Socialist Republic of Vietnam Danang Priority Infrastructure Investment Project, Water & Sanitation Program, Water Supply Development Project, Urban Upgrading Project, and TF Pilot Design Building Lease – Haiphong Redacted Report March 2019 Statement of Use and Limitations This Report was prepared by the World Bank Group (the “WBG”) Integrity Vice Presidency (“INT”). It provides the findings of an INT administrative inquiry (the “Investigation”) into allegations of corrupt, fraudulent, collusive, and/or coercive practices, as defined by the WBG for purposes of its own policies, rules and procedures (the “WBG’s Framework regarding Anti-corruption”), in relation to the WBG-supported activities. The purpose of the Investigation was to allow the WBG to determine if the WBG’s Framework regarding Anti-corruption has been violated. This Report is being shared to ensure that its recipients are aware of the results of the INT Investigation. However, in view of the specific and limited purpose of the Investigation underlying this Report, this Report should not be used as the sole basis for initiating any administrative, criminal, or civil proceedings. Moreover, this Report should not be cited or otherwise referred to in the course of any investigation, in any investigation reports, or in any administrative, civil, or criminal proceedings. This Report is provided without prejudice to the privileges and immunities conferred on the institutions comprising the WBG and their officers and employees by their respective constituent documents and any other applicable sources of law. The WBG reserves the right to invoke its privileges and immunities, including at any time during the course of an investigation or a subsequent judicial, administrative or other proceeding pursued in connection with this matter. The WBG’s privileges and immunities cannot be waived without the prior express written authorization of the WBG. 1 Background Company A won several contracts under five World Bank-financed projects in Vietnam: (i) the Danang Priority Infrastructure Investment Project; (ii) the Water & Sanitation Program; (iii) the Water Supply Development Project; (iv) the Urban Upgrading Project; and (v) the TF Pilot Design Building Lease – Haiphong (collectively, the “Projects”). Company B won a contract under the Water Supply Development Project. Allegations & Methodology The World Bank Group Integrity Vice Presidency (“INT”) received an allegation that a then-World Bank staff member, who was involved in the procurement processes for the Projects, was also an undisclosed owner and the primary principal of Company A. The World Bank staff member no longer works for the World Bank. INT’s investigation consisted of, among other things, a review of Project documents, as well as statements and documents obtained from relevant parties. Findings Evidence indicates that the former World Bank staff member improperly influenced the procurement process to steer contract(s) to two Companies. Evidence indicates that the former World Bank staff member, who was involved in the procurement processes for the Projects, was a key principal in the establishment, ownership, operation, management, and control of Company A. Evidence indicates that the former World Bank staff member operated and managed Company A through his/her family members, business partners, friends, and former classmates, who served as Company A’s registered principals. However, neither Company A nor the former World Bank staff member disclosed this conflict of interest in the Project tenders, in violation of the tenders’ requirements. Evidence indicates that Company A and another company (“Company B”) obtained contract awards with the improper assistance of the former World Bank staff member. Specifically, evidence indicates Company A, and its business partners, received approximately USD 4 million worth of contracts under the Projects in which the former World Bank staff member played an integral procurement decision-making role. Evidence also indicates that Company B was awarded a contract for which the former World Bank staff member was involved in both drafting the Terms of Reference and reviewing and modifying the contract. Evidence indicates that Company B employed the former World Bank staff member’s son to work under the contract in order to influence the former World Bank staff member. Corrective Actions The World Bank imposed administrative sanctions on Company A and Company B. 3