It takes the equivalent of a Marvel comics super power to fight world poverty, encourage good governance and combat corruption, but the World Bank has taken a very serious and structured approach to doing all of that, in addition to the plethora of other goals it strives to accomplish to make this world a better place.
In today’s panel discussion, “World Bank Sanctions and Anti-Corruption Efforts,” at the World Bank in Washington, D.C., mechanisms that the Multilateral Development Bank (MDB) uses to deter and combat corruption and encourage rehabilitation and further its 2007 Governance and Anticorruption Strategy were discussed by its enforcers.
One of the tools in its superhero corruption combating arsenal is administrative sanctions, a formal administrative process, against firms and individuals that have engaged in certain Sanctionable Practices in World Bank-financed projects. Sanctionable Practices include forms of fraud and corruption that have been agreed upon among other MDBs which should be sanctionable, including corrupt, fraudulent, collusive, and coercive practices. The result of such a sanction includes various levels of debarment and cross-debarment (among other MDBs), a recent addition to heighten the austerity of the sanctions, which makes companies and individuals ineligible to receive new contracts for World Bank projects.
Since 2010, 34 sanctions have been levied against individuals and companies from such countries as India, the United States, Russian Federation, Bolivia, the United Kingdom and the Democratic Republic of Congo. To date, there have not been any cross-debarred firms. Since 1999, 415 individuals and companies have been publicly debarred. The list of sanctions are public and can be found here.
From January 1, 2011, publications of the Sanctions Board and the Evaluation and Suspension Officer determination will also be made public on the World Bank website.
The World Bank doesn’t take its superhero role lightly and despite its own superpowers, it has realized that it cannot wage this battle alone. As such, it has combined forces with an MDB superhero squad that imposes cross-debarment sanctions and mutually agreed upon Sanctionable Practices.
***December 4, 2010 Update: Speaking of debarment and cross-debarment initiatives worldwide: currently, if a company is found guilty for failing to take adequate procedures to prevent bribery under the 2010 UK Bribery Act, they will also be prevented from securing a public procurement contract under the European Union’s Directive 2004/18/EC. The severity of the cross-debarment is under review prior to the commencement of the Act in 2011. For further discussion, see Richard Tyler’s December 2nd Telegraph article and the FCPA Professor’s December 3rd blog post here.