In 2012, the Asian Development Bank’s annual aid fraud index tallied a peak in corruption complaints. This year, Asia’s premier development bank jacks up its anti-corruption drive.
ADB has released its annual report on the monitoring of fraud and corruption in ADB-assisted projects, prepared by its Office of Anti-corruption and Integrity.
In the report, OAI recorded 240 complaints and 114 new investigations against illicit practices, leading to the debarment of 42 firms and 38 individuals. These numbers show a marked increase from the reported 225 allegations of corruption or integrity violations, 94 investigations, and 34 firms and 31 individuals sanctioned in 2011.
A big chunk of the complaints involved misrepresentations of qualifications, experience and technical capabilities by consulting firms, contractors and individuals gunning for a chance to do business with ADB. More than two-thirds (78 percent) of the complaints were received by email, with only 13 percent from anonymous sources.
A rise in corruption?
The reported numbers could be read in two ways. First, that the rise in complaints denote an increase in the incidence of fraud and corruption in ADB-financed projects; or second, that ADB’s continuing campaign to spread awareness on aid fraud and reporting has been successful in encouraging the public to submit complaints.
Most of the recorded complaints came from ADB staff. This may be attributed to OAI’s anti-corruption awareness-raising activities in 2012, under which it ignited efforts to reach ADB staff, the civil society and the private sector through learning events, trainings and engagements with development partners globally.
Even the private sector has participated in this movement. The report has noted some major international firms working on ADB-assisted projects which have voluntarily reported suspected integrity violations after internal company audits.
OAI also launched in 2012 various project procurement-related spot reviews targeted at bolstering project monitoring and compliance. OAI continued to offer support and advice to the management and project teams of ADB-funded projects.
Overall, these strides could have contributed to the climb in the number of complaints, and thus, in investigations and sanctions.
ADB’s anti-corruption crusade
The rise in reported corruption incidences will be met with equal measures to fight fraud and corruptions, according to an ADB announcement.
The importance of fighting corruption in aid projects was underscored by Clare Wee, the top honcho at OAI.
“At a time when many donors are implementing austerity measures, those entrusted with development mandates have an obligation to use a steadily declining pool of development funds.” said Wee in a statement.
“When development funds are diverted or misused, people with real needs are deprived of basic services, rights, and opportunities,” she added.
Onward and upward
The report indicates that the move to counter fraud should have a multifaceted and multilevel approach, which would involve collaboration of different development stakeholders.
For 2013, ADB, a signatory to the the Paris Declaration on Aid Effectiveness, has vowed to intensify its anti-corruption efforts, culminating in the following steps:
Responding to allegations of fraud and corruption.
Undertaking proactive project procurement-related reviews.
Improving due diligence.
Intensifying its awareness campaign.
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About the author
Johanna Morden
Johanna Morden is a community development worker by training and a global development journalist by profession. As a Devex staff writer based in Manila, she covers the Asian Development Bank as well as Asia-Pacific's aid community at large. Johanna has written for a variety of international publications, covering social issues, disasters, government, ICT, business and the law.
