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World Bank anti-graft chief to launch global corruption prevention force

by Stella Dawson | https://twitter.com/stelladawson | Thomson Reuters Foundation
Monday, 4 February 2013 17:26 GMT

Leonard McCarthy, head of the World Bank's Integrity Vice Presidency, tells TrustLaw a global network of experts to work on preventing corruption in development projects is a key part of his 2013 strategy.

WASHINGTON, (TrustLaw) – The World Bank plans to launch a global network of experts this year tasked with preventing corruption as part of a beefed-up program to tackle graft in its development projects.

Leonard McCarthy, head of the Integrity Vice Presidency, told TrustLaw this would be a key part of his 2013 strategy.  He answered questions by email about his plans for strengthening prevention, after World Bank President Jim Yong Kim discussed its importance in an anti-corruption speech earlier this week.  

Following are McCarthy’s e-mailed comments:

Q – President Kim spoke of the need to do a better job capturing the knowledge of what works in governance and anti-corruption activities and in disseminating that more effectively, among Bank staff and development partners.  What steps will Integrity take to implement that?

A - We are acutely aware of the fact that fighting corruption only has meaning if it contributes to the reduction of poverty in a constructive way.  We have done significant work in this area over the last four years.  Our insights on how to prevent fraud and corruption, analysis of high-risk sectors like roads (infrastructure), how to address pitfalls in community driven development and the outcomes of important forensic audits, are all publicly available.  At the World Bank, investigative findings and rulings by the Sanctions Board are publicly accessible for learning, anticipation and solutions.

       Good, credible institutions are continuously striving for progress.  In this spirit, we will over the next three months mine through all the applied knowledge arising from our investigative and analytical work; and customize it better so that it resonates where it matters most: the design, implementation and supervision of the project.  The increased use of cross-functional teams can also help us generate greater corporate consensus to support decision-making and accountability in cases that may impede the World Bank's mission to end poverty. 

Q -  How much of your budget currently is allocated to prevention, and is that growing or shrinking?  

A -  35% of the budget is devoted to prevention, forensic accounting and internal staff due-diligence.  This is a sustained increase over the past three years since the function was first introduced in 2008. The figure reflects balancing the need for heightened proactive/preventive work with the demand from Bank regions where preventive costs may be fully paid for by clients or shared on a case by case basis.

Q -  According to your annual report, two-thirds of Prevention Advice is for building precautions into investment lending. How could more be done by your department and by the World Bank in building prevention at the country level?  Will this be a significant part of your 2013 strategy? 

A -  In 2011, a great momentum was injected into the notion of building precautions into high-risk operations -- as an ongoing business imperative.  While this initiative has had mixed results, we are committed to making early input into the design of high-risk projects in difficult sectors and to extend our advice to the execution and supervision stages of these projects.  

      Yes, a key part of our 2013 strategy will be to assert greater preventive science at a country level.  This year we intend to establish a global network of preventive experts that cannot just solve problems impeding development but actually prevent them in the first place. There is also a lot of knowledge residing in countries and we find that it is far more empowering and lasting if we get counterparts in the same room to learn, resolve and react together.

Q -  Kim also talked of balancing development benefits against the risk of corruption, and finding ways to mitigate the risks.  In this regard, what have you learned from the Padma Bridge experience?

A -   I can't speak for the Bank, but we in INT have learned (1) to sharpen our lens to the risk associated with mobilization payments, (2) to find ways to better protect whistle blowers, (3) to adjust our investigative approach in difficult cases to go beyond documentary evidence; and (4) to develop an advanced understanding of countries' criminal and evidentiary laws and aspects of public international law that can support our work.

Our Standards: The Thomson Reuters Trust Principles.

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