The Effects of MDB Debarment and Cross-Debarment
Companies and individuals who have bid on and who have been awarded contracts on projects financed by the Multilateral Development Banks (“the MDBs”), such as the African Development Bank (“AfDB” in Abidjan), the Asian Development Bank (“AsDB” in Manila), the Inter-American Development Bank (“IDB” in Washington, D.C.), the World Bank Group (also in Washington DC) and more, fall squarely within the counter-corruption jurisdictions of those international governmental organisations. What this means in practice, is that the likes of the AfDB, the AsDB and the World Bank Group can and will investigate and thereafter seek to sanction a company and its directors if they believe that the company engaged in fraud, corruption, collusion or coercion (“Sanctionable Practices”) on one or more of their projects.
The anti-corruption offices of the MDBs, of which there are several, are highly capable and they are all mandated to ensure that the public funds lent by their respective banks go to their intended destinations untouched by Sanctionable Practices. A company found culpable by, for example, the World Bank Group, of paying bribes to facilitate the award of a Bank financed contract will be debarred either for a defined period of time or indefinitely, depending upon the facts of the case.
Since 2010, a company debarred by one MDB, such as the World Bank Group, will likely be cross-debarred by the AfDB, the AsDB, the European Bank for Reconstruction and Development (“the EBRD” in London) and the IDB. This can and often does have catastrophic consequences – both financially and reputationally – for those businesses that depend upon winning and working on large-scale public-sector infrastructure projects around the world. Those companies debarred or cross-debarred are also likely to be prevented from bidding for contracts financed by national aid agencies, such as the United Kingdom’s Foreign, Commonwealth & Development Office (“FCDO”) or the United States’ Agency for International Development (“USAID”).
Any company doubting the effectiveness and consequences of falling foul of an MDB investigative office, such as the World Bank Group’s Integrity Vice Presidency (“INT”) or the AsDB’s Office of Anti-corruption and Integrity (“OAI”) need merely look at the debarment lists published by those banks and others.
Our Global MDB Service
In the right hands, a well-crafted Negotiated Resolution Agreement (“NRA”) can be an extremely powerful tool that enables both the MDB to discharge its obligations on the one hand and the company to continue doing business on the other. Such agreements are multi-faceted and it is absolutely essential that those charged with negotiating them have in place the knowledge, standing and relationships of trust to achieve agreement. Yet that is only the first step, for any NRA is only as strong as the ability to deliver what is expected under that agreement. This is an area where early engagement with expert, specialist barristers can yield significant results by providing direction and insulation in the face of substantial threats to business continuity, reputations, and of cross-debarment by other MDBs, and referrals to national law enforcement or prosecutors.
NRAs invariably involve an investigative component. Yet the power and protection that comes from such agreements is only maintained by the parties’ ability to deliver the investigative work that follows. Unlike many, the specialist barristers at Pavocat Chambers do not only represent clients as advocates or across the table in negotiations; rather we personally undertake and oversee the crucial investigative work that secures and maintains a company’s pathway through the turbulence that can come with the discovery of Sanctionable Practices. Performance of any investigative component is often as important as the NRA itself, first because such agreements are conditional and, secondly, because additional matters often arise. Our barristers have a wealth of in-depth investigative experience obtained internationally on bank-financed projects and through work with national prosecution authorities, which means that clients have the benefit of lawyers who investigate and investigators who understand the law, and the risks that clients face.
Any company that (1) suspects or discovers that it may have committed a Sanctionable Practice on an MDB financed project anywhere in the world; or (2) is subjected to investigation or formally accused of such a practice by an MDB investigative office, would benefit from representation by one or more of Pavocat Chambers’ MDB experts.
A Word on Settlements
Barristers from Pavocat Chambers are established and recognised experts in navigating the complexities of the sanctions regimes operated by all of the MDBs. Our members have over many years successfully represented some of the largest companies to have fallen foul of the MDB investigative offices. They provide a truly comprehensive service ranging from defending cases through all stages of the sanctions process culminating in hearings before Sanctions Committees, to negotiating settlement agreements (“NRAs”) and entries into voluntary disclosure programmes (“VDPs”).
Each sanctions case brought by the MDBs requires a bespoke response; whatever your needs or your preferred approach, the members of Pavocat Chambers are perfectly placed to advise, assist, negotiate and represent you.
