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WELCOME TO THE PRESENTATION ON INTEGRITY PACT

WELCOME TO THE PRESENTATION ON INTEGRITY PACT. OVER VIEW. TI-AN INTRODUCTION WHY INTEGRITY PACT? KEY FEATURES OF IP IMPLEMENTATION STEPS TEETHING TROUBLES DIFFICULTIES BEING ENCOUNTERED WHAT DO WE EXPECT FROM CVC & TI. TRANSPARENCY INTERNATIONAL.

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WELCOME TO THE PRESENTATION ON INTEGRITY PACT

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  1. WELCOME TO THE PRESENTATION ON INTEGRITY PACT

  2. OVERVIEW • TI-AN INTRODUCTION • WHY INTEGRITY PACT? • KEY FEATURES OF IP • IMPLEMENTATION STEPS • TEETHING TROUBLES • DIFFICULTIES BEING ENCOUNTERED • WHAT DO WE EXPECT FROM CVC & TI

  3. TRANSPARENCYINTERNATIONAL • Transparency International (TI) is a non-profit, non-Governmental organization • Initiated by Peter Eigen, a former World Bank official, in May 1993 • Headquartered in Berlin (Germany), with an objective to curb corruption in international transactions by raising awareness

  4. WHY “INTEGRITY PACT” • Large scale corruption in procurement programs and works’ contracts. • A major drain of valuable resources in developing countries • impedes the development process and corrodes the moral fibre of the society. • Integrity Pact (IP) Program launched in 1990s by Transparency International • creates a voluntary contract between the Buyer and the Seller to eliminate corrupt practices. • Integrity Pact Program implemented in several Countries. • IP begins when a bidder submits an EOI/purchases the bid document • IP ends with the execution of the contract

  5. KEY FEATURES OF INTEGRITY PACT PROGRAMME • The program will have the following six key features: • The Commitments & Obligations of the PRINCIPAL (The concerned PSU). • The Commitments & Obligations of the Counterparty (i.e. the Bidder, Contractors, Suppliers of goods and services). • Consequences of violation of the Commitments & Obligations. • The Role & Responsibilities of the External Independent Monitors. • Implementation Steps • Periodic review of effectiveness

  6. KEY COMMITMENTS & OBLIGATIONS OF THE PRINCIPAL • Will commit to have ethical and corruption-free business dealings with Counterparties • Will value its relationship with all counterparties and will deal with them in a fair and transparent manner • Principal and/or its Associates (employees, agents, consultants, advisors, etc.) will not seek any favour, undue benefit or accept bribes for themselves or for third parties • Will honour its commitments and make payments in a timely manner • Will initiate action and pursue it vigorously whenever corruption or unethical behaviour comes to notice

  7. KEY COMMITMENTS & OBLIGATIONS OF THE COUNTERPARTY • The Counterparty, directly or indirectly (through Agent, consultant, advisor, etc.), will not pay any bribe or extend illegal benefit or provide undue advantage to any one while dealing with the Principal • The Counterparty will not engage in collusion, Price-Fixing, etc. with other Counterparties in dealing with the Principal • The Counterparty will not pass on to any third party any information unless authorized by it • The Counterparty will promote and observe best ethical practices within its organization,etc.

  8. VIOLATIONS & CONSEQUENCES • If a Counterparty commits any violation of the Integrity Pact, it may loose Bid Security and Performance Bond. In addition, the Principal may terminate any current contract and business relationship with such Counterparties and their associates • The Principal would black list and exclude the Counterparty from future dealings until the Principal is satisfied that the Counterparty will not commit any violation in future • The Counterparty will be liable to damages as determined by the EIM • The Principal may initiate criminal proceedings against violating Counterparties

  9. EXTERNAL INDEPENDENT MONITOR • The Principal, in consultation with CVC, will appoint an External Independent Monitor (EIM) to oversee Integrity Pact Program implementation and effectiveness. • EIM will be a person of impeccable Integrity, and knowledgeable of Government tendering/contracting processes. • EIM preferably should have domain knowledge /experience of the Principal's work area • The major role of the EIM will be to prevent/reduce/ eliminate corruption, bribes and other unethical practices • EIM will not have any administrative, implementation or enforcement responsibilities.

  10. EXTERNAL INDEPENDENT MONITOR(contd.) • EIM will have access to all officers and internal records of the Principal. He will also have access to Counter- parties’ records and information regarding their dealings with the Principal. • EIM will have the right to attend any meeting between Principal concerned and the Counterparties as well as internal meetings of Principal. • If the EIM observes or suspects any irregularity, he will inform appropriate senior most officers of Principal concerned. He may also inform CVC and make the information public. • EIM can be removed from his office by the Principal concerned with the consent of CVC through an open and transparent process.

  11. HONORARIUM TO EIM • In RINL, it was decided to pay an honorarium of Rs.10,000/- per working day spent in examination of a case, i.e. equal to the amount being paid to Independent Directors • All other perks at par with Directors

  12. KEY IP IMPLEMENTATION STEPS • Commitment from all Senior-level officials to implement the programme • Developing a phased implementation program, initially all contracts worth over a threshold limit be covered under this Programme • Selection and appointment of EIMs • Developing detailed implementation plans • Notifying all senior executives and major contractors about the plans to implement Integrity Pact Program • Publicity to raise the awareness • Periodically to conduct review with the help of CVC, TI and EIMs

  13. Central Government Departments State governments Public Sector Undertakings Municipalities Indian Corporates Other large Organizations such as Hospitals, Schools, etc. POTENTIAL USERS OF INTEGRITY PACT

  14. Threshold values • Initially to keep threshold values to cover all important tenders being floated by the organization • After gaining experience, say after one year, enlarge the scope to cover all tenders above a meaningful value, say Rs. 1 crore • In RINL, the threshold values are Rs.3 crores for works and project tenders and Rs.5 crores for purchase and Marketing tenders

  15. Teething troubles faced • Doubts about the usefulness / effectiveness of IP in the minds of Senior executives • Doubts over Role of CVC,CVO,CBI etc. Vis-à-vis Role of EIM • Inclination to keep high threshold values

  16. Difficulties being encountered • In few cases pertaining to procurement, the lone tenderer refused to sign IP • Few global agencies expressed their objection about the Principal’s authority to decide violation against clauses of IP. According to them, it should be vested with courts only. • Few Global tenderers insisted for keeping the scope to their Indian operations only

  17. WHAT DO WE EXPECT FROM CVC & TI • METHODOLOGIES TO BE ADOPTED FOR SORTING OUT THE TEETHING PROBLEMS BEING FACED • AWARENESS CAMPAIGN IN A BIG WAY • IP TO BE MADE MANDATORY TO ALL PSUs • PANEL OF ELIGIBLE PERSONS FOR CONSIDERATION AS EIMs • REQUIREMENT OF COMMON GUIDELINES APPLICABLE TO ALL PSUs • ON PROVISIONS OF IP DOCUMENT • ON THRESHOLD VALUES • ON TYPE OF CONTRACTS TO BE BROUGHT UNDER THE PURVIEW OF IP

  18. THANK YOU FOR YOUR KIND ATTENTIONJAI HIND

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