World Bank debarment of Alstom Hydro France and Alstom Network Schweiz AG (2012)
- Resolution type
- Negotiated Resolution Agreement between Alstom and the World Bank 1
- Date
- 22 February 2012, press release 2012/282/INT 1
- Agency
- World Bank Group, Integrity Vice Presidency 1
- Entities debarred
- Alstom Hydro France and Alstom Network Schweiz AG (Switzerland), and their affiliates 1
- Sanction
- Debarment for three years, reducible to 21 months with enhanced oversight if the companies comply with all conditions 1
- Parent and other affiliates
- "Alstom SA and its other affiliates are conditionally non-debarred" during the debarment period 1
- Restitution
- About US$9.5 million, paid by the two companies 1
- Conditions
- Cooperate with the Integrity Vice Presidency and keep improving the internal compliance program 1
- Misconduct as stated
- An improper payment of €110,000 in 2002 to an entity controlled by a former senior government official, for consultancy services 1
- Project
- Zambia Power Rehabilitation Project, Zambia 1
- Admission
- The release refers to "Alstom's acknowledgment of misconduct" 1
- Cross-debarment
- The Bank said it "qualifies for cross-debarment by other MDBs" 1
The World Bank resolution
The World Bank Group announced on 22 February 2012 the debarment of Alstom Hydro France and Alstom Network Schweiz AG (Switzerland), together with their affiliates, for three years 1. The Bank said the debarment is part of a "Negotiated Resolution Agreement between Alstom and the World Bank" 1.
The release says the debarment can be cut to 21 months, with enhanced oversight, if the companies comply with all conditions of the agreement 1. During the debarment, "Alstom SA and its other affiliates are conditionally non-debarred" 1. Alstom SA, the two debarred companies and their affiliates committed to cooperate with the Integrity Vice Presidency and to "continuing to improve their internal compliance program" 1.
The two companies agreed to a restitution payment of about US$9.5 million 1.
Misconduct described by the Bank
The release says Alstom "made an improper payment of €110,000, to an entity controlled by a former senior government official" for consultancy services linked to the World Bank-financed Zambia Power Rehabilitation Project 1. It dates the payment to 2002 1. The release does not name the official or the entity 1.
The Bank said the companies agreed to the restitution payment following acknowledgement of misconduct 1. Integrity Vice President Leonard McCarthy said "Alstom's settlement with the Bank is a wake-up call to global companies" 1.
What kind of resolution this was
This was a negotiated settlement with the World Bank, not a contested decision of the Sanctions Board 1. Under the World Bank's current procedure, issued in 2023, a settlement agreement is signed by INT and the respondent and reviewed by the Suspension and Debarment Officer 2. Restitution and conditional non-debarment are among the sanctions the procedure lists 2. The 2023 procedure postdates this case and is cited here only to explain the terms.
An acknowledgment of misconduct in a World Bank settlement is not a criminal conviction. It is what the Bank's release says the company accepted 1.
Cross-debarment
The Bank said the debarment "qualifies for cross-debarment by other MDBs under the Agreement of Mutual Recognition of Debarments", which the release says was signed on 9 April 2010 1. The Asian Development Bank calls the agreement the Agreement for Mutual Enforcement of Debarment Decisions 3. It says a debarment qualifies only if it is public and its initial period exceeds one year, among other tests 3. A three-year debarment meets the length test 1,3. This page has not confirmed which banks enforced it.
Common questions
Did Alstom admit wrongdoing to the World Bank?
The World Bank release refers to "Alstom's acknowledgment of misconduct" 1. This is an administrative settlement, not a criminal plea.
How much did Alstom pay the World Bank?
The two companies agreed restitution of about US$9.5 million 1.
How long was Alstom debarred?
Three years, reducible to 21 months with enhanced oversight if all conditions were met 1.
Was Alstom SA debarred?
No. Alstom SA and its other affiliates were conditionally non-debarred 1.
Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email [email protected] with the official link.
Sources
- World Bank: press release 2012/282/INT, Enforcing Accountability, World Bank Debars Alstom Hydro France, Alstom Network Schweiz AG, and their Affiliates (22 February 2012)
- World Bank: Bank Procedure, Sanctions Proceedings and Settlements in Bank Financed Projects (30 November 2023)
- Asian Development Bank: Cross Debarment
Related
- World Bank sanctions and debarment explained
How the World Bank investigates, debars and settles with firms over fraud and corruption in Bank-financed projects, from INT to the Sanctions Board.
- Cross-debarment among multilateral development banks explained
How a debarment by the World Bank, AfDB, ADB, EBRD or IDB can be enforced by the others under the 2010 mutual enforcement agreement, and its limits.
- World Bank debarment of SNC-Lavalin Inc. over the Padma Bridge project (2013)
On 17 April 2013 the World Bank debarred SNC-Lavalin Inc. and over 100 affiliates for 10 years under a negotiated resolution over the Padma Bridge project.
- What a government settlement means
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