Academic journal article Business Law International

Oversight Mechanisms at the EBRD

Academic journal article Business Law International

Oversight Mechanisms at the EBRD

Article excerpt

The European Bank for Reconstruction and Development (EBRD), whose membership consists of 63 countries and two intergovernmental institutions, the European Union and the European Investment Bank (EIB), was founded in 1991 to assist the countries of Central and Eastern Europe and the former Soviet Union in their transition to democratic market economies. The majority of the EBRD's loans and equity investments are for private sector enterprises, but the EBRD also provides loans to, or loans that are guaranteed by, its countries of operations and public entities in the countries of operations. In recent years, EBRD has expanded the geographical reach of its activities: since 2005 it has been operating in Mongolia, and in 2008 Turkey became an EBRD country of operations. Most recently, following the 'Arab Spring' events in 2011, the EBRD has started activities to support the transition of the countries of the southern and eastern Mediterranean region - Morocco, Tunisia, Egypt and Jordan.

As part of its commitment to the transparency and accountability of its operations, the EBRD has established three quasi-judicial procedures, in order to ensure that the projects it finances comply with the highest standards of integrity, that the EBRD's clients comply with the EBRD's procurement rules and that the EBRD itself complies with the policies and procedures it has adopted in order to offer to civil society members an opportunity to express concerns that an EBRD operation may have adverse environmental or social impact. This article reviews these three mechanisms:

1. Enforcement proceedings, which deal with the EBRD's efforts in combating fraud and corruption in its operations, that is, any occurrence or suspected occurrence of a sanctionable practice in the context of an EBRD operation (including in respect of the award or implementation of an EBRD-financed contract).

2. Procurement complaint mechanism, which concerns allegations of unsuccessful tenderers participating in procurement processes governed by the EBRD's Procurement Policies and Rules for public sector operations that the applicable rules have not been observed.

3. Project complaint mechanism, which has been established to provide an opportunity for an independent review of complaints from one or more individuals or organisations concerning an EBRD-financed project that allegedly has caused, or is likely to cause, harm.

In particular, the article analyses key procedural components of each of the three mechanisms, which have been designed to reflect best international practice. While the EBRD's policies and procedures are not subject to any national laws or oversight of any national authorities, the EBRD carefully considers broad values and principles of good administrative procedure, the rule of law, due process, transparency, timeliness, as well as practices and norms of other international bodies, to inform its own policy-making.

Anti-corruption efforts and enforcement proceedings


Investigating and sanctioning misconduct and corruption constitute key pillars of the EBRD's anti-corruption strategy. If an allegation of misconduct is made against a staff member, the investigation will be carried out in accordance with the EBRD's Conduct and Disciplinary Rules and Procedures,1 which also regulate the process to be followed by the EBRD in making a determination as to whether misconduct has been established and the imposition of disciplinary measures, if any. Where such an allegation is made against a board official, the investigation is governed by the provisions of the EBRD's Code of Conduct for Officials of the Board of Directors.2 In cases where prohibited practices (ie fraud, corruption, collusion and/or coercion; collectively, 'prohibited practices' and each a 'prohibited practice'3) are suspected or detected to have occurred in EBRD-financed projects, the investigation and sanctioning are governed by the EBRD's Enforcement Policy and Procedures (EPPs). …

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