Contacts:
In Manila: Dave Llorito (632) 917-3047
E-mail: dllorito@worldbank.org
Kitchie Hermoso (632) 917-3013
E-mail: mhermoso mhermoso@worldbank.org
In Washington: Michelle Porvaznik +1.202.458.7716
Email: mporvaznik@worldbank.org MANILA, August 22, 2008—The World Bank today announced that it has debarred the Korean firm Dongsung Construction Co. Ltd. (Dongsung) for fraudulent and corrupt practices in relation to a Bank-financed road project in the Philippines. The first phase of the project, known as NRIMPI, closed in March 2007. Dongsung did not contest accusations brought against the firm in the Bank’s administrative sanctions proceedings. Under the terms of its debarment, Dongsung cannot be awarded a Bank-financed contract in any country during the next four years. The debarment is a result of an investigation conducted by the World Bank’s Integrity Vice Presidency (INT), which is responsible for investigating allegations of fraud and corruption in Bank-financed projects. NRIMPI was designed to assist the Philippine government in the upgrading of the roads network and was partially financed by a $150 million loan from the World Bank. It aimed not just to build roads, but also to address weaknesses in project management, so that future roads projects would deliver more benefit at lower cost. Through an in-depth quantitative and qualitative analysis of the procurement process that the firm participated in as well as numerous interviews, investigators uncovered evidence of Dongsung’s involvement in widespread bid-rigging. Mr. Bert Hofman, World Bank Country Director for Philippines, said, “Rapid action against colluding companies demonstrates that efforts to combat corruption are working and sends a strong signal across the private sector. Building more and better roads to remote areas is critical for development in the Philippines. But it is also critical to take action against corruption. NRIMP is now in its second phase and includes stringent anti-corruption mechanisms, such as the use of an independent procurement evaluator and independent oversight by civil society, in part because of what the INT investigation of NRIMPI revealed.” The World Bank revised its sanctions procedures in 2006 to allow the Bank to deal with fraud and corruption cases more efficiently. At the first tier of the two-tier sanctioning process, the Evaluation and Suspension Officer reviews the case brought by INT against a respondent. The Bank Evaluation Officer determines whether or not there is sufficient evidence to support the accusations against the respondent and recommends an appropriate sanction. Under the sanctions procedures, when a respondent like Dongsung chooses not to contest the accusations against it within 90 days, the Sanctions Board will then impose the recommended sanction. Mr. Leonard McCarthy, World Bank Integrity Vice President, said, “Effective development requires all of us to be vigilant in detecting fraud and corruption. Those people who bring allegations to INT deserve special commendation for assisting the Bank in seriously addressing corruption. For our part, INT will continue increasing its outreach efforts so as to contribute to an environment that encourages reporting.” Since 1999, the World Bank has debarred 343 firms and individuals for their involvement in fraud and corruption in Bank-financed projects. |
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