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Fighting corruption and fraud in Asia

Article | 10 December 2012

Fighting corruption and fraud is crucial to achieving the goal of reducing poverty in the Asia and the Pacific region, explain Peter Pedersen and Clare Wee from ADB's Office of Anticorruption and Integrity. Beginning 9 December, ADB is marking International Anticorruption Day with a week-long series of learning events to further develop the understanding among its staff of this complex issue.

What is the impact of corruption on development projects? Why is fighting corruption and fraud so important to ADB?

Given the complexity of the nature of corruption, the impacts may differ from project to project. Nevertheless, ADB takes the approach that every dollar of its development funds should go to its intended beneficiaries, and not lost to corruption or fraud.

ADB has always been at the forefront of fighting fraud and corruption. In 1995, ADB became the first multilateral development bank to adopt a policy on good governance and more initiatives were introduced over the years.

More than ever, in this time of financial constraints, conditions are ideal for corruption and fraud to prosper, so it is ever more crucial for ADB to exercise strong vigilance in preventing fraud and corruption in ADB-financed, supported, or related activities, as well as take strong remedial action when circumstances of fraud and corruption are identified.

How does ADB fight corruption?

We take a holistic approach and focus not only on remedial actions, such as debarment, but also on awareness raising, prevention and forging partnerships with others to maximize positive outcomes.

For example, on the occasion of International Anticorruption Day, we are raising awareness amongst ADB staff that they not only have a right, but also a responsibility to fight corruption in ADB-financed, supported and related activities. This year's theme is "iACT: Let's Keep up the Fight".

Do you review the projects ADB is involved in?

Projects are of course subject to regular audits and reviews. In addition, ADB regularly conducts project procurement-related reviews (PPRR) of ongoing projects to confirm compliance with applicable ADB's policies, guidelines, and the loan agreement to ensure that funds are spent for their intended purposes. ADB also collaborates with members of the international community and shares its PPRR methodology with other institutions, so as to maximize impacts.

These reviews focus on procurement, financial management, and asset verification, and inspect project outputs, assess internal controls, identify irregularities and possible non-compliance, as well as make recommendations to fight fraud, corruption or abuse of resources. Two PPRRs reports were recently released: one on a power sector expansion project in Samoa, and another one on a project on decentralized rural infrastructure and livelihood in Nepal.

What do you think is ADB's biggest challenge in its anticorruption efforts?

"Our biggest challenge is getting our stakeholders on board in our anticorruption efforts. That means changing the mindsets of governments, executing agencies, corporations, and civil societies."

Our biggest challenge is getting our stakeholders on board in our anticorruption efforts. That means changing the mindsets of governments, executing agencies, corporations, and civil societies. In coordination with supreme audit institutions and executing agencies, we have been sharing knowledge on PPRRs which have had positive results. This involvement has allowed the borrowing country to take ownership of these anticorruption efforts. For example, Bhutan has requested more support from ADB in its governance efforts after we did a PPRR. We see that as a positive sign showing their readiness to take ownership of anticorruption efforts.

Are you hopeful that corruption can be eliminated in Asia?

We have to be hopeful. The awareness factor has improved. If civil society says it will not tolerate corruption, we will see things change.