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TI Latvia Reports on the Implementation of the Integrity Pact on the National Culture Buildings

Regular report published today

A report published today by Transparency International Latvia on the anti-corruption efforts of the state agency New Three Brothers (J3B states that the agency must continue to improve its communications with the public and with specific target audiences. Generally speaking, the communications work of J3B has improved significantly. The agency regularly reacts to public complaints and distributes detailed information about its operations. This work, however, is still inadequately planned and is not sufficiently proactive. As far as TI Latvia is concerned, the agency still is not prepared to pursue anti-corruption activities to full effect in the upcoming bids for tender which will relate to its major construction projects. Much work has been done to educate representatives of the construction sector about the corporate social responsibilities of suppliers in these projects, but the agency’s work as to supervising this process remains incomplete. Another problem it that the J3B anti-corruption activities which should become an all-encompassing element of its operations remain fragmentary.

Generally speaking, TI Latvia has seen significant progress in the extent to which J3B employees understand anti-corruption work and in the way in which the agency has improved its procurement procedures. There have been no complaints or suspicions of the misuse of J3B resources in procurement processes since the last TI Latvia report. Based on a previous TI Latvia recommendation, J3B has established a procurement procedure which exceeds the minimal requirements of the law and is an example of good governance. The J3B procurement procedures are clearly regulated, all documentation is prepared properly, and criteria for applicants and decisions as to the selection of winners are clearly justified. TI Latvia inspected documents related to all procurement processes with a value of between LVL 1,000 and LVL 10,000, determining that J3B ensures sufficient competition in the process and can always justify its decisions. There have been a few minor departures from accepted process, but these cannot be seen as fundamental violations.

At the same time, however, J3B has not worked hard enough to demand that its partners in the business environment implement anti-corruption activities. There have been many instances of procurement procedures in which business obligations vis-à-vis anti-corruption procedures have been explained imprecisely or incompletely. These obligations are defined in the J3B agreement with TI Latvia. The problem here is that the Latvian business environment is one in which there is limited understanding of the principle of corporate social responsibility. The result is that the J3B demands are of a unique nature in Latvia.

The role of suppliers in anti-corruption work, however, will only increase as costs and activities expand in the J3B projects. The businesses which earn money through the New Three Brothers projects must undertake a great deal of responsibility for ensuring that the process is an honest one. The agency must make sure that the rules are properly explained and that the work of its partners is adequately supervised to make sure that all companies take J3B requirements into account.

In its previous report TI Latvia instructed J3B to draft a proper anti-corruption plan for the next six months, but J3B has done this work only in part. The agency must improve planning and organisation in its work so as to ensure that changes are introduced more quickly in the fight against corruption. TI Latvia must state once again that some of the previously identified problems have not been resolved. This has to do with the planning of anti-corruption efforts at J3B, with public communications, and with demanding that partners in the agency’s work observe higher standards of social responsibility.

The agency still has not fully implemented those processes which are addressed in the Anti-Corruption Declaration. The draft anti-corruption plan has not yet been revised in line with the requirements of the Corruption Prevention and Combating Bureau (KNAB) and the recommendations which have been submitted by TI Latvia. Risk evaluation has been conducted, but there is still a lack of clear criteria as to how to prevent the risk of corruption and to determine those cases in which corruption is possible. TI Latvia cannot understand or excuse the fact that the agency has dilly-dallied in the preparation of these documents for more than a year now.

The main aspect of anti-corruption planning is the drafting of a proper anti-corruption plan which defines J3B goals vis-à-vis the fight against corruption, the principles of good governance, the evaluation of corruption risks, and the steps that are to be taken to prevent these risks. The responsible agency officials must be defined, and a schedule must be established for implementing the various processes. The anti-corruption plan must speak to diverse communications activities – explaining the principles of social responsibility to companies which take part in procurement procedures, implementing policies of transparency, and, particularly, disseminating more extensive information about procurement processes.

TI Latvia would also call on J3B to be more attentive to the requirements of Latvian laws and regulations related to construction and territorial planning and the preparation and approval of detailed construction plans. The agency must also answer public questions which have been posed about the proposed concert hall which J3B is to build – questions about traffic infrastructure and the building’s environmental effect. All of this is very important in terms of the role of planning in project development. The three construction projects which J3B is organising are of national importance, and that provides sufficient reason to be particularly careful as to territorial planning and construction norms which prevail.

TI Latvia serves as the independent public representative and watchdog in the J3B projects on the basis of the Integrity agreement which was concluded in September 2005 by the Ministry of Culture, J3B and TI Latvia. TI Latvia takes part in the work of the ministry and agency to ensure that they observe the principles of good governance and do nothing that would cast doubt upon their work. The ministry and agency must particularly avoid any activities which are dishonest, based on private interests or even corrupt. Members of the public are invited to take part in this supervisory process by informing TI Latvia of any suspicions related to the construction of the Latvian National Library, the Rīga Concert Hall and the Museum for Contemporary Art.

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