In its selection of partners, and in its due diligence process for a particular investment, IFC has always paid particular attention to the issue of fraud and corruption. This may involve:
- checks against public databases
- an assessment of the client’s safeguards for dealing with fraud and corruption
- a review of the fairness and balance of underlying contractual arrangements.
If there are allegations of questionable practices or a lack of transparency, IFC’s review may involve more in-depth investigations. IFC’s stance against fraud and corruption is also incorporated into the legal documentation governing its investments, and acts of fraud or corruption by a client may give IFC the right to accelerate its investment, cancel disbursements or terminate a facility.
Additionally, allegations of fraud or corruption in technical assistance arrangements, and in IFC investment projects for which IFC has committed financing or issued a guarantee, will be subject to the World Bank Group’s anti-corruption and anti-fraud sanctions and debarment process. This process provides a fair, transparent and rational way to evaluate allegations of fraud and corruption in any IFC project.
- First, INT would conduct an in-depth investigation of any allegations. Then, IFC's Evaluation Officer would have to concur in the results of the INT investigation.
- Next, the person or entity against which allegations have been made would have the right to appear before an independent World Bank Group sanctions board to present evidence and respond formally to any allegations.
The majority of the sanctions board members will be senior figures not affiliated with the World Bank Group. A final decision would be made by the sanctions board. Such decision may not be overruled by IFC.
If, at the conclusion of this due process procedure, a person or entity is found to have engaged in corrupt, fraudulent, coercive, collusive or obstructive practices in connection with an IFC project, that person or entity may be sanctioned.
Sanctions will include:
- publication of the person’s name on a Web site
- debarment (ineligibility to participate in World Bank Group financing for a stated period or indefinitely)
