Alstom SA’s release today from World Bank sanctions ensures that the US Department of Justice (DOJ) will not impose an independent corporate monitor under its recent settlement with the company. This is because the DOJ’s December 22, 2014 settlement with Alstom, which imposed a record fine of $772 million, declined to impose such a monitor so long as Alstom satisfied the World Bank’s monitoring requirements. Today’s announcement by the World Bank confirms that those requirements were met.
The DOJ’s plea agreement with Alstom specifically credited the significant compliance enhancements that Alstom had already made under its World Bank-imposed independent monitor. Alstom was therefore allowed to self-report to the DOJ regarding implementation of its compliance program and internal controls so long as the World Bank’s monitoring requirements were satisfied. Those requirements would be considered satisfied once the World Bank’s Integrity Compliance Office concluded that Alstom had “implemented a Corporate Compliance Program that complies with the World Bank’s integrity compliance policies and practices, particularly those reflected in the World Bank’s Integrity Compliance Guidelines.” That conclusion was announced today.
The DOJ’s decision to defer to the World Bank’s monitoring process is a credit to the maturity and robustness of that system. The DOJ’s plea agreement noted Alstom’s “substantial efforts to enhance its compliance program and to remediate prior inadequacies ... substantially increasing its compliance staff, improving its alert procedures, increasing training and auditing/testing, and ceasing the use of external success fee-based consultants[.]”
The World Bank’s settlement with Alstom was announced three years ago on February 22, 2012. Two Alstom companies and their affiliates were barred from bidding on World Bank-financed projects for three years. Alstom and its other affiliates were conditionally non-debarred for the same period. Alstom also committed to pay $9.5 million in restitution. The sanctions were imposed after Alstom acknowledged misconduct in relation to a World Bank-financed hydropower project in Zambia.
Alstom is just one of a growing number of companies that find themselves subject to the integrity enforcement mechanisms of governmental and international organizations. Multilateral Development Banks — including (but not limited to) the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank — now also regularly enforce cross-debarments with each other and the World Bank.