The World Bank Group has announced a 15-month debarment of the Chinese company Xinjiang Xiaohaizi Water Conservancy Construction and Installation Engineering Co. The debarment is a result of fraudulent practices connected to the Lushan Earthquake Reconstruction and Risk Reduction Project in China. This project aimed to enhance disaster-resilient infrastructure and strengthen risk reduction measures in several municipalities in Sichuan Province, while also improving emergency preparedness in Shimian County.
The fraud involved Xinjiang Xiaohaizi subcontracting a significant portion of its contractual obligations to a third party without obtaining the necessary prior approval. This violation resulted in the company's ineligibility to participate in projects and operations funded by the World Bank Group.
Under a settlement agreement, Xinjiang Xiaohaizi acknowledged its responsibility for the misconduct and agreed to fulfill specified corporate compliance conditions to be released from debarment. The agreement allows for a reduced debarment period due to the company's voluntary and remedial actions. To comply with the settlement, the company must develop and implement integrity compliance measures aligned with the World Bank Group Integrity Compliance Guidelines and continue cooperating with the World Bank Group Integrity Vice Presidency.
Additionally, Xinjiang Xiaohaizi's debarment qualifies for cross-debarment by other multilateral development banks under the Agreement for Mutual Enforcement of Debarment Decisions signed in 2010.