Legal firm Freshfields Bruckhaus Deringer’s report, published this week, revealed that this figure is four times the number of companies blacklisted during all of 2012, and more than the total number of debarments of the previous seven years.
The development bank has also penalised a further 91 contractors and consultants in the first half of this year, by imposing sanctions other than debarment, such as compliance and monitoring requirements.
Investing over $200bn (€147.7bn, £124.7bn) to finance projects in developing countries since 2008, the World Bank has the authority to investigate and debar both major multinationals and smaller firms for bribery, bid-rigging, fraud and other wrongdoing related to projects which it funds.
The World Bank’s 2010 adoption of a settlement mechanism typically includes a term of debarment, cooperation obligations and monitoring of compliance.
This has resulted in major corporate settlements, including one involving Canada’s largest engineering group, SNC Lavalin, which resulted in a 10-year tendering ban following a World Bank corruption investigation into a bridge-building project in Bangladesh that it funded.
A World Bank investigation can also alert other authorities to alleged wrongdoing.
The Freshfields’ analysis revealed that five sectors make up two-thirds of the Bank’s investigations: healthcare, transportation, agriculture, water, and energy.
Geographically, the highest proportion of currently blacklisted entities are based in North America, 29%, followed by Latin America and the Caribbean, 21%, Europe and Central Asia, 21%, and East Asia and the Pacific region, 16%. Canada had the most debarred entities, 119, followed by the US, 46, Indonesia, 43, and the UK, 40.
Tim Coleman, a global investigations partner at Freshfield noted one reason for the increase in blacklisted companies was because the majority of its sanctions have involved fraud, such as forgery of misrepresentation in bidding documents, which are easier to prove than bribery and other forms of corruption.
