Reuters
October 19, 2005

The Asia Development Bank’s corruption chief on Wednesday defended his decision not to publish the names of companies blacklisted for corruption in institution-funded projects, despite pressure from donors.

Peter Pedersen, the bank’s auditor general, said he did not believe the list should be made public without companies being allowed to properly defend themselves against any charges.

Currently, companies are barred from doing business with the ADB for corruption following an investigation by auditors from the institution, which invests about $6 billion a year in development projects in Asia.

A tally of the blacklisted companies is only made available on a “need to know basis” and circulated among donor countries and other development banks, Pedersen said.

“We don’t believe the multilateral development banks should be above the law and categorize somebody as being corrupt without being accountable for making such statements,” he said.

The World Bank is currently the only development bank to publish the names of companies it penalizes for corruption or fraud. Companies are given 60 days to respond in writing to a notice of debarment.

In many countries, labeling a company or individual corrupt is considered slander unless the charge is proved in court, Pedersen said.

While large international firms are able to afford expensive legal costs to fight corruption charges, smaller, less significant companies would not, he said.

“None of us have interests in keeping the list secret, but the problem is can we implement out policy in a manner which is fair to all parties?” he said. “We are doing better without publicizing the list than if we were publicizing the list. Practically that makes our lives so much easier.”

Pedersen acknowledged he was under pressure from major European donors and the United States to publish the names, arguing it will deter corruption and fraud.

He was scheduled on Wednesday to meet staff of U.S. Senate Foreign Relations Committee chairman Richard Lugar in Washington, who has pushed for more accountability in the institutions to ensure less waste of taxpayer money.

Lugar has led a probe into allegations of corruption in projects funded by the development banks and questioned how successful the institutions have been in fighting corruption.