The International Centre for Collective Action (ICCA) has launched two projects to bolster the evidence base and business case for two different types of Collective Action initiatives: Integrity Pacts and Certification Initiatives.

With financial support from the KBA-NotaSys Integrity Fund, the projects involve analysis and sharing of lessons learned. Findings and new resources on Integrity Pacts and Certification Initiatives will be added to the ICCA’s B20 Collective Action Hub.

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.

The Integrity Pact (IP) is a tool developed during the 1990s by Transparency International (TI) to help governments, businesses and civil society intent on fighting corruption in the field of public contracting. It consists of a process that includes an agreement between a government or government department and all bidders for a public sector contract.

This brochure provides a brief description of the Integrity Pact.

This handbook seeks to provide hands-on guidance to those contracting authorities and bidders who are willing to act for a more transparent public procurement market by pursuing an integrity pact. Moreover, it is aimed at providing additional information to all those who wish to know more about this anti-corruption tool.

As integrity risks exist throughout the public procurement process, a holistic approach for risk mitigation and corruption prevention is needed. Focusing integrity measures solely on one step in the process may increase risks in other stages. Similarly, addressing only one type of risks may give leeway to integrity violations through other mechanisms. For example, administrative compliance measures in the bidding phase do not root out the risk for political interference in the identification of needs.