13 January 2013

Uganda: World Bank Halts Aid to Civil Engineering Firm

Kampala — The World Bank has announced the debarment of Energoprojekt Niskogradnja, a Serbian civil engineering and contracting firm for 2.5 years.

This came following the company's acknowledgment of misconduct in a bank-financed roads and development project in Uganda.

The suspension is part of a negotiated resolution agreement between Energoprojekt and the bank following an investigation by the bank's integrity Vice President.

"This case is just another example of why fighting corruption matters for the World Bank as well as for companies that are engaged in development projects," said Leonard McCarthy, World Bank Integrity Vice President.

"Clean business is smart business. We will pursue our efforts to maximize the value of infrastructure development," he said.

Under the agreement, Energoprojekt Niskogradnja commits to cooperate with the World Bank's Integrity vice Presidency and continue to improve their internal compliance program.

This debarment qualifies for cross-debarment by other multi development banks under the agreement of mutual recognition of debarments that was signed on April 9, 2010.

A statement issued last week explained that the World Bank Integrity Vice Presidency (INT) is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in bank's projects, capitalizing on the experience of a multilingual and highly specialized team of investigators and forensic accountants.

Mr. McCarthy explained that key results of INT's work in 2012 include 83 entities that were debarred, bringing the total number of debarred entities, non-governmental organizations and individuals to 541 while 122 jointly recognized debarments were carried out among multilateral development banks (MDBs) that signed the Cross Debarment agreement

He further added that last year saw building precautions against fraud and corruption in 84 high-risk projects with a combined lending volume of $21.2bn, while in the same year the bank debarred two wholly-owned subsidiaries of Oxford University Press that included Oxford University Press East Africa Limited and Oxford University Press Tanzania Limited - for a period of three years following acknowledgment of misconduct in relation to two Bank-financed education projects in East Africa. The company agreed to pay $500,000 to the World Bank as part of settlement.

He added that the bank also 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 bank's world bank's integrity App is available for the IOS platform through the iTunes store," he said.

He pointed out that following Alstom's acknowledgment of misconduct in relation to a Bank-financed hydropower project in Zambia, the 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 bank which also includes a restitution payment by the two companies totaling approximately $9.5 million.

"Based on an INT referral, UK authorities ordered Macmillan Publishers Limited to pay over £11 million and the bank debarred Macmillan for 6 years (2010), for bribery linked to an education project in Sudan among others," he added.

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