by Piyaporn Hawiset
7 August 1999
The Asian Development Bank accords high priority to fighting corruption, particularly with respect to the projects it finances, and has adopted an Anti-corruption Policy to guide its anti-corruption efforts. In this connection, a high-level dialogue was held in Jakarta between the Government of Indonesia and the Bank on 22 July 1999 to discuss and agree on concrete steps to combat corruption. This session was followed by an open forum on the same day in which NGOs and civil society was be invited to participate. The ADB is also looking at having high-level dialogue with the Government of Vietnam over irregularities in the Irrigation and Flood protection Rehabilitation Project.
Under the ongoing anticorruption activities of the Bank, a recent inquiry in the Bank-financed Private Junior Secondary Education Project revealed some serious irregularities. The Government is carrying out a detailed investigation of the Project and its report is expected to be completed soon. This matter will continue to be pursued by the Government and the Bank in the joint effort to improve governance in Indonesia. Once there is marked improvement with respect to this problem the bank stated to the Government of Indonesia it would begin to considering fiancing projects in the pipeline. A number of projects, such as the Integrated Rural Development Project in the Eastern Islands, were deferred upon completion of the technical assistances until this issue, among other related matters, was resolved.
The ADB has also requested high-level dialogue with the Government of Vietnam to discuss corruption as it relates to Bank-financed projects in Vietnam ,as well as the overall impact of this problem with respect to furthering the economic and social development of the nation. The Bank became aware of a problem when as early as mid-1997 there were reports of irregularities associated with the Irrigation and Flood Protection Rehabilitation Project, the first ADB-financed project in Vietnam. Recently an inquiry by a National Assembly special committee has begun under orders of Vietnam's Prime Minister Phan Van Khai to review the problems of irregularities associated with the project. The Bank has ackowledged that the concern by the Prime Minister is genuine particularly as this project has important strategic and economic repercussions on national food supplies with respect to rehabilitation of a dam and two large irrigation schemes in Nghe An and Thanh Hoa provinces, and on the physical and economic well-being of large parts of Hanoi city with respect to the rehabilitation of Hanoi's dyke system. Investigations, although continuing, have already revealed the prime foreign consultant appears to have bribed the project executing agency to win the project, the bribe to be paid through irregular payment with project finances of goods and services provided by certain Ministry of Agriculture and Rural Development bodies associated with the project.