The FINANCIAL — The World Bank on June 1 announced a Negotiated Resolution Agreement with two Spanish companies: Iberdrola Ingeniería y Construcción, S.A.U. and its parent company Iberdrola, S.A. following acknowledgment of misconduct by Iberinco involving two power projects in Albania tendered between 2004 and 2005.
Under the terms of the Agreement, Iberinco is debarred for a period of 12 months to be followed by a 6-month conditional non-debarment period for its direct responsibility in the misconduct while Iberdrola S.A. received a letter of reprimand for failure to supervise. In addition, Iberinco will also make a restitution payment of US$350,000 to the Albanian government, according to the World Bank.
According to a World Bank investigation, Iberinco retained an agent in 2004 with regard to two tenders, one under the Power Sector Rehabilitation and Restructuring Project (PSRRP) and the other under Power Sector Generation and Restructuring Project (PSGRP), but failed to disclose those agency arrangements in those tenders. Such failure to disclose the agency arrangements constitutes fraudulent practice as per the World Bank Procurement Guidelines. During the course of the investigation, Iberinco took necessary steps to hold employees accountable, and review its compliance systems to ensure such misconduct is not repeated. Similarly, Iberdrola S.A. cooperated with the World Bank investigation and reviewed its own compliance systems to enhance the supervision of its subsidiaries.
“Steps toward stronger compliance and transparency standards while acknowledging misconduct are always welcomed by the World Bank Group,” says Leonard Frank McCarthy, World Bank Integrity Vice President. “This case offers a clear example of how a company shifted course and sought corrective action in light of investigative evidence. Our objective is to work with more companies to achieve that goal.”
Throughout the debarment period Iberinco is also required to cooperate with the World Bank Integrity Vice Presidency and improve its Corporate Compliance Program to reflect the principles of an effective integrity compliance program consistent with the World Bank Group Integrity compliance standards.