ADB Toughens Anti-corruption Drive

MANILA, PHILIPPINES – The Asian Development Bank (ADB) toughened measures to battle fraud and corruption in 2012, as complaints reached a new annual high.

"At a time when many donors are implementing austerity measures, those entrusted with development mandates have an obligation to use a steadily declining pool of development funds. When development funds are diverted or misused, people with real needs are deprived of basic services, rights, and opportunities,” said Clare Wee, Head of ADB’s Office of Anticorruption and Integrity (OAI).

In its Annual Report released today, OAI reported a record 240 complaints in 2012, and the opening of 114 new investigations. Sanctions were imposed on a total of 42 firms and 38 individuals. The bulk of the complaints involved fraudulent misrepresentations about qualifications, experience, and technical capabilities of consulting firms, contractors and individuals seeking work from ADB.

In addition, a total of 57 firms and 51 individuals were barred from seeking ADB-financed contracts as part of a cross debarment agreement forged between ADB and four other multilateral development banks.

ADB has zero tolerance for corruption. OAI continued to inform and empower staff, civil society and the private sector with tools to fight fraud and corruption and prevent abuse of funds. The  report notes numerous positive developments, including several major international firms working on ADB-assisted projects who voluntarily reported suspected integrity violations to OAI after internal company audits.

In 2012, OAI piloted project procurement-related spot reviews aimed at strengthening project monitoring and compliance. The reviews provide hands-on support and skills transfers to ADB’s operations departments to improve project supervision and ensure projects fully deliver their intended development outcomes. Lessons from similar reviews over the last 10 years have been developed into toolkits that are shared and used by other international financial institutions.

To prevent fraud and corruption in ADB projects, OAI provides substantial support and advice to management and project teams on issues relating to integrity, money laundering, and financing of terrorism risks, particularly for its public and private sector projects.

For 2013, OAI will continue to channel its work to ADB’s front line, to maximize opportunities for ensuring ADB’s development funds are used with regard to value for money, for their intended purposes, and not usurped through fraudulent or corrupt practices. It will adopt and continue measures such as increased support for Resident Mission staff, customized project procurement related reviews, and enhanced capacity for due diligence advice.