Combating Fraud and Corruption

Select a Region Sub navigation page selecting option, jump to that section

Corruption is among the greatest obstacles to economic and social development. The harmful effects of corruption are especially severe on the poor, who are hardest hit by economic decline, most reliant on the provision of public services, and least capable of paying the extra costs associated with bribery, fraud, and the misappropriation of economic privileges. 

Corruption also represents a significant additional cost of doing business in many developing countries. It undermines development by distorting the rule of law and weakening the institutional foundation upon which economic growth depends.

Corruption damages policies and programs that aim to reduce poverty, so attacking corruption is critical to the achievement of IFC's overarching mission of poverty reduction. Countering corruption is therefore aligned with IFC’s overarching mission to promote sustainable private sector investment in developing countries, to help reduce poverty and improve people's lives.

IFC has always expected its staff and clients to maintain the highest standards of ethical behavior and compliance with the law and is at the forefront of the market and of development institutions in guarding against fraud and corruption in its work. This approach complements and supports IFC's determination to act as a leader on sustainability. Avoiding fraud and corruption is necessary to ensure that IFC's investments are successful, that its resources are being used effectively, and that its development objectives are met.

Sanctions Process

IFC’s Sanctions Process sets clear standards and procedures if there are allegations against clients or partners. These standards have gained broader acceptance. Multilateral Development Banks (MDBs) have stepped up their fight against corruption with the signing on April 9, 2010, of a joint Sanction Accord with Cross Debarment as a new enforcement tool, greatly increasing potential penalties for firms engaging in fraud and corruption, and adding a strong deterrent.

The World Bank Group is committed to improving governance and fighting corruption in member countries through the Governance Anti-Corruption framework, which has three main pillars:

  • Helping countries build capable, transparent, and accountable institutions
  • Expanding partnerships with multilateral and bilateral development institutions, civil society, the private sector, and other actors in joint initiatives to address corruption
  • Minimizing corruption in World Bank-funded projects by assessing corruption risk in projects upstream, actively investigating allegations of fraud and corruption, and strengthening project oversight and supervision

Learn more about Sanctionable Practices

Frequently Asked Questions

What does Cross Debarment mean?

Under a new agreement entities debarred by one Multilateral Development Bank (MDB) may be sanctioned for the same misconduct by other signatory MDBs.

Which other MDBs have currently signed the cross-debarment agreement?

The new agreement includes the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group, and the World Bank Group.

What impact does this have on the World Bank Group sanctions process?

The agreement does not affect our sanctions process as such. However, it allows each signing bank to respect and enforce decisions of the other signatory MDBs, which will ensure greater consistency among the MDBs and avoid the anomalous situation of an entity debarred by one MDB, to freely participate in projects financed by another MDB.

When does cross debarment become effective for IFC engagements?

Cross-debarment is now in effect for IFC engagements among World Bank Group, European Bank for Reconstruction and Development (EBRD), and Asia Development Bank (ADB). Cross-debarment effectiveness is also anticipated for Inter American Development Bank (IADB) and African Development Bank (AfDB). It will apply to all existing investment and advisory engagements that are subject to the WBG sanctions process and to all new engagements.

Is this going to change the list of sanctionable practices?

The agreement does not change the definition or types of sanctionable practices. These are common to all MDBs (with the exception of obstructive practices, which is included in the Bank Group definitions but is not part of the sanctionable practices covered by the cross-debarment agreement).

 


How to Report Fraud and Corruption

Allegations of fraud or corruption in IFC projects may be reported via the Online Integrity Complaint Form.

This form can also be found on the World Bank's Integrity Vice Presidency website.