IsDB Group Integrity Enhancements to meet Standards of Cross-Debarment Agreement
While providing IDB Group-financed proceeds for development projects and programs in its member countries as well as Muslim communities in non-member countries, it is the declared objective of the IDB Group to ensure that IDB Group funds are used for their intended purposes. In this context, on September 17, 2006, a task force of International Financial Institutions (IFIs) had adopted a “Uniform Framework for Preventing and Combating Fraud and Corruption” (the Uniform Framework) which devises a harmonized strategy to address fraud and corruption in the Financial Institutions’ operations. The proposed strategy includes updated definitions of fraud and corruption, detailed principles and guidelines for investigations, protection of whistleblowers, and the coordination and exchange of information between the IFIs.
On April 9, 2010, the IFIs entered into an agreement for mutual enforcement of debarment decisions (Cross-Debarment Agreement) according to which each participating institution will enforce debarment decisions made by other participating institutions. This agreement details minimum standards for participation such as, adopting harmonized definitions of sanctionable practices, adhering to IFIs principles and guidelines for investigations as they appear in the Uniform Framework and applying due processes to determine whether a sanctionable practice has occurred and the appropriate enforcement action to address it has been taken. With this in mind, on August 8, 2010, the IDB Group declared its intention to adopt the Uniform Framework to join the Cross-Debarment Agreement, with the aim to benefit from relevant best practices of other international developmental institutions and harmonize to the extent possible, the IDB Group policies and procedures with such best practices.
To strengthen its integrity framework and to enable the IDB Group to be on par with or to exceed the standards of other IFIs, the IDB Group adopted its Integrity Policy on December 8, 2010. The Integrity Policy stresses that, “the concepts of integrity and combating corruption and fraud are well established by Islamic Shariah where the founding instruments of the IDB Group take their spirit.” Furthermore, the IDB Group has (i) created and structured a Group Integrity Office (GIO), (ii) prepared IDB Group principles and guidelines and GIO Procedures, and (iii) adopted a Whistleblower and Witness Protection Policy.
In order to complete the IDB Group efforts to meet the cross-debarment standards and join the agreement, the IDB Group adopted the Anti-Corruption Guidelines on February 18, 2012, which contain harmonized definitions of sanctionable practices in line with the best practices in place in other IFIs. The IDB Group Anti- Corruption Guidelines set out general principles, requirements and sanctions applicable to persons and entities which receive, are responsible for the deposit or transfer of, or take or influence decisions regarding the use of IDB Group financing proceeds. These guidelines have become part of the legal framework for all IDB Group-financed activities and have been incorporated by reference into the legal agreements for each financed activity.
Another step to join the Cross- Debarment Agreement was to update the current IDB Guidelines for Procurement of Goods and Works and the Guidelines for the Use of Consultants under Islamic Development Bank financing. These Procurement Guidelines require that all Beneficiaries, consulting firms as well as bidders, suppliers and contractors observe the highest standards of ethics during the procurement and execution of related contracts. In application of these provisions, the IDB Group will take remedial actions (declaration of ineligibility – or debarment- , and or misprocurement) against participants in IDB-Group financed activities who have engaged in a “corrupt and or fraudulent practice. The amendments to the Procurement Guidelines have updated current IDB Group definitions of corrupt and fraudulent practices with the purpose of harmonizing them with those adopted by other IFIs.