* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Stephen S. Zimmermannis the Director of Operations in the World Bank's Integrity Vice Presidency
On April 9, 2010, 5 multilateral development institutions signed a cross-debarment agreement marking the first global harmonised enforcement action against corruption in development projects.
Under the agreement, firms and individuals debarred by one Multilateral Development Bank (MDB) may be sanctioned for the same misconduct by the remaining 4 MDBs. Cross-debarment will greatly expand the deterrent value and is expected to trigger a major shift in preventing and addressing corrupt practices particularly those which impacts scarce development resources.
The agreement applies to sanctionable practices in projects financed by the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group and the World Bank Group.
The commitment expressed by these 5 institutions is expected to raise the cost of corruption and greatly expand the deterrent effect of sanctions by any one MDB.
The cross debarment regime will become operational once at least two MDBs complete the necessary modifications to their policies. These processes are currently underway by each of the 5 institutions and effectiveness of the agreement is expected by June 30, 2010.
This landmark agreement follows the extensive work and consultations among members of the Joint International Financial Institution Anti-Corruption Taskforce that was established during the World Bank Group annual meetings in Singapore in 2006.
One of the important conditions for MDBs to join the cross-debarment agreement is a harmonized definition of sanctionable practices and investigative guidelines.
Other elements of a harmonised anti-corruption global framework include exchange of information between signatory MDBs, integrity due diligence, mutual recognition of enforcement actions and finally support of anti-corruption efforts of MDB-member countries.
For the World Bank Group, the Cross-Debarment Agreement is a significant input to the implementation of the Governance and Anticorruption (GAC) agenda. The partnership with other MDBs will also advance the institution’s efforts to detect, investigate and sanction fraud and corruption risks impacting projects particularly in vulnerable sectors and countries challenged by weak governance resources and capacity.
In 2009, the World Bank Integrity Vice Presidency introduced a new preventive services function that builds on the lessons and knowledge emanating from its investigations.
The newly established Preventive Services team will work closely with project teams and national authorities to identify red flags, deliver tailored training and provide technical advice to mitigate fraud and corruption risks. Building international and regional anticorruption coalitions is another important focus for INT (World Bank Group Integrity Vice Presidency).
To this end, INT launched a dialogue with anticorruption officials from different regions to exchange experience and knowledge on how best to address some of these challenges at the country and regional levels. These officials represent a new and critical stakeholder group for development organizations to minimize the loopholes for corrupt practices and/or intentions impacting project resources within their national jurisdictions.
