Corruption is concealed.  It can be reduced by greater transparency.

As explained in What is Corruption, GIACC uses the term “corruption” in the wider sense to include bribery, extortion, fraud, cartels, abuse of power, embezzlement, and money laundering.   Consequently, the discussion in this section applies to all such criminal activity.  

(1) General principles of transparency

Secrecy facilitates corrupt activity and its concealment.  Consequently, transparency is an important anti-corruption measure. 

Organisations should endeavour where possible to increase transparency in their operations. 

Greater transparency will not only help to reduce corruption.  It will also help improve the image of the organisation.

Reasons given for confidentiality should be examined carefully.  They may not be valid.  For example, claims of necessary commercial confidentiality may be a guise for concealing corrupt dealings.

An organisation should endeavour to ensure that the projects and contracts in which it is involved are transparent as far as is reasonable and possible.  So, for example, a public sector project owner should ensure transparency on its projects, and other participants in the project (such as funders, consultants and contractors) should require or encourage such transparency.  The nature of transparency which should be provided on projects is outlined below.

(2) Transparency in public sector projects

The public’s right to know

Public sector projects are wholly or partly publicly-owned, publicly financed or publicly guaranteed.  The public is entitled to information as to how public funds are being spent and whether such funds are being properly spent.  Transparency should, therefore, be a matter of public entitlement, not a matter of choice by the public sector.

Inadequacy of freedom of information legislation

Freedom of information legislation which permits members of the public to be provided with information following a request by them is a step towards greater transparency, but is not adequate.  This is because this process of disclosure occurs only if a request is made by the public, and results in piecemeal disclosure of some information only to those members of the public that have made the request.  It may also result in disclosure being slow and information emerging too late to be of any use.  In addition, a request can only be made for disclosure in relation to information the requester knows exists.

The required transparency

Transparency should involve disclosure of project information to the public on a prompt and regular basis.

Reduction of corruption

Greater transparency on public sector projects will help materially to reduce corruption.  It will have the following results:

• Project information will be made widely available, and not only to those who may be implicated in corruption.  The project will, therefore, be subject to greater independent scrutiny.
• It will increase the likelihood that corruption will be discovered.
• It will discourage corrupt activity because the potential perpetrators will be aware that there is a greater chance that any corruption will be discovered.
• It will encourage better governance, as project participants will be obliged to disclose their existing practices, which may be shown to be inadequate.
• It will reveal those project participants who refuse to disclose information.

Disclosure by the project owner

The public sector project owner is responsible to the public for delivery of the project, and for ensuring as far as possible that there is no corruption on the project.  Consequently, the project owner should be responsible for the disclosure of project information to the public.  Much of the information will be in the project owner’s possession, or will be readily available to the project owner.  Where this is not the case, the project owner may (for example, through relevant terms of contract) require other project participants to provide the necessary information and to agree to its disclosure to the public.

Requirements by the funder

The funder should require transparency to be provided in relation to those projects which it is funding and should be willing to provide transparency of all project financing details.

Other project participants

Other project participants, such as contractors and consultants, should co-operate with the project owner in providing information for disclosure, encourage project transparency where the project owner is failing to provide transparency, and require their sub-contractors, agents, subsidiary and related companies to provide transparency.  This will help to reduce the risk of their own involvement in corruption, whether as perpetrators or victims.  It will also help to ensure that the project is carried out properly and at proper cost.

Method of disclosure

The method of disclosure will depend on the technology available and the degree to which the public has access to that technology.  The preferred method should be disclosure on the project owner’s website.  However, if there is inadequate public access to the web, then the information should be made available at the project owner’s offices, or by whatever means will maximise public availability.  The public should be informed that the information is available.

The information to be disclosed:

• In relation to public sector projects: Ideally, there should be disclosure to the public in relation to all public sector infrastructure projects.  This may result in disclosure for a very large number of projects.  The process can be kept within manageable proportions by ensuring that the degree of information disclosed for each project is proportionate to the size, value and importance of the project.  Alternatively, where a government is introducing the concept of transparency, disclosure could be provided initially in relation to larger projects, expanding to include other projects as the process becomes more familiar and routine.
• In relation to each phase of a project: Information should be disclosed in relation to each phase of a project, including: project identification, financing, tendering, execution, completion, maintenance and operation.
• In relation to contracts and sub-contracts: Information should be disclosed in relation to each significant project contract and sub-contract.  The definition of the term “significant” will vary according to the project.  An individual project may contain a large number of contracts and sub-contracts.  It would not be practical or beneficial for details of all these contracts to be disclosed.  Value thresholds should be set to determine those contracts and sub-contracts whose details should be disclosed.  These thresholds will vary from country to country. The range of contracts may include project financing and guarantee contracts; construction and consultancy contracts at main contract level; a range of sub-contracts; and agency agreements.
• Type of information to be disclosed: The information to be disclosed should include all information which might reveal significant potential or actual corruption.  This would include details of the following:
  • The project
  • The project owner
  • Each party to each relevant contract, and the beneficial owners of such party
  • The award process for each relevant contract
  • The terms of each relevant contract
  • Variations to the terms of each relevant contract
  • The outcome of each relevant contract
  • Payments made under the contract
  • The project evaluations and audits
• Circumstances where public disclosure should not be provided: There are few reasons which would justify a decision not to disclose project information to the public.  Such reasons may include genuine concerns as to: national security; personal safety or confidentiality; or logistical difficulty in making all information available.  Concerns as to commercial confidentiality may also be relevant but in most cases these should not override the public interest in receiving the information.

(3) Transparency in private sector projects

The argument in favour of compulsory disclosure on private sector projects is not as strong as on public sector projects, as public money is not at stake.  However, private sector project owners may, for the sake of good governance and transparency, wish to implement all or some of the above disclosure recommendations on their projects.

(4) Transparency tools

The Project Anti-Corruption System (PACS) provides rationale and recommendations as to the specific disclosure to be provided on infrastructure projects (see PACS Standard – PS 2).