Firms admit paying bribes in World Bank program

UNITED STATES: A "healthy" number of companies have admitted paying bribes under a new World Bank disclosure program, which encourages firms that have worked on bank-funded projects to report corruption or fraud.

From cash handouts to forking out for luxury travel, sports utility vehicles and schooling for children of government officials, companies are revealing that bribes are part of doing business in some developing countries.

Pascal Dubois, Acting Manager for the Voluntary Disclosure Program, said the initiative was part of the bank's efforts to root out corruption in development projects.

"Companies are telling us that in certain jurisdictions they were paying bribes in order to get a contract; they were paying bribes to get a contract amended and they were paying bribes in order to get paid," Dubois said in a recent interview.

"You clearly see that bribe-paying and corruption turns up at every stage of a particular project," she added. In exchange for being part of the program and admitting to corruption or fraud over the past five years, companies can keep doing business with the bank and have their identities kept secret while also avoiding being put on a blacklist. They also have to agree to hire a compliance monitor, such as a lawyer or auditor.

If a company that is not part of the program is caught, the World Bank bars the company from its projects and publishes its name on its Web site.

Dubois said the program strengthened the World Bank's ability to tackle corruption.

"Knowledge is power and unless you know exactly what is going on, you can't really fight it, because you're shooting in the dark," Dubois said. "We already know so much more and what it does it's evidence instead of hearsay," she said.

Armed with information from companies and its own investigations, the World Bank shares its findings with the government of the country, including the names of the bribe takers.

"We ask the country to take meaningful action in order to make sure that this corruption, which we are sure did happen because it is based on disclosures, stops," Dubois said.

"Obviously if that country does not take meaningful action then the bank has certain remedies at its disposal," she added, pointing out that suspending projects was an option.

Some critics say the program will scare off potential business for the bank, but Dubois said a crackdown on corruption meant a better working environment for firms.

Frank Vogl, a founder and board member of Transparency International, said the program demonstrated the bank is serious about transparent and clean procurement in projects.

Washington, Thursday (Reuters)