Five Major Multi-Lateral Banks Sign Cross-Debarment Pact

Five large international lenders have agreed to honor each other’s debarments of companies and individuals found to have engaged in fraudulent or corrupt practices on bank-funded construction projects. The cross-debarment pact— signed on April 9 by the World Bank, Asian Development Bank, Inter-American Development Bank, European Bank for Reconstruction and Development, and the African Devlopment Bank—is set to take effect by “midyear,” says a statement by the banks, with key operational details still to be worked out. One bank official says the pact won’t apply retroactively to the banks’ current debarment rosters, but industry executives still point to uncertainties on liability issues and on what constitutes debarrable offenses. Noting that corruption costs as much as $500 billion a year on bank-funded construction projects, Blaine D. Leonard, president of the American Society of Civil Engineers, says, “Sharing this kind of basic information among the world’s leading development institutions is a major step.”