The World Bank Tuesday debarred Brazil-based engineering and construction company Construtora Norberto Odebrecht S.A. for three years for “fraudulent and collusive practices” during a project in Colombia.
Also debarred were Odebrecht construction subsidiaries based in Colombia, Chile, Panama, Peru, Barbados, Angola, the United States, Luxembourg, Austria, and the Cayman Islands.
Construtora Norberto Odebrecht and the other Odebrecht companies named Tuesday are ineligible to participate in World Bank-financed projects during the debarment.
The company — a subsidiary of Odebrecht S.A. — admitted it committed “the underlying sanctionable practices.”
The project in Colombia was the World Bank-financed Río Bogotá Environmental Recuperation and Flood Control Project. It was designed to improve water quality and reduce flood risks along the Bogotá River.
In late 2016, Odebrecht S.A. and its petrochemical unit, Braskem S.A., pleaded guilty in the United States to paying bribes around the world. The companies agreed to pay $3.5 billion for a global settlement with authorities in the United States, Brazil, and Switzerland.
The DOJ later reduced the U.S. share of Odebrecht’s “global” criminal penalty from $260 million to $93 million. Odebrecht’s ability to pay the criminal penalties was impaired after it lost big contracts for construction projects with the governments of Peru, Colombia, and Panama, the DOJ said.
The World Bank said Tuesday that Construtora Norberto Odebrecht engaged in “fraudulent practices by failing to disclose fees paid to commercial agents during the tender prequalification and bidding processes.”
“These agents assisted the company in obtaining confidential information,” the World Bank said.
Constructora Norberto Odebrecht and an agent also tried to “improperly influence the tendering package that was part of the project, engaging in collusive practices prohibited by the World Bank’s procurement guidelines.”
Under the negotiated settlement, the company agreed to cooperate with the World Bank Group Integrity Vice Presidency and meet compliance requirements.
Tuesday’s Odebrecht debarments qualify for cross-debarment by the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the African Development Bank.
A list of all World Bank debarred entities and individuals is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog.