Procurement Processes in Fiji and Strategies for Curbing Corruption
Joseph Veramu CLCT: Integrity Fiji: Supported by Transparency International
In the Financial Year from August 2020 to July 2021, a
little more than $1.2 billion will be spent by the Fijian Government on various
goods and services. This entails small items being purchased like stationeries
to huge projects like the construction of roads and bridges.
Like other states globally where so much money changes
hands, there are always temptations to succumb to corrupt practices for
personal gain. Fbc.news.com reported on 23/5/2020 that the Fiji Independent
Commission Against Corruption (FICAC) revealed that more than $1.6 million has
been lost due to corruption in the public procurement sector. FICAC cases
involving alleged procurement scams make up approximately 18 percent of all
their cases. They have 17 cases pending before the court. FICAC is in the
process of preparing a comprehensive training program for those involved in
public procurement. FICAC notes that it is evident that corruption within the
public procurement system is prevalent and must be addressed to prevent future
corrupt activity.
This article looks at the anti-corruption advocacy
work of CLCT Integrity Fiji which is supported by Transparency International to
provide government officials, businesses and civil society with key principles
and minimum standards which, when respected, can protect public contracting
from corruption. The article also discusses the work of the Fiji Procurement
Office under the Ministry of Economy.
Public procurement deals with all goods and services
that Ministries and any government owned body buys. It deals with all the
stages of the procurement process, encompassing the needs assessment,
allocation of budgets, market research, the tender preparation evaluation of
tenders and award of contracts. Fulfilling the contract, auditing and
evaluation are also part of the procurement process.
Procurement principles
Transparency International defines corruption as “the abuse
of entrusted power for private gain.’ “Private gain” can mean illicit payments made
to Government officials, their family members, close friends, the political
party they are affiliated to, their favourite charities, or other groups in
which the official or their family or close friends have financial or social
interests. Vendors, for example, can make very generous ‘donations’ to the
charity group(s) patronised by the Government procurement officer. Vendors can
also make facilitation payments by finding out the names of those who sit on
Government tender boards with the perception that a few months or years later,
these board members will look positively on the tender applications of those
who had gifted them generously.
Need to affirm principles of Integrity in the
procurement process
Everyone involved should be guided by the principles
of integrity, transparency, accountability, fairness, efficiency and professionalism
throughout the entire process.
Transparency International notes that “in the context
of public procurement, it means that laws, regulations, institutions,
processes, plans and decisions are accessible to all potential bidders and the
public at large. Transparency needs to pervade all steps in the procurement
cycle, from the earliest decisions on needs assessments, developing a procurement
plan and budget allocation, to bid evaluation, implementing the contracts and
auditing performance.”
The Fiji Government is a major purchaser of goods and
services and encourage the participation of all suppliers from small &
medium enterprises (SMEs) to large vendors. The Fiji Procurement Office was
established to provide advice and guidance to ensure that the procurement of
goods, services and works are based on
the principles of; a) Value for money; (b
the ethical use of Government resources; (c) the promotion of open and fair
competition among suppliers and contractors; (d) promotion of integrity,
fairness and public confidence in the procurement process; and (e) achieving
accountability and transparency in the procedures relating to procurement.
The Fiji Procurement Office provides clear guideline
and templates that vendors can use in the bidding process. They enable access
to information on regulations that need to be understood and agreements that
will have to be adhered to in the case of winning bids.
Accountability
Transparency International notes that Accountability
means that governments (including government-owned/controlled institutions), individual
officials, and companies and their executives and agents must be accountable
for the execution of their duties and for decisions and actions taken in their
area of responsibility. There are many ways to promote accountability:
In June 2018, the Fijian Ministry of Economy set up
the Government eTender portal to enable potential suppliers to get information
on opportunities available with government. Potential vendors can access the
eTender portal on www.tenderlink.com/economyfiji/ To be part of the bidding process,
suppliers need to register in the portal. There is an online registration
facility. Although anyone can view the portal, only registered vendors will get
email notifications of upcoming business opportunities and be able to respond
online.
Fairness and Efficiency
Transparency International asserts that Government contracts
that are awarded and implementation decisions should be fair and impartial. Standards
and specifications must be non-discriminatory; suppliers and contractors should
be selected on the basis of their qualifications and the technical and
financial merits of their offers; there should be equal treatment of all bids, including
equal provision of information, deadline-setting and confidentiality.
Risk management strategies are Integrated into procurement
processes
We are of the view that corruption is part and parcel
of life and a perfect compliance system of zero corruption is idealistic and
unrealistic. There will always be attempts to engage in corrupt practices so
there should always be a very dynamic and proactive risk management strategy. Risk
Management deals with identifying, understanding and assessing risks so they
can be better managed and mitigated. The Procurement Office has to manage various
form of risk on a daily basis. Controlling and mitigating the different kinds
of risks associated with procurement operations ensures that corruption is
curbed.
During a pandemic or natural disaster there may be
cases of “Urgent Purchases” especially towards the end of a financial year when
most Ministry budgets have to be spent. Emergency responses to natural
disasters and other events may also entail immediate spending.
It should be noted that the Fiji Procurement Office
mainly process tenders over $50,000 in the eTender portal. Government Ministries
& Departments handle smaller amounts by calling for quotations from
vendors. Some procurements are handled through Expression of interest which is
jointly administered by Ministries / Departments and the Fiji Procurement
Office.
The Fiji Procurement Officer actively mentors all
these processes and there is no pressure on Ministries given that they can
carry over the unspent portions to the next financial year. The Ministry of
Economy is very strict in ensuring that Permanent Secretaries must ensure that
all standing offer contracts executed by the Fiji Procurement Office on behalf
of Government pursuant to Procurement Regulations 35 sub regulations (1) and
(2) are complied with at all times.
Decentralisation of procurement to national and
sub-national levels
Transparency International cautions that the movement
of procurement decisions from a national to sub-national government presents
significant corruption risks. The local government may have its own procurement
rules that are not consistent with those of the national government. Local
officials are more likely to know the significant companies in their locality
and regularly interact with company officials. Procurements are often issued in
smaller values, avoiding open competitive bidding. The case of the Nasinu Town
Council where two former employees and 5 directors or employees of private
companies were charged by the Fiji Independent Commission Against Corruption
(FICAC) for alleged exchange of money/bribes for services and contracts is a
case in point.
The important lesson is that corruption related
offences get caught out in the end as FICAC is very vigilant in ensuring
compliance to existing procurement processes. Fijivillage.com reported that the
Auditor General has recommended an investigation be carried out to find out
whether there was a conflict of interest when the Rakiraki Market construction
contract was awarded for $5.2 million to the company that gave over $100,000 to
the Rakiraki Town Council to pay off its debts. The Minister for Local
Government said she would respond in Parliament in relation to revelations in
the 2018/2019 Auditor General's Report on Municipal Councils that audits for 11
municipal councils are in backlog and 44 financial statements are yet to be
received from various municipal councils.
Integrity Pacts
Transparency International reports that Integrity
Pacts are tools that can improve the procurement process, based on a
collaborative approach including procuring agencies, the private sector and
civil society. Procuring agencies and potential bidders can, for example, enter
into an Integrity Pact, with the objective of curbing corruption.
The impression we get is that there is lukewarm
reaction especially amongst small and micro enterprise to having Integrity
Pacts. One drawback is that many vendors registered with the Fiji Procurement
Office are family run. Due to limited staff, they multitask procurement tasks
amongst themselves. For this logistical
reason, they may not be able to spend days attending procurement training programs.
FICAC should consider working with the Fiji
Procurement Office Centre of Excellence Team whose task is to provide
knowledge-based services to vendors/suppliers to drive efficiency,
repeatability and best practice in government procurement. They also regularly
conduct Procurement Training to promote excellence. Vendors/Suppliers are also
encouraged to use the Team to raise Procurement Awareness amongst their staff
and sub-contractors. FICAC could cross-credit training time offered by the
Excellence Team towards the Integrity Pact Certificate offered by FICAC
CLCT Integrity Fiji would like to collaborate with FICAC
and the Fiji Procurement office in monitoring Integrity Pacts procurement
processes, providing expertise and acting as an independent voice to raise
issues. We are also open to discussions on signing Integrity Pacts with
Vendors/Suppliers under the provisions of the United Nations Convention Against
Corruption (UNCAC). The provision of Article 13 enables Civil Society agencies to
support State initiatives in promoting anti-corruption.
Conclusion:
Civil society groups like CLCT Integrity Fiji can increases transparency by supporting anti-corruption agencies like FICAC and engaging the public and providing information about different aspects of procurement. We support fairness and efficiency by identifying irregularities in the procurement process and independently investigating them
Reference: Transparency International. (2020). Curbing Corruption in Public Procurement A Practical Guide. https://images.transparencycdn.org/images/2014_AntiCorruption_PublicProcurement_Guide_EN.pdf
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