Anti-Corruption Standards of the International Financial Institutions

CRS Report for Congress
Anti-Corruption Standards of the International
Financial Institutions
Updated July 7, 2004
Danielle Langton
Analyst in International Trade and Finance
Foreign Affairs, Defense and Trade Division

Congressional Research Service ˜ The Library of Congress

Anti-Corruption Standards of the International Financial
The international financial institutions (IFIs) all have procedures to prevent,
identify, and punish corruption within their organizations. The World Bank appears
to have the most extensive and detailed process for addressing corruption issues, but
the other multilateral development banks (MDBs) have or are establishing similar
procedures. The International Monetary Fund (IMF) does not make loans for specific
projects; all its loans go directly to the central bank or finance ministry of the
borrower country. Nevertheless, it also has procedures for preventing, investigating,
and punishing unethical or corrupt practices.
Organizations may achieve more effective anti-corruption programs by
implementing complementary measures to counter corruption at many levels. These
include scrutiny of the IFIs’ lending procedures, their systems for the procurement
of goods and services, staff conduct, oversight and management of their operations,
and the education of staff on policies and procedures. Major procedures for
controlling corruption include the establishment of an independent corruption unit,
an oversight committee, mandatory staff financial disclosure procedures, and a
corruption reporting hotline. The World Bank is the only IFI that has adopted
procedures in all four areas. Most of the others, excepting the African Development
Bank (AFDB) and the International Fund for Agricultural Development (IFAD), have
procedures in three of these areas. The AFDB requires mandatory staff financial
disclosure and is considering possible action in the other areas. IFAD’s anti-
corruption unit is organized differently than the other IFIs in that anti-corruption
responsibilities are carried out by its Office of Internal Audit, but it functions
similarly to anti-corruption units at the other IFIs. Also, IFAD is still in the process
of implementing mandatory staff financial disclosure.
This report provides, on a side-by-side basis, comparisons of the anti-corruption
procedures in the MDBs and the IMF. It also provides a detailed description of the
institutional arrangements each IFI has adopted to address corruption issues. This
report will be updated if significant changes are made in the systems and procedures
it describes.

Corruption and the IFIs .............................................1
Anti-Corruption Measures in the MDBs................................4
The World Bank...............................................4
The International Monetary Fund .................................5
International Fund for Agricultural Development ....................6
African Development Bank .....................................7
Asian Development Bank.......................................8
European Bank for Reconstruction and Development .................9
The Inter-American Development Bank ..........................10
List of Tables
Table 1. IFI Anti-Corruption Features at a Glance........................3
Table 2. Comparison of the IFIs’ Anti-Corruption Mechanisms.............11

Anti-Corruption Standards of the
International Financial Institutions
Corruption and the IFIs
Corruption is broadly defined as the abuse of public or private office for
personal gain. This includes, but is not limited to, taking bribes, granting a contract
or choosing a project in order to make a profit or to allow someone else to make a
profit, or coercing someone else to act in a corrupt manner. Most of the multilateral
development banks (MDBs) define corruption and state their policies relating to it
in their codes of conduct for staff, procurement guidelines, and other public
This report is based on information provided by the international financial
institutions themselves, through publicly available information on their websites and
correspondence with members of their staff. It compares, on a side-by-side basis, the
international financial institutions’ (IFIs’) procedures and policies for preventing and
punishing corruption in their operations. It does not attempt to evaluate the extent
to which the IFIs adhere to these standards and guidelines.1
The anti-corruption measures at the MDBs are new, and in some cases (notably
in the African Development Bank) are still being implemented. The need for anti-
corruption policies became evident in the late 1990s, when scandals involving
corruption became public and the activities of the MDBs were more closely
scrutinized. Development specialists recognized the importance of combating
corruption to achieve economic development, and in response the MDBs began to
provide technical assistance in corruption prevention and governance to member
countries. They recognized that improving the anti-corruption mechanisms within
their own organizations would complement governance activities in developing
countries and increase development effectiveness, as well as improve their own
credibility on governance issues.
The United States and the international community have been influential in the
increased attention to anti-corruption standards. The G-8 Finance Ministers and
Central Bankers issued a statement at their meeting in Rome in July 2001 that
recognized the recent improvements in the internal governance of the MDBs, but
added that further improvements were still needed. At the June 2004 G-8 Summit
at Sea Island, Georgia, the G-8 issued a statement on fighting corruption in
developing countries, announcing that the IMF agreed to publish its program
documents and surveillance reports effective July 2004. The Inter-American

1 Jonathan E. Sanford, Specialist in International Political Economy, assisted in the final
preparation of this report for publication.

Development Bank (IDB) also agreed to an improved disclosure policy at the
summit. Furthermore, the G-8 pledged to encourage developing countries to meet
the high disclosure standards set by the IFIs. The G-8 recognizes that corruption is
detrimental to economic development, and fighting corruption requires cooperation
between the IFIs and member countries on transparency and disclosure policies.2
In 2003, Congress instructed the U.S. Executive Directors to seek changes in
each of the MDBs that would make their procedures for controlling corruption
clearer and more transparent.3 (For procedural reasons, the IMF was not included
within the scope of the act.) Congress specified that they shall use the voice and vote
of the United States in each MDB to ensure that by June 30, 2005, each institution
(1) posts an annual report on its website containing statistical summaries and case
studies of the fraud and corruption cases pursued by its investigations unit; (2)
establishes a plan for conducting regular independent audits of internal management
controls including fraud prevention and making reports publicly available; and (3)
establishes an effective procedure for the receipt, retention, and treatment of
complaints received by the bank regarding fraud and other matters of internal control.
The Secretary of the Treasury is required to report to Congress by September 1, 2004,
on the actions taken by each MDB to achieve these goals.
Experts say measures for countering corruption at the MDBs must be
implemented on many levels to be effective. These include bank lending and
operations; procurement of goods and services; staff conduct; independent internal
reporting mechanisms to address allegations of misconduct; oversight and
management of bank operations; and educating staff on policies and procedures.
The establishment of effective internal controls is presumptively a deterrent,
reducing the number of corruption cases that the system handles. Internal controls
that aim to ensure the efficiency of the organization as a whole — such as internal
audit procedures to ascertain that organizational policies and procedures are being
followed — complement explicit anti-corruption procedures. A high level of
transparency and accountability in all operations helps to combat corruption, in
addition to specific anti-corruption measures taken.

2 Sea Island G-8 Summit 2004, Summit Documents, available online at
[], accessed July 6, 2004.
3 Section 581 of the Consolidated Appropriations Act of 2004 (P.L.108-199), adding
a new Section 1504 to the International Financial Institutions Act (P.L. 95-118).

Table 1. IFI Anti-Corruption Features at a Glance
Independent Oversight Mandat oryStaf f Corrupt i o n
Corrupt i o n Committee Financial Re por t i n g
Uni t Di sclosure Hotline
World Bankyesyesyesyes
IF ADa nod ye s proposed no
Af rican proposed proposed ye s proposed
As i a n ye s ye s ye s n o
EB RDb ye s n o ye s ye s
IDB c ye s ye s n o ye s
Source: Compiled from IFI websites and correspondence with IFI staff.
a. IFAD: International Fund for Agricultural Development
b. EBRD: European Bank for Reconstruction and Development
c. IDB: Inter-American Development Bank
d. IFAD does not have a unit dedicated to anti-corruption activities; however, the Office of Internal
Audit (OA) is independent and has anti-corruption responsibilities in addition to other audit and
investigation responsibilities.
Sanctions are an important aspect of internal control, but they are only as
effective as the mechanisms for detecting and investigating corrupt behavior. Each
of the IFIs consider similar sanctions for misbehavior, such as demotions and
dismissals of staff members, blacklisting firms, and the cancellation of loans for
Despite the efforts by the MDBs to implement internal controls and prevent
corruption, it is impossible to completely eliminate the possibility that MDB
resources will be used toward corrupt ends. It is possible for MDBs to ensure that
the actual loans are used legitimately, but in a corrupt country they may be used to
free up resources for less legitimate purposes. Furthermore, there is a distinction
between the operations of the MDB management and the decisions made by the
executive board. The executive board is composed of representatives of member
countries with political interests, and it is these board members who make the
decisions about whether to make a loan or grant, the conditionality for that assistance,
and whether borrowers have sufficiently met the conditionality requirements. Anti-
corruption efforts are focused on the activities of management, not the decisions of
the executive board. In the most airtight organization, it may still be possible for
corruption to occur. However, the consistent implementation of internal controls can

send a clear message that corruption is not tolerated within the organization, and this
could have a positive impact on the organization’s experience with corruption.
The World Bank took the lead among the international financial institutions
(IFIs) in implementing its anti-corruption system in 1997. The regional MDBs have
moved since to set up basically similar systems, with organizational variations. The
MDBs have made substantial changes in their internal controls over the last five
years, which are aimed at bolstering their effectiveness. However, there are still
concerns about inadequate effectiveness and insufficient independence of these
The MDBs communicate with each other on issues of transparency and
accountability through the Evaluation Cooperation Group (ECG), an organization of
evaluation departments of MDBs. All of the institutions listed below are members
of the ECG, with the exception of the International Fund for Agricultural
Development (IFAD). The European Investment Bank (EIB), a component of the
European Union (EU), is also a member of the ECG. The United States is not a
member of the EIB.
Anti-Corruption Measures in the MDBs
The World Bank
The World Bank’s Internal Audit Department (IAD) began working in anti-
corruption issues in 1997. A special unit, the Department of Institutional Integrity
(INT) was created in 1998, hiring specialists from outside the bank as well as
employees from within IAD.4 In May 1998 the bank established the Oversight
Committee on Fraud and Corruption (OCFC) to oversee the bank’s anti-corruption
system. The OCFC is composed of high level bank officials from administrative
offices at the World Bank. In addition, the bank established a Sanctions Committee
to review findings of investigations related to fraud and corruption by contractors.
Further, the bank established a 24-hour free telephone hotline and a post office box
hotline to receive allegations of fraud and corruption, available for use by bank staff
and the public. The hotline is managed by an outside firm and observes strict
confidentiality. Users of the hotline may remain anonymous.
Reports of fraud or corruption from the hotline are sent to the OCFC. After an
initial review, the OCFC determines whether the allegations warrant an investigation,
and whether the investigation will be carried out by the Investigations Unit of IAD,
the Office of Professional Ethics, or by external, specialized investigative resources.
At the completion of the investigation, the OCFC reviews the case and refers the case
either to senior management or the Sanctions Committee for further action, or to the
appropriate authorities for criminal prosecution or civil action.

4 For a description of the INT’s procedures and a discussion of one instance where it
investigated allegations of corruption, see CRS Report RS21501, World Bank: Bujagali
Hydropower Project, by Jonathan E. Sanford.

The World Bank’s efforts to fight corruption also encompass the procurement
process. The bank disburses billions of dollars annually to finance purchases
necessary for the implementation of projects. The bank has standards and guidelines
aimed at ensuring that procurement funds are spent on their intended uses, and that
no staff members or contractors abuse the procurement process. One difficulty is that
the borrower, not the bank, has control over the procurement process. However, the
bank has taken steps to monitor compliance. Over the last two years, the bank has
hired independent firms to audit more than 50 bank-funded projects. They found
instances of misprocurement in 40 contracts out of about 45,000 that were included
in the audit.5 The Sanctions Committee may blacklist contractors and consultants
who are found to be involved in corrupt activities, either for a stated period of time
or indefinitely. The bank maintains a list of such firms ineligible for bank contracts
on its public website. The audits are also used to develop plans with the borrower
to build capacity to avoid future fraud and corruption.
Separate from specific anti-corruption efforts, the World Bank Group has an
Operations Evaluations Department (OED). An independent evaluation unit which
reports directly to the executive directors, the OED rates the performance and
development impact of bank lending operations. It also evaluates the effectiveness
of the bank’s general policies and procedures. Its mandate is not directly related to
anti-corruption, but it adds to accountability at the bank, and thus complements anti-
corruption efforts.
The bank also as an independent Inspection Panel, which also reports directly
to the executive board. Composed of three outside experts, plus a small secretariat,
the panel receives complaints from the public and assesses whether the bank has
complied with its own rules and procedural guidelines in the design and
implementation of bank-funded projects or programs. Again, this is not a specific
control against financial corruption but it is a measure to insure that the bank’s
operational rules or policies are not inappropriately breached.
The International Monetary Fund
The IMF is different from the MDBs in that it does not fund projects. Rather,
it provides balance of payments finance that typically involves boosting the reserves
of the central bank. As money in the central bank can be fungible, it is difficult to
track specific uses of IMF resources. Nonetheless, the IMF has instituted a
‘safeguards’ framework that aims to verify that the central bank has the proper
control and auditing systems in place to manage its resources, including fund
disbursements. A key element is a requirement that countries publish annual central
bank financial statements that are independently audited in accordance with
internationally-accepted standards.
The centerpiece of the IMF’s internal controls is its Code of Conduct for Staff,
which is supported by financial disclosure requirements for senior staff (to prevent
financial conflicts of interest) and an ethics officer. The ethics officer position was

5 These are not necessarily instances of corruption, but they are cases of noncompliance with
the bank’s procurement rules.

established in February 2000 to investigate alleged violations of the Code of
Conduct, and of other IMF rules and regulations. The ethics officer is appointed by
the managing director, and is intended to be an impartial person having no former
employment with the IMF. However, there is no prohibition on future employment
with the fund, and the ethics officer’s term may be extended by the managing
director. The ethics officer conducts investigations at the direction of the managing
director or the director of Human Resources (HRD), or he/she initiates investigations
with the approval of the Oversight Committee (OC). The OC is composed of three
senior IMF officials, with the director of HRD as chair. The OC also rules in the
event of a staff appeal, and determines if an investigation should be begun as well as
whether one should be continued.
The Independent Evaluation Office (IEO) was established in July 2001 to
support the board in institutional governance and oversight responsibilities. It reports
directly to the executive board and its purpose is to evaluate IMF advice, operations,
and policies. The IEO staff is hired from both outside and from within the IMF.
The IMF has made efforts in recent years to make its policies and operations
more transparent and open to public scrutiny. The fund publishes all Article IV staff
reports for the public as a matter of policy, unless an individual country does not
consent to having its report published. Countries have a right under the Articles of
Agreement to block any IFI disclosures about their internal economic conditions.
Countries that block such disclosure can be readily identified, however, and potential
investors or lenders may note that there may be information about its internal
economic situation which the country does not wish to release to the public. The
IMF also releases fund policy papers, the minutes of executive board meetings,
details of loan programs, and annual evaluations.
International Fund for Agricultural Development
The International Fund for Agricultural Development (IFAD) is a specialized
agency of the United Nations (U.N.). It seeks to prevent corruption by pre-screening
potential recipients of grant financing, and through structured financial reporting and
audit requirements for loan and grant recipients. Grant recipients must follow
procurement guidelines acceptable to IFAD to ensure transparency. The procurement
guidelines have recently been amended to specifically address fraud and corruption,
and they were presented to the executive board in April 2004 for approval after they
are reviewed by the Audit Committee. IFAD is different than the other IFIs in that
it is a specialized agency of the U.N., and it conducts investigations in a manner
consistent with the rules of the United Nations.
IFAD set up its Oversight Committee (OC) in May 2000 to coordinate
investigations into irregular practices, either within IFAD or in connection with
operations and contracts financed by IFAD. The OC is similar to investigations units
in the MDBs, but it operates on a higher level as it is composed of the vice president,
the general counsel, and the chief of Internal Audit. It decides whether an
investigation is warranted, determines who should be involved in the investigation,
and reports the facts emerging from the investigation to the president. If external
agencies, such as national authorities, are involved in an investigation, the OC
determines IFAD’s role in that investigation. External agencies report the findings

of their investigations to the OC, which then reports to the president. The president
makes decisions about sanctions independent of the OC.
The Office of Internal Audit (OA) reviews operations of IFAD for efficiency
and integrity, and participates in investigations of fraud and corruption. It is an
independent unit with only review responsibilities and no involvement in sanctions.
The head of OA reports to the president.
African Development Bank
As part of the bank’s “zero tolerance policy,” staff members of the African
Development Bank (AFDB) are required to submit financial disclosures, and they are
required to comply with the Staff Code of Conduct. In the recent past, allegations
were investigated by the Internal Audit Department (IAD) or by an ad-hoc team,
including the general counsel. The bank’s Procurement Review Committee (PRC)
receives the findings and conclusions of investigations and decides on a plan of
action; including sanctions, both against the borrower (cancellation of loans) or the
contractor/consultants who have been declared ineligible to participate in bank
funded operations for a minimum period of five years.
The AFDB has established guidelines and procedures for preventing and
combating fraud and corruption in Bank Group operations. Efforts are also underway
to establish a specific unit within the existing Internal Audit Department (IAD) to
conduct internal investigations and to provide protection for whistle blowers, in the
form of a hotline for complaints of misconduct. It is also considering a proposal for
the establishment of a senior management oversight committee to combat fraud and
corruption, much like the oversight committees at some of the other MDBs.
Additionally, the management of the bank has submitted final proposals to the
AFDB for the establishment of an independent Compliance Review and Mediation
Unit (CRMU). The CRMU would focus on issues of noncompliance by the Bank
Group with regard to operational policies and procedures in the design,
implementation or supervision of a Bank-financed project. Under this plan, third
parties would be able to submit complaints of harm from bank activities to the
CRMU. The CRMU would not be directly involved in fraud or corruption
investigations, but would complement the anti-corruption activities of the bank by
adding to accountability.
There are units within the bank that work in similar ways to the proposed
CRMU. The IAD investigates compliance with bank rules, but it does not have the
capacity to respond to complaints from third parties. Meanwhile, the Operations
Policy and Review Department (OPRD) reviews all bank projects and programs for
compliance with AFDB operating policies and procedures as they enter the financing
The 2002 Presidential Directive on the Bank Operation Evaluation Department
(OPEV) allows the department to carry out its functions independently. OPEV was
established to provide a comprehensive and objective assessment of the development
effectiveness of the Bank Group’s strategies, policies, operations, processes and
procedures. It undertakes, independently of the bank’s operational units, performance

evaluation of completed and selected ongoing projects and examines their
development impact. It reports directly to the board of directors, which supervises
the department’s work through its Committee on Operations and Development
Effectiveness (CODE). The reporting relationship of OPEV and its director is
reportedly materially similar to that of the World Bank’s Evaluation Department.
Asian Development Bank
At the Asian Development Bank (ADB), an Anti-corruption Unit (OAGA)
within the Office of the Auditor General (OAG) is responsible for implementing the
ADB’s anti-corruption policies, with oversight from the Oversight Committee on
Corruption. In addition to investigating allegations of corruption, the OAGA
provides training to ADB staff and member countries in anti-corruption procurement
and investigative techniques. It provided extensive training to staff members on the
revisions to the Code of Conduct involving corruption.
OAGA receives reports of corruption and screens them to determine whether
they warrant further investigation. Its decisions are reviewed by the Oversight
Committee on Anti-corruption, which is comprised of three voting members and
three alternates who are nominated by the auditor general and approved by the
president. OAGA coordinates investigations, which it may conduct by itself or with
the help of external auditors, investigators, or other experts selected by OAGA or
designated by the Oversight Committee. At the conclusion of an investigation
OAGA submits its findings to the Oversight Committee, which then determines
whether the alleged violation took place, whether there is need for further inquiry,
and ultimately, what sanction or remedial action ADB should impose. Appeals of
Oversight Committee decisions are brought to the Review Committee, which is
composed of ADB vice presidents.
ADB may declare a firm or individual ineligible to participate in ADB-financed
projects and activities for a specified time period or indefinitely. Firms declared
ineligible are notified, and are listed on the ADB website only if ADB is unable to
contact them, or if they attempt to participate in an ADB activity during their period
of ineligibility. If ADB consistently encounters problems with a particular executing
agency or sector, it has the flexibility to change its programming mix to avoid
working in that area. Likewise ADB can focus its lending and technical assistance
on strengthening government institutions to facilitate greater transparency and
The Asian Bank has an Operations Evaluation Department whose head reports
to the ADB executive board through the bank president. The ADB has established
a new inspection mechanism to reinforce accountability and address in a fair and
objective way the concerns of persons affected by ADB-assisted projects. A special
project facilitator will focus on informal problem-solving and an independent three-
member Compliance Review Panel will investigate alleged violations of the ADB’s
operational policies and procedures.

European Bank for Reconstruction and Development
At the European Bank for Reconstruction and Development (EBRD), the chief
compliance officer (CCO) is responsible for ensuring professional integrity. The
CCO identifies relevant standards and best practices in this area and promotes them
in the bank, enhances staff awareness of the bank’s commitment to such standards,
conducts investigations of allegations in accordance with the Procedures for
Reporting and Investigating Suspected Misconduct (PRISM), and monitors the
banks’ hotline and follows up as appropriate. Complaints related to fraud or
corruption are directed by the CCO to the appropriate office within the bank. The
CCO is independent of bank project operations.
The hotline is reportedly available to report allegations of fraud or corruption
from all countries, on the part of bank officials, employees, consultants, or bank-
financed projects.
The bank’s Procurement Policy states that all entities involved in bank projects
must adhere to high ethical standards, and it defines corruption. The bank may reject
a proposal, cancel financing, or blacklist a firm for reasons of corruption in bank-
related activities. The bank will maintain a list of blacklisted firms on its website,
although currently no firms are blacklisted from participating in bank-financed
To prevent corruption through increased accountability and transparency, the
EBRD has a Public Information Policy governing disclosure to the public, an
Environmental Policy, and an Independent Recourse Mechanism (IRM) to receive
complaints from groups adversely affected by bank-financed projects. The IRM was
approved by the board in April 2003, and was implemented shortly thereafter.
Complaints to the IRM must not be related to fraud or corruption; those are directed
to the hotline and the CCO.
The EBRD has a Project Evaluation Department (PED) that reports to the
president via the secretary general’s office and is independent of banking operations.
The PED evaluates both projects and technical assistance programs for compliance
with the bank’s mandate, by comparing actual with expected outcomes. It makes
note of the lessons learned and disseminates them within the bank. The PED also
conducts sector studies and has a pilot program to evaluate country strategies. This
form of project review may add to accountability and transparency at the bank.
The broader or operational review functions are performed by the board of
directors, or one of the three board committees. One such committee is the board’s
Audit Committee, which has the responsibility to ensure that PED and other related
functions (such as compliance and internal audit) are able to perform their duties
independently. The Audit Committee also aims to ensure that these functions are
performing a needed role within the bank, have adequate resources and institutional
capacity to perform their roles, and their performance meets expectations. The Audit
Committee recently recommended adopting an internal controls framework that aims
to assure compliance with bank policies, and the board accepted this

The Inter-American Development Bank
In June 2001, the Inter-American Development Bank (IDB) created an
Oversight Committee on Fraud and Corruption (OCFC). The OCFC does not
actually conduct investigations, but it oversees investigations of fraud and corruption
that are conducted by the Office of Institutional Integrity (OII). The OCFC may
impose appropriate remedies, oversee their implementation, and determine when
matters should be referred to national authorities. The OCFC is composed of
members of senior management of the bank and reports directly to the president.
The OII was created in October 2003, and it is an independent office that reports
directly to the bank president. It is responsible for receiving allegations of fraud and
corruption and it submits reports of completed investigations to the OCFC for a final
decision. Issues not involving fraud or corruption are referred to the proper authority
within the bank. OII also aims to prevent corruption by promoting and disseminating
the bank’s policies on fraud and corruption to bank staff and by leveraging the results
of investigations in order to improve preventative measures. The OII also reportedly
serves as the secretariat to the OCFC, the Ethics Committee, and the Conduct Review
Statistics on fraud and corruption cases at the IDB are available on its website.
From its inception in April 2002 to April 2004, OCFC (and later OII) have received
183 allegations, averaging about 7 per month. The OCFC/OII have opened 92
investigations during the past two years, including investigations that have been
concluded and those still in progress. Allegations can be reported to the OII through
a toll-free hotline number, secure email, fax, surface mail, in person, or via the
bank’s website. The IDB has also recently adopted a rule providing protection for
whistleblowers, strictly prohibiting retaliation against bank staff for reporting an
allegation of fraud or corruption, or a violation of a law, rule or regulation of the
The OCFC classifies allegations in accordance with the Operating Guidelines
and regulations for the Oversight Committee. Allegations relating to fraud and
corruption that appear to be credible are sent to the Auditor General’s Office (AGO),
which determines whether an investigation should be initiated. The AGO conducts
the investigation if required, with OCFC oversight. The AGO submits the report of
the completed investigation to the OCFC for a decision. Issues not involving fraud
or corruption are referred to the proper authority within the bank.
There are other mechanisms at the IDB that aim to enhance accountability and
efficiency. The bank’s Ethics Committee reviews allegations of unethical behavior
on the part of bank staff as described in the Code of Ethics. In 2003 the bank’s board
of executive directors adopted its own Code of Ethics, which will regulate board
members’ own behavior, as distinct from the Code of Ethics for bank management.
The bank requires external audits of financial statements for project executing
entities and the projects themselves throughout the execution period of the project,
until all funds have been disbursed. The bank’s Procurement Committee oversees
the bank’s procurement policies. It resolves major procurement-related issues during
project implementation, including awards to bidders not evaluated as the lowest, and
all protests by bidders submitted during the procurement process. The Independent

Investigation Mechanism (IIM) investigates formal complaints from groups alleging
that they have been negatively affected by a bank-financed project due to the bank
not having complied with its own operational policies.
The IDB’s independent evaluation office is the Office of Evaluation and
Oversight (OVE), which evaluates project performance and the effectiveness of IDB
policy and programs. The OVE reports to the executive board, and it has an
independent budget approved by the board. Its findings are publicized through the
new information disclosure policy.
Table 2. Comparison of the IFIs’ Anti-Corruption Mechanisms
Repo rting ,
Investigating, andProject ReviewTransparencyRules and
Punishingand EvaluationGuidelines
Co rrupt io n
World Bank1. Reporting: 24-1. OperationsBlacklistedDetailed in
hour hotline run byEvaluationsfirms are listedEthical
an independent firm. Department rateson the banksGuide for
2. Investigation: byperformance ofwebsite.Bank Staff,
Investigations Unitbank operations,Procurement
of Internal Auditresponds directlyGuidelines,
Department, withto executiveand
O ve r si ght board. Consultant
Committee (OC)2. IndependentGuidelines.
oversight.auditors have
3. Sanctions: bybeen hired to
senior management,audit bank
with review by OC.projects.
International1. Reporting:Independent1. Publishes allCode of
Monetarydirectly toEvaluationArticle IV staffConduct.

Fundmanagement.Office reportsreports unless
2. Investigation: bydirectly todirected
ethics officer, inexecutive boardotherwise by
coordination withand evaluatescountry.
Office of Internalfund advice,2. Releases
Audit, Securityoperations,fund policy
Office, withpolicies.papers and
oversight byminutes of
Oversightexecutive board
Co mmittee. me e t i ngs.
3. Sanctions: by
senior management.

Repo rting ,
Investigating, andProject ReviewTransparencyRules and
Punishingand EvaluationGuidelines
Co rrupt io n
International1. Reporting: to1. Office of1. Disclosure ofProcurement
Fund forOversightInternal AuditEvaluationGuidelines.
AgriculturalCommittee (OC).reports to theCommitteeA thorough
Development2. Investigation: bypresident. Officedocuments, andCode of
OC and Office ofof EvaluationotherConduct has
Internal Audit.reports directlydocuments onbeen drafted
3. Sanctions: byto executivethe website.and is
president, withboard on2. Annualcurrently
Borrower andoperations andReport ofbeing
Cooperatingpolicies. 2.Oversightconsidered
Institution.IndependentCommittee willfor issuance.
Externalbe provided to
Evalua tio n Au d i t
evaluates IFADCommittee of
overall. Executive
AfricanIn the process of1. Proposed1. Studies ofRule of
Developmentestablishing newComplianceprojects areProcedure
Bankmechanisms,Review andpublished onfor
including a hotline,Mediation Unit,the website.Procurement
corruption unit,to investigate2. List ofof Goods and
oversight committee.noncomplianceblacklisted andwork; Rules
with banksanctionedof Procedure
policies, andfirms is sharedfor the Use of
complaints ofwith executiveConsultants;
harm from thirdboard. RequestGuidelines
parties.for such list byon
2. Internal Auditgeneral publicPreventing &
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