| Contact: | Daoud Khairallah (202) 473-0423 |
WASHINGTON, March 16, 1999 In its effort to eliminate fraud and corruption, the World Bank today declared the Canadian firm Canadax Technologies Inc., of Verdun, Quebec, Canada, and its President, Pierre Savignac, permanently ineligible to be awarded any Bank-financed contracts. The sanction was imposed after the World Bank concluded that Canadax engaged in fraudulent conduct during the procurement of a Bank-financed contract in Argentina. The Bank's Sanctions Committee found that the Canadax case involved the forgery of two letters of credit. Canadax submitted the letters as bid and performance securities in the context of the bidding for, and the award of, a CDN $5,000,000 Bank-financed contract for the supply of computers to the Ministry of Culture and Education in Argentina. The Committee agreed on the recommendation against Canadax after reviewing a report prepared by the Bank's Internal Auditing Department and a response submitted by the accused firm in which Mr. Savignac denied any direct responsibility for the forgeries. "When contractors fail to observe the highest of ethical standards during the bidding process, as happened in this instance, we will debar bidders, suppliers, contractors or consultants from bidding on Bank-financed contracts. In this case, we concluded that permanent debarment was clearly warranted," explained James D. Wolfensohn, President of the World Bank Group. Wolfensohn made his decision on February 23, following a submission by the World Bank's Sanctions Committee. These actions were taken pursuant to procedures laid out in the institution's procurement guidelines (see box, next page). Since the Sanctions Committee was set up in November 1998, four cases have been submitted for review. The present case is the first to result in a recommendation to the President. Several regional development banks have recently introduced provisions similar to paragraph 1.15 of the World Bank's Procurement Guidelines and the Procedures. | Procurement Guidelines for Preventing Fraud and Corruption PARA. 1.15 of the World Bank's Procurement Guidelines states that: It is the Bank's policy to require that Borrowers (including beneficiaries of Bank loans), as well as bidders/Suppliers/Contractors under Bank-financed contracts, observe the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy, the Bank: (a) defines, for the purposes of this provision, the terms set forth below as follows: (i) "corrupt practice" means the offering, giving, receiving, or soliciting of any thing of value to influence the action of a public official in the procurement process or in contract execution; and (ii) "fraudulent practice" means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Borrower, and includes collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the Borrower of the benefits of free and open competition; (b) will reject a proposal for award if it determines that the bidder recommended for award has engaged in corrupt or fraudulent practices in competing for the contract in question; (c) will cancel the portion of the loan allocated to a contract for goods or works if it at any time determines that corrupt or fraudulent practices were engaged in by representatives of the Borrower or of a beneficiary of the loan during the procurement or the execution of that contract, without the Borrower having taken timely and appropriate action satisfactory to the Bank to remedy the situation; (d) will declare a firm ineligible, either indefinitely or for a stated period of time, to be awarded a Bank-financed contract if it at any time determines that the firm has engaged in corrupt or fraudulent practices in competing for, or in executing, a Bank-financed contract; and (e) will have the right to require that, in contracts financed by a Bank loan, a provision be included requiring Suppliers and Contractors to permit the Bank to inspect their accounts and records relating to the performance of the contract and to have them audited by auditors appointed by the Bank. |
For more information on the World Bank's fight against corruption, see the Anti-Corruption Knowledge Resource Center. |
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