At a Glance One way the World Bank tackles fraud and corruption in Bank-financed projects is through the use of administrative sanctions against firms and individuals found to have engaged in wrongdoing. Allegations of fraud and corruption in a Bank-financed project are investigated by the Integrity Vice Presidency (INT). If INT finds evidence of sanctionable misconduct by a firm or individual, it presents the case to the Evaluation and Suspension Officer (EO)—the first tier of the Bank’s two-tier administrative sanctions process. Sanctionable misconduct is fraud, corruption, coercion, collusion, or obstructive practices. If the firm or individual contests the allegations made by INT and/or the sanction recommended by the EO, the case is referred to the Bank’s Sanctions Board (Board)—the second tier of the Bank’s two-tier administrative sanctions process. Possible sanctions are: Public Letter of Reprimand, Debarment, Conditional Non-Debarment, Debarment with Conditional Release, and/or Restitution. Since 2001, the Bank has publicly debarred 363 firms and individuals. (Visit www.worldbank.org/debarr for the current list of debarred firms and individuals.)
Overview The World Bank has a fiduciary responsibility to its stakeholders to ensure that development funds are used for the intended purpose of promoting development and reducing poverty, and are not jeopardized by corruption. Promoting good governance and tackling corruption are critical to achieving sustainable development and poverty reduction. At the Bank, allegations that a firm or individual has engaged in fraud, corruption, coercion, collusion or obstructive practices (Sanctionable Misconduct) in relation to a Bank-financed project are investigated by INT. Sanctionable Misconduct Defined Fraud: any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation. Corruption: offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party. Coercion: impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party. Collusion: an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party. Obstructive Practice: (i) deliberately destroying, falsifying, altering or concealing of evidence material to the investigation or making false statements to investigators in order to materially impede a Bank investigation into allegations of a corrupt, fraudulent, coercive or collusive practice; and/or threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation, or (ii) acts intended to materially impede the exercise of the Bank’s contractual rights of audit or access to information. Two-Tier Sanctions Process If INT finds evidence of Sanctionable Misconduct by a firm or individual, it presents the case to the Evaluation and Suspension Officer (EO)—the first tier in the Sanctions Management process. The EO (i) evaluates whether the evidence presented by INT is sufficient to support a finding of Sanctionable Misconduct; (ii) issues a Notice to the firm or individual that includes the EO’s recommended sanctions; and (iii) determines whether a temporary suspension shall come into effect pending the final outcome of the case. If the firm or individual contests the allegations made by INT and/or the sanction recommended by the EO, the case is referred to the World Bank’s Sanctions Board (Board)—the second tier of the Bank’s two-tier administrative sanctions process. The Board, comprising three Bank staff and four external members, considers the evidence against the firm or individual, along with any response from the firm or individual, before taking a final decision in the case. The Board may hold a hearing as part of its deliberations. The Bank has five possible sanctions: Public Letter of Reprimand, Debarment, Conditional Non-Debarment, Debarment with Conditional Release, and/or Restitution. Public sanctions raise the cost to businesses of engaging in corruption and are a powerful deterrent to wrongdoing. The Bank’s investigative and sanctions process are key components of the work being done within the Bank, its member countries, and its partners to tackle corruption and promote good governance. For the current list of debarred firms and individuals visit www.worldbank.org/debarr. For more information on the sanctions system at the World Bank visit: http://www.worldbank.org/sanctions. Contact: Michelle Porvaznik, (202) 458-7716, mporvaznik@worldbank.org Updated August 2009 |
