Debarment is the World Bank's main sanction for such actions. Debarred entities are prohibited from participating in and benefitting from PPP projects and developments funded by the World Bank. Debarred entities are also listed on a 'global due diligence blacklist, which is publicly available.
Debarment by the World Bank may also trigger 'cross-debarment'. This means that a defaulter may be prohibited from participating in PPP projects which are financed by other development banks which are signatories to the Agreement for Mutual Enforcement of Debarment Decisions, as well those financed by the World Bank. Signatories include the African Development Bank Group and the Asian Development Bank.
According to the World Bank's sanctioning guidelines, the default sanction is debarment for a period of three years with conditional release. In order to be released from a fixed period of debarment with conditional release, a contractor is required to comply with certain conditions imposed by the World Bank. This may include an integrity compliance programme, set in accordance with the World Bank's integrity compliance guidelines.
Other possible sanctions include debarment without conditional release; conditional non-debarment; restitution; and reprimand.
The process leading to debarment is initiated by a thorough investigation. An investigation may be triggered as a result of suspicion that a contractor committed or was involved in a sanctionable practice: fraud; corruption; coercion; collusion; or obstructive practices relating to any project or development financed by the World Bank.
A contractor which is suspected of participating in a sanctionable practice can appeal to the World Bank Sanctions Board ahead of formal debarment. The appeal process must be initiated in writing within 30 days of a determination of non-compliance with the World Bank's procurement guidelines.
The contractor party will request the Sanctions Board to review the determination, and the Sanctions Board will make its decision within 90 days of receiving the request. The Sanctions Board may hold a hearing, if necessary, and consider arguments and evidence presented by the contractor. Upon its review, the Sanctions Board will impose a final sanction, which cannot be appealed.
Tanya Calitz is a projects expert at Pinsent Masons, the law firm behind Out-Law.