On Tuesday the World Bank quietly announced a bold program to combat corruption on its own projects.
Under the new Voluntary Disclosure Program (VDP), firms, NGOs or individuals who work as contractors on Bank projects perform an internal investigation, report their corrupt acts and pledge to follow the rules on future projects. In exchange, they secure confidentiality and the right to continue working with the Bank. According to the press release, “those under active investigation by the World Bank are not eligible to enter the program.” Once firms sign on, any deviation from the VDP’s non-negotiable contract means ineligibility for Bank work for 10 years. (They’ll join the 330+ firms currently debarred.)
I asked Pascale Dubois, acting manager of the VDP, about the move to voluntary disclosure. She said:
Putting together a VDP that would work well for the private sector and for the Bank meant for us a long process of consultations and research into the latest trends in international anticorruption law and corporate social responsibility. We have also been working with pilot firms for the past two years, and that experience helped us to refine the program.
But is the Bank letting offenders off too easy by granting immunity? Pascale corrected me:
Now that we’ve launched the program, one challenge is to make sure that firms and other potential participants have no misconceptions about it. For example, the word “immunity” keeps popping up when people describe the VDP. This is inaccurate. VDP allows firms to avoid public debarment by the Bank, which is an administrative sanction. This has nothing to do with firms’ liabilities under national laws where they do business. Participating in the VDP does not protect firms from being prosecuted according to national legal systems.
I think the success of the VDP will hinge partially on how successful we are in getting the message out – accurately – about how it works.
Transparency International has been a huge supporter of the proposal. I see the initiative as perhaps the most cost-effective way to reduce corruption at the World Bank – considering that firms pay virtually all of the costs.