Recent exclusions of contractors by the World Bank underscore the need for companies working under multilateral development bank contracts („MDBs“) to implement effective strategies to limit funding for anti-corruption projects and to prepare for defense against MDB audits and exclusion measures. China Railway First Group Co. Ltd., PT. Suburo Jayana Indah Corp. and Aqualia Intech S.A. are among the companies that recently excluded MDBs. Each company agreed with the World Bank, agreed to be excluded and acknowledged responsibility for the underlying sanctionable conduct and committed to take certain compliance measures as a precondition for exclusion. [ii] On 9 April 2010, the Asian Development Bank Group, the African Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Group and the World Bank Group signed the Agreement on the Mutual Implementation of Exclusion Decisions. An exclusion decision is appropriate for cross-skidding when it comes to (1) fraud, corruption, collusion or coercion (we note that disability is certainly a punishable practice of all signatories, but that it is not qualified for cross-debarment); (2) is public; 3.
the exclusion is more than one year; and (4) is not based on a decision of a national or international authority. Many MDBs, including those that have not signed the non-proliferation agreement, have increased their focus and funding for anti-corruption investigations and sanctions enforcement. As in other contexts, companies can derive significant benefits from a proactive compliance approach, including conducting timely and appropriate internal investigations. Identifying the nature and extent of a misconduct prior to an MDB audit allows the situation to be remedied at an early stage. Even if a problem cannot be resolved and the MDB is ultimately informed, a proactive and credible self-investigation by the company will maximize its ability to obtain lenient treatment and a cooperative loan from MDB. For example, by imposing a one-year exclusion, just prior to the cross-skids threshold, the World Bank took note of AISA`s „exceptional“ cooperation, which likely indicates that AISA has received significant mitigation credits in accordance with the World Bank Group`s sanctions guidelines. The Indonesian company PT. Suburo Jayana Indah Corp. („Sujainco“) was also granted a two-year exclusion for fraud and collusion under Indonesia`s Water Resources Management and Irrigation Program, funded by the World Bank. [iii] In accordance with Sujainco`s settlement agreement, Sujainco cooperated with a third party and other bidders prior to the submission of the bid in order to submit artificial and non-competitive bids. Sujainco also admitted to providing false documents to collect payments during the performance of the contract.
Sujainco`s exclusion is also more than one year, which means that Sujainco is excluded from other MDBs. Agreement on the mutual application of each institution`s exclusion mechanisms by African Development Bank Group, ADB, European Bank for Reconstruction and Development Group, Inter-American Development Bank Group and World Bank Group China Railway First Group Co. Ltd. . . .