World Bank, regional lenders to share graft evidence

Singapore, Sept 17: The World Bank and four of the largest regional development banks agreed on Sunday to share evidence and use common methods to probe corruption, but not all of them plan to publish companies' names.

The agreement is another step in World Bank President Paul Wolfowitz's drive since last year to stamp out the abuse of development funding by people who syphon off cash for personal gain.

''We're running into some legal problems,'' said Asian Development Bank auditor general Peter Pedersen, who tracks 66 countries.

''If we put them on the Web site, that's actually slander or libel in some of the countries,'' he said, referring to the naming of companies.

In practice the agreement, which also includes the European Bank for Reconstruction and Development, the African Development Bank and the Inter-American Development Bank, would serve as an early warning mechanism by red-flagging companies.

''We have opened the door so that we can decide to sanction somebody the World Bank has sanctioned,'' Pedersen added, after regional banks net with Wolfowitz to agree on evidence sharing.

''The World Bank has one great advantage over the rest of us -- they are immune (to lawsuits) all over the world. We are immune in only 66 member countries.'' The World Bank currently publishes a list of more than 330 firms ineligible to be awarded World Bank-financed contracts because they were found to have violated the bank's fraud and corruption provisions. This list is available on: http://web.worldbank.org/external/default/main?theSitePK=84266&c ontentMDK=64069844&menuPK=116730&pagePK=64148989&piPK=64148984.

Wolfowitz's anti-corruption plan includes training civil servants, judicial reform and freedom of information as well as a new system to curb the risk of corruption on World Bank projects.

Some European countries, including Britain, France and Italy, fear the anti-graft campaign could slow the bank's lending to poor countries by withholding funds rather than working with recipient governments to correct the problem.

Last week Britain threatened to withhold a payment of 50 million pounds ( million) to the World Bank to press the body to change the conditions it attaches to its loans.

Research by development group Oxfam in April found that 18 out of 20 countries surveyed had privatisation-related conditions attached to their World Bank loans.

Reuters