This presentation describes Integrity Pacts (a tool to counter corruption in public contracting), that was developed by Transparency International (TI) , an international NGO, that is active in approximately 100 countries. It describes a third-party monitoring process aimed at reducing corruption risks in public contracting. It is adapted from a presentation that was made in Rwanda in 2012.

1. Donal O’Leary
Sr. Advisor
Transparency International Secretariat
Berlin, GERMANY

2. 






Definition/Elements of Integrity Pacts (IPs)
Roles and responsibilities of stakeholders,
including civil society
Conditions for success
Benefits of Integrity Pacts
Limitations of Integrity Pacts
In what kinds of contracts can IPs be applied
Contracting Process and Corruption Risks at
Each Stage

3. Objectives:
 Enables companies/contractors to abstain from bribing
 Others will not bribe
 Government authority takes measures to prevent
corruption/extortion
 Enables governments to reduce high costs and
distorting impact of corruption
In addition, the IP seeks to contribute to
 Building up public confidence in the procurement
system
 Improving the investment climate

4. 
Formal Agreement between a Government Agency and Bidders for
Public Contracts
 Establishes rights and obligations between parties
 Provides for sanctions in case of violation
 Provides for Alternative Dispute Resolution

Process occurring during all stages of procurement
 Increased transparency
 External, independent monitoring
 Detection of risks/red flags, facilitating corrective measures

Applicable to all sectors & types of contracts

Frequently, IPs add value to other aspects of project
preparation/implementation

5. 



Political will of authority to reduce corruption
and promote integrity
Maximum transparency via public access to
relevant information
Third party independent monitoring to verify
fulfillment of obligations by the parties
Multi-Stakeholder Involvement by civil society
organizations (CSOs), government and private
companies

6. 
Feasible:


Collaborative:


Built on trust and support among parties
Preventative:


IPs can be implemented without the need for legal
reforms within the existing ordinary authority of
contracting officials and bodies
Tackles corruption risks from the outset
Inclusive:

Involves civil society as an active contributor and as
a channel to increase legitimacy and public trust

7. Project Cycle
Monitoring & Evaluation
Policy Making/
Project Planning
Needs
Assessment
Identify
Demand
Design & Bid
Documents
Preparation
Project Design
Final
Accounting,
Audit
Procurement
Process
Project Implementation
Contract
Execution
Operation
Contractor
Selection,
Contract
Award &
Signing

8. Commitments
Role
• Not to demand/accept bribes
• Disclose all relevant information
• Guarantee protection of restricted information
• Use of Internet and Public Hearings
• Disclosure of assets
• Reviews and provides expert feedback on
all documents and steps in procurement
process
• Monitors access to information
• Hears complaints by bidders, if any
• Informs public & authorities
• Contributes to raise overall confidence in
the process
Commitments
Independent
Monitor
(CSO)
• Not to pay bribes, facilitation payments, etc.
• Not to collude with other bidders
• Disclose information on payments to representatives
• Code of conduct & compliance program
Public
Authority
Integrity Pact
Bidders/
Contractors

9. Sanctions
Public
Authority
Independent
Monitor
(CSO)
• Civil, criminal, administrative sanctions
• Loss of Contract
• Loss of Bid Security/Performance Bond
• Liability for Damages (to principal and
competitors)
• Debarment/Blacklisting
Integrity Pact
Dispute Resolution
Bidders
Contractors
• Arbitration as alternative dispute
resolution mechanism
• Often more expeditious than Courts
• Increase ownership and empowerment
• Accessible to all parties

10. 





They cannot rule out corruption 100%
Need proper monitoring and careful implementation
to be effective
Aimed at changing behavior during contracting
processes
Do not replace the role of control, oversight and
regulatory agencies = complements them
While increasing participation of different
stakeholders, they do not release Government from its
responsibility for managing the contracting process
While transparency and accountability is important in
the budgeting/planning process, this are not an area
where IPs can contribute

11. 
Will I scare away bidders in requiring an IP?




OECD Anti-bribery Convention, UNCAC
In many jurisdictions, corruption is a crime
Good outcome, if bidders not willing to sign an IP, do not
submit a bid
Why is an IP valuable, if there are good anticorruption laws in place?
Persistence of corruption indicates need for other
mechanisms to assure compliance
 Monitor’s job is to assure everybody’s commitment to the
IP
 Through increasing access to information and
accountability and ensuring the correct implementation of
procedures, increases trust in the law and Government.


12. 

IPs can be applied for any kind of contract and
for any kind of project
Examples
 The
buyer/recipient of state property as part of a
Government’s state asset privatization program
 Engineering, architectural and other consultants
 The beneficiary of a state license or concession
 Management contracts for an electricity/water
utility (and other service delivery contracts)
 Construction and supply contracts

13. 
Needs Assessment

Project Preparation

Contract Selection, Award and Signature

Contract Execution

Final Accounting & Decommissioning (When
Applicable)

14. 


Corruption is a continuing problem with
contracting
IPs are a ‘light ‘ effective approach towards
reducing corruption in contracting
However, IPs are not a panacea – we should be
aware of their limitations

15. 
Transparency International and Water Integrity
Network, 2010. Integrity Pacts in the Water Sector:
An Implementation Guide for Government Officials.
http://www.waterintegritynetwork.net/page/3456

16. THANK YOU
FOR
YOUR ATTENTION