World Bank blacklisted 45 contractors last year

WASHINGTON—The World Bank said Wednesday it had blacklisted 45 more companies and individuals last year as it boosted a crackdown on corruption in its contracting.

The global development bank, which made financial commitments of $72.2 billion in the year to June 20, 2010, said it initiated 117 investigations last year which resulted in 45 debarments of firms and individuals “for engaging in wrongdoing.”

Under a cross-debarment pact signed last year, firms debarred by the World Bank are also automatically denied contracting opportunities at other multilateral development banks, it said.

“The message is pretty straightforward: if companies or individuals try to cheat one of us, they are going to get banned by all of us,” bank president Robert Zoellick told a seminar on corruption-fighting Wednesday.

The bank pushed ahead with counter-corruption measures after strong criticism in the 1990s for tolerating huge losses to graft and other malfeasance in its contracting and lending.

Since the debarment policy began in July 2008, a total of 90 individuals and businesses have been blacklisted by the bank.

In one major case Zoellick termed “quite innovative”, Italian engineering firm C. Lotti agreed last December to pay $350,000 in restitution to Jakarta after admitting involvement in a fraudulent invoicing scheme related to a bank-backed Indonesia water project.

Lotti was also debarred from bank projects.

“This was a first effort for the bank and the first for a developing country and a debarred company,” said Zoellick.

“We are interested to see how we can build on it,” he said.

He meanwhile praised a 2009 “flagship settlement” with Siemens over corruption in a bank project in Russia. Siemens committed to pay $100 million over 15 years to support anti-corruption efforts.

The German giant was also shut out of World Bank business for two years.