The World Bank’s corruption investigation unit has banned a Cambodian construction firm from entering future tender processes as punishment for submitting what it says were fraudulent financial documents.

The bank’s Integrity Vice Presidency (INT) last week announced the sanction on CDW Construction Co for a period of three years for engaging in fraudulent practices in connection with the bank’s Ketsana Emergency Reconstruction and Rehabilitation Project (KERR).

“An investigation by the INT revealed CDW Construction submitted fraudulent financial reports and a false statement of construction turnover in its bid in connection with the procurement process,” the bank’s July 29 statement reads.

Announced for tender in late 2010 and officially completed on July 31 this year, the $37 million KERR project provided disaster relief and restored roads, water and sanitation services for communities affected by 2009’s Typhoon Ketsana, which killed 43 and caused $140 million in damage.

Chuon Dawin, president of CDW Construction, admitted that his firm had been “blacklisted” after submitting an unsuccessful proposal to the World Bank to repair a typhoon-damaged road in Kampong Thom province.

But Dawin criticised the World Bank’s bidding process, saying it did not allow enough time for companies to pull together accurate financial assessments of the proposed work, and he called the bank’s efforts to pursue the matter unwarranted.

“The problem was that my draft was different to the external auditor’s assessment of the project because I had a very short time to do it and the World Bank’s criteria was very complicated,” he said.

“I decided not to follow through with this project, which we didn’t win anyway, so why is the World Bank still asking me about it and why is my company in their blacklist?”

According to Dawin, CDW Construction won a bidding process in 2007 for a $100,000 contract with the World Bank to build a structure in Koh Kong province.

Dawin’s firm was not alone in the World Bank’s recent round of debarments, with two Dutch companies also banned for similar fraudulent practices in Iraq.

“Managing fraud and corruption risks through corporate compliance and preventative work in development projects is a priority particularly in conflict-affected situation where needs for services and infrastructure cannot be excused or delayed,” World Bank integrity vice president Leonard McCarthy was quoted as saying in the statement.

The World Bank in Cambodia declined to comment on the matter, and the US-based INT did not return requests for comment.

According to the World Bank’s Internal Advisory Board (IAB), which worked with the bank on anti-corruption and anti-fraud measures between June 2008 and June this year, the INT’s sanction and debarment regulations have so far proven successful, albeit it with some flaws.

The IAB’s latest annual report, published in February, shows the INT had 69 active investigations into fraudulent and corrupt practices and 78 active debarment cases across the World Bank group as of December 31, 2013.

Of the INT’s debarment process, the IAB said: “The object of the sanctions system should be efficient disposal of business to protect the reputation of the Bank and use the authority of the Bank as an exemplary lender to make a stand against fraud, corruption and other sanctionable activities.”

The IAB’s assessment also raised concerns of malpractice within the World Bank’s ranks, particularly with regards to monitoring and reporting corrupt and fraudulent activities, and urged the bank to maintain its role as a lending institution first.

“In the course of our on-site visits, we have been alerted to possible incidents of individual or systemic screening and filtering of reports within regional managements . . . This issue should indeed be taken very seriously by the Bank,” the IAB said in its 2013 annual report, published in February.

“The IAB has consistently recommended that the bank remember that it is a lending institution – not a judicial body. It does not have the powers of a judicial body nor does INT have the powers of a criminal investigator.”