Transparency, Good Governance and Anti-Corruption Mechanisms

Fight Corruption

Poor governance and corruption undermine the economies of developing countries as well as the World Bank's core mission of poverty reduction and disproportionately affect the poor. The World Bank has a fiduciary obligation to assure its own shareholders and stakeholders that funds are used for their intended purposes and so seeks to strengthen governance and anti-corruption measures in its borrower countries.

PPPs can be susceptible to corrupt activity if not carefully planned and designed, as with general public procurement. Prevention of corruption requires the integration of anticorruption approaches during project design. This page provides examples of some of the tools that the World Bank and other institutions employ to address the risk of corruption in infrastructure projects. also, go to Anti-Corruption and Freedom of Information Laws for examples of laws in developed and developing countries on this topic.

Another crucial area of reducing corruption in PPPs is by encouraging transparency in the bidding process, contract award and implementation.

The World Bank Group, in collaboration with the Construction Sector Transparency Initiative (COST) and PPIAF has circulated for consultation a draft Framework for Disclosure in PPP (2015), expanding on a study and report of WBG in 2013 on Disclosure of Project and Contract Information in Public Private Partnerships, part of a larger G20 initiative, working with CoST. Feedback on the draft Framework would be very welcome!

International Initiatives to Combat Corruption
Anticorruption Action Plans
How to Manage Unsolicited Proposals
Output Based Aid
Learning and Training
Useful Links
Further Reading

International Initiatives to Combat Corruption

There are many international initiatives to combat corruption that have direct relevance to infrastructure projects. Click on the following links:

Extractive Industries Transparency Initiative (EITI) . Three and a half billion people live in countries rich in oil, gas and minerals. With good governance the exploitation of these resources can generate large revenues to foster economic growth and reduce poverty. However when governance is weak, such resources endowments may result in poverty, corruption, and conflict. The Extractive Industries Transparency Initiative (EITI) aims to strengthen governance by improving transparency and accountability in the extractives sector. The EITI is a coalition of governments, companies, civil society, investors and international organizations. It has developed a robust yet flexible methodology for monitoring and reconciling company payments and government revenues. The EITI is a globally developed standard that promotes revenue transparency at the local level.
World Bank Support of EITI - Press Release, Fact Sheet
ResourceContracts.org, the online, searchable and user-friendly database of publicly available oil, gas and mining contracts from around the world that was developed by CCSI, together with the World Bank and Natural Resource Governance Institute, now features contracts and documents from 90 countries; it just retrieved the first disclosed oil contract from Guyana from the public domain.
World Bank Governance and Public Sector Management Portal
Construction Sector Transparency Initiative (CoST) - Department for International Development (DFID) Press Release on Pilot
Transparency International
See also Anti-Corruption and Freedom of Information Act Legislation for links to websites with examples of anti-corruption and freedom of information legislation.

World Bank Anticorruption Action Plans

Colombia - La Guajira Water and Sanitation project- Annex 11 of PAD (page 136)
India - Rampur Hydropower Project (para 42 and Annex 6)
Indonesia - Anticorruption plan

How to manage unsolicited proposals

A discussion of how different countries manage unsolicited proposals can be found in PPIAF Working Paper No.1 Unsolicited Infrastructure Proposals (pdf). A more recent initiative was carried out by PPIAF: Unsolicited Proposals – An Exception to Public Initiation of Infrastructure PPPs: An Analysis of Global Trends and Lessons Learned, Public-Private Infrastructure Advisory Facility (PPIAF), August 2014.

Governments may be presented with unsolicited proposals for infrastructure projects by private sector entities. How to respond to unsolicited bids so as to protect transparency in the procurement process and recognize the initiative of the proponent, is typically difficult. A number of approaches have been developed, and examples are set out below:

UNCITRAL

UNCITRAL has produced the useful Legislative Guide on Privately Funded Infrastructure Projects which considers these issues at paragraphs 96 to 117. It sets out suggested legislative language in provisions 20 to 23 of its text Model Legislative Provisions on Privately Financed Infrastructure Projects.

Whenever a host authority receives an unsolicited bid, UNCITRAL recommends that the authority first consider whether the proposal is potentially in the public interest. If so, the authority then requests further information from the proponent in order to make a full evaluation. If the authority decides to go ahead with the project, it determines whether the project necessarily involves intellectual property, trade secrets or other exclusive rights of the proponent. For projects that do not involve these rights, a full selection procedure is followed, with the proponent being invited to take part in the selection. If it does necessarily involve the proponent's intellectual property, a full selection procedure does not need to be followed.

Australia

The New South Wales (NSW) Government

The Guide for Submission and Assessment of Unsolicited Proposals (2014) outlines a transparent and streamlined approach that will facilitate the NSW Government and private sector working together to develop and deliver innovative ideas. It has been developed to help those considering making a submission to confirm compatibility with the requirements of the process. Its key objective is to provide consistency and certainty to private sector participants as to how their unsolicited proposals will be assessed within a transparent framework with key drivers for the NSW Government being how the proposal helps meet a strategic Government objective and value for money.

Chile

Chile has adopted an approach whereby the project proponent is required to take part in a fully competitive tender process, but is given bonus points in relation to the evaluation. The process to manage unsolicited proposals is found in detail (in Spanish) in a regulation (secondary legislation) to the law (reglamento) Reglamento no. 956 Chilean Concession Regulations no. 956. Click on Chile Summary for a summary of the regulations.

South Korea

South Korea has adopted an approach similar to Chile.

South Africa

The South African National Roads Agency policy - this grants the original proponent an advantage by giving it the opportunity to take part in the call for "best and final bids".

Output Based Aid

Through Output-Based Aid, aid can be conditional on seeing improvements in procurement processes and other initiatives designed to reduce the risk of corruption in Infrastructure projects. For more on this, go to Global Partnership on Output-Based Aid.