World Bank Bars Two Oxford University Press Subsidiaries From Contracts

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VENTURES AFRICA – In order to enforce corporate integrity, two wholly-owned subsidiaries of Oxford University Press (OUP), Oxford University Press East Africa Limited (OUPEA) and Oxford University Press Tanzania Limited (OUPT), have been blacklisted from participating in World Bank projects and other agency projects which have an agreement with the World Bank like the African Development Bank.

In their place, Oxford’s archrivals Kenya Literature Bureau (KLB), Longhorn Kenya and state owned Jomo Kenyatta Foundation (JKF) are expected to be the major beneficiaries of the three-year ban.

According to the World Bank, the Kenyan and Tanzanian subsidiaries were blacklisted for irregular payments to government officials for two contracts to supply text books under programmes funded by the Bretton Woods institution.

Oxford East Africa was penalised and delisted by the World Bank Integrity Vice Presidency (INT) from the World Bank’s multi-billion shilling project for three years after it was linked in a bribery scandal with top government officials.

The publishing house parent company, Oxford University Press (OUP), was billed Sh292 million ($3.5 million) as part of the settlement.

Oxford’s debarment comes one year after donors pulled out of the $80 million (Sh6.7 billion) Kenya Education Sector Support Programme (KESSP) citing rampant fraud involving senior officials at the Ministry of Education.

The bribery scandal investigation that culminated in a penalties and sanctions started in May last year and closed early this year after establishing that the subsidiaries bribed government officials directly and through agents to win tenders and publishing contracts for textbooks.

Investigators found that Oxford East Africa was involved in widespread bribery that spanned five countries including Burundi, Malawi, Rwanda, Sudan and Uganda.

“This debarment is testimony to the bank’s continued commitment to protecting the integrity of its projects,” said Leonard McCarthy, the World Bank Integrity vice-president.

“OUP’s acknowledgment of misconduct and the thoroughness of its investigation is evidence of how companies can address issues of fraud and corruption and change their corporate practices to foster integrity in the development business,” he added.

The World Bank Integrity Vice Presidency (INT) is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in World Bank projects, capitalizing on the experience of a multilingual and highly specialized team of investigators and forensic accountants.

The Oxford University Press is to pay the World Bank $500,000 (Sh42 million) for flouting agreed procurement rules and additional £1.9 million (Sh250 million) to the UK’s Serious Fraud Office (SFO) for the same offences.
Oxford University Press voluntarily reported the bribery scandal to the World Bank and SFO on suspicion of the underhand dealings at its regional subsidiaries.

“We do not tolerate such behaviour,” said Nigel Portwood, Oxford’s chief executive adding that the company was committed to maintaining the highest ethical standards.

Oxford’s debarment follows a similar one on its rival Macmillan which was banned from bidding for world-bank funded contract till 2014 for bribery linked to an education project in Sudan. Macmillan was asked to pay Sh1.5 billion penalty to SFO after investigations revealed that it had bribed government officials in pursuit of public and World Bank-funded contracts in Africa.

In July last year, Macmillan paid a Sh1.5 billion ($18 million) penalty to SFO after investigations revealed that it had bribed government officials in pursuit of public and World Bank-funded contracts in Africa.

The publishing house was found to irregularly won tenders for the supply of text books to public schools in Rwanda, Uganda and Zambia between 2002 and 2009.

The publisher remains banned from bidding for World Bank–funded contracts up to mid-2014. After the scandal, Macmillan sold its Kenyan and Ugandan subsidiaries to veteran publisher David Muita for Sh300 million ($3.6 million).

Since 1970, foreign publishers like Thomas Nelson, Heinemann, and Longman have exited the Kenyan publishing market thereby creating more room for local publishers.