Sunday, October 25, 2009

World Bank Fights Corruption


World Bank Report Highlights Progress in Addressing Corruption Risks

Integrity Vice Presidency Annual Report Fiscal Year 2009

The World Bank Group has taken steps during the past year to address corruption risks and ensure that anti-corruption is a critical element in its development mission according to the Integrity Vice Presidency (INT) Annual Report for Fiscal Year 2009. The World Bank Group established the INT to investigate allegations of fraud and corruption in the Bank Group-sponsored activities, as well as allegations of significant fraud or corruption involving staff.

The World Bank Group President, Robert Zoellick, said that the bank must assure its donors and client governments that they are responsible stewards of funds at a time when the Bank Group is ramping up to support countries affected by the global crises. During the past year, the Bank Group debarred 13 firms and individuals from participating in Bank-funded activities because they engaged in fraud and corruption. In addition, the INT and Bank Group have worked to develop a Company Risk Profile Database (CRPD) to help the Bank Group staff perform due diligence before awarding contracts to firms being watched by the INT. A settlement in the Siemens AG case, where the company acknowledged past misconduct in its global business, requires Siemens’ to pay US$100 million to support anticorruption work and refrain from bidding on Bank Group business for two years.

During the past 20 months, the INT has implemented 18 recommendations of an Independent Review Panel headed by former U.S. Federal Reserve Chairman Paul Volcker in 2007. These recommendations were intended to increase the INT’s effectiveness in supporting the Bank Group’s Governance and Anticorruption (GAC) program. The INT has streamlined preventive measures into projects and has pushed integrity to the forefront early in the project cycle.

During this fiscal year, the INT signed two cooperation agreements with the European Anti Fraud Office and the UK’s Serious Fraud Office which allow for joint investigations and information sharing. In addition, INT organized regional meetings to bring together the people entrenched in the day-to-day fight against corruption. These regional meetings will allow the INT and national anticorruption enforcement authorities to build relations, better understand each other’s needs, and formalize cooperation. Leonard McCarthy, World Bank Vice President for Integrity, said that they will further develop the tools and networks among teams and clients to enhance the impact of INT’s investigations and preventive services.

Discussion Questions:
1. What other ways could the World Bank Group filter corruption out of sponsored activities?
2. How can the INT expand its mission to prevent corruption?

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