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IDB debars construction company for ‘failure to prevent’ bribery

The Inter-American Development Bank (IDB) debarred a Brazilian construction company Thursday for a year and a half for corrupt and fraudulent practices related to a project in Brazil.

Sociedad Anónima de Obras y Servicios Copasa do Brasil (Copasa) is ineligible to participate in projects and operations financed by the IDB during the 18-month debarment.

According to the IDB, the prohibited practices were committed by a road construction consortium in which Copasa was a non-leading party. In 2013-2015, the other entity partner, Construcap, paid around $1 million in bribes on behalf of the consortium to a public official involved in the supervision and management of the contract.

Before the bribes were paid, a manager at Copasa was aware of the public official’s bribe solicitations and the requested use of a subcontractor. The Copasa employee refused to make the payments but failed to report it, believing the bribes would not be paid, the IDB said.

According to the IDB, the Copasa manager was informed several years later that the bribes had been paid by the consortium partner using the consortium’s designated subcontractors.

Copasa did not contest its responsibility for the prohibited practices committed by the consortium, including the IDB’s Office of Institutional Integrity (OII) finding that a company’s senior manager “failed to act to prevent those prohibited practices from occurring.”

As part of the settlement, Copasa committed to report on its compliance program through an existing independent monitor and to continue its cooperation with the OII.

In a related July settlement, consortium partner Construcap was debarred by the IDB for 18 months and paid Brazilian authorities fines and restitution of around $712,000. 

Thursday’s debarment qualifies for cross-debarment by the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the African Development Bank.

A list of all IDB debarred entities and individuals is here.

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