Within the network of investigators and prosecutors from over 130 countries known as the World Bank International Corruption Hunters Alliance, we feel optimistic about all that is happening to support our mission of ensuring that every development dollar is spent with integrity.
To achieve that at the World Bank Group, we at the Integrity Vice Presidency (INT) are continually advancing our investigative techniques, our preventive advice, monitoring the compliance standards of debarred entities and engaging with partners across multilateral development banks, national enforcement agencies and CSOs to strengthen this young global movement against corruption.
Last fiscal year, the World Bank prevented approximately $138 million across 20 contracts from being awarded to companies that had attempted to engage in misconduct. This is progress that could not have been achieved without years of investigative experience invested in gathering evidence, patterns of misconduct and documenting lessons learned.
This fiscal year, INT investigations led to the debarment of 71 entities. Our response to fraud and corruption risks covered 61 projects and 93 contracts worth about $523 million.
This integrated approach is the outcome of a closer engagement with frontline project leaders, courageous citizens who can no longer tolerate corruption as a norm, private entities that are excluded from development bidding and those who suffered consequences of poor judgement, as well as national entities seeking a higher standard for their anti-corruption efforts.
As a development institution, there is no doubt that corruption is a major challenge to the World Bank’s goal of ending poverty. Our President, Dr. Jim Yong Kim, said: “When money is lost through illicit financial flows, it often finds its way across borders to fund major crime, including drug and human trafficking. Our goals are tied to efforts to fight corruption and it’s a challenge that demands our constant vigilance.”
So what’s next?
For INT, we will continue our mission to prevent, deter and investigate fraud and corruption impacting World Bank-financed projects. Our goal is to strengthen our engagement with global leaders on fraud and corruption challenges that directly impact development efforts beyond our projects.
When I took on the position to manage the World Bank Group’s Integrity Vice Presidency in 2008, I explained to my son that our work is to make his world a better place. Seven years later, my optimism remains.
Leonard McCarthy is the Integrity Vice President of the World Bank Group, a position he has held since June 2008. The mandate of the Integrity Vice Presidency (INT) is to anticipate, detect, deter and prevent fraud and corruption in Bank Group-supported activities. Prior to joining the World Bank Group, Mr. McCarthy headed the Directorate of Special Operations (DSO) in South Africa.
Advocate McCarthy I am always thankful for the efforts that you and other leaders in the fight against corruption are making, particularly those who are members of the International Corruption Hunters Alliance. Clearly, the World Bank's Integrity Vice Presidency has taken a leading role in developing advanced methodologies in proactively preventing and combating fraud and corruption and through the efforts of its personnel has significantly contributed in making the world a better place for countless millions of people.
There are admittedly still much to be done in increasing the cooperation between global leaders in combating these societal evils, but developments in the recent 5-odd years are encouraging indeed. Global Anti-corruption efforts in the past 24 months have brought to light the corruption scandals around Petrobras, the FIFA as well as Volkswagen.
However, it is important that this momentum not only be maintained but that the strides currently made be sustained well into the the future. This require the transfer of knowledge and skills to the next generation of "Anti-corruption Activists" or "Corruption Hunters" that will provide a further measure of assurance that the UN MDGs are indeed turned into a reality.
Once again, our gratitude goes out to the efforts made by the World Bank's INT Vice Presidency and yourself for the efforts made to ensure World Bank funding reaches its intended beneficiaries.
This is a great summary of the Bank’s effort to combat bribery and corruption. It is clear, based on the number of sanctioned companies over the past few years, that the Bank is very serious about addressing an issue that will undermine, if left unchecked, the exceptional work of the Bank in improving the lives of millions.
I understand that your efforts are a work in progress and a substantial portion of your effort has been focused on investigating projects that are already in the pipeline. However, I would urge the Bank to look at opportunities to improve the due diligence process at the funding approval stage.
For example, the IFC has very comprehensive environment, health, safety and social assessment guidelines, but nothing in the anti-bribery and anti-corruption sphere. And, I know from experience that very few of the consultants utilized to conduct the more traditional environment and social assessments have experience in governance and anti-bribery and anti-corruption.
I think it is important to ensure that there is a strong due diligence process in this area, in order to weed out potential bad actors, before they enter the funding pipeline. It might not be a case of completely denying a loan application. Some organizations might be given an opportunity to enhance their controls, prior to being granted the funding.
Leonard, I like to join Myron in thanking you and your colleagues at the Bank for the great job you are doing to combat fraud and corruption in Bank financed projects.
However if the Bank's goal of ending poverty and ultimately improving the living conditions of beneficiaries is to be realised, the Bank's policy of non interference with debtor governments implementation and execution of Bank financed projects must be revisited. This is particularly necessary in developing African countries where much of Bank credit funds are frittered away into the pockets of influential government officials who are involved in implementation. The Bank as credit provider needs to move beyond fraud detection and sanctions but must follow the money through very close monitoring of upstream contracting and procurement processes as well as down stream execution activities to ensure that not only that relevant governance and controls framework are in place prior to releasing credit monies but also that credits released are properly and judiciously applied with utmost integrity.
I am however confident that when the new Bank procurement guidelines are rolled out, most of these gaps in the value chains will be closed.
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