World Bank’s Corruption Blacklist Soars To 7-Year High
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More than 250 companies and individuals were placed on the World Bank’s blacklist of corrupt or fraudulent entities during the first seven months of 2013, said the international organisation on Sunday, with the total amounting for nearly four times the number for the whole of 2012 and the highest number of reported cases over the last seven years.
More than 250 companies and individuals were placed on the World Bank’s blacklist of corrupt or fraudulent entities during the first seven months of 2013, said the international organisation on Sunday, with the total amounting for nearly four times the number for the whole of 2012 and the highest number of reported cases over the last seven years.
Of the 250 blacklisted entities this year, Canada had the highest number of reported cases at 119. The U.S. came in second at 46, while Indonesia was third with 43. Meanwhile, Latin America and the Caribbean accounted for 21 percent of all cases, with Europe and Central Asia contributing 19 percent, while East Asia and the Pacific accounted for 16 percent.
The World Bank said that it would ban any company or individual found guilty of fraud, corruption, collusion or coercion from receiving project funding, while it can also order companies to instigate compliance and monitoring regimes if it suspects incidences of graft.
“We’re not a global policeman but what we can do is facilitate the global conversation against corruption,” told Stephen Zimmerman, director of operations at the bank’s integrity division, to the Financial Times.
[quote]“The World Bank is unique in that it’s the only office in the world that looks at corruption cases globally; law enforcement tends to be national by its nature.”[/quote]According to Freshfields Bruckhaus Deringer, the law firm that compiled the report, healthcare, water, energy, transport and agriculture were the sectors most heavily targeted by the bank’s investigative division this year.
“When a major company is implicated in this sort of activity, reputations can be seriously damaged and it can stand to lose large contracts and the ability to bid for future ones for years to come,” said Jane Jenkins, a lawyer at Freshfields. “Multilateral development banks, led by the World Bank, have assumed a role similar to U.S. and U.K. authorities that enforce the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws against white-collar crime.”
Speaking to the South China Morning Post, Geoff Nicholas, a partner at Freshfields, further noted that though Chinese cases were minimal – only 10 Chinese companies or people have been barred by the World Bank – the risk of Chinese firms being affected by World Bank bans was increasing.
[quote]”The new reality for companies accessing development funds is that the World Bank is focusing on compliance, and debarment is a real risk for those companies that break the rules,” Nicholas said.[/quote]The World Bank estimates that some $40 billion of developmental funding has been stolen over the past seven years. The lender has invested more than $200 billion in projects in developing countries during that time frame.
Related: World Bank Publishes List Of Corrupt Companies & Individuals
Related: Debt-Ridden Countries the Most Corrupt in Europe: Study
Related: World Corruption Special Report
Among the companies cited this year include two divisions of Alstom, the French engineering conglomerate, which was made to pay $9.5 million in restitution over a Zambian hydropower project. SNC-Lavalin, a Canadian engineering group, has also been banned from receiving World Bank funding for the next 10 years following corruption allegations into a $3 billion bridge-building project in Bangladesh.
Last year, the World Bank had warned that any corrupt official or company who siphons money from the development assistance fund would be publicly exposed.
[quote]”The World Bank means business. Its ramping up in 2013 is a clear signal that it will not tolerate corruption or fraud,” said Tim Coleman, a World Bank global investigations partner, to SCMP.[/quote]
