It is common for the OSD to impose a temporary suspension on a Respondent preventing it from entering into new contracts for World Bank financed projects whilst investigations are on-going. Whilst a temporary suspension is not announced publicly, it is posted on the World Bank’s intranet and the Client Connection extranet site used by borrowing countries. It should be noted that, whilst the sanctions system is a “quasi-judicial administrative process” – meaning that it does not have jurisdiction to enforce criminal or civil penalties - the World Bank may refer cases to national governments where the wrongdoing would likely be considered a criminal act.
Once the investigation has been concluded, and likely wrong doing established, there are 5 possible sanctions that may be implemented: debarment with conditional release; debarment for a fixed period (without conditional release); conditional non-debarment; public letter of reprimand and restitution. By far the most common sanction is debarment – meaning that the Respondent is declared ineligible to receive World Bank financed contracts. Where a debarment with “conditional release” is granted, the conditions for release will focus on the debarred party demonstrating that it has in place, and has implemented for an adequate period, an integrity compliance program satisfactory to the World Bank (using standards reflective of global consensus). Debarments are public and printed on the World Bank’s website.
As of 30 June 2015, the World Bank has publicly debarred or otherwise sanctioned more than 700 firms and individuals. Of the 368 cases concluded since the creation of the two-tier sanctions system in 2008, 39 per cent have been sanctioned during the last two fiscal years. The recent increase in suspension and debarment actions suggests the efficacy of the OSD’s sanctions regime has improved and further demonstrates the World Bank’s continued commitment in the fight against corruption.
This trend is reflected in the legislative changes in Canada, the EU and UK where the number of offences for which companies can be debarred has recently increased. In Canada, for example, amendments to the Public Works and Government Services Canada Supply Manual in 2014, mean that companies convicted of dishonesty offences (including bribery, extortion, forgery and insider dealing, as well as the offences under the Corruption of Foreign Public Officials Act) are prohibited from obtaining a federal government contract for a period of 10 years, regardless of subsequent efforts to “clean house” and remediate corrupt behaviours within the business. In contrast the UK imposes a maximum debarment of 5 years and enables companies convicted of a corruption or dishonesty offence to recover eligibility to bid for public contracts having undergone a “self-cleaning” process.
Interestingly in the US, an upward trend in suspension and debarment actions has recently plateaued. The Interagency Suspension and Debarment Committee Annual Report, suggests that after consistent increases from 2009, the number of cases levelled off in 2015 with a slight decrease in reported instances of debarment from 1,929 in 2014 to 1,873 the following year. According to the Committee, this should not however be seen to reflect the effectiveness or otherwise of the system but regarded as “purely a function of need”. Ultimately, Congress remains keen that the administrative powers of suspension and debarment are utilised where appropriate, a sentiment that is echoed in other quarters. The most recent OECD Foreign Bribery Report dated December 2014, for example, notes that out of 427 cases brought only 2 resulted in debarment and concluded that countries need to do more to ensure those that are sanctioned for having bribed a foreign public official are suspended from participation in national public procurement contracting.