The World Bank Group's ("Bank") Integrity Vice Presidency ("INT") is an independent unit within the Bank charged with investigating five types of misconduct—fraud, corruption, collusion, coercion, and obstruction—related to bank-financed projects. To date, INT, which began operating in 1999, has investigated and closed almost 3,000 cases.
In FY2013 (ending June 30), INT evaluated 449 complaints from 90 countries and opened 89 as new cases, some of which are ongoing. The top three regions with the highest number of new cases were Africa, South Asia, and East Asia Pacific, respectively. Agriculture, healthcare, transport, and water were the most commonly targeted sectors.
INT has five administrative sanctions at its disposal: public letter of reprimand; debarment; conditional non-debarment; debarment with conditional release; and, restitution. In FY2013, however, INT imposed only debarments and conditional nondebarments on sanctioned entities. In total, INT debarred 44 entities in FY2013, with all of the matters involving fraudulent or collusive practices. The periods of debarment, during which the respondents are ineligible to be awarded contracts from the Bank, range from one year to 10 years. INT imposed conditional nondebarments on three entities, requiring them to meet certain conditions to avoid debarment on future projects.
As evidence of its increased commitment to cooperating with other regulatory agencies, INT referred 19 cases to national authorities in FY2013 to investigate allegations of misconduct. Additionally, under the Agreement on Mutual Enforcement of Debarment Decisions, signed in 2010 by the World Bank, African Development Bank Group, Asian Development Bank, European Bank for Reconstruction and Development, and Inter-American Development Bank, INT jointly recognized the debarment of 295 entities.
On the technological front, in an effort to expand its "open data universe," INT released a World Bank Integrity Application ("app") for mobile devices in FY2013. This app allows users to report confidential allegations of fraud or corruption in bank-financed projects, and to attach an image or record the location of the complaint through an optional GPS function.
The Bank appears dedicated to continuing its enforcement efforts in 2014. As noted above, these actions can have serious effects on companies.
Debarment may affect a company's subsidiaries and affiliates or create potential breaches of contractual relationships. Additionally, when a company enters into a settlement agreement with the Bank, that agreement may affect the company's ability to negotiate similar settlement agreements with other enforcement regulators. Companies subject to Bank regulations should consider these consequences when faced with potential enforcement action by the Bank.
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