World Bank debars Chinese contractor for corruption in China

The World Bank Group has announced the two-year debarment of China-based Zhejiang First Hydro & Power Construction Group Co. in connection with fraudulent and corrupt practices under the Guangxi Laibin Water Environment Project in China.

The debarment makes Zhejiang First Hydro ineligible to participate in projects and operations financed by institutions of the World Bank Group. It is part of a settlement agreement under which Zhejiang First Hydro acknowledges responsibility for the underlying sanctionable practices and agrees to meet specified compliance requirements as a condition for release from debarment.

The Guangxi Laibin Water Environment Project was designed to reduce flood risks and improve drainage in selected areas of Laibin city.

The World Bank said that according to the facts of the case, Zhejiang First Hydro’s de facto agent and subcontractor offered and paid bribes to two government officials in exchange for a contract. 

The company also misrepresented its intent to mobilise the resources required to implement the contract as well as the availability of experts proposed in its bid. The bank said these were corrupt and fraudulent practices, respectively.

The debarment period was significantly reduced in light of what the bank said was Zhejiang First Hydro’s "extraordinary cooperation and voluntary remedial actions".

As a condition for release from sanction under the terms of the settlement agreement, Zhejiang First Hydro commits to undertake integrity compliance programmes and to continue to cooperate with the World Bank Group Integrity Vice Presidency.

The debarment qualifies for cross-debarment by other multilateral development banks.

Image ©GCR, illustration by Denis Carrier

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