the role of transparency international in fighting corruption in infrastructure by donal o leary...

The Role of Transparency International

in Fighting Corruption in Infrastructure

byDonal O’ Leary Senior Advisor

Transparency InternationalBerlin, Germany

Prepared forANNUAL BANK CONFERENCE ON DEVELOPMENT ECONOMICS,

TOKYO, MAY 29-30, 2006

ABCDE Conference, Tokyo 2006: Infrastructure and Governance

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OUTLINE OF PRESENTATION

• INTRODUCTION TO TRANSPARENCY INTERNATIONAL

• SOURCES OF CORRUPTION IN INFRASTRUCTURE (‘GRAND’ AND ‘PETTY’)

• INSTRUMENTS FOR ADDRESSING ‘GRAND’ CORRUPTION

• INSTRUMENTS FOR ADDRESSING ‘PETTY’ CORRUPTION

• THE WATER INTEGRITY NETWORK (WIN): SETTING UP A COALITION TO COMBAT CORRUPTION ISSUES


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INTRODUCTION TO TRANSPARENCY INTERNATIONAL

• INTERNATIONAL NGO FOUNDED IN BERLIN IN 1993

• IS A GLOBAL NETWORK INCLUDING MORE THAN 90 LOCALLY ESTABLISHED NATIONAL CHAPTERS AND CHAPTERS-IN-FORMATION

• THE CHAPTERS BRING TOGETHER RELEVANT PLAYERS FROM GOVERNMENT, CIVIL SOCIETY, BUSINESS AND THE MEDIA TO PROMOTE TRANSPARENCY IN ELECTIONS. IN PUBLIC ADMINISTRATION, IN PROCUREMENT AND IN BUSINESS

• CHAPTERS ALSO SUPPORT ADVOCACY CAMPAIGNS AGAINST ANTI-CORRUPTION

• POLITICALLY NON-PARTISAN, TI DOES NOT UNDERTAKE INVESTIGATIONS OF ALLEGED CORRUPTION OR EXPOSE INDIVIDUAL CAUSES


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Exhibit 1. How Does Corruption Happen in Infrastructure Projects ?

Contracting Decision Contracting

Process/Bid Evaluation

Contract Implementatio

nContract design


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Exhibit 1. How Does Corruption Happen in Infrastructure Projects ?

Contracting Decision Contracting

Process/Bid Evaluation

Contract Implementatio

n

•Unnecessary

•Tagged

•Conflicts of interest

Contract design

•Tagged

• Over-designed,

•Under-designed

• Documents are confusing

•Decision makers are biased

• Selection procedures are non-transparent, or not objective

• Clarifications are not shared with other bidders

• Confidentiality during the process

• Award decisions are not made public or are not justified

• Poor quality, defective, specifications

• Contract renegotiation

•Claim non-existent damages

• Supervisors are biased


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‘PETTY’ CORRUPTION IN INFRASTRUCTURE

PROJECTS• ILLEGAL CONNECTIONS

• FALSE METER READINGS

• INCOMPLETE/TARDY BILLING

• INCOMPLETE/TARDY COLLECTIONS

• UNDULY HIGH CONNECTION CHARGES (LEADING TO ‘UNAUTHORIZED’ CONNECTIONS)

IN SUM, ‘PETTY’ CORRUPTION CAN ACCOUNT FOR 20% ORMORE OF SYTEM LOSSES IN POWER OR WATER

DISTRIBUTION NETWORKS.


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INSTRUMENTS FOR ADDRESSING ‘GRAND’

CORRUPTION

• INTERNATIONAL

• NATIONAL INTEGRITY SYSTEMS

• INTEGRITY PACTS

• BUSINESS PRINCIPLES FOR COUNTERING BRIBERY


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INTERNATIONAL INSTRUMENTS FOR

ADDRESSING ‘GRAND’ CORRUPTION

• UN Convention Against Corruption

• OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

NEED FOR CONSTANT MONITORING AND FOLLOWUP TO ASSURE THAT THESE AND OTHERCONVENTIONS ARE BEING ADHERED TO


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NATIONAL INTEGRITY SYSTEMS

• Institutional Pillars for the National Integrity System

• Rules and Practices for the Institutional Pillars


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Exhibit 2. Pillars of Integrity

National Integrity System

Public Service to Serve the Public

Ruleof Law

Sustainabledevelop-

ment

Qualityof Life

Exec

utiv

e

Civ

il So

ciet

y

Priv

ate S

ecto

r

Cha

mpi

on o

f Ref

orm

Judi

ciar

y

Enfo

rcem

entA

genc

ies

Parli

amen

t

Wat

chdo

gAge

ncie

s

Med

ia


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Integrity Pacts

• Process

• Rights and Obligations

• Monitoring

• Sanctions


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Business Principles for Countering Bribery (BPCB)

The Business Principles state:

• The enterprise shall prohibit bribery in any form whether direct or indirect

• The enterprise shall commit to implementation of a Program to counter bribery.

These principles are based on a commitment tofundamental values of integrity, transparency andaccountability. Enterprises shall aim to create andmaintain a trust-based and inclusive internal culture inwhich bribery is not tolerated.


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Implementation of the BPCB

A program is the entirety of an enterprise’s anti-bribery efforts including values, policies,processes, training and guidelines.

• The BPCB

• Program Implementation Requirements

• Implementation: The TI Six Step Process


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BPCB – SUPPORTING TOOLS

• A Guidance Document provides background on each section of the Business Principles, explains how to implement each Principle, answers frequently asked questions and gives examples of corruption and of good practice.

• The TI Six-Step Implementation Process is a how-to guide for companies who wish to introduce an anti-bribery programme within their organization. This tool is also available as an interactive electronic module.

• TI is currently developing a Self-Evaluation Module to assist companies in assessing their anti-bribery performance, which can also serve as the basis for external verification.


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INTERNATIONAL CORPORATE REPORTING

INITIATIVES/INDICES USING THE BPCB

• FTSE4Good Index

• UN Global Compact

• Global Reporting Initiative

• World Economic Forum Partnering Against Corruption Initiative


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SECTOR-WIDE ANTI-BRIBERY AGREEMENTS

• COVER THE WATER PLASTIC PIPE MANUFACTURING SECTOR

• FIRST AGREEMENT SIGNED IN COLOMBIA in April 2005

• SECOND AGREEMENT SIGNED IN ARGENTINA in December 2005

• FOLLOW UP AGREEMENTS ARE UNDER PREPARATION


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INSTRUMENTS FOR ADDRESSING ‘PETTY’ CORRUPTION

• Management Contracts

• Benchmarking

• Business Principles for Countering Bribery

• Citizens’ Report Cards


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THE WATER INTEGRITY NETWORK (WIN)

• OBJECTIVES

• SCOPE

• MEMBERSHIP

• ACTIVITIES

• NETWORK ORGANIZATION


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WIN GOVERNANCE

Chair and Steering Committee

• Elect• Monitor

Secretariat + Host organization (TI) Members/National groups

• Manage


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WIN GOVERNANCE (Contd.)

Decisions Taken at Interim Steering Committee Meeting, Berlin, May8/9, 2006

• Chair Elected (Hakan Tropp, SIWI)

• TI Designated WIN Manager (Donal O’Leary)

• Work Program Prioritized and Endorsed

• Financing Strategy Agreed

• Launch at WWW, Stockholm, August, 2006


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ISSUES

• Can Reformers Address Corruption on a Sector-Specific Basis?

• Can Reformers Develop Generic Sectoral Anti-corruption Tools?

• How do the Efforts of Civil Society Fit with the Efforts of Other Reformers? Example of the Integrity Pact


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HOW CAN INTERNATIONAL STAKEHOLDERS SUPPORT

ONGOING ANTICORRUPTION EFFORTS IN INFRASTRUCTURE?

• Vigorously Support Institutionalization and Enforcement of Existing International Anti-bribery Conventions

• Provide Financial Support for and Implement the Integrity

Pact in their Own Organizations • Support and Actively Participate, as Appropriate in

Promoting the BPCB

• Provide Financial Support and Participate in the WIN


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THANK YOU FOR YOUR ATTENTION!Donal O‘LearySenior Advisor

Transparency InternationalAlt Moabit 96

Berlín 10559, GermanyTel: (49) (0) 30 343820 30

Fax: (49) (0) 30-3470 3912 Email: [email protected]

the coalition against corruption