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Integrity Pacts: An old tool teaches us new tricks

More investors, donors, business groups and civil society organisations should consider adopting Integrity Pacts – and not only as a way to safeguard public tenders from corruption

Photo by Keagan Henman on Unsplash

Basel Institute on Governance

The Basel Institute on Governance is a Swiss foundation dedicated to working with public and private partners around the world to prevent and combat corruption.

Corruption in procurement is a red-hot topic right now as reports of overpricing of personal protective equipment (PPE) and fraudulent contracts for medical equipment spring up around the world. Long before the pandemic pushed these issues to the top of the agenda, citizens have grown tired of seeing trillions in public money squandered in contracts that are overpriced or unfairly awarded to bidders who bribe.

And even without the looming global economic crisis, investors and donors have been paying closer attention to safeguarding their funds.

Many of these different stakeholder groups would do well to take a closer look at Integrity Pacts – and not just as a tool to prevent corruption and bring transparency to public tenders.

The versatile tool for clean contracting

Since Transparency International pioneered the approach in the 1990s as a way to reduce corruption in large public contracts such as construction projects, at least 32 countries have applied variations of Integrity Pacts to projects across 20+ sectors. This illustrates one of the benefits of the Integrity Pacts approach – they can be adapted and tailored to different contexts.

  • 32 countries
  • 20+ sectors

What’s also interesting is that, until recently, it’s been mostly civil society groups – often local Transparency International chapters – who have pushed for the use of Integrity Pacts in public tenders. Now, a much wider range of stakeholders are realising its collective benefits and actively seeking to use the tool.

Can Integrity Pacts stop corruption in COVID-19 procurement? What do they look like? How do they increase trust between governments, companies and citizens? How much money can they save in public tenders? Where have Integrity Pacts been used and what were the results?

The Basel Institute of Governance has recently launched a free online resource with hands-on guidance on these and other common questions around the how, what, where, when and why of Integrity Pacts.

Integrity Pacts – Basel Institute of Governance

Protecting investments

Investors are the first group. The biggest current example is the European Commission's Civil Control Mechanism for Safeguarding EU Funds programme, which Transparency International is leading in collaboration with 15 civil society monitors.

In 2015, the European Commission and Transparency International teamed up to tackle corruption in public procurement in EU-funded investments. The pilot initiative explores the potential of civic monitoring on a large scale and to promote more transparent and accountable use of EU funds through Integrity Pacts – signed commitments between public authorities, companies bidding for a contract and civil society.

Integrity Pacts – Civil Control Mechanism for Safeguarding EU Funds

With an emphasis on monitoring and evaluation through comprehensive key performance indicators and independent analysis, this 18-project pilot will provide concrete evidence of how Integrity Pacts can help ensure that European structural and investment funds are used efficiently and responsibly.

Other institutional investors, as well as large private investors and donors, will be watching with interest.

Clean competition

Increasingly, companies also see the benefits of a clear no-bribes commitment, a chance to compete in a fair and transparent environment, and a straightforward mechanism for handling complaints.

In sectors where confidentiality is a security issue, the tool has helped ensure integrity and address reports of unfair business practices without revealing confidential data to the public. The Banknote Ethics Initiative is one example of businesses coming together to advocate for the use of Integrity Pacts in their industry.

Gains for governments

Political will is strengthening, too, as governments respond to calls for greater transparency in the management of public finances. In Honduras, sustained use of Integrity Pacts and an online platform have helped bring transparency, fair competition and value for money to medicines procurement. Civil society monitor Asociación por una Sociedad mas Justa is now expanding the initiative to El Salvador and Guatemala.

Cost savings attributed to the use of Integrity Pacts have inspired some governments, starting with Pakistan, to make them a legal requirement for tenders above a certain threshold. The economic downturn and consequent belt-tightening may trigger more governments and regional authorities to do the same.

And it’s not just about obtaining better value in the tender itself. Contracting authorities increasingly tell us of the benefits of deploying monitors right from the start of the contracting process and maintaining this oversight mechanism through project implementation.

Community engagement

Citizen groups beyond Transparency International also report real impact in terms of civic engagement. While implementing an Integrity Pact in an EU-funded project to revitalise the ancient city of Sybaris in southern Italy, for example, ActionAid Italy has succeeded in mobilising local communities to play an active role in the project. Direct citizen engagement generates a sense of ownership and responsibility for seeing the project through to completion.

This supports our general finding that in contexts of high unemployment, organised crime and systemic corruption, Integrity Pacts – when coupled with good communication – can help give citizens a fresh sense of pride in public projects and greater faith that taxpayer money is well spent. This, in turn, can gradually lead to improved trust in government.

Civic monitoring: the voice of citizens: Integrity Pacts in Sybaris, Italy

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Who else will join the party?

Like other forms of collective action, Integrity Pacts need collective buy-in and input from all stakeholders in order to succeed.

Transparency International has provided the framework for Integrity Pacts, plus plentiful guidelines, toolkits and case studies. Through the EU project, it is leading the way in critically analysing the impact of the tool and providing evidence on what works and what doesn’t.

Now the doors are open for other civil society organisations, as well as governments, investors, donors and business groups, to consider what they might be able to learn and achieve by applying this approach to their projects. We hope our new online resource for Integrity Pacts on the B20 Collective Action Hub will help all newcomers advocate for, develop and implement Integrity Pacts – in whichever context and for whatever reasons they wish.

The Basel Institute on Governance has supported companies and multi-stakeholder groups with advice on anti-corruption Collective Action for over 15 years. It hosts the B20 Collective Action Hub, an online resource centre for anti-corruption Collective Action.