Anticorruption Seminar, October 2009

RETA 6447: /]6f M– ^$$&

Anticorruption
p ei6frf/
e| i6frf/ lj/f]
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Seminar
uf]i7L
Genevieve Abel h]g]eLe Pan tyf
and hL eLnfl/on
Gie Villareal
Office of e|i6frf/ lj/f]wL tyf
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Anticorruption and Integrity
g y OOdfgbfl/tf sfof{no
Anticorruption Seminar, October 2009
 Workshop sfof{zfnfsf] c+zx?
components
• Introduction
I t d ti to t Integrity
I t it ƒ Odfgbfl/tfsf] kl/ro
• ADB’s
ADB s Anticorruption
Policy, Guidelines and ƒ Pl8aLsf] e|i6frf/ lj/f]wL gLlt
Process lgb]{lzsf tyf k|lqmof

• Conducting Basic Due ƒ cfwf/e"t oyf]lrt kl/>dsf]

Diligence
g ;~rfng
• Spotting Every Day Red
Fl
Flags ƒ blgs
b}lgs /ftf]
/ftf em08fx?sf
em08fx?sf] klxrfg
 The costs of e|i6frf/sf] d""Nox? M–
corruption:
i

• Political • /fhgLlts
• Economic • cfly{
l s {
• Social • ;fdflhs
• Environmental • jftfj/0fLo
 The political cost e|i6frf/sf] /fhgLlts
off corruption
ti d"Nox? M–

• Obstructs democracy
• k|hftGq cj/f]
cj/fww ub5
ub{5
– popular opinion is not – nf]slk|o ljrf/ dxTjk"0f{
important
– justice can be bought
x'xFbg}
– Gofo v/Lb ug{ ;lsG5
• Undermines trust in
government • ;/sf/ k|kltsf]
ltsf ljZjf;
– hurts tax collection cjd"Nog ub{5
– s/ ;+ ;sngnfO
sngnfO{ xfgL
• Can result in political
instability k'¥ofpF5
• /fhgLlts cl:y/tfdf
kl/0ft x'g ;Sb5
The economic cost e|i6frf/sf] /fhgLlts
off corruption
ti d"Nox?
• /fli6o
/fl 6«o ;Dkltdf sdL
• Depletes national Nofp5
wealth

• Gofof]lrt ahf/
• Hinders
development of fair ;+/rgfsf]] lljsf;df
market structures cj/f]w v8f ub{5
– Distorts competition – k|ltikwf{ ljs[t t'Nofpb5
– Deters investment – nufgL lg?T;flxt ub{5
 The social cost of e|i6frf/sf] ;fdflhs
corruption
ti d"Nox?
• Undermines p public • hgljZjf; cjd"
cjdNog
Nog ub5ub{5
trust
– /fhgLlts k4ltdf
in p
political system
y
in institutions
– ;+:yfx?df
in leadership p – g]t[Tjdf
• Causes frustration • lg/fzf tyf pbfl;gtf
and apathy
p y pAhfp5
• May promote • jfXo a;fO{ ;/fO{ k|f]T;fxg ug{
outward migration ;Sb5
 The environmental
costt
jftfj/0fLo
jftfj/ fLo d"
dNoNo

• Degradation • cwfult
cwf]ult

• D
Destruction
t ti off • k|fs[lts jftfj/0fsf]
natural
environments
i t
ljgfz
Corruption Poverty
e|i6frf/ ul/jL
• Bribery:
y $1,000 • 3if
3' f M–M $!
$!))) c/a ($!
billion ($1 trillion) v/a) /jif{
/year
Procurement bribes: v/Lb 3' 3ifx?
fx? MM– $@
$@))
$200 billion/year c/a/jif{
• One Asian country
lost $48 billion • Ps Pl;ofnL /fi6«n] ljut
through corruption
over the past 20 @ jjif{fdf
@) df e|i6frf/af6 $$*
*
years, surpassing its c/a u'dfof], hf] ljb]zL C0fsf]
foreign debt level. txeGbf dfly lyof] .
Global Challenges ljZjJofkL
ljZj ofkL r'
rgf}
gfltx?
ltx?
• Cultural norms • ;f:s[
;fF :slts
lts dfGotfx?
• Different • u|fXo cfr/0fsf ljljw
understandings of
a'aemfO{
emfOx?
x?
acceptable conduct
• Different expectations
p • ljljw ck]Iffx?
• Precision of language • efiffsf] z'4tf
• Risks in upholding • e|i6frf/ lj/f]
lj/fww k|of;x?
anticorruption initiatives hf/L /fVgsf hf]lvdx?
 Corruption Perception Index
Country Rank 2009 score
India 84 3.4
Sri Lanka 97 3.1
Bangladesh 139 2.4
Pakistan 139 2.4
Nepal 143 2.3
Azerbaijan 143 2.3
K
Kenya 146 22
2.2
Russia 146 22

The Corruption Perception index shows county rankings and scores related to
the perception of public-sector corruption within a country. The CPI is based on
13 separate surveys. New Zealand ranked 1. Congo Brazzaville ranked lowest,
at 162.
162 http://www.transparency.org/
http://www transparency org/
 hfn;fhL lqsf]
lqsf0f
dnfO{ ;dfT5g\
h:tf] nfusf
h:tf nfu]sf] lyPg

c? ;a}
;an n]
oxL ub}{5g\
ljQLo jf
cGo ;'ljwf k|fKt
ug{ jf floTjaf6 o;n]
6f9f /xg . s;}}nfO{{ ufx|f]
cj;/ ;f/f] kfb}{g
d o;sf] of]Uo 5' Û
 Fraud hfn;fhL sfo
sfo{
Any act or omission
omission, hfn;fhL sfo{sfo eGgfn
eGgfn] s'
sg}g
including a sfo{ jf cg'kl:ylt, unt
misrepresentation, that ljj/0ff lbg'
ljj/ lbg ;dt
;d]t xf
xf] h;n
h;n]
knowingly or recklessly s'g} kIfnfO{ cfly{s jf cGo
misleads, or attempts nfe lng jf bfloTjaf6
to mislead, a party to ljd'v /xg hfg]/ jf
obtain a financial or nfk/jfxLk"j{s u'd/fxdf
other benefit or to avoid /fVg]] jf u'd/fxdf /fVg]]
unt k|of; ug'{ xf].
an obligation.
g
 Simply, ;/n ef
efiffdf
ffdf

• Misrepresentation is • unt k|:t'tL eg]]sf]]

– Saying you’re – cfk"m h] xf]Og Tof] xf]

something you’re not eGgg'
e
– Not saying
y g yyou’re
something you are – cfk"m h]] xf]] Tof]] xf]]
geGg'
 Example Claims to have a certain skill

pbfx/0f lglZrt zLk ePsf] bfjL ug{'

Is contracted to do a certain job

Which compromises the project s'g} sfo{ ;DkGg ug{sf nflu
h;n] kl/of]
h;n kl/ofhgfsf
hgfsf] xsdf ;+emf}tf ul/g'
;emftf ul/g
;+emf}tf ub{5

Which results in unclear outputs

hf] c:ki6 glthfx?df k|ltljlDat x'G5
 Examples of False e"m6f bfjLsf
Claims pbfx/0fx?
• False hotel receipts • hfnL xf]6n /l;bx?

• Fake airline tickets • hfnL xjfO{ l6s6x?

• False time sheets • hfnL sfo

sfo{ tflnsfx?
Falsified bus ticket hfnL a; l6s6
Fake Airline Tickets hfnL xjfO{
xjfO l6s6x?

• Background • k[i7e"dL
– Resident
R id t Mi Mission
i – k/fdz{b{ ftf sDkgLn]L ]
reported that a hfnL xjfO{ l6s6x? k]z
consulting firm u/]s
] f]] cfj;Lo
L lld;gn]]
submitted fake
airline tickets
hfgsf/L lbPsf]
John –
Not an
Findings lgisif{
lg s fx?x?

– Tickets were fake • l6s6x? gsnL lyP

– Elton John was not a – PN6g hg Po/
Air France travel k|kmfG;sf
mfG;sf …6fen
6«fen PhG6
Ph]G6Ú
agent lyPgg\
– Further review – yk ;dLIffn]
;dLIffn ;do
revealed time sheets tflnsfx? kfgL hfnL
were fabricated also lyP e
eGg]g hfgsf/
hfgsf/L
u/fof]
Fraudulent Hotel
Receipts hfnL xf]
xf6nsf
6nsf] /l;bx?
• Background:
g • k[ki7edL
i7e"dL M–M
– Receipts were
submitted by a – k/fdz{b{ ftf sDkgLdfk{
L {m t
consultant through
a consulting firm k/fdz{bftfn] /l;bx? k]z
u/]s
] f]]
– Department – ljefun] xf]6nsf] /l;bx?
reported alleged
fraudulent receipts hfnL ePsf] cf/f]k
for hotel hfgsf/L u/fPsf]
gsnL
 Corruption ei6
e| i6 sfo
sfo{

The offering, giving, e|i6 sfo{ eGgfn] cGo s'g}

g, or soliciting,
receiving, g, kIfsf] sfo{x¿nfO{ cjfl~5t
directly or indirectly, tj/n] k|efljt t'Nofpg s'g}
y
anythingg of value to klg dxTjsf
dxTjsf] j:t'
j:t k|ToIf jf
influence improperly ck|ToIf ¿kdf k|:tfj ug{', lbg',
the actions of another lng jf dfu ug'
lng' ug{ xf.
xf].
party.
 Example pbfx/0fx?

• Bribery 3iff
3'
receiving/providing s'g} ;+emf}tf jf cGo
moneyy or a favor in
sfo{sf abnfdf k;f
sfosf k};f
exchange for a
contract or other jf ;xof]u lng'/lbg' .
action.
Misaligned doors cJojl:yt
c ojl:yt 9f]
9fsfx?
sfx?
 Coercion cfqmfds sfo
sfo{

Impairing or harming, cfqmfds sfo{ eGgfn] s'g}

or threatening to impair kIfsf] sfodfly
kIfsf sfo{dfly k|efj kfg{ kfg,,
or harm, directly or
k|ToIf jf ck|ToIf ¿kdf,
indirectly, any party or
the property of the sg}g kIf jf s'
s' sg}g kIfsf
kIfsf]
party to influence ;Dklt laufg]{ jf Iflt
improperly the actions k'¥ofpg],] jf laufg]
l {] jf Iflt
l
of a party. k'¥ofpg wDsL lbg] sfo{ ug'{
xf].
 Examples pbfx/0fx?
pbfx/ fx?
Extortion hah:tL
hah{ :tL rGbf
r bf c;nL
c;"nL
• obtaining money or • wDsL jf 7uLåf/f k};f jf
favors through blackmail
or threat ;xof]ux? k|fKt ug{‘
Blackmail 7uL
• an actt intended
i t d d tto • cGosf]] cfr/0f k|efljt
l
manipulate the conduct t'Nofpg] Wo]o ;lxt ul/g]
of another
sfo{
sfo
Threat of violence
(real or perceived) lx;fsf
lx+ ;fsf] hflvd
hf]lvd -jf:tljs jf
dx;'; ul/g]_
 Collusion if8oGqdns
f8\o qd"ns sfo
sfo{

An arrangementt
A
between two or more if8\oGqd"ns sfo{ eGgfn]
parties designed to cjfl~5t tj/n]
tj/n cGo
achieve an improper kIfsf] sfo{x¿ dfly k|efj
purpose, including
kfg{ ;lxt,
kfg ;lxt cjfl~5t p2Zo
p2]Zo
influencing improperly
the actions of another k|fKt ug{sf nflu b'O{ jf
party. a9L kIfx¿ aLr ePsf ePsf]
ldnLeutsf] of]hgf xf].
 Examples pbfx/0fx?
pbfx/ fx?
• Sharing of • afnaf]n nufpg]
nufpg tof/Lsf
tof/Lsf] qmddf
information by vendors ljq]mtfx?åf/f ;"rgfsf] cfbfg k|bfg
while preparing bids
• af]n
] sf]] cfnf]]kfnf]]
• Bid rotation
• ljq]mtf //jf kl/of]hgf
• Pre-negotiation of Joj:yfkg OsfO{, sfof{Gjog ug]{
award between vendors lgsfo, Pl8aLaLr lg0f{osf nflu
and/or Project lg0f{okj{j dfntfn
lg0fok" df]ntf]n
Management Unit,
Executing
g Agency,
g y, ADB
 Company X

Company Z Company Y
 Conflict of Interest :jfy{sf] åGå

Any situation in which a party :jfy{sf] åGå s'g} cj:yf xf]

has interests that could h;df s' sg}g kIfsf
kIfsf] :jfysf
:jfy{sf
improperly influence that
party’s performance of official
sf/0f p;sf] cf}krfl/s
duties or responsibilities
responsibilities, bfloTj jf lhDdjf/L,
lhDd]jf/L
contractual obligations, or ;+emf}tfut bfloTjx¿ jf
compliance
p with applicable
pp ;DalGwt
;Dal wt sfgg
sfg"g /
laws and regulations.
lgodfjnLx¿sf]
cgkfngdf
cg' kfngdf cglrt
cg'lrt tj/n]
tj/n
k|efj kfb{5 .
Conflict of interest: :jfy{sf] åGå MM–
:jfysf
ƒ cfk
cfk}+mdf tyf cfk}
cfk+mleq unt
• Not wrong in in and gePsf]
of itself ƒ lg
lgikIftf
kIftf tyf kf/bzLtfsf
kf/bzL{tfsf
• Must be managed ;fy Joj:yfkg ul/g' kb{5
with impartiality and ƒ jf:tljs tyf dx;;
dx;';
transparency ul/Psf] :jfy{sf] åGåx? b'j}
• Need to avoid both 6fg{ kb5
6fg' kb{5
real and perceived
conflicts of interest.
Sharing principal stakeholders
k|d'v ;/f]s
] f/jfnfx?sf]] afF8F kmfF8F
Associated Parties ;DalGwt
;Dal wt kIfx?
Ali Baba Printing Alakazaam Printing Beezlebub Printing WE-BE PRINTING
 Obstruction cj/f]w
cj/fw

• Deliberately destroying, ƒ cg';Gwfg;Dj4 ;"rgf jf

falsifying, altering or
concealing
li iinformation
f ti or
k|df0fsf
f fsf ;fdfu|L hfgLhfgL ggi66,
evidence material to an x]/k]m/, kl/jt{g jf 9fs5f]k ug]{
investigation
ƒ unt jQmJox? lbg]
• Making false statements

• Threatening, harassing or ƒ ;"rgfsf] ;fj{hlgsLs/0f /f]Sg

intimidating to prevent wwDsL,
sL, xtfT;fx
xtf]T;fx jf 8/wfs
disclosure nufpg]
Exercise cEof;
c of;
Questions k|Zgx?