The Inter-American Development Bank has announced the debarment of Egis Eau S.A.S. and Egis International S.A.S. (the “Investigated Parties”) for three years in connection with allegations of fraudulent and corrupt practices relating to the supervision of water and sanitation works financed with resources from the Multiphase Program of Investments in Drinking Water and Sanitation of the National Institute of Aqueducts and Sewers (2367/OC-PN) and the Sanitation Program for the City and Bay Area of Panama II (3506/OC-PN).
The debarment makes the Investigated Parties ineligible to participate in projects and operations financed by the IDB Group and follows an investigation by the IDB Group’s Office of Institutional Integrity (OII), with the full cooperation of the Investigated Parties.
The sanction is the result of a Negotiated Resolution Agreement (the “Settlement”) between the IDB and the Investigated Parties in accordance with the IDB Group’s Sanctions Procedures. For the purposes of the Settlement, the Investigated Parties did not contest OII's findings that they engaged in fraudulent practices by not disclosing payments to an agent and the subcontracting of services. These disclosures were required pursuant to the applicable bidding documents and contracts. Additionally, the Investigated Parties did not contest OII's findings that it was more likely than not that the undisclosed agent and one of the undisclosed subcontractors offered and/or paid an amount up to $16,000 in order to improperly influence officials’ conduct in connection with an IDB-financed contract. These specific payments were on the agent's and the subcontractor’s own initiative and were, at the time, unknown to the Investigated Parties.
In response to OII’s investigation, the Investigated Parties proactively conducted an internal investigation and disclosed relevant evidence to OII and adopted other mitigating measures in accordance with their compliance program. These facts were reflected in a significantly reduced sanction.
Under the terms of the Settlement, the Investigated Parties commit to report on their compliance program – already under improvement – through a Monitor and to continue its cooperation with OII. In the event that these companies fail to fulfill their obligations, the sanction will continue until the conditions are met, or until nine years from the effective date of the settlement, whichever occurs earlier.
The debarment of Egis Eau and Egis International qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.
About the IDB Group
The IDB Group is the leading source of development finance for Latin America and the Caribbean. It helps to improve lives by providing financial solutions and development know-how to public and private sector clients. The Group comprises the IDB, which has worked with governments for more than 60 years; IDB Invest, which serves the private sector; and IDB Lab, which tests innovative ways to enable more inclusive growth.
The Office of Institutional Integrity (OII) has a central role in the IDB Group’s commitment to integrity through its mandate to conduct investigations of Prohibited Practices and provide prevention support to operational units.