Transparencia Mexicana – Transparency International’s chapter in Mexico – first introduced the integrity pact (IP) to Mexico around the year 2000. In addition to bringing the tool to the country, Transparencia Mexicana created a complementary figure called “Social Witness”, an independent individual or civil society organisation monitoring the legal compliance of a public contracting procedure.

The model combining these two elements was first implemented in Mexico City, which in December 2000 faced the possibility of a volcano eruption, affecting the price of the insurance policy of the city’s systems. In just days, Transparencia Mexicana organised a technical team that reviewed the market conditions, made recommendations to the authorities and implemented a pact among authorities and insurance companies. Their work generated savings in a very demanding context.

By 2002, the chapter had designed and monitored several integrity pacts and served as an independent monitor or Social Witness for them. The projects included the acquisition of insurance policies for the national energy agency, the Federal Electricity Commission (CFE). In the same year, the scope of independent monitoring was extended to the procurement of financial services for the energy minister.

In 2002, CFE invited Transparencia Mexicana to implement an integrity pact to monitor the construction work and equipment supply of a US$64 million-worth hydroelectric dam project in El Cajón. The two parties signed a Memorandum of Understanding outlining Transparencia Mexicana’s role as a monitor and service delivery agreements for the monitoring details of each procurement procedure.

Transparencia Mexicana came up with the “Unilateral Declaration of Integrity” to be signed by firms and public officials involved in the contracting project and bidders. The declaration contained commitments to integrity, not to engage in corruption or collusion, and to grant the monitor access to all information generated in the process. The signature of the declaration by the bidders was mandatory for them to participate in the tender, and they had to present it along with other bidding documents. Together, these declarations and their binding agreements formed the integrity pact.

The IP did not foresee additional sanctions to those established by the law and therefore did not include a special process for their application. Only the relevant prosecuting authorities and the courts could impose sanctions, and the process for doing so was left to established procedures. However, guidelines for swift reporting of corruption and irregularities were established to increase the deterrent effect.

As part of its monitoring duties as a Social Witness, Transparencia Mexicana appointed a technical team to review the contracting procedure from bid preparation until contract award. During the process, they received complaints about favouritism in the tendering phase, and the media reported that the winning bidder did not meet the requirements. In both cases, the technical and legal team thoroughly investigated the claims through interviews and document analysis, demonstrating that the tender and award had taken place fairly and followed the law.

In 2006, CFE, under new federal regulation for the operation of the integrity pact/Social Witness (see next section), requested the monitoring of a dam project called La Yesca worth US$760 million. This time, the signature of the integrity declaration by bidders was voluntary, as the parties believed this was a more productive approach to foster business integrity. Non-signatories would still be mentioned in the monitoring reports. Eventually, all bidders signed the declaration.

The first tender in the La Yesca procurement was issued in 2006, but none of the bids fulfilled the requirements. The monitor suggested closing the tender and relaunching it with revised technical specifications. A second tender was carried out in 2007, and construction was carried out between 2008 and 2012. Similar to the El Cajón project, the application of the IP demonstrated that it is possible to complete projects of strategic economic and social importance while protecting their credibility and legitimacy.

In 2004, due to the success and improvement in the quality of procurements brought about by integrity pacts until then, Mexico’s Ministry for Public Administration (Secretaría de la Función Pública, SFP) issued a decree regulating and setting minimum quality standards for the participation of Social Witnesses in contracting processes undertaken by public institutions at the federal level. The regulation assigns the ministry responsible for implementing the Social Witness mechanism and ensuring its effectiveness.

Through an independent committee, the SFP is responsible for appointing a Social Witness through a strict accreditation process and keeps a registry of the approved ones along with performance evaluations. Unsatisfactory performance might potentially result in their removal from the registry. The committee also determines, if applicable, the fees for Social Witnesses’ work and makes recommendations to improve the programme's effectiveness. Registered Social Witnesses cannot select the projects they wish to monitor.

In 2009, the regulation was revised to make the participation of the Social Witnesses mandatory at the federal level in contracting procedures above certain value thresholds. It also enabled authorities to request Social Witnesses for projects below such thresholds if they are considered strategically important. At the subnational and municipal level, where federal law does not apply, individual monitoring contracts are negotiated with each authority and contain clauses regarding access to information and meetings, payment of the monitor, and conditions for withdrawal.

Under current regulations, against the recommendations issued by Transparencia Mexicana, Social Witnesses cannot unilaterally withdraw from the process. They submit a publicly available report with observations on regulatory compliance, information on irregularities and how these were dealt with, and recommendations for improving future procedures. If any illegal activity is detected, the Social Witness has the legal obligation of formally denouncing it to the anti-corruption authorities.

The Federal Government carried out 877,422 public contracting procedures between December 2012 and December 2018, and 637 involved Social Witnesses. Transparencia Mexicana acted as a Social Witness in 66 (10,36 per cent).

Over the years, the Social Witness programme has been widely acknowledged as an effective tool for promoting transparency and integrity in public procurement. A 2006 OECD-World Bank Institute study indicated that the participation of Social Witnesses in procurement processes of the Federal Commission for Electricity created savings of approximately US$26 million in 2006 and increased the number of bidders by over 50 per cent.

After 14 years of implementation, a 2018 report carried out by independent experts identified relevant challenges and limitations of the Social Witness programme. One of the main issues relates to the Social Witness Committee, the body appointed without participation or intervention by the Social Witness. The study noted a glaring lack of clarity, transparency, and safeguards against conflict of interest in the committee's work, a problem compounded by the lack of centralised information on the involvement of Social Witnesses in federal contracting projects. Furthermore, the report suggests that the effectiveness of the monitoring has been limited by the narrow focus on the bidding process –despite the corruption risks affecting the planning and contract execution phase– and the absence of follow-up mechanisms on Social Witnesses’ recommendations and regular evaluation of the programme’s results.

The report recommended that the Social Witnesses intervention started earlier, during the planning phase of the procedure, and that it also considered the execution of the contracts, relying on technology to perform these tasks. It also suggested using random designation mechanisms and developing more precise guidance and capacity-building material for the work and evaluation of the Social Witnesses.

Integrity pacts and Social Witnesses are in the process of evolution in Mexico. As part of this endeavour, Transparencia Mexicana is redesigning them for projects aimed at the economic recovery after COVID. These include the design, construction, installation, operation and maintenance of a management system, organic waste use through energy recovery in the municipality of Naucalpan de Juarez, and the Concession for the Operation of Multimodal Transport in Mexico City.