The Asian Development Bank has a new weapon in its fight against aid fraud: its staff. ADB’s integrity chief Clare Wee shares her insights with Devex on the bank’s new “holistic approach” in purging the scourge once and for all.
ADB is no stranger to corruption incidences. Like other global development organizations, it has received numerous reports of fraud in activities it has financed or supported. This year, the number of reports reached a peak, leading ADB to launch 114 investigations and pull the plug on 34 firms and 31 individuals.
But ADB is cracking down on unscrupulous practices in Asia, the region that contains the largest number of poor people. This task has been assigned to its Office of Anticorruption and Integrity, which serves as the first point of contact for allegations of integrity violations involving ADB-related activities or ADB staff. The OAI has debarred a total of 499 firms and 474 individuals.
If it were up to Clare Wee, director of OAI, the number would be more. Wee highlights the success of the bank’s awareness-raising campaign that has prompted many ADB staff members — composing half of the complainants — to place corruption complaints. She talks more below of the other strategies in combating corruption and the challenges to be met along the way.
What is the impact of corruption on development projects? Why is fighting corruption and fraud so important to ADB?
Given the complexity of the nature of corruption, the impacts may differ from project to project. Nevertheless, ADB takes the approach that every dollar of its development funds should go to its intended beneficiaries, and not lost to corruption or fraud.
More than ever, in this time of financial constraints, conditions are ideal for corruption and fraud to prosper, so it is ever more crucial for ADB to exercise strong vigilance in preventing fraud and corruption in ADB-financed, supported, or related activities, as well as take strong remedial action when circumstances of fraud and corruption are identified.
How does ADB fight corruption?
We take a holistic approach and focus not only on remedial actions, such as debarment, but also on awareness raising, prevention and forging partnerships with others to maximize positive outcomes.
For example, on the occasion of International Anti-corruption Day, we are raising awareness amongst ADB staff that they not only have a right, but also a responsibility to fight corruption in ADB-financed, supported and related activities.
Do you review the projects ADB is involved in?
Projects are of course subject to regular audits and reviews. In addition, ADB regularly conducts project procurement-related reviews of ongoing projects to confirm compliance with applicable ADB policies, guidelines, and the loan agreement to ensure that funds are spent for their intended purposes. ADB also collaborates with members of the international community and shares its PPRR methodology with other institutions, so as to maximize impacts.
These reviews focus on procurement, financial management, and asset verification, and inspect project outputs, assess internal controls, identify irregularities and possible noncompliance, as well as make recommendations to fight fraud, corruption or abuse of resources. Two PPRR reports were recently released: one on a power sector expansion project in Samoa, and another one on a project on decentralized rural infrastructure and livelihood in Nepal.
What do you think is ADB’s biggest challenge in its anti-corruption efforts?
Our biggest challenge is getting our stakeholders on board in our anti-corruption efforts. That means changing the mindsets of governments, executing agencies, corporations and civil societies. In coordination with supreme audit institutions and executing agencies, we have been sharing knowledge on PPRRs which have had positive results. This involvement has allowed the borrowing country to take ownership of these anti-corruption efforts. For example, Bhutan has requested more support from ADB in its governance efforts after we did a PPRR. We see that as a positive sign showing their readiness to take ownership of anti-corruption efforts.
What changes do you expect to see in 2013?
OAI expects that with staff trained in spotting red flags of fraud and corruption, that ADB will be able to see a rise in fraud prevention. We plan to offer more in-depth courses for ADB project staff on fraud and corruption prevention techniques in the design and monitoring of projects.
Through experience, we know that it takes more than just staff action to deal with fraud and corruption. We must work together and with civil society for the best results in the fight against fraud and corruption.
Can groups not affiliated with the ADB consult with the OAI?
Yes, definitely. They can also check OAI’s website for updated information on ADB’s anti-corruption activities.
Are you hopeful that corruption can be eliminated in Asia?
We have to be hopeful. The awareness factor has improved. If civil society says it will not tolerate corruption, we will see things change.
*Some sections have been reposted with permission from the Asian Development Bank.
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