The European Investment Bank and GE Steam Power have reached an agreement regarding historical cases of prohibited conduct by various Alstom Steam Power companies, in particular, Alstom Power Systems S.A (France), Alstom Power Systems GmbH (Germany), and Alstom Hrvatska d.o.o (Croatia) in the Šoštanj Power Project in Slovenia.
Such settlements (as the EIB has previously agreed with Siemens, Iberdrola Ingeniería y Construcción S.A.U. (Iberinco), Sediver and VW, etc.) can result in periods of exclusion for the respondents and also provide very positive potential impact for global anti-corruption initiatives such as collective action.
EIB Exclusion and MDB Debarments. An exclusion decision by EIB is very similar to a debarment decision by sanctioning bodies of one of the other major Multilateral Development Banks or MDBs, such as the World Bank, IDB, or EBRD.
For the EIB, the term “exclusion” derives from the European Commission’s use of the term under the Early Detection and Exclusion System (EDES). This is the system established by the European Commission to reinforce the protection of the European Union’s financial interests. Consequently, EIB uses the term “exclusion” rather than using the terms “sanction” or “debarment” that the other major MDBs use. Indeed, there is a cross debarment agreement in operation among the other MDBs, although EIB is not party to it for legal reasons.
Settlements: EIB’s Exclusion Policy and the MDB General Principles for Settlements that were adopted in 2021 indicate that, in these cases, settlements may be agreed with the company responsible for the misconduct.
Section 12.01 of EIB’s Exclusion Policy notes that: “…the Inspector General may, after consultation with the President, … initiate negotiations with a Respondent(s) with a view to reaching a Settlement”. Also, section 12.04(a) states that “If the Settlement Agreement provides for the definitive resolution of the case … the case … shall be deemed closed … on such terms and conditions as may be specified, including the mutually agreed application of exclusion on the Respondent(s).”
Settlement with GE regarding Alstom Power Companies. Due to restrictions, the following s atement on EIB’s website has only recently been published:
The European Investment Bank and GE Steam Power have reached agreement regarding historical cases of Prohibited Conduct by various Alstom Steam Power companies, in particular, Alstom Power Systems S.A (France), Alstom Power Systems GmbH (Germany) and Alstom Hrvatska d.o.o (Croatia) in the Šoštanj Power Project in Slovenia.
According to the Agreement, the European Investment Bank has concluded its investigation and the three Alstom Steam Power companies involved have voluntarily agreed not to participate in any European Investment Bank project during exclusion periods of varying lengths (being 12 months for Alstom Power Systems S.A, 12 months for Alstom Power Systems GmbH and 18 months for Alstom Hrvatska d.o.o.), which started running from November 15, 2021 when they voluntarily agreed to refrain from involvement in European Investment Bank funded projects.
GE Steam Power has implemented and will continue to maintain its rigorous compliance procedures in these Alstom Steam Power companies that it acquired in 2015, to mitigate the risk of any similar issues arising in the future.
Additionally, the three companies involved will finance anti-corruption, integrity, sustainability, climate change and/or environmental protection activities and, in this context, have agreed to provide €7 million ($6.9 million) to fund such projects in the next 5 years.
Furthermore, the three companies involved will cooperate with the European Investment Bank in the exchange of best practices in relation to compliance standards and the fight against fraud and corruption.
In addition, the three companies involved have settled the civil case in Slovenia.