World Bank, India to jointly stamp out corruption in health sector

March 14th, 2008 - 11:24 am ICT by admin  

By Arun Kumar
Washington, March 14 (IANS) The World Bank Group and the Indian government will launch joint action to stamp out corruption after a bank probe “found serious indicators of fraud and corruption in the health sector”. The probe findings made public in January revealed indications of fraud and corruption in five Bank-financed health projects in India, some dating back to 1997, for HIV/AIDS, malaria and tuberculosis, the World Bank said Thursday.

These are now being followed up with detailed investigations for possible criminal action, and sanctions, it said. “We take these indicators of fraud and corruption extremely seriously,” said World Bank Group president Robert B. Zoellick.

“Working with the Indian authorities, we will take action against those found responsible, including debarment and sanctions against firms and individuals from doing business with the Bank, and disciplinary action against Bank staff if warranted,” he said.

“We will also apply the lessons learned to our projects around the world. Our focus is on ensuring that the people for whom these projects are designed receive the development benefits they deserve.”

The World Bank’s Board of Executive Directors, which met here Thursday, commended the government of India for its constructive and swift response to address the findings of the review. Board members welcomed the joint action plan as strong, comprehensive and ambitious.

Agreed joint actions include comprehensive procurement audits and performance reviews by independent third-party agents, strengthened procurement and financial management in the health ministry.

Besides increased use of community monitoring and oversight, and intensified supervision for civil works and equipment, and pharmaceutical procurement, qualification requirements in World Bank financed bids will also be adapted to reduce the risks of collusion.

Following the review, the Bank has started nine investigations, which could lead to the debarment of firms and individuals from doing business with the Bank. It has started an internal review and disciplinary action will be taken against Bank staff if warranted.

The Indian government has also announced it will punish anyone found guilty of fraud or corruption with “exemplary punishment”.

It has referred three new cases to the Central Bureau of Investigation (CBI) and the Vigilance Department in Orissa has launched a number of follow-up investigations in that state.

“We welcome the Government of India’s resolute commitment to eliminate fraud and corruption, and are pleased it has already started to implement many of the actions in the plans endorsed today,” said World Bank Managing Director Ngozi Okonjo-Iweala.

“We believe our joint agreement will not only improve existing projects, but will also strengthen the design, integrity, and implementation of future projects,” he added.

The Bank said it intends to remain engaged in the health sector in India, to help strengthen healthcare systems and meet critical public needs, provided future projects include mechanisms to counter the risks identified in the probe.

It acknowledged the review had revealed weaknesses in the Bank’s own systems and processes that allowed possible indicators of wrongdoing to go unnoticed.

In response, Bank management plans to build stronger anti-corruption measures into projects and strengthen supervision, monitoring and evaluation.

Acknowledging the Indian government’s feedback and concerns about the probe process, and the Board discussion, the Bank is changing some methodology in the reviews.

This includes implementing the recommendations of the panel, led by former Federal Reserve Chairman Paul Volcker, to provide governments with 30 days to comment on draft reviews before they are released.

The Bank has also agreed not to publish the names of people or companies until indicators of fraud and corruption have been confirmed. Detailed comments received from the Indian government will be addressed in the course of implementation of the action plan.

The Bank is creating an Independent Advisory Board to advise on the work of its Department of Institutional Integrity, and is supporting preventative services to alert Bank staff to indicators of fraudulent and collusive practices by private firms.

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