Biennial Meeting

1. '08 Biennial Meeting World Bank December 10-11, 2008 Ethics & Integrity in ProcurementAsha AyoungLead Procurement Specialist, OPCPR

2. Biennial Meeting '08 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 (1st Set of Debarred firms from WB in 1999 – 343 Firms and Individuals Debarred) • Establishment of INT in 2001 • Collaboration of Procurement with INTVP

3. Biennial Meeting '08 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

4. Biennial Meeting '08 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

5. Biennial Meeting '08 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

6. Biennial Meeting '08 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

7. Biennial Meeting '08 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

8. Biennial Meeting '08 Risk Assessment, Tracking and 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

9. Biennial Meeting '08 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

10. Two-Tier Sanctions Process IntegrityVice Presidency(INTVP) Investigation • Evaluates evidence • May temporarily suspend companies • Recommends a sanction (becomes effective if respondent does not contest) • Four (4) EOs Evaluation and Suspension Officer 1st Tier • 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 Sanctions Board 2nd Tier

11. Biennial Meeting '08 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

12. Biennial Meeting '08 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

13. Biennial Meeting '08 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

14. Biennial Meeting '08 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

15. Biennial Meeting '08 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

16. Biennial Meeting '08 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

17. Biennial Meeting '08 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