Transparency, Accountability and Anti-Corruption

The IDB Group prohibits the following practices in all financed activities:

• A “Corrupt Practice” is the offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence improperly the actions of another party; 
• A “Fraudulent Practice” is any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation; 
• A “Coercive Practice” is impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party; 
• A “Collusive Practice” is an arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party; 
• An “Obstructive Practice” is: (i) destroying, falsifying, altering or concealing of evidence material to an IDB Group investigation, or making false statements to investigators with the intent to impede an IDB Group investigation; (ii) threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to an IDB Group investigation or from pursuing the investigation; or (iii) acts intended to impede the exercise of the IDB Group’s contractual rights of audit or inspection or access to information; and 
• A “Misappropriation” is the use of IDB Group financing or resources for an improper or unauthorized purpose, committed either intentionally or through reckless disregard.

Prevention

The Office of Institutional Integrity’s (OII) prevention strategy is multipronged. OII advises project teams on the identification and assessment of integrity risks and vulnerabilities that may have an adverse impact on the Bank’s efforts to promote social and economic development in the region. OII further advises on the design of practical and targeted measures to mitigate the risk and correct vulnerabilities.

OII shares integrity-related knowledge with operational divisions within the Bank and with our development partners. We recognize that the fight against fraud and corruption requires the coordinated effort of all parties playing a role in the design, implementation and evaluation of IDB-Group financed activities.

OII provides advice to Bank’s management to improve, from an integrity stand point of view, IDB Group’s policies, procedures and mechanisms.

Outreach

A strong strategy to fight fraud and corruption requires a coordinated effort of all relevant stakeholders. OII’s investigation efforts are primarily reactive and therefore, OII invests in promoting existing channels to report allegations.

OII also works with borrowers, executing agencies, national authorities, civil society, private practitioners and other third parties to raise awareness of the prevailing integrity standards of the IDB-Group and to share knowledge on tools designed to detect fraud and corruption.

Recognizing that corruption undermines sustainable economic growth, on September 17th, 2006, the leaders of the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank Group, the International Monetary Fund, the Inter-American Development Bank Group and the World Bank Group agreed to establish a Joint International Financial Institution Anti-Corruption Task Force.

The International Financial Institution Anti-Corruption Task Force agreed on:

• Standard definitions of fraudulent and corrupt practices;
• Common principles and guidelines for investigations;
• Exchange of information in connection with investigations;
• General Integrity Due Diligence principles relating to private sector lending and investment decisions;
• Further exploring alternatives for mutual recognition of debarment decisions; and
• Supporting anti-corruption efforts of member countries.

These elements are the foundation of a harmonized strategy to fight fraud and corruption, which is further elaborated in the Uniform Framework for Preventing and Combating Fraud and Corruption . The framework also introduced a set of guidelines and principles to conduct investigations.

Under this framework, the Office of Institutional Integrity (OII) works closely with the investigative and preventive offices at other IFIs to discuss best practices and standards and to harmonize procedures.

Perhaps the most significant tool adopted under the framework is the Agreement for Mutual Enforcement of Debarment Decisions  entered into by and between the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the World Bank Group and the Inter-American Development Bank Group. The Agreement, now in effect for all signatories, set the basis for the mutual recognition of certain sanctions imposed by any of the institutions against firms and individuals found to have engaged in Prohibited Practices.

In furtherance to the agreement, other principles and guidelines have been adopted by the signatories:

The MDB Harmonized Principles on Treatment of Corporate Groups  – a set of principles to set out common standards to impose sanctions against entities within corporate groups.

The General Principles and Guidelines for Sanctions  – a set of principles to ensure consistent treatment of individuals and firms in the determination of sanctions.