The African Development Bank Group (AfDB) announced this week that it reached a settlement agreement with Japan-based Hitachi.
The settlement agreement follows a three-year investigation by AfDB's Integrity and Anti-Corruption Department into allegations of sanctionable practices by certain Hitachi subsidiaries concerning the AfDB-financed Medupi Power Station boiler works contract in the Republic of South Africa. The IACD alleged that Germany-based Hitachi Power Europe (HPE), and its South African subsidiary, Hitachi Power Africa (HPA), engaged in sanctionable practices in exchange for a boiler works contract.
The AfDB said it acknowledged that Hitachi and its affiliates co-operated fully and openly with the IACD investigation, and that Hitachi was determined throughout to maintain its good relations with the AfDB and to protect the integrity of the Medupi project.
Due in part to the high level of assistance provided to the IACD by Hitachi, the AfDB said it “has agreed to impose the sanction of debarment for twelve months with conditional release upon HPE and HPA. “Debarment will be terminated as soon as Hitachi enhances its integrity compliance program to the standard set by the AfDB’s Integrity Compliance Guidelines,” AfDB said.
Moreover, AfDB said that Hitachi has voluntarily agreed to “make a substantial financial contribution to the AfDB, which will be used to fund worthy anti-corruption causes on the African continent,” and “to cooperate with the IACD on a variety of matters, including enhancing where necessary its existing integrity compliance program.”