International Regulatory Enforcement (PHIRE)
It's Only the Beginning: COVID-19, Public Procurement, and Corruption
September 10, 2020
Nicola Bonucci
As public money is increasingly used to mitigate the damage of COVID-19 on the world economy, the guidance document issued by the United Nations Office on Drugs and Corruption (UNDOC) on August 31, 2020, should raise the interest not only of public authorities but also of all companies bidding for public procurements.
This “practical guide for public organizations on how to conduct corruption risk assessments to identify, mitigate and prevent corruption vulnerabilities in their operations” comes almost as a follow up to previous warnings by international organizations (see my previous article on the subject) and civil society organizations. Interestingly the “guide recognizes that many public organizations simply do not have the required human or financial resources or the knowledge to implement such comprehensive mitigation measures. Engaging in lengthy and often expensive risk identification exercises can lead organizations to spend their available resources on detecting risks, leaving few resources with which to implement the required mitigation measures. The purpose of this guide is to support public organizations in effectively conducting risk assessments, within the margins of their available resources.” Annex ten on Procurement Fraud and Corruption is worth noting, in particular the “TEN SIGNS OF PROCUREMENT CORRUPTION” which are simple, straightforward questions to help detect bribery, kickbacks, and other forms of corruption in procurement.
In May, we warned that corruption risks will be high on the international agenda; everything since then also points in the direction of an increased attention and enforcement at the national level.
In May 2020, the Coordinator of the COVID-19 emergency for Sicily was arrested together with nine other persons based on allegations of corruption on four call-for tenders worth €600 million.
At the end of June, the Minister of Health of Zimbabwe was arrested by the Zimbabwe Anti-Corruption Commission over alleged corruption related to the supply of medical materials to combat coronavirus.
In the same period, the Head of Romanian state-owned drug and medical equipment procurement and distribution company, Unifarm, was charged with corruption for allegedly demanding a bribe from a supplier of medical equipment needed to fight COVID-19.
On August 6, 2020, the South African President set up a ministerial committee to investigate alleged corruption in state tenders in the fight against COVID-19
In late August 2020, the Governor of Rio de Janeiro was temporarily removed from office after his residence was raided in a probe into accusations he stole COVID-19 emergency funds.
In an interview given to Reuters on May 12, 2020, Mrs. Laura Kovesi, European Public Prosecutor, indicated that “the promise of vast sums of European aid to countries affected by the coronavirus and less oversight over the funds is likely to lead to a surge in fraud and corruption.” Facts are proving that Mrs. Kovesi was right in her prediction and that this applies well beyond Europe.
Companies not only in the health and medical sector but also in all sectors should be extremely careful in dealing with public procurements issued on an urgent basis and/or through derogation or ad hoc procedures. They should be rigorous and transparent in their dealings with public officials and keep track of any donation they may make…..it’s only the beginning.