In the Courts

In 2010, the WBG's Integrity Vice Presidency (INT) unit ' the group responsible for investigating sanctionable practices in connection with WBG projects ' learned of a plan by representatives of Canadian-based engineering and construction company SNC-Lavalin to bribe government officials in Bangladesh. The bribe was planned in order to secure a development contract to build a bridge over the Padma River, for which the WBG had already committed to providing $1.2 billion in financing. INT's investigation was triggered by its receipt of e-mails from four unnamed “tipsters,” suggesting corruption in the contract-award process for the project.

After its investigation, INT voluntarily shared its findings ' including the e-mails ' with the relevant federal enforcement authorities in Canada and Bangladesh, the Royal Canadian Mounted Police (RCMP) and the Bangladeshi Anti-Corruption Commission (BACC), respectively, so that both could initiate their own investigations. The BACC concluded its investigation without action, while the RCMP's investigation resulted in multiple indictments under the Corruption of Foreign Public Officials Act, including against Mohammad Ismail, the company's former director of international projects; Ramesh Shah, a former vice-president of SNC's international division; Kevin Wallace, SNC's vice-president of energy and infrastructure; and Zulfiquar Bhuiyan, a businessman who was allegedly a representative of senior Bangladeshi official, Abudl Chowdhury.

In a June 2012 press release, the WBG announced the results of its investigation, including evidence of high-level corruption, and, in April 2013 the WBG announced a Negotiated Resolution Agreement with SNC that included debarment of the company from participation in WBG-funded projects for 10 years. The WBG also attempted to work with the Bangladeshi government to correct issues with the Padma River bridge project; ultimately, however, the WBG determined that the Bangaldeshi government's response was “unsatisfactory” and, accordingly, the WBG cancelled its funding of the project.

After the RCMP's investigation, the defendants sought discovery of INT's records, which were used to secure authorization for a wiretap by the RCMP. Specifically, they sought an order for INT to produce relevant records and to compel INT investigators to appear in court. At question was whether the Bank could place its files beyond the reach of the court by asserting immunity. The Canadian Bretton Woods Act affords certain privileges and immunities to the WBG, including immunity for their archives, and for their employees, from legal process surrounding acts performed in their official capacity.

The lower court initially sided with the defendants, holding that the WBG had waived immunity by participating in the RCMP's investigation. The court reasoned that the documents were relevant to a challenge of the wiretap authorization, and the immunities were implicitly waived when WBG initially provided investigative findings and made one of its investigators available to give further evidence at a preliminary hearing. The decision would have subjected WBG files to the typical scrutiny of a police investigation for using reliable witnesses, or relying on unsubstantiated information. Additionally, it would have hampered work with local jurisdictions to combat bribery and corruption, as the WBG, and the lower-level officials that report crimes to them, require a framework where they can be protected.

The Canadian Supreme Court's Ruling

On appeal, the Canadian Supreme Court rejected the lower court's decision, stating, “Without any sovereign territory of their own, international organizations are vulnerable to state interference ' [and] member states often agree to grant international organizations various immunities and privileges to preserve their orderly independent operation.” The court specifically stated that the WBG's disclosure of some documents does not waive as to all documents; and, moreover, that the archival immunity of the WBG is not subject to waiver. Relying on sections five and eight from Articles VII and VIII of the Bretton Woods Act, the court rejected the idea that the immunity was only in matters of functional necessity for WBG, finding instead that the WBG's immunity was broad in its purpose in order to shield the WBG's operations. As for employees, the court noted that personal immunities could be waived, but must be done explicitly.

Continuing Significance

The WBG's privileges and immunities allow collaboration with local governments, and had it been construed that these immunities were waived, it would have inhibited its ability to investigate claims of corruption. The work of the INT and RCMP provide an example of the power that is necessary to fight corruption while still pursing an agenda of growth. All actors play a key role in the fight against corruption.

The decision serves as a reminder that the World Bank and other like organizations “serve at the front line of international anti-corruption efforts.” The privileges and immunities afforded to the WBG exist to prevent access by third parties to sensitive information and to encourage future work with law enforcement.

As many countries adopted their own versions of the Bretton Woods Agreement, this case is likely to have international effects. The Canadian Supreme Court provided an international standard to which other countries may look as a starting place to determine the extent of the immunities, should such challenges arise worldwide. ' Nicholas McCoy, Mayer Brown