world bank integrity vice president fiscal 2010 annual report

8/8/2019 World Bank Integrity Vice President Fiscal 2010 Annual Report

http://slidepdf.com/reader/full/world-bank-integrity-vice-president-fiscal-2010-annual-report 1/24

ANNUAL REPORTF ISCA L 2010

T H E W O R L D B A N K G R O U P

I N T E G R I T Y V I C E P R E S I D E N C Y



ANNUAL REPORTF I SCAL 2010

T H E W O R L D B A N K G R O U P

I N T E G R I T Y V I C E P R E S I D E N C Y



iiiAnnual Report 2010

Tis year the World Bank Group persisted in its support of develop-ing country clients as the world economy slowly emerged from crisis.Faced with a period of high uncertainty and uneven growth, we areproviding assistance to the neediest and sowing the seeds of futuregrowth and opportunity by investing in key sectors.

In scal 2010, the Bank Group committed a record $72.9 billion inloans, grants, equity investments, and guarantees. Since the onset of the crisis, we have substantially scaled up our funding to soften theblow on the neediest and invest in the long-term drivers of economicgrowth. Our shareholders recognized these eorts and endorsed the World Bank’s rst major capital increase in more than twenty years.But with this support comes an even greater responsibility to ensurethe highest accountability and transparency in the Bank Group’sprovision of nancial and technical resources.

As we further ramp up our operations, we must continue to assuredonors and client governments that we are responsible stewards of scarce development funds. Working with governments, the privatesector, and other international institutions, our governance and anti-corruption eorts can also help restore the public’s trust in nancialinstitutions and markets.

Persistent fraud and corruption undermine a country’s developmentand jeopardize its growth prospects. Experience shows that consis-tently applying safeguards and improving transparency curtail avenuesfor fraud and corruption. Te Bank Group’s Governance and Anti-Corruption strategy has both a short and long-term approach. In theshort term we are establishing integrity safeguards to protect WorldBank projects. Over the long term, we are ensuring that these safe-guards build governance and anticorruption capacity and strengtheninstitutions in our client countries, and keep governments engaged.

Last year, I committed the Bank Group to bringing about an eectiveinternational sanctions system to debar delinquent companies fromdoing business with other institutions as well as our own. In April, we delivered on our pledge; the Bank Group signed a path-breakingagreement on cross debarment with the other four regional multilat-eral development banks. Te agreement sends a powerful message:cheat or steal from one of us, and you will be punished by all. Inthe past decade, multilateral development banks have collectively debarred more than 1,100 fraudulent and corrupt entities. Teaccord greatly enhances our ability to jointly crack down on fraudand corruption. It also provides an incentive to companies to cleanup their operations. And it underscores to donor and recipientcountries that every development dollar must be spent as intended:to overcome poverty.

From the Presidentof the World Bank



iv INTEGRITY VICE PRESIDENCY THE WORLD BANK GROUP vAnnual Report 2010

Te World Bank Group’s integrity mission is designed to detect,investigate, sanction, and prevent wrongdoing. Te integrity of proj-ects is a core part of any development mission. Te results of the l asttwo years speak volumes about the World Bank’s commitment to setthings straight. I anticipate that the next two years will be even morechallenging—and rewarding.

Te large number of people I have to thank correlates with IN’saccomplishments this past scal year. Teir advice and hard work enabled us to meet many of the challenges set forth in last year’sannual report, to contribute more signicantly to the Bank Group’sGovernance and Anticorruption agenda, and to stay ahead of many problems before they arose.

I thank the World Bank Group President and Senior Managementfor their leadership and guidance; the Chairman and members of the World Bank Group Board of Executive Directors for their support;members of the Audit Committee and Independent Advisory Boardfor their oversight and advice; the Sanctions Board and the Evaluationand Suspension Ocers, who weigh and judge the merits of sanctionsapplications brought by IN; and those who came forward with com-plaints, provided IN with information about fraud and corruption,and helped the Bank in its preventive eorts.

I thank all of IN’s sta, who deserve special recognition for theircontinued commitment.

During scal 2010, IN sta’sexceptional work and eortallowed it to close 117 investiga-tions. Te World Bank debarred45 entities—including multina-tional companies, individuals,and non-governmental organi-zations—from doing business with it. IN sent 32 referralsof investigative ndings togovernments and anticorrup-tion agencies so that local lawenforcement can bring those to justice who steal from the poor. After implementing all 18 of theVolcker Commission report’srecommendations, IN hasdeveloped a strategic framework for eective investigations.

Building on this progress, theBank Group will move forward with strengthened governanceand anticorruption eorts. We will provide more resourcesfor prevention. Our PreventiveServices Unit is making goodprogress in turning the resultsof investigations into practicaladvice on how to prevent cor-ruption, training nearly 1,200people in scal 2010 in preven-tive activities, such as identify-ing red ags in procurementand managing integrity risksin development projects. We will also pursue corrupt entitiesand individuals and work withthe international community to hold them accountable andrecover stolen assets. We willrene and develop the bestmechanisms to deter fraudand corruption.

Robert B. Zoellick

President, World Bank

Acknowledgements As our traditional anticor-ruption eorts produce moreresults, we are pushing ahead innew areas. We need systematizednegotiated resolutions that allowus to pursue delinquent corpo-rations. We continue to helpinvestigators access nancialinformation held by commercialinstitutions dealing with WorldBank-supplied funds.

Our investment lendingreform will improve our focuson results, increase speedand delivery, and strengthenrisk management.

We are also adopting a rangeof operational reforms that will enhance our eectiveness,accountability, transparency,and ability to eciently delivernancial and technical resourcesto our clients.

A multipolar global economy is taking shape where develop-ing and emerging countries areincreasingly powerful sourcesof demand. A modernizedmultilateralism must thereforetreat them as key players. We aretransforming the Bank Groupto reect this new reality andenable us to better assist ourclients. Tis transformationrequires that we learn from thepast, evaluate the present, andanticipate future events. Buta key pillar of our work willremain the same: our unwaver-ing commitment to upholdintegrity and tackle corruption.

Leonard F. McCarthy

Vice President for Integrity,

World Bank

Tis is central to strengthen-ing development. Overcomingpoverty needs good governanceand institutions just as much asit needs resources.

I want to thank all of ourpartners in the ght against cor-ruption. I particularly want torecognize the men and women who bravely provide evidence tothe Bank Group’s Integrity VicePresidency as well as the many ocials around the world who work with us to expose fraudand corruption—often at greatpersonal risk. Te World Bank Group will support them andall who stand up for integrity and good governance. Finally,I would like to thank LeonardMcCarthy, Vice President forIntegrity, for his hard work andexemplary leadership over thepast year.



vi INTEGRITY VICE PRESIDENCY THE WORLD BANK GROUP 1Annual Report 2010

iii FromthePresidentoftheWorldBankv Acknowledgements

2 Integrity at the World Bank Group Works

3 Executive Summary

8 NGAING INN IN PRIA R

8 Te Macmillan Limited case paves way for negotiated resolutions10 Encouraging corporate compliance10 Cross debarment multiplies eectiveness of sanctions11 Voluntary disclosure and self-reporting

12 BING ANIRRPIN APAI A NAINA

12 Strengthening criminal prosecution of fraud and corruption12 raining to strengthen national capacity

13 MAING R WN M MR FFI

13 Reviewing project design and implementation14 Developing preventive tools15 Reworking policies15 Mitigating risks of fraud and corruption in corporate procurement16 Promoting integrity among Bank Group sta 16 New disclosure policy increases transparency of IN’s work

16 Accountability and oversight

18 asting ur Net Wide—Protecting Projects

from Fraud and orruption

19 OOO Siemens and the eect of the Siemens AG Settlement19 Corruption scheme leads to poor project implementation

20 Senior project ocial’s contract terminated for soliciting bribes20 Quick reporting allows highway project to move forward

despite attempted collusion20 Red ags uncovered during ongoing investigation leads

to early intervention

25 Facts and Figures

26 INIGAI AA

26 External Investigations29 Internal Investigations

31 BG AN AFFING

32 NII BARR IN F10

34 RFRRA MA IN F10

36 W RPR A MPAIN

contents

C h a r l o t t e K e s l / W o r l d B a n k



2 INTEGRITY VICE PRESIDENCY THE WORLD BANK GROUP 3Annual Report 2010

Every year is an opportunity to

improve over the last, and IN’s

performance this year is a testimony to this. In FY10, IN managed a case

load that spread across 84 countries

and 260 projects, all while closing

investigations well under targetedtimeframes. As a result of IN’s

investigative work, the Bank Group in

FY10 debarred 45 rms, individuals,

and non-governmental organizations,

preventing them from participating infuture Bank Group-nanced projects

for varying periods of time. It sent

32 referrals of investigative ndings

to governments and anticorruptionagencies so that they can undertake

corrective action and their owncriminal investigations to determine

if the laws of the country have been

violated. IN sta trained nearly 1,200 people in preventive activities

such as identifying red ags in

procurement and managing integrity

risks in development projects.

Assurance that World BankGroup funds go towardpromoting development andreducing poverty.

ondence that the WorldBank Group can help clientssafeguard projects from fraudand corruption.

Assistance to clients who arestrengthening governanceand anticorruption in theircountries.

Integrity works.

Integrity is:

Jamie Martin / World Bank

Curt Carnemark / World Bank

Charlotte Kesl / World Bank

Scott Wallace / World Bank




Tese results are the outcome of strategic actions undertaken in thepast two years: the recently completed backlog of old cases, whichallowed IN investigators to focus on high priority and high impactcases; the full implementation of the recommendations set forth by the Volcker Panel, which lay the groundwork for IN’s enhancedpreventive function; and, nally, a more robust and active sanctionsregime, which hastened the Bank Group’s ability to hold corruptentities and individuals accountable for their wrongdoing.

IN has noted increased initiative from client countries to tacklefraud and corruption. Building on this momentum, IN continuesto work across sectors and regions, all while engaging the privatesector, national authorities, and other multilateral organizations.Cross-cutting initiatives from FY10 include:

• A landmark cross-debarment accord signed by ve multilateraldevelopment banks on April 9, 2010, which stipulates thatentities debarred by one bank will be sanctioned for the samemisconduct by the other signatories. Te agreement makes sanc-tions more eective, as well as demonstrates the ability of theBank Group to convene consensus in a multilateral environment.

• An International Roads Review, which IN piloted in responseto insights gained over many years from investigations showingthat the transport sector is particularly vulnerable to fraud andcorruption risks.

• A risk-prevention review of Community Driven Developmentprojects in Africa that recommends how the Bank Groupcan continue funding this widely-used program model withreduced risk.

In addition, IN had marked success using negotiated resolution asa means for quickly resolving cases, removing corrupt entities fromBank Group business, and encouraging other rms to come forward.Tis mechanism was rst tested in July 2009, resulting in Siemens AG’s voluntary restraint from bidding and committing a $100 mil-lion payment to support anticorruption work. In April 2010, theBank Group debarred UK publisher Macmillan Limited for six years,following an admission that the rm had paid bribes in an attempt to win a contract.

IN’s case studies show there is a wide range of scope and complex-ity when it comes to fraud and corruption schemes aecting Bank Group-nanced projects. Placed in the context of increased Bank Group lending, the relevance and importance of IN’s anticorruption work remains paramount.

Kristoffer S. Tripplaar / World Bank

“No one has the monopoly on integrity around the world. It’s vital that the Bank

emphasize the integrity agenda, because

without it so much of the money that wehave set aside for development gets lost.

If we really want development to happen,

if we want the poverty to be dealt with

in a much faster way than it is now, then

integrity has to be central to all that we do.”

— Huguette Labelle, Chairperson of TransparencyInternational, speaking at the World Bank’s Integrity Day




AFRIA

F10 30%FY09 26%FY08 20%FY07 28%FY06 17%

RP ANNRA AIA

F10 15%FY09 20%FY08 9%FY07 16%FY06 17%

A AIAPAIFI

F10 14%FY09 17%FY08 19%FY07 32%FY06 27%

AIN AMRIAAN ARIBBAN

F10 13%FY09 7%FY08 7%FY07 6%FY06 8%

MI A ANNR AFRIA

F10 9%FY09 5%FY08 7%FY07 6%FY06 4%

AIA

F10 19%FY09 25%FY08 38%FY07 12%FY06 27%

Percentage of cases opened by Region for F06-10

IN opened the most cases in

Africa in FY10, the region in which

the Bank Group also had the largest

portfolio of projects in FY10,

worth $33.9 billion.Te number of cases IN opens in a region does not directly correlate with greater fraud and corruption risks. Rather thestatistic indicates where allegations have been reported, whichin turn reects where IN has been most active over the years.

To enhance the effective-ness of the Bank Group’swork in these sectors, INTpiloted its rst internationalreview of the roads sector,which examines and assessesfraud and corruption risks,and provides recommendedpreventive measures.

INT is also doing a reviewof systemic risks in healthsector projects to help

operational staff betterunderstand and respondto fraud and corruption risks.

When possible, the WorldBank Group takes a globalapproach to addressingfraud and corruption so thatpositive outcomes can havea widespread impact. A newcross-debarment agreementprevents companies debarredby the Bank Group from seek-ing business from other mul-tilateral development banks,and the Corruption Hunters’Network connects national

authorities around the globe.

To better address the riskof fraud and corruption inAfrica, in FY10 the WorldBank put INT on the frontlineto review Community-DrivenDevelopment Projects, a wide-ly-used method for designingand implementing projects inthe region. It also sponsoreda forensic auditing workshopfor nearly 100 Kenyan govern-ment officials, including theKenya AnticorruptionCommission and the KenyanNational Audit Office, whichwill enhance long-term audit-ing capacity in that country.

IN continues to register the

most cases in the ransport and

Health, Nutrition and Population

sectors, which are key ones for

development.

R F09 F10

Agricultural and Rural 10 23

Economic Policy 1 0

Education 13 24

Energy & Mining 8 11

Environment 8 4

Financial and PrivateSector Development 3 9

Global Information/ CommunicationsTechnology 2 1

Health, Nutritionand Population 30 26

No Sector 5 10

Public Sector Governance 10 7

Social Development 0 8

Social Protection 4 5

Transport 27 38

Urban Development 5 10

Water 12 18

A 138 194

REGION FY06 FY07 FY08 FY09 FY10

Africa 32 33 31 36 58

East Asia Pacic 51 37 29 23 27

Europe & Central Asia 33 18 15 28 30

Latin America & Caribbean 15 7 10 10 25

Middle East & North Africa 8 7 10 7 18

South Asia 51 14 57 34 36

A 190 116 152 138 194




Negating delinquency in the private sector

When it comes to fraud and corruption aecting World Bank Group-nanced activities, the most frequent perpetrators are those outsidethe Bank Group. For this reason, gaining the support of externalstakeholders such as the private sector is crucial to the long-termsuccess of the Bank Group’s anticorruption work. Te Bank Groupcontinues to enhance its business processes to more eectively addressfraud and corruption risks, but ultimately the desire to perpetuateclean business must come from the private sector itself. By supportingexisting corporate anticorruption initiatives and further incentivizingnon-compliant rms, the Bank Group can clear the way for privatesector participation in development.

MAMIAN IMI A PA WA

FR NGIA RIN

Since 1999 the World Bank Group has used debarment to protectBank Group funds, and as a way to hold fraudulent or corrupt rmsaccountable for their misconduct. Publicizing the debarments deterspotentially wayward rms from participating in Bank Group projects,thereby increasing the opportunity for fair competition amongbidders and protecting Bank Group funds from misuse. Beginningin 2009, the Bank Group began using negotiated resolutions as ameans of quickly resolving cases, removing corrupt rms from Bank-supported projects, and encouraging other rms to acknowledgemisconduct sooner. Building on the initial success the Bank Grouphas had in negotiating these settlements of investigations, in the

coming scal year it will incorporate and formalize this mechanism aspart of its sanctions regime.

On April 30, 2010, the Bank Group debarred UK publisher Macmil-

lan Limited for six years. Te debarment was part of a negotiated res-olution that followed Macmillan’s admission that it had paid bribes inan attempt to win a contract in Southern Sudan. Macmillan has beena major supplier of educational materials for Bank Group-nancedprojects, winning more than $35 million in contracts since 1999.

Tis particular education project included a multimillion dollarcontract to print primary school text books. Acting upon informationit received, IN’s investigation uncovered evidence that Macmillanmade a series of corrupt payments in an eort to inuence the pro-curement process, and Macmillan was not awarded the contract. INcollaborated with national authorities, which expedited resolution of IN’s investigation, as well as underscored the World Bank’s commit-ment to working closely with governments to pursue corruption.

By supportingexisting corporateanticorruptioninitiatives and furtherincentivizing non-compliant rms, theBank Group can clearthe way for privatesector participationin development.

Simon Robertson / World Bank

Ray Witlin / World Bank




Under the terms of the agreement, Macmillan has agreed to cooper-ate with the World Bank’s eorts to combat fraud and corruption in World Bank Group-nanced projects. Macmillan will also implementa compliance program that will be monitored by a third-party toensure its adequacy. In recognition of Macmillan’s early acknowledge-ment of its corrupt conduct, the Bank Group agreed to a reduceddebarment of six years.

NRAGING RPRA MPIAN

Instituting corporate compliance programs as a condition of settle-

ment is one way the Bank Group is encouraging the private sectorto take responsibility for curbing fraud and corruption. o furtherencourage companies to adopt thorough—and sustained—corporatecompliance programs, in FY10 the Bank Group developed a proposalfor increased use of ‘debarment with conditional release, whereby debarred entities will not have their debarment lifted until they implement a suitable compliance program. Expanding the useof conditional release in sanctions discourages recidivism by companies and causes them to rectify their behavior.

R BARMN MIPI FFIN F ANIN

Tanks to a landmark agreement signed on April 9, 2010, companiesdebarred by the Bank Group will no longer be able to seek businessfrom other multilateral development banks (MDBs), thus closing a

problematic loophole in MDB-nanced development programs.Te agreement stipulates that entities debarred by one MDB willbe sanctioned for the same misconduct by other participatingdevelopment banks—currently the signatories include the AfricanDevelopment Bank, the Asian Development Bank, the EuropeanBank for Reconstruction and Development, the Inter-AmericanDevelopment Bank and the World Bank Group. Full implementationof the Agreement by each of the participating banks will occurover the course of the coming scal year. Participants will continueto manage their independent anticorruption strategies; however, crossdebarment allows MDBs to maximize limited investigation resources while further protecting their projects from fraud and corruption.More than two years in the making, the agreement marks the successof the Bank Group in convening consensus among multilateral enti-ties to solve problems on a global scale.

NAR IR AN F-RPRING

o further engage the private sector, IN also operates a Voluntary Disclosure Program (VDP) on behalf of the Bank Group. Similar toprograms in use around the world, the VDP is a mechanism by whichrms undertake internal investigations, disclose their misconduct toIN, and implement suitable compliance programs. In exchange forfull cooperation, rms remain anonymous, avoid the reputationaldamage of public debarment, and may continue to compete forBank Group-nanced contracts. Te program allows IN to engagethe private sector as a whole, but to especially target rms that haveinherited problems, for example, as a result of an acquisition. In theFY11, IN will address how it can further incentivize rms to comeforward and report integrity issues. (See www.worldbank.org/vdp)

As part of its strategic repositioning in 2010, IN introduceda process whereby rms, intent on cleaning up their business, present

the outcomes of their internal investigation to the Bank Group foraction. Depending on the outcome and the company’s level of coop-eration, IN then decides on constructive steps, which can includethe initiation of sanctions proceedings that take into account thecompany’s cooperation.

In one such instance this scal year, a company presented to the World Bank its ndings about a “ghost employee” scheme to fraudu-lently obtain additional funding under a Bank-nanced contract.Te company further presented evidence about the role of the projectmanagement unit director in submitting fraudulent invoices. Inexchange for the company’s cooperation, IN will acknowledge thescope of cooperation in the sanction application and referral reportsent to the relevant country.

Instituting corporatecompliance programsas a condition ofsettlement is one

way the Bank Groupis encouraging theprivate sector to takeresponsibility forcurbing fraud andcorruption.

Curt Carnemark / World Bank




Boosting anticorruption capacity at the national level

RNGNING RIMINA PRIN F FRA

AN RRPIN

Equally important to the success of the Bank Group’s anticorrup-tion work are the close partnerships it has developed with nationalauthorities. National authorities assist in resolving investigations, andare well-positioned to follow up on information that the Bank Grouprefers to them. IN sends referrals to relevant national authorities if evidence indicates that the laws of a Bank Group member country may have been violated. Criminal investigations—and subsequent

prosecutions—perhaps send the strongest message to would-be of-fenders that fraud and corruption are not tolerated. In November2009, IN referred ndings from a forensic review to the Kenyan Anticorruption Commission. As a result, the government opened38 criminal investigations, two of which are awaiting trial. Actingon information it received from IN, the Norwegian governmenthas indicted three former employees of Norconsult for bribery.Te Palestinian Attorney General’s oce has likewise opened aninvestigation, pursuing a rm and its owner for fraud. (See page34 for a list of referrals made in FY10.)

RAINING RNGN NAINA APAI

Te World Bank created a Corruption Hunters’ Network in 2009, which grew this past scal year to 120 anticorruption ocials from31 countries. Te network serves as a conduit for IN referrals andinformation sharing, while oering members an opportunity toprovide one another technical support.

IN also provides tailored training that focuses on preventing fraudand corruption within the unique context of a country. Tese ses-sions bring together multiple stakeholders and focus on pinpointing

concrete actions for mitigating risks of fraud and corruption. Oneof IN’s most successful training interventions from the past scalyear brought together 65 government ocials, 40 contractors andconsultants, and representatives from multiple development banks fora meeting in the South Asia region. Participants agreed to short-termremedies such as amending contract qualication criteria in order toenhance competition and reduce false bid submissions, and establish-ing an e-procurement system to improve contract administration andtransparency. Mindful of long-term solutions that can modify theoverall environment, participants also agreed to reforms to currentlaws and policies.

Making our own systems more effective

RIWING PR IGN AN IMPMNAIN

Over the last decade, the Bank has increasingly focused lending toCommunity Driven Development (CDD) programs to better reachlocal communities directly. Te CDD portfolio amounts to approxi-mately $2 billion a year. Tese projects emphasize local empower-ment, participatory governance, administrative autonomy, and publicaccountability. Direct responsibility and control over decisions andallocations of resources are assigned to local community organiza-tions. However, IN’s investigations have shown that CDD projectscan face challenges during implementation.

One of IN’s goals is to provide relevant and timely advice to op-erational colleagues so that they can make informed decisions abouttheir work. IN therefore initiated a risk-prevention review coveringCDD projects in the Africa region. Based on IN’s initial ndings,the reliance on self-governance by communities and weak monitoringand evaluation processes created numerous challenges. Te primary risks that were forensically established included: insucient com-munity buy-in, lack of proof or over-valuation of delivered goods andservices, and duplication of donor funding. IN is currently naliz-ing recommendations on how to strengthen integrity controls as part

Equally important

to the success ofthe Bank Group’santicorruptionwork are the closepartnerships it hasdeveloped withnational authorities.

Gennadiy Ratushenko / World Bank




of the overall governance of CDD projects to ensure that the account-ability and integrity of these projects remain intact.

PING PRNI

o complement its private sector and national government initiatives,IN uses its investigative expertise to develop tools that assist Bank Group sta build more preventive measures into their work. In orderto meet increasing demand for support in this area, in FY10 INadded additional preventive specialists, forensic accountants,and research analysts to its sta.

IN frequently investigates allegations related to roads projects, andits data show the transport sector is particularly vulnerable to fraudand corruption risks. Te sector in general receives signicant fund-ing from the Bank—in FY10, lending reached a peak of $9 billion,amounting to 15% percent of the World Bank’s total lending for theyear. In response to this recurring issue, in FY10, IN piloted anInternational Roads Review, which predictably put the spotlight on:collusion among bidders; the submission of fraudulent documentsto qualify to bid; and, the over-billing for, or the under-supply of,materials during contract execution.

Based on IN’s assessment and insights from roads investigationsover many years, it recommends the following solutions serve as thebasis for a preventive strategy: customizing techniques for analyz-ing and reviewing collusive patterns in highway construction bids;making certicates of independent price determinations a prerequi-

site; standardizing the use of high-tech equipment and machinery totest the quality of road-building materials; revisiting public tenderrules and using e-procurement against collusion; experimenting withproperly supervised capped bids where national competitive biddingprocedures are allowed; greater use of independent oversight; and,legislating against cartels and prosecuting hard cases.

Developing preventive tools is the rst step in enhancing the Bank Group’s anticorruption capabilities. Even more important, IN fo-cuses on how these tools can best be integrated into the Bank Group’sdaily operations. Close collaboration with project sta resulted insignicantly increased use of the Company Risk Prole Database inFY10. Te database helps Bank Group sta perform more thoroughdue diligence before awarding a contract, alerting them to rms about which IN has pertinent information. In FY10, sta performed3,029 searches on the database, resulting in matches approximately 2% of the time. Te majority of queries involved companies basedin Afghanistan, Bangladesh, Kazakhstan, and India.

RWRING PII

Supplementing preventive tools with sound policies ensures the Bank Group eliminates opportunities for fraud and corruption to aectits work. Drawing on trends identied during investigations, IN’spreventive specialists review sector strategies to help operational sta determine where policy modications can better address fraud andcorruption risks. With regard to the sanctions system, IN works with the Legal Vice Presidency to clarify issues as they arise—forexample how to apply a debarment if a sanctioned company under-goes complex corporate restructuring.

MIIGAING RI F FRA AN RRPIN

IN RPRA PRRMN

Te Bank Group spends approximately $1 billion a year on productsand services for its own internal requirements through its corporateprocurement unit. o enhance open, transparent, and global competi-tion in bidding for corporate procurement contracts, the Bank Groupperforms Vendor Eligibility Reviews. During a review, the Bank Group’s corporate procurement unit can request IN to investigatevendors suspected to have engaged in misconduct. Similar to the sys-tem used for sanctioning delinquent rms bidding on Bank Group-nanced contracts, the Bank Group uses IN’s ndings as a basis fordebarring “non-responsible” vendors. In FY10, this process resultedin six rms being declared non-responsible for fraud and collusionrelated to an oce relocation and refurbishment project.(See http://go.worldbank.org/C3YIALVBF0 )

Developing preventivetools is the rststep in enhancing

the Bank Group’santicorruptioncapabilities.

Guiseppe Franchini / World Bank




PRMING INGRI AMNG BAN GRP AFF

Bank Group sta are held to high standards of integrity, and throughtraining and outreach, IN further promoted the reporting, detec-tion, and prevention of misconduct. In addition, working with the World Bank’s Internal Justice System, IN familiarizes sta, bothat headquarters and in the country oces, with its mandate, and what rights and obligations sta have.

Sta misconduct can occur, and in FY10, IN opened 54 casesrelated to alleged sta involvement in fraud and corruption. Oneinvestigation involved the alleged unauthorized disclosure of strictly condential Bank Group information, which appeared in a nationalnews media outlet’s website article. Forensic evidence from theinvestigation indicated that a Bank Sta member had providedthe documents and information to the reporter who had writtenthe on-line article. Based on IN’s ndings and supporting evidence,the Bank permanently terminated the sta member’s employment.wo additional sta members were reprimanded in FY10.

NW IR PI INRA RANPARN

F IN’ WR

ransparency and accountability are of fundamental importancefor the Bank Group because openness promotes engagement withstakeholders, which, in turn, improves the design and implementa-tion of projects and policies and strengthens development outcomes.Consistent with the new Access to Information policy, IN is reningits disclosure policy, which will aim to strike an appropriate balancebetween the need to grant the public access to information in IN’spossession, and IN’s obligation to respect condentiality and toprotect the integrity of its investigations. With respect to informationabout investigations, the Bank Group currently publishes the out-comes of its investigations as well as the outcomes of its debarment

rulings. (See www.worldbank.org/integrity )

ANABII AN RIG

Te Audit Committee of the Bank Group’s Board of ExecutiveDirectors has a mandate to assist the Board in overseeing and makingdecisions regarding the World Bank Group’s nancial condition,risk management and assessment processes, and reporting andaccounting policies and procedures, and the adequacy of governanceand controls.

On a quarterly basis, IN briefs the Audit Committee on mattersthat may indicate systemic weaknesses, cases that will be referredto the sanctions system, or investigations that involve a reputationalrisk for the Bank Group. Tis scal year, IN has beneted inparticular from the Audit Committee’s guidance on putting a cross-debarment accord in place, enhancing the eect of sanctions,and improving performance management.

IN also draws on the insights of four international anticorruptionand policy leaders who have agreed to serve on the World Bank’sIndependent Advisory Board (IAB.) Te new Board protects theindependence and strengthens the accountability of IN by provid-ing advice on policies and procedures and on the Vice Presidency’sinteractions within the World Bank Group. It advises the Presidentof the World Bank and the Audit Committee on the performance of IN and the implementation of the related Volcker Panel recommen-

dations. Te IAB has four members: Peter Costello, Chester Crocker,Simeon Marcelo, and Mark Pieth.

In the past scal year, IN has especially relied on the IAB’s adviceon how to best complement IN’s investigations with an enhancedpreventive function, undertake Detailed Implementation Reviewsthat benet the Bank Group and client countries, operate in high-risk sectors, and standardize procedural rules for investigations.(See http://go.worldbank.org/S262CF3KD0 )

Dominic Sansoni / World Bank

Transparency andaccountability areof fundamentalimportance forthe Bank Group.




Casting Our Net Wide:Protecting Projects from Fraud and Corruption

IMN AN FF F IMN AG MN

Last year the Bank Group and Siemens AG agreed on a comprehen-sive settlement, following the company’s acknowledged past miscon-duct in its global business and a World Bank investigation into fraudinvolving OOO Siemens, the Russian subsidiary of Siemens AG,in the World Bank-nanced Moscow Urban ransport Project.Te settlement included a two year voluntary restraint on biddingand in November 2009, OOO Siemens was debarred for four years.

One of the major components of the project was making a seriesof improvements to Moscow’s Tird Ring Road. o enable theseimprovements, a consultant designed a new trac control systemfor the road and helped prepare documents to solicit bids for thesystem’s construction.

OOO Siemens, which sought to receive the contract to constructthe trac control system, had a close, longstanding relationship withthe design consultant and frequently communicated with him abouttrac control systems. Yet despite the requirement to disclose any potential conicts of interest, OOO Siemens never mentioned thisrelationship in its bid for the trac control system contract.

Te last 12 months have shown the eectiveness of voluntary restraintin depriving companies of business opportunities. Te settlementremains a landmark for IN, and its structured combination of sanctions and remedial measures has signicantly informed IN’sapproach to resolving other complex investigations.

RRPIN M A PR PR IMPMNAIN

IN discovered a corruption scheme during the execution phaseof a Bank-nanced land management project. Te project aimedto improve land tenure security and promote the development of

ecient land markets. IN found that the Chief Executive Ocerof a company made illicit payments to inuence the actions of publicocials in the execution of several of its Bank-nanced contracts.Specically, the company paid bribes to receive payments on itsinvoices and used substandard materials and construction methodsin implementing the contracts.

o win the contracts, the CEO approached several public ocialsduring the bid evaluation stage in a coordinated fashion designedto obtain inside information and thus gain unfair advantage overthe other bidders. Te company also misrepresented its operationalcapacity in its bids by not disclosing that it would use subcontractors.

Eric Miller/ World Bank

Edwin Huffman / World Bank Trevor Samson / World Bank

The last 12 monthshave shown theeffectiveness ofvoluntary restraintin depriving

companies of businessopportunities.




As a result of this investigation, both the company, CADE GroupCambodia, and its CEO, Sam Sothearith, were debarred by the World Bank and are ineligible to be awarded Bank-nanced contractsfor a two year period.

NIR PR FFIIA‘ NRA RMINA FR

IIING BRIB

IN conducted an investigation after receiving allegations of fraudand corruption related to a road construction project. Investigatorsfound that a senior project ocial solicited a bribe of $75,000(approximately 12% of the contract sum) from a multinational rm.

During interviews with IN investigators, a former sta memberof the rm admitted that the senior project ocial had solicited thebribe in order to issue the rm with a Work Acceptance Certicate.Te rm required the certicate which would verify that servicesperformed under the contract had been properly executed, andthe contractor could be paid for the work completed.

Te investigation further uncovered that the same senior projectocial engaged in fraud and corruption with another rm whilenegotiating an addendum to an infrastructure rehabilitation project.Tis led to a cost increase of over 200% on the unit prices for somegoods compared to the quote in the original contract award.

Based on IN’s ndings, the government ocial’s contract has beenterminated, and IN will seek sanctions against both companies forfraudulent and corrupt practices.

I RPRING AW IGWA PR M

FRWAR PI AMP IN

Collusion is one of the most dicult forms of misconduct for INto investigate—and prove—since the perpetrators rarely leave behind

documents as evidence. However, in this particular example, an alertBid Evaluation Committee and a vocal competing bidder noticedsuspicious bidding documents, and promptly notied IN. Working with the Bank’s regional sta, IN was able to take steps whichprevented two colluding companies from winning an approximate$45 million highway improvement contract.

When Bank Group funds are used to nance a contract, all partici-pating bidders may attend the meeting in which the Bid EvaluationCommittee opens the sealed bids that were submitted. Te processis designed to enhance transparency and fair competition amongparticipating rms. When the committee opened the bids for thisparticular tender, they discovered that nancial guarantee documents

for one company were included in the sealed envelope belonging to adierent company, and vice versa. Tis occurrence immediately raisedthe suspicions of the committee members, who disqualied the two

companies. Te disqualied companies had submitted the two lowestbids, and would otherwise have won the contract.

IN’s investigation determined that the two companies had colludedin a scheme whereby one company would win the contract and theother would be hired as a subcontractor for the rst. IN’s review of the documents showed that the two companies’ bids had identicalformulations and variations in bills of quantities, common missingdocumentation, and common areas of non-compliance with biddingrequirements. IN met with all members of the Bid Evaluation Com-mittee who conrmed the nancial guarantee documents which hadoriginally raised suspicions were indeed switched in the two compa-nies’ bids when they were opened.

Collusion is oneof the most difcultforms of misconductfor INT to investigate— and prove—sincethe perpetratorsrarely leave behinddocuments as evidence.

Nathan Williams / INT




Charlotte Kesl / World Bank

Because the attempted collusion was caught early in the project cycle,the contract award was able to proceed with minimal interruption.IN is seeking sanctions against the two colluding rms and hasreferred its ndings to those governments in which the rmsare headquartered.

R FAG NR RING NGING INIGAIN

A AR INRNIN

During the course of an investigation, IN investigators oftenuncover additional red ags not raised in the initial complaint. Tesered ags do not always relate to the sanctionable practices under in-

vestigation, but they do provide a good opportunity for IN to work with operational sta and client countries to resolve potential issues.

While investigating a coercion case, IN investigators discovered thatcontractors were either delivering sub-standard goods or that the pro-curement ocers were generating bogus medical equipment require-ments so that certain contractors could “dump” unwanted goods.

Nick van Praag / The World Bank

IN worked with eld-based sta to assist in establishing risk mitigation measures for the project. Tis collaborative eort identi-ed relatively quick and ecient changes to reduce opportunitiesto manipulate the bidding process. Te country’s Ministry of Healthnow uses international price comparators for all products itprocures. Additionally, the Ministry also regularly conducts pre-bidconferences, allowing bidders to raise issues of concern at an early stage. Finally, the World Bank Group collaborated with nancepartners to conduct a thorough capacity assessment of the Ministry of Health. As a result, the donors were able to quickly provide assis-tance in developing technical specications for procurement, main-taining les, and implementing complaint-handling mechanisms.

During the course ofan investigation, INTinvestigators oftenuncover additionalred ags not raised inthe initial complaint.



Annual Report 2010 25

FY10 Facts and Figures

a n a s m i l l i e / W o r l d B a n k




of proof for investigations is akin to a “balanceofprobabilities.” If IN nds sucient evidence to prove the allegation, it is consideredsubstantiated.Te allegation is considered unsubstantiated if there wasinsucient evidence to prove or disprove it, and unfounded if theallegation has no basis in fact.

f the external cases opened in F10 that related

to sanctionable practices, most involved collusion

See www.worldbank.org/sanctions for legal denitions of thesanctionable practices: fraud, corruption, coercion, collusion,and obstruction.

verview of external investigation outcomes, F06–F10

A F06 F07 F08 F09 F10

Substantiated 13 33 29 39 42

Unsubstantiated 35 44 23 32 57

Unfounded 26 8 15 15 18

Other* 28 20 54 63 121

No further action 46 44 48 4 0

losed 148 149 169 153 238

* Other includes: Not Bank Group-nanced; no sanctionable practice; referred toProcurement or Regional Vice Presidency.

FINA INIGAIN RPR

When IN substantiates a case, it produces a Final InvestigationReport (FIR). FIRs are sent to regional management for commentbefore being nalized and provided to the President of the WorldBank Group. In some cases, IN will produce an FIR, even if thereis not reasonably sucient evidence to substantiate a complaint; forexample, if IN believes that the investigation unearthed importantlessons that should be shared with colleagues in the Bank Group and with client governments of the World Bank.

Investigative ata IN groups its investigations into two categories, external andinternal investigations. External investigations look into allegations of ve types of misconduct: fraud, corruption, collusion, coercion, andobstruction. Tese are the ve practices for which the Bank Groupmay impose sanctions on entities doing business with the Bank Group. (See www.worldbank.org/sanctions ) Evidence of misconductby government ocials is generally referred to national authorities forfollow-up. Internal investigations address allegations of fraud, corrup-tion, collusion, embezzlement, and misuse of trust funds involvingBank Group sta.

xternal Investigations

MPAIN INA

IN performs an initial assessment to determine whether the com-plaint relates to a sanctionable practice in Bank Group-supportedactivities, whether the complaint has credibility, and whether thematter is of sucient gravity to warrant an investigation. In deter-mining whether to investigate a complaint, IN also considers thepossible reputational risk to the World Bank Group, the amount of funds involved, and the quality of the information or evidence inIN’s possession. When a complaint involving Bank Group activitiesis not investigated, IN works with operational sta to address theissues raised. In FY10, IN received 441 new complaints of which 379 involveda Bank Group-supported activity, thereby warranting further initialreview. Tese complaints related to 307 projects in 91 countries.

IN receives complaints—anonymous and named—from all over the world and from many sources. Of the external cases opened in FY10,31% of complaints received came from Bank Sta, 45% of com-plaints were from non-Bank sources, and 24% came from anonymouscomplainants. Non-Bank sources include contractors, government of-cials, employees of NGOs, and the media. IN conducted outreachto all groups in FY10, in an eort to increase overall awareness andreporting of complaints. INIGAIN F A

Trough investigations, IN ascertains whether rms and/or indi-viduals have engaged in one of the Bank Group’s ve sanctionablepractices. In FY10, IN carried over 143 external cases, opened 194new cases, and investigated 117. It closed 238 cases, which is a 56%increase over the previous scal year. Te complexity of cases var-ies from those that are one-time fraud cases to multi-jurisdictionalmatters involving local and joint venture companies. Te standard

46% ollusion

31% Forgery

21% orruption

2% oercion

0% bstruction




IN began tracking case turnaround time in FY10, striving to ensurethat the time between opening a case and submitting the FIR to thePresident of the World Bank is between 12 and 18 months, depend-ing on the complexity of cases. Tis timeframe was recommendedby the Volcker Panel in its independent review of IN in 2007.IN submitted 47 FIRs to the President of the World Bank in FY10, with an average turnaround time of 436 days or approximately 14.5 months.

FIRs also form the basis for two other IN outputs: referral reports, which IN sends to relevant national authorities if evidence indi-cates that the laws of a Bank Group member country may have beenviolated (see page 34 for list of referrals made in FY10); and redactedreports, which are provided to the Bank Group’s Board of ExecutiveDirectors for information and, after the completion of any relatedsanctions proceedings, made publicly available. (See www.worldbank.org/integrity )

PRP NI F ANIN PRING

When IN nds sucient evidence to substantiate that a sanction-able practice occurred, it also prepares a Proposed Notice of SanctionsProceedings (NoSP) based on the FIR. Te Notice is presented for re-view to the relevant Bank Group’s Evaluation and Suspension Ocer.

Increased number of proposed Notices of anctions Proceedings

and debarments in F10

F06 F07 F08 F09 F10

NoSPs 1 2 4 40 42

Debarments 2 1 8 13 45

ANIN

Te decision whether a rm or individual has more likely than not

engaged in a sanctionable practice and, if so, what sanction should beimposed, is determined via a two-tier process involving the Evalua-tion and Suspension Ocers (EOs) and the Sanctions Board. Boththe EOs and the Sanctions Board are independent of IN. Te EOsreview the case brought by IN against a respondent to determine whether there is sucient evidence to support the accusations againstthe respondent and, if so, recommend an appropriate sanction. Underthe sanctions procedures, when a respondent chooses not to contestthe accusations against it within 90 days, the Sanctions Board willthen impose the sanction recommended by the Evaluation Ocer.If the respondent contests the recommended sanction, the SanctionsBoard will consider the case, which may include a hearing if requestedby the respondent or IN. (See page 32 for list of entities debarredin FY10.)

Internal Investigations

MPAIN INA

IN performs an initial assessment for every complaint it receives.Tose that fall under IN’s jurisdiction move to a preliminary inquiry, while those outside its scope are referred to other appropriateareas of the Bank Group, such as the Oce of Ethics and BusinessConduct or other oces within the Bank Group Internal JusticeSystem. Complaints that fall under IN’s jurisdiction include:

• Operational fraud and corruption involving allegations againststa such as irregularities in procurement, misuse of trust funds,fraud, corrupt practices involving Bank Group nanced/sup-ported operations, or embezzlement from loans, credits, grants ordonor trust funds.

• Corporate fraud and corruption including fraudulent or corruptpractices involving corporate procurement, other corporateprocurement irregularities, conicts of interest, embezzlementfrom Bank Group administrative budgets, or misuse of donortrust funds.

IN also provides support to the Bank’s General Services Department(GSD) by investigating allegations against corporate vendors involv-ing fraud, corruption, collusion, coercion or obstructive practicesin connection with “vendor eligibility reviews” leading to corporatedebarment proceedings.

PRIMINAR INIR AN INIGAIN

If IN determines during the preliminary inquiry that there issucient evidence to warrant further proceedings, the matter nor-mally proceeds to a full investigation according to Sta Rule 8.01.

IN strives to conduct its internal investigations in a thorough,objective, and timely manner, while fully respecting the rights of sta to a fair process. In keeping with IN’s role as a neutral fact-nder,IN investigators collect and assess evidence that is both inculpatory and exculpatory. In FY10, IN carried over 27 internal cases, andopened 54.

IN aims to complete internal cases within nine months (270 days).In FY10 the average turnaround time for the 45 cases closed was 212days or approximately seven months.




verview of internal investigation outcomes, F06-F10

A F06 F07 F08 F09 F10

Substantiated 30 51 24 24 4

Unsubstantiated 16 38 23 23 16

Unfounded 23 25 7 24 7

Referred/not investigated 24 38 20 28 18

losed 93 152 74 99 45

In contrast to years prior, IN has observed a slight increase in theproportion of operational fraud and corruption allegations receivedin its overall portfolio of sta cases. Tis increase should not be inter-preted as evidence of a rise in the frequency of operational fraud and

corruption related to sta misconduct matters; rather, it is more likely an indicator of an improved reporting environment.

Te outcomes of the substantiated cases in FY10 are as follows:

• One sta member’s employment was terminated for wrongfully disclosing strictly condential Bank information to a nationalmedia outlet;

• One sta member was reprimanded for violating Bank Groupstandards for the use of rust Funds;

• One sta member was reprimanded for having engaged in con-icts of interest; and

• Te Bank Group’s General Services Department debarred sixcorporate vendors in FY10 for having engaged in bid riggingand collusive practices.

In FY10, IN’s sta grew by 26% to 98, of which 48% are femaleand 52% are male. Forty-two percent of sta represents Part IIcountries and 7 % represents Part I Nationalities of Focus.

With respect to stang, IN added to its litigation and forensicservices sta, enabling IN to reduce its h istoric reliance on outsiderms while also building and retaining institutional knowledgeat a reduced overall cost.

o meet the growing demand in its preventive services function,IN has also assembled a multi-disciplinary team of specialists inBank operations to work with IN’s investigative sta toward furtherdeveloping its preventive and diagnostic capacity.

Budgetand tafng

F06 F07 F08 F09 F10

Budget ($ in millions) $13.3 $14.0 $14.6 $18.8 $18.7

tafng

Staff grades GE+* 37 38 42 52 74

o/w Investigators/Specialists 33 32 37 47 63

Staff grades GA–GD* 9 14 12 26 24

o/w GA–GD Specialists 1 4 4 15 10

otal 46 52 54 78 98

* Includes staff holding Extended Term Consultant and Extended TermTemporary appointments at equivalent grades GE+ and GA-GD respectively.

NR NAM NR GRN FRBARMN

RM

1 Mehta Associates India Fraud and ollusion 4 years

2 arim Interiors India Fraud and ollusion 3 years

3 itura lectrical echnologies India Fraud and ollusion 3 years4 Puran umar Architects India Fraud and ollusion 3 years

5 Raj Furniture India Fraud and ollusion 3 years

6 ishal Wood Works India Fraud and ollusion 3 years




ntities ebarredin F10

MPAN/INIIA NR GRN FRBARMN

AR FBARMN

1 Macmillan imited nited ingdom orruption 6

2 Glocoms, IN nited tates Fraud 4

3 imited iability ompanyiemens (iemens )

RussianFederation

Fraud,orruption

4

4 Maurence Anguh nited tates Fraud 45 Abdul Matin han Bangladesh Fraud 3

6 Aid for ocial Reformation Bangladesh Fraud 3

7 Arun umar Mohalder Bangladesh Fraud 3

8 B.R. & ons India Fraud 3

9 Bandhan Bahumukhi amajiknnayan angstha

Bangladesh Fraud 3

10 Golam Mostafa wapon Bangladesh Fraud 3

11 elpful Institutions for ocialuman evelopment

Bangladesh Fraud 3

12 emant ibrewal India 3

13 henada Atmobiswas Bangladesh Fraud 3

14 M. Abdul uddus arkar Bangladesh Fraud 3

15 M. Mizanur Rahman Bangladesh Fraud 3

16 M. Raqul Islam Bangladesh Fraud 3

17 M. haul oque Bangladesh Fraud 3

18 Mohila nnayan angstha Bangladesh Fraud 3

19 Most. hahnaz Parvin Bangladesh Fraud 3

20 MR. M. Aslam ossain Bangladesh Fraud 3

21 MR. M. Raur Rahman Bangladesh Fraud 3

22 MR. hamima Bangladesh Fraud 3

23 M Prakash indal India Fraud 3

24 rganization for social andconomical evelopmentutilizing the ommunityResources

Bangladesh Fraud 3

25 rganization of ocial andconomic evelopment()

Bangladesh Fraud 3

26 Palli Purnargathon lub Bangladesh Fraud 3

27 Poverty Alleviation and Rural

evelopment rganization

Bangladesh Fraud 3

28 Pronab umar Roy Bangladesh Fraud 3

29 .M. cientic InstrumentsP. .

India Fraud 3

30 amaj ikash angstha Bangladesh Fraud 3

31 amaj Progati angstha Bangladesh Fraud 3

32 aviour Bangladesh Fraud 3

33 heikh Mohammad Motalib Bangladesh Fraud 3

34 rinomulunnayan () Bangladesh Fraud 3

35 dbhabani hamaj alyanhangstha

Bangladesh Fraud 3

36 pasana indal India Fraud 3

37 idecon Industries imited India Fraud 3

38 World uman evelopmentAssociation

Bangladesh Fraud 3

39 Zahid assan ukun Bangladesh Fraud 3

40 ade Group ambodia .,.

ambodia orruption 2

41 eng Rathpiseth ambodia Fraud 2

42 rganization of ruralconomic evelopment& Rehabilitation (RAR)

Bangladesh Fraud 2

43 Rezaul arim Bangladesh Fraud 2

44 Royal Mekong onstructions& evelopment P., .

ambodia Fraud 2

45 am othearith ambodia Fraud 2

MPAN/INIIA NR GRN FRBARMN

AR FBARMN

A COMPLETE LIST OF ENTITIES THAT ARE CURRENTLY DEBARRED

FROM WORLD BANK GROUP-FINANCED PROJECTS IS AVAILABLE

AT WWW.WRBAN.RG/BARR




18 Roads Improvement andManagement

ollusion inmultiple roundsof bidding

African evelopment Bank,Integrity & Anticorruptionivision

Nov. 6, 2009


ollusion inmultiple rounds

of bidding

nited tates: epartment ofustice

Nov. 11, 2009

20 ong istance earningNetwork

Fraud World Bank xecutive irector,ominican Republic*

Nov. 12, 2009

21 Flood Mitigation Fraud,orruption

enya: enya AnticorruptionMission

Nov. 13, 2009


ollusion inmultiple roundsof bidding

uropean Bank forReconstruction andevelopment

Nov. 16, 2009

23 conomic Reform andGovernance

Fraud nited ingdom: ity ofondon Police, verseasAnticorruption nit

Nov. 25, 2009

24 Metropolitan evelopmentand Governance

nsubstantiatedallegations**

Nigeria: conomic andFinancial rimes ommissionof Nigeria

ec. 3, 2009

25 echnical Assistance,Governance, and BankModernization

Fraud Asian evelopment Bank,fce of Anticorruption andIntegrity

an. 5, 2010

26 echnical Assistance,Governance, and BankModernization

Fraud nited tates: Agency forInternational evelopment,fce of the General ounsel

an. 7, 2010

27 Infrastructure Reconstruction Fraud Indonesia: Ministry of Finance;fce of the Attorney General

an. 19, 2010

28 Infrastructure Reconstruction Fraud Asian evelopment Bank,fce of Anticorruption andIntegrity

an. 19, 2010

29 Infrastructure Reconstruction Fraud Austral ia: reasury of theommonwealth

an. 19, 2010

30 Road evelopment F raud enmark : fce of the tateProsecutor

un. 18, 2010

31 Road evelopment Fraud nited ingdom: ity ofondon Police, verseasAnticorruption nit

un. 18, 2010

32 ducation Rehabil itat ion Fraud udan: Ministry of Finance& conomic Planning;outhern udanAnticorruption ommission

un. 18, 2010

Referrals Madein F10

PR RIPIN NAR FMIN

RFRRA RIPIN A FRFRRA

1 mergency ervices upport Fraud Palestinian Authority: Ministryof Finance; fce of theAttorney General

Aug. 11, 2009

2 mergency ervices upport Fraud Israel: ustoms irectorate;conomic Affairs ivision;

fce of the eputy AttorneyGeneral

Aug. 11, 2009

3 il Field Rehabilitation ollusion azakhstan: Ministry of nergyand Mineral Resources

Aug. 25, 2009

4 Provincial and RuralInfrastructure

Fraud ambodia: fce of theeputy Prime Minister;Minister of National Assembly

ept. 11, 2009

5 Payment ystems and BankModernization

Fraud ietnam: fce of the entralteering ommittee; Ministryof Planning and Investment;tate Bank of ietnam

ept. 11, 2009

6 ducation Rehab il itat ion F raud nited ingdom: ity ofondon Police, verseasAnticorruption nit

ept. 22, 2009

7 Food and rugs Fraud,orruption

India: entral Bureau ofInvestigations

ept. 30, 2009

8 India IR Fraud India: entral Bureau ofInvestigations

ept. 30, 2009

9 India IR ol lusion India: entral Bureau ofInvestigations

ept. 30, 2009

10 India IR Fraud India: entral Bureau ofInvestigations

ept. 30, 2009

11 Road Rehabilitation andMaintenance

orruption Bangladesh: fce of thePrime Minister; Ministry ofFinance

ct. 31, 2009

12 rban ransport Fraud,orruption

Bangladesh: fce of thePrime Minister; Ministry ofFinance

ct. 31, 2009

13 Water upply and anitation Fraud,orruption

World Bank xecutive irector,Netherlands*

Nov. 4, 2009


World Bank xecutive irector,nited ingdom*

Nov. 4, 2009


World Bank xecutive irector,anada*

Nov. 4, 2009


World Bank xecutive irector,anzania*

Nov. 4, 2009


World Bank xecutive irector,Norway*

Nov. 4, 2009 *INT apprises the relevant Executive Director of any referral it makes. In these instances, the Executive Director’sofce referred ndings to the appropriate national authority as a means of expediting the process.

**Where appropriate, INT will refer allegations it has not yet substantiated to relevant authorities where thereis a positive duty or pressing necessity to do so.

PR RIPIN NAR FMIN

RFRRA RIPIN A FRFRRA




ow to Reporta omplaint

IN’s investigations are primarily based upon the allegations itreceives, so it is extremely important that those people who areinvolved in activities supported by Bank Group funds take theinitiative to report suspsected fraud or corruption. For example, thefollowing red ags can indicate larger fraud and corruption schemes:

• Multiple contracts are just below the procurement threshold• Agent fees or the price of goods seem to be inated• Te lowest bidder is not selected• A single bidder wins repeated or unjustied sole-source awards• A contract has unjustied changes in terms or value• A contract has multiple change orders• Goods or services are of low quality or are not delivered altogether

Please report any instance of Bank sta involvement in suspectedfraud and corruption including:

• Misuse of Bank Group funds or donor trust funds for personalgain or gain by another

• Abuse of position for personal gain or gain by another• Solicitation or receipt of kickbacks or bribes• Embezzlement

What should I report to IN?

Te more specic the information you provide, the better IN is ableto follow up on your allegation. Share basic information—who, what, where, when and how?—and also try to include details such as:

• Project name• Supporting documents• Names of witnesses

Remember to let us know how you can be reached for furtherinformation or clarication.

What if I want to remain anonymous?

If you prefer to remain anonymous, the Bank may still investigateyour complaint and will do its best to examine the allegations thatyou provide. However, anonymous allegations are often more dicultto pursue and often do not fully address all of the complainant’sconcerns, but we respect your wish not to provide your name.

In order to protect the reputations and privacy rights of all parties,and to promote due process and the fairness of investigations, it isimportant that the information you provide be truthful, accurate,and given in good faith.

What is the World Bank’s condentiality policy?

If you choose to give us your name but want your name to remaincondential, the Bank will not reveal your name in any court ortribunal process and will not reveal any information that may disclose

your identity to anyone outside the investigative team and its manag-ers and attorneys, unless the Bank determines you have made anintentional misrepresentation or omission, or the Bank is requiredto do so by law.

Contact IN directly at World Bank Headquarters:PH: +1.202.458.7677FX: +1.202.522.7140EM: [email protected]

FRA & RRPIN IN

all 1-800-831-0463 inside the all 1-704-556-7046 outside the

• Operated by an independent third party• Open 24 hours a day• Interpreters available• Anonymous calls accepted



Abbreviations

and Acronyms

BEC Bid Evaluation Committee

CDD Community Driven DevelopmentCEO Chief Executive Ocer

CRPD Company Risk Prole Database

DIR Detailed Implementation Review

EBC Oce of Ethics and Business Conduct

EO Evaluation and Suspension Ocer

FIR Final Investigation Report

FY Fiscal Year

GAC Governance and Anticorruption

GSD General Services DepartmentIAB Independent Advisory Board

IEG Independent Evaluation Group

IFC International Finance Corporation

IFI International Financial Institution

IN Integrity Vice Presidency

MDB Multilateral Development Bank

MIGA Multilateral Investment Guarantee Agency

MOU Memorandum of Understanding

NGO Non-Governmental OrganizationNoSP Notice of Sanctions Proceedings

OPCS Operations Policy and Country Services

PREM Poverty Reduction and Economic Management Network

PSU Preventive Services Unit

VDP Voluntary Disclosure Program

VPHR Vice President Human Resources

world bank integrity vice president fiscal 2010 annual report

Documents