The World Bank Group has identified corruption as among the greatest obstacles to economic and social development. Corruption and similar misconduct undermine development by distorting the rule of law and weakening the institutional foundation upon which economic growth depends. 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 damages policies and programs that aim to reduce poverty, so attacking corruption is critical to the achievement of MIGA’s and the World Bank Group’s overarching mission of poverty reduction.
MIGA’s approach to combating fraud and corruption is part of a larger World Bank Group effort, and MIGA works closely with the relevant World Bank Group departments on these issues.
Combating Fraud and Corruption in MIGA-Supported Projects
MIGA carries out an integrity/corporate risk assessment in all projects considered for MIGA guarantees, by considering:
- checks of involved parties
- client’s safeguards for dealing with fraud and corruption
- the project structure and contractual arrangements.
MIGA’s stance against fraud, corruption, related misconduct (coercive, collusive, and obstructive practices), or a lack of transparency, is also incorporated into the legal documentation governing its investment guarantees, and gives MIGA the right to decline to pay compensation or terminate guarantee coverage.
Additionally, allegations of such misconduct in projects for which MIGA has issued a guarantee are subject to review and determination under the World Bank Group’s sanctions and debarment process. MIGA’s objective is to ensure a fair, transparent, and rational way to evaluate allegations of misconduct in any MIGA project.