|April 8, 2004—Through its anticorruption hotline and the Department of Institutional Integrity (INT), the World Bank strives to prevent corruption within the projects it finances and its own operations.
The hotline 1-800-831-0463 (in the United States) operates 24 hours a day and is accessible outside the US through an international AT&T operator with international translation facilities. Complaints can also be made online.
The Department of Institutional Integrity, managed since 2001 by Maarten de Jong, a Dutch national and senior criminologist, is currently staffed by a multi-national team of more than 30 professionals, including investigators, legal specialists, forensic accountants, procurement specialists and former Bank task managers. INT is charged with investigating allegations of fraud and corruption in Bank-financed projects and Bank staff misconduct.
More than 1500 cases have been investigated by INT since 1998, says Stephen R. Dice, the department's knowledge coordinator. He has a simple message for people who may be aware of questionable practices in Bank-financed projects. "Talk to us," he says. "Tell us about it. We want to make it very clear that we are serious about investigating corruption." INT conducts a preliminary review of every report received, then works with regional and country teams in order to focus on those cases having the greatest potential impact. All allegations of staff misconduct are automatically classified as high priority cases.
INT investigates many types of allegations including fraud and theft, bid rigging, bribes, kickbacks, collusion or coercion by bidders, fraudulent bids, fraud in contract performance, product substitution and misuse of Bank Group funds.
Dice says "getting feet on the ground and checking the realities of a situation" is very important in investigating corruption. He went on to say how important it is that "…information gathered as part of a corruption investigation not only results in sanctions against those involved in wrongdoing, but also can then be used to recommend reforms and improve policies."
In a number of recent cases, INT staff have worked very closely with Bank operations staff in regional offices to investigate allegedly suspect practices.
Dice says confidence in the corruption investigation system is very important. The number of reports of corruption in a particular country might not necessarily be representative of the amount of corruption present. In some cases an increase in confidence that a corruption report will be acted upon, can increase people's willingness to come forward with allegations.
In areas where confidence is low about anything being done about suspect practices, corruption may flourish while there may be a very low incidence of corruption reports. INT strongly encourages reporting. The more information received by the Department, the better patterns of corruption or emerging trends can be identified.
As well as receiving allegations, INT has conducted proactive reviews of Bank-financed projects with country teams. A review is designed to make sure that proper financial controls and oversight are in place in selected projects. INT has also provided advice to task managers on how to avoid fraud and corruption in Bank-financed projects.
If the INT investigation determines that there are grounds for allegations of fraud or corruption by a Bank-financed contractor, INT sends its recommendation and evidence to the Bank's Sanctions Committee, which is comprised of senior Bank officials. The Sanctions Committee is independent of INT. The Bank's Procurement Guidelines and the Sanctions Committee's procedures are both available on the Bank website. Those firms accused of wrongdoing are given an opportunity to appear before the committee and defend their actions.
If the Sanctions Committee decides that the allegations are proven, it has the power to issue a letter of reprimand or debar a firm from working on Bank-funded projects. The ban can be either permanent or for a set period of time. The results of these proceedings are published on the Bank's website: http://www.worldbank.org/debarr.
The Bank is the only multi-lateral development bank to post its debarments and reprimands list on its website, along with press releases describing the postings.
Where warranted, criminal referrals are made to national legal authorities for further adjudication, and the Bank co-operates in such proceedings. For example, a recent case in Sweden involving the misuse of funds from a World Bank administered trust fund resulted in two convictions in Swedish court.
In another case, a detailed implementation review of an urban development project in Sulawesi, Indonesia (240k pdf), was conducted by INT and the Country Team which confirmed patterns of systemic corruption. The Bank had provided money to improve water services, housing, sanitation flood control, roads and transportation. Widespread corruption was found in procurement practices and in April, 2003, the Bank debarred 15 Indonesian firms and individuals for various lengths of time. Investigations against a number of other firms are continuing.
The implementation review and other work by the Department of Institutional Integrity has given the Bank a number of findings and recommendations which can assist in the improvement of policies and safeguards in its development projects.
$1,000,000,000,000 and counting…
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