As partnerships broaden, ADB to crack down on corruption and fraud

Asian Development Bank President Takehiko Nakao shakes the hand of children in areas affected by Typhoon Haiyan in Tacloban, Philippines. The bank wants tougher measures against corruption and fraud. Photo by: ADB

To ensure development programs and initiatives implemented in developing countries are effective, efficient and operationally-sound, the Asian Development Bank is pushing for tougher measures against corruption, and fraud — a policy shift in line with the increasing integration of development efforts and multi-sector partnerships.

In an annual report published this week by ADB’s anti-corruption and integrity office, the Manila-based institution promises to enhance its policing mechanism by cracking down any integrity-violating acts that stakeholders may commit — both by ADB and partners — to ensure maximum benefits of development outcomes.

“[We] will maintain [our] awareness-raising programs to mobilize greater staff engagement, understanding, and support of ADB’s Anticorruption Policy ... [and] also continue to raise awareness on spotting red flags and fraud,” assured the report.

Aside from increased awareness and vigilance, the bank also plans to continue providing “external partners with consistent advice” in anti-corruption and fraud mechanisms, while improving its own appeals process “to ensure due process, fairness, and consistency.”

The bank's renewed zero tolerance for corruption policy is shared by other development agencies and seen as a key factor in determining the success of development outcomes, especially midway through the ADB's Strategy 2020.

READ: How far is ADB from its 2020 strategy goals?

“[ADB] recognizes that tackling corruption requires a multifaceted approach and a comprehensive network of partnerships and alliance ... to ensure that the finite development funds entrusted to ADB are not misused as a result of fraud and corruption,” said the report.

Partnership, collaboration

In 2013, over 250 complaints on integrity violations — including acts of corruption, fraud, coercion, collusion, abuse of power, and conflict of interest — were received by the bank’s anti-corruption team.

Of the total number, 87 percent were complaints on reported violations in projects, while the remaining 13 percent were complaints about staff. Garnering the bulk of the complaints are fraud issues with 60 percent, followed by corruption and collusion at 14 percent and 13 percent, respectively.

“Fraud related to work experience, qualifications, and technical and financial capacities of consulting firms or consultants continue to be the most common type of integrity violation reported to OAI,” Clare Wee, ADB’s anticorruption and integrity head, said in a statement.

The high rate of filed complaints was mainly due to the collaboration and cooperation of different partners, according to Wee, underlining the importance of stakeholder engagement in the whole process of development. Half of the complaints, 123, came from external parties, with the rest coming from ADB staff and audit reviews.

An effective policing mechanism is crucial in development projects anywhere in the world, especially with the trend of increased collaboration and partnership. It can ensure the effectiveness of these programs as multilateral institutions, local organizations, and private contractors may not always be on the same page when it comes to objectives.

It may also prove instrumental in making sure that development funds are maximized by eliminating wasteful activities that, at times, hound development processes like corruption and fraud, given these resources are finite — demanding more transparency and accountability.

Sanctions

In pushing for more stringent action, ADB has laid out sanctions for firms and individuals caught violating its anti-corruption and integrity regulations.

The base sanction for integrity violations, according to the bank’s policy, is a three-year debarment although merits of cases may prompt OAI to lessen or increase the punishment. First offense means a 1 year to indefinite period of debarment for an individual, while a firm is suspended for up to 7 years. Second and third offenses include indefinite debarment for individuals ten to twenty years debarment for firms.

Debarment means individuals and firms will be banned from participating in any ADB-related activities within the specified time.

As of February, ADB has debarred almost 1,500 firms and individuals with over 60 coming from last year including cases of corruption, use of substandard materials in development projects, overlap of project proposals, and bloated procurement prices, among others. OAI is planning to update its anti-corruption and integrity policies, along with other multilateral institutions this year.

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About the author

  • Lean 2

    Lean Alfred Santos

    Lean Alfred Santos is a former Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. He previously covered Philippine and international business and economic news, sports and politics.

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