Transparency International has developed the concept of Integrity Pact in the mid-1990‘s. It was originally called the “Islands of Integrity” concept. Integrity Pact (IT) contains rights and obligations to the effect that neither side will pay, offer, demand or accept bribes of any sort, or collude with competitors to obtain the contract, or while carrying it out. It also says that bidders will disclose all commissions and similar expenses paid by them to anybody in connection with the contract; and that sanctions will apply when violations occur. These sanctions range from loss or denial of contract, forfeiture of the bid or performance bond and liability for damages, to debarment for future contracts on the side of the bidders, and criminal or disciplinary action against employees of the government.
Integrity Pact has been conceived to be applied to individual and specific contracting processes, therefore their goals remain initially restricted to provide transparency and prevent corruption in that particular contracting process. Some of the key elements of the Integrity Pact are as follows.
It is a contract between the Government and the Suppliers/Bidders
It contains an undertaking that the government will not demand or accept any bribes, gifts or payments etc., with appropriate disciplinary, civil/criminal sanctions in case of violation;
It contains a statement by each bidder that he has not paid, and will not pay, any bribes;
It contains an undertaking by each bidder to disclose all payments pertaining to the contract;
It contains explicit acceptance by each bidder that the “no-bribery commitment” and “disclosure obligation” will remain in force until the contract has been fully executed;
All undertakings on behalf of a bidding are made in the name of the company’s “Chief Executive Officer”;
Bidders are advised to have a company Code of Conduct (that clearly rejects the use of bribes and other unethical behaviour) and
A pre-announced set of sanctions for any violation, by a bidder, of its statements or undertakings
Integrity Clause
Governments may insert the Integrity Clauses in their contracts with suppliers, contractors and consultants. Such clauses normally stipulate that the supplier,
has not been convicted, and has not been formally investigated, of a corruption crime and
has not and will not resort to bribery or any other form of corruption in the context of the respective contract.
Misinformation by the supplier under such clause would give the principal the right to cancel the contract unconditionally. A setback of the Integrity Clause is that it normally contains no direct sanction. Another limitation is that the Clause in the absence of an independent monitoring system might be ineffective.
