Ethics & Integrity in Ethics & Integrity in ProcurementProcurement

Asha AyoungAsha Ayoung

Lead Procurement Specialist, OPCPRLead Procurement Specialist, OPCPR

Overview (Part I)Overview (Part I)Bank Funded ProjectsBank Funded Projects

• WB Procurement Policy – Risk Based Approach – Compliance Reviews (No-Objections, Post

Reviews, Independent Reviews)– Misprocurement

• Anti-Corruption Guidelines• GAC Strategy & Implementation Plan • Revision of Sanctions Regime

• Debarment (1st Set of Debarred firms from WB in 1999 – 343 Firms and Individuals Debarred)

• Establishment of INT in 2001• Collaboration of Procurement with INTVP

Overview (Part II)Overview (Part II)Country LevelCountry Level

• WB works with Member Countries, Private Sector and Civil Society to tackle corruption.

• More specifically in Public Procurement Systems, WB helps strengthen governance address corruption through projects and programs that support reforms by promoting– Competition, – Transparency, – Equity, – Accountability and Controls

Safeguards in Safeguards in Bank Funded ProjectsBank Funded Projects

• Procurement Policy– Updated WB Guidelines

• Definition of eligibility expanded• Fraud and corruption (F&C) defined

– Revisions to Guidance Notes• Revisions to Guidance Notes• Prior review thresholds• Handling of allegations of F&C• New Templates

Safeguards in Safeguards in Bank Funded ProjectsBank Funded Projects

• Risk Based Aproaches – Assessments based on risks identied at

project desing and monitored throughout the life of the project

• Procurement Capacity Development – Training/Certfication Programs– Handling of F&C

Safeguards in Safeguards in Bank Funded ProjectsBank Funded Projects

• Anti-Corruption Guidelines– Make explicit the responsibility of the

Borrower to prevent and report corruption to the Bank

• GAC Strategy – Deepen Support to countries to

strengthen governance– Combat corruption in World Bank Projects– Work with development partners in

sharing experiences and addressing global issues

• Use of Risk Identification Worksheet for all Projects (MRIL)

• From July 2008 all projects now subject to risk Review process which includes corruption risks

• Risk based Procurement Assessment – Risk Assessment drives the level at which

any project is reviewed and approved

Risk Based ApproachRisk Based Approach

Risk Assessment, Tracking and Risk Assessment, Tracking and Examination System (RATES)Examination System (RATES)

• Risk-based capacity assessment tool based on Country, Project characteristics– Identify & track risk profile of Bank-

financed operations– Identify project rocurement risk– Separate F&C Risk– Risk mitigation actions – Monitors progress towards

strengthening borrower capacity

Post Reviews Post Reviews and Templatesand Templates

• Revised instructions– Procurement Post Reviews– Independent Procurement Reviews

(IPRs)

• Centralized template for PPR– Harmonized PPR Risk Rating System in

Operations Portal– Single Repository for Collecting PPR– Enable Bank wide Monitoring and

Reporting

Two-Tier Sanctions Process Two-Tier Sanctions Process

Integrity Vice Presidency (INTVP)

Evaluation and Suspension Officer

Sanctions Board

InvestigationInvestigation

• Evaluates evidenceEvaluates evidence• May temporarily suspend May temporarily suspend companies companies • Recommends a sanction Recommends a sanction (becomes effective if respondent (becomes effective if respondent does not contest)does not contest)• Four (4) EOsFour (4) EOs

1st Tier1st Tier

2nd Tier2nd Tier

• Comprised of Bank staff (3) and Comprised of Bank staff (3) and external members (4)external members (4)• Decides a case only if respondent Decides a case only if respondent contestscontests• Evaluates evidence and decides Evaluates evidence and decides whether to impose a sanction (not whether to impose a sanction (not bound by EO recommendation)bound by EO recommendation)• May hold a hearingMay hold a hearing

Institutional IntegrityInstitutional Integrity

• Volcker Report recommended changes to INT’s Operations– Preventive Services Unit

• Dissemination of Lessons learned• Advice to Project Teams• Technical support to client anticorruption

functions

– Participation in key operational committees of the Bank

• Continued investigations and sanctioning of Firms and Individuals– 343 so far

• Voluntary Disclosure Program

Collaboration with INTCollaboration with INT

• Protocol on handling Allegations of F&C– Staff obligations– Regional and INT obligations

• Handling red flags – Developing online Red Flag Toolkit– Guidance Note

Principles to Enhance Integrity in Principles to Enhance Integrity in

Public Procurement SystemsPublic Procurement Systems

• Legislative and Regulatory Framework– The laws, regulations and implementing

rules are: • Clear and consistent• Easily available to potential suppliers and

contractors • Promote competition, transparency equity and

accountability

Principles to Enhance Integrity in Principles to Enhance Integrity in

Public Procurement SystemsPublic Procurement Systems

• Institutional Framework and Management Capacity– Ensure Central Institutions have the

capacity to oversee public procurement, handle complaints, carry out compliance reviews

– Eliminate conflict of interest situations

Principles to Enhance Integrity in Principles to Enhance Integrity in

Public Procurement SystemsPublic Procurement Systems

• Procurement Operations and Market Capacity– Promote Professionalism in

implementing agencies so that they are effective and competent.

– A private sector that is well organized and have access to the market

Principles to Enhance Integrity in Principles to Enhance Integrity in Public Procurement SystemsPublic Procurement Systems

• Integrity and Transparency of the System– Strengthen Control and audit systems so

that they are effective– Efficient and independent appeals

mechanisms– Access to information

• Civil Society/Private Sector Involvement– Countries should empower civil society

organizations, media, and the wider public to scrutinize public procurement

ChallengesChallenges

Successful combatting of fraud and corruption will require :

– Bank’s Side: Assessing corruption risks in projects upstream, actively investigating allegations of F&C, Strengthening project

oversight and supervision – Borrower’s Side: Strengthening Country

Systems by building capable, transparent and accountable insitutions

– Expanding partnerships with Government/Private Sector/Civil Society/ Development partners