This section summarizes what the World Bank is doing to fight corruption in the projects and programs it finances in Indonesia. The World Bank wishes to support the anti-corruption stance that has often been reiterated by Indonesia’s President Susilo Bambang Yudhoyono and his Ministers. At the project level this means trying to ensure that funds are effectively used for the agreed purposes. At a more macro level, the Bank is trying to help the government seek more sustainable changes at a sector and cross sector level, for example by advising on policy reform. The World Bank's FY 2001-2003 Country Assistance Strategy (CAS) for Indonesia described Indonesia's weak fiduciary environment and noted the endemic nature of corruption, which affect all stages of the project cycle, and different levels of government. The CAS for FY 2004-2007 further emphasized the importance of good governance in relation to the eradication of poverty and meeting development goals. It stated: “A central lesson of the Bank Group’s experience in Indonesia is that our entire success will be judged by the contribution that our programs are seen to make towards greater transparency and accountability, and by the standards of integrity with which we implement these programs.” The CAS went on to stress four key roles that the Bank should play: A clear and consistent voice raising corruption concerns and promoting feasible responses across all sectors of our operations. Project selection to open multiple entry points in the fight against corruption. Mechanisms to mitigate corruption risks for all projects through empowerment, participation and transparency. Pre-emptive audits, vigorous investigation and follow-up to allegations of corruption in Bank projects, and public disclosure of the results
Smart Project Designs Continue to Generate Cost Savings Beating collusion in the Bali Urban Investment Project (FY97): Redesigned so that successful, documented policies mitigate chances of collusion resulting in lower prices. The concept is to reduce chances of collusion and increase open competition, which would empower capable, honest contractors. The policy implemented included: wider advertising in national newspapers; post qualification which allowed participation by all bidders; complaints were encouraged and handled, and key indicators were tracked. Lessons learned under this project are now feeding into the design of a proposed sector-wide anti-corruption program. Use of the Internet for Information Dissemination in the Third Urban Poverty Project (FY05): can be rightly proud of its groundbreaking work in making information available to the general public through a variety of media. One such effort can be seen today on the internet at www.p2kp.org . This project website in Bahasa Indonesia has pioneered a popular, interactive approach which has become a major conduit for feedback to the project and this in turn is leading to a better, smarter project. Involving end-users in procurement in the Second Eastern Indonesia Regional Transport Project (FY04): Based on the experience of previous projects (e.g the Java Irrigation Improvement and Water Sewage Management Project (FY94)), the EIRTP-II has included almost two hundred community observers to key procurement events. Despite some initial challenges, it is hoped that this system will eventually help to keep the procurement process free of collusion and at the same time ensure that factual information about the project circulates at the community level. Involving communities in procurement and contract supervision in the West Java Basic Education Project (FY98): Civil works by communities versus contractors. The redesigned concept is to empower communities to complete rehabilitation of schools and even build new schools. The communities have completed works at lower prices and better quality.
In Indonesia, the Bank's efforts have benefited from the vigorous new democratic environment and from the opening up of civil society. This has enabled us to take a number of steps to strengthen our efforts to fight corruption in World Bank financed projects: Reviews of implementing agencies' procurement of goods and services financed by the Bank have been tightened. More attention is paid to procurement issues at early stages of project preparation. Monitoring of compliance with accounting and auditing requirements has been enhanced, and the Bank systematically follows up on all significant audit findings with executing agencies. The capacity of the World Bank Office in Jakarta has been enhanced to improve compliance with procurement, accounting and auditing requirements both through expansion of staff, training, and improved procedures. The resources allocated to the Bank's supervision of projects in Indonesia are protected despite pressures on our overall administrative budget. Sector unit staff located in Jakarta intensively supervise most projects. The Bank has begun to actively promote beneficiary involvement in the design and implementation of its projects. In particular, by progressively building relations with civil society and local communities to help prevent misuse of development funds.
The Bank systematically monitors implementation of all ongoing projects with at least two formal supervisions each year, monitoring projects inter alia for their development impact, for compliance with procedural regulations, for implementation constraints and for corruption risks. These supervision visits are essential to ensure a real understanding of the issues and to hear firsthand about the pressures that implementers face in the field
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