«INTERNATIONAL FINANCIAL INSTITUTIONS ANTI-CORRUPTION TASK FORCE September 2006 African Development Bank Group Asian Development Bank European Bank ...»
The World Bank Group
INTERNATIONAL FINANCIAL INSTITUTIONS
ANTI-CORRUPTION TASK FORCE
African Development Bank Group Asian Development Bank
European Bank for Reconstruction and Development European Investment Bank Group
International Monetary Fund Inter-American Development Bank Group World Bank Group
UNIFORM FRAMEWORK FOR PREVENTING AND
COMBATING FRAUD AND CORRUPTIONOn February 18, 2006, the leaders of the African Development Bank Group, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank Group, International Monetary Fund, Inter-American Development Bank Group and the World Bank Group agreed to establish a Joint International Financial Institution Anti-Corruption Task Force to work towards a consistent and harmonized approach to combat corruption in the activities and operations of the member institutions. The leaders of the member institutions recognize that a unified and coordinated approach is critical to the success of the shared effort to fight corruption and prevent it from undermining the effectiveness of their work.
The International Financial Institutions (IFI) Task Force has agreed on the following recommended elements of a harmonized strategy to combat corruption in the activities and operations of the member institutions. 1 1. Definitions of Fraudulent and Corrupt Practices Critical to the success of a harmonized approach is a common understanding of the practices prohibited. To this end, the Task Force has agreed in principle on the following standardized definitions of fraudulent and corrupt practices for investigating such practices in activities financed by the member institutions.
• 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.
Each of the member institutions will determine implementation within its relevant policies and procedures, and consistent with international conventions.
2. Principles and Guidelines for Investigations It is recognized that detection, investigation and sanctions are vital to effectively deterring corrupt activities. All investigations must be thorough, professional and respectful of the parties involved. To promote consistency in the practices of the member institutions’ investigative units, the Task Force has endorsed the attached common principles and guidelines for investigations.
3. Exchange of Information
The Task Force has recognized that exchange of relevant information among member institutions will promote a common approach and enhance cooperation in addressing integrity issues in their activities. It is also critical to ensure that the confidentiality of information be maintained so whistleblowers and others remain confident in their ability to communicate with member institutions. The IFI Task Force has agreed that the institutions should exchange information, as appropriate, in connection with investigations into fraudulent and corrupt practices consistent with these principles.
4. Integrity Due Diligence
The member institutions of the IFI Task Force recognize the need to promote ethical business practices and good governance consistent with international standards as part of their lending and investment decisions. Accordingly, the Task Force recommends that member institutions will be guided by the following general principles in analyzing integrity issues relating to private
sector lending and investment decisions:
• adequate “know-your-customer” procedures to ensure identification of beneficial ownership;
• close scrutiny of parties that have been convicted of or are under investigation for serious crimes, investigated or sanctioned by a regulatory body or appearing on a sanctions list recognized by the member institution;
Each of the member institutions of the IFI Task Force has a distinct mechanism for addressing and sanctioning violations of its respective anti-corruption policies. The Task Force recognizes that mutual recognition of these enforcement actions would substantially assist in deterring and preventing corrupt practices. The member institutions will explore further how compliance and enforcement actions taken by one institution can be supported by the others. As an immediate 3 step, the Task Force recommends that each member institution should seek to require all bidders, sponsors, or other firms or individuals participating in activities financed by a member institution to disclose any sanction imposed on that firm or individual by a member institution.
6. Support for Anti-Corruption Efforts of Member Countries
The Task Force recognizes the critical importance of ensuring integrity within the member institutions as well as the activities they finance. The Task Force also supports the initiatives of member countries and other stakeholders, including the press and judiciary, to increase transparency and accountability, strengthen governance and combat corruption.
To this end, the Task Force recommends that member institutions continue to develop analytical tools designed to assess risks of corruption in individual countries, sectors and regions and institutional capabilities to respond to those risks. In addition, member institutions should, within their respective mandates, seek to develop a proactive and coordinated approach to assist member countries and the private sector in the development of institutions, as well as administrative systems and policies that eliminate opportunities for fraudulent and corrupt practices.
The Task Force also recommends that the member institutions work to strengthen coordination on governance, integrity and anti-corruption activities and technical assistance with other donors, including in their activities in individual countries, to avoid duplication and maximize synergies. Where appropriate, member institutions also should assist executing agencies in evaluating integrity risks among potential contractors and in developing good governance and anti-corruption mechanisms.
PREAMBLE The following Institutions have jointly endorsed these common principles and guidelines for investigations conducted by their respective investigative units: 2
These principles and guidelines are intended to be used as guidance in the conduct of investigations in conjunction with the policies, rules, regulations, and privileges and immunities applicable in the Organization. 3 For the purpose of this document, use of the term “Organization” includes reference to all institutions that are part of or related to the above-mentioned Institutions. The investigative units of each Organization are hereinafter referred to as the “Investigative Office.”
GENERAL PRINCIPLES1. Each Organization shall have an Investigative Office responsible for conducting investigations.
2. The purpose of an investigation by the Investigative Office is to examine and determine the veracity of allegations of corrupt or fraudulent practices as defined by each institution including with respect to, but not limited to, projects financed by the Organization, and allegations of Misconduct on the part of the Organization’s staff members.
2 The designated investigative units are the Office of the Auditor General of the African Development Bank Group, the Integrity Division of the Asian Development Bank, the Office of the Chief Compliance Officer of the European Bank for Reconstruction and Development, the Inspectorate General of the European Investment Bank Group, the Office of Institutional Integrity of the Inter-American Development Bank Group, the Department of Institutional Integrity of the World Bank Group. The Management of the IMF supports and encourages these efforts to fight corruption in project lending and dealings with private firms. Unlike the other Organizations, the IMF does not engage in project lending or lending to the private sector. It maintains procedures tailored to the circumstances of the IMF to deal with potential issues of staff misconduct and safeguard the use of Fund resources.
3 These guidelines are not intended to confer, impose, or imply any duties, obligations, or rights actionable in a court of law or in administrative proceedings on the Organization carrying out the investigation. Nothing in the guidelines should be interpreted as affecting the rights and obligations of each Organization per its rules, policies and procedures, nor the privileges and immunities afforded to each Organization by international treaty and the laws of the respective members.
3. The Investigative Office shall maintain objectivity, impartiality, and fairness throughout the investigative process and conduct its activities competently and with the highest levels of integrity. In particular, the Investigative Office shall perform its duties independently from those responsible for or involved in operational activities and from staff members liable to be subject of investigations and shall also be free from improper influence and fear of retaliation.
4. The staff of the Investigative Office shall disclose to a supervisor in a timely fashion any actual or potential conflicts of interest he or she may have in an investigation in which he or she is participating, and the supervisor shall take appropriate action to remedy the conflict.
5. Appropriate procedures shall be put in place to investigate allegations of Misconduct on the part of any staff member of an Investigative Office.
6. Each Organization shall publish the mandate and/or terms of reference of its Investigative Office as well as an annual report highlighting the integrity and anti-fraud and corruption activities of its Investigative Office in accordance with its policies on the disclosure of information.
7. The Investigative Office shall take reasonable measures to protect as confidential any non-public information associated with an investigation, including the identity of parties that are the subject of the investigation and of parties providing testimony or evidence.
The manner in which all information is held and made available to parties within each Organization or parties outside of the Organization, including national authorities, is subject to the Organization’s rules, policies and procedures.
8. Investigative findings shall be based on facts and related analysis, which may include reasonable inferences.
9. The Investigative Office shall make recommendations, as appropriate, to the Organization’s management that are derived from its investigative findings.
10. All investigations conducted by the Investigative Office are administrative in nature.
11. Misconduct is a failure by a staff member to observe the rules of conduct or the standards of behavior prescribed by the Organization.
12. The Standard of Proof that shall be used to determine whether a complaint is substantiated is defined for the purposes of an investigation as information that, as a whole, shows that something is more probable than not.
RIGHTS AND OBLIGATIONSWitnesses and subjects
14. The Organization may require staff to report suspected acts of fraud, corruption, and other forms of Misconduct.
15. The Organization shall require staff to cooperate with an investigation and to answer questions and comply with requests for information.
16. Each Organization should adopt rules, policies and procedures and, to the extent that it is legally and commercially possible, include in its contracts with third parties, provisions that parties involved in the investigative process shall cooperate with an investigation.
17. As part of the investigative process, the subject of an investigation shall be given an opportunity to explain his or her conduct and present information on his or her behalf.
The determination of when such opportunity is provided to the subject is regulated by the rules, policies and procedures of the Organization.
18. The Investigative Office should conduct the investigation expeditiously within the constraints of available resources.
19. The Investigative Office should examine both inculpatory and exculpatory information.
20. The Investigative Office shall maintain and keep secure an adequate record of the investigation and the information collected.
21. The staff of the Investigative Office shall take appropriate measures to prevent unauthorized disclosure of investigative information.
22. The Investigative Office shall document its investigative findings and conclusions.
23. For purposes of conducting an investigation, the Investigative Office shall have full and complete access to all relevant information, records, personnel, and property of the Organization, in accordance with the rules, policies and procedures of the Organization.
24. To the extent provided by the Organization’s rules, policies and procedures and relevant contracts, the Investigative Office shall have the authority to examine and copy the relevant books and records of projects, executing agencies, individuals, or firms participating or seeking to participate in Organization-financed activities or any other entities participating in the disbursement of Organization funds.