World Bank bars Odebrecht subsidiary

1 Feb 19

The World Bank has blocked the subsidiary of a multinational corporation at the centre of a web of corruption across Latin America from participating in its projects.

Brazil-based construction and engineering company Construtora Norberto Odebrecht S.A. will not be able to undertake work financed by the Washington-based lender for three years.

The move could prevent the company cooperating with other multilateral development banks under an agreement between the World Bank and other international financial institutions.

Construtora Norberto Odebrecht is the construction and engineering subsidiary of Odebrecht S.A., a multinational at the heart of a massive bribery scandal in more than half of the countries of Latin America.

The Brazilian construction giant was behind the construction of venues for the 2016 Olympics, infrastructure for the 2014 World Cup, and the metro system in Caracas among other huge projects.

Odebrecht has admitted paying bribes across Latin America and in Africa to gain contracts, with much of the money finding its way into political party election campaigns.

In Brazil itself, the scandal snared almost a third of the ministers in the former administration of President Michel Temer.

The World Bank has barred Construtora Norberto Odebrecht in connection with fraudulent and collusive practices linked to its role in the bank-financed Río Bogotá Environmental Recuperation and Flood Control Project in Colombia.

The bank said Construtora Norberto Odebrecht engaged in fraudulent practices by failing to disclose fees paid to commercial agents during the tender and bidding processes, and these agents assisted the company to obtain confidential information.  

Under a settlement, the company acknowledged responsibility for wrongdoing and agreed to meet conditions imposed by the bank on corporate compliance in order to regain its status in the future.

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