Former Australian Treasurer, U.S. Diplomat, Philippine Ombudsman and Swiss Jurist Tapped For Anti-Corruption Board

September 18, 2008

WASHINGTON, September 18, 2008 – The World Bank Group said today it had appointed former Australian Treasurer Peter Costello, former U.S. diplomat and scholar Chester Crocker, former Philippine Ombudsman Simeon Marcelo and Swiss jurist Mark Pieth to its new Independent Advisory Board (IAB), which will provide advice on anti-corruption measures.

The appointments fulfill a recommendation made by the Independent Review of the World Bank's Department of Institutional Integrity (INT), which was led by former U.S. Federal Reserve Chairman Paul Volcker.  

Costello was Australia's Treasurer from 1996 to 2007 and chaired the APEC and G-20 Group of Finance Ministers; Crocker was U.S. Assistant Secretary of State for African Affairs from 1981 to 1989 and also chaired the board of the United States Institute of Peace; Marcelo served the Philippines as Ombudsman and as a prosecutor in the impeachment of former President Joseph Estrada; and Pieth chairs the OECD Working Group on Bribery in International Business Transactions and is a professor at Basle university.

"These four individuals each have a distinguished record as public servants and will help ensure the World Bank Group makes every dollar count to overcome poverty," said World Bank Group President Robert B. Zoellick.  "The Volcker Report was extremely helpful in pointing to areas where we could make improvements.  As we move forward with our broader work in governance and anti-corruption, we will continue to draw on the lessons from the Volcker Panel."

The new board aims to protect the independence and strengthen the accountability of INT by giving advice on policies and procedures and on the department’s interactions within the World Bank Group.  It will advise Zoellick and the World Bank Group Audit Committee on the performance of INT and the implementation of the related Volcker Panel report recommendations.

Leonard McCarthy, Integrity Vice President for the World Bank, said, "The World Bank Group is taking the fight against corruption to the next level.  While INT has the critical job of investigation, it is only through strong coordination across the entire institution, combined with clear dedication from our partner countries, that we will be able to deal with the problem in a progressive and effective manner." 

The appointments come one year after the Volcker Panel made its recommendations on September 13, 2007, and the Bank said it would adopt all of them.  Since then, the Bank has taken action on major areas including:

  • Upgrading INT from a Directorate to a Vice Presidency reporting directly to the Bank president;
  • Recruiting the first Vice President of INT, Leonard McCarthy, who previously headed South Africa's Directorate of Special Operations, known as the Scorpions;
  • Establishing a Preventive Services Unit within INT to help mainstream lessons learned from INT investigations into the Bank and provide upstream risk-mitigation support to task teams; and
  • Adopting procedures for processing and publicly disclosing information from investigations on INT's website, which now includes reports concerning cases in the Democratic Republic of Congo and Honduras, as well as a Detailed Implementation Review in India.

The work of INT is a critical part of the Bank's Governance and Anti-Corruption (GAC) strategy, which was unanimously approved by the Bank's Board in March 2007.  This strategy has three key pillars: i) building capable, transparent, and accountable institutions and country systems, through assistance to countries; ii) expanding partnerships with multilateral and bilateral development institutions, civil society, the private sector and other actors in joint initiatives to address corruption; and, iii) minimizing corruption in Bank-funded projects by assessing corruption risk in projects upstream, such as through the work of INT's Preventive Services Unit; actively investigating allegations of fraud and corruption, the role of INT; and strengthening project oversight and supervision.

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