A Review on the Employment of Integrity Pacts Released

Integrity pacts constitute a civil control mechanism. It is used in the area of procurement in the form of a trilateral legally binding agreement between the contractor, the supplier of goods, works and services and the monitor. The pact is concluded with the aim to prevent corruption and fraud also by enhancing transparency of public (local) procurement at all stages and improve accountability mechanisms.

The monitor’s role is performed by a civil society organisation (a TI regional chapter is often the third party to pacts) that oversees compliance of the participants of the procurement procedure with the obligations they assumed and ensures open access to the information obtained throughout the monitorship by publishing relevant data. The monitor and the officials responsible for the procurement procedure draft the pact, taking into consideration:

international open contracting standards;
provisions of domestic legal acts in the area of countering corruption and other offences;
corruption risks inherent in the country/region/area of activity where procurement is conducted.

Integrity pacts appeared in the 1990s and are becoming increasingly widespread, especially in European countries also due to the active promotion of this mechanism by regional and international organisations. Integrity pacts, for instance, were considered as a measure to ensure civil control in the G20 Compendium of Good Practices for Promoting Integrity and Transparency in Infrastructure Development and the European Court of Auditors described the tool as an innovative measure to counter fraud. What is more, they received the European Ombudsman’s Award for Good Administration in the category “Excellence in open administration” for “the innovative use of the partnerships with NGOs, public authorities and private companies, helping to increase public trust through tackling corruption”. In total, these pacts are being employed in over 25 countries.

This mechanism was employed for the first time in Mexico in 2002 with regard to almost 100 public contracts whose total value exceeded $30 million. Two years later, taking account of the results achieved, including enhanced effectiveness of detection of corruption offences with the participation of monitors, the government decided to make integrity pacts obligatory for the cases where the value of public contracts exceeded certain amount which was ultimately defined by each body autonomously.

In 2016, IT in cooperation with its 11 regional chapters in the European Union and other partnering civil society organisations started to monitor the efficiency of employment of integrity pacts under the pilot project entitled “Integrity Pacts – Civil Control Mechanism for Safeguarding EU Funds” sponsored by the European Commission. The project spanning the period between 2016 and 2021 concluded with the analysis of 18 procurement procedures with the total value of roughly €920 million in 11 EU countries, namely Bulgaria, Czechia, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Portugal, Romania and Slovenia. The use of integrity pacts in procurement made it possible to achieve, among other things, the following results:

in procurement for the Technical Assistance for the Development of MS2014+ project in Czechia implying the development of an online system of management of EU funds and monitorship of their use, where the government decided to introduce a fee for anyone who wanted to submit a motion to review a contracting procedure, the monitor managed to make the government abolish the restrictions considered as a deterrent to the reporting of any potential wrongdoing;
in procurement for the construction of the Tisza-Túr Flood Reservoir in Hungary, the monitor’s participation allowed for detecting the indicators of a collusion at the implementation stage of the project and verify whether proposed contract modification was justified; additionally, the monitor was instrumental to taking the decision to oblige the contractor to adopt a set of measures to counter corruption;
in procurement for the Restoration of the Archaeological Site of Sybaris in Italy, the monitor’s recommendations prompted the contractor to simplify the contracting strategy, which fostered project timeliness. Additionally, the monitor promoted civic monitoring schools to engage local civil society organisations in public procurement monitoring also without concluding integrity pacts;
under the technical assistance project on the access of local government bodies in the Lombardy region in Italy to the EU funds, the monitor detected the indicators of collusion, as the only two bidders proposed the same estimated value for their work. As no formal procedure had been envisaged for such an event, the monitor reported the case to the National Anti-Corruption Authority (Autorità Nazionale Anticorruzione). While the latter did not detect any irregularity, the Lombardy region now has a blueprint for how to react to similar occurrences in the future. Moreover, following the recommendation of the monitor, the contractor established a modern, secure and reliable whistleblowing channel, as well as published up-to-date anti-corruption guidelines on its website;
in the course of procurement of works for maintaining and renovating the Alcobaça Monastery in Portugal, the monitor managed to achieve better value for money thanks to the adjustment of the criteria to define the price of the goods, works and services based on an analysis of similar contracts undertaken in the past three years.

However, despite these success stories and gradual expansion of the geography of integrity pacts, this civil control mechanism is not yet widespread enough also due to the following reasons:

it is efficient only in the event that the pacts are used at all stages of public procurement;
it is expensive and resource-intensive;
there is hesitation and/or lack of political will on the part of the leadership of the country etc.