China Three Gorges subsidiary banned from World Bank projects
The World Bank has barred China International Water and Electric Corporation (CWE) from its projects for three years for misconduct in Africa and Southeast Asia.
The World Bank has barred China International Water and Electric Corporation (CWE) from its projects for three years for misconduct in Africa and Southeast Asia, the multilateral lender announced on September 24.
The World Bank banned CWE and its affiliates following an investigation by the World Bank’s Integrity Vice Presidency (INT) into allegations of sanctionable practices involving the company in a hydropower project in Africa and a roads project in Southeast Asia. The countries were not identified.
The investigation found that CWE misrepresented its experience during the procurement process in the two World Bank-funded projects.
Under an agreement with the World Bank, CWE has committed to improving its internal compliance and cooperation with the institution.
“This agreement reflects (World Bank’s) interest and willingness in resolving sanctions cases in a mutually agreeable manner with companies that are willing to acknowledge wrongdoing and who commit to improving their compliance regimes,” said Leonard McCarthy, World Bank Integrity Vice President.
The Bank warned the action against CWE from World Bank projects renders the Chinese firm vulnerable to being barred by other multilateral development banks.
CWE is wholly owned by the China Three Gorges Corporation, which manages China's biggest dam, the Three Gorges Dam. China Three Gorges acquired CWE in 2008 as a platform to develop its overseas business, according to International Rivers, a US nongovernmental organisation.
In February, Chinese government corruption inspectors passed onto the central government evidence of possible corruption and corporate governance problems at China Three Gorges. In March, China Three Gorges removed Cao Guangjing as its chairman and Chen Fei as general manager. The two have been transferred to other posts outside the company.
China Three Gorges is part of a Chinese consortium bidding for the US$12 billion Inga 3 dam in the Democratic Republic of Congo, one of the world’s costliest hydropower projects. On 15 November last year, the South China Morning Post reported China Three Gorges and Energias de Portugal (EDP) planned to jointly invest US$2 billion in Africa by 2020.