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Project Anti-Corruption System (PACS)

Overview

[NOTE:  This webpage and the webpages on PACS Standards 1 to 15 are being updated between 1st and 30th September 2021, during which time the page content may not be complete, and there may be inconsistencies on these pages.]

What is PACS?

The Project Anti-Corruption System (PACS) is a system designed by GIACC to assist in the prevention and detection of corruption on infrastructure projects.  It comprises 15 PACS Standards which impact on all project phases, on all major project participants, and throughout the project contractual structure.   Each PACS Standard deals with a separate anti-corruption measure.  These measures have been designed and written in a manner which enables their independent verification.

Each PACS Standard is contained on a separate webpage, is accompanied by supporting Guidance, and contains a link to the other Standards at the foot of each webpage.   

An overview of, and link to, each PACS Standard is set out later on this webpage.

What is meant by “corruption” in the PACS Standards?

In the PACS Standards, “corruption” is used in its widest sense to include bribery, extortion, fraud, cartels, abuse of power, embezzlement, and money laundering.  Limiting “corruption” only to bribery would be a mistake as it would miss other damaging criminal practices which can commonly occur on infrastructure projects.

Why is a project anti-corruption system necessary?

Corruption on infrastructure projects is a complex issue:

  • It may occur in the form of bribery, extortion, fraud, cartels, abuse of power, embezzlement, and money laundering.
  • It can take place during any phase of a project, including project selection, planning, financing, design, procurement, execution, operation and maintenance.
  • It may involve members of government or other public officials, the project owner, funders, consultants, contractors, sub-contractors, suppliers, joint venture partners, and agents.
  • It may occur at any level of the contractual structure.
  • It is usually concealed, and those who are aware of it may be complicit in it or be reluctant to report it. This makes it more difficult to detect.

See What is Corruption, How Corruption Occurs, Why Corruption Occurs, and Examples of Corruption for an explanation and examples of corruption, and how it occurs in each project phase. 

There is no single or simple method by which to prevent such corruption.  These widespread and varied corruption risks can only be effectively dealt with by the implementation of anti-corruption measures throughout the project cycle.

During the last 30 years, material improvements have been made to the safety of personnel in factories and on construction sites.  Similarly, significant improvements have been made to the quality of manufactured products and construction projects.  These improvements have come about only as a result of improved management and oversight practices.  These practices include detailed written procedures, contractual obligations, training, independent verification, reporting and enforcement.  These improvements have been achieved as a result of a genuine intent to make improvements and increased controls and resources.  A similar approach needs to be taken in relation to corruption prevention.  

Is PACS a public sector or private sector system?

PACS is designed and recommended for use on public sector projects (i.e. those which are wholly or partly owned, financed or guaranteed by a government or a tax-payer funded body).  However, PACS can also be used on wholly private sector projects.

What size of project is PACS designed for?

PACS is designed to be used on large infrastructure projects.  The cost threshold for “large” can be selected  by the relevant government or project owner.  GIACC suggests, as an indicative figure, that PACS could be implemented in full on all projects with an estimated cost of more than the equivalent of US$5 million.

On smaller projects, it may be more appropriate to use only some of the PACS Standards, or simplified versions of them.

Who can require PACS to be implemented on projects?

  • A government regulatory authority may require (through law or regulation) that some or all of the PACS measures are implemented on all public sector infrastructure projects, or on public sector projects above a specified value.
  • A project funder may require some or all of the PACS measures to be implemented on all projects funded by it, or on all projects above a specified value.  It may make this requirement a condition of providing funding.
  • A public or private sector project owner may decide to implement some or all of the PACS measures on its projects.

How to use PACS

A government, or a public or private sector project owner, may use PACS as follows:

  • It can compare its existing project anti-corruption measures with the measures recommended in the PACS Standards.  In undertaking this comparison, it will be assisted by the accompanying Guidance.
  • If it determines that it is not currently implementing a recommended PACS Standard at all, it may decide to implement the PACS Standard in whole or in part. 
  • If it determines that it is currently implementing a PACS Standard, but that its implementation can be improved in accordance with the recommended PACS Standard, it can introduce improvements.
  • Implementation needs to be tailored to the size and value of the project.  On major projects, all of the PACS Standards should be used in full.  On smaller projects, it may be more appropriate to use only some of the Standards, or simplified versions of them.

Many governments and organisations have sophisticated and detailed regulations and management procedures in relation to Projects.  The PACS Standards are not intended to replace or supersede these regulations or procedures.  They are intended to recommend anti-corruption measures which can be incorporated into the relevant regulations or procedures in relation to Projects.

Adapting PACS to local conditions

Users of PACS should adapt the recommended PACS measures to their local requirements, taking into account their local laws and procedures.

Why use PACS?

PACS is not a guarantee against corruption.  However, the use of PACS will:

  • discourage corruption
  • reduce the opportunity for corruption
  • increase the chance of identifying corruption.

Therefore, the use of PACS will help:

  • reduce project costs
  • improve project quality and safety
  • provide a level playing field for organisations undertaking the works and services
  • reduce the risk of a project participant being a victim of corruption
  • encourage better quality and more ethical suppliers, contractors, consultants and funders to participate in the project
  • satisfy the public that corruption is being tackled.

Can the effective implementation of PACS be independently verified?

Independent verification that the PACS Standards are being effectively implemented on a project is built into PACS due to the independent monitoring and audit requirements contained in PACS Standards 11 and 12.

If a further level of verification is required, then compliance with the PACS Standards can in addition be independently certified by a reputable third party certifier.   The PACS Standards have been written in a manner which facilitates their certification as the certifier can verify that each provision of each PACS Standard is being properly implemented.  Certification that the Project Owner has effective procedures in place in order to meet the PAC Standards in relation to the project (as required in PS 1) can be undertaken prior to project commencement.  This will give some comfort to potential project participants (such as funders and contractors) that the project will be managed with integrity.  The certification can then be renewed annually as the project progresses.

An experienced international certification industry already provides certification in relation to ISO management standards (such as ISO 37001 (anti-bribery management), ISO 9001 (quality management), ISO 14001 (environmental management) and ISO 45001 (safety management)).  These certifiers could be used to certify a project to the PACS Standards.

Overview of the PACS Standards

An overview of the primary recommendations of each PACS Standard is as follows (click on title to access the full content of each Standard):

PS: Definitions:  This page contains the defined terms used in connection with PACS Standards 1 to 15

PS 1:  Anti-corruption management of the Project:  The Project Owner should design and implement, in relation to all phases of the Project, procedures which comply with all relevant anti-corruption laws and regulations and which give effect to PACS Standards 1 to 15.  The top management of the Project Owner, supported by the compliance manager, should be responsible for ensuring that these Procedures are properly designed and are effectively implemented.  Decisions in relation to the Project should be made by managers of appropriate number and seniority, without conflict of interest, and with appropriate separation of function.  Communications should be open and fair, and full records should be retained.

PS 2:  Project risk assessment, selection and design:   Project selection and design should be carried out in compliance with anti-corruption laws and regulations.  The Project should be selected on the basis that it has a legitimate purpose, is necessary, and provides value for money.  The project design should be based on the legitimate needs of the Project Owner and should not favour any particular Supplier.

PS 3:  Procurement:  Procurement of Project Contracts should be carried out in compliance with anti-corruption laws and regulations.  Procurement criteria and procedures should be clear and objective, should ensure that there is no conflict of interest, should maximise competition, and should be determined and published in advance of the procurement process.  Evaluation of submissions should be carried out honestly and impartially.  The terms and conditions of the contracts awarded upon completion of the procurement exercise should be at arm’s length. 

PS 4:  Contract provisions:  Project Contracts and Sub-contracts should contain provisions designed to deter, prevent and deal with corruption, including requirements for relevant project parties to: comply with anti-corruption laws and regulations, implement an anti-corruption management system in their organisations (PS 7), comply with a Project Code of Conduct (PS 8), provide anti-corruption training to relevant staff (PS 9), implement a corruption reporting system (PS 13), and enforce anti-corruption rights, remedies and sanctions (PS 14).  A contracting party should be entitled to terminate a contract where there is sufficient evidence of corruption and should be entitled to recover compensation for loss suffered as a result of corruption by another contracting party. 

PS 5:  Contract managementThe management of Project Contracts should be carried out in compliance with anti-corruption laws and regulations.  The works and services under Project Contracts should be managed and carried out in compliance with contract provisions, and free from any conflict of interest or corruption.  Any modifications to Project Contracts should be made only where they are necessary and appropriately approved and controlled.

PS 6:  Financial management Financial management of the Project should be carried out in compliance with anti-corruption laws and regulations.   Managers should operate without any conflict of interest or corruption, and should ensure that complete and accurate Project accounts are maintained by the Project Owner, that all sums owed by or to the Project Owner in relation to the Project are paid in full, and that no payment is made by or on behalf of the Project Owner in relation to the Project unless the payment is appropriately authorised, lawful and is properly due under the relevant Project Contract.  All payments by the Project Owner over a de minimis threshold should be made through the banking system.  

PS 7:  Major Suppliers’ anti-corruption controls:  Major Suppliers and Major Sub-suppliers should implement a recognised and adequate anti-corruption management system within their respective organisations for the duration of the Project and obtain annual certification of the effective implementation of such system from a reputable third-party certifier.

PS 8:  Project Code of ConductThe Project Owner and all Suppliers and Sub-suppliers should comply with, and ensure that all of their personnel comply with, the Project Code of Conduct in relation to their Project activities.  The Code of Conduct should prohibit involvement in corruption and should contain specific provisions designed to ensure integrity in relation to all Project activities.

PS 9:  Training:  The Project Owner and all Suppliers and Sub-Suppliers should provide appropriate anti-corruption training to their relevant personnel involved in the Project.  This training should instruct the trainees on: the types of corruption they may face in their role; how to avoid, prevent and report such corruption; and the importance of compliance with applicable anti-corruption procedures and the Project Code of Conduct.

PS 10:  Government permits:  The Project Owner should inform all those Suppliers and Sub-suppliers which may require government permits in connection with the Project of the type of permits needed and how to obtain them.  Suppliers and Sub-Suppliers should report to the Project Owner any suspicions of corruption in relation to the permit issuing process, in which case the Project Owner should take all reasonable steps to assist the Suppliers and Sub-suppliers resolve the issues complained of.

PS 11:  Independent monitoring:  An appropriately qualified and experienced independent monitor should be appointed to monitor whether there is any suspicion of corruption in relation to Project selection, planning, design, funding, procurement, performance, contract management and financial management.  Where the monitor identifies reasonable grounds to suspect corruption, the monitor should report such suspicions to the Project Owner and the law enforcement body.

PS 12:  Independent auditing:  Financial audits should be carried out which verify that all payments by and to the Project Owner in respect of the Project were properly made to or received from legitimate persons and for legitimate purposes.  Technical audits should be carried out which verify that the Project has been designed and specified in accordance with good technical practice and provides good value for money, and that the Project has been properly completed in accordance with the design and specification.  Where the auditor identifies reasonable grounds to suspect corruption, the auditor should report such suspicions to the Project Owner and the law enforcement body.  

PS 13:  Reporting:  The Project Owner should provide a system which enables any individual or organisation involved in the Project and any member of the public to report: (1) suspected corruption in relation to the Project, (2) any breach of the Project Owner’s anti-corruption Procedures, and (3) any breach by any individual or organisation of the Project Code of Conduct.

PS 14:  Enforcement:  The Project Owner, Suppliers and Sub-suppliers should enforce contractual and employment rights, remedies and sanctions against any parties or personnel who are involved in corruption in relation to the Project or who are in breach of the Project Code of Conduct or of their anti-corruption commitments.  Where there are reasonable grounds to suspect that a corruption offence may have been committed, the Project Owner should refer the matter to the law enforcement body for investigation and prosecution.

PS 15:  Transparency:  The Project Owner should promptly publish on a freely accessible public website complete, comprehensive, up-to-date and intelligible information in relation to the Project.  This should include disclosure of information in relation to Project selection, design, planning, funding, procurement, contract management, financial management, monitoring and auditing.   

Conditions of use of PACS

GIACC has published PACS as a free-issue product as a public service.  It can be downloaded, adapted and used by anyone free of charge.  No-one is permitted to charge a fee for the use of PACS or to pass PACS off as its own product. 

Feed-back and improvements to PACS

GIACC welcomes suggestions on how PACS can be improved.  GIACC also welcomes feedback on PACS, for example, as to whether you have found PACS useful or have implemented PACS in whole or in part on your projects.  If you have any suggestions or feedback, please Contact GIACC

History of PACS 

PACS was the first certifiable project anti-corruption system to be published internationally.

The First Edition of PACS was published by GIACC in May 2008.  Minor modifications were subsequently made from time to time.

The Second Edition of PACS is currently being uploaded onto the website and will be fully published in September 2021.  This Second Edition is a significant revision to the First Edition.  It is built on many years of GIACC experience in developing and assessing government, organisational and project anti-corruption measures and also takes account of the publication of major international certifiable anti-corruption programmes, such as ISO 37001 (2016) and the Commonwealth Anti-Corruption Benchmarks (2021).

As PACS is a website based publication, it is updated by GIACC periodically online.  The date of any page update is contained at the foot of each page.

Updated on 17th September 2021

© GIACC