Democratic Republic of Congo

           Multi-modal Transport Project


                  Redacted Report




                              November 2018
                                Statement of Use and Limitations

This Report was prepared by the World Bank Group (the “WBG”) Integrity Vice Presidency
(“INT”). It provides the findings of an INT administrative inquiry (the “Investigation”) into
allegations of corrupt, fraudulent, collusive, and/or coercive practices, as defined by the WBG for
purposes of its own policies, rules and procedures (the “WBG’s Framework regarding Anti-
corruption”), in relation to the WBG-supported activities. The purpose of the Investigation was to
allow the WBG to determine if the WBG’s Framework regarding Anti-corruption has been
violated.

This Report is being shared to ensure that its recipients are aware of the results of the INT
Investigation. However, in view of the specific and limited purpose of the Investigation underlying
this Report, this Report should not be used as the sole basis for initiating any administrative,
criminal, or civil proceedings. Moreover, this Report should not be cited or otherwise referred to
in the course of any investigation, in any investigation reports, or in any administrative, civil, or
criminal proceedings.

This Report is provided without prejudice to the privileges and immunities conferred on the
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subsequent judicial, administrative or other proceeding pursued in connection with this matter.
The WBG’s privileges and immunities cannot be waived without the prior express written
authorization of the WBG.




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Background

In July 2010, the International Development Association (the “Bank”) and the Democratic
Republic of Congo (the “DRC”) signed an initial Financing Agreement, and in July 2013, the Bank
and the DRC signed a second Financing Agreement. Both agreements finance the Multi-modal
Transport Project (the “Project”).

The Project aims to, inter alia, improve transport connectivity in the recipient’s territory to support
national economic integration and improve the operational performance of state-owned enterprises
in the transport sector.

Company A bid for and was awarded a Project-financed contract (the “Contract”) valued at more
than Euros 11,000,000.

Allegations & Methodology

INT obtained evidence indicating that a company had paid bribes to Project officials.
Subsequently, INT initiated a proactive review of other significant Project contracts and identified
the Contract as warranting further investigation.

INT conducted an audit of Company A.

Findings

       Evidence indicates that Company A failed to disclose its agency relationship with, and
       commission payments to, Company B.

Companies bidding for Project-financed contracts were required to disclose any commissions
paid, or to be paid, in relation to the bidding process or contract execution.

In its bid, Company A did not disclose any commissions related to the bidding process or contract
execution. Company A left the section regarding commission payments blank. Elsewhere in the
bid, Company A disclosed that Company B was its representative in the DRC.

Company A was awarded the Contract. At Contract signing, Company A submitted an additional
bid submission letter asserting that it had not paid any commissions.

Evidence indicates, however, that Company A hired Company B as its agent prior to bid
submission. Evidence indicates that Company A sent an undated, draft consultancy agreement to
Company B prior to bid submission. Evidence indicates that, in response to this proposed
agreement, Company B asked that the agreement be concluded in the name of Company B in the
DRC, to simplify the company’s ability to make payments to stakeholders in the DRC. Company
A was unable to provide a dated and signed copy of this agreement.

Evidence further indicates that: (i) Company A committed to pay Company B a commission
totaling more than Euros 600,000; (ii) Company A agreed to pay Company B upon receipt of each

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Contract installment payment; and (iii) Company A ultimately made multiple, high-value
payments to Company B.

Evidence indicates that, although Company A kept a master data list of all suppliers, service
providers, and clients, Company B was not included in the list. Company A provided inconsistent
explanations for this omission. Further, Company A’s records indicate that it paid Company B
more than Euros 600,000—more than Company A’s own Euros 400,000 net profit margin on the
Contract. Company A stated that the remuneration of agents ranged normally from three to six
percent, but did not explain how the remuneration was calculated in this specific case.

Corrective Actions

The World Bank imposed the administrative sanction of debarment with conditional release on
Company A, extending to any legal entity Company A directly or indirectly controls.




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