The World Bank has announced the 13-month debarment of Germany’s Ferrostall Oil & Gas (FSOG), an engineering, procurement and construction contractor for oil, gas and other industrial plants.
It is in connection with an alleged fraudulent practice under the Bank-financed Ayeyarwady Integrated River Basin Management Project in Myanmar.
The project was designed to strengthen climate-resilient management and development of the river, in the event of an eligible crisis or emergency.
The debarment makes FSO ineligible to participate in projects and operations financed by institutions of the World Bank Group for 13 months.
According to the World Bank, 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.
It states: “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 co-operation 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.”