The World Bank Group (WBG) has imposed a 4.5-year debarment on L.S.D. Construction & Supplies, a construction firm in the Philippines, for “collusive, fraudulent, and corrupt practices” linked to the Philippine rural development project (PRDP).

In a May 28 statement posted on its website, the Washington-based multilateral lender said that L.S.D. was involved in two undisclosed arrangements from 2017 to 2018, allowing other entities to use its name and credentials to bid on World Bank loan-funded contracts in exchange for a fee.

The specific World Bank-financed project is PRDP, being implemented by the Department of Agriculture (DA), aimed at boosting rural incomes and productivity in the country’s farm and fishery sectors.

According to the World Bank, L.S.D. had secretly subcontracted the work to other firms that lacked the technical and financial qualifications required for the contracts.

L.S.D. also made an improper payment to secure a contract award and to facilitate the processing of invoices during implementation—actions that violated the World Bank’s anti-corruption guidelines, the statement said.

As a result, L.S.D. and any companies or individuals it controls are now ineligible to participate in WBG-financed projects and operations.

The sanction is part of a settlement agreement in which the company acknowledged its misconduct and agreed to implement specific integrity compliance measures.

In recognition of L.S.D.’s cooperation and voluntary remedial actions, the World Bank said it granted a reduced debarment period.

The lender noted that L.S.D. has committed to developing a compliance program aligned with the WBG’s integrity compliance guidelines and to ongoing cooperation with the WBG’s integrity vice presidency.

The debarment also qualifies for cross-debarment by other multilateral development banks (MDBs) under a 2010 agreement on mutual enforcement of such decisions, which means L.S.D. cannot take part in projects to be rolled out through financing from the Manila-based Asian Development Bank (ADB), the China-led Asian Infrastructure Investment Bank (AIIB), among others.

In a report early this month, the World Bank said that PRDP, which started a decade ago, “remains on track in meeting the project development objective (PDO) outcome indicators.”

So far, PRDP helped achieve a 24-percent increase in real household income of farmers and fisherfolk beneficiaries—still short of the targeted 30 percent; a 42-percent increase in income of beneficiaries involved in enterprise development, surpassing the 30-percent target; a 111-percent increase in value of annual marketed output, which exceeded the goal of 41 percent; and 1,323,712 farmers reached with agricultural assets or services—the target is 760,000—of whom 39 percent are women, nearing the 40-percent goal, according to the World Bank.