One of the most corruption-prone government activities is public procurement. The reasons are twofold. One is the high volume of transactions and the financial interests at stake. The other is the complexity of the process, close interaction between public officials and businesses and multitude of stakeholders. As mentioned in the Anti-Corruption and Economic Crimes Act, it may include bribery, embezzlement and abuse of office, among many others.
Procurement corruption occur as a result of a conflict of interest, whereby a public official may want to secure for themselves and/or related parties the benefits which belong to the public by circumventing the formal requirements for their award. Public procurement is particularly predisposed to collusion, cartelism and other corrupt practices that thwart competition so that the citizens do not receive value for money in the process.
One sure way of fighting this corruption is by use of integrity pacts. The flexible tool can help to make public procurement more transparent and fair and reduce the risk of corruption by the involvement of all stakeholders. An agreement between a government procuring entity and bidding companies, it is tailored to each tender and entity, committing parties to refrain from bribery, corruption or collusion. It typically involves an independent monitor and a clear process for reporting, resolving and sanctioning integrity issues.
Some of the benefits are increasing trust in a public procurement among governments, businesses and citizens; increasing competition by leveling the playing field; reducing the cost of procurement and contract implementation; and preventing delays in the tender cycle or project implementation. However, all stakeholders aren’t must be involved.
Lack of political will may make parties not to comply with the requirements and monitors may withdraw. In others, cost escalations or interruptions in the tender or contract implementation have been inevitable. Even then, the integrity pact has helped to make the reasons for delays or cost increases transparent, increasing trust and fairness.
Other commitments — such as the obligation that bidders disclose all commissions and similar expenses paid by them to anyone in connection with the contract or the government officials involved subscribe to ethical commitments in line with the integrity pact — can be included.
The pact establishes a monitoring system and a process for determining the presence of offences, which carry sanctions as a consequence. The penalties for bidders vary from loss or denial of contract to forfeiture of the bid or performance bond, liability for damages and debarment from contracts, and, for the officials, criminal or administrative action.
An integrity pact can provide a means of stakeholder participation that ensures all relevant parties can contribute to integrity.
Let’s all implement integrity pacts to fight graft.
Dr Omai is an anti-corruption crusader and governance consultant.