annual report 2010 - asian development bankoai annual report 2010 5 year in brief1 month milestone...

OFFICE OF ANTICORRUPTION AND INTEGRITY

ANNUAL REPORT

Supplement2010

Office of Anticorruption and Integrity 2010 Annual Report Supplement

This supplement to the 2010 Annual Report contains brief at-a-glance information on the Office of Anticorruption and Integrity and its activities.

About the Asian Development Bank

ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.

Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.orgPublication Stock No. ARM113140 Printed in the Philippines

OAI 2010 Annual Report_SUPPLEMENTARY FA Cover.indd 1 3/1/2011 10:13:52 AM


Supplement

ANNUAL REPORT 2010

ii

Contents

The Office of Anticorruption and Integrity 1

Performance at a Glance 3

Year in Brief 4

Status of Reported Fraud and Corruption Investigations as of 31 December 2010 9

Process for Dealing with Allegations of Misconduct by ADB Staff Members 10

Process for Dealing with Allegations of Integrity Violations Involving Bidders, Consultants, Contractors, Suppliers, or Other Third Parties in ADB-Related Activities 11

Project Procurement–Related Review Process 12

Closed Investigation as of 31 December 2010 13

How to Report Fraud or Corruption 14

1

The Offi ce of Anticorruption and Integrity

By mandate, the Office of Anticorruption and Integrity (OAI) is solely responsible for conducting independent and objective investigations of fraud, corruption, collusion, coercion, conflict of interest, and abuse in Asian Development Bank

(ADB)-related activities or staff members. OAI reports directly to the ADB President and, through the President, to the Audit Committee of the Board of Directors. OAI has unrestricted access to all information and records relating to ADB activities, personnel, and property as necessary to accomplish its mandate.

As of 31 December 2010, OAI was composed of 18 staff members. Table 1 shows the staff composition in OAI from 2005 to 2010 as well as projections for 2011.

In 2010, OAI engaged seven staff consultants to augment its existing resources. OAI also contracts for external investigative and audit services on an as-needed basis.

ExecutiveAssistant

Assistant IntegrityCoordinator Director, OAI

Head, OAI

2 Principal IntegritySpecialists

Integrity Officer

2 Associate Integrity Analysts

2 Administrative Assistants2 Administrative Assistants

2 Integrity Officers

Integrity Specialist

Integrity SpecialistIntegrity Specialist

Senior IntegritySenior IntegritySpecialist

2 Integrity Specialists

SeniorIntegrity Officer

PPRRsInvestigations

OAI = Offi ce of Anticorruption and Integrity, PPRR = project procurement–related review.Source: OAI.

Offi ce of Anticorruption and Integrity Organizational Chart

2 OAI Annual Report 2010

Table 1: Staffing at the Office of Anticorruption and Integrity, 2005–2011

Position 2005 2006 2007 2008 2009 2010 2011

Head – – – –

Director

Principal Integrity Specialist – –

Senior Integrity Specialist

Integrity Specialist

Senior Integrity Officer – –

Integrity Officer

Associate Integrity Analyst

Assistant Integrity Coordinator – –

Executive Assistant – – –

Administrative AssistantTotal 10 10 13 12 15 18 19

– = Positions were not available during these years. Source: OAI.

OAI Annual Report 2010 3

Performance at a GlanceKey Achievements in 2010 Number

Complaints screened 220

Investigations opened 99

Investigative missions conducted 8

Individuals sanctioned 47

Firms sanctioned 37

Individuals/firms reinstated 1/1

Individuals/firms reprimanded 1/3

Individuals/firms issued warning letters 35/33

ADB staff cases referred to BPMSD 10

Appeals reviewed concerning individuals/firms 3/4

Project procurement–related reviews conducted 5

Regional seminars on anticorruption conducted 11

Mandatory staff briefing on “Say No To Corruption” 27

Presentations for business delegations, ADB Board of Directors, and donors 6

Presentation at the project implementation/due diligence seminars/departmental retreats

8

MDB integrity forums attended 8

Conferences, conventions, symposia against corruption attended 5

Learning and development programs attended by OAI staff members 26


Year in Brief1

Month MilestoneJanuary 2010 • Prepared 2010 OAI work plan

• Conducted Fraud and Corruption Awareness Briefi ng to new staff

• Participated in MDB heads of integrity and legal departments regarding mutual recognition of debarment decisions, and MDB discussions on due diligence in private sector operations

February 2010 • Issued 2009 OAI Annual Report to the President

• Presented the fi ndings from two investigations to the Integrity Oversight Committee (IOC)

• Conducted anticorruption workshop in Cambodia

• Presented at the World Bank’s Forum on Strengthening Cooperation on Investigating and Prosecuting Corruption and Financial Crimes in Asia, Thailand

• Conducted Fraud and Corruption Awareness Briefi ng to New Staff , one mandatory “Say No to Corruption” briefi ng for staff , anticorruption workshop for fi nance and administration staff of resident missions, and fraud and corruption awareness training for Cambodia and Thailand fi eld offi ces

March 2010 • Conducted Fraud and Corruption Awareness Briefi ng for new staff

• Participated in SIDA–ADB Annual Consultation

• Conducted anticorruption briefi ng for the Third “ICE Constituency” Trade Mission to ADB

April 2010 • Presented the fi ndings from six investigations to the IOC

• President H. Kuroda signed the Agreement on Mutual Enforcement of Debarment Actions

• Conducted Fraud and Corruption Awareness Briefi ng for new staff and staff of Controller’s Department, and three mandatory “Say No to Corruption” briefi ngs for staff

• Met with representatives of the Netherlands’ Ministry of Economic Aff airs

REPORT TO THE PRESIDENT

ANNUAL REPORT

2009OFFICE OF ANTICORRUPTION AND INTEGRITY

Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.orgPublication Stock No. RPT101338 Printed in the Philippines

Office of Anticorruption and Integrity 2009 Annual Report

This report describes the mandate of the Office of Anticorruption and Integrity of the Asian Development Bank (ADB), its work and achievements in 2009 on case investigations, project procurement–related reviews, and awareness-raising of ADB’s anticorruption policy. It also features ADB’s updated whistleblower and witness protection provisions.


ADB's vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region's many successes, it remains home to two-thirds of the world's poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

continued on next page


Year in Brief1

Month MilestoneMay 2010 • Presented the findings from three investigations

to the IOC

• Received approval for revised IPG

• Conducted nine anticorruption workshops for six projects in Uzbekistan under RETA 6447: Anticorruption Workshops

• Participated in forum on the effects of the Agreement on Mutual Enforcement of Debarment Decisions signed by MDBs hosted by the World Bank and Transparency International, USA

• Conducted Fraud and Corruption Awareness Briefing to new staff and three mandatory “Say No to Corruption” briefings for staff

• Presented OAI’s Anticorruption Policy to the American Chamber of Commerce in Uzbekistan

• Conducted project procurement–related review (PPRR) planning mission for Loan 2092-NEP

June 2010 • Presented the findings from three investigations to the IOC

• Declared the Agreement on Mutual Enforcement of Debarment Actions in force

• Met with participating MDB investigative offices on cross-debarment implementation issues


• Conducted PPRR planning mission for Loan 2503-KAZ, and fieldwork and wrap-up mission for Loan 2092-NEP

• Participated in 11th Conference of International Investigators in Nairobi, Kenya

Table continued



Year in Brief1

Month MilestoneJuly 2010 • Conducted two anticorruption workshops for one

project in Nepal under RETA 6447: Anticorruption Workshops


• Presented OAI’s Anticorruption Mandate to the Swiss Business Delegation and Private Sector Department Briefing on Annual Declaration of Compliance and Related Administrative Order

• Conducted PPRR fieldwork and wrap-up mission for Loan 2092-NEP and planning mission for Loans 2163/2164-INO

August 2010 • Presented the findings from three investigations to the IOC

• Conducted Fraud and Corruption Awareness Briefing for new staff, and four mandatory “Say No to Corruption” briefings for staff

• Presented the anticorruption segment of disbursement and procurement workshops for resident missions and two project implementation seminars

• Presented Anticorruption Workshop for the Ministry of Public Works of Indonesia, in coordination with the Indonesia Resident Mission

• Conducted PPRR planning mission for Loan 2219-PRC

September 2010 • Presented the findings from two investigations to the IOC

• Presented OAI’s anticorruption mandate for various German firms and agencies in coordination with ADB’s European Representative Office

• Presented at the induction program for new staff and Project Implementation Seminar, and conducted one mandatory “Say No to Corruption” briefing for staff


Table continued


Year in Brief1

Month Milestone• Conducted PPRR fieldwork for Loans 2163/2164- INO,

planning mission for Loan 2254-BAN, and PPRR fieldwork and wrap-up mission for Loan 2503-KAZ

• Attended the inaugural High Level Conference of the First Global International Anticorruption Academy in Vienna, ADB/OECD Seminar on Criminalization of Bribery in Malaysia, and Strengthening Cooperation on Corruption and Enforcement in Eastern Europe and Central Asia Hosted by the World Bank in Turkey

October 2010 • Presented the findings from five investigations to the IOC

• Submitted three firms and nine individuals to World Bank and EBRD for cross debarment

• Conducted Fraud and Corruption Awareness Briefing to new staff and four mandatory “Say No to Corruption” briefings for staff in PRCM and ADB headquarters, and presented anticorruption segment of project implementation seminars

• Published Anticorruption and Integrity: Policies and Strategies

• Presented OAI’s Anticorruption Mandate to donors of the Governance Cooperation Fund

• Hosted African Development Bank delegation to OAI

• Conducted PPRR fieldwork and wrap-up mission for Loan 2219-PRC

Table continued



Year in Brief1

Month MilestoneNovember 2010 • Presented the findings from one investigation to the IOC

• Met with participating MDB investigative offices to discuss cross debarment

• Hosted World Bank delegation to OAI and meeting of participating MDBs on cross debarment at the Thailand Resident Mission

• Presented the anticorruption segment of the induction program for new staff and Project Implementation Seminar and conducted four mandatory “Say No to Corruption” briefings for staff

• Conducted PPRR fieldwork mission for Loan 2254-BAN

• Participated in and presented at the National Investigation Symposium in Australia and in the 14th International Anticorruption Conference in Thailand

December 2010 • Celebrated the first year anniversary of the Whistleblower Policy

• Presented Anticorruption Policy at the External Experts’ Forum on Review of ADB's Accountability Mechanism Policy

• Issued draft reports for PPRR on Loan 2151-IND and Loans 2163/2164-INO

• Submitted one firm and one individual to World Bank and EBRD for cross debarment

• Conducted one mandatory “Say No to Corruption” briefing for staff

• Cross-debarred two firms and one individual sanctioned by the World Bank under the Cross-Debarment Agreement

EBRD = European Bank for Reconstruction and Development, IOC = Integrity Oversight Committee, MDB = multilateral development bank, OCRP = Office of the Compliance Review Panel, OAI = Office of Anticorruption and Integrity, PPRR = project procurement–related review, PRCM = People’s Republic of China Resident Mission, RETA = regional technical assistance, Sida = Swedish International Development Cooperation Agency.1 Does not include investigative activity and investigative missions.

Table continued


Status of Reported Fraud and Corruption Investigations,* as of 31 December 2010

Year Received Status Total

ADB Staff Grant Loan MFF Others

Technical Assistance

1998 and 1999 Closed 55 10 0 32 0 7 6

2000 Closed 59 14 0 35 0 5 5

2001 Closed 77 7 0 58 0 6 6

2002 Closed 81 12 0 54 0 5 10

2003 Closed 92 11 0 53 0 11 17

2004 Closed 99 25 0 52 0 6 16

2005 Closed 102 13 0 68 0 13 6

2006 Closed 108 17 3 74 0 0 14

2007

Open 1 0 0 1 0 0 0

Closed 94 10 3 70 0 5 4

Total 95

2008

Open 9 0 1 7 0 0 1

Closed 80 14 3 50 0 7 6

Total 89

Open 16 1 0 12 0 1 2

2009 Closed 57 7 6 31 1 4 8

Total 73

Open 76 4 7 50 1 5 9

2010 Closed 23 1 3 12 1 3 3

Total 99

Cumulative

Open 102 5 8 70 1 6 12

Closed 927 143 18 589 2 72 103

Total 1,029 148 26 659 3 78 115

MFF = multitranche financing facility.* Does not include cases at the complaint stage. Source: OAI.


Closed Investigations** as of 31 December 2010

Year Received Total

Closed after Investigation

Closed Warning

Closed after

Appeal

Closed IOC no

Sanction

Closed with

Sanction

Referred to

BPMSD1998 21 12 0 0 0 5 4

1999 34 22 0 0 2 7 3

2000 59 37 0 0 4 8 10

2001 77 58 0 1 3 12 3

2002 81 56 0 0 3 18 4

2003 92 69 0 0 3 18 2

2004 99 52 0 2 6 21 18

2005 102 71 0 1 0 22 8

2006 108 64 0 3 0 30 9

2007 94 64 2 0 2 22 7

2008 80 42 0 0 0 27 10

2009 57 25 12 1 0 12 6

2010 23 13 5 0 1 4 1***

TOTAL 927 585 19 8 24 206 85

BPMSD = Budget, Personnel, and Management Systems Department; IOC = Integrity Oversight Committee. ** Covers only closed investigations related to violations of the Anticorruption Policy.*** This forms part of 10 referrals made to BPMSD in 2010.Source: OAI.


Process for Dealing with Allegations of Misconduct by ADB Staff Members

The flowchart is not intended to, and does not replace, modify, supersede, or amend ADB’s Integrity Principles and Guidelines (2010).AO = Administrative Order; BPHR = Human Resources Division; BPMSD = Budget, Personnel, and Management Systems Department.Misconduct by staff members that OAI may investigate include violation of ADB’s Anticorruption Policy (including fraudulent practices, corrupt practices, or conflicts of interest) or abuse (theft, waste or improper use of ADB assets, either committed intentionally or through reckless disregard).

OAI receives an allegation of misconduct by a staff member.

OAI screens the allegation.

OAI director approves the investigation plan.

OAI investigates the allegation.

OAI reports its findings to BPMSD.

BPMSD determines the disciplinary action and informs

the staff member.

Staff member requests compulsory conciliation from

the BPHR director within 45 calendar days from date of receipt of the decision.

Staff member requests for administrative review from the BPMSD director general within

15 calendar days.

Staff member appeals the decision of the BPMSD director

general to the Appeals Committee through its

secretary.

Appeals Committee investigates and makes a recommendation to the

President.

ADB President makes a final decision.

Staff member is disciplined and/or the case is closed.

No sanction imposed. OAI director endorses the closing report; the OAI head approves

the closing report.

OAI director approves the closing report, and if

appropriate, refers to other ADB departments.

Is the allegation within OAI’s mandate,

credible, verifiable, and material?

Is there sufficient evidence that the

Anticorruption Policy or AO 2.02 was

violated?

no

no

no

yes

yes

yes

Was the conciliation successful?


Process for Dealing with Allegations of Integrity Violations Involving Bidders, Consultants, Contractors, Suppliers, or Other Third Parties

in ADB-Related Activities

The flowchart is not intended to, and does not replace, modify, supersede, or amend ADB’s Integrity Principles and Guidelines (2010).IOC = Integrity Oversight Committee, OAI = Office of Anticorruption and Integrity, SAC = Sanction Appeals Committee.Integrity violations that OAI may investigate include corrupt practice, fraudulent practice, coercive practice, collusive practice, abuse, conflict of interest, obstructive practice.

OAI receives an allegation of integrity violation involving

ADB-related activities.

OAI screens the allegation.

OAI director approves the investigation plan.

OAI investigates the allegation.

OAI submits its findings to the IOC.

IOC makes a decision on sanctions.

IOC secretariat advises sanctioned firms and/or

individuals of the decision.

SAC secretariat considers the appeal.

SAC decides whether to confirm sanction.

ADB President makes a decision if the 5AC is unable

to agree unanimously.

The case is closed.

The sanction is upheld or the case is closed.

OAI director endorses closing of investigation; OAI head

approves it.

OAI director closes the complaint.

Is the allegation within OAI’s mandate,

credible, verifiable, and material?

Is there sufficient evidence that the

Anticorruption Policy was violated?

no

no

yes

yes

yes

yes

no

no

Did the sanctioned party file an appeal

within 90 days?

Was new and relevant information

presented?


Project Procurement–Related Review Process

DMC = developing member country, EA = executive agency, IA = implementing agency, SAI = supreme audit institution.

Preliminary planning phase:Identify projects;

Seek inputs from Operations Department; Invite SAI to participate; and

Notify ADB stakeholders.

Detailed planning phase:Understand project operations;

Engage consultants; Determine sample sizes;

Share review details with SAI; Engage with DMC;

Coordinate with EA on review requirements;

Conduct planning mission; and Assess risks.

Fieldwork phase:Obtain relevant documents from EA/IA;

Review documentation; Interview beneficiaries and third parties;

Verify physical assets on site; and Wrap up mission and closing conference.

Interact with project and finance team for clarifications.

Discuss and agree findings with EA.

Reporting phase:Send draft report for official comments

and Transmit final report to SAI,

DMC, and ADB.


How to Report Fraud or Corruption

Contact OAI to report concerns or evidence that fraud, corruption, collusion, coercion, abuse, or conflict of interest may have occurred or is occurring in any ADB-financed activity. Information concerning the identity of a complainant is strictly controlled and will not be released to anyone outside OAI without the consent of the complainant.

When reporting concerns, please provide as much information and detail as possible, including who, what, when, where, why, and how.

For further guidance, see www.adb.org/Integrity/whatto.asp.

Tel: +63 2 632 5004 (this is not a toll-free number, and local or long-distance telephone charges will apply)

Fax: +63 2 636 2152 (this is not a toll-free number, and local or long-distance telephone charges will apply)

E-mail: [email protected] or [email protected] form: www.adb.org/Integrity/complaint.aspPostal address: Office of Anticorruption and Integrity Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines In person: OAI is located at Rooms 1608 to 1648 (South Core),

ADB Headquarters, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines.


ANNUAL REPORT

Supplement2010

Office of Anticorruption and Integrity 2010 Annual Report Supplement

This supplement to the 2010 Annual Report contains brief at-a-glance information on the Office of Anticorruption and Integrity and its activities.


ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.

Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.orgPublication Stock No. ARM113140 Printed in the Philippines

OAI 2010 Annual Report_SUPPLEMENTARY FA Cover.indd 1 3/1/2011 10:13:52 AM

annual report 2010 - asian development bankoai annual report 2010 5 year in brief1 month milestone...

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