Anti Corruption Policy

“Corruption hurts the poor disproportionately – by diverting funds intended for development,

undermining a government’s ability to provide basic services, feeding inequality and injustice, and

discouraging foreign investment and aid.”

Secretary-General of the United NationsStatement to the General Assembly on the UN Convention Against Corruption

31 October 2003

Anti Corruption Policy• Zero-tolerance policy

• Appropriate sanctions will be applied where allegations are substantiated

• Range of sanctions enforced in accordance with the provisions of applicable IFAD rules and regulations and legal instruments

• Applies to IFAD-funded activities whether supervised directly by IFAD or by a cooperating institution

Anti Corruption Policy

• IFAD will continue to improve its internal controls, including controls inherent in or pertaining to its project activities, so as to ensure that it is effective in preventing, detecting and investigating fraudulent, corrupt, collusive and coercive practices.

• IFAD shall take all possible actions to protect individuals from

reprisals who help reveal corrupt practices and individuals or entities subject to unfair or malicious allegations.

• This policy is in line with the policies adopted by the other IFIs

Anti Corruption Policy

• Corrupt practice

• Fraudulent practice

• Collusive practices

• Coercive practice

Anti Corruption Policy• Corrupt practice = offering, giving, receiving, soliciting (directly or

indirectly) anything of value to influence action of public official during procurement process

• Fraudulent practice = misrepresentation or omission of fact (prior to or after submission of proposal) to influence the process

• Collusive practices = scheme or arrangement between two or more bidders to establish bid prices at a non-competitive level

• Coercive practice = harming persons – or their property – to influence their participation in the process

Anti Corruption Policy

• Red Flags of fraud / corruption

– Persistent high prices– Poor quality works– Unnecessary agents (“middlemen, ”local partners”)

– Inadequate/incomplete documentation

– Lack of or inadequate inspections

– Project official ‘micro managing’

Anti Corruption PolicyIn case of fraud and corruption, IFAD will:

a. Reject award recommendations

b. Cancel relevant portion of loan if borrower fails to take action

c. Sanction firms or individuals involved and declare ineligible for stated or indefinite period of time

• IFAD has the right to require a provision in the bidding documents / RFP enabling IFAD’s inspection and audit of accounts related to contract

Anti Corruption Policy

How to combat the problem:AcknowledgePrevent: Training; contractor compliance; voluntary

disclosure programsTransparency: Project financial details, checks & balancesEncourage and facilitate reports of concernsEnforce sanctions: withhold payments; refer violators for

prosecution

Anti Corruption Policy

IF YOU HAVE ANY INFORMATION ON CORRUPTION PRACTICES IN IFAD-FINANCED

PROJECT,

PLEASE CONTACT:

Confidential online complaint form: www.ifad.org/governance/anticorruption