1 Preventing conflict of interest and corruption: From policy to practice Elodie Beth, Administrator, OECD Public Governance and Territorial Development Directorate Global Forum V Sandton, Gauteng, South Africa, 4 April 2007

2 Integrity in the public service, why is it so critical today? Integrity has become a key factor in the quality of governance  Corruption distorts competition, risk-factor for the economy  Tolerating corruption leads to the loss of public confidence Public management reforms have had unintended impacts:  Limited resources -- require downsizing and restructuring  Increased commercialisation of the public service Public expectations have increased  Changing relationship between public servants and citizens

3 A Framework for conflict of interest: The OECD approach  Identify emerging challenges - Conflicts of interests are a critical risk for integrity  Provide policy advice – OECD Guidelines for Managing Conflict of Interest in the Public Service, based on the review of country experiences  Support implementation – Toolkit  Review of implementation – Measure progress made since the 2003 Guidelines

4 Recent efforts in OECD countries to manage conflict of interest  OECD countries reviewed their conflict-of-interest policy and practice in the last 3 years to verify adequacy of rules  ¾ of countries developed or updated conflict-of-interest laws, codes of conduct, and implementing mechanisms  Post-public employment and lobbying were identified as emerging challenges

5 From policy to practice: Public procurement, a government activity at risk Procurement  The most vulnerable government activity to corruption  A major economic activity, equivalent to 15% of GDP, where corruption has high impact on public finances How to prevent conflict of interest and possibly corruption in public procurement?

6 Prevention of conflict of interest in procurement at the organisational level Ensuring separation of duties and authorisations at the organisational level  Main challenge: Avoiding that “firewalls” result in a lack of co- ordination Ensuring interaction between officials and bidders to avoid bias  Rotation of officials  Four-eyes principle  Role of new technologies (e.g. e-auctions)

7 Ethical standards for procurement officials: From design to implementation Definition of integrity standards  A vast majority of OECD countries legislated integrity standards across the whole public service, few developed specific standards for procurement officials Application: What is the practice?  Ethical considerations are sometimes taken into account in the recruitment  Disclosure of relevant private interests  Integrity trainings  Post-public employment prohibitions

8 Partnering with the private sector  Verifying that bidders have a satisfactory record of integrity (e.g. role of information systems, declaration of integrity by the administration)  Denying access to bidders (e.g. disqualification for specific procurements, deletion from list of bidders, disqualification not necessarily linked to procurement)  Voluntary steps for self-regulations by bidders (e.g. sector agreements, company codes of ethics, guidelines, etc.)  Mutual commitments with business and non-governmental organisations (e.g. Integrity Pacts)

9 Recent publications : - Integrity in Public Procurement: Good Practice from A to Z - Managing Conflict of Interest: Guidelines, Country Experiences and Toolkit - Public Sector Integrity: A Framework for Assessment Website: FOR FURTHER INFORMATION