TI-InO the Role of CSO in PP - For ADB - Final

8/9/2019 TI-InO the Role of CSO in PP - For ADB - Final

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The Role of CSOin Public Procurement

to ImprovePublic Procurement Outcomes


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About Transparency International

A global civil society organisation leading the fight against corruption and creating

change towards a world free of corruption.

Coalition building: TI is a global network, with more than 113 locallyestablished national chapters and chapters-in-formation. They bringtogether relevant players from government, civil society, business and themedia to promote transparency in elections, in public administration, in

procurement and in business. TIs global network of chapters and contacts also

use advocacy campaigns to advocate for anti-corruption reforms.

Politically non-partisan: Transparency International challenges theinevitability of corruption, and offers hope to its victims. Since its founding

in 1993, TI has the skills, tools, experience, expertise and broad participation tofight corruption on the ground, as well as through global and regional initiatives.TI raises awareness and diminishes apathy and tolerance of corruption, and

devises and implements practical actions to address it.

Non-involvement in individual cases: TI does not undertake investigationsof alleged corruption or expose individual cases, but at times will work incoalition with organisations that do.


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Collective Action guide for Businesses


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Importance Issues on Public Procurement

in Indonesia (background)

Unhealthy competition cause business owners have to bribe,mark up on price by suppliers

Tender requirement is created by affiliated group of companiesin order for one of their companies to win the tender

Entertainment, bribe to win the tender

Winner of tenders take turn or won by the relatives, familymember, etc

There is very urgent for establishment the Act on Public

Procurement According to the Corruption Eradication Commission (KPK),

30% of the procurement budget is lost into corruption; 70 % ofthe corruption cases handled by the KPK are related to publicprocurement.


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What is an Integrity Pact

Formal Agreement between government agency and bidders

for public contracts

Establishes rights and obligations between parties

Provides for sanctions in case of violation

Provides for Alternative Dispute Resolution

Process occurring during all stages of procurement

Increased Transparency

External, independent monitoring

Detection of risks/red flags, facilitating corrective measures

Applicable to all sectors & types of contracts


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What is the Integrity Pact for?

Objectives: enable companies to abstain from bribing

others will not bribe

government authority is taking measures to prevent

corruption/extortion enable governments to reduce high costs and distorting impact of

corruption

In addition, the IP seeks to contribute to build up public confidence on the procurement system

improve investment climate


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Conditions Necessary for Success

Political will of authority to reduce corruption and

promote integrity

Maximum transparency via public access to relevant

information Third party independent monitoring to verify

fulfillment of obligations by the parties

Multi-Stakeholder Involvement by Civil SocietyOrganizations, government and private companies


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Advantages of Integrity Pacts

Feasible: IPs can be implemented without the need for legal

reforms within the existing ordinary authority of

contracting officials and bodies

Collaborative:

Built on trust and support among parties

Preventive:

Tackles corruption risks from the outset Inclusive:

Involves Civil Society as an active contributor and as a

channel to increase legitimacy and public trust


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Possible risks of Integrity Pacts

IPs may not rule out corruption 100%

For IPs to be more effective, detection and

enforcement mechanisms by the relevant

agencies need to be effective too

IPs may be misused as window dressing if not

properly implemented

Appearance of integrity stands in contrast toreality of corruption


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Progress & Challenges in Indonesia

Since the IP has been promoted in Indonesia, there are 5 typesof Integrity Pact term which are very confusing for the people :

1. Integrity Pact by Three Pillar Partnership (representative ofbusiness, government and other NGO) even the Politician andPolitical Party have sign the IP too

2. Integrity Pact to reform the bureaucracy by State Ministry for StateApparatusReforms

3. IP in the Presidential Decree nr 80 / 2003

4. IP from TI Indonesia chapter itself.

5. IP signature for the new minister candidate of SBY cabinet

IP term has been exploded and also inflated in this country


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Nowadays supported by DFID & DANIDA , TI Indonesiahas been facilitate the Integrity Pact program in severalPilot Project Areas such as :

1. Aceh Province (6 District) supported by DFID

2. West Sumatera (Solok District & Dharmasraya District ),

3. Semarang, Central Java

4. Banjar Baru, South Kalimantan Province

5. Balikpapan, East Kalimantan Province

6. Makassar, South Sulawesi Province

Integrity Pact Program in Indonesia


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International & Regional Level :

Share knowledge & experiences on public procurement works in the globalnetwork (through email, quarterly, semester and annually meeting)

Align & Coalition to promote more transparency & accountability of public

procurement Part of the ANSA coalition (Affiliated NGO for Social Accountability)

National level :

Promote & Advocacy : the New Draft of Public Procurement Act, including :

Set up the position paper

Academic draft preparation

In cooperation with LKPP (NPPO) to set up a better public procurementsystem

Scope of Integrity Pact Program


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Provincial & District / City level :

Ensuring the implementation of Freedom of Information Act (UU14 / 2008) and Whistle Blower Protection Act (UU 13 / 2006) inpublic procurement process

CSO / IMO Empowerment consist of beneficiaries, religion /cultural community etc, to monitor public procurement

Promote & facilitate establishment the Complaint HandlingMechanism (CHM)

Promote & facilitate establishment of Conflict ResolutionMechanism

promote blacklisting, reward & punishment system

Hand in hand & advocacy with local media (TV, local radio &print media)

Scope of Integrity Pact Program


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How to Adopt the IP ?


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STEP & ACTIONPrimary

ResponsibilityPROCESS

Challenge &Constraint

1.

Promote the IP concept for head of district / major

2.

Policy and LocalRegulatory Assessment

3.

Planning and design of IPprocess with input from all

stakeholders

Formal & informal meeting

Obtain & decision to adopt the IP

Data gathering

Review all policies and additional local legalin related with public procurement

Facilitate the action plan & implementationwith multi stake holders representative as

participants

Not all the majorcommitted to tacklecorruption in public

procurement

Not every district hasPolicy

Consistently to followup the action plan

Major / head of District

Appointed

Head of Dept / Sector

Appointed IP team (from thelocal government official)


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Freedom information

act not guarantee thatthe people couldaccess the informationeasily

Different perception &commitment betweenthe major & the staffs

Complaint HandlingMechanism (CHM),

whistle blowerprotection are new termfor the public althoughthere is act on whistle

blower protection

Appointed Integrity PactTeam


4.

Ensure there is properinfrastructure for access toinformation (who, where,

when, how, by whom)

5.Facilitate workshop &

logistics: Explain the IPfully, how it works and itseffects, public hearings,

etc.

Formal/informal meeting series

Define specific project & thebidders in regard IP implementation

Review ability of service functionsto support IP program

SOP & system reform proposal ifnecessarily

Identify feedbacks &recommendations

Facilitate multi stakeholders

workshop on IPimplementation

Explain the IP principlessuch as : CHM, IMO, reward& punishment, sanction,whistle blower protection,access the information


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Difficulties to set up thesystem without

guideline from thecentral government

Adapt the document asfollow the environment& local politic situation

Difficulties to select theCSO / IMO, who

independently & notexclusive among all the

CSO




6.

Contribute to find andchannel necessaryresources

7.

Draft IP and MonitoringAgreement

8.

Select and support theMonitor, ensuring

accountability

Review the role, system & mechanism inIP implementation

Agreement on IP implementation inselected projects

meeting series to develop the IPprogram Adapt HR policies &SOP

Training program Establishment the monitoring &

reporting system

Facilitate multi stakeholders meeting onmonitoring

Propose & adapt SOP on monitoringprocess if needed

Criteria, requirements and selectionprocess the monitor


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All stake holders

agreeing the selectedIMO / CSO

Where & by whom theCHM in place

Consistently to monitor: Quarterly, semester,

annually



Appointed Integrity PactTeam & the Major

Explain the role of monitoringsystem

Select the best actor as monitor MoU & agreement on

monitoring

IP sign & declaration

Establishment the CHM (complainthandling mechanism)

SOP & HR policiesimplementation

Monitoring & reporting system

Establishment the Monevsystem

Review progress &achievements quarterly,semester, annually

9.

Get Monitoring Agreementand Integrity Pact signed byparties

10.

Supervise compliance withthe monitoring agreement

11.

Manage & monitoringevaluation the IP

implementation with credibility& independence


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Civil Society Movement onpublic Procurement


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Civil Society Movement onpublic Procurement


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When & where can IPs work best?

ProcurementProcess

Project Cycle

Policy Making/Project Planning

Project Design

Project Implementation

Operation

Preparation Phase,Design & Bid

Documents

Preparation

Contractor Selection,

Contract Award &

Signing

Contract Execution

Final Accounting,

Audit

Needs Assessment

Identify Demand


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Elements Parties & Roles

IndependentMonitor

Organization(IMO / CSO)

Not to demand/accept bribes

To disclose all relevant information

To guarantee protection of restricted information

Use of Internet and Public Hearings Disclosure of assets

Not to pay bribes, facilitation payments, etc. Not to collude with other bidders

Disclose information on payments to middlemen

Code of conduct & compliance program

Reviews and provides expert

feedback on all documents andsteps of procurement process

Monitors access to information

Hears of eventual complaints bybidders

Informs publically & to authorities Contributes to raise overall

confidence in the process

PublicAuthority

BiddersContractors

Integrity

Pact

Commitments

Role

Commitments


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Civil, criminal, administrative sanctions Loss of Contract Loss of bid security/performance bond Liability for Damages (to principal and

competitors)

Debarment/Blacklisting

Arbitration as alternative resolutionmechanism

Often more expedite (foster) than Courts Increase ownership and empowerment Accessible to all parties

Elements Enforcement Mechanisms

IndependentMonitor

Organization

(IMO / CSO)

PublicAuthority

BiddersContractors

IntegrityPact

Sanctions

Dispute Resolution


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Main activities to implement an IP

Planning and design of IP process with input from all stakeholders

Ensure there is proper infrastructure for access to information

Facilitate logistics: public hearings, workshops, etc.

Draft IP and Monitoring Agreement

Select and support the Monitor, ensuring accountability

Get Monitoring Agreement and Integrity Pact signed by parties

Supervise compliance with the monitoring agreement

Explain the IP fully, how it works and its effects

Contribute to find and channel necessary resources

Manage the IP implementation with credibility & independence


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Implementation Arrangements (1)

Civil SocietyOrganisation

(NGO)Authority

BiddersMonitor

MonitoringContract

Memorandum ofUnderstanding

NGO undertakes most implementation activities

IPDocument


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Implementation Arrangements (2)

Civil SocietyOrganisation

(NGO)Authority

BiddersMonitor Monitoring

Contract

Memorandum ofUnderstanding

Authority undertakes most implementation activities

IPDocument


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Qualities of a good monitor

Independence

Objective monitoring with public good as guidance

Knowledge

Expertise adds value to the project

Capacity

Individual monitor or organization, depending on project

Accountability

Accountable to all parties and the public in varying degrees

Commitment

Strength of character and impeccable behaviour


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Selection Criteria for IP Projects

Public Agency has many projects

Projects with more relevant social or economic impact

Projects that use combined funds Projects where risks of corruption threaten its viability

Projects suffering from corruption in the past

Complex Projects

Projects that are sensitive in terms of public opinion

Large scale projects that take a large part of the budget


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TI experience in IP implemention

Applied in more than 15 countries around the World > 300

monitored IPs, mainly in Asia and Latin America

10+ years experience/ continuous improvement

Reported results on contract savings (10%-60%), bidders

increased confidence, decreased complaints, impact on

procurement law.


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Broad sector/regional experience

Sectors and Areas of Work

Telecommunications

Public works

Transportation

School supplies

Office supplies Utilities

Services

Tourism

Police supplies

Local government

Finance

Information systems

Defence

Countries

Argentina

Colombia

Ecuador

Italy

Latvia Germany

South Korea

Mexico

India

Pakistan

Paraguay

Indonesia


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Some of the current Applications

Argentina (public hearings)

Italy, Indonesia, South Korea (local governments)

Mexico (different types of contracts)

Pakistan & India (MOUs)

China, South Korea (sector policy)

Germany (complex construction contracts)

Colombia (evolution - Industry agreements)


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Thank You

Heni [email protected]

Transparency International Indonesiawww.ti.or.id
mailto:[email protected]://www.ti.or.id/http://www.ti.or.id/mailto:[email protected]