Enhancing Integrity in Public Procurement FIDIC seminar, Brussels, 26 June 2012 Elodie Beth, Head of Procurement Unit, OECD Public Sector Integrity Division

Why enhancing integrity in public procurement? A crucial economic activity of governments: 13% of GDP A major risk area for mismanagement, fraud and corruption Interface between the public and private sectors

Bribery is more frequent in procurement than in other government activities

What could countries do better to prevent corruption in procurement? OECD Recommendation on Enhancing Integrity in Public Procurement Set of integrity measures 1.transparency, 2.good management, 3.prevention of misconduct, 4.accountability and control Review of progress made in OECD countries Since 2008 Recommendation

Reforms have tackled the whole procurement cycle in only half of the countries

Prevention of misconduct, compliance and monitoring Put mechanisms in place to prevent risks to integrity in public procurement - Risk map of the organisation - Integrity training sessions, codes of conduct - Independent responsibility for at least persons in the decision- making and control - Mechanisms to avoid prolonged contact between potential suppliers and government (rotation, use of new technologies) Ex: Fingerprint recognition e-bidding in Korea to verify identity

Integrity risks – post award

63% of governments require declarations of integrity but based on good faith - Not required to provide evidence of their AC policies (less than 20%) - Not required to contractually commit to complying with AC standards (less than 20%) US Review : resource shift away from the contract management - monitor progress against pre-specified targets - inspection of work in progress / random sample checks - monitoring of payment through e-procurement - third party scrutiny – e.g. Social witness in Mexico Encourage close co-operation between government and the private sector to maintain high standards of integrity, in particular in contract management

Provide specific mechanisms to monitor procurement as well as to detect misconduct and apply sanctions -Tracking decisions and enabling the monitoring of procurement -Data mining and red flags -Procedures to report misconduct -Blacklists: only a third of countries are using them (risk of manipulation, lack of evidence of corruption) Ex: Data mining in Brazil to detect misconduct and collusion\ Data from public puspending observatory crossed with other government databases (e.g. coi, exemptions, substantial contract amendments)

Thank you!