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IDB offers support for transparency in mega infrastructure projects in Latin America and the Caribbean

GUATEMALA CITY – The Inter-American Development Bank today offered to help guarantee transparency in the mega infrastructure projects planned by countries in Latin America and the Caribbean during an international anti-corruption conference.

At the opening ceremony of a biennial conference organized by Transparency International, IDB President Luis Alberto Moreno noted that the major challenges raised by mega projects such as expansion of the Panama Canal could also become great opportunities to put an end to corruption.

“As we all know,  the history of mega projects in Latin America has not always been exemplary in terms of transparency,” said Moreno. “We cannot repeat those mistakes.”

In addition to expansion of the transoceanic canal, which would cost an estimated $5.5 billion, other proposed projects include oil refineries, gas pipelines, power transmission lines, hydropower plants, highway systems and multimodal ports, initiatives that are essential to enhance competitiveness in the region.

Moreno reported that Latin American and Caribbean countries and multilateral organizations have expressed unprecedented interest in cooperating in the fight against corruption. In fact, during the Guatemala conference, heads of state and high-ranking officials of Belize, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama signed a declaration for a “corruption-free zone.”

The IDB is prepared to support its borrowing member countries in fulfilling their commitments under international agreements such as the Inter-American Convention Against Corruption, the Convention of the Organisation for Economic Co-operation and Development on Combating Bribery of Foreign Public Officials and the United Nations Convention against Corruption (Mérida Convention).

“You can be certain that the IDB will be a steadfast ally of governments that wish to convert the recommendations made in the conventions into reality. We have the resources, we know the region and we are more than willing to face this challenge together,” said Moreno.

The IDB and the fight against corruption

As the primary source of multilateral financing for Latin America and the Caribbean, the IDB recognizes that corruption is a risk in practically every one of its areas of activity, and that it can prevent the Bank from fulfilling its mission of promoting economic and social development in the region.

Accordingly, the IDB does not consider itself the “corruption police,” but rather a partner of its member countries to help them in their efforts to fight fraud and abuse in the public sector.

The IDB has a considerable portfolio of projects for institutional strengthening of judicial systems, comptroller’s offices and agencies for administrative oversight, with an emphasis on preventing corruption. Other projects have financed modernization of government systems for procurement, customs and taxes in several countries.

The IDB also promotes active participation by civil society in oversight of public spending through its contribution to the Regional Fund for the Promotion of Transparency, among other channels.

At the Guatemala conference, the IDB is sponsoring a number of workshops on investigating corruption cases that involve multiple jurisdictions, fighting corruption in municipal governments and preventing conflicts of interest in the public sector.

The IDB is also organizing a meeting here with the head of institutional integrity offices of four other multilateral financial institutions: the World Bank, African Development Bank, Asian Development Bank and European Bank for Reconstruction and Development.

In addition, the IDB financed the translation and publication of a Spanish version of Transparency International’s Annual Report on Corruption and Health, which will be presented in Guatemala City.

The IDB also signed a memorandum of understanding with the World Bank, the United Kingdom’s Department for International Development (DFID) and Transparency International for interagency cooperation in the fight against corruption in Latin America and the Caribbean.

 

After conducting an internal review of its own operations and projects, the IDB has strengthened its mechanisms for the prevention, investigation and sanctioning of corruption, fraud and abuse.

To enforce its internal regulations, the IDB created an expeditious oversight system made up of its Office of Institutional Integrity, Oversight Committee on Fraud and Corruption and Sanctions Committee.

In 2005 the Office of Institutional Integrity received 138 reports from inside and outside the IDB of alleged cases of fraud, extortion, bribery and contract manipulation. The office also completed 144 investigations that, where justified, led to sanctions such as banning individuals and companies from doing business with the IDB.

The IDB is also in the process of strengthening its internal oversight systems. This year it approved a new code of ethics for staff and instituted compulsory ethics training for all staff.

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