Integrity pacts: reaching out to the water sector

**A new guide from Transparency International and the Water Integrity Network (WIN) provides a more hands-on approach to the implementation of the Integrity Pacts.

Integrity pacts - signing up for transparency

The abuse of public power diverts public resources from their goals and denies citizens access to public services.

Public procurement is one of the areas of government most prone to corruption. It is a worldwide market worth US$ 2 trillion annually, according to the OECD.

Corruption in procurement does not just impact the effectiveness of government investments: it also affects people’s lives. The high death tolls of earthquakes (in Haiti for example) can be partly blamed on alleged corruption  in the construction of public buildings through public contracts.

Transparency International has found that one solution to corruption in public contracting is to get all players to sign up to a legally binding no-bribe agreement called an Integrity Pact.

The government agency and all bidders for a public sector contract set out the terms of the deal, and sanctions for any who breaks it, such as loss of the contract, liability for damages or debarment from future bidding opportunities.

The Integrity Pact allows businesses to compete for contracts on a level playing field, without the risk that a company with integrity will lose out to another that bribes to win contracts. It allows governments to save costs and get better value for taxpayers’ money.

Overseen by an independent monitor, the Integrity Pact opens up procurement processes to civil society monitoring, and to the general public who have an obvious stake in project being carried out properly.

A flexible tool for all sectors

Integrity Pacts can be used to prevent corruption in public contracting in any sector. They can be adapted to different circumstances and types of contracts (goods and services, works, licensing and even privatisation) as long as all institutions and management involved are committed to transparency.

The Integrity Pact is based on a simple principle: full transparency at every step of a well- designed contracting process. Independent experts and NGOs provide the monitoring that ensures increased levels of transparency and accountability, compliance with the Pact’s commitments.

Monitors can comment on bidding documents and evaluation processes, conduct site visits and take part in meetings and public hearings. They can support the communication and reporting that will build public trust.

Using Integrity Pacts should lead to corruption-free projects in the short term, and greater investment in infrastructure in the long term.

When Integrity Pacts are first tried, there are often fears that taking time for transparency and accountability will delay work. Experience has shown, however, that they help ensure projects are delivered on time and within or below budget.

Corruption in the water sector

Corruption is a big problem in the water sector. It puts the lives and livelihoods of billions of people at risks and slows development and poverty reduction. It has been estimated that corruption raises the cost of Millennium Development Goal 7 by US$48 billion: halving the number of people without access to safe water and sanitation by 2015.

When public power is abused, the costs can be high. Project prices rise, farms and poor villages may not get the water they need and safety features on large projects like dams get a low priority and people may have to pay a bribe to get connected to city grids. A TI Kenya survey reveals that 87% respondents had witnessed bribes for connecting to water provision services.

Irrigation, dams, sanitation projects involve consulting, civil works and several levels of supply contracts. The market for contracts for municipal water works in big cities is worth US $210 billion annually in Western Europe, North America and Japan.

Bringing integrity into water

Integrity Pacts can be applied to projects on the management of water resources, for the provision of drinking water and sanitation services, for irrigation in agriculture or big hydroelectric power projects.

Two monuments to Integrity Pacts in the water sector sit on Mexico’s Santiago river: the El Cajón and La Yesca hydroelectric projects. The first was completed in 2007, five years after the contracting process took place with an Integrity Pact. There were no reports of corruption

In 2006 the La Yesca project was launched. It began in 2008 and like El Cajón, it is being run with civil society oversight.

Transparency International’s chapter in Mexico, Transparencia Mexicana, took part in both projects, reviewing and commenting on the draft the bidding documents and designating an independent external monitor.

Mexican procurement and public works laws have been amended so that all major Federal Government contracts require such an independent monitor.

A joint venture to reach out to the water sector

Transparency International’s research  and experience shows that greater government accountability, through citizen monitoring, for example, has an impact on the percentage of the population that has access to clean drinking water.

The Water Integrity Network (WIN) raises awareness of corruption and the impact that fighting it can have through advocacy, capacity-building, research and monitoring. It was founded by the International Water and Sanitation Centre (IRC), Stockholm International Water Institute (SIWI), Swedish Water House (SWH), Transparency International (TI) and the Water and Sanitation Program-Africa (WSP). WIN is open to new members who want to rid the water industry of corruption. AquaFed, the International Federation of Private Water Operators, recently joined. TI serves as the Secretariat for WIN.

TI and WIN have joined forces to make the Integrity Pact more accessible to water sector officials, businesses and activists who want to keep corruption out of public contracting in their sector.

A new guide for government officials implementing Integrity Pacts in the water sector, will help them take a practical, step-by-step approach to ridding their sector of corruption in procurement.

TI and WIN can advise stakeholders in the water sector who want to implement Integrity Pacts in specific countries or projects.

Additional resources

• More information on Integrity Pacts
• Transparency International focused its 2008 Global Corruption Report on the water sector.
• TI Working Paper No 05/2010: Corruption and Public Procurement