The World Bank Group has announced the two-year debarment of Madagascar-based Colas Madagascar S.A., a construction company, in connection with collusive and fraudulent practices as part of the Airports Madagascar Project.
The sanction stems from an investigation that was conducted by the World Bank Group’s Integrity Vice Presidency and highlights the institution’s efforts to promote high integrity standards in International Finance Corporation (IFC)-financed projects. The matter was resolved through settlement agreements that were negotiated with the multiple companies involved. The settlements demonstrate how such agreements, and Bank Group sanctions in general, can be used to help promote better business practices by companies engaged in private sector development projects.
The debarment makes Colas Madagascar S.A. and its subsidiary, CMBI SNC, ineligible to participate in projects and operations financed by institutions of the World Bank Group. It is part of a settlement agreement under which the company acknowledges responsibility for the underlying sanctionable practices and agrees to meet specified corporate compliance conditions as a condition for release from debarment.
The project, which is supported by IFC, provides partial financing for the design and development of the expansion and renovation works of the two main airports in Madagascar: the Ivato International Airport and the Fascene Airport. According to the facts of the case, Colas Madagascar S.A. engaged in collusive practices by arranging for improper meetings with government officials between February 4, 2015 and May 4, 2015, during the tender for the 28-year contract for the concession to run the airports. Colas Madagascar S.A. also committed a fraudulent practice by failing to disclose such meetings to the IFC.
The settlement agreement provides for a reduced period of debarment in light of the company’s cooperation and voluntary remedial actions. As a condition for release from sanction under the terms of the settlement agreement, Colas Madagascar S.A.’s non-sanctioned parent company, Colas S.A., has committed to adapt its group-wide corporate integrity compliance program to reflect the principles set out in the World Bank Group Integrity Compliance Guidelines. Colas Madagascar S.A. and Colas S.A. have agreed to implement and maintain the program as part of their business operations going forward, including at CMBI SNC. Colas Madagascar S.A has also committed to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.
The debarment of Colas Madagascar S.A. qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.