The World Bank published a Notice of Uncontested Sanctions Proceedings (“the Notice”) on April 6, 2023 regarding the debarment of Ecuador-based construction company Construcciones y Servicios de Minería Consermin SA (“Consermin”) for a period of 2 years and 10 months. According to the World Bank, the debarment was issued for engaging in a “fraudulent practice” in connection with the Ecuador Guayaquil Wastewater Management Project, a project aimed at reducing wastewater pollution and increasing access to improved sanitation services in Guayaquil. The World Bank accused Consermin of submitting an Expression of Interest and a bid letter for a Project-related construction contract which misrepresented that a consortium, which was formed by Consermin and two other unnamed companies, did not pay or did not intend to pay any fees, commissions, or gratuities under the contract. While World Bank sanctions procedures permit respondents to submit an explanation in response to allegations, the World Bank reported that Consermin did not submit an explanation or otherwise contest the allegations.
The World Bank issued a debarment with conditional release after considering certain aggravating factors, including the multiple misrepresentations made by Consermin regarding fees paid or to be paid under the contract and a Consermin manager’s involvement in the misconduct. The World Bank also considered other factors, including the cooperation of Consermin representatives with World Bank investigators, Concermin’s relatively minor role in the scheme, and the significant amount of time that elapsed between the sanctionable practice and the date that Bank became aware of it.
According to the Notice, the debarment makes Consermin, and any affiliate-entity that it controls, ineligible to participate in World Bank projects throughout the debarment period. The debarment also qualifies for cross-debarment by other multilateral development banks. As a condition of release from debarment, Consermin is required to take appropriate remedial measures to address the alleged sanctionable practice and must also adopt and implement an integrity compliance program in accordance with World Bank sanctions procedures.