European Structural and Investment Funds boost growth and jobs and help build everything from transport infrastructure to schools, housing, water and power supply and fund other community improvement projects. But with vast expenditures, opportunities for public money to be lost through fraud, corruption and mismanagement are rife.
We're working to stop it.
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What’s at stake
Five billion euros.
According to experts, that’s what corruption in public procurement could be costing the European Union (EU) each year. This financial black hole has disastrous consequences: when clean and competitive companies know that a contract to build a hospital or school is rigged, why bother to bid? The losers are clear: communities who endure bad services, and EU taxpayers whose money disappears.
In 2015, we teamed up with the European Commission to tackle corruption in public procurement in EU-funded investments. Our 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.
What's an 'Integrity Pact'?
An Integrity Pact is both a signed document and approach to public contracting which commits a contracting authority and bidders to comply with best practice and maximum transparency. A third actor, usually a civil society organisation (often one of our chapters), monitors the process and commitments made.
What we’re doing
We're bringing together government agencies, private sector and civil society in 11 EU countries to ensure that 18 major public contracts are designed and implemented to the highest possible standards of transparency, accountability and efficiency, according to the public interest.
By setting precedents for clean practices in the public procurement process, we also aim to contribute towards greater confidence among the public, government agencies and the private sector that funds are being spent efficiently and as they should – and that redress is possible if corruption does occur.
An Integrity Pact is a tool developed by Transparency International back in the 1990s as a method for preventing corruption in public contracting. It is essentially a document signed between a contracting authority, bidders and an independent monitor. Legally binding, it commits all parties to comply with anti-corruption best practice and allows the monitor to make sure this happens. Monitors follow the whole procurement process – from design to implementation. They commit to maximum transparency and all monitoring reports and results are made available to the public on an ongoing basis.
In addition to the Integrity Pacts, this project draws on international open contracting principles, and engages communities, social groups and professional associations directly affected by a specific public contract; those who live near to where a flood reservoir, highway, hospital or other facility is being built, for example.
These social accountability mechanisms are necessary for building trust in the public procurement process and ensuring that these big projects reflect the public interest, particularly the interest of those communities and groups most affected by the project. That means engaging these communities in monitoring the procurement along as many phases of the project (from pre-tender to implementation and evaluation) as possible.
We aim to help achieve broader and deeper scrutiny of public contracts than previously possible, and to bring citizens much closer to the process, working with individuals in the public and private sector to safeguard European money and improve trust and efficiency in public contracts.
During the G20 Summit in Osaka, the G20 Compendium of Good Practices for Promoting Integrity and Transparency in Infrastructure Development is published, which features Integrity Pacts as an effective collaborative approach to assessing and mitigating the risk of corruption in infrastructure development.