The Integrity Pact (IP) is a powerful tool developed by Transparency International (TI) to help governments, businesses and civil society fight corruption in public contracting. It consists of a process that includes an agreement between a government or government agency (‘the authority’) and all bidders for a public sector contract, setting out rights and obligations to the effect that neither side will pay, offer, demand or accept bribes; nor will bidders collude with competitors to obtain the contract, or bribe representatives of the authority while carrying it out. An independent monitor who oversees IP implementation and ensures all parties uphold their commitments under the IP brings transparency and invaluable oversight to all stakeholders in a contracting process, from the authority to the public.
The IP clarifies the rules of the game for bidders, establishing a level playing field by enabling companies to abstain from bribery through providing assurances to them that their competitors will also refrain from bribery, and that government procurement, privatisation or licensing agencies will commit to preventing corruption (including extortion) by their officials, and to following transparent procedures. IPs are legally-binding contracts, breaches of which trigger an array of appropriate sanctions, including loss of contract, financial compensation and debarment from future tenders. These act as powerful disincentives to corrupt behaviour, ensuring IPs are never simply goodwill gestures. Rather, they enable governments to reduce the high cost and the distorting impact of corruption on public procurement, privatisation or licensing, and to deliver better services to citizens.
With this IP implementation manual, TI aims to help leaders and champions within their own governments across the world who are determined to overcome corruption in public contracting. This manual is a hands-on, practical guide to familiarise government officials in charge of public procurement processes with the Integrity Pact and to provide them with tools and ideas for its application.
Integrity PACTS Contributing To SUCCESS In Public Contracting
A successfully implemented IP means that a contracting process was undertaken in a transparent and accountable manner, free from corruption and from delays caused by trouble, confusion and a lack of transparency. The social, economic and development goals of the project are achieved – or at least not impaired by corruption. As a side effect, trust in government and government officials is increased, and the reputation of all participants improved. If corruption does occur, it is detected and eliminated from the process: when tools such as IPs that are designed to identify corruption find it, they perform their job effectively.
In addition, the IP helps governments to mobilise public support for their own procurement, privatisation and licensing programmes and to avoid the high cost in trust and reputation caused by corruption in highly sensitive projects. Beyond the individual impact on the contracting process in question, the IP is also intended to build confidence and trust in public decision-making; to support a more hospitable investment climate; to empower public officials to restrain corruption and to protect their good work in complicated projects; and to empower civil society to contribute to the integrity of public procurement processes. IPs help to increase the impact and effectiveness of resources when federal or national funds are involved in local projects or when aid resources are used.
IPs enable the implementation of desirable law-abiding standards without additional legal reform, reduce conflict and distrust and provide a channel for managing dissent. Through the use of an independent monitor, they help to ensure the credibility and legitimacy of the contracting process, and offer all stakeholders oversight that would otherwise be denied to them. They reassure the authority and all participants of the integrity of the process, and help to isolate it from political pressures.
As well as the commitment not to partake in bribery or extortion, an IP can include other obligations such as the requirement that bidders disclose all commissions and similar expenses paid by them to anybody in connection with the contract, or that government officials involved in the process adopt codes of ethics consistent with the IP. The IP establishes a monitoring mechanism and a process for determining the presence of violations, which carry sanctions as a consequence. The sanctions for bidders range from loss or denial of the contract, forfeiture of the bid or performance bond and liability for damages, to debarment from future contracts. Criminal, civil or disciplinary action should proceed against government employees.
The IP process has shown itself to be adaptable to many legal settings and is flexible in its application. Since its conception, the IP has been used in more than 15 countries worldwide. Being essentially a collaborative tool, it is built on trust and support and is therefore constructive. It also emphasises prevention, and so does not have the side effects of other corruption control tools, which often generate fear and distrust. IPs help to make projects viable. They are not an end in themselves, but are a means of supporting the appropriate completion of projects crucial for development and the satisfaction of basic needs in society.
You can find out more by reading the Integrity Pact Guide created by Transparency International in 2013. Click here!