Republic of Iraq Emergency Baghdad Water Supply and Sanitation Project 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 In December 2004, the Mayoralty of Baghdad and the International Development Association signed a Trust Fund Agreement for the Emergency Baghdad Water Supply and Sanitation Project (the “Project”). The principal objective of the Project, implemented by the Baghdad Mayoralty, was to assist in restoring basic water supply and sanitation services for the capital city of Baghdad through: (a) the reconstruction and rehabilitation of existing priority networks and treatment facilities; and (b) providing capacity building support through training and technical assistance. The Project closed in June 2013. Company A was awarded and signed a Project-financed contract to supply and install equipment (the “Contract”). Methodology INT contacted the parent of Company A, which agreed to conduct its own internal investigation concerning the Contract. When INT was not provided with documentation to support the internal investigation’s findings, it conducted its own investigation, which included an audit of Company A and interviews with Company A’s Agent for the Contract (the “Agent”) Findings Evidence indicates that Company A under-disclosed the amount of commissions to be paid to the Agent. In its bid for the Contract, Company A disclosed that it would pay the Agent approximately a US$ 40,000 sales commission. However, evidence indicates that Company A, in fact, paid the agent approximately US$ 100,000 in commissions. Evidence indicates that Company A knew it would pay the larger commission amount in advance of its bid submission and the final contract signing. Corrective Actions The World Bank imposed administrative sanctions on Company A. 3