For over two decades the World Bank (WB) had repeatedly reaffirmed its commitment to fight fraud and corruption which are seen as serious impediments to achieving its development goals and a world free of poverty. During this period, the organization’s Sanctions System has evolved from a small unit to a highly skilled and independent administrative system with professional investigators and two tiers of review to ensure due process for companies accused of misconduct.
What is the WB’s Integrity Vice Presidency (INT)?
In 2001, the Department of Institutional Integrity (INT) was created with the mandate to investigate allegations of fraud and corruption in WB-financed projects. In 2007, the INT was elevated from a department to a vice presidency (the Integrity Vice Presidency) having its work portfolio significantly expanded. Today, the INT is an independent unit within the WB empowered to investigate and apply sanctions related to allegations of sanctionable practices in projects funded by the World Bank.
What are the sanctionable practices investigated by the World Bank?
- Fraudulent practices – can be considered any acts or omissions that knowingly or recklessly mislead a party in order to obtain any (financial) benefits
- Corruptive practices – relate to any activities involved with offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence a decision or an (in)action of another party
- Collusive practices – represent specific arrangements between two or more parties designed to achieve an improper decision of influence the (in)actions of another party
- Coercive practices – are considered activities that aim to harm, impair or threaten, directly or indirectly, a party to influence its (in)actions
- Obstructive practices – represent acts that deliberately aim to destroy, falsify or alter the evidence used in investigations performed by the World Bank
- Staff misconduct – INT investigates acts of professional misconduct that relate to the misuse of WB funds, conflicts of interest, or abuse of position carried out by WB staff members.
Parties sanctioned as a result of WB investigations are added to the debarment list and are not eligible to participate in World Bank-financed contracts for the period indicated in the decision statement.
- In FY2020 INT received 2,598 complaints and opened 429 new external preliminary investigations
- The unit launched 46 new external investigations of which 14 were related to projects in Africa, 7 for projects in the East Asia Pacific region, 10 for projects in Europe and Central Asia, 9 for the South Asian region, 3 for Latin America and the Caribbean and 3 investigations related to projects in the Middle East and North Africa region
- Based on the outcomes of the investigations carried out in FY20, 30 firms and 8 individuals were temporarily suspended
- The INT, in collaboration with the WB’s Sanctions Board, determined that 18 previously sanctioned parties had satisfied their conditions for release from debarment
- In FY20, the INT pursued 82 staff and vendor investigations, of which 66 investigations targeted acts of misconduct by staff and 16 investigations were opened in relations to vendors
- Out of 82 internal investigations, 7 were substantiated (with related evidence), 17 unsubstantiated (with a lack of evidence), 10 unfunded (where the acts of misconduct, as alleged, did not occur), and 14 were referred to other locations within World Bank for further investigation
- There were 76 cases of Cross-Debarments recognized by the World Bank in FY20. Cross-debarment is a situation when entities debarred by one multilateral development bank are sanctioned for the same conduct by the other four institutions that are the signatories of the Agreement for Mutual Enforcement of Debarment Decisions (ADB, AfDB, EBRD, IADB, and WB).
World Bank’s approach to combating sanctionable practices
- The implementation of the electronic government procurement (e-GP) systems and the digitalization of governmental services are identified as key instruments for addressing corruption vulnerabilities
- The design and implementation of tools for reducing corruption in public procurement requires a country-specific approach
- Increased frequency of audits and higher rates of transparency are seen as key factors associated with declines in the incidence of corruption in procurement systems
- Open Government Initiatives aiming to involve citizens in the oversight of government functions can strengthen accountability and foster transparency
- Inter-agency cooperation in terms of information exchange can significantly decrease the rates of acts of corruption
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