The World Bank voluntary disclosure program (VDP): A distributive justice critique

Columbia Journal of Transnational Law

Volumn 46, Issue 3, 2008, Pages 709-731

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EID: 52049096659     PISSN: 00101931     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (86)

1. Bruce Zagaris, World Bank Adopts Anti-Corruption Asset Recovery Initiative, 22 INT'L. ENFORCE. L. RPTR. 433, 433 (2006).
2. See, e.g., John R. Fleder, A Voluntary Disclosure Program for FDA - The Time Has Come, 54 FOOD & DRUG L.J. 389, 392 (1999).
3. See, e.g., TRANSPARENCY INT'L, COMMENTS AND RECOMMENDATIONS ON THE WORLD BANK INITIATIVE ON GOVERNANCE AND ANTICORRUPTION 12-13 (2006), http://www.transparency.org/content/download/9347/63477/version/1/file/ TI_Submission_WB_06-08_04.pdf (last visited Mar. 3, 2007).
4. See Louis Kaplow & Steven Shavell, Fairness Versus Welfare, 114 HARV. L. REV. 961, 968 (2001).
5. Id. at 969.
6. Christopher H. Schroeder, Rights Against Risks, 86 COLUM. L. REV. 495, 537 (1986) (citing JOHN RAWLS, A THEORY OF JUSTICE 302 (1971)).
7. Edward T. Pound & Danielle Knight, Cleaning Up The World Bank, U.S. NEWS & WORLD REP., Apr. 3, 2006, at 40-41.
8. See id.; see also Editorial, Checking Corruption, J. COM., Aug. 25, 1997, at 8A.
9. See Sebastian Mallaby, Wolfowitz's Corruption Agenda, WASH. POST, Feb. 20, 2006, at A21.
10. Id.
11. A Regime Changes - Paul Wolfowitz at the World Bank, ECONOMIST, June 4, 2005, at 65, 66.
12. See id.
13. Id.
14. See, e.g., id. at 67.
15. Filomeno S. Sta. Ana III, Fighting Corruption Needs More Than A 'Spray Gun,' BUSINESSWORLD, Oct. 2, 2006, at S1/5.
16. World Bank Department of Institutional Integrity, About the VDP, http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/ORGUNITS/ EXTDOII/EXTVOLDISPRO/0,,contentMDK:20996886∼menuPK:2720524∼pagePK: 64168445∼piPK:64168309∼theSitePK:2720459,00.html (last visited Jan. 10, 2007) [hereinafter World Bank, About the VDP].
17. WORLD BANK DEP'T OF INSTITUTIONAL INTEGRITY, VOLUNTARY DISCLOSURE PROGRAM: GUIDELINES FOR PARTICIPANTS ¶ 5.2.2 (2006), http://siteresources.worldbank.org/INTVOLDISPRO/Resources/ VDPGuidelinesforParticipants.pdf (last visited Jan. 10, 2007).
18. Id. ¶ 5.3.1.
19. Id.
20. See, e.g., WORLD BANK DEP'T OF INSTITUTIONAL INTEGRITY, VOLUNTARY DISCLOSURE PROGRAM: TERMS & CONDITIONS ¶ 26, 51 (2006), http://siteresources.worldbank.org/INTVOLDISPRO/Resources/ VDPTennsandConditions.pdf (last visited Jan. 10, 2007) [hereinafter WORLD BANK, TERMS & CONDITIONS].
21. Id. ¶ 4, 6, 15.
22. Id. & 20.
23. Id. ¶ 122.
24. Id. ¶ 34-35, 37-39.
25. See World Bank, Frequently Asked Questions, at Part III, Question 4, http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/ORGUNITS/ EXTDOII/EXTVOLDISPRO/0,,contentMDK:20997552∼menuPK:2766556∼pagePK: 64168445∼piPK:64168309∼theSitePK:2720459,00.html (last visited Jan. 10, 2007) [hereinafter World Bank, Frequently Asked Questions].
26. World Bank, About the VDP, supra note 16, ¶ 8.
27. Id.
28. See, e.g., David White, The 'Resource Curse' Anew: Why a Grand World Bank Oil Project Has Run Into the Sand, FIN. TIMES (London), Jan. 23, 2006, at 13 (noting that the Bank suspended its various obligations to Chad after a loan earmarked for oil pipeline financing was misspent); Edward Olebar, Guatemala Risks Loss of Loans, FIN. TIMES (London), May 26, 1994, at 5 (noting that Guatemala's failure to meet IMF-set fiscal targets would lead to the World Bank freezing a $42 million structural adjustment loan); Jane Perlez, Citing Corruption by Kenya Officials, Western Nations Are Canceling Aid, N. Y. TIMES, Oct. 21, 1991, at A9.
29. MOLLY MAUDE COCHRAN, NORMATIVE THEORY IN INTERNATIONAL RELATIONS: A PRAGMATIC APPROACH 24 (2000) (citing JOHN RAWLS, A THEORY OF JUSTICE 4 (1971)).
30. DANIEL M. HAUSMAN & MICHAEL S. MCPHERSON, ECONOMIC ANALYSIS AND MORAL PHILOSOPHY 153 (1996).
31. JOHN RAWLS, A THEORY OF JUSTICE 87 (Oxford U. Press 1999) (1971).
32. THOMAS W. POGGE, REALIZING RAWLS 198 (1989).
33. RAWLS, supra note 31, at 246-47.
34. Frank Garcia, Global Justice and the Bretton Woods Institutions, 10 J. INT'L. ECON. L. 461, 468 (2007).
35. Id. at 470.
36. Corruption 's Big Funder - Or How to "Lose " $100 Billion Without Even Trying, NEW INTERNATIONALIST MAG., Dec. 1, 2006, at 15, available at http://findarticles.com/ p/articles/mi_mOJQP/is_396/ai_n17093887.
37. See Jonathan Finer, World Bank Focused on Fighting Corruption; Graft and Bribery, Once Tolerated, Punished by Blacklisting, WASH. POST, Jul. 4, 2003, at E01.
38. A list of World Bank contractors is available at http://web.worldbank. org/external/projects/main?menuPK=228440&theSitePK=40941&pagePK= 227829&piPK=95918&query=®ioncode=ALL&countrycode= ALL§or=ALL&majorsector=ALL&procurementtype=ALL& procurementmethod=ALL&procurementgroup=ALL&suppliercountry= ALL&startyr=ALL&endyr=ALL&pagesize=100.
39. See Scott D. Hammond, Dir. of Criminal Enforcement, U.S. Dep't of Justice Antitrust Div., Address at the ABA Criminal Justice Section's Fifteenth Annual National Institute on White Collar Crime: When Calculating the Costs and Benefits of Applying for Corporate Amnesty, How Do You Put a Price Tag on an Individual's Freedom? (Mar. 8, 2001) (discussing how the "winner-take- all" dynamic engendered by the Amnesty Program of federal antitrust law, a program analogous to the VDP, facilitates effective enforcement against cartel members).
40. See World Bank, Frequently Asked Questions, supra note 25, at Part II (noting limits of the confidentiality policy and discussing redacted reports that will be distributed to country officials).
41. Id. at Part III, Question 7 (acknowledging the logistical burden of the VDP's internal investigation requirement, but noting that the costs for smaller firms are likely lower, and that the Bank can provide these smaller firms with assistance in meeting their VDP requirements).
42. WORLD BANK, TERMS & CONDITIONS, supra note 20, ¶ 13.
43. WORLD BANK DEP'T OF INSTITUTIONAL INTEGRITY, VDP PROTOCOL 6: INTERNAL INVESTIGATION AND REPORT PERFORMED BY PARTICIPANT § C, http://siteresources. worldbank.org /INTVOLDISPRO/Resources/ Protocol6InternalInvestigation andReportPerformed byParticipant.pdf (last visited Feb. 10, 2007) [hereinafter WORLD BANK, VDP PROTOCOL 6].
44. WORLD BANK, TERMS & CONDITIONS, supra note 20, ¶ 10.
45. See WORLD BANK, VDP PROTOCOL 6, supra note 43, § D.
46. WORLD BANK DEP'T OF INSTITUTIONAL INTEGRITY, VDP PROTOCOL 7: PARTICIPANT PREPARES A COMPLIANCEPROGRAM (Jul. 24, 3007), http://siteresources. worldbank.org/INTVOLDISPRO/Resources/ Protocol7ParticipantPreparesaComplianceProgram.pdf.
47. WORLD BANK, TERMS & CONDITIONS, supra note 20, ¶ 22.
48. Id. ¶ 29(ii).
49. See World Bank, Frequently Asked Questions, supra note 25, at Part II, Question 7 (acknowledging the possibility that participants' identities may be "leaked" by non-Bank sources).
50. See id.
51. See Kevin Bales, International Labor Standards: Quality of Information and Measures of Progress in Combating Forced Labor, 24 COMP. LAB. L. & POL'Y J. 321, 322 (2003) (observing that in developing countries with corrupt governments, "the criminal [is able] to use violence with impunity").
52. See WORLD BANK, TERMS & CONDITIONS, supra note 20, ¶ 3, 6. For a critique that the "Misconduct" standard is vague, see JOHN OBERDORFER ET AL., CONTRACTORS BEWARE: THE PITFALLS OF A WORLD BANK DEBARMENT PROCEEDING (2002), http://www.pattonboggs.com/files/News/89dM3d8-b1bc-48fb-919e- b91e61e665f8/Presentation/NewsAttachment/47c98bfl-620a-44fd-94ee-04213b703ebf/ 2002_09_24_WorldBankArticle.pdf (last visited Mar. 2, 2007).
53. This figure includes those terms that are apparently designed merely to prevent assertion of attorney-client privilege by the Participant with respect to information gleaned by the Compliance Monitor. See WORLD BANK, TERMS & CONDITIONS, supra note 20, ¶¶ 29(iii), 37, 50.
54. See id. ¶ 50.
55. See DICK THORNBURGH, ET. AL., REPORT CONCERNING THE DEBARMENT PROCESS OF THE WORLD BANK 43 (Aug. 14, 2002), http://siteresources.worldbank. org/INTDOII/Resources/thornburghreport.pdf (last visited Mar. 1, 2007).
56. See World Bank, Frequently Asked Questions, supra note 25, at Part III, Question 7.
57. Id.
58. See WORLD BANK, TERMS & CONDITIONS, supra note 20; World Bank, Voluntary Disclosure Program Documents and Forms, http://web.worldbank.org/WBSITE/EXTERNAL/ EXTABOUTUS/ORGANIZATION/ORGUNITS/EXTDOII/EXTVOLDISPRO/0,,contentMDK: 20997232∼menuPK:2766549∼pagePK:64168445∼piPK 64168309∼theSitePK: 2720459,00.html (last visited Mar. 1, 2007) (where a comprehensive inventory of forms and protocols can be downloaded, but text regarding the "technical assistance" provision is nowhere to be found); see also World Bank, Frequently Asked Questions, supra note 25, at Part I, Question 5 (noting the "extensive" scope of VDP information published on the Bank's website, and implying that anything unavailable online would not be integral to a firm's decision to enter the VDP).
59. World Bank, Frequently Asked Questions, supra note 25, at Part III, Question 7.
60. Id.
61. See id. at Part III, Questions 7, 11 (explaining that the Bank "can" and "may" provide technical assistance to firms with fifty or fewer employees, and that "[p]articipants bear the cost of all [VDP] obligations unless they are small firms to which the Bank decides to provide technical assistance") (emphasis added).
62. Id.
63. Jason Matechak & Pascale Dubois, World Bank Battles Corruption Through New Voluntary Disclosure Program, MONDAQ BUS. BRIEFING, Oct. 3, 2006.
64. See Stephen Robert Geisler, Comment, Voluntary Disclosure of Corporate Violations of Federal Law, 51 ALA. L. REV. 375, 376-79 (1999).
65. See id. (noting that under the DOD program, firms may not avoid prosecution absent "effective remedial action" among other criteria; the Antitrust Division VDP requires "restitution where possible;" the EPA program mandates "prompt correction and remediation."). For the parallel provision of the DHHS healthcare fraud VDP, see Publication of the OIG's Provider Self-Disclosure Protocol, 63 Fed. Reg. 58, 399 (Oct. 30, 1998).
66. United Nations Convention Against Corruption, G.A. Res. 58/4, Annex, art. 1, U.N. Doc. A/RES/58/4/Annex (Oct. 31, 2003), available at http://daccessdds.un.org/doc/UNDOC/GEN/N03/453/15/PDF/N0345315.pdf?OpenElement.
67. Id. art. 35.
68. See ERIC RAKOWSKI, EQUAL JUSTICE 228-29 (1991).
69. See World Bank, Frequently Asked Questions, supra note 25.
70. See sources cited supra note 16.
71. See, e.g., William Wallis, Chance for West Africa's Jewel to Regain its Sparkle: With a Collapse in Cocoa Prices and Debt Servicing Taking 40% of the Budget, Ivory Coast's New Army Chief Faces a Tough Task to Restore Its Fortunes, FIN. TIMES (London), Jan. 6, 2000, at 14 (describing recession and political coup that occurred after the World Bank and IMF withdrew $420m in annual aid); see also Barry Bearak, Why People Still Starve, N.Y. TIMES, Jul. 13, 2003, § 6 (Magazine), at 32, 36 ("Like many poor, heavily indebted countries, Malawi operates something like a business in receivership .... When the spigot of aid goes on [and] off," the result is "unsteadiness" and, in select instances, famine.").
72. See World Bank, Frequently Asked Questions, supra note 25, at Part III, Question 7.
73. Cash may also be especially difficult to obtain for firms in emerging markets, where liquidity tends to be scarce. See Philip Coggan, Companies & Markets: The Short View, FIN. TIMES (London), Oct. 6, 2005, at 21.
74. See World Bank, Frequently Asked Questions, supra note 25, at Part III, Question 10 ("VDP Participants are, however, obligated to pay for most costs associated with the VDP process, and the size of this obligation should not be underestimated, particularly for firms with activities in multiple countries.").
75. See discussion supra p. 5.
76. The Initial VDP Meeting takes place once the Bank has determined, based on Background Data supplied by a prospective Participant, that the firm is VDP-eligible. It is the last step prior to the firm's official enrollment. For details, see WORLD BANK DEP'T OF I NSTITUTIONAL INTEGRITY, VDP PROTOCOLS, available at http://siteresources.worldbank.org /INTVOLDISPRO/Resources/ Protocol3ParticipantandWorldBankSigntheVDPTerms&Conditions.pdf (last visited Mar. 2, 2007).
77. Press Release, Government Accountability Project (GAP), World Bank Makes Wrong Move (Sept. 26, 2006), available at http://www.whistleblower.org/ content/press_detail.cfin?press_id=619.
78. See RAKOWSKI, supra note 68, at 228-29.
79. Emil Ruderfer, Time To Treat Aid-Recipient Countries As Mature Nations, FIN. TIMES (London), Jul. 4, 2001, at 12.
80. See World Bank, About the VDP, supra note 16, ¶ 8 (explaining that Participants "alert the Bank to on-going and planned corrupt acts in real-time").
81. See Kaplow & Shavell, supra note 4, at 968.
82. See Schroeder, supra note 6, at 535-37.
83. See, e.g., David McGowan, Politics, Office Politics and Legal Ethics: A Case Study in the Strategy of Judgment, 20 GEO. J. LEGAL ETHICS 1057, 1090 (2007).
84. See World Bank, About the VDP, supra note 16, ¶ 8. This is a possibility contemplated but rejected by the World Bank, which argues that the VDP is uniformly, evenly accessible to all eligible contractors. See id.
85. See generally Kaplow & Shavell, supra note 4.
86. Sarah B. Rogers Staff-editor, Columbia Journal of Transational Law. J.D. Candidate, Columbia Law School, 2008: B.A. International Relations, Dartmouth College, 2005. I would like to