TALLINN 2019 - European CommissionGabriella Nagy, Head of Public Funds programs, Transparency...
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TALLINN 2019 Gabriella Nagy, Head of Public Funds programs, Transparency International, Hungary
TALLINN 2019 - European CommissionGabriella Nagy, Head of Public Funds programs, Transparency International, Hungary \ WHY PUBLIC PROCUREMENT? • $9.5 trillion spent through public
Gabriella Nagy, Head of Public Funds programs, Transparency International, Hungary
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WHY PUBLIC PROCUREMENT?
• $9.5 trillion spent through public contracts per year• large amounts lost through corruption
significant costs to government, business and citizens
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Corruption in public procurement creates significant costs to government, business, and citizens.
CLEAN CONTRACTING MANIFESTO
Open Data (e.g. Open Contracting Data
Standard)
Civil Society monitoring
Engagement of affected
communitiesStrong,
professional and
engaged civil society
Sanctions
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TI has been working to fight corruption for many years with different tools. IPs were introduced 25 years ago…the context back then was very different. Based on our experience over these years, and our interactions with new players in the space, we have arrived together with partners in civil society at a common vision of what is needed to prevent corruption in public procurement. The result was the five pillars of the clean contracting manifesto. Integrity Pacts are just one part of this picture. We see the different pillars building on and supporting each-other. We are making efforts to complement each others work for greater impact.
IP origin: collective action to corruption in PP as an intractable problem where one actor acting alone has not been able to solve the issue. Collective action brings together actors across the board who together can better tackle the issues. IP is based on this concept. Integrity Pacts are a document and a process A document: A legal contract between contracting authority (government) and bidders (companies) to abstain from corruption and collusion. A process: A series of activities to ensure the rights and obligations of the contract are being lived up to. Interaction on findings prior to publication In 2015 we undertook a comprehensive assessment of past experience with the Integrity Pacts in order to understand better how we could best deploy it in the future. What we had was a history that included: A significant gap in terms of centralised coordination of Integrity Pact activities from the TI Secretariat, Integrity Pacts used and adapted by various actors across the globe over the previous 20 years, A significant change in context at all levels from their first introduction: more comprehensive laws in place in many instances, business moved from writing off corruption as a legitimate expense in their tax returns to in many cases being lead advocates for progress against corruption, huge changes in technology and connectivity CSO space grew with TI itself only founded around the same time but now number over 100 chapters Corruption itself evolved with new issues like off-shore jurisdictions and shell companies added to the mix Focus moved from reactive access to information to proactive data focus A much greater focus on aid effectiveness. Not enough to say you are doing good but need to show it! So going forward, for the EU project, we tried to address many of these changes….taking advantage of having a donor ready to support and test the approach. Some of the main elements we tried to adjust / bring into play were: Country context – the Integrity Pact is a very flexible tool and there is no one road map which if applied will lead to the best possible outcomes. A strong understanding of country context including legal context, the actors involved, specific risks and how to navigate this will be one of the determining factors in how effectively the Integrity Pact is used to achieve its goals. Monitoring, Evaluation and Learning – we are putting a lot of effort into putting in place a sound framework to demonstrate results and impact and to interrogate what we have been achieving and why. At the end of the four years we want to have a strong body of evidence of what works, what doesn’t work and how context plays a role. Citizen Participation– moving beyond the initial focus on transparency and a more professional monitor to effective engagement of those most effected by the sub-standard road, the energy that is not provided or the transport system that does not work. This recognises both the critical importance of involving the final beneficiary in holding their leaders to account as well as the proliferation of avenues they can make use of to engage Links to other initiatives – the review we conducted in 2015 has paved the way for TI to more actively seek to link the Integrity Pact with others initiatives and advances in particular open data – both using and feeding into it….
To explore and promote the use of Integrity Pacts for safeguarding EU Funds against fraud and corruption and as a tool to:• Increase transparency and accountability• Enhance trust in authorities and
government contracting• Contribute to a good reputation of
contracting authorities• Bring cost savings• Improve competition through better
procurement
WHAT ARE WE TRYING TO DO?
INTEGRITY PACTS IN THE EU
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We have put a strong focus on learning in this project. We have 17 IPs over 11 countries. We therefore have a good number of IPs we can learn from.
AN OVERVIEW OF PROGRESS
TI Czech Republic ActionAid SBF
Poland
TIHungary /
M6
TI Italy / Cagliari
rail
TI Italy / ESF TI Latvia TI
LithuaniaTI
Slovenia
TI Greece
TI Bulgaria
TI Hungary/ Reservoir RAS TI Romania
/ CadastreTI Romania
/ Library TI Portugal Amapola TI Romania / E-Catalogue
Implementation
Preparation of the selection process
and launch of tenders
Tender evaluation
Final accountingand audit
Contract signature Tender published
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(status of most advanced tender of a given project)
ACHIEVEMENTS
ff
“Anti-Corruption Successes”
Improved enforcement by CAs and successful bidders of standards and policies
More transparent, participatory & accountable public procurement processes
Some evidence of increased cost effectiveness
Increased goodwill to implement systemic reforms
Increased capacity of beneficiaries to engage & of participants to act with integrity
Strengthened detection and resolution of irregularities
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What it can do? 1. Enforcement: 70% of monitor recommendations considered as critical taken on board: these often relate to incomplete or improper application of the entities own policies! E.g. In Poland, the successful bidder in a railway construction project has adopted for the first time a WB policy working together with SBF to in its words “bring its policies in line with its values”. 2. Transparency: adoption of recommendations targeted improved transparency (57%) and active steps taken to release important documents (73%). E.g. In Italy, the CA agreed to allow monitor participation in the usually restricted meetings of the evaluation commission. This enabled the monitoring staff to verify how the work of the Commission was conducted and the adequacy and reliability of the members in performing their duties. 3. Cost effectiveness: 33% of recommendations made have potential positive cost effectiveness implications. E.g. In Hungary, engagement with the monitor during the pre-tender phase led to the drop of the estimated prices from 1.5 to 1.3 billion Hungarian Forints. 4. Detection of irregularities: 45% of such issues raised have to date been adequately addressed. E.g. In one of the IPs, due to a discrepancy identified by the monitor, one of the bidders was excluded from the competition and is currently subject to a police complaint. 5. Goodwill: IP as a trust building approach: confrontation to cooperation. Three project partners have reported evidence of increased good-will to implement systemic reforms. E.g. interest to have citizen monitoring outside of the project has been expressed in a Sicilian municipality. 6. Capacity: Three project partners have reported. E.g. Affected communities and interested citizens coming from Calabria Region are more and more interested in learning how to monitor a public tender and how to use digital tools in order to keep administration accountable. What it cannot do? It is very much focused on this one discreet project. As such it is an island. Changes of a type needed to achieve broader, deeper change are not foreseen. However, it is enabling greater awareness and interaction across government e.g. ACA, PPO, etc. of the potential role for civil society. Appreciation of that role leading to opportunities to discuss deeper reform. Opening the door for such discussions. What we are not sure yet whether it can do? Four years allows for focus on embedding these achievements at least within the CA and contractors involved: e.g. open data for sub-contractors testing in Italy, focus on building capacity to identify and manage risks in Lithuania, engagement of affected communities in Calabria.
LESSONS LEARNED
IP: A marathon and a few sprintsIP is a long term and intensive commitment requiring constant review and adjustment of expectations on all sides.
IP signed ≠ plain sailing Civil society also need to adjust
IP is not just about preventing corruption
IP does not replace existing oversight Civil society need broad capacity
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lessons that have been learned in the EU context. The process of negotiating an IP is not for the faint hearted. The IP is not an “off the shelf product”. Context matters hugely A myriad of factors can make the start up phase long, complicated and tedious! The absence of a centralized IP regulation (Romania) Differences in commitment (Some CA’s felt that the IP was a bit imposed on them by the MA e.g. Hungary) Negotiation styles (Who took the lead: monitor proposing followed by negotiation versus a more co-development approach) Negotiation team make up (Some CA’s had very heavy involvement of their legal teams which slows things down a lot) Schedule (e.g. in Hungary sudden rush to launch before new rules came into being) Yet the process of negotiation and design sets the framework for the relationship between the parties over the duration of the monitoring. 2. Beyond fulfilling a watchdog function, it was encouraging to hear from people at the meeting how IPs have already brought concrete, additional advantages to the public procurement processes they are monitoring. (1) Successful contractor in Poland: have implemented a WB policy for the first time with the help of SBF. (2) CSOs have mobilised public engagement with certain project for the first time (3) CSOs are helping to introduce new best practices or creative solutions to various procurement issues. 3. It takes time to build trust but it is possible: In the beginning, we found that many of our counterparts in government or the private sector were apprehensive about how to work with NGOs. We have now reached a point where civil society is being seen as a constructive partner; not waiting to pounce at every misstep but keen to support those seeking to make public procurement better. In November in Bucharest, the open and frank discussions, the attempts to find solutions together and a genuine buzz in the corridors really brought that home for me. In fact the event itself has proven crucial to facilitate peer-to-peer exchange. E.g. of one CA who was very doubtful before but after was very engaged. 4. Constructive relationships are not always perfectly harmonious: They are about holding a shared vision, but not always agreeing on how to get there. They are about working through disagreements to find a common way. The Integrity Pact process is built on this premise and it takes brave and persistent actors like to make it happen. 5. Once the IP gets underway, it is also not all plain sailing: There are a number of risks that need to be managed along the way including: political risks (elections and the impact that can have on consistency of contact), financial (project delays causing difficulty for the monitor), and relational (ensuring all stakeholders get and stay on board). changing context and external events can also cause difficulties such as closing space for civil society e.g. in Hungary 6. Civil society too need to get used to the change in role: As civil society we sometimes have a tendency to define ourselves as opponents rather than counterparts to the public and private sectors. Yet for the most part, government officials and business people are equally committed to high ideals of integrity and service. We are seeing this gradual shift in outlook as we proceed with this process. 7. Fear that the pact will replicate existing oversight without adding anything useful is diminishing. “We appreciate the IP project and see potential. We are only able to review about 2–3% of tenders and usually the problems are in the ones we don’t get to! This project promotes the idea that the general population can ask questions, get answers, work together.” Gediminas Golcevas, Chief Specialist, Public Procurement Office, Lithuania. 8. Broad civil society capacity is key A strong understanding on the part of civil society of country context including legal context, the actors involved including their motivations, inhibitions and concerns, specific risks and opportunities AND strong and persistent negotiation skills are all determining factors in how effectively the Integrity Pact is designed. This entails understanding where the red lines are; pushing where there is space for ambition and supporting where there is already commitment but in some cases poor execution and at all times being wary to ensure the CA and bidders are truly engaged and buying into the process.
THE ROLE OF CIVIL SOCIETY
Improves ability to detect irregularities throughout the whole process:
“We appreciate the IP project and see potential. We are only able to review about 2–3% of tenders and usually the problems are in the ones we don’t get to! This project promotes the idea that the general population can ask questions, get answers, work together.”Gediminas Golcevas, Public Procurement Office, Lithuania
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CIVIC MONITORING
“For years now citizens have perceived public works as useless and a waste of money…now I have a chance to have a say in what is happening and what the government is doing.”Alfonso, Civic Monitor, Sybaris, Italy
Civic monitoring participants’ level of confidence that any notified wrongdoing in the public procurement process will be effectively followed-up, investigated and brought to a conclusion. Low Fair
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Still very early days. Changes mainly being seen in knowledge and confidence. However civic monitors are also engaging beyond the project to promote similar initiatives outside of the region.
