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Wednesday
Mar222017

Hamid Sharif: Asian Infrastructure Investment Bank takes strong stance against corruption

There are commonalities across the sanction regimes of multilateral development banks (MDB). All have clearly articulated prohibited practices, investigation and sanction procedures, often including an array of possible sanctions and appeals process.

The ultimate sanction is that a firm may be debarred from doing business with these banks.

It is important for these organizations make investments but even more important to do so in accordance with the value systems they espouse -- literally putting their money where their mouths are.

I am personally very pleased that the Asian Infrastructure Investment Bank (AIIB) has recently taken a critical step against corruption by publicly listing those firms or individuals it will not do business with because their practices are not aligned with our values of integrity and transparency.

AIIB recognizes the considerable work done by other multilateral development banks on the fight against corruption and has unilaterally adopted the list of sanctioned firms and individuals put out by the five banks that are parties to the Agreement for the Mutual Enforcement of Debarment Decisions (AMEDD).

These banks are the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the World Bank Group. AIIB is actively engaging with these banks to further cooperation between multilateral development banks.

In due course AIIB plans to be a signatory to AMEDD.

As one of the newest multilateral financial institutions, AIIB has signaled that it will be tough on corruption from the start. AIIB’s management and Board of Directors are committed to embedding a culture of integrity in the bank. For example, one of the first policies adopted by AIIB was the Policy on Prohibited Practices. Within the year this policy was further revised to increase its effectiveness including adding provisions for whistle blower protection.

As an integral part of AIIB’s Lean, Clean and Green organizational principles, AIIB insists on zero tolerance for corruption and has put in place similarly strong policies on governance, accountability, procurement, and environmental and social frameworks.

Organizationally, I report directly to the Board of Directors, which underlines the independence of CEIU and creates an open channel that will improve the bank’s ability to react and deal with any suspicions of corruption or unethical behavior in our operations.

From the outset, we are spelling out the kind of standards and governance we uphold and, by extension, the business partners we choose to work with. As the stewards of taxpayers’ money from all our members, we take this responsibility very seriously. We have taken some important first steps, but we cannot become complacent. 

I look forward to working with all our partners as we seek to continuously strengthen and improve our anti-corruption practices.

________

Hamid Sharif, pictured above, was appointed in 2016 to be the first Director General of the Asian Infrastructure Investment Bank’s Compliance, Effectiveness & Integrity Unit. He's based at the AIIB's headquarters in Beijing and reports to the Bank's Board of Directors. He's a UK-qualified barrister and holds a Masters in Law from the University of Cambridge.

Reader Comments (1)

The article indicates resolve and actions taken by Asian Infrastructure Investment Bank (AIIB) against corruption. Infrastructure investment is one of the highly prune areas for corruption. Most of the multilateral development banks (MDB) have adopted stiff policies against corruption and the results are slowly showing up in the form of increased open market competition and responsible use of taxpayers’ money. However, in most such banks and governing institutions the buck stops after successful scrutiny of main contractor and award of contract. Most MDB’s lack in (and not staffed appropriately) effective follow-up of unethical field practices adopted by the main contractor as well as, by a hierarchy of sub-contractors / vendors. More often the main contractors purposely employ sub-contractors to hide their unethical and thus unacceptable practices. This gap is often ignored and becomes main source of unethical practices in contract execution.
Further, at present times when most spheres of our daily lives are driven by data (or big data), it is prudent to make use of accumulated data with many MDBs. A well coordinated effort and sharing of data will help in development of benchmarks those can be applied to determine fair price of contracts and as such provide a good deterrent against corruption.

Jafar Hyder
March 28, 2017 | Unregistered CommenterJafar Hyder
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