OFFICE OF INTEGRITY AND ANTI-CORRUPTION

Annual Repor t

2017

Each one of us has a role to play in fighting

corruption. Let’s together put the searchlight on

corruption. Whenever light appears darkness has

no place. As we light up and power Africa, let us

also light up systems to detect and deal decisively

with corruption. Let there be light!

“

”

Pres ident , AfDB

| CONTENTS

ACRONYMS

PERISCOPE

EXECUTIVE SUMMARY

REVIEW OF ACTIVITIES

Prevention and integrity compliance

Project integrity review

Proactive activities through data analytics and media analysis

Strengthening due diligenceprocesses for enhanced integrityin bank processes

Ensuring sanctioned entities measure up to the integrity compliance guidelines

Reviewed integrity policiesand guidelines

Capacity buildingand awareness creation

Investigation of sanctionable practices

External collaborations

STAFF COMPOSITION

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ACA Ant i -Corrupt ion AgencyACCPA Associat ion of Cert i f ied Compl iance Profess ionals in Afr ica AfDB Afr ican Development BankAML Ant i -Money Launder ingAU Afr ican UnionAUFI Audi t and F inance CommitteeBCRM Compl iance Review and Mediat ion DepartmentCCCC China Communicat ions Construct ion Company Ltd.CIFFs Counter ing I l l ic i t F inancia l F lowsCFT Combatt ing the F inancing of Terror ismCICO Chongqing Internat ional Construct ion Corporat ionCHHR Human Resources Management DepartmentCEO Coal i t ion for Eth ica l Operat ionsFoSP F indings of Sanct ionable Pract ices ICP Integr i ty Compl iance Programme IDD Integr i ty Due Di l igenceIFFs I l l ic i t F inancia l F lows IRT Integr i ty Risk Tool MDB Mul t i la tera l Development BankMoU Memorandum of UnderstandingNSA Negot iated Sett lement AgreementPEP Pol i t ica l ly Exposed Person PETH Eth ics Off ice PIAC Off ice of Integr i ty and Ant i-Corrupt ionPIR Pro ject Integr i ty ReviewRMCs Regional Member Countr iesWBG Wor ld Bank Group

| ACRONYMS

PIAC | Annual Report 2017

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PIAC | Annual Report 2017

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PIAC | Annual Report 2017PIAC | Annual Report 2017

Graph. 1 Prevent ion metr ics

Graph. 3 Sectora l d ist r ibut ion of completed cases of sanct ionable pract ices

Graph. 4 Regional d ist r ibut ion of completed cases of sanct ionable pract ices

Graph. 5 Sanct ionable pract ice and staff misconduct cases

Graph. 2 Completed cases of sanct ionable pract ices

Tra in ing andcapaci ty bui ld ing

External sensi t izat ion sess ions

Integr i ty opin ion

| PERISCOPE

898421 21Bank stafftrained

Integrityopinionsissued

Participants

Total : 26 cases

CollusionCollusionCollusionCollusionCollusionFraudFraudFraudFraudFraud CorruptionCorruptionCorruptionCorruptionCorruption

12%, 312%, 3 23%, 623%, 665%, 1765%, 17

AFRICACentr

al

EastNorth

South

West

HQ

23% 23%

8% 8%

27%

11%

12Completed

22Investigated

22

26

39

78Received

Sanctionablepractice

Staffmisconduct

8%Agriculture

23%Econs & Governance

11%Energy

4%Health

11%Human capital

4%Infrastructure

27%Transport

12%Water & sanitation

Corrupt ion, f raud, money launder ing and i l l ic i t f inancia l f lows appear to cont inue to f lour ish despi te concerted internat ional efforts to not only denounce these pract ices but a lso pract ica l steps taken to stem them. The sophist icat ion of the methods adopted to put these schemes into effect a lso appears to be growing in complex i ty and dar ing.

The Afr ican Development Bank Group (Bank) has a zero-to lerance stance towards corrupt pract ices. The Bank Group’s Pol icy on Good Governance stresses the need to ident i fy, prevent, report , and sanct ion a l l forms of corrupt pract ices that may lead to mismanagement of Bank funds and staff misconduct. The Off ice of Integr i ty and Ant i-Corrupt ion (PIAC) of the Bank is vested with invest igat ive and prevent ive mandates to put the Bank’s Good Governance Pol icy into effect .

PIAC executes i ts mandates through i ts two div is ions. F i rst , the Integr i ty and Prevent ion Div is ion (PIAC.1) , which supports the Bank Group’s miss ion to encourage socio-economic development on the Afr ican cont inent by developing proact ive measures to decrease the potent ia l for f raud and corrupt ion in operat ions and t ransact ions f inanced by the Bank. Second, the Invest igat ion Div is ion, (PIAC.2) which conducts invest igat ions into a l legat ions involv ing f ive sanct ionable pract ices ( f raud, corrupt ion, col lus ion, coerc ion and obstruct ion) affect ing the Bank’s administ rat ive budget or perpetuated in pro jects f inanced by the Bank; i t a lso invest igates a l legat ions of misconduct against Bank staff .

In 2017, PIAC cont inued to pursue i ts ant i -corrupt ion prevent ion mandate, resul t ing in 13 t ra in ing sess ions, workshops and seminars, wi th part ic ipants drawn f rom Bank staff , ant i -corrupt ion off icers of Regional Member Countr ies (RMCs), representat ives of c iv i l society and the pr ivate sector. The sess ions covered an array of specia l ized areas inc luding an introduct ion to Integr i ty Due Di l igence ( IDD), use of the

| EXECUTIVE SUMMARY Banks (MDBs) and other stakeholders engaged in combatt ing corrupt ion. These col laborat ions, in the context of the Cross Debarment Agreement wi th MDBs, led to the recogni t ion of 195 requests for cross debarments f rom s ister MDBs. PIAC col laborated with other MDBs on informat ion shar ing and in organiz ing jo int act iv i t ies and t ra in ing. PIAC a lso col laborated with other organizat ions, inc luding the Associat ion of Cert i f ied Compl iance Profess ionals in Afr ica (ACCPA), Coal i t ion for Eth ica l Operat ions (CEO) and the Commonwealth Afr ica Ant i -Corrupt ion Centre (CAACC).

Looking forward, PIAC has in i t iated a process a imed at mainstreaming measures to counter i l l ic i t f inancia l f lows in the Bank’s operat ions and to address issues of money launder ing and the f inancing of terror ism. This is in response to the recent ly approved Bank’s Strategic Framework and Act ion Plan on the Prevent ion of I l l ic i t F inancia l F lows in Afr ica (2017-2021) and the Bank’s Pol icy

Bank’s Tools for Moni tor ing Integr i ty in operat ions and severa l integr i ty modules. Other capaci ty bui ld ing and sensi t izat ion programs organized in conjunct ion with partners focused on asset t rac ing, integr i ty compl iance monitor ing, ant i -corrupt ion research, and enhancing the capaci ty of compl iance off icers on the cont inent. Based on requests f rom operat ional departments of the Bank, the Department issued 21 IDD opin ions on pro jects under the Bank’s non-sovere ign operat ions. I t a lso monitored the Integr i ty Compl iance Programmes ( ICPs) of 5 debarred ent i t ies and carr ied out i ts f i rst Pro ject Integr i ty Review (PIR) of a UA 23 mi l l ion water and sani tat ion pro ject in Abid jan, funded by a grant. The lessons learnt f rom th is maiden PIR wi l l be used to ref ine the methodology for conduct ing PIRs in the future.

On the invest igat ion s ide, PIAC received 78 compla ints of sanct ionable pract ices in 2017, out of which 39 were ass igned for fu l l invest igat ion af ter screening processes. By 31 December 2017, the Department had completed 26 invest igat ions, inc luding cases brought forward f rom 2016. PIAC f i led 10 F indings of Sanct ionable Pract ices (FoSP) before the Bank’s independent Sanct ions Commiss ioner. Dur ing the same report ing per iod, the Sanct ions Commiss ioner issued decis ions, resul t ing in the debarment of 3 f i rms and 1 indiv idual . In addi t ion, 2 f i rms a l leged to have been involved in f raudulent pract ices voluntar i ly accepted l iab i l i ty and entered into negot iat ions for sett lement wi th the Bank. After rev iew and rat i f icat ion of the Sett lement Agreements by the Sanct ions Commiss ioner, debarments of 12 and 15 months and a condi t ional non-debarment of 36 months respect ive ly, were imposed on these ent i t ies. PIAC a lso received 22 a l legat ions of staff misconduct dur ing the same per iod, of which 12 have been c losed with invest igat ions ongoing on the remain ing 10 a l legat ions.

In recogni t ion of the importance of col laborat ion and informat ion shar ing, PIAC engaged in meaningfu l partnerships with s ister Mul t i la tera l Development

on Prevent ion of I l l ic i t F inancia l F lows. In 2018, the Department p lans to develop re levant Ant i -Money Launder ing (AML), Counter F inancing of Terrosr ism (CFT), and Counter I l l ic i t F inancia l F lows (CIFFs) Guidel ines and Internal Framework for ex-ante due di l igence, ex-post moni tor ing and sanct ions screening. This work wi l l cont inue unt i l the f i rst quarter of 2019, af ter inter-departmenta l consul tat ions with in the Bank. PIAC wi l l a lso work to rev iew i ts invest igat ion manuals as wel l as the Bank’s Whist le Blowing and Compla ints Handl ing Pol icy (2007) and Guidel ines for the Prevent ion of Fraud and Corrupt ion (2007). The addi t ional human resources recent ly approved by the Bank’s Board of Di rectors wi l l he lp br ing onboard an array of addi t ional sk i l ls , in areas inc luding, f inancia l inte l l igence analys is, l i t igat ion and pol icy development. W ith these addi t ional resources, PIAC is poised to better del iver on i ts broad mandates in 2018.

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PIAC | Annual Report 2017 PIAC | Annual Report 2017

Ag. Director, P IAC

PIAC | Annual Report 2017

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Prevention and integrity compliance

The corrupt ion prevent ion and integr i ty compl iance mandates of PIAC compr ise of act iv i t ies inc luding the conduct of Data and Media Analys is, PIRs and IDDs. Others inc lude monitor ing ICPs of debarred ent i t ies, managing and shar ing informat ion f rom the debarment and cross debarment database, rev iewing integr i ty issues, issu ing integr i ty adv isor ies, ant i -corrupt ion awareness ra is ing and capaci ty bui ld ing. Updates on these mandate areas are prov ided below.

Project Integrity Review

PIR enables the Bank to ident i fy corrupt ion r isks dur ing pro ject implementat ion and prov ide recommendat ions on r isk mit igat ing measures to be adopted to ensure that pro jects achieve the i r intended purposes. I t a lso ensures that there is a proact ive process of ident i fy ing r isks in pro jects before they negat ive ly affect pro jects and thereby jeopardize the Bank’s resources. This is especia l ly important for the successfu l conduct of Bank operat ions in h igh-r isk env i ronments and t rans i t ion states, where c i t izens have l imi ted informat ion on where and how to report sanct ionable pract ices occurr ing in pro jects. F indings f rom PIRs wi l l be used to engage re levant stakeholders, wi th the a im of st rengthening Bank operat ion processes for better pro ject del ivery.

PIAC conducted i ts f i rst PIR in 2017, on a UA 23 mi l l ion (USD$34.7 mi l l ion) water and sani tat ion pro ject being implemented in Abid jan. The f indings f rom the PIR ident i f ied inadequate pro ject moni tor ing and superv is ion pract ices, the absence of adequate archiv ing procedures, instances of non-compl iance with procurement procedures and weaknesses in administrat ive and f inancia l record keeping. Al l these pose r isks of corrupt ion, which could jeopardize the successfu l complet ion of the pro ject . The col laborat ive method ( involv ing the Bank’s operat ions departments and the Project Implementat ion Uni t of the borrowing state) used dur ing the integr i ty

rev iew enabled stakeholders involved to acknowledge the ident i f ied r isks and agree on remedia l act ions that need to be put in p lace for the successfu l complet ion of the pro ject . Being the maiden PIR, i t was a lso used to test the methodology developed, and lessons learnt f rom the exper ience are being used to ref ine the methodology in preparat ion for the 2018 PIRs. Further more, red f lags detected dur ing the maiden PIR were col lated for in format ion shar ing and wi l l be factored into t ra in ing act iv i t ies on the prevent ion of f raud and corrupt ion in Bank operat ions.

Proactive activities through dataanalytics & media analysis

The ever-growing media landscape is an important open resource for ident i fy ing integr i ty, f raud and corrupt ion matters affect ing the Bank and act iv i t ies f inanced by i t . From monitor ing media reports, PIAC is able to detect red f lags and compla ints on sanct ionable pract ices f rom open informat ion sources in the Bank’s RMCs. Reports generated f rom the monitor ing and analys is of media reports feed into both the prevent ion and invest igat ion act iv i t ies of PIAC. Dur ing the year, 8 a ler ts detected on the Bank’s act iv i t ies and pro jects in 6 RMCs were ass igned for invest igat ion. In addi t ion, the Department is developing a data analyt ics tool , which wi l l ass ist wi th

the proact ive ident i f icat ion and f lagging of sanct ionable pract ices in the Bank’s f inanced pro jects us ing i ts procurement data. The development of the tool is in the f ina l stages and i t wi l l be tested in 2018, before i ts launch. The outcome of the data analyt ic rev iew wi l l be used as part of the cr i ter ia for the se lect ion of PIRs and as pointers to countr ies and areas where PIAC should proact ive ly focus i ts prevent ive work. Other Bank departments, such as procurement and pro ject department wi l l a lso have access to the informat ion to strengthen the i r pro ject moni tor ing processes.

Strengthening due diligenceprocesses for enhanced integrityin bank processes

The Bank’s IDD Pol icy of 2016 has empowered PIAC to undertake the overs ight ro le of integr i ty assessments on potent ia l c l ients of the Bank. These assessments are conducted by operat ions departments on non-sovere ign ent i t ies seeking to do business with the Bank. PIAC thereafter conducts independent assessments as part of i ts overs ight ro le and recommends integr i ty mit igat ing factors in some instances by issuing integr i ty opin ions. IDD enables the Bank to better understand a pro ject , i ts shareholders and to help assess the integr i ty and reputat ional r isks that i t may pose to the Bank. In 2017, 18 opin ions were issued with var ious mit igat ing factors and recommendat ions made to safeguard the reputat ion of the Bank and by extension,

to ensure the success of Bank f inanced pro jects. Opin ions issued on t ime, he lp to mit igate integr i ty r isks as t imely act ion can be taken to address them. Three case studies were developed f rom the IDD rev iews conducted on pro jects and these were incorporated into the mater ia ls used in t ra in ing Bank staff . Operat ions departments cont inued to use the Integr i ty Risk Tool ( IRT) to assess the status of ent i t ies and indiv iduals v is-à-v is the sanct ions databases of the Bank, s ister MDBs, the Uni ted Nat ions and others. The Pol i t ica l ly Exposed Persons (PEPs) Tool and the IRT are accessib le to the Bank’s operat ional departments through the Bank’s int ranet. The PEPs Tool he lps to ident i fy the pol i t ica l exposure of indiv iduals seeking to do business the Bank and therefore a ler ts the Bank to take appropr iate decis ions, inc luding r isk mit igat ion. The PEPs Tool and the IRT are updated on a weekly basis to ensure that the informat ion on them keep up with developments on integr i ty issues. In the year under rev iew, PIAC conducted 5 t ra in ing sess ions for operat ional staff on the use of the IRT and the PEPs Tool .

Ensuring sanctioned entitiesmeasure up to the integritycompliance guidelines

Weak integr i ty st ructures negat ive ly affect inst i tut ional processes and predispose corporate ent i t ies to corrupt ion. S ince companies and indiv iduals debarred by the Bank may cont inue to do business with the Bank af ter the expirat ion of the i r debarment terms, PIAC has inst i tuted a monitor ing process to cert i fy that such companies effect ive ly implement compl iance programs to meet the requirements of the Bank’s Integr i ty Compl iance Guidel ines, before they are re leased f rom debarment. The Bank’s ICP guidel ines and monitor ing act iv i t ies encourage indiv iduals and ent i t ies to improve the i r business eth ics in order to contr ibute posi t ive ly to the development of Afr ica.

In rev iewing ICPs of debarred companies, PIAC takes into considerat ion the s izes of companies and the context in which they do business, in st ipu lat ing the appropr iate ICPs they should complete. Furthermore, to

| REVIEW OF ACTIVITIES

PIAC | Annual Report 2017PIAC | Annual Report 2017

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ass ist companies gain better understanding of how to implement compl iance programs, PIAC has introduced peer-to-peer coaching among companies. Newly debarred companies are pai red with those who have successfu l ly implemented ICPs, to fac i l i tate in format ion and exper ience shar ing on successfu l ICP implementat ion. Dur ing 2017, PIAC encouraged a peer-to-peer learn ing re lat ionship between Chongqing Internat ional Construct ion Corporat ion (CICO), which is implement ing an ICP and China Communicat ions Construct ion Company Ltd (“CCCC”) , an ent i ty that had a l ready successfu l ly completed an ICP under PIAC’s superv is ion. CICO and CCCC engaged at management leve l to exchange ideas on effect ive ICP implementat ion and re levant compl iance t ra in ing programs.

In 2017, the Bank sanct ioned 3 ent i t ies and 1 indiv idual through the decis ions of the independent Sanct ions Commiss ioner and entered into negot iated sett lement agreements wi th 2 ent i t ies, whi le 195 ent i t ies debarred by other MDBs were accepted for cross debarment by the Bank. PIAC rev iewed the progress on ICPs of 6 companies and prov ided appropr iate guidance. In tota l , s ince ICP processes were introduced in 2014, 8 ent i t ies have successfu l ly completed these processes. The success of the ICPs has encouraged some companies that have completed or are implement ing ICPs, to in i t iate col lect ive act ion in i t iat ives on the cont inent. One such in i t iat ive is the Coal i t ion for Eth ica l Operat ions (CEO), compr is ing of 20 mult inat ional ent i t ies wi th the object ive of promot ing integr i ty in business operat ions on the cont inent. To support and deepen the exchange of in format ion, the Bank in col laborat ion with the Wor ld Bank Group (WBG) and CEO, organized a conference in South Afr ica in November 2017. The conference brought together businesses, experts and pract i t ioners, to share exper iences and lessons learnt in implement ing ICPs.

Reviewed integritypolicies & guidelines

Over t ime, the Bank has developed a comprehensive body of integr i ty and ant i -corrupt ion pol ic ies, which together serve as

i ts integr i ty f ramework and guides Bank staff and external ent i t ies in the i r engagements wi th the Bank. PIAC’s mandate is not only to implement the Bank’s integr i ty pol ic ies but a lso to document lessons learnt f rom the implementat ion of these pol ic ies. In addi t ion, PIAC per iodica l ly submits proposals to the Board for the rev iew of ex ist ing pol ic ies and considerat ion of new pol icy proposals a imed at address ing ident i f ied integr i ty re lated pol icy gaps. Dur ing the course of 2017, PIAC coordinated an inter-departmenta l consul tat ion to rev iew the Bank’s Whist le Blowing and Compla ints Handl ing Pol icy adopted in 2007, wi th a v iew to updat ing i t . The f ina l ized draf t pol icy wi l l go through Management and Board approval processes in 2018. The department is a lso rev iewing i ts internal operat ional pol ic ies to ref lect i ts addi t ional mandate of invest igat ing staff misconduct and ref ine other business processes of the department.

Capacity building andawareness creation

PIAC’s awareness and t ra in ing programs ensure that Bank staff and re levant partners are kept abreast of emerging corrupt ion t rends to strengthen the Bank’s internal processes and l imi t the r isks of corrupt act iv i t ies. In 2017, 421 Bank staff part ic ipated in PIAC tra in ing sess ions, whi le 898 external part ic ipants were engaged through severa l PIAC-led sensi t izat ion sess ions.

To ensure that a l l new Bank staff are aware of PIAC’s mandate and to sensi t ize them on the Bank’s ant i -corrupt ion pol ic ies, PIAC carr ies out a range of sensi t izat ion act iv i t ies. Dur ing the year, outreach act iv i t ies were held at the Regional Di rector Genera l East’s (RDGE) off ices, in Nairobi , Kenya, to explore areas of col laborat ion towards improv ing integr i ty in act iv i t ies f inanced by the Bank. One hundred and twenty (120) staff of the RDGE team part ic ipated in in-person sess ions and by te leconference f rom country off ices in Burundi , Eth iopia, Rwanda, Sudan, Uganda and Tanzania. These engagements helped to strengthen informat ion exchange between PIAC and Bank staff on pro ject re lated invest igat ions, management of potent ia l conf l icts of interests, ident i f icat ion

and management of corrupt ion red f lags and conduct ing IDDs on pro jects. Dur ing the interact ive sess ions, PIAC received suggest ions for i ts annual work programme and these helped inform the needs based approach adopted for the department’s 2018 work programme.

To advance the Bank’s ant i -corrupt ion agenda with key stakeholders, PIAC conducts capaci ty bui ld ing act iv i t ies to strengthen the capaci ty of ant i -corrupt ion agencies (ACAs) and c iv i l society actors, to f ight corrupt ion on the cont inent. Af ter conduct ing a needs assessment of the t ra in ing needs of ACAs in 2015, some of the needs ident i f ied re lated to f inancia l invest igat ions and asset recovery. Thus, PIAC col laborated with the Commonwealth Afr ican Ant i-Corrupt ion Centre and the Basel Inst i tute on Governance to organize a t ra in ing on f inancia l invest igat ions and asset recovery. Thi r ty-three (33) invest igators and legal off icers f rom the ACAs of RMCs part ic ipated in the t ra in ing. The t ra in ing covered areas inc luding procedures of asset recovery, conduct ing invest igat ions in mult ip le- jur isd ict ions and informat ion shar ing among agencies, to strengthen the i r asset recovery efforts. At the end of the t ra in ing, part ic ipants p ledged to advocate for inter-agency informat ion shar ing by the i r respect ive agencies.

The Afr ican Union (AU) declared 2018 as the Afr ican Ant i-Corrupt ion Year. In preparat ion for the Afr ican Ant i-Corrupt ion Year, PIAC, in col laborat ion with the AU Advisory Board on Corrupt ion (AUABC), brought together one hundred and f i f ty (150) part ic ipants f rom ACAs, c iv i l society organizat ions and ant i -corrupt ion experts, to formulate a strategic p lan and develop cont inenta l leve l act iv i t ies, to mark the Afr ican Ant i-Corrupt ion Year. The workshop was the f i rst cont inenta l p lat form for engagement between ACAs and the AUABC. Discussions were focused on how to strengthen the AUABC to p lay i ts ro le as mandated in the Afr ican Union Convent ion on Prevent ing and Combat ing Corrupt ion 2013 and receive commitments f rom member countr ies for the universa l rat i f icat ion of the Convent ion. The conference a lso served as an opportuni ty for countr ies to share p lans of the i r 2018 ant i -corrupt ion act iv i t ies.

PIAC | Annual Report 2017PIAC | Annual Report 2017

“The training was up to standard in all aspects.I recommend that PIAC

be included in the project teams and peer reviews of all Bank funded projects so as

to minimize delays, problems and failed projects.”

Comment from a participantat the 24 November 2017IDD Training

“I appreciated the explanation on the difference between

debarment and cross-debarment. I recommend

that every two months, PIAC should provide staff with an Integrity Evaluation form to evaluate the integrity and

anti-corruption component of Bank projects.”

Comment from a participantat the 13 December 2017IDD Training

“

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”

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Investigation of sanctionable practices

In accordance with i ts standard operat ing procedures, PIAC receives compla ints f rom with in and outs ide the Bank. Upon receipt of a compla int , PIAC conducts a pre l iminary evaluat ion to determine i f a sanct ionable pract ice is involved and whether the compla int fa l ls wi th in PIAC’s mandate ( i .e. re lates to a Bank f inanced act iv i ty ) and the degree of i ts credib i l i ty, ver i f iab i l i ty and mater ia l i ty. Based on these cr i ter ia, a decis ion is taken on the sui tabi l i ty of the compla int for invest igat ion. I f a compla int fa l ls under the mandate of another Bank

Pract ices (FoSP) were submit ted to the Sanct ions Commiss ioner, represent ing a 70% increase f rom the prev ious year. Overa l l , 17 compla ints were found to be unsubstant iated by facts, whi le one led to the opening of a new invest igat ion.

A typology analys is of invest igat ions on a l legat ions of sanct ionable pract ices for the year suggests a s igni f icant lean towards procurement re lated f raud, which represents 65.17% of completed cases, whi le corrupt ion and col lus ion fo l lowed with 23.6% and 12.3% respect ive ly. A three-year t rend analys is indicates that procurement f raud is the most common mani festat ion of sanct ionable pract ice the Bank is exposed to. These f raudulent pract ices typica l ly mani fest themselves as del iberate fa ls i f icat ion of facts and company prof i les a imed at obta in ing undue advantage dur ing procurement processes in the Bank act iv i t ies and the Bank f inanced pro jects implemented by RMCs.

A geographica l analys is indicates a broad distr ibut ion of the cases, wi th the West Afr ican sub-region account ing for 34.6% of c losed cases, before d iscount ing a th i rd of th is number for cases that or ig inated f rom procurements in the Bank Headquarters in Abid jan. PIAC’s v iew is that these numbers are not conclus ive ev idence of the actual

occurrence of sanct ionable pract ices across the cont inent. The dist r ibut ion observed is only indicat ive and is subject to var iat ion by factors inc luding the leve l of awareness of the Bank’s compla int channels among local stakeholders and the d i ffer ing local compla ints making cul tures. In 2018 and beyond, PIAC wi l l conduct studies a imed at prov id ing the Bank with better understanding of the factors affect ing the d ist r ibut ion of cases of sanct ionable pract ices on the cont inent.

Of the 26 cases completed, the Transport Sector accounted for 27% of the tota l , fo l lowed by the Economics and Governance Sector, wi th 23%, whi le Heal th and Inf rastructure sectors had the lowest representat ion of 4% each. Other sectors covered by the Bank’s operat ions that d id not feature among the cases invest igated inc lude Cl imate Change, Educat ion, Env i ronment, Gender, In format ion & Communicat ion Technology and the Pr ivate Sector. The non-representat ion of some sectors in th is dataset is not conclus ive of the absence of sanct ionable pract ices in Bank f inanced pro jects in these sectors. PIAC is therefore committed to conduct ing the re levant research, PIRs and proact ive invest igat ions in these unrepresented sectors, to get a better understanding of the actual s i tuat ion.

department or a nat ional inst i tut ion, PIAC forwards i t to the re levant ent i ty for appropr iate act ion.

In 2017, the department received 78 compla ints of sanct ionable pract ices and af ter rev iew, 39 were ass igned for invest igat ion. PIAC’s caseload in 2017 was 112, consist ing of 39 cases opened dur ing the year and 73 cases brought forward f rom 2016. At the end of December 2017, invest igat ions on 26 cases had been completed, represent ing a 19% improvement over the 2016 rate of case complet ion. From these, 10 F indings of Sanct ionable

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PIAC | Annual Report 2017PIAC | Annual Report 2017

Fraud

2015 2016 2017Collusion Corruption

62,5%

15%

35%

50%

11,5%

23,1%

65,4%

12,5%

25%

Table. 2 Negot iated sett lement agreements

SanctionsFirm SectorSanctionable

Practice

Roadsector

Roadsector

Statistics & Public Finance

Sinohydro Corporation

Limited

Germs Consulting

GH Management and

Mr. HANIN

Fraudulent practice

Fraudulent practice

Fraudulent practice

*Conditional non debarment for a period of 36 months*Implementation of an Integrity Compliance Program

*12 months and 1-day debarment*Training in ethics for the Management*Reparation for a particular victim

*15 months debarment with conditional release*Ethics Training for the Managing Director

Table. 1 Case stat ist ics on sanct ionable pract ices

Investigative activitiesSanctionable Practices

2013 2014 2015n°

Case load carried over from the previous year 49 81 941

New cases received in the year, meriting investi-gations and added to investigation pipeline 34 31 382

Total investigation pipeline (1+2) 83 112 1323

Cases closed following completedinvestigations 2 18 194

Investigation pipeline at year end andcarried over (3-4 ) 81 94 1135

FoSP prepared/submitted to sanctions o�ce 4 5 46

Negotiated Settlement Agreements (NSA) 0 7 37

Cases transferred to PETH or BCRM 0 5 6

2016 2017

113 73

41 39

94 112

21 26

73 86

3 10

1 3

_ 28

Graph. 6 Trend of sanct ionable pract ices

1716

Investigation of staff misconduct

In 2017, 22 compla ints re lat ing to staff misconduct were received, wi th Profess ional Misconduct represent ing the largest category at 68%, whi le other categor ies reported inc luded Conf l ict of Interest (18%), Harassment (9%) and Personal Issues (5%). As of 31 December 2017, 12 cases had been invest igated and c losed, whi le 10 are ongoing and are expected to be f ina l ized in the f i rst quarter of 2018. This indicates a 55% complet ion rate of compla ints received. Invest igat ions on the c losed cases were completed with in the three-month average complet ion per iod set as the KPI for the complet ion of invest igat ions into staff misconduct a l legat ions.

Of the 12 misconduct invest igat ions concluded, 4 a l legat ions were substant iated, 4 were unsubstant iated and 4 were referred to other departments of the Bank for appropr iate act ion. Cases are referred to other departments by PIAC when i ts pre l iminary inqui ry conclude that such matters do not fa l l wi th in i ts mandate but may be better addressed by other Bank recourse mechanisms.

Analys is of the nature of indiv idual misconduct cases shows that the abuse of employee benef i ts for personal interest is the most s igni f icant. In the last 3 years, PIAC observed a t rend of abuses re lated to educat ion and medical benef i ts . To address th is, PIAC wi l l devote a s igni f icant part of i ts 2018 staff integr i ty t ra in ing, to ra ise the i r awareness of these areas. In addi t ion to that , PIAC recommends regular audi ts of the administrat ion and use of benef i ts in genera l , wi th a specia l focus on educat ion and heal th benef i ts .

External collaborations

Building on sol id ground: achieving the High 5s through evidence driven anti-corruption policymaking.The Bank is committed to ev idenced-based intervent ions in the implementat ion of i ts ten-year (2013 - 2022) High 5s strategy. The strategy pr ior i t izes energy, agr icu l ture, industr ia l izat ion, integrat ion and improv ing the qual i ty of l ives of Afr icans. Recogniz ing

the chal lenges corrupt ion poses to the actual izat ion of the High 5s strategy, the Bank is determined to mit igate corrupt ion r isks through ev idence-dr iven approaches.

On 2 March 2017, PIAC organized a meet ing to explore partnership opportuni t ies wi th Afrobarometer and to leverage on i ts exper ience in conduct ing opin ion and exper ience surveys on corrupt ion, democracy, governance, economic condi t ions, socia l development and c iv i l society in more than 35 Afr ican countr ies. The sess ion was attended by a broad range of Bank Staff , wi th s igni f icant representat ion f rom the Afr ican Development Inst i tute, the Governance and Publ ic F inancia l Management Coordinat ion Off ice and the Department of Macroeconomics Pol icy, Forecast ing & Research. The Execut ive Director of the Afrobarometer Research Team, Mr. Gyimah-Boadi made a presentat ion on the resul ts of Afrobarometer’s Sixth Round of Governance Indicator Surveys. This was fo l lowed by d iscussions on the re levance of the research to achiev ing the Bank’s High 5s strategy. The seminar prov ided Bank staff wi th some ev idence usefu l for determin ing sectors prone to corrupt ion; where the Bank wi l l need to focus, to enable i t to achieve the High 5s pr ior i ty Agenda. The discussion a lso touched on potent ia l areas of t ra in ing and capaci ty bui ld ing that the Bank’s Tasks Off icers may require to effect ive ly engage with partners and stakeholders to ensure that corrupt ion r isks are addressed.

Enhancing anti-corruption capacit ies in regional member countries.Dur ing th is report ing per iod, PIAC col laborated with severa l organizat ions, including CAACC, AUABC and the East Afr ican Associat ion of Ant i -Corrupt ion Author i t ies, to prov ide t ra in ing to profess ionals f rom var ious f ie lds. In format ion on these t ra in ing sess ions are set out on the next page.

(a) Annual Regional Meeting for African Chapters of Transparency International (12 - 14 July 2017, Mozambique)

The meet ing prov ided an opportuni ty to strategize on strengthening each chapter’s response to corrupt ion on the cont inent. PIAC used the opportuni ty to int roduce part ic ipants to the operat ions of the Bank, i ts High 5s and efforts being made by PIAC to promote integr i ty and t ransparency in the use of the Bank’s resources. Representat ives f rom the fo l lowing TI chapters at tended the meet ing: Zambia, Congo DRC, Z imbabwe, Cameroun, Niger ia, Niger, Rwanda, Maur i t ius, L iber ia, Senegal , Madagascar, S ierra Leone, Eth iopia, Ghana, Kenya, Mozambique and Malawi. Development partners in at tendance inc luded the Nether lands Embassy, the Open Society Foundat ion (OSF), the Open Society In i t iat ive for South Afr ica (OSISA), Afr ica Ris ing and Afrobarometer.

(b) Training on Financial Investigations and Asset Recovery (21 - 25 August 2017)

In col laborat ion with the Commonwealth Afr ica Ant i -Corrupt ion Centre (CAACC) and the Basel Inst i tute on Governance, a capaci ty development t ra in ing on “F inancia l Invest igat ions and Asset Recovery” was held in Gaborone, Botswana. The t ra in ing was organised for ACA off icers f rom Afr ican member states of the Commonwealth. Countr ies represented at the t ra in ing inc luded Botswana, Ghana, Kenya, Maur i t ius, Niger ia, Swazi land, Tanzania, Zambia and the Is land of Zanzibar. The object ive of the t ra in ing was to strengthen the f inancia l invest igat ion and asset recovery capaci ty of the part ic ipat ing ACAs. PIAC’s presentat ion covered i ts mandate and act iv i t ies wi th in the context of the High 5s and informat ion about the Afr ica Integr i ty Fund.

(c) 2nd Annual ACCPA Conference (24 -25 August 2017)

The Associat ion of Cert i f ied Compl iance Profess ionals in Afr ica (ACCPA) held i ts second annual conference in Accra, Ghana under the theme; “Mit igat ing Compl iance Risk in Afr ica.” The meet ing brought together compl iance profess ionals f rom across Afr ica to d iscuss new developments and emerging chal lenges in compl iance r isk management and to map out a strategy for enhancing the ro le of compl iance profess ionals on the cont inent. PIAC made a jo int presentat ion with the Internat ional F inance Corporat ion ( IFC) of the WBG ent i t led “ Integr i ty Due Di l igence Chal lenges in Fragi le and Conf l ict States.”

(d) Integrity Compliance Programs Workshop Lessons Learned (19 – 22 November 2017)

The workshop was hosted by CEO, WBG and the Bank in Johannesburg, South Afr ica. The workshop formed part of PIAC’s work on monitor ing the ICPs of companies sanct ioned in accordance with the AfDB’s Integr i ty Compl iance Guidel ines. The workshop brought together 75 part ic ipants f rom businesses operat ing in Afr ica (which are undergoing or have completed ICPs, under the superv is ion of e i ther the WBG or the Bank) , compl iance pract i t ioners and other experts. The two-day workshop was focused on the d i fferent chal lenges faced by Mult i -Nat ional Corporat ions and Smal l to Medium Size Enterpr ises in implement ing ICPs, to internat ional standards and lessons learnt wi th part icu lar reference to the Afr ican context .

PIAC | Annual Report 2017PIAC | Annual Report 2017

22 casesreceived22 casesreceived

18%18%

68%68%

ProfessionnalmisconductProfessionnalmisconduct

Conflict ofinterestConflict ofinterestHarassmentHarassment

Personal issuesPersonal issues

9%9% 5%5%

44

1515

22 11

18

PIAC | Annual Report 2017

| STAFF COMPOSITION

Vacant

Director

Managers

2Professional

staff

7

Generalservices

staff

4

Consultants

2

Short termstaff

2

Annual Repor t

To report or seek counsel on possib le v io lat ions of AfDB’s ant i -corrupt ion pol ic ies and codes of conduct, p lease contact the Off ice of Integr i ty and Ant i-Corrupt ion (PIAC):

E-mail : invest igat ions@iacd-afdb.org integr i ty@afdb.org

Helpl ine: 1 (770) 776-5658 (FR, EN) +225 20 32 01 49, +225 20 26 55 50

Address: 9th F loor CCIA Bui ld ing, Afr ican Development Bank, Avenue Jean Paul I I , 01 BP 1387 Abid jan 01, Cote d’ Ivo i re.

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Cot

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OFFICE OF INTEGRITY AND ANTI-CORRUPTION (PIAC)

2017