This 2016 OECD study covers:
PUBLIC PROCUREMENT: A HIGH-RISK AREA FOR CORRUPTION
HOW TO ENHANCE INTEGRITY AND CURB CORRUPTION IN PUBLIC PROCUREMENT
A PhD thesis by Mike Balthazar Beke looking at understanding the effect of the Integrity Pact as an anticorruption collective action tool for public procurement through the EU funds and the role of civil society organisations, businesses and contracting authorities in preventing corruption through collective action.
Notes for rapporteurs from a workshop on Thursday 16 November 2006 at the 12th International Anti-Corruption Conference (IACC).
Public procurement is one of the highest risk areas for corruption. A public project contaminated with corruption is a recipe for disaster: ordinary citizens suffer from substandard facilities and services; competitive companies lose out when the bidding is rigged; and government money vanishes without making a difference. To rein in procurement corruption in, improving transparency and civic monitoring is vital.
Corruption in government procurement is a massive problem worldwide, especially in developing countries. In an ideal world, measures to combat procurement corruption would include structural changes that would open up monopolies, break cartels, and enact rational, uniform, and effective procurement laws. Sadly, the potential effectiveness of these measures is matched only by the near impossibility of their implementation any time soon. We should continue to push for comprehensive structural solutions to the procurement mess, of course.
Quality infrastructure supports sustainable growth, improves well-being and generates jobs. Recognising this, quality infrastructure is both an explicit goal and enabler of the 2030 sustainable development agenda.
The member countries of the ADB/OECD Anti-Corruption Initiative for Asia and the Pacific attach high priority to the fight against corruption in public procurement. In July 2004, member countries of the Initiative decided to dedicate the Initiative’s first thematic review to curbing corruption in public procurement.
Integrity Pacts have been used in more than 18 countries worldwide, among others in Argentina, Bulgaria, China, Colombia, Ecuador, Germany, Hungary, India, Indonesia, Italy, Latvia, Mexico, Pakistan, Panama, Paraguay, Peru, Rwanda, South Korea and Zambia. They have been implemented at various levels and across numerous sectors.
This paper includes an overview of how an Integrity Pact can be initiated and their benefits.
Why do companies need Integrity Pacts?
It’s all too common for companies to encounter corruption during public procurement processes. The Organisation for Economic Co-operation and Development (OECD) Foreign Bribery Report states that 57 per cent of foreign bribery cases which it assessed related to public procurement.In the EU alone, corrupt bidding processes have increased annual contract costs by US$5 billion. The effects can be disastrous, including exposing companies to serious risks, such as:
The Banknotes Ethics Initiative (BnEI) is an anti-corruption collective action initiative founded in 2013. It addresses the internal compliance standards of its members combined with a rigorous accreditation process administered by an external accreditation council.
The objectives of BnEI are also supported by 38 central banks, and now, some five years after its inception, the BnEI is picking up on one of its driving themes – ensuring fair competition in the procurement of banknotes.