Report to the President: Office of Anticorruption and Integrity: Annual Report 2012

The Office of Anticorruption and Integrity (OAI) contributes to ensuring that the funds entrusted to ADB's care are used with regard to value for money for their intended purposes and not usurped for fraudulent or corrupt purposes.

OAI continues to actively align with operations colleagues in ensuring ADB-financed, -supported, and -administered projects deliver quality outputs with maximum impact. Its achievements in 2012 reflect an evolving and multifaceted approach toward this endeavor, in close collaboration and teamwork with ADB's governance and operations departments.

Responding to Allegations of Fraud and Corruption

Investigative activities against all key indicators were higher than those in previous years. In 2012, OAI received 240 complaints, the highest it has ever received in a year. More than 50% of these were either converted into investigations or were closed. OAI processed cases that led to sanctions being imposed on 38 individuals and 42 firms. Majority of complaints came from ADB staff, each of whom plays a key role in combating threats to the integrity and effectiveness of ADB's development work. Fraud in the form of misrepresentations concerning qualifications, experience, and capacity of consultants or consulting firms was the most common complaint.

ADB updated its Integrity Principles and Guidelines (IPG) to incorporate developments in remedial measures including harmonized principles among multilateral development banks on the application of sanctions against corporate groups, and recognizing voluntary disclosure of misconduct as a mitigating factor when imposing sanctions.

OAI has continued to conduct project procurement-related reviews (PPRRs), piloting focused, limited PPRRs in collaboration with ADB operations departments in 2012.

Following management approval in late 2011, OAI's new advisory function played an important role in providing substantial support and advice to management and concerned operations departments on issues relating to integrity and money laundering and financing of terrorism (ML/FT) risks.

Initiatives for 2013

In 2013, OAI will continue to build on achievements of previous years. It will increase PPRRs in 2013, thereby better appreciating integrity challenges in project implementation and resulting in more relevant, practical feedback and training. It will strengthen its due diligence advisory capacity and further assess how it can better support and contribute to ADB's commitment in Strategy 2020 to increase its private sector development and operations portfolio.

Finally, OAI will continue to strongly align its work program with ADB's broader commitment to aid effectiveness.