SCUTTLEBUTT

Hands in cookie jar

A culture of corruption is usually attached to the Philippines, which many protest as unfair, but the country’s reputation precedes it.

The World Bank Group recently announced the 4.5-year debarment of LSD Construction & Supplies, the latest in a long list of companies penalized for “collusive, fraudulent, and corrupt practices.” The company was flagged in connection with the Philippine Rural Development project, which aims to increase rural incomes and enhance farm and fishery productivity in targeted areas of the Philippines.

Between 2017 and 2018, LSD entered into two undisclosed arrangements with entities to bid on two World Bank-financed contracts using LSD’s name and its technical and financial credentials, for a fee.

LSD secretly subcontracted the work to entities that lacked the financial and technical capacities to qualify for the contracts, according to the multilateral lender.

Additionally, LSD made a payment to improperly ensure its receipt of one of the contracts and to secure the timely processing of invoices during the contract implementation. These acts constituted collusive, fraudulent, and corrupt practices in violation of the World Bank’s Anti-Corruption Guidelines.

The debarment may extend to other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on 9 April 2010.

Also imposed sanctions earlier by the World Bank were four Philippine companies.

E.C. de Luna Construction Corp. was permanently debarred from WB projects. Cavite Ideal International Construction and Development Corp. was debarred for four years for fraudulent and collusive practices.

CM Pancho Construction Inc. was debarred for four years for fraudulent and collusive practices in road projects. China Communications Construction Company Limited (CCCC) was debarred for fraudulent practices under Phase 1 of the Philippines National Roads Improvement and Management Project, as the successor entity to China Road and Bridge Corporation (CRBC).

The four firms were linked to a 2009 investigation into collusive schemes involving World Bank-funded road projects in the Philippines.