Contacts :
In Delhi: Sudip Mozumder 091-11-41479210 Mobile: + 91 9810052117 smozumder@worldbank.org In Washington: Carl P. Hanlon (202) 473-8087 Email:chanlon@worldbank.org Washington, DC, March 13, 2008 - The World Bank Group and the Government of India today announced joint action in response to a Detailed Implementation Review (DIR) that found serious indicators of fraud and corruption in the health sector. "We take these indicators of fraud and corruption extremely seriously. Working with the Indian authorities, we will take action against those found responsible, including debarment and sanctions against firms and individuals from doing business with the Bank, and disciplinary action against Bank staff if warranted," said World Bank Group President Robert B. Zoellick. " We will also apply the lessons learned to our projects around the world. Our focus is on ensuring that the people for whom these projects are designed receive the development benefits they deserve." The DIR , which the World Bank and the Government of India made public in January, revealed serious indicators of fraud and corruption in five Bank-financed health projects in India. These are now being followed up with detailed investigations for possible criminal action, and sanctions. Meeting today, the World Bank's Board of Executive Directors commended the Government of India for its constructive and swift response to address the findings of the DIR. Board members welcomed the joint action plan as strong, comprehensive and ambitious. Agreed joint actions include comprehensive procurement audits and performance reviews by independent third-party agents, strengthened procurement and financial management in the Ministry of Health, increased use of community-monitoring and oversight, and intensified supervision for civil works and equipment, and pharmaceutical procurement. Qualification requirements in World Bank financed bids will also be adapted to reduce the risks of collusion. Following the review, the Bank has started nine investigations, which could lead to the debarment of firms and individuals from doing business with the Bank. It has started an internal review and disciplinary action will be taken against Bank staff if warranted. The Government of India has announced it will punish anyone found guilty of fraud or corruption with exemplary punishment. It has referred three new cases to the country's Criminal Bureau for Investigation and the Vigilance Department in Orissa has launched a number of follow-up investigations in that state. "We welcome the Government of India's resolute commitment to eliminate fraud and corruption, and are pleased it has already started to implement many of the actions in the plans endorsed today," said World Bank Managing Director Ngozi Okonjo-Iweala. " We believe our joint agreement will not only improve existing projects, but will also strengthen the design, integrity, and implementation of future projects." The Bank intends to remain engaged in the health sector in India, to help strengthen health care systems and meet critical public needs, provided future projects include mechanisms to counter the risks identified in the DIR. It acknowledges the review had revealed weaknesses in the Bank's own systems and processes that allowed possible indicators of wrongdoing to go unnoticed. In response, Bank management plans to build stronger anti-corruption measures into projects and strengthen supervision, monitoring and evaluation. Acknowledging the Government of India's feedback and concerns about the DIR process, and the Board discussion, the Bank is changing some methodology in the reviews including implementing the recommendations of the panel, led by former Federal Reserve Chairman Paul Volcker, to provide governments with 30 days to comment on draft reviews before they are released. The Bank has also agreed not to publish the names of people or companies until indicators of fraud and corruption have been confirmed. Detailed comments received from the Government of India will be addressed in the course of implementation of the action plan. The Bank is creating an Independent Advisory Board to advise on the work of its Department of Institutional Integrity, and is supporting preventative services to alert Bank staff to indicators of fraudulent and collusive practices by private firms. ### To view the Government of India Response to the India Health Sector Detailed Implementation Review (Including their transmission of the Joint Health Action Plan) pls. click here To view the detailed response of the Ministry of Health & Family Welfare, Government of India to the DIR of India Health Sector projects, please click here To view the Bank Management's submission of its integrated action plan to the Board (which also includes the Joint Health Action Plan) please click here To view the complete Detailed Implementation Review – India Health Sector 2006-2007 click here: Volume 1 (7.5mb pdf) http://siteresources.worldbank.org/INTDOII/Resources/WB250_Vol1_Web_011508.pdf Volume 2 (3.6mb pdf) http://siteresources.worldbank.org/INTDOII/Resources/WB250_Vol2_Web_011508.pdf |
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