The Inter-American Development Bank today announced the approval of a set of measures designed to enhance transparency and its effectiveness in responding to allegations of fraud and corruption in IDB-financed activities. The new system will become effective July 25, 2006.
The measures authorize the implementation of sanctions procedures for dealing with allegations of fraud and corruption and creating a Sanctions Committee to serve as a specialized body to consider claims and determine sanctions where appropriate.
Amendments were made to IDB policies for the procurement of works and goods, selection and contracting of consultants, general conditions of loan agreements, disclosure of information policy and corporate procurement policy, in conformity with the new measures. These changes enhance the terms of IDB loan contracts by further emphasizing IDB’s intolerance of fraud and corruption and by increasing counterpart accountability.
If a sanction is imposed by the Sanctions Committee, information regarding the identity of each sanctioned party and the type of sanction will be available to the public.
The Sanctions Committee will have at least five members, appointed by the President of the Bank. He will also name the chairperson of the committee and appoint a staff member to serve as its secretary. Each committee member will serve for a term of two years with a possibility of reappointment up to a maximum of six years.
The IDB requires all firms, entities or individuals bidding for, or participating in, a Bank-financed project to adhere to the highest ethical standards. Its Office of Institutional Integrity is the entity that conducts investigations and addresses any allegations of fraud or corruption involving Bank staff or Bank-financed operations.
The IDB is working towards fulfillment of goals established by the leaders of the multilateral development institutions this year by participating in a task force to develop a shared framework to combat fraud and corruption and improve information sharing. It will work toward harmonization of investigative rules and procedures and mutual support in the compliance and enforcement of actions taken.