World Bank Group Debars Ferrostaal Oil & Gas GmbH

New Delhi: The World Bank Group today announced the thirteen-month debarment of Germany-based Ferrostaal Oil & Gas GmbH (“FSOG”), an international engineering, procurement, and construction contractor for oil, gas, and other industrial plants, in connection with a fraudulent practice under the Bank-financed Ayeyarwady Integrated River Basin Management Project in Myanmar.

The debarment makes FSOG ineligible to participate in projects and operations financed by institutions of the World Bank Group for thirteen months. It is part of a settlement agreement under which the company acknowledges responsibility for the underlying sanctionable practice and agrees to meet specified corporate compliance conditions as a condition for release from debarment.

The Ayeyarwady Integrated River Basin Management Project was designed to strengthen integrated, climate-resilient management and development of the Ayeyarwady River and, in the event of an eligible crisis or emergency, to provide an immediate and effective response to said eligible crisis or emergency.

According to the facts of the case, FSOG assisted a company by acting as the company’s local Myanmar partner and agent to prepare a bid for a contract under the project. FSOG’s local representative and managing director of its Myanmar branch instructed the company not to disclose the agreed commission to be paid to FSOG in the initial bid and did not correct this omission in a later amendment to the contract. This constitutes a fraudulent practice under the World Bank Group procurement guidelines.

The settlement agreement provides for a significantly reduced period of debarment with conditional release in light of FSOG’s extraordinary cooperation and voluntary remedial actions. As a condition for release from sanction under the terms of the settlement agreement, FSOG commits to complete integrity compliance programs consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines. FSOG also commits to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.

The debarment of FSOG qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.

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