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Bridgetown, Barbados–2013
Integrity in IDB Group Operations
Inter-American Development Bank
MEMBER MEMBER COUNTRIESCOUNTRIES
BORROWERBORROWER
Integrity Dividend
Accountability
WHY DO WE CARE?
INSTITUTIONAL INTEGRITY IN THE IDB GROUP
3
IDB Integrity Framework• Promoting the highest levels of integrity within the IDB Group/ Ethics Office
• Ensuring that activities financed by the IDB Group are free of fraud and corruption/ OII
• Supporting programs that strengthen good governance, enforce the rule of law and combat corruption/ VPS /IFD/ ICS
Roles and Responsibilities vis a vis Integrity
To verify eligibility of contractors/suppliers/consultants
AllAll To report suspected prohibited practices
Sector Specialists, OIISector Specialists, OIITo manage integrity risk at the design and execution phases of IDB-financed
operations and Country Strategies
Office of Institutional Office of Institutional Integrity Integrity
To investigate, to advice operational teams regarding the
Case Officer and Case Officer and Sanctions CommitteeSanctions Committee To sanction
Executing Agency, Executing Agency,
Fiduciary SpecialistsFiduciary Specialists
5
Prohibited Practices as recognized by the IDB (1)
• Corruption - offering, giving, receiving, or soliciting anything of value to influence the actions of another party
• Fraud - misrepresentation that knowingly or recklessly misleads a party in order to obtain a benefit or to avoid an obligation
• Coercion - threatening to impair or harm a party in order to influence improperly the actions of that party
Prohibited Practices as recognized by the IDB (2)
• Collusion - arrangement between two or more parties designed to achieve an improper purpose
• Obstruction - deliberately destroying, falsifying, altering or concealing evidence material to the investigation or making false statements to investigators in order to materially impede a Bank Group investigation into allegations of a prohibited practice
Office of Institutional Integrity (OII) Activities
OII CaseloadJanuary 1, 2007 – December 31, 2012
2007 2008 2009 2010 2011 2012
Pending Investigations (prior year) 123 97 69 80 65 45
New Investigations (Allegations) 136 122 163 139 130 127
Active Investigations 259 219 232 219 195 172
Completed Investigations 162 150 152 154 150 104 Pending Investigations (period's
end)97 69 80 65 45 68
Post-Investigation Activities (cases)
9
Source of allegationsJanuary 1, 2007 – December 31, 2012,
(in percentage)
INVESTIGATIONS
11
Investigative Process: Anatomy of an Investigation
Cross-debarment: rising the cost of corruption for the private sector
An innovative coordinated global initiative
•5 MDBs including the AfDB, ADB, EBRD, IDB, WBG agreed to mutually enforce each other’s debarment actions, with respect to corruption, fraud, coercion, and collusion.
– Deterrent to firms and individuals engaged in fraud and corruption in MDB-financed development projects; and
– Provides an incentive for firms to clean up their operations.
Prevention
IDB’S PREVENTIVE STRATEGYIdentification of risk factors at the sector
level and relevant stakeholders
Agreement on relevant risk indicators to
monitor across the procurement phases
Perform risk assessment
Based on assessment, identify areas for action,
allies and incentives systems
Implement mitigation actions
Monitor & Evaluation of interventions
Country contextCountry context
Identification and assessment of integrity risks in SG Operations
During the procurement process: looking for ‘red-flags’ and consulting with OII
Regular monitoring of disbursements: checking anomalies (cash payments, off-shore places, data-mining)
During the life of the operation: using the Project Risk Management tool (GRP for its Spanish name) and consulting with OII
During execution: conducting due diligence concerning the Bank’s Sanctions
Supervision of the Auditors: making sure that independent recommendations in management letters are implemented
Integrity Due Diligence in NSG Operations
Confidential
18
Contacting OII
Web page: http://www.idbfc.org
PhoneInternational Line+(877) 223-4551
Fax+(001) - 202 312-4029
Mail or in person:Inter-American Development
BankOffice of Institutional Integrity1300 New York Avenue, N.W.
Stop B-680Washington D.C. 20577, USA“Personal and Confidential”
[email protected]@iadb.org
THANK YOU VERY MUCH