Ethics Integrity in Procurement Asha Ayoung Lead Procurement

Ethics & Integrity in Procurement Asha Ayoung Lead Procurement Specialist, OPCPR

Overview (Part I) Bank 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 (1 st 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) Country 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 Bank 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 Bank 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 Bank 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

Risk Based Approach • 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 Assessment, Tracking and Examination System (RATES) • Risk-based capacity assessment tool based on Country, Project characteristics – Identify & track risk profile of Bankfinanced operations – Identify project rocurement risk – Separate F&C Risk – Risk mitigation actions – Monitors progress towards strengthening borrower capacity

Post Reviews and 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 Integrity Vice Presidency (INTVP) Evaluation and Suspension Officer 1 st Tier Sanctions Board 2 nd Tier Investigation • Evaluates evidence • May temporarily suspend companies • Recommends a sanction (becomes effective if respondent does not contest) • Four (4) EOs • Comprised of Bank staff (3) and external members (4) • Decides a case only if respondent contests • Evaluates evidence and decides whether to impose a sanction (not bound by EO recommendation) • May hold a hearing

Institutional 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 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 Public 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 Public 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 Public 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 Public 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

Challenges 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