India: Strengthening transparency and accountability in procurement procedures
Procurement is the acquisition of goods or services by public bodies and private companies. The prime objective of any procurement is getting the right product or service, at the right price and quality at the right time. However, procurement processes are also highly vulnerable to corruption, collusion, fraud and manipulation. Estimates suggest that 20-30 per cent of the value of procurement may be lost through corruption while on the other hand procurement itself is estimated to constitute 15 per cent of gross domestic product (GDP) in OECD 1 countries, a higher percentage in developing economies and up to 45 per cent of government spending in some economies 2.
As part of its ongoing project on 'Public - Private Partnership for Probity in Public Procurement', implemented under the Siemens Integrity Initiative, UNODC, in partnership with the Global Compact Network India (GCNI), organized a national consultation on 'Transparency and Anti-Corruption Measures in Procurement in India' on 18 and 19 April in New Delhi. The consultation was aimed at deliberating on challenges related to maintaining transparency in procurement procedures and exploring opportunities and collaborations to address corruption and enhance accountability in procurement in India, in line with the United Nations Convention against Corruption (UNCAC). India ratified the UNCAC in May 2011, the first legally binding global anti-corruption instrument adopted by the world community in 2003. The Convention calls upon States Parties to establish systems of procurement based on transparency, competition and objective criteria in decision-making. It also encourages States Parties, the corporate community and relevant organizations to collaborate with each other and share best practices on the alignment of systems of public procurement with the requirements of the Convention.
The consultation brought together stakeholders from the Central Vigilance Commission and the Comptroller & Auditor General's Office, India, chief vigilance officers of public sector units, compliance officers of private companies, representatives from industry associations, procurement experts and civil society representatives. Mr. T K A Nair, Advisor to the Prime Minister of India and Chief Guest for the occasion, shared his insights on vulnerabilities of procurement processes in India and also outlined the objectives of the Indian Government's Public Procurement Bill 2011, which aims to address the gaps in the present procurement process. Over one and a half days, the participants discussed subjects such as differential procurement guidelines in the public and private sector, roles that industry associations can play to strengthen procurement, integrity pacts, Public Private Partnerships (PPPs) and whistle blower mechanisms as per standards suggested in the UNCAC. A number of pertinent observations and recommendations emerged from the consultation, the significant ones being as follows:
• Adequate guidelines and principles exist for procurement in the public sector. There is a need to ensure more effective implementation, along with ensuring checks and balances as well as disciplinary measures.
• The private sector needs to go beyond developing codes of conduct. It is important to develop policies and proper procurement guidelines/mechanisms/principles for the private sector just as in the public sector.
• Public Private Partnerships are an emerging method of engagement. They seem to present a more complex and complicated scenario for procurement and therefore require specific guidelines/mechanisms for transparency and accountability.
The findings and recommendations of this consultation will feed into UNODC's ongoing project, which aims to support India's efforts to effectively implement Article 9 of the UNCAC by facilitating an environment where public contracts are awarded on the basis of objective criteria and merit. As part of the project, UNODC will conduct a review of India's legal system, policies and practices to identify good practices and gaps and make recommendations so as to enhance India's conformity with the provisions of the UNCAC. This will be followed by an awareness and training program for the business community and law enforcement officials on international standards and best practices in procurement. A follow-up meeting has been planned for August 2012, to share the results of the review with stakeholders and discuss the next steps to be implemented under the project.
1 - The Organisation for Economic Co-Operation And Development (OECD) is a forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalization.