Sanitation titans, Zoomlion Ghana Limited and some of its affiliates across Africa are in serious trouble.
The World Bank, the no nonsense international financial institution has blacklisted the Ghanaian company for allegedly indulging in fraud and corruption, whilst executing some of its flagship projects in Africa.
The World Bank did not quote any specific amount that changed hands, but in a statement published on its website the bank noted that Zoomlion and its affiliates mentioned in the report, are ineligible to be awarded a World Bank-financed contract for the periods ranging from September 23, 2013, to September 23, 2015.
The company has been sanctioned under the Bank’s fraud and corruption policy as set forth in the Procurement Guidelines or the Consultant Guidelines. According to the bank, such sanction was imposed as a result of:
(1) An administrative process conducted by the Bank that permitted the accused firms and individuals to respond to the allegations of fraud and corruption. “Through July 2007, this process was conducted in accordance with the Sanctions Committee Procedures adopted on August 2, 2001. Since then, the process has been conducted in accordance with the Sanctions Procedures of the World Bank Group Sanctions Board.”
Under its procurement guidelines promulgated in May 2004, and revised on October 1, 2006 and May 1, 2010, the bank states as follows:
Fraud and Corruption
It is the Bank’s policy to require that Borrowers (including beneficiaries of Bank loans), as well as bidders, suppliers and contractors and their agents (whether declared or not), personnel, subcontractors, sub-consultants, service providers or suppliers under Bank-financed contracts observe the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy, the Bank defines, for the purposes of this provision, the terms set forth below as follows:
(i) “Corrupt practice” is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party;
(ii) “Fraudulent practice” is any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation;
(iii)“Collusive practice” is an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party;(iv)“coercive practice” is impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party;
(v)“Obstructive practice” is deliberately destroying, falsifying, altering or concealing of evidence material to the investigation or making false statements to investigators in order to materially impede a Bank investigation into allegations of a corrupt, fraudulent, coercive or collusive practice; and/or threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation, or (bb) acts in tended to materially impede the exercise of the Bank’s inspection and audit rights provided for under par. 1.14 (will reject a proposal for award if it determines that the bidder recommended for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for the contract in question;
c)will cancel the portion of the loan allocated to a contract if it determines at any time that representatives of the Borrower or of a beneficiary of the loan engaged in corrupt, fraudulent, collusive, or coercive practices during the procurement or the execution of that contract, without the Borrower having taken timely and appropriate action satisfactory to the Bank to address such practices when they occur;
(d)will sanction a firm or individual, at any time, in accordance with prevailing Bank’s sanctions procedures, including by publicly declaring such firm or individual ineligible, either indefinitely or for a stated period of time
(i) to be awarded a Bank-financed contract ; and (ii) to be a nominated sub-contractor, consultant, Manufacturer or supplier, or service provider of an otherwise eligible firm being awarded a Bank -financed contract.
According to the World Bank Zoomlion and its affiliates breached these provisions, which forced them to refer the sanitation giant to its sanctions committee board.
Work Of Sanctions Committee
The work and scope of the sanction committee as explained by the bank is as follows;
As a result of reforms approved by the Executive Directors in July 2004 and in August 2006, the World Bank’s sanctions system consists of a two-tier adjudicative process, with a first level of review carried out by the Bank’s Suspension and Debarment Officer (SDO)* and, for contested cases, a second level of review by the World Bank Group Sanctions Board, an independent body with a majority of external members.
In the system’s first tier, the SDO determines (1) whether the evidence submitted by the Integrity Vice Presidency (INT) is sufficient to support a finding that the respondent engaged in fraud, corruption, coercion, collusion, or obstruction in connection with a World Bank Group-financed project, or violated a material term of the Voluntary Disclosure Program (VDP) Terms and Conditions; and (2) whether the respondent should be temporarily suspended from bidding on Bank-financed contracts, pending the final outcome of the sanctions process. In addition, the SDO recommends a sanction to be imposed on the respondent, which becomes effective where the respondent elects not to challenge the allegations against it. If the respondent contests the allegations or the SDO’s recommended sanction, the case is referred to the Sanctions Board.
The Sanctions Board carries out a full de novo review in each contested case. It is not bound by the SDO’s recommendation. An administrative hearing may be held by the Sanctions Board either upon a party’s request or at the discretion of the Sanctions Board Chair.
In its deliberations, the Sanctions Board considers INT’s allegations and evidence; the respondent’s arguments and evidence submitted in response to INT’s allegations and evidence; INT’s reply brief; the parties’ presentations at a hearing, if applicable; and any other materials contained in the record.
After completing its review, the Sanctions Board determines whether it is “more likely than not” that the respondent engaged in a sanction able practice. If so, the Sanctions Board imposes a sanction on the respondent, which may be extended to the respondent’s affiliates, successors and assigns. The decisions of the Sanctions Board are final and non-appealable.
Meanwhile the following are some of the Zoomlion affiliates that have been affected by the ban as a result of the alleged corruption. Accra Compost Plant, an affiliate of Zoomlion, Zoom Alliance, Zoomlion Ghana Limited and its affiliates across Africa.
On November 25, 2014, The Chronicle published yet another story about the activities of Zoomlion, this time over importation and sale of dump trucks that were meant to execute government contracts. The story reads:
Sanitation giants, Zoomlion Ghana Limited appears to have stabbed the government in the back. After being assisted to clear 100 refuse trucks, 154 dump trucks, 38 towing trucks and 1230 motor bikes on permit the company has turned round to sell some of these trucks to individuals, without the blink of an eye.
The trucks were imported essentially to assist the Ministry of Local Government and Rural Development to execute some specific projects; hence the decision to clear them on permit from the Tema Port, but five months after the importation, the company started selling the trucks to private individuals.
The cover of the nocturnal deal was blown when the Driver Vehicle License Authority (DVLA) refused the transfer of the trucks, which were sold at $80,000 each, into the names of the new owners.
On February 3, 2012, Mrs. Comfort Boahene-Osafo, a Deputy Commissioner on behalf of the Commissioner General, wrote a letter with reference number OPS EXM-120203 to the Commissioner in charge of custom division of the Ghana Revenue Authority (GRA), Accra division, directing him to allow Zoomlion to clear the aforementioned trucks on permit.
The letter reads: “This is to inform you that approval has been granted in accordance with Ministry of Finance and Economic Planning letter number SA/MOFEP/CEPS/105 and dated February 2, 2012, for clearance of the above consignment on permit by Zoomlion Ghana Limited.
“We attach herewith copies of the Bill of Laden numbers: MDW1124SHGTM001, SWX1104W0036, KKLUMFM8437200, SRHSHC1104F, LLLUMFM8461400, SWAX1104W-0035, MDW1124SHGTM002, KLSH001, DSJA600138, LOKTEM01, attesting to the consignment of the above to Zoomlion Ghana Limited.
“This approval is specific to the above consignment of 100 refuse trucks, 154 dump trucks, 38 towing trucks and 1230 motor bikes. This facility is granted pending Parliamentary approval. The Ministry of Local Government and Rural Development/Zoomlion would be required to pay the duties and taxes”
Based on this letter, the Customs division of the GRA allowed Zoomlion to clear the trucks on permit on February 10, 2012.
But despite the fact that the trucks were meant to execute specific duties, the company has surprisingly started selling them.
On September 9, 2013, the Madina-Accra area Manager of Zoomlion, Mr. S. Asiedu Offei wrote a letter to the Director of the DVLA to change the ownership of one of the trucks they have sold.
The letter reads: “This is to inform you that we have sold the above mentioned vehicle – Dayun Dump Truck with registration number GC 1391-12, chassis number LG6DANH1BY202257 to Heals-B Construction Limited P.O. Box 161, Takoradi. We would appreciate if you could amend your records accordingly”.
The Chronicle established that when the new owners of the vehicle took it to the DVLA to effect the change of ownership as directed by Zoomlion, they were told in the face that the vehicle was not meant for sale and that they could not change the ownership into their name.
Despite this setback, Zoomlion has also failed to refund the $80,000 paid as purchase price for the vehicle. Though The Chronicle contacted the Public Affairs department of Zoomlion for their side of the story, they failed to respond to our enquiries.
The Chronicle
