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Integrity pact – A global standard for safeguarding strategic public investments

Integrity Pacts Atlas - Integrity pact – A global standard for safeguarding strategic public investments

Asia Pacific

Indonesia

Number of integrity pacts
N/A
Relevant sectors
Multiple
Governmental levels
Local
First integrity pact
2002
Most recent integrity pact (project end)
Not specified
Integrity pact recognised in country legislation
No

The Solok Regency integrity pact

Transparency International Indonesia started promoting integrity pacts (IPs) in 2002. A year later, the governor of the Solok Regency in West Sumatra participated in an integrity pacts session at the International Anti-Corruption Conference and decided to implement an IP. As part of the preparation, TI Indonesia organised a workshop with civil society organisations and senior officials, IP training for public officials, businesses, and civil society, as well as collaborative drafting of the documents.

The IP was finalised and announced publicly in November 2003. It applied to all public institutions and their officials for all future procurement procedures. The bidders in individual tenders would sign the IP as part of the bidding process. The IP was issued as local government regulation, thus establishing it as a legitimate tool among bidders and enforcement. The IP's signature was accompanied by several reforms to mitigate corruption risks, increase legal clarity, and enhance the effectiveness of the contracting process.

The text contained commitments to refrain from corruption and collusion, provide transparency in public contracting processes, foster citizen engagement, and recognise independent supervision. It also established a system of incentives and sanctions for civil servants and businesses (including a priority list for clean vendors) and procedures for dispute resolution. A monitoring board comprising TI Indonesia and local non-governmental organisations called Alliance of Integrity Pact Independent Monitor (AIPIM) was established to monitor the integrity pact.

A study carried out in 2004 indicated that IP implementation positively impacted business confidence and contributed to a lighter administrative burden, prevention of illegal payments, and detection of corruption. Before the IP, most bidders were met with demands for bribes, but afterwards, they were much more reluctant to strike illegal deals, carry out illegal payments, and submit false reports on the execution of the contracts. In 2005, the AIPIM oversaw nine of the largest procurement projects in the regency and declared three (construction of a convention hall, a pipe water channel, and a bridge) as “troubled”. Their assessment was followed up by an investigation by local authorities and judicial processes.

The PITA project

In 2013, TI Indonesia initiated a project called PITA (Participation, Integrity, Transparency, and Accountability), featuring a range of activities to help businesses, particularly state-owned enterprises, uphold anti-corruption standards, including in public procurement. Activities included an “integrity pact function”, entailing a collaborative agreement between the country’s anti-corruption commission, the company, and TI Indonesia.

Under the PITA agreement, all three parties work together to evaluate the implementation and functioning of existing regulations on procurement, identify weaknesses and loopholes, and provide policy recommendations. The PITA agreement also includes commitments for bidders not to bribe, collude, or engage in other illegal activities, for public officials to disclose information on procurement procedures and their financial interests, and to report any breaches to the PITA clauses. In case of irregularities, stakeholders must first try to solve them through a collective agreement. If this fails, the decision can be taken to court.

From 2013-2014, the PITA project was introduced in 47 business units and ten subsidiaries, with committed company leadership being one of the main drivers of successful implementation. PITA projects were considered a temporary learning exercise, and they usually ended once TI Indonesia considered the company to be self-sufficient in its anti-corruption efforts. This was the first instance in the country of such intensive collaboration between civil society and the private sector.

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