CASE STUDIES
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Alstom SA and various subsidiaries Company headquarters – France Cases – France, Switzerland, World Bank Investigations – European Investment Bank, European Bank of Reconstruction and Development, France, Mexico, Norway There were a number of enforcement actions across the world against French engineering giant Alstom SA in 2011 and the start of 2012. In February 2012, the World Bank Group announced the debarment for three years of Alstom subsidiaries Alstom Hydro France and Alstom Network Schweiz AG.This related to allegations of attempted bribery of Zambian officials in 2002. The companies agreed to a settlement of US $9.5 million as part of its Negotiated Resolution Agreement, and the subsidiaries will also be prohibited from participating in bids of the African Development Bank, Asian Development Bank. European Bank for Reconstruction and Development (EBRD) and the Inter-American Development Bank Group.189 As to enforcement in France, Alstom reported in 2010 that a Group subsidiary in the Hydro business was formally charged in France on 6 October 2010 for alleged illegal payments concerning operations in Zambia. Apart from the World Bank, the European Investment Bank was also at the time reportedly conducting an investigation for alleged illegal payments concerning operations in Zambia.190 The Swiss authorities in November 2011 charged Alstom Network Schweiz with having failed to take all reasonable and necessary organisational measures to prevent the payment of bribes to foreign public officials in Latvia, Malaysia and Tunisia. The Swiss attorney general announced a summary punishment order against the company assessing penalties of CHF 38.5 million (US $42.2 million) including a mandatory donation of CHF 1 million (US $1.1 million) to the International Committee of the Red Cross.191 It was reported in April 2012 that the European Investment Bank and the EBRD were investigating the company following allegations that it had bribed Slovenian officials for information on a rival bid submitted by Siemens AG for a D700 million (US $537 million) power plant project.192 The company reportedly has been investigated in Mexico on suspicion of bribery and ist reportedly under investigation in Brazil, Poland, the UK and the US.193 Implications: The World Bank debarment of Alstom marks a significant commitment to anti-bribery enforcement by international development banks and highlights the reach of the cross-debarment agreement established in 2011, which de-bars any company banned by one bank within the network by the other four. Further, this is confirmation the World Bank’s previous enforcement efforts through a fine of US $100 million that was imposed on Siemens. Investigative journalism, including by the Wall Street Journal, has played a role in spotlighting emerging enforcement efforts against Alstom.
189 World Bank Group, 22 February 2012, “Enforcing Accountability: World Bank Debars Alstom Hydro France, Alstom Network Schweiz AG, and their Affiliates”, http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0%2c%2ccontentMDK:23123315~pagePK:34370~pi PK:34424~theSitePK:4607%2c00.html 190 Alstom, Half-year ended 30 September 2010, http://www.alstom.com/Global/Group/Resources/Documents/30-09-10%20 SEMESTRIAL%20FINANCIAL%20REPORT.pdf 191 WSJ Corruption Currents Blog, 22 November 2011, “Alstom Fined By Switzerland In Bribery Case”, http://blogs.wsj.com/corruptioncurrents/2011/11/22/alstom-fined-by-switzerland-in-bribery-case/ 192 Wall Street Journal, 30 April 2012, “Alstom Bid Draws Scrutiny”, http://online.wsj.com/article/SB1000142405270230486800457737 5923946945092.html 193 Responsible Investor, 6 December 2011, “Norwegian Finance Ministry puts France’s Alstom on watch over corruption” http://www. responsible-investor.com/home/article/norwegian_finance_ministry_alstom/
Progress Report 2012
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