1. 16-19 May 2011 Walter Poick Principal Procurement Specialist Asian Development Bank Combating Fraud & Corruption in ADB

2. Presentation Overview Introduction - the bigger picture Integrity violations Investigative activities - sanctions Recent initiatives: whistleblower & witness protection, cross-debarment

3. ADB/OECD Anticorruption Initiative Integrity in public service Accountability and transparency 1: Developing Effective and Transparent Systems for Public Service Effective prevention, investigation and prosecution Corporate responsibility and accountability 2. Strengthening Anti-Bribery Actions and Promoting Integrity in Business Operations Public discussion on corruption Access to information 3. Supporting Active Public Involvement Regional network for coordinated and systematic actions in fighting corruption, established in 1999 Anti-Corruption Action Plan for Asia and Pacific:

4. Second Governance & Anticorruption Action Plan (GACAP II) Approved in July 2006 Key feature: a risk-based approach to governance assessment Objective: minimize risk of reduced development effectiveness Priority areas: Procurement Public financial management Fighting corruption

5. GACAP II: Key Result Areas KRA 1: Deliver gov & anticorruption programs at country level Country Portfolio Review Missions (CPRMs) report on country systems & risk mgmt plans KRA 2: Preliminary assessm’t of financial mgmt, procurement & corruption risks Risk assessm’ts & mitigation measures in program/project (RA/RMPs) Meet project admin requirements KRA 3: Strengthened program/project admin thru effective managem’t Strengthened managem’t oversight Annual review of quality & effectiveness of project supervision KRA 4: Uphold ADB’s zero tolerance policy Role of regional dep’ts & RMs in governance & anticorruption Build staff skills in …anticorruption Staff recognition & promotions based on skills in governance & anticorruption

6. ADB: policy steps Governance Policy 1995 Anticorruption Policy 1998 Integrity Principles and Guidelines (2006; revised 2010) MDB harmonized definitions (2006) Whistleblower & Witness Protection (2009) Cross-debarment (2010)

7. ADB Anticorruption and Integrity Resources Anticorruption Policy Integrity Principles & Guidelines Code of Conduct Administrative Orders Guidelines: procurement, consultants, FAQs Procedures: investigations, sanctions, disciplinary actions Protection: Whistleblowers and witnesses (AO 2.10) OAI

8. Integrity Violations Conflict of Interest Obstructive Practice http://www.adb.org/Integrity/faqs.asp

9. Corrupt practice The offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence improperly the actions of another party. * Bribery * Kickbacks

10. Fraudulent practice 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.

11. Coercive practice 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. Examples: Blackmail Extortion

12. Collusive practice An arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party. Examples: Sharing information by vendors while preparing bids Pre-negotiation of award

13. Obstructive practices  Deliberately destroying, falsifying, altering or concealing information or evidence material to an investigation  Making false statements  Threatening, harassing or intimidating to prevent disclosure

14. Conflicts of Interest Any situation in which a party has interests that could improperly influence that party’s performance of official duties or responsibilities, contractual obligations, or compliance with applicable laws and regulations. E.g.: Hiring a family member or close friend Awarding contracts to one’s own company, family or friends Locating a project investment on one’s own land

15. Office of Anticorruption and Integrity (OAI) Initial contact for allegations of integrity violations Undertake Project Procurement-Related Review (PPRRs) Investigate allegations of fraud and corruption Promote awareness of Anticorruption Policy

16. OAI Integrity Oversight Committee Sanction Appeals Committee ScreenInvestigate  Administrative process  For bidders, consultants, contractors, and suppliers Investigative Process REFERRAL President SANCTIONS 90-day appeal period

17. Resulting actions include Warning Caution Sanction Still eligible to participate in ADB activity Aggravating circumstance for subsequent violations Reprimand Sanction – base period: 3 years Ineligible to participate in ADB activities Possibly subject to cross-debarment Debarment

18. Sanctions as of 14 April 2011 FirmsIndividuals Total Currently Ineligible 308350658 Reprimanded301848 Reinstated7939118 Cross-debarred Entities 729

19. Disclosure of Sanctions SANCTIONS LIST: Cross-debarred entities ADB sanction violators ADB process avoiders First-time offenders Reprimands Published on website: www.adb.org Accessible via password- enabled site to ADB staff, Board of Directors, other MDBs & Gov’t agency partners: sanctions.adb.org & MyADB Accessible to general public on: www.adb.org

20. RECENT INITIATIVES

21. Whistleblower and witness protection (AO 2.10)  Adopted in December 2009  Both for ADB staff and external parties  Sets out procedures on how to deal with retaliations towards whistleblowers or witnesses

22. ADB signed on 9 April 2010  Reinforces anticorruption policies of MDBs  Increases harmonization among MDBs  Strengthens impact of development projects Cross-debarment by MDBs

23. Who Can Be Cross-Debarred?  Entities or individuals  Publicly debarred by any of the participating MDBs  For a period of over a year  For one of the 4 harmonized prohibited practices

24. Who cross-debars today? EBRD: 9 June 2010 ADB: 9 June 2010World Bank: 19 July 2010

25. THANK YOU