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World Bank and Siemens

Although one would welcome this settlement between the World Bank and Siemens, it also raises several questions. The first deals with how the settlement money will be spend.
One 100 million dollars seems an enormous amount to spend on “ global efforts to fight fraud and corruption“. After all, there is already a budget for this effort.

A much better way would be to create a compensation fund for companies which would have won if there had not been bribery. Too much emphasis is placed on companies making bribes. Very seldom is there a discussion about the economical loss companies suffer because of bribery. The vast majorities of participants do not bribe, and are honest. Somewhere along the lines we forget that participation in global tenders require an enormous investment in time, manpower and effort.

For every tender in which Siemens participated, there are companies which have suffered an economical loss. Many of them should have won awards and would have received substantial profits.Companies were counting on the World Bank procurement rules for transparent bidding.

Secondly, World Bank officials, either at the project site or in D.C. who were responsible for supervision and oversight, obviously were ineffective in their work. In the private sector these managers would be replaced or demoted. What happened with these WB officers, and what action did the World Bank take? Were there other projects which they supervised? Who is looking into this question?

World Bank loans are given to countries with the implicit understanding that World Bank procurement rules are to be followed. The World Bank has a fiduciary responsibility to make sure these rules are being adhered to. Not only is Siemens to blame, but also the World Bank. Corruption comes in many ways. Not only by giving bribes, but also by not full filling its obligations to lenders, bid participants, projects and other stakeholders.

Bernard Vanderlande