RETA 6447

:
Anticorruption
·= – -·
~ ==· -·(
Seminar
~ ==· -·(
=s
º:¤+ ~==· -·(
-- -··+ -¤ | +=
ADB’s Anticorruption
Policy, Guidelines
d P
Anticorruption Seminar, October 2009
and Processes
Workshop
+=·=+ =·-·
components
I t d ti t I t it
+=·=+ =·-·
• Introduction to Integrity
• ADB’s Anticorruption
ƒ :=-··-+ |·==
ƒ º:¤+ ~==· -·( --
ADB s Anticorruption
Policy, Guidelines and
Process
ƒ º:¤+ ~==· -·( --
-··+ -¤ |+=
• Conducting Basic Due
Diligence
ƒ =(·~- =¤=- |·¬=+
===-
• Spotting Every Day Red
Flags
ƒ ·-+ ·- ~-:-·+ |-=-
Flags
Harmonization
==-=-=-
Harmonization
• World Bank
==-=-=-
-·- ¤ +
• EBRD
• European Investment
-·- ¤+
• :¤=·:

p
Bank
• IMF
• =·|= ==- ¤+
• =·-·== =· + =:º=º|
• UN
• African Development
Bank
• ==a ·= =¤
• =|+ -+= ¤ +
Bank
• Inter-American
Development Bank
=|+ -+= ¤+
• =·-· ==·+ -+= ¤+
Development Bank
ADB’s Anticorruption
P li
º:¤+ ~==·
-·( --
Policy
-·( --
··= =--·=-
Zero Tolerance
=-=-= --+ =|·-:
Highest Ethical Standards
www.adb.org/Documents/Policies/Anticorruption-
Integrity/default.asp
• Corruption is a serious
• -+= |+== ~ ==·
p
impediment to the
development process.
• Recognizes the importance
-+= |+== ~ ==·
==~· =-·( -
• =-=-+ -¤ -= ·++ Recognizes the importance
of accountability for officials
in the public and private
sectors and transparency
=-=-+ -¤ -= ·++
=(+--·+ =-|·--. ·
=-=-+ -¤ -= ·+
sectors, and transparency
and predictability in public
and private sector
operations
===-= |···- º-
~-=--+ =-·- |-=-

operations.
• Seeks to address it as part
of its broader work on
governance issues
=·c
• ·=- |:-==-: =-=+

governance issues.
¤--· +=+ |=+ ·|=
==¤(- =- |== =·c
ADB’s
it t
º:¤+ |--:-
commitment
• Support competitive
º:¤+ |--:-
• |-|( ¤=· -¤ =--.
pp p
markets and efficient,
effective, accountable,
and transparent public
|- |( ¤=· -¤ =--.
|~-+·. =-|·- ·
|··· =-=-+ |·=-=:
p p
administration
• Support anticorruption
efforts and improving
=-==
• ~==· -·( |== -¤
efforts and improving
dialogue with Member
Countries on corruption
E h ADB
=·-= ·=-·== ==-·
=(· =- =-==
• Ensure that ADB
projects and staff adhere
to the highest ethical
• º:¤ |·==--· ·
+==·= =-=-= --+

g
standards
=|·-: =-=·- =c- ~-·
=-·=- =-
Anticorruption
P li
~==· -·( --
Policy
• Deters violations
• ===- =¤=+·-:·
through strengthening
operations
• Detects violations
• ===- =¤=+·-:·
=--=--· -··=-- =·c
• =--=--· |-=- =·c Detects violations
through
– Defining prohibited
activities
=--=--· |-=- =·c
– |-¤·(- +=+=|-·
|·~ =··
activities
– Encouraging reporting
– Investigating
– =-+·+ ==- |·=--
=··
• Enforces the policy
through sanctions
• Promotes awareness
– =-=·(- =··
• |-¤·(-·=|- -- == =·c

Promotes awareness
• =-- =~- : =·c
“Zero Tolerance”
P li
··= =--·=-

Policy
• Disallows integrity
--
• :=···- =--=--·
Disallows integrity
violations.
• Upholds integrity in
• :=···- =--=--·
=--+· =·c
• º:¤+ ==- ·-+
p g y
ADB-funded activities
• Ensures transparency
º
+=+=|-·+ :=-··-
+== ·r·c

p y
and accountability in
project activities
• |·==-+ +=+=|-·+
|···- · =-|·--
=-·=- =·c
• Holds individuals
accountable for their
ti
=-·=- =·c
• ·=a -·-·=: =ˆ-
+=|- =-|·- s--==·c
actions
ADB may cancel
j t
º:¤= |·==-

projects
• If fraud or corruption
-==¤- =- =+·c

p
has reached such
proportions that it
poses a significant
• ==== - ~==·=
º:¤ +=+=|-·+

poses a significant
impediment to the
probity and integrity of
:=-··- -¤ |-+- -
··+ =(·~- -+=

p y g y
ADB operations or the
attainment of a
country’s fundamental
=r·=-·= =-- =-·(
|-==- =· == +==

country s fundamental
development
objectives.
=·=
ADB will cancel
some/all financing
º:¤= +-/=¤

some/all financing
==- ·r =-c
for a contract if
representatives of
=~-+ -+= =·
=- - =|~a+
representatives of
the borrower or
beneficiary violated
=- - =|~a+
|--(-·= º:¤+
beneficiary violated
ADB’s Anticorruption
Policy
~==· -·( --
=-=¤- =·=
Policy.
АDB may cancel funding if it finds that y g
The representatives of the
Recipient/Borrower or any Recipient/Borrower, or any
beneficiary violated ADB’s
Anticorruption Policy p y
during the procurement of
goods/services/consultant
f selection or execution of
contract
ADB may also cancel
funding if it finds that
º:¤= == =-= |- ==-
funding if it finds that
• The Recipient failed to
-==¤- =- =+·c =·
p
perform obligations
under agreement
• =-=-= =~- =-·|
·=·--· --- =- -=+=
• The Executing Agency
failed to perform
obligations under
• +=·-=- =- -+== =~-
=-·| ·=·--· --- =- obligations under
agreement
=-·| ·=·--· --- =-
-=+=
• Material
misrepresentation
were made to ADB by
• º:¤ ==· =-=-= ~-+
|·+ ==- |--- =·=
y
the Recipient
Highest Ethical
St d d
=-=-= --+ =|·-:
Standards
= =-= --+ =|· :
Requires borrowers,
bidders suppliers
=-. ¤=-=. t--+-
bidders, suppliers
and contractors to
observe the highest
· s+··-·= ¤·· ·
=~- +=·-=-+
observe the highest
standard of ethics
during procurement
+== =-=-= --+
=|·-: |=- =-
g p
and execution of
contracts
=|· : |=- =-
=-·=+ ·-·c
ADB
º:¤= =¤ |··-

may audit
=- =+·c
• bidding documents
and contracts
• ¤= ==º+ ·---=
-¤ =~--·
• records and
documents related
-¤ =~ --·
• ¤= -¤ =~-

documents related
to bids and
contract
+=·-=- ==¤·(-
=~=¤ -¤
co t act
performance.
·---=-·
Proposal
t l t i l d
|--- -=--·=
templates include
• A statement that no fees,
==-· -- =+·c
• ¤·· |+= - =~-
,
gratuities, rebates, gifts,
commissions, or other
payments were given or
¤·· |+= - =~-
+=·-=-+ =··~= +-
·-+. =|·-. c=. +==-
p y g
received in relation to the
procurement process or
contract execution.
. . .
- =·= ~a- ·- - =-
-=·º+ ~·- --·-
• The bidders’ signature
confirming the above
• =¤+ --·- |=-- =-
confirming the above
statement.
¤=-=+ ---··
Conflicts of
I t t
--¤+ =+·--·
• Shared controlling partners
Interest
• =~ -=·++ =~··-·
--¤+ =+·--·
• Same legal representative for
purposes of this bid
• ¤= ===- == |==--·+
== ==- +-- |--(
• Preferential relationship with
each other or through common
third parties
• º+ =|== - =~ -=
|·-·=|- |¤=+-=a ==¤·(
• ¤= ===- == |+==
• Participating in more than one
bid in this bidding process
(instant disqualification)
• ¤= ===- == |+==
º+~·· ¤t ¤== =-~=-
-·+= ==·= s-·
• Participation as a consultant in
the preparation of the design or
technical specifications for the
• |·=··-+ ·|= =~-+
== :=:- - |-(+

technical specifications for the
contract
--·--·+ -=·= =-~=-
Conflicts of
i t t
--¤+ :·:-·
interest
--¤+ : :-·
• Are defined in the
Guidelines
ƒ -··+= |·~-
=·º+ c
• Violate the “highest
standard of ethics”
requirement
ƒ =-=-= --+ =|·-:
requirement
• Will result in sanctions
=-·=+-+ =-=¤-
Will result in sanctions
if discovered
ƒ =-+·= =º
|-¤·(-·= |·-- -- c - - c
Conflicts of
i
==+ :·:-·
interest
A consultant/firm may not receive
a contract if they have a
|·=··-/=-¤+ = +===
a contract if they have a
business or family relationship
with
|·=··-/=-¤+ = +===
·=|·+ - |·-·+ ==¤·(
~º= =~- |- -=- =+c-
(i) an ADB staff member or
(ii) a borrower’s staff
h di tl i di tl

· º:¤ +==· -
- =-+ +==·
who are directly or indirectly
involved in any part of
(iii) the preparation of the Terms
= +- |== |·=· - =|·=·
=-~= -·c-

(iii) the preparation of the Terms
of Reference,
(iv) the recruitment process or
(v) supervision of the contract
¯ ===-·+ ·--·+ -=·=.
~- |+= -
· =~-+ =|·-·-
Complaints and Investigations Complaints and Investigations
==· -¤ =-=·(--·
Whistleblower and
witness protection (AO
==+ -¤ =· =··-
|= +=== - ··
witness protection (AO
2.10)
|= +=== -··
• Adopted in December
2009
ƒ :==¤· -··· =
=¤==¤- =·º+
• Both for ADB staff and
external parties
=¤= ¤- =·º+
ƒ ·¤ º:¤ +==·
external parties
• Sets out procedures
on how to deal with
-¤ --= |·-·
ƒ ==+ -¤ =·-·
on how to deal with
retaliations towards
whistleblowers or

=¤+ |-+· +=·
==¤(- =- ~·-
whistleblowers or
witnesses
= ¤(- =- ~ -
|+= -(·- =·c
What happens when
th i i l ti ?
=-=¤- ~º= + -·c
there is a violation?
• ADB/OAI receives a
=-=¤- ~º= + - c
• /
ADB/OAI receives a
complaint
• Complaint is reviewed for
• º:¤/=º=:= ==· |- =·c
• ==· ==· =··c

p
– Credibility
– Materiality
– -·-=-=-+ ==
– =··~+-+ ==
Materiality
– Verifiability
– mandate (jurisdiction)
– |-==+ ==
– ==· =º=:+ ==-:=

– mandate (jurisdiction)
• Investigation commences
=(+··+ ~+ c ~-·
=-·=- =-+ ==
• =-=·(- =· -·c
Investigative
process
=-=·(- |+=
process

REFERRAL

OAI =º=:
Integrity
Oversight
Screen c-=
Investigate
=|·=
OAI =º=: Oversight
Committee
Screen c-=
Investigate
=-=·(-
90-day period ·· ·- ===
Sanction
y p
|-¤·( =|= ==-
Appeals
Committee
President =·=·
OAI will investigate
= º=:= =-=·(- =-c
OAI will investigate
• Borrowers/executing
º
• ¤=-=/+= ·-=- =-
g
agencies
• Private sector participants
¤=-=/+=·-=- =-
-+=-·
• -= ·++ =-~=-·
• Private sector participants
(bidders, consultants,
contractors, suppliers)
• -= ·++ =-~=-·
¤=-=. |·=··-.
s+·· t--+--·
• АDB staff
s+··. t--+--·
• º:¤ +==·
• Anywhere else ADB’s money
goes
• º:¤+ ==- =- =·=
+- |- -¤-
Sanctions |-¤·(-· Sanctions
• If OAI finds that there has
b i l ti t th
|-¤ (-·
• =º=:= ~==· -·( --
been a violation to the
Anticorruption Policy, on
the balance of probability,
ADB may
• =º=:= ~==· -·( --
=-=¤- ~º+ =-+· |º=.
=·-=-+ =~--+ -+=. º:¤=
ADB may
– Sanction a company for up
to 7 years
– +=|-=: · -=== |-¤·(
==:·- =+·c

to 7 years
– Sanction an individual for
up to forever
– +- ·=a=: =·+ ==
|-¤·( ==:·- =+·c
|-¤·(= º:¤+ ==- ·-+
A sanction makes a
firm/individual not eligible to
contract/work on ADB-
funded activity.
|-¤·(= º:¤+ ==- ·-+
+=+=|= +- =-¤/·=a=:
=~-/+=+ == ==·= s-·
y
=·c
Sanctions |-¤·(-· Sanctions
• Are internal,
|-¤ (-·
• =·-·+. |·=-+ ,
administrative decisions
• Are not public
.
--=-· --
• =-=-+ -:--
• Are reviewed by АDB
prior to any contract
award
• +- =~- |·- =-|-
º:¤:· ==· =··c

award
• Will be provided to the
Executing Agencies in
• -+= ~-== +=·-=-
=- -+=-· ==· =|=·(
=·:-c
ecut g ge c es
the near future
• Are shared among the
=·:-c
• -+= ¤+-· ==· =·-
|·- =··c
development banks.
Resulting actions include: Resulting actions include:
Reprimand: warning Reprimand: warning
Sanctions: debarment
(ineligibility to participate in
Sanctions: debarment
(ineligibility to participate in
ADB-funded activities) ADB-funded activities)
• Firms: 1 to 7 years Firms: 1 to 7 years
• Individuals: 1 year to indefinite
--===+ +=-·= ==-· --===+ +=-·= ==-· –
-=-- – =--- -=-- – =---
| -¤·(-· – · ++
º:¤+ ==- ·-+ +=+=|-·=
| -¤·(-· – · ++
º:¤+ ==- ·-+ +=+=|-·=
=-~= -- ==·=- =-~= -- ==·=-
• =-¤-· : · -·¤ · -=== =-¤-· : · - ·¤ - = =
• =-¤-· : · -·¤ =·+ ==
Debarred firms
·++ =·º+ =-¤-·
A i li ibl t
·++ =·º+ =-¤-·
–Are ineligible to
participate in ADB-
f d d ti iti
– º:¤+ ==- ·-+
+=+== =-~= --
funded activities
==·= -·c-
=-¤-·
Firms
·=a-·
Individuals
--=- =--¤= At present 273 309
=·+ == Ever 347 345 =·+ == Ever 347 345
When under
ti
|-¤·(= ·-·
sanction…
„ Current contracts
„ --=- =~--· =·
may continue
„ Entities may not
„ --=- =~--· =·
--=+·c

es ay o
compete in further
tenders
„ -+=-· =·= =-:·-·=
|-|( -=- =+·c-
„ Self-compliance is
expected
„ --== =-|=-+ =·
=··c
„ Sanctions extended
if violated
„ =-=¤- ~º= |-¤·(
====- =+·c
„ Reinstatement is not
automatic
= ==- =+ c
„ |--¤|- --- -·-
Disclosure of sanctions list
|-¤·(+ ==+ =-=-+·- |-¤·(+ ==+ =-=-+·-
SANCTIONS LIST SANCTIONS LIST:
• Cross-debarred entities
• ADB sanction violators
Published on
website:
www adb org
• ADB sanction violators
• ADB process avoiders
• First-time offenders
www.adb.org
• Reprimands
Accessible only to ADB staff,
Board of Directors, other
MDBs & EAs on:
Accessible to
general public on:
www adb org MDBs & EAs on:
www.adb.org & MyADB
www.adb.org
Cross-debarment
|- ·++
• Concerns published

• |+·- |-¤·(-·==
Concerns published
sanctions
• |+·- |-¤·(-·==
=·+· ·r·c
• Builds on
harmonized
• º=:¤+
harmonized
definitions of MDBs
º
|·~-·=
==·=-=-+ -=-
Borrowers /
E ti A i
=-/+=·-=- =-
Executing Agencies
-+=-·
• АDB may request that
the Government
• º:¤= =·+·==
=-·( =- =+·c
– Investigate
– Change staff
– =-=·(- =-
– +==· -·|· =-
Change staff
+==· -·| · =-
Borrowers /
E ti A i
=-/+=·-=- =-
Executing Agencies
-+=-·
АDB may
º:¤=
– Suspend financing
– Cancel loans
– ==- -==¤- =- =+·c
– =- ·r =- =+·c
– Amend lending
program
– =- ·r =- =+·c
– =- +=+= =·(- =-
=+·c
Real examples of
ll ti
º:¤= =-/=-·--· -==¤-/·r

cancellations
• Misuse of project funds
=- +·-+ -·=- =·-·--·
• |·==- ++ ··|==
• Compromised
procurement
• Bribes paid to project

• =~-=a ¤··
• |·==-+ =(+·-·=: ¤

Bribes paid to project
officials
• Substandard material
·:º+
• -=- +== +=== ===
|== =·º+
was used on a
construction project
• Misappropriated funds
º
• ++ ··|==
• |·=··-+ =·=-+ ==-

• Misappropriated funds
• Misrepresented
qualifications of
--·-
• =~-= =-==--
consultants
• Contract irregularities
Questions?
|·--·
Questions?
|·--·

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