30th Session of the Congress of Local and Regional Authorities of the Council of Europe – 22 to 24 March 2016

Public procurement: “Transparency offers the best protection against corruption”

In its second debate on ethics and transparency at local level, the Congress on 24 March 2016 debated the prevention of corruption in public procurement.  It underlined the importance of transparency in all stages in procurement procedures, from the publication of calls for tenders through to the announcement of the results.  The transparency policy conducted by the Slovakian town of Martin in the procurement sector and in all other areas of public life has been praised as an example both by Europe and by the UN.  The town’s deputy mayor, Imrich Zigo, gave the Congress details of the keys to this success.  From 2008, the town introduced local anti-corruption regulations developed in co-operation with the NGO, Transparency International.  All the town’s procurement procedures, contracts, invoicing and recruitment can now be consulted online by all citizens on a round-the-clock basis.

In introducing the debate, Congress President Jean-Claude Frécon pointed out that public procurement accounted for 20% of European states’ gross national product, and underlined that secrecy and lack of transparency in procedures encouraged misconduct and corruption.

Elizabeth David-Barrett, lecturer at the University of Sussex (United Kingdom), said that attempted corruption could be observed from the announcement of procedures, for instance with calls for tenders drafted in such a way as to disqualify certain bidders from the outset.  She presented five key rules applicable at the local level for preventing corruption more effectively: firstly, local authorities did not always have sufficient expertise in terms of preparing and negotiating contracts, especially when dealing with firms which sometimes had lawyers specialised in the field, and needed to improve their own know-how.  Secondly, they needed to be more careful when they outsourced services or delegated them to experts or outside firms.  At the same time, there were risks stemming from cases where individuals moved from jobs in the public sector to private companies and then sometimes back into the public sector again.  Lastly, it was important to employ independent auditors and to keep on using such impartial professionals.

In her view, the online publication of public procurement procedures, making the details available for everybody to consult, was also one of the best means of combating corruption.  Lastly, she recommended granting anonymity to whistle-blowers who reported cases of corruption in both the public and private sectors so that they did not face reprisals.

Martin, a model transparent town

Martin, the eighth-largest town in Slovakia, introduced local anti-corruption regulations developed in co-operation with Transparency International in 2008, turning it into a “transparent town” that is now recognised worldwide.  According to its deputy mayor, Imrich Zigo, the main aim had been to “restore public confidence in local public bodies”, but the town’s efforts had also enabled it to make savings of up to 20% in some areas, in particular through fairer and more transparent public procurement.  “We have taken action in 17 key areas of municipal policy”, he said, with all the town’s public procurement, contracts, invoicing and recruitment being published online, making the data available for consultation by everybody on a round-the-clock basis.  The town’s philosophy could be summed up in the idea that “transparency protects against corruption”, he added, even though success was never guaranteed and this type of crime evolved quickly.  Moreover, according to Mr Zigo, “it is not just in the run-up to elections that the municipal authorities listen to the public: in keeping with our transparent approach, anyone who wishes to meet the mayor can do so without an appointment on the first Wednesday every month.”

All local authorities can choose transparency and a grassroots approach

Speaking during the debate, Breda Pecan (Slovenia, SOC) asked whether Martin’s example could be followed by very small municipalities: according to Ms David-Barrett, properly adapted IT could enable them to ensure the necessary transparency in their work.  In her view, transparency always started at grassroots level.

For her part, Barbara Toce (Italy, SOC) said that public procurement through specialised agencies fostered transparency but could run against the principles of local management on account of its centralised nature.  It would probably be necessary here to restrict collective, centralised procurement to certain standardised products and keep local procurement procedures for more specific goods.  Lastly, Gyorgy Illes (Hungary, ILDG) also warned his colleagues about the risks involved in public-private partnerships that lacked proper oversight.