EVER since I mentioned “Integrity Pacts” in a previous article, I have had some queries requesting for more details.
If you run a business, transparency and accountability are very good variables because they build investor confidence in your company’s stocks.
Consumers have more confidence in your products and services and are willing to support the business. Ethical business practices promote better profit margins.
As a contextual point, the World Bank has released its 2015 “Ease of Doing Business” rankings. Fiji has an overall ranking of 81 out of 189 countries.
A high ease of doing business ranking means that the regulatory environment is more amenable to the starting and operation of a local company.
With our gross national income (GNI) per capita of $US4430 ($F9392) we are considered an “upper middle income country” in the East Asia and Pacific region. Comparing Fiji’s ranking with PNG (ranked 133) it is noted that in some economic indicators they do better than Fiji especially in the ease of starting a business, getting electricity connection, and protecting minority investors.
Which brings me back to the integrity pact which is a tool developed by Transparency International to help the Government, businesses and civil society intent on fighting corruption in the field of public contracting. It consists of a process that includes an agreement between a Government and all bidders for a public sector contract. The integrity pact sets out rights and obligations to the effect that neither side will pay, offer, demand or accept bribes, or collude with competitors to obtain the contract, or while carrying it out.
In addition, bidders are required to disclose all commissions paid by them to anybody in connection with the contract. If violations happen then sanctions will apply.
These sanctions range from loss or denial of contract, forfeiture of the bid or performance bond and liability for damages, to blacklisting for future contracts on the side of the bidders, and criminal or disciplinary action against workers of the Government.
There are no recent surveys of corporate bribery and corruption. The most recent is the survey of 164 Fiji companies undertaken in 2009-2010 by the World Bank. While the corruption statistics are relatively low compared with East Asia and the Pacific region (thanks to the work of anti-corruption agencies), more can still be done through Integrity Pacts to promote transparency and accountability.
How do the integrity pacts operate?
In a specific contracting process, the IP is intended to accomplish two main objectives:
(1) To enable companies to abstain from bribing by providing assurances to them that:
(i) their competitors will also refrain from bribing, and
(ii) Government procurement, privatisation or licensing agencies will undertake to prevent corruption, including extortion, by their officials and to follow transparent procedures;
(2) To enable Government to reduce the high cost and the distorting impact of corruption on public procurement, privatisation or licensing. Beyond the individual impact on the contracting process in question, the integrity pact is also intended to create confidence and trust in the public decision-making, a more hospitable investment climate and public support for the Government’s own procurement, privatisation and licensing programs.
* Dr Joseph Veramu works as a consultant on economic policy planning and is a board director at Transparency International Fiji. For feedback, email: oa@transparencyfiji.org or director@transparencyfiji.org
