World Bank Bans Australian Engineering Firm from Projects for 2 Years

The World Bank (WB) banned on Thursday Australian engineering firm Kellogg Brown & Root (KBR) from participating in its projects for two years. The ban was due to KBR's misconduct in talks over a Vietnamese water supply contract.

KBR is the subsidiary of U.S.-based firm. It is the contractor of the $37-billion Gorgon liquefied natural gas development project off the Western Australian coast which is one of the largest infrastructure projects in the world.

The WB said KBR is banned for two years with conditional release after an investigation by the bank's Integrity vice president into violations of the company's guidelines under a bank-financed water supply project in Vietnam.

In a statement, the bank said KBR misrepresented the availability of key consultants during contract negotiation and execution, which led to the award of the contract but also resulted in subsequent delays in contract execution.

KBR said it agreed with the WB in a settlement to remedial measures to its corporate compliance programme.

Besides KBR, the WB also banned two other firms involved in other projects in Vietnam and Indonesia. These are the Social and Environmental Development Joint-Stock Company (SECO) and its managing director, and PT Amythas Experts & Associates.

SECO and Managing Director Nguyen Xuan Doan were barred for five years for fraud allegations in a Vietnam water sector project and after they were found to have engaged in a scheme to defraud a WB client in another water supply project.

PT Amythas was also banned for fraudulent practice linked to a WB-finance community development and poverty alleviation project in Indonesia.

The WB banned in October for three years China First Metallurgical Construction Corporation for fraud and Turkish firm Oztas Insaat for collusion.

"We have to act with ever more vigilance when it comes to rooting out fraud and corruption. This is true for the larger global financial architecture, and without question, the key to the future of international development," WB Integrity Vice President Leonard McCarthy said in a statement.