- New system to take effect April 1
- Revamped Sanctions Committee membership now includes four external members
- Six firms, 13 individuals sanctioned in 2010
The Inter-American Development Bank (IDB) announced today that beginning April 1, 2011, all new corruption allegations will be investigated and sanctioned under a new process that includes a Case Officer and outside membership in a key committee, among other changes.
The IDB also modified its procurement procedures to permit the Bank to implement the agreement with other multilateral development banks to cross-debar individuals and firms sanctioned for prohibited practices, providing further deterrence against corruption in IDB operations.
The IDB’s Office of Institutional Integrity (OII) will continue to investigate allegations of prohibited practices in IDB Group-financed activities and, under the new framework, submit its results to the Case Officer, who in turn determines whether to sanction a firm or an individual. The affected parties may appeal the decision to the Sanctions Committee.
Ongoing cases will continue to be processed under the old framework.
The changes seek to streamline as well as strengthen the way the Bank investigates and sanctions allegations of wrongdoing in its operations.
“The Bank Group can only succeed in its mission if it is grounded in integrity,” IDB President Luis Alberto Moreno said. “These modifications – focusing on the functions of the various bodies charged with oversight, sanctions and investigation – will improve our capacity to ensure that Bank-financed activities are free of fraud and corruption.”
The Bank expanded its definition of fraud and corruption by introducing the term “prohibited practices ” which includes corrupt, fraudulent, coercive, collusive and obstructive practices.
The new Case Officer is Juan Ronderos, who previously worked at the World Bank in the Integrity Vice-Presidency as Regional Team Leader for Latin America and the Caribbean.
The new Sanctions Committee will now be composed of seven members, four of whom are external members:
- Dr. Andrés Rigo – A Spanish national, Mr. Rigo holds a PhD in International Law from Cambridge University. A former Deputy General Counsel and former member of the Sanctions Committee at the World Bank, he often chairs arbitration tribunals in cases involving investor disputes. Also he is currently a Judge of the Administrative Tribunal of the IMF.
- Ms. Josefa Sicard-Mirabal – A Dominican Republic and U.S. citizen, Ms. Sicard-Mirabal holds a Juris Doctor degree from the Pontificia Universidad Católica Madre y Maestra in the Dominican Republic and has experience as an international arbitrator, Judge and Chief Justice in the Dominican Republic.
- Mr. John Detzner – A U.S. citizen, Mr. Detzner is a Juris Doctor graduate from Harvard Law School and has extensive experience counseling in international trade policy and regulation in the context of corruption and sanctions systems related to foreign asset control.
- Mr. Alejandro Garro – An Argentine citizen, Mr. Garro graduated from Columbia University (JSD), Louisiana State University Law School (LLM) and National University of La Plata (Juris Doctor). An Adjunct Professor at Columbia University, he has provided advice to the World Bank, the U.N. and USAID.
The three IDB staff members of the Sanctions Committee are Mr. Rafael de la Cruz, Ms. Lori Kerr and Ms. Susana Sitja. Mr. de la Cruz will preside over the Committee. The Secretary of the Sanctions Committee is Mr. Bernardo Weaver.
The new procedures form part of the Bank’s action plan for the implementation of the recommendations contained in the Report Concerning the Anti-Corruption Framework of the Inter-American Development Bank.
OII Annual Report results
The new procedures come at a time when the IDB Group is stepping up its investigations. The Bank’s OII completed 154 investigations in 2010 involving prohibited practices. Based on OII’s investigations, the Sanctions Committee issued sanctions against six firms, 13 individuals and issued 17 letters of reprimand, according to the IDB’s Office of Institutional Integrity 2010 Annual Report released today.
The IDB sanctions firms and individuals found to have engaged in prohibited practices, including fraud and corruption, by declaring them ineligible to participate in Bank-financed projects, among other sanctions. The list of sanctioned individuals and firms is published on the IDB’s website.
Cross-debarment
The IDB also modified its policies for the Procurement of Goods and Works; Selection and contracting of Consultants; and Corporate Procurement.
The changes permit the Bank to implement the April 9, 2010, Agreement for Mutual Enforcement of Debarment Decisions signed with the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the World Bank Group.