Firms Banned Under Cross-Debarment Agreement
The Corruption Hunters meeting comes on the heels of the World Bank’s announcement last week debarring 14 firms from doing business in projects it finances: two that had been working on World Bank-financed projects in Africa and Albania, and 12 that had previously been debarred by the Asian Development Bank, one of the partners in the Cross-Debarment agreement signed last April.
The decision marked the first time the World Bank cross-debarred firms that have engaged in fraud related to another multilateral development bank’s projects under the new global enforcement agreement . Under the agreement, the World Bank and other multilateral development banks have agreed to enhance information-sharing, harmonize sanctionable practices and step up enforcement action to ensure development resources do not end in the wrong pockets and are used for their intended purposes.
The World Bank, recently ranked as the most transparent donor among 30 major donors by a coalition of civil society organizations, has debarred 58 firms in the last two years, compared with 9 the previous two years. Debarments have included high-profile cases involving the UK publisher Macmillan Ltd a Russian subsidiary of Siemens AG. Siemens agreed to pay $100 million for anti-corruption initiatives worldwide as part of a settlement (pdf).
Seeking Better Enforcement
At the meeting this week, anticorruption officials from six regions will join authorities from countries that have prosecuted bribe payers, private sector representatives, and members of international organizations such as the United Nations, Interpol, Organization for Economic Cooperation and Development (OECD), andTransparency International to set priorities and define the next level of anti-corruption action.
The alliance was established by the World Bank in 2009 to channel the Bank’s referrals for bribery and corruption cases to affected countries. In the last fiscal year, the World Bank referred 32 cases to governments and anticorruption agencies so they could investigate whether national laws had been violated. The list of countries was made public in the 2010 Integrity Annual Report (pdf).
However, getting national authorities to enforce and follow up on transnational cases has been a challenge for a variety of reasons, including lack of political commitment, legal tools, or material resources. Gathering evidence may be difficult because witnesses may be fearful of retaliatory actions or even threats to their safety, World Bank Integrity Unit staff said in a recent Speak Out on the World Bank website.
In addition, of 38 countries that have ratified an OECD convention on bribery, only seven actively enforced the convention as of the end of 2009, according to Transparency International.
Likewise, the Stolen Asset Recovery Initiative to recover funds lost through corruption from safe havens around the world, has been challenged to increase the number of cases, World Bank Managing Director Sri Mulyani said at the 14th International Anti-Corruption Conference in Thailand last month.
“This requires more action on the part of national authorities in developing countries and financial centers, to identify, investigate and prosecute corruption cases.”
‘Corruption Can Kill’
The stakes are high. Not only is corruption a barrier to development, innovation and business growth, but it can be deadly, Mulyani said.
“…Sometimes the corruption is in the form of counterfeit drugs, so people don’t get better, or they die. Sometimes corruption is a building that collapses in the face of a natural disaster, because the quality inspector took a payment from the construction contractor to falsify an inspection. Corruption can kill.”