As well, for the effective and efficient implementation of aid, much effort is exerted for appropriate and efficient procurement particularly on equipment and consulting services.

## (3) Prevention of Fraud and Corruption

Japan’s ODA has the goal of contributing to the socio-economic development and the welfare of the developing countries and, given that taxpayers’ money supports ODA projects, fraudulent use of the funds provided for assistance must be avoided. Accordingly, the government and the implementing agencies take steps to enhance the transparency and simplicity of procurement procedures.

During the procurement stage for ODA projects, tenders have been submitted by developing countries in accordance with guidelines for grant and loan aid. The results of these are verified by the implementing agencies, and steps taken to ensure transparency; not only is the name of the business receiving the order made public, but so too is the contract amount. For technical cooperation, JICA procures equipment, services, and so forth for implementing projects in accordance with provisions pertaining to procurement. In case improprieties are discovered relating to grant aid, loan aid, and technical cooperation, a mechanism has been set in place whereby firms that commit improprieties are disqualified from bidding or receiving contracts for projects for a certain period.

Efforts are also underway to increase the efficacy of auditing. External audits are being expanded and spot audits have been introduced, with the recommendations obtained from these audits being used to further measures aimed at improving the use of assistance. With regard to improving external audits of loan aid, a review by an external expert on the procedures for procurement is now being applied. For grant aid, external audits for Grant Assistance for Grassroots Human Security Projects worth ¥3 million or more are obligatory in principle and are steadily implemented. JICA also uses external audits for technical cooperation to serve as accounting audits. With respect to the implementation of spot audits of loan aid, a mechanism has been introduced for audits that can be conducted where necessary for projects agreed upon by the governments after FY2002 in principle. For grant aid, “spot check without prior notice” was introduced from FY2004 to determine whether or not contract verification, which is the process of checking that all the contacts related to the projects are in line with the agreements between the governments concerned, has been carried out pursuant to a set of standards. Meanwhile, for technical cooperation, internal audits are conducted through sampling.

Along with fraudulent acts related to bidding carried out within Japan for the purpose of participating in ODA projects, other improper conduct such as the inappropriate granting of funds to persons affiliated with foreign governments cannot be acceptable. Japan ratifies the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and as such it is strict in its handling of fraudulent business with foreign government parties, including application of the Unfair Competition Prevention Law, in order to ensure trust toward ODA projects, which use taxpayers' money as their main resource.

Improprieties were revealed in ODA loan projects in Viet Nam, and concerned parties in Japan were arrested. As a result, from the perspective of strict and appropriate execution not to lose trust in ODA projects, in August 2008, MOFA and the former JBIC announced measures to disqualify the applicable firm as a tenderer for loan and grant aid projects for a period of 24 months (by that point though, JICA had already taken it off the list of registered consultants). The government has also alertly warned the industrial associations covering major Japanese consultant firms involved in ODA projects against its members' possible misconducts. As for the inter-government relations, both of the governments of Japan and Viet Nam have seriously regarded the incident and confirmed the policy in a fresh light that the Vietnamese government would take stern measures against any corruption associated with ODA. Both governments have further set up Japan-Vietnam joint committee for Preventing Japanese ODA related Corruption, to discuss feasible preventive measures aimed at blocking recurrence of similar misconducts and winning back trust on ODA for Viet Nam.

## (4) Securing the Safety of Personnel Engaged in Development Assistance

Japan currently provides assistance using ODA to over 160 countries and regions, and the public order in the developing countries where ODA personnel involved in development operations varies considerably and changes constantly. In addition, since the terrorist attacks in the United States on September 11, 2001, tensions in the Middle East and South Asia have increased. As well, frequent global terrorist activities still exist. In implementing peace building activities, it is considerably critical how to