The World Bank has declared two India-based firms, Nestor Pharmaceuticals Ltd. (Nestor) and Pure Pharma Ltd. (Pure Pharma), ineligible to be awarded Bank-financed contracts. Both firms were found to have engaged in collusive practices in connection with the Bank-financed Reproductive and Child Health Project (RCH I) in India. Nestor has been debarred for a period of three years, while Pure Pharma is debarred for one year.
There were allegations of impropriety in the procurement of pharmaceuticals under the RCH I project against these two firms. The Reproductive and Child Health program was designed by the Government of India to help deliver much-needed medical services to some of the most vulnerable citizens. The actions of both companies harmed the very people this project was meant to help. It was found that the two firms had behaved improperly. The investigation into RCH I was a very complex and labor-intensive initiative spanning several years. The investigation involved the analysis of a large number of documents, multiple field missions and the conduct of scores of interviews.
The case prompted former bank President Paul Wolfowitz to halt loans to India's health sector in 2006 until improvements were made to the country's procurement methods. Wolfowitz's actions sparked tensions with the Indian government and a wider feud between him and bank shareholders over the poverty-fighting institution's role in tackling corruption. Britain and other shareholder nations argued that by halting the loans the bank was hurting the poor. Instead, they argued, the bank should keep the loans flowing while working with countries to fix the problem. Praful Patel, the bank's vice president for South Asia, said the project was designed by the Indian government to help deliver much-needed medical services to some of the country's most vulnerable citizens.
The World Bank has blacklisted more than 330 firms and individuals for fraud, bribery and corruption since it set up a formal mechanism to investigate corruption in development projects it funds in poor countries. The World Bank Department of Institutional Integrity (INT) is charged with investigating allegations of fraud and corruption in Bank-financed projects. The department reports directly to the President of the World Bank and is staffed by a multinational team including investigators, legal specialists, forensic accountants, and others. Additional information can be found at