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Jordan Howells

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Alex Haines of Bretton Woods Law at the ‘School of Tomorrow’ Conference in Islamabad, Pakistan

By | Development Banks, Multilateral, Multilateral Development Banks, News | No Comments

The School of Tomorrow Conference series was initiated by Beaconhouse in 2000, and the recent event focused on seeking inspiration and equilibrium in a new age. The conference took place at the Pak-China Friendship Centre in Pakistan’s capital and involved more than 40 panel discussions. Alex sat on two panels: “The China Pakistan Economic Corridor and the Future of the Region: Socio-cultural and Economic Perspectives” and “Global Media in a Post-Truth Era”. As a barrister who specialises in international corruption and Multilateral Development Banks (‘MDBs’) sanctions cases, Alex gave his perspective of the impact which the recently established Beijing-based Asian Infrastructure Investment Bank (‘AIIB’) has had on the balance of power in the International Financial Institution (‘IFI’) arena. Specifically, he analysed the result of the AIIB-part-funded projects in the region on the MDB landscape and the traditional balance of power comprising the US-dominated World Bank, the European-dominated International Monetary Fund (IMF), and the Japanese-dominated Asian Development Bank (ADB). To a certain extent, the AIIB together with the Shanghai-based New Development Bank (NDB) suggests a new age in the world of MDBs in which China has a pivotal role, resulting in a number of opportunities for Pakistan and the surrounding region to make the most of the opportunities which an increasingly globalised world has to offer. Alex identified corruption and transparency as the two biggest challenges in this context. Alex also discussed the vital role of the judiciary and the Law in general in light of recent political events such as the US election and the High Court judgment at the end of 2016, concerning the UK Government’s capacity to trigger Article 50 – or ‘Brexit’ – after which the British press attacked its judges.

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UN fails to protect whistleblowers: the importance for International Civil Servants of protection by independent legal counsel.

By | Derecho Administrativo, Disputas Laborales, Funcionarios Públicos, News | No Comments

UN, NEW YORK

The United Nations Dispute Tribunal has found the international organisation’s mechanisms for dealing with whistleblowers to be so “fundamentally flawed” that they fail to protect the basic rights of its employees.  In its ruling in the case of Wasserstrom (judgment to be published), the Tribunal held that the UN Ethics Office failed to protect the applicant against reprisals from his bosses.  James Wasserstrom, an American diplomat, was sacked and then detained by UN Police, who proceeded to ransack his flat, search his car and post his picture on a wanted poster after he expressed suspicions in 2007 about corruption in senior ranks of the UN Mission in Kosovo.

The clear lack of protection for UN staff members encapsulated in this case is confirmed by the statistics.  The Guardian (27th June 2012) cites statistical analysis by the Washington based Government Accountability Project (GAP), which found that out of 297 cases in which whilstleblowers complained of retaliation, the Ethics Office fully sided with the complainant once in six years.  Statements made by GAP confirm the importance for international civil servants of seeking independent legal advice and protection when they find themselves in the position of whilstleblower.  Bea Edwards, GAP Executive Director remarked:

“Like any internal office in an international institution, it is always subjected to huge pressures from above.”  She continued, “It is very difficult for an official employed by the institution to be impartial”.

It is a view which is confirmed by the experience of the team at Bretton Woods Law: the rights of, and the protections afforded to, individuals working within international organisations are all too often subjugated by realpolitik.

Indeed, the attitude of those within the UN towards whilstleblowers was succinctly summed-up by Wasserstrom who remarked:

“I was told at some point in the whole process that the UN didn’t want a ‘culture of snitches’.  What has grown up instead is a culture completely insulated from reality.  It’s a culture of impunity.”

As well as raising concerns about staff exposure to fundamental failings in the UN system, the case is also of assistance to those seeking redress as it adds validity to the approach of directing such grievances to the Secretary General, as the office-holder with ultimate responsibility for the Ethics Office.

If you have concerns about whilstleblowing, contact Bretton Woods Law for impartial confidential advice.

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Asian Development Bank gets tough with companies who engage in sanctionable activities

By | Corruption, Development Banks, Fraud, International, Multilateral, Multilateral Development Banks, News | No Comments

The Office of Anticorruption and Integrity (OAI) of the Asian Development Bank (ADB) recently published its 2011 Annual Report (‘the Report’).  Two core messages flow from it.  The first is that efforts to tackle fraud and corruption have never been greater.  The second is the importance of ‘communication’ both between the MDBs and through OAI’s aim to ‘empower’ those involved in ADB activities “with a deeper understanding of ADB’s approach to the anticorruption fight”.  An appreciation of both messages is of paramount importance both for board members and employees of companies operating within the sphere of international development and procurement.  Indeed, many may think they have a clear view of the meaning of fraud and corruption; they are often equally clear that ‘fraud’ and ‘corruption’ are words which do not apply to them or their companies.  Yet the Report to the President may make for chilling reading: it spells out with crystal clarity conduct which may be viewed by the ADB as fraudulent or corrupt; conduct which, if found, will almost inevitably lead to the imposition of sanctions.  What might surprise many, is just how easy it is for a company to cross the threshold into sanctionable conduct.

The Bribery Act 2010 has, understandably, focused the attention of many bodies corporate on the need to be cognisant of the risks associated with such corrupt conduct.  However, it is important not to lose sight of the fact that sanctionable practices are not always as flagrant as the soliciting or payment of bribes.  Indeed, in 2011, in the case of allegations dealt with by OAI, “fraudulent practice formed the majority of investigations at 60%”.  Of that majority, misrepresentation “constitutes 52% of allegations pertaining to fraudulent practice, with submission of false documents (including bank guarantees, bid securities, or curricula vitae) at 27%.  False or inflating financial claims represent 18% of the investigations”.  It is of note that CV fraud is cited, since this is all too often a significant, but unappreciated risk area for many companies.

Companies necessarily operate in a competitive commercial environment and it seems that a practise has emerged in the field of procurement of submitting what effectively amount to ‘representative proposals’, where the personnel included are viewed not so much as integral and inseparable to a proposal, but as merely representative of the staff who might eventually be provided, should the bid be successful.  Such behaviour manifests itself as a risk in a number of ways.  One of the most common is the inclusion by a company of contractors’ CVs in proposals when that company knows or suspects that the consultant in question is not available to complete the project it is bidding for.  Furthermore, it is not uncommon for contractors to be unaware that their CVs have been included in a proposal.  It is no defence for a company to cite normal commercial practice as an explanation for such conduct; indeed, a single instance of such a misrepresentation is sufficient for a Multilateral Development Bank (MDB) to impose sanctions – including debarment.  The threat for companies of sanctions and in particular, debarment, is now greatly enhance by the cooperative approach to tackling fraud and corruption, which is now at the heart of the efforts of all of the MDBs.

The Report states that it “is important to note that the communication and exchange of information among the integrity offices of other MDBs greatly assisted in OAI’s investigations in 2012”.  It goes on publically to confirm that “ADB routinely shares information with the World Bank’s Integrity Vice Presidency and has received assistance from said office that has facilitated OAI’s investigations”.  Furthermore, the Report openly states that “more than 45 officials from government agencies and 13 development institutions have access to ADBs sanctions list”.  It is, perhaps, worthy of note that the period of debarment most frequently imposed by the ADB, both for firms and individuals, fell into the 4-7 years category.  This is made all the more significant as the relevant qualifying period for considering automatic ‘cross debarment’ is met where the “initial period of debarment exceeds one year”.

It is quite clear, then, that the regime in which international development companies operate has never been stricter and companies should factor this into their risk management strategies.  Not only is the liability often strictly interpreted, but it is now undeniable that knowledge of infringements arising out of that liability is not only being shared, but is being acted on throughout the MDB community.  The report recognises that such cross debarment has the effect of “significantly extending the reach and impact of sanctions” and as a result, it is not surprising that discussions “to further harmonize debarment practices among participating MDBs continue”.  It is with these points in mind that the value of early internal investigation and advice cannot be underestimated when companies are facing allegations, or even accusations, of fraud or corruption.  A misjudgement in respect of a CV could have potentially catastrophic consequences for the entire business.

If you are worried that your company’s internal procedures and programmes might leave you exposed to possible  accusations of fraud and corruption, Bretton Woods Law’s International Organisations Consultancy Service is the perfect solution to ensure compliance with Multilateral Development Banks’ stringent policies. To discuss your company’s needs in person, please click here to contact your nearest office.