New OECD guidance aims to reduce corruption in aid sector
09/12/2016 - New international guidance on fighting corruption in the development sector goes into effect today, backed by more than 40 countries, with progress on agreed recommendations to be monitored by the OECD Working Group on Bribery and the OECD Development Assistance Committee (DAC).
Launched on International Anti-Corruption Day, the OECD Recommendation for Development Cooperation Actors on Managing Risks of Corruption calls on countries to create or improve systems for avoiding and responding to corrupt practices in the management and delivery of aid by development agencies and private firms. Anti-corruption systems should include codes of ethics, whistleblowing mechanisms, financial controls and sanctions for misconduct, among other elements.
The new guidance responds to calls for more effective responses from international development agencies to cases of corruption involving aid. It should ensure more checks and balances at a time when public-private partnerships in the aid sector are increasing. The Recommendation applies to the 41 countries party to the OECD Anti-Bribery Convention and the 30 DAC members.
“Development activities are very often accompanied by different forms of corruption, which cause the loss of billions of euros being channelled into private pockets instead of countries in need,” said Drago Kos, Chair of the OECD Working Group on Bribery in International Business Transactions. “This new guidance will help development agencies around the world to detect potential corruption cases and eradicate corruption.”
“Corruption in the aid sector steals from the world’s poorest and most vulnerable people and is a stain on our efforts to reach global development goals. Donor countries, aid agencies and developing countries have a common interest in doing everything we can to reduce it,” said DAC Chair Charlotte Petri Gornitzka. “As we try to grow the aid pie with more private sector involvement, the help of the OECD’s anti-corruption experts will be invaluable in fighting misconduct.”
The Recommendation is the result of a DAC decision to update its 1996 Recommendation on Anti-Corruption Proposals for Bilateral Aid Procurement, extending its scope beyond procurement to reflect the growth in new partners and new channels for aid disbursement. It will contribute to how donors respond to Sustainable Development Goal 16 making it their responsibility to do no harm with their development interventions.
The OECD Working Group on Bribery will monitor the implementation of relevant sections, such as those relating to prevention measures and sanctions, in the context of its monitoring for the OECD Anti-Bribery Convention. The DAC will develop a complementary monitoring mechanism.
The OECD Anti-Bribery Convention establishes legally binding standards to criminalise bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective. It is the first and only international anti-corruption instrument focused on the ‘supply side’ of the bribery transaction.
The Working Group on Bribery – made up of the 35 OECD countries plus Argentina, Brazil, Bulgaria, Colombia, Russia and South Africa – comprises the Parties to the Convention. It conducts a systematic programme for monitoring implementation of the Convention. Typical examples of “foreign bribery” involve bribing officials in foreign countries to obtain public contracts for building infrastructure.
The new Recommendation:
Suggests measures to prevent and detect corruption in projects financed by official development assistance (ODA).
Details sanctions to be provided in ODA contracts to enable agencies to respond adequately to cases of corruption.
Advises countries’ international development agencies to work towards corruption risk management systems that include codes of ethics, whistleblowing mechanisms, financial control and monitoring tools, sanctions, coordination in responding to corruption cases.