WB bans Lavalin for 10 years

The World Bank has banned from its project Canadian company SNC-Lavalin and over 100 of its partners for 10 years over the firm's misconduct in the Padma bridge project and another WB-funded project in Cambodia.
“The debarment is part of a Negotiated Resolution Agreement between the World Bank and SNC-Lavalin Group following a World Bank investigation into allegations of bribery schemes involving SNC-Lavalin Inc. and officials in Bangladesh,” the WB said in a statement yesterday.
The ban could be reduced to eight years if the company complies with all conditions of the agreement, it added.
SNC-Lavalin accepted the punitive action and said in a statement that it would try to stick to business ethics in future.
The WB action followed an investigation by the bank's anti-corruption arm, the Integrity Vice-Presidency.
The Canadian company was trying to bag the $3 billion project's supervisory consultant's job worth $50 million.
In April last year, the WB temporarily barred a unit of the company from bidding in new World Bank projects, after primarily finding it to be involved in corruption in the bridge's project.
This is the first time that the global lender has expelled a company for the highest period of 10 years. Earlier, the bank debarred a company for five years and two others for three years. The last two companies were also fined $9.5 million, WB officials said.
According to the WB statement, Lavalin faced the ban also because of its misconduct in a WB-funded Rural Electrification and Transmission project in Cambodia.
Its misconduct involved a conspiracy to pay bribes and misrepresentations when bidding for WB-financed contracts in violation of the bank's procurement guidelines.
"This case is testimony to collective action against global corruption,” said Leonard McCarthy, the bank's integrity vice-president.
“Once we had evidence of the company's misconduct, we referred the matter to the Royal Canadian Mounted Police whilst the World Bank finalised its investigation. Going forward, I hope that SNC-Lavalin's commitment under this agreement represents meaningful action in deterring the risks of fraud and corruption to development projects,” he added.
Robert G Card, Lavalin's president and CEO, in a statement said: “The company's decision to settle signals our determination as we go forward to set standards for ethics in business conduct and for good governance that are beyond reproach.”

The Royal Canadian Mounted Police has charged two former Lavalin officials -- Ramesh Shah and Mohammed Ismail -- for their alleged involvement in corruption in the Padma bridge project. Hearing of the case is underway, but details are subject to a court-ordered publication ban.
In Dhaka, Anti-Corruption Commission Chairman Ghulam Rahman welcomed the WB action, saying, “Our general people have been deprived of the Padma bridge due to SNC-Lavalin's corruption.”
The WB had cancelled its $1.2 billion credit for the project on June 30 last year, citing proof of a corruption conspiracy. In September, following Bangladesh's request, the Bank returned to the project on four conditions, including a fair investigation into the graft allegation and removing the suspected officials from office.
But on January 31 this year, the government withdrew the loan request, after the WB expressed dissatisfaction at the ACC investigation and the filing of a case that excluded former communications minister Abul Hossain, among other top suspects.
The ACC said it did not find enough evidence to sue him.
In November last year, the WB in a report to the ACC noted that Ramesh Shah's notebook had names of individuals who would receive "percentages" for ensuring the consultancy job.
In the notebook, the following percentages and names are listed under the heading Padma PCC: "4% Min; 2% Kaiser; 2% Nixon; 1% Secretary; 1% Moshi Rahman."
According to the report, “Min” is Syed Abul Hossain; “Kaiser” is Abul Hasan Chowdhury (former state minister for foreign affairs); “Nixon” is Mujibur Rahman (the prime minister's nephew); “Secretary” is Mosharraf Hossain Bhuiyan (secretary of Bridges Division) and “Moshi Rahman” is Mashiur Rahman (the economic affairs adviser to the prime minister).”
In a statement, Abul Hossain yesterday denied his involvement in any irregularities, conspiracy and corruption in the project, reports BSS.
Comments from Abul Hasan Chowdhury, Mujibur Rahman and Mashiur Rahman were not immediately available.