SECURING DEVELOPMENT FUNDS FOR A POVERTY FREE ASIA
The Asian Development Bank (ADB) strongly believes that weak governance and corruption hurt the poor most. Despite robust economic growth in Asia and the Pacific over recent years, the region remains home to half the world’s poor or those who live on $1.90 a day or less. The misuse and redirection of development funds from their intended purpose will significantly impact ADB’s ability to deliver its mandate of a poverty-free region.
ADB has a long history of fighting corruption. As early as 1998, it had developed an anti-corruption policy with three objectives: (i) supporting competitive markets and efficient and transparent public administration; (ii) bolstering anti-corruption efforts and quality of dialogue with developing member countries; and, (iii) ensuring that ADB projects and staff adhere to the highest ethical standards.
To meet the third objective, in 2009 ADB established the Office of Anti-corruption and Integrity (OAI, replacing a previous integrity unit that had been in place since 1998. OAI’s mandate is underpinned by ADB’s zero tolerance for corruption. It is aligned with ADB’s broader commitment to combat corruption and improve governance as a core strategic objective of its Strategy 2020, and of the Paris Declaration on Aid Effectiveness of 2005 – to which ADB is a signatory – in support of effective, transparent, and accountable aid.
OAI is the designated point of contact for allegations of fraud or corruption pertaining to matters and activities that are supported, financed, or administered by ADB. It is also responsible for ensuring that those participating in ADB-related activities meet the highest standards of integrity.
ADB imposes sanctions on companies and on individuals which it finds to have engaged in fraudulent or corrupt practices. The length of the sanction period will depend on the circumstances of each case. In the case of companies, the sanction period could last up to seven years for first time offenders, while individuals may be sanctioned indefinitely. During the sanction period, the company or individual is ineligible to participate in any ADB activity.
In an attempt to strengthen their anticorruption efforts through a unified and coordinated approach, ADB along with the African Development Bank Group (AfDB), European Bank for Reconstruction and Development (EBRD), European Investment Bank Group, International Monetary Fund, Inter-American Development Bank Group (IDB) and the World Bank Group established the Joint International Financial Institutions (IFI) Anti-Corruption Task Force in 2006.
Four years later, ADB entered into a Cross-debarment Agreement with the AfDB, EBRD, IADB and World Bank. Under this agreement, ADB may cross debar companies and individuals that have been debarred or sanctioned by any of the participating multilateral development banks (MBDs), and vice-versa. The agreement has considerably strengthened the anti-corruption tools available to MDBs.
Apart from investigating alleged integrity violations, OAI plays a proactive role in the fight against corruption. It performs an advisory function in the conduct of integrity due diligence involving ADB’s operations to safeguard ADB funds, reduce reputational risk, and combat money laundering as well as the financing of terrorism. It also recognizes the need to empower “frontliners” in the fight against fraud and corruption. These frontliners – ADB staff and external partners and stakeholders such as government officials, civil society, and the private sector – have the requisite knowledge and tools to detect and prevent fraud and corruption through workshops, seminars, and other training forums conducted by OAI. Furthermore, OAI conducts project procurement related reviews which proactively identify vulnerabilities in ongoing ADB projects and recommend measures to better safeguard project resources.
ADB works with its developing member countries to strengthen anti-corruption initiatives, improve regulatory frameworks for a better investment climate, and enhance the involvement of civil society in policy development and implementation. These initiatives help ensure that ADB’s efforts on anti-corruption and governance make a difference, and that they help ADB to reduce poverty and improve lives across the region.