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• The Role of
• Transparency International
• in Fighting Corruption in Infrastructure
• by
• Donal O Leary
• Senior Advisor
• Transparency International
• Berlin, Germany
• Prepared for
• ANNUAL BANK CONFERENCE ON DEVELOPMENT ECONOMICS,
  TOKYO, MAY 29-30, 2006
  

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OUTLINE OF PRESENTATION

• INTRODUCTION TO TRANSPARENCY INTERNATIONAL
• SOURCES OF CORRUPTION IN INFRASTRUCTURE (GRAND
  AND PETTY)
  
• INSTRUMENTS FOR ADDRESSING GRAND CORRUPTION
• INSTRUMENTS FOR ADDRESSING PETTY CORRUPTION
• THE WATER INTEGRITY NETWORK (WIN) SETTING UP A
  COALITION TO COMBAT CORRUPTION ISSUES

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INTRODUCTION TO TRANSPARENCY INTERNATIONAL

• INTERNATIONAL NGO FOUNDED IN BERLIN IN 1993
• IS A GLOBAL NETWORK INCLUDING MORE THAN 90
  LOCALLY ESTABLISHED NATIONAL CHAPTERS AND
  CHAPTERS-IN-FORMATION
  
• THE CHAPTERS BRING TOGETHER RELEVANT PLAYERS FROM
  GOVERNMENT, CIVIL SOCIETY, BUSINESS AND THE MEDIA
  TO PROMOTE TRANSPARENCY IN ELECTIONS. IN PUBLIC
  ADMINISTRATION, IN PROCUREMENT AND IN BUSINESS
• CHAPTERS ALSO SUPPORT ADVOCACY CAMPAIGNS AGAINST
  ANTI-CORRUPTION
  
• POLITICALLY NON-PARTISAN, TI DOES NOT UNDERTAKE
  INVESTIGATIONS OF ALLEGED CORRUPTION OR EXPOSE
  INDIVIDUAL CAUSES
  

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Exhibit 1. How Does Corruption Happen in
Infrastructure Projects ?
Contracting Decision
Contracting Process/Bid Evaluation
Contract Implementation
Contract design
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Exhibit 1. How Does Corruption Happen in
Infrastructure Projects ?
Contracting Decision
Contract Implementation
Contracting Process/Bid Evaluation
Contract design

• Unnecessary
• Tagged
• Conflicts of interest

• Tagged
• Over-designed,
• Under-designed
• Documents are confusing

• Poor quality, defective, specifications
• Contract renegotiation
• Claim non-existent damages
• Supervisors are biased

• Decision makers are biased
• Selection procedures are non-transparent, or not
  objective
  
• Clarifications are not shared with other
  bidders
  
• Confidentiality during the process
• Award decisions are not made public or are not
  justified

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PETTY CORRUPTION IN INFRASTRUCTURE PROJECTS

• ILLEGAL CONNECTIONS
• FALSE METER READINGS
• INCOMPLETE/TARDY BILLING
• INCOMPLETE/TARDY COLLECTIONS
• UNDULY HIGH CONNECTION CHARGES (LEADING TO
  UNAUTHORIZED CONNECTIONS)
  
• IN SUM, PETTY CORRUPTION CAN ACCOUNT FOR 20
  OR
  
• MORE OF SYTEM LOSSES IN POWER OR WATER
• DISTRIBUTION NETWORKS.

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INSTRUMENTS FOR ADDRESSING GRAND CORRUPTION

• INTERNATIONAL
• NATIONAL INTEGRITY SYSTEMS
• INTEGRITY PACTS
• BUSINESS PRINCIPLES FOR COUNTERING BRIBERY

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INTERNATIONAL INSTRUMENTS FOR ADDRESSING
GRAND CORRUPTION

• UN Convention Against Corruption
• OECD Convention on Combating Bribery of Foreign
  Public Officials in International Business
  Transactions
  
• NEED FOR CONSTANT MONITORING AND FOLLOW
• UP TO ASSURE THAT THESE AND OTHER
• CONVENTIONS ARE BEING ADHERED TO

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NATIONAL INTEGRITY SYSTEMS

• Institutional Pillars for the National Integrity
  System
  
• Rules and Practices for the Institutional Pillars

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Exhibit 2. Pillars of Integrity
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Integrity Pacts

• Process
• Rights and Obligations
• Monitoring
• Sanctions

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Business Principles for Countering Bribery (BPCB)

• The Business Principles state
• The enterprise shall prohibit bribery in any form
  whether direct or indirect
  
• The enterprise shall commit to implementation of
  a Program to counter bribery.
  
• These principles are based on a commitment to
• fundamental values of integrity, transparency
  and
  
• accountability. Enterprises shall aim to create
  and
  
• maintain a trust-based and inclusive internal
  culture in
  
• which bribery is not tolerated.

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Implementation of the BPCB

• A program is the entirety of an enterprises
  anti-
  
• bribery efforts including values, policies,
• processes, training and guidelines.
• The BPCB
• Program Implementation Requirements
• Implementation The TI Six Step Process

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BPCB SUPPORTING TOOLS

• A Guidance Document provides background on each
  section of the Business Principles, explains how
  to implement each Principle, answers frequently
  asked questions and gives examples of corruption
  and of good practice.
• The TI Six-Step Implementation Process is a
  how-to guide for companies who wish to introduce
  an anti-bribery programme within their
  organization. This tool is also available as an
  interactive electronic module.
• TI is currently developing a Self-Evaluation
  Module to assist companies in assessing their
  anti-bribery performance, which can also serve as
  the basis for external verification.

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(No Transcript)
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INTERNATIONAL CORPORATE REPORTING
INITIATIVES/INDICES USING THE BPCB

• FTSE4Good Index
• UN Global Compact
• Global Reporting Initiative
• World Economic Forum Partnering Against
  Corruption Initiative

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SECTOR-WIDE ANTI-BRIBERY AGREEMENTS

• COVER THE WATER PLASTIC PIPE MANUFACTURING
  SECTOR
  
• FIRST AGREEMENT SIGNED IN COLOMBIA in April 2005
• SECOND AGREEMENT SIGNED IN ARGENTINA in December
  2005
  
• FOLLOW UP AGREEMENTS ARE UNDER PREPARATION

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INSTRUMENTS FOR ADDRESSING PETTY CORRUPTION

• Management Contracts
• Benchmarking
• Business Principles for Countering Bribery
• Citizens Report Cards

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THE WATER INTEGRITY NETWORK (WIN)

• OBJECTIVES
• SCOPE
• MEMBERSHIP
• ACTIVITIES
• NETWORK ORGANIZATION

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WIN GOVERNANCE

• Chair and Steering Committee
• Elect
• Monitor
• Secretariat Host organization (TI)
• Members/National groups
• Manage

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WIN GOVERNANCE (Contd.)

• Decisions Taken at Interim Steering Committee
  Meeting, Berlin, May8/9, 2006
  
• Chair Elected (Hakan Tropp, SIWI)
• TI Designated WIN Manager (Donal OLeary)
• Work Program Prioritized and Endorsed
• Financing Strategy Agreed
• Launch at WWW, Stockholm, August, 2006

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ISSUES

• Can Reformers Address Corruption on a
  Sector-Specific Basis?
  
• Can Reformers Develop Generic Sectoral
  Anti-corruption Tools?
  
• How do the Efforts of Civil Society Fit with the
  Efforts of Other Reformers? Example of the
  Integrity Pact

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HOW CAN INTERNATIONAL STAKEHOLDERS SUPPORT
ONGOING ANTICORRUPTION EFFORTS IN INFRASTRUCTURE?

• Vigorously Support Institutionalization and
  Enforcement of Existing International
  Anti-bribery Conventions  
  
•               
• Provide Financial Support for and Implement the
  Integrity Pact in their Own Organizations
  
•                  
• Support and Actively Participate, as Appropriate
  in Promoting the BPCB 
  
• Provide Financial Support and Participate in the
  WIN

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• THANK YOU FOR YOUR ATTENTION!
• Donal OLeary
• Senior Advisor
• Transparency International
• Alt Moabit 96
• Berlín 10559, Germany