Anticorruption and Integrity

Confidentiality of Anticorruption Sanctions List

ADB adopted the practice of not publicizing the Anticorruption Sanctions List when it first established procedures to implement the Anticorruption Policy (the Policy) in 1998. The Office of the Auditor General firmly supports retaining the current practice because it best supports the Office of the Auditor General, Integrity Division’s (OAGI) ability to fairly and consistently implement its responsibilities under the Policy. The primary reasons are:

• The Policy and procedures are administrative tools, not a legal or judicial assessment of fraud or corruption—terms that carry significant legal implications in ADB’s member countries.
• Entities are more likely to present significant challenges to investigations and decisions that publicly classify them as corrupt or fraudulent, challenging already limited resources.
• The deterrent effect believed to be the benefit of publicizing the list does not exceed the benefits of the current practice.
• Publicizing the list may lead to incorrect interpretations and would focus on only a portion of ADB's efforts to fight corruption.

OAGI supports transparency in its operations to the same extent it supports transparency in the rest of ADB's operations, and has worked diligently to ensure those characteristics are incorporated into its procedures. OAGI recognizes, however, that transparency is not an absolute and should not deter it from fulfilling the Policy’s objectives.

OAGI provides most ADB staff access to the Anticorruption Sanctions List, and shares the information, on a confidential basis, with other multilateral development banks and international organizations, and parties outside ADB with a need to know. OAGI does not provide the Anticorruption Sanctions List to any of ADB’s member countries, but will extract and share certain information on the list in an appropriate manner on need-to-know basis.

Member countries that, through their own means, have information related to an entity that ADB debarred may disclose that information in a manner consistent with their own practices, polices, procedures or laws.

Administrative Tool

The Policy and related procedures are administrative tools of ADB. The Anticorruption Sanctions List comprises entities that ADB decided it does not wish to do business (declared ineligible) with because they have not observed the highest ethical standards in an ADB-financed activity by engaging in corrupt or fraudulent practices, as defined by ADB.

ADB set a consistent standard for all parties to ADB-financed activity when it adopted the Policy, understanding that each of ADB's member countries may have its own definitions of fraud and corruption. In addition, other international organizations have different definitions of fraud and corruption, which vary from ADB's. In consistently and equitably fulfilling its responsibilities, OAGI applies the Policy without judgment of the legal aspects in its member countries or interpretations by other international organizations.

Challenging the Process

To prevent the stigma of being publicly labeled fraudulent or corrupt, entities—particularly large firms with plentiful resources—are likely to vigorously challenge ADB when it investigates and imposes sanctions under the Policy. Publicizing the Anticorruption Sanctions List would likely restrict OAGI’s ability to investigate some concerns, and obtain evidence relating to concerns with entities having sufficient resources to challenge OAGI.

OAGI has found the current practice of keeping the Anticorruption Sanctions List confidential helps it fulfill its responsibilities under the Policy. As an administrative process, OAGI does not have legal or judicial authority to compel anyone to cooperate with an investigation.

OAGI addresses allegations without bias to whether it was dealing with large or small firms, from developed or developing countries. This fair, reasonable, consistent approach has supported acceptance by firms and individuals of its findings and ADB's decisions.

Balancing Benefits

OAGI’s experience has not demonstrated that the deterrent effect believed to be the benefit of disclosing names of debarred entities outweighs the known benefit of being able to more efficiently and effectively implement the Policy. In such a case, disclosure would provide nothing but a more sever penalty—public "shaming"—of those that ADB determines violated the Policy.

OAGI’s experience shows that entities do not violate the Policy after ADB has imposed a sanction, and ADB will publicize the name of entities that violate ADB’s sanction. OAGI has found its investigations and the potential of ADB debarment is a significant deterrent, and does garner appropriate attention. Our experience has also shown that in most cases, firms that have been debarred have found it appropriate to notify partners, associate firms, and their employees of ADB's sanction. Thus, firms effectively publicize, to a degree and on their own terms, ADB's sanction. Also, OAGI makes significant effort to increase awareness of the Policy and ADB's anticorruption procedures to staff, governments, and contractors, consultants and others, to deter fraud and corruption related to ADB-financed activity.

Interpretation and Focus

Publicizing the Anticorruption Sanctions List would associate names with fraud and corruption, terms for which there are significant and varying legal implications and perceptions because of the various laws of ADB’s member countries. Also, publicizing the Anticorruption Sanctions List could lead to incorrect conclusions regarding the focus of ADB's anticorruption efforts or levels of corruption within a particular region or country.

Also, while many of OAGI’s cases are to investigate bidders, consultants, contractors and suppliers involved in ADB-financed activities, a portion relate to government officials or ADB staff. OAGI deals with those cases differently, and the results would not be publicized in the same way ADB would publicize a sanctions list.

Conclusion

OAGI’s purpose is to investigate concerns of fraud and corruption under the Policy in a fair, consistent and equitable manner. The current practice of not publicizing the Anticorruption Sanction List supports doing this in the best way and as efficiently and effectively as possible.