WASHINGTON, April 16, 2025—The World Bank Group today announced the 15-month debarment of Xinjiang Xiaohaizi Water Conservancy Construction and Installation Engineering Co. in connection with fraud as part of the Lushan Earthquake Reconstruction and Risk Reduction Project in China.
The project was designed to improve access to disaster resilient infrastructure and strengthen risk reduction in select municipalities of Sichuan Province, as well as to improve emergency preparedness in Shimian County in Sichuan Province. According to the facts of the case, Xinjiang Xiaohaizi failed to obtain prior approval before subcontracting substantial part of the contract to a third party, which is a fraudulent practice.
The debarment makes Xinjiang Xiaohaizi ineligible to participate in projects and operations financed by institutions of the World Bank Group. 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.
In light of the company’s voluntary and remedial actions, the settlement agreement provides for a reduced period of debarment. As a condition for release from sanction under the settlement agreement terms, the company commits to developing and implementing integrity compliance measures that reflect the relevant 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 Xinjiang Xiaohaizi 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.
