designed to assist and improve the capacity for basin water resource and irrigation management and increase integrated agriculture productivity in project areas.
According to the facts of the case, Sujainco, prior to bid submission, colluded with a third party to arrange for other bidders to submit artificial and non-competitive bids to rehabilitate an irrigation management system. This allowed Sujainco to win the contract, but the third party did the work under Sujainco’s name without obtaining the proper approvals from the procurement agency. Sujainco also submitted fraudulent documents to collect payments during contract implementation. These are fraudulent and collusive practices under the World Bank Procurement Guidelines.
The settlement agreement provides for a reduced period of sanction in light of the company’s cooperation and acceptance of responsibility for its conduct. As a condition for release from sanction under the terms of the settlement agreement, the company commits to developing an integrity compliance program consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines. The company also commits to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.
The debarment of Sujainco qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.