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Tackling Corruption: New Solutions in a Shifting Landscape

Tackling Corruption: New Solutions in a Shifting Landscape

  •  Date: 04 December 2017
  •  Location:
    • EIB Headquarters, 98, boulevard Konrad Adenauer L-2950
    • Luxembourg
    • Luxembourg

The EIB hosted the second Anti-Corruption Conference on December 4, 2017 to commemorate International Anti-Corruption Day. Around 160 people, including EIB staff, representatives of Civil Society Organisations, EU Commission, European Court of Justice as well as national anti-corruption authorities gathered to reflect on and discuss new solutions to tackling corruption in a shifting landscape.

President Hoyer welcomed the participants in a pre-recorded video, noting that addressing corruption was key to the development agenda. VP Taylor followed with an opening address emphasising the EIB’s zero tolerance policy on fraud and corruption. He further added that the risks of fraud and corruption are taken into account through the project cycle. In VP Taylor’s own words, “Fighting corruption is seldom an easy path to follow. It implies difficult choices… [but] it is important not to undermine our own work to strengthen economies, create jobs, mitigate climate change and finance SME’s by supporting risky projects with dubious counterparts that would undermine integrity, and jeopardise their own and the EIB Group’s reputation in the process”. The Inspector General Jan Willem van der Kaaij then introduced the speakers.

Tackling Corruption: New Solutions in a Shifting Landscape
Tackling Corruption: New Solutions in a Shifting Landscape.
   

The first keynote speaker, Dr. Huguette Labelle (a member of the Advisory Group to the OECD Secretary General on Anti-Corruption and Integrity and former Chair of Transparency International), highlighted the human cost of corruption as well as the impact of corruption on legal and regulatory agencies. She emphasised the critical role that multilateral development banks (MDBs) such as the EIB could play and noted that “the MDBs are critical actors in the international field and have huge leverage to tackle corruption and promote integrity”.

Dr. Huguette Labelle
Dr. Huguette Labelle: “The strength of collective action cannot be
underestimated by major global organizations”.
  

The second keynote speaker, Dr. Mihály Fazekas (research fellow at the University of Cambridge and Director of the Government Transparency Institute), discussed the use of big data to control corruption risk and improve governance. In particular, he explained how the conclusions drawn from data analysis can be used to prevent corruption by informing public opinion, implementing automated compliance checks and elaborating on predictive analytics and risk-based audit. He concluded by stressing some policy implications of the use of big data and called for a shift from monitoring to outcomes. In his view, poorly governed areas are the most needy of EIB investment but also the most risky ones.

Dr. Mihály Fazekas
Dr. Mihály Fazekas: The EIB should push for the “creation of islands of meritocracy,
openness and transparency” to change the game and avoid entrenching
corrupt and collusive activity further in national systems.
  

The morning presentations were followed by a panel discussion on innovative integrity initiatives involving representatives from Transparency International (Zoë Reiter), Integrity Action (Fredrik Galtung), Esin Attorney Partnership (Birtürk Aydin) and EIB (Duncan Smith), and was chaired by EIB’s Head of the Corporate Responsibility and Civil Society Division, Hakan Lucius.

The panel discussion focused on the implementation of new mechanisms to increase accountability and transparency in EIB projects
The panel discussion focused on the implementation of new mechanisms
to increase accountability and transparency in EIB projects,
thereby reducing fraud and corruption.
  

Fredrik Galtung explained that the top-down approach to fight corruption is not always effective and provided examples (including earthquake-rebuilding projects in Armenia and Nepal) to illustrate the efficiency of a bottom-up strategy based on “open beneficiary feedback”. Zoë Reiter explained how Integrity Pacts and systemic framing around key pillars are making projects more resistant to fraud and corruption due to open contracting. She called for the implementation of the Clean Contracting Manifesto. Birtürk Aydin illustrated innovative approaches by giving the example of the compliance monitoring of Gama Holding after the Settlement Agreement concluded between Gama Holding, EIB and EBRD and detailed how the changes to integrity and governance implemented in the company were beginning to be seen more widely in the Turkish construction industry. Duncan Smith described a number of recent initiatives undertaken by EIB, through the Fraud Investigations Division of the Inspectorate General. Amongst other initiatives, Duncan mentioned the work to prevent and deter fraud and corruption on the demand side (working with utility companies in Latvia, Egypt and Zambia to make them more reliable EIB counterparties) and the supply side (by pursuing exclusion of companies that pay bribes), the use of Proactive Integrity Reviews (PIRs) to uncover hitherto unknown fraud and corruption, as well as the importance of fraud awareness training and collaboration with other International Financial Institutions.

Bernie O’Donnell, the Head of the Fraud Investigations Division, concluded the conference by recalling the catalytic role that the EIB can play in the fight against fraud and corruption and the value-added to the Bank of having minimised its reputational and corruption risks.


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