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.
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.
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.
The Fiji Procurement Office allows registered suppliers to view information on current and closed offers and see details about awarded contracts. The Procurement Centre of Excellence Team is based at the Fiji Procurement office. Their task is to provide knowledge-based services to vendors/suppliers to drive efficiency, repeatability and best practice in government procurement. Apart from process reviews, best practice implementation, and contract monitoring, they regularly conduct Procurement Training to promote procurement excellence across Government. Vendors/Suppliers are also encouraged to use the Team to raise Procurement Awareness amongst their staff.
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.
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.
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