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Combating corruption in public procurement

Opinion
Justice Loice Matanda-Moyo

PUBLIC procurement has been defined as “the process by which governments, regional and local public authorities or bodies governed by public law purchase products, services and public works”.

Recently social and mainstream media has been awash with expositions of the rot in our procurement system, with goods and services being procured at exorbitant prices. Public procurement affects all aspects of people’s lives and assumes a large share of the national budget hence it is of public interest that it be transparent, fair, honest, cost-effective and competitive.

The importance of safeguards against corruption in public procurement cannot be over emphasised as inefficient and compromised public procurement frameworks are bound to create and regenerate corruption, misuse of public funds, poverty and consequently underdevelopment in general. In view of this, it is clear that effective public procurement regulation is a critical tool in public administration.

The good news is that everyone can play a role in ensuring taxpayers’ money spent on procurement delivers good quality services at a fair economic cost for all.

Corruption in public procurement involves a number of people who take decisions based on their own interests rather than the public good. Some of the most important actors involved include the officials who are responsible for procurement and the management of contracts, politicians who influence decisions at the planning and contracting stages and bidders, suppliers, contractors and sub-contractors who are involved in competing for and delivering on contracts.

The legal framework: The Constitution

As the supreme law of the land, the Constitution provides public procurement objectives that the public procurement system should aspire to achieve. Section 9 calls for the government to “adopt and implement policies and legislation to develop efficiency, competence, accountability, transparency, personal integrity and financial probity”. In addition, section 56 of the Zimbabwean Constitution further guarantees equal opportunity and fairness by prohibiting unfair discrimination on grounds of nationality, race, colour, place of birth, ethnic and social origin, economic or social status among other categories.

Accordingly, legislation or policy practices that unfairly discriminate against a certain category of foreign or domestic suppliers and contractors in favour of others is bound to be unconstitutional.

Aggrieved bidders and suppliers can rely on this section to commence “protest actions” in the form of reviews, appeals, or submissions to relevant authorities challenging the award of tenders on the basis of unfairness or some other recognised grounds. By so permitting, the Constitution safeguards against bribery, unjustified preferential treatment, unethical behaviour and favouritism in the selection of proposals, suppliers and contractors.

Section 315 (1) of the Constitution also governs the field of public procurement by providing for the setting up of the Public Procurement and Disposal of Public Assets Act. Zimbabwe’s principal legislation in public procurement, the Constitution, should, however, be admitted, provides a very skeletal framework that is important, albeit as a starting point. Critical provisions that establish and pronounce a workable legal framework are found in legislation that is passed to give effect to the Constitution’s provisions. The Procurement Act is one such law.

The Public Procurement and Disposal of Public Assets Act

The Act regulates the procurement cycle from procurement planning, approaches to the market, evaluation and award of tenders, contract management and disposal of assets. The Act created the Procurement Regulatory Authority of Zimbabwe (Praz) which has an oversight role over public entities. In terms of the Act, public entities are responsible for their own procurement whereby the value of the construction works, consultancy and non-consultancy services are below a specified threshold.

Section 11 of the Act obliges the authority to report annually to Parliament on its activities and functions of the public procurement system. The board is also subject to prosecution for negligence, wrong doing or breach of contract. This ensures accountability and fairness while guarding against political manipulation, corruption and inefficiency.

The Act clearly provides for the nature and manner of publication of invitation to tenders, standard form requirements for bids and proposals, criteria for evaluation of bids and proposals, access to relevant information and official documents, description of goods, services and work being put to tender, provisions for security deposit and other matters.

These provisions, if complied with, and actively enforced, can guard against bribery, favouritism, unethical behaviour, preferential treatment, and, can ensure fair, impartial evaluation of contract proposals.

Application and administration of the Act

In relation to administration, the President determines the Ministry responsible for the administration of the Act.

Thus, the President may from time to time assign a minister or the Vice -President to the administration of the Act. The Finance ministry (Treasury) is only responsible for financing governmental contracts and contract supervision and monitoring. The fact that the Office of the President and Cabinet has been given a number of responsibilities in the Act suggests that the legislature intended the Office of the President and Cabinet to be directly responsible for the administration of the Act.

 

The problem with this scenario is that institutions established by the Act, are bound to be directly affected by mainstream politics of the day that originates within the Office of the President and Cabinet. Statutory bodies set up under the Act are bound to be perceived, or perceive themselves, as being part of the Executive. This creates the impression that these institutions are not necessarily corporate, but political and are free to overlook or ignore critical corporate governance measures in order to pursue or satisfy political objectives.

Functions and Composition of PRAZ

The Act clearly spells out the functions of PRAZ as (a) to ensure that procurement is effected in a manner that is transparent, fair, honest, cost-effective and competitive; and, (b) to promote competition among bidders; and (c) to provide for the fair and equitable treatment of all bidders, leading to procurement contracts that represent good value for money; and to promote the integrity of, and fairness and public confidence in, procurement processes; and (e) to secure the implementation of any environmental, social, economic and other policy that is authorised or required by any law to be taken into account by a procuring entity in procurement proceedings.

However, membership of PRAZ’s Board is susceptible to bias and political influence. The President directly appoints the chairperson and his /her vice and has powers to suspend them, furthermore, the board members are appointed by the minister of Finance after consultation with the President. It should be noted that executive appointments tend to ignore the importance of professional technocrats and create a real possibility that Board members would be more politically aligned and thus amenable to political manipulation consequently compromising the integrity of the institution. By failing to promote corporate accountability, the Act creates a scenario were political accountability is more important than cooperate responsibility thereby encouraging political manipulation.

Debarment and Blacklisting

Under section 99 Praz wields the power to declare a supplier ineligible to be awarded a state contract in a case where he or she has been convicted of an offense in terms of the Act or for corruption in respect of any procurement proceedings, fraud, persistent under performance or non-performance.

The debarment provisions are progressive in that they show governments commitment to maintain integrity and safeguard against corruption. These measures are also important in that they deter misconduct and boost public trust in the procurement system.

However, due to executive influence in the Board earlier on alluded to, politically connected contractors may not be disbarred easily as the executive is likely to have the final say on whom to contract with on a given time without necessarily considering the previous misconduct of the contractor.

Anti-Corruption Mechanisms

The Zimbabwe Anti-Corruption Commission is the principal organisation tasked with the eradication of corruption in both government and private sectors. It is established in terms of the Anti-Corruption Commission Act (Chapter 9:22) and its aim is to “provide for the establishment of the Anti-Corruption Commission in order to combat corruption”.

Its objectives, as provided for in section 11, include, inter alia, promoting the investigation of serious cases of corruption and fraud and making proposals for the elimination of corruption in the public and private sectors.

The Commission has very wide powers which are set out in section 13 of the Act. It can carry out its own independent investigations into matters of procurement corruption, has the power to cause the prosecution, through the Prosecutor General`s office, of any person who is reasonably believed to have committed offences that involve corruption. In this regard, the Commission can recommend the prosecution of those who engage in procurement corruption which prosecution will be done in terms of the Criminal Procedure and Evidence Act.

In terms of section 170 of the Criminal Law (Codification and Reform) Act, bribery is proscribed and is punishable by a fine not exceeding level fourteen (or 3 times the value of any bribe) or alternatively imprisonment of not more than 20 years.

This sanction is commendable for providing a deterrent imprisonment term, however, in practice, it is yet to be passed on anyone thus the guilty are just fined and released. This therefore means that in practice there is no effective penalty against bribery though in theory the penalty is stiff enough.

However, Zimbabwe is yet to enact legislation in line with the provisions of Article 32 of the UNCAC which provides for witness protection for witnesses, experts and victims of corruption. The absence of such legislation hampers investigations and prosecution for corruption. In most instances the identity of witnesses is known and eventually they fear to come and testify in court because there is a risk of intimidation, loss of employment and harassment afterwards. The relevant institutions like the Zimbabwe Anti-Corruption Commission and civic organisations continue to lobby and advocate the law-makers to consider the enactment of such important pieces of legislation.

Conclusion

In addition to the legal framework above, it is suggested that to achieve transparent, cost effective, fair and honest public procurement practices there is need to provide more access to information, both to the civil society and the general public, enhance capacity development by ensuring that all players in public procurement processes are well equipped to perform their duties professionally and the employ of internal and external control and auditing systems to serve as deterrents to corruption also to make sure offenders are punished accordingly.

l Clinton Chipo is a legal practitioner writing here in his own capacity

 

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