Cross Debarment: A new global tool against corruption
The cross debarment agreement signed recently by the world’s top multilateral banks is a milestone for the anticorruption agenda.
Due to come into force by mid-year, the agreement says that if one Multilateral Development Bank (MDB) declares a firm or individual ineligible for procurement contracts because of fraud and corruption, then all the other MDBs will do the same.
According to the IDB, fraud and corruption are major impediments to development effectiveness. The threat of public sanctions should add significantly to the financial and reputational risks for individuals and firms, creating both a deterrent for misconduct and an incentive for them to adopt effective anticorruption programmes.
Cross-debarment, along with improved information sharing and coordinated investigations, is part of unprecedented collaboration between the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank Group and the World Bank Group.
Transparency International-USA will hold a roundtable on the impact of cross debarment at Inter-American Development Bank headquarters, May 5, 2010, from 12:00 pm to 2:00 p.m.
Panelists at this roundtable will discuss important questions raised by this joint sanction accord. What are the stakes for the future of a debarred company? Will cross debarment redefine risk parameters for other development organizations? What are the broader implications for securing government contracts or finance?