“IDB President Enrique Iglesias has a very rigid zero-tolerance approach towards corruption”, IDB Executive Vice President Dennis E. Flannery said at Bank headquarters during an open luncheon, part of the IDB's Forum on the Americas series.To combat poverty and achieve the Bank's development objectives, it is vital to fight corruption because it diverts scarce aid funds from the public good to private enrichment and is a threat to democratic institutions, Flannery added.
The IDB, within the context of the 2001 Board-approved paper, Strengthening a Systemic Framework against Corruption (pdf), continues to implement a variety of project-specific and institutional reforms to combat corruption in IDB borrowing member countries.
The document identifies 3 areas of actions:
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Efforts to support borrowing member countries in their anti-corruption activities. The Executive Vice President cited examples of Bank loans directed at fighting corruption, including $5 million loan to modernize and strengthen Brazil’s federal court of accounts, the auditing arm of the legislative branch of government, with jurisdiction over the entire country; and a $21.6 million loan to Honduras in July 2000, that led to the preparation of inspection reports on government purchases for 240 separate public-sector projects.
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Efforts to ensure that staff have clear guidelines for their behavior as international civil servants.
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Efforts to ensure that the Bank's internal control environment is designed to minimize opportunities for corruption or fraud in all aspects of Bank activities, especially the design and execution of the institution's lending operations.
In March 2001, the Oversight Committee on Fraud and Corruption (OCFC) was created to provide “internal oversight critical to preventing, detecting, and dealing with fraud and corruption.” The OCFC was created as a step in implementing a systemic, Bank-wide framework against corruption. The functions of this Committee include overseeing the investigation of allegations of fraud and corruption against Bank staff or in connection with Bank activities, monitoring the implementation of recommendations arising from the investigation; and recommending to the president of the IDB cases that should be forwarded to the proper national authorities.
Flannery said that a newly revised Code of Ethics for Bank Staff would be approved shortly. This new code improves the current code and lays out core principles that should guide overall staff behavior. A draft of a Code of Ethics for Board of Executive Directors is also in the process of being drafted.