Openness Forum May 23-25, 2017 Kyiv, Ukraine UNCITRAL Perspective - PowerPoint PPT Presentation

UNCITRAL United Nations Commission on International Trade Law 13 th Procurement Integrity Management and Openness Forum May 23-25, 2017 Kyiv, Ukraine UNCITRAL Perspective on Curbing Corruption Caroline Nicholas UNCITRAL Secretariat May 2017

UNCITRAL Perspective on Curbing Corruption Enduring problems in public procurement “[G] overnments have in the past with few exceptions notoriously failed as purchasers. [...] Dealers complain of red tape which hampers them in bidding, in delivering goods and in securing the payment of bills. Government executives themselves complain of delays between the issue of purchase acquisitions and the availability of goods for use. Citizens generally are prone to assert that graft and political favouritism taint a large part of government purchasing .” UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption What is corruption? “The abuse of public or private office for personal gain” UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Impact of corruption • “Corruption is one of the most toxic impediments to efficient and effective investment.” - Angel Gurría, OECD Secretary-General, 2015 OECD Integrity Forum UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Some numbers and context … • WBI estimate: systemic corruption means 20-30% of public procurement wasted • OECD estimate: public procurement averages 13.8% GDP • EU estimate: EUR 120 bn p.a. (20-25%) losses • Bandiera, Prat, and Valletti (CONSIP): “Government spending in Italy - inefficiency vs. corruption” • Passive waste – 80% • Active waste – 20% • In OECD countries: 1% saving in public spending = 43 billion EUR per year UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Corruption prevention strategies • Sound legal framework (UNCAC article 9) • “appropriate systems of procurement, based on transparency, competition and objective criteria in decision-making, that are effective, inter alia, in preventing corruption” More detailed rules are needed to implement the UNCAC principles • UNCITRAL Model Law is fully UNCAC- compliant • ERBD-UNCITRAL Initiative, among others, to advise national governments UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption A sound legal framework UNCITRAL United Nations Commission on International Trade Law

http://uncitral.org/uncitral/en/uncitral_texts/procurement_infrastructure. html UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption UNCITRAL safeguards • Publicity of legal texts • Publicity of all the ‘rules of the game’ in advance • Rules on communications • Award criteria and procedures • Competitive, objective processes • Exhaustive record keeping • Notification of award • Standstill notice • Publicity of award • Notification and publicity of all other decisions UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Legal “red flags” 1. Insufficient transparency • Subjective criteria (“reputation”) • Failure to require full disclosure of award criteria • Sub-criteria and weightings • Exceptions to notice requirements (“urgency”, “clarifications”) • Many exceptions 2. Excessive transparency and collusion /bid rigging? • Pre-bid conferences • Results of pre-qualification • Details of evaluation • Two-stage tendering • Framework agreements UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Exhaustive record requirements - UNCITRAL • Legal requirement for a procurement record • All major decisions to be explained • Procurement method • Qualification, evaluation criteria • Socio-economic criteria • These tools allow non-compliance and corruption to be visible and investigated UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Limitations of legal framework • Covered: Selection process, but • Thresholds • Exempted sectors (defence) • Often not covered • Planning, contract management, oversight • Sometimes not covered • Compliance programmes for suppliers (integrity pacts etc) • Sanctions and debarment • Interaction with other areas : e.g. culture, workload, professionalization, training, performance appraisals, incentives for identification of corruption/collusion, etc UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Using the procurement record effectively (1) • Including planning and contract management • Who can see the information? • Confidentiality and timing concerns • Facilitating challenges and oversight • Impact on …. • Collective action • Include private companies, academia • Civil society • Whistleblowing • “Excessive transparency”? UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Ongoing reluctance in some countries to publish procurement contracts UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Using the procurement record effectively (2) • Data • How to make data accessible? • Example: “Open Contracting Data Standard” • Structured, standardized, open data & documents • Searchable (cf pdfs …) • Can identify questionable practices • All 3 phases of procurement cycle • Can identify patterns across procurements UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption Examples … AND Paraguay, Mexico City, Nigeria, the UK, Colombia, Mexico, Taiwan and Moldova UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption • Publish early, and iterate: improving disclosure step-by-step • Simple and extensible JSON structure • Publish data for each step of the contracting process • Create summary records for an overall contracting process • Re-useable objects: organisations, tender information, line- items, amounts, milestones, documents etc. • Recommended data and documents at basic, intermediate & advanced levels • Common open data publication patterns • Guidance on improving data collection and data quality • A growing community of users and range of open source tools UNCITRAL United Nations Commission on International Trade Law

UNCITRAL Perspective on Curbing Corruption • Many research and practical tools available … • ACRN - Anti-Corruption Research Network • http://corruptionresearch network.org UNCITRAL United Nations Commission on International Trade Law

Corruption in Public Procurement For more information Website: – http://www.uncitral.org/uncitral/uncitral_te xts/procurement_infrastructure.html Contact: caroline.nicholas@uncitral.org THANK YOU UNCITRAL United Nations Commission on International Trade Law