NIB expects its staff, members of governing bodies and other stakeholders to adhere to the highest level of integrity and ethical standards. To pursue these goals, the Bank has adopted a zero tolerance attitude towards fraud and corruption in all of its operations and activities.
The Bank has also established codes of conduct for its staff, the Board of Directors and President and the members of the Control Committee.
The Board of Directors adopted a new compliance integrity and anti-corruption framework in 2016. This framework includes the Compliance, Integrity and Anti-Corruption Policy, the Investigation and Enforcement Policy and the Speaking-up and Whistleblowing Policy.
NIB’s anti-corruption efforts are based on the principals of the Uniform Framework for Preventing and Combating Fraud and Corruption, which was agreed upon by the major international financial institutions in 2006.
A major change in NIB’s new framework is the establishment of a Sanctions Panel and an appeal function for external fraud and corruption cases. In 2016, the Board of Directors appointed Ms Enery Quinones and Mr Rohil Hafeez as external members of the Sanctions Panel. In addition to the two external members, the Sanctions Panel will have one internal member appointed by the President on a case-by-case basis.
The Office of the Chief Compliance Officer (OCCO) is responsible for investigating allegations of prohibited practices including fraud and corruption, misconduct and complaints related to non-compliance with the Bank’s polices.
For investigations of prohibited practice involving external parties to the Bank, OCCO shall present its findings and recommendations to the Sanctions Panel, which will review the findings and decide on possible sanctions.
For investigations of prohibited practice involving NIB staff members, including allegations of misconduct, OCCO will report its findings to the President, who shall decide on appropriate actions based on the Bank’s Staff regulations.
OCCO oversees and coordinates matters relating to integrity and reputational risks and regularly provides advice and guidance to the Bank’s management and Board of Directors on how to address integrity and reputational risks in new and ongoing lending operations. OCCO is headed by the Chief Compliance Officer who reports directly to the President and has unrestricted access to the chairpersons of the Board of Directors and the Control Committee.
In terms of prevention, NIB puts particular emphasis on knowing its customers, for which purpose the Integrity Due Diligence (IDD) Guidelines are established. Training of operational staff is an important aspect of the IDD process, with the aim of identifying potential integrity risks as early as possible in the project cycle.
This is to avoid that the Bank becomes involved with unethical borrowers and projects in which corruption, money laundering, terrorist financing or tax fraud and evasion could take place. All new clients are screened thoroughly in the Bank’s integrity due diligence processes, as well as in the annual portfolio follow-up work.
In 2016, the Bank’s Council of Fighting Corruption was reinforced with more members from different departments of the Bank and focusing on prevention of fraud and corruption. Also in 2016, the Council was involved in the risk assessment of the Bank’s procedures to combat money laundering and terrorist financing.
This work resulted in a comprehensive integrity risk assessment of all of the Bank’s operations, which will be used as a foundation for the development of improved integrity due diligence controls.
Two new external cases of corruption involving borrowers from NIB member countries were registered in 2016. These cases are currently under investigation by OCCO in consultations with national enforcement agencies and co-financing partners.
OCCO has continued to follow up with a national enforcement agency on a fraud and corruption case, for which NIB’s own investigation was concluded in 2014.